As filed with the Securities and Exchange Commission on March 4, 2002
1933 Act Registration No. ___________
- --------------------------------------------------------------------------------
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-14
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
[ ] Pre-Effective [ ] Post-Effective
Amendment No. Amendment No.
FIRST AMERICAN INVESTMENT FUNDS, INC.
[Exact Name of Registrant as Specified in Charter]
Area Code and Telephone Number: (612) 303-1606
800 Nicollet Mall
Minneapolis, Minnesota 55402
-----------------------------------
(Address of Principal Executive Offices)
Christopher O. Petersen
U.S. Bancorp Asset Management, Inc.
800 Nicollet Mall, J1012057
Minneapolis, MN 55402-7020
-----------------------------------------
(Name and Address of Agent for Service)
Copies of All Correspondence to:
James D. Alt, Esq.
50 South Sixth Street, Suite 1500
Minneapolis, Minnesota 55402-1498
Approximate date of proposed public offering: As soon as possible after
the effective date of this Registration Statement.
The Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Section 24(f) under the Investment Company
Act of 1940; accordingly, no fee is payable herewith. A Rule 24f-2 Notice for
the Registrant's fiscal year ended September 30, 2001 was filed with the
Commission on or about December 27, 2001.
It is proposed that this filing will become effective on April 3, 2002 pursuant
to Rule 488 of the Securities Act of 1933.
[LOGO]
FIRST AMERICAN INVESTMENT FUNDS, INC.
800 Nicollet Mall
Minneapolis, MN 55402
_________________, 2002
Dear Shareholders:
As a shareholder of Capital Growth Fund, Relative Value Fund, Growth &
Income Fund or Science & Technology Fund (each, a "Voting Fund"), each a
separate series of First American Investment Funds, Inc. ("FAIF"), you are
invited to vote on a proposal to reorganize your Voting Fund with and into Large
Cap Growth Fund, Large Cap Value Fund, Equity Income Fund or Technology Fund
(each, an "Acquiring Fund"), each a separate series of FAIF, at a Special
Meeting of Shareholders to be held on May 14, 2002 (the "Special Meeting").
Before the Special Meeting, I would like your vote on the important proposal
that pertains to your Voting Fund as described in the accompanying
Prospectus/Proxy Statement.
The Prospectus/Proxy Statement describes the proposed reorganizations
of the Voting Funds. All of the assets of each Voting Fund would be acquired by
the corresponding Acquiring Fund in exchange solely for shares of the
corresponding Acquiring Fund and the assumption by the corresponding Acquiring
Fund of the identified liabilities of the respective Voting Fund. Each
shareholder will receive shares of the applicable Acquiring Fund that are of the
same class, and the same total value, as their Voting Fund shares. The proposed
reorganizations are intended to be tax-free reorganizations. As a result, it is
anticipated that shareholders will not recognize any gain or loss in connection
with the proposed reorganizations.
Each Voting Fund's investment policies are similar to those of the
corresponding Acquiring Fund. Details about each Acquiring Fund's investment
objective, investment strategies and risks are contained in the attached
Prospectus/Proxy Statement.
The Board of Directors of FAIF has approved the proposal for each
Voting Fund and recommends that you vote FOR the proposal.
You can vote quickly and easily by toll-free telephone call, by
internet or by mail. Just follow the instructions that appear in the voting
instructions that accompany this booklet. You will receive a proxy card for each
Voting Fund in which you own shares. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT
THE SPECIAL MEETING, PLEASE HELP THE FUNDS AVOID THE COST OF A FOLLOW-UP MAILING
BY VOTING AS SOON AS POSSIBLE. If you have any questions about the proxy card,
please call ________________.
NOTE: You may receive more than one proxy package if you hold shares in
more than one Voting Fund or account. You must return separate proxy cards for
separate holdings.
Thank you for taking this matter seriously and participating in this
important process.
Sincerely,
/s/ Thomas S. Schreier
Thomas S. Schreier, President
First American Investment Funds, Inc.
SHAREHOLDER Q&A
Within this package you will find the following:
o Proxy statement/Prospectus describing proposed reorganization
o Current Prospectuses of the respective Voting and Acquiring Funds
o Voting instructions
o Voting ballot
o Business reply envelope
The Board of Directors unanimously approved the proposed merger of the funds
listed below, subject to the approval of the shareholders of the Voting Funds.
The following questions and answers provide a brief overview of the proposal.
The Board of Directors also encourages you to read the full text of the enclosed
proxy statement carefully.
Q: WHAT ARE FUND SHAREHOLDERS BEING ASKED TO VOTE UPON?
A: Shareholders of each Voting Fund are being asked to consider and
approve a proposal to merge their fund into the existing First American
Fund ("Acquiring Funds") set forth below:
VOTING FUNDS ACQUIRING FUNDS
First American Capital Growth Fund -> First American Large Cap Growth Fund
First American Growth & Income Fund -> First American Equity Income Fund
First American Relative Value Fund -> First American Large Cap Value Fund
First American Science & Technology Fund -> First American Technology Fund
Q: WHY ARE THE PROPOSED MERGERS BEING RECOMMENDED?
A: The Board of Directors has determined that each proposed reorganization
is in the best interests of shareholders. Among the benefits for fund
shareholders considered by the Board of Directors, include the
potential opportunity for better investment performance due to the
investment adviser's ability to focus its resources on fewer products,
the potential for reduced operating expenses over time, and that
post-reorganization total Acquiring Fund operating expenses (after
waivers) will be the same or lower than the current total operating
expenses of the Voting Funds.
Q: HOW DO THE INVESTMENT OBJECTIVES AND POLICIES OF THE ACQUIRING FUNDS
COMPARE TO THOSE OF THE VOTING FUNDS?
A: Each of the Voting Funds is proposed to be reorganized into an
Acquiring Fund that has investment objectives and policies that are the
same or similar to those of the Voting Fund.
Q: WHICH CLASS OF SHARES WILL I RECEIVE IN THE REORGANIZATION?
A: The share class structure for each of the funds involved in the
proposed mergers is identical. That is, you will receive the same class
of shares following the merger transaction that you currently hold.
Q: WHAT ARE THE TAX IMPLICATIONS TO SHAREHOLDERS IN CONNECTION WITH THE
PROPOSED MERGERS AND WHO WILL PAY THE EXPENSES FOR THESE MERGERS?
A: The proposed mergers are anticipated to qualify as tax-free
reorganizations. The expenses of the mergers, including legal expenses,
printing, packaging, and postage, plus the cost of any supplementary
solicitations, will be borne by U.S. Bancorp Asset Management, Inc.,
investment adviser for the funds.
Q: WHAT IS THE ANTICIPATED TIMING OF THE REORGANIZATION?
A: The meeting of shareholders to consider the proposal is scheduled to
occur on May 14, 2002. If all necessary approvals are obtained, the
proposed reorganization will likely take place shortly thereafter.
Q: WHO WILL RECEIVE THE PROXY MATERIAL?
A: The proxy has been mailed to all persons and entities that held shares
of record in the Voting Funds on March 18, 2002. Please note that in
some cases, record ownership of and/or voting authority over fund
shares may reside with a fiduciary or other agent. In these cases, the
fiduciary or other agent may receive the proxy.
Q: WHEN IS MY PROXY DUE?
A: We would like to receive your vote as soon as possible. You may cast
your vote:
By phone:
Please see the voting instructions on your proxy ballot. Call the 800
number listed and follow the recorded instructions.
By Internet:
Visit http://www.proxyvote.com. Once there, enter the 12 digit control
number located on your proxy ballot.
By mail:
Please note that you received one proxy ballot for each fund you own.
All ballots must be marked with your vote and returned in the business
reply envelope included in this package. If you have misplaced your
envelope, please mail your proxy to:
Proxy Services
P.O. Box
Xxx, XX, #####
PLEASE READ THE FULL TEXT OF THE ENCLOSED PROXY STATEMENT/PROSPECTUS FOR FURTHER
INFORMATION. IF YOU HAVE QUESTIONS, PLEASE CALL YOUR INVESTMENT PROFESSIONAL OR
FIRST AMERICAN FUNDS AT 800-677-FUND.
FIRST AMERICAN INVESTMENT FUNDS, INC.
800 Nicollet Mall
Minneapolis, MN 55402
CAPITAL GROWTH FUND
RELATIVE VALUE FUND
GROWTH & INCOME FUND
SCIENCE & TECHNOLOGY FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on May 14, 2002
Dear Shareholders:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the Shareholders of
Capital Growth Fund, Relative Value Fund, Growth & Income Fund and Science &
Technology Fund, each a separate series of First American Investment Funds, Inc.
("FAIF"), a Maryland corporation, will be held at 800 Nicollet Mall,
Minneapolis, Minnesota 55402, on May 14, 2002 at 10:00 a.m., Central Time, and
any adjournments thereof (the "Special Meeting") for the following purposes:
1. To consider and act upon an Agreement and Plan of
Reorganization providing for the acquisition of all of the
assets of Capital Growth Fund, a series of FAIF, by Large Cap
Growth Fund, a separate series of FAIF, in exchange for shares
of Large Cap Growth Fund and the assumption by Large Cap
Growth Fund of the identified liabilities of Capital Growth
Fund. The Agreement and Plan of Reorganization also provides
for distribution of these shares of Large Cap Growth Fund to
shareholders of Capital Growth Fund in liquidation and
subsequent termination of Capital Growth Fund. A vote in favor
of the Agreement and Plan of Reorganization will be considered
a vote in favor of an amendment to the Articles of
Incorporation of FAIF effecting the reorganization
contemplated by the Agreement and Plan of Reorganization.
2. To consider and act upon an Agreement and Plan of
Reorganization providing for the acquisition of all of the
assets of Relative Value Fund, a series of FAIF, by Large Cap
Value Fund, a separate series of FAIF, in exchange for shares
of Large Cap Value Fund and the assumption by Large Cap Value
Fund of the identified liabilities of Relative Value Fund. The
Agreement and Plan of Reorganization also provides for
distribution of these shares of Large Cap Value Fund to
shareholders of Relative Value Fund in liquidation and
subsequent termination of Relative Value Fund. A vote in favor
of the Agreement and Plan of Reorganization will be considered
a vote in favor of an amendment to the Articles of
Incorporation of FAIF effecting the reorganization
contemplated by the Agreement and Plan of Reorganization.
3. To consider and act upon an Agreement and Plan of
Reorganization providing for the acquisition of all of the
assets of Growth & Income Fund, a series of FAIF, by Equity
Income Fund, a separate series of FAIF, in exchange for shares
of Equity Income Fund and the assumption by Equity Income Fund
of the identified liabilities of Growth & Income Fund. The
Agreement and Plan of Reorganization also provides for
distribution of these shares of Equity Income Fund to
shareholders of Growth & Income Fund in liquidation and
subsequent termination of Growth & Income Fund. A vote in
favor of the Agreement and Plan of Reorganization will be
considered a vote in favor of an amendment to the Articles of
Incorporation of FAIF effecting the reorganization
contemplated by the Agreement and Plan of Reorganization.
4. To consider and act upon an Agreement and Plan of
Reorganization providing for the acquisition of all of the
assets of Science & Technology Fund, a series of FAIF, by
Technology Fund, a separate series of FAIF, in exchange for
shares of Technology Fund and the assumption by Technology
Fund of the identified liabilities of Science & Technology
Fund. The Agreement and Plan of Reorganization also provides
for distribution of these shares of Technology Fund to
shareholders of Science & Technology Fund in liquidation and
subsequent termination of Science & Technology Fund. A vote in
favor of the Agreement and Plan of Reorganization will be
considered a vote in favor of an amendment to the Articles of
Incorporation of FAIF effecting the reorganization
contemplated by the Agreement and Plan of Reorganization.
5. To consider and act upon such other business as may properly
come before the Special Meeting or any adjournments or
postponements thereof.
The Board of Directors of FAIF has fixed the close of business on March
18, 2002 as the record date for determination of shareholders entitled to notice
of and to vote at the Special Meeting.
By order of the Board of Directors
James L. Chosy
SECRETARY
______________________, 2002
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE SPECIAL MEETING ARE REQUESTED TO COMPLETE, SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO
POSTAGE IF MAILED IN THE UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF
THE PROXY CARD ARE SET FORTH IMMEDIATELY FOLLOWING THIS NOTICE. ALTERNATIVELY,
SHAREHOLDERS MAY VOTE BY CALLING A SPECIALLY DESIGNATED TELEPHONE NUMBER ON THE
PROXY CARD OR VIA THE INTERNET WEBSITE ON THE PROXY CARD.
INSTRUCTIONS FOR SIGNING PROXY CARD
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense involved in validating your
vote if you fail to sign your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in
the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the
party signing should conform exactly to the name shown in the
registration on the proxy card.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the
proxy card should be indicated unless it is reflected in the
form of registration. For example:
REGISTRATION VALID SIGNATURE
------------ ---------------
CORPORATE ACCOUNTS
------------------
(1) ABC Corp. . . . . . . . . . . . . ABC Corp.
(2) ABC Corp. . . . . . . . . . . . . John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer . . . . . John Doe
(4) ABC Corp. Profit Sharing Plan . . John Doe, Trustee
TRUST ACCOUNTS
--------------
(1) ABC Trust . . . . . . . . . . . . Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78. . . . . . . . . . Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
----------------------------
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA . . John B. Smith
(2) Estate of John B. Smith . . . . . John B. Smith, Jr., Executor
FIRST AMERICAN INVESTMENT FUNDS, INC.
800 Nicollet Mall
Minneapolis, MN 55402
(800) 677-3863
PROSPECTUS/PROXY STATEMENT DATED ________________, 2002
ACQUISITION OF THE ASSETS OF
CAPITAL GROWTH FUND, RELATIVE VALUE FUND, GROWTH & INCOME FUND AND
SCIENCE & TECHNOLOGY FUND
EACH A SEPARATELY MANAGED SERIES OF
FIRST AMERICAN INVESTMENT FUNDS, INC.
BY AND IN EXCHANGE FOR SHARES OF
LARGE CAP GROWTH FUND, LARGE CAP VALUE FUND, EQUITY INCOME FUND AND
TECHNOLOGY FUND, RESPECTIVELY,
EACH A SEPARATELY MANAGED SERIES OF
FIRST AMERICAN INVESTMENT FUNDS, INC.
This Prospectus/Proxy Statement is being furnished to shareholders of
Capital Growth Fund, Relative Value Fund, Growth & Income Fund and Science &
Technology Fund (each, a "Voting Fund," and collectively, the "Voting Funds")
for consideration at a Special Meeting of Shareholders to be held on May 14,
2002 at 10:00 a.m., Central Time, at 800 Nicollet Mall, Minneapolis, Minnesota
55402, and any adjournments thereof (the "Meeting").
As more fully described in this Prospectus/Proxy Statement, the purpose
of the Meeting is to vote on the proposed Agreements and Plans of Reorganization
(each, a "Plan") in which Large Cap Growth Fund, Large Cap Value Fund, Equity
Income Fund and Technology Fund (each, an "Acquiring Fund," and collectively,
the "Acquiring Funds"), each a series of First American Investment Funds, Inc.
("FAIF"), would acquire all the assets of Capital Growth Fund, Relative Value
Fund, Growth & Income Fund and Science & Technology Fund, respectively, in
exchange solely for shares of the corresponding Acquiring Fund and the
assumption by the corresponding Acquiring Fund of the identified liabilities of
the respective Voting Fund (each, a "Reorganization" and collectively, the
"Reorganizations"). The Voting Funds and the Acquiring Funds are sometimes
collectively referred to herein as the "Funds."
If the Reorganizations are approved, shares of the corresponding
Acquiring Fund will be distributed to the shareholders of the applicable Voting
Fund in liquidation of each Voting Fund, and each Voting Fund will be terminated
as a series of FAIF. Each shareholder of a Voting Fund would be entitled to
receive that number of full and fractional shares of the corresponding Acquiring
Fund of the same class that he or she held in the Voting Fund, with an aggregate
net asset value equal to the aggregate net asset value of the shareholder's
Voting Fund shares held as of the close of business on the business day
immediately prior to the closing of the Reorganization. A vote in favor of a
Plan will be considered a vote in favor of an amendment to the Amended and
Restated Articles of Incorporation of FAIF effecting the Reorganizations. These
transactions are being structured as tax-free reorganizations. See "Information
About the Reorganizations - Federal Income Tax Consequences." Shareholders
should consult their tax advisors to determine the actual impact of a
Reorganization in light of their individual tax circumstances.
GENERAL
The Board of Directors of First American Investment Funds, Inc.
("FAIF") has approved the proposed Reorganizations. You are being asked to
approve the Plan pursuant to which the Reorganizations would be accomplished.
Because shareholders of the Voting Funds are being asked to approve a
transaction that will result in their holding shares of the corresponding
Acquiring Funds, this Proxy Statement also serves as a Prospectus for the
Acquiring Funds.
A vote in favor of each Plan will be considered a vote in favor of an
amendment to the Amended and Restated Articles of Incorporation of FAIF
effecting a Reorganization. The amendment is attached to the form of Plan
attached as Exhibit A to this Prospectus/Proxy Statement.
Each Voting Fund and each Acquiring Fund is a separate diversified
series of FAIF, a Maryland corporation which is registered as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The investment objectives of each Voting Fund are
similar to those of the corresponding Acquiring Fund, and are as follows:
- ---------------------------------------- ---------------------------------------
Fund Investment Objective
---- --------------------
- ---------------------------------------- ---------------------------------------
Capital Growth Fund (Voting Fund) Maximize long-term returns.
- ---------------------------------------- ---------------------------------------
Large Cap Growth Fund (Acquiring Fund) Long-term growth of capital.
- ---------------------------------------- ---------------------------------------
- ---------------------------------------- ---------------------------------------
Fund Investment Objective
---- --------------------
- ---------------------------------------- ---------------------------------------
Relative Value Fund (Voting Fund) Maximize total return from capital
appreciation plus income.
- ---------------------------------------- ---------------------------------------
Large Cap Value Fund (Acquiring Fund) Capital appreciation as a primary
objective, with current income as a
secondary objective.
- ---------------------------------------- ---------------------------------------
- ---------------------------------------- ---------------------------------------
Fund Investment Objective
---- --------------------
- ---------------------------------------- ---------------------------------------
Growth & Income Fund (Voting Fund) Long-term growth of capital and income.
- ---------------------------------------- ---------------------------------------
Equity Income Fund (Acquiring Fund) Long-term growth of capital and income.
- ---------------------------------------- ---------------------------------------
2
- ---------------------------------------- ---------------------------------------
Fund Investment Objective
---- --------------------
- ---------------------------------------- ---------------------------------------
Science & Technology Fund (Voting Fund) Maximize long-term growth of capital.
- ---------------------------------------- ---------------------------------------
Technology Fund (Acquiring Fund) Long-term growth of capital.
- ---------------------------------------- ---------------------------------------
While the investment strategies for each Voting Fund are compatible
with those of the corresponding Acquiring Fund, there are certain differences
which are described under "Comparative Information on Investment Objectives,
Strategies and Risks" in this Prospectus/Proxy Statement.
This Prospectus/Proxy Statement explains concisely the information
about the Acquiring Fund that corresponds to your Voting Fund that you should
know before voting on the Reorganization. Please read it carefully and keep it
for future reference. Additional information concerning the Funds and the
Reorganizations is contained in the documents described below, all of which have
been filed with the Securities and Exchange Commission ("SEC"):
o Prospectuses of First American Investment Funds, Inc., related to
the designated share classes of each Voting Fund and Acquiring Fund,
dated January 28, 2002, as supplemented on February 20, 2002,
February 22, 2002, and, with respect to Science & Technology Fund
and Technology Fund, on February 28, 2002. THIS DOCUMENT ACCOMPANIES
THIS PROSPECTUS/PROXY STATEMENT.
o Annual report of First American Investment Funds, Inc., related to
each Voting Fund and Acquiring Fund, for the year ended September
30, 2001. THIS DOCUMENT IS AVAILABLE UPON REQUEST AND WITHOUT CHARGE
IF YOU WRITE OR CALL FIRST AMERICAN INVESTMENT FUNDS, INC. AT THE
ADDRESS OR TELEPHONE NUMBER ON THE COVER PAGE OF THIS
PROSPECTUS/PROXY STATEMENT.
o Statement of Additional Information of First American Investment
Funds, Inc., related to each Voting Fund and Acquiring Fund, dated
January 28, 2002. THIS DOCUMENT IS AVAILABLE UPON REQUEST AND
WITHOUT CHARGE IF YOU WRITE OR CALL FIRST AMERICAN INVESTMENT FUNDS,
INC. AT THE ADDRESS OR TELEPHONE NUMBER ON THE COVER PAGE OF THIS
PROSPECTUS/PROXY STATEMENT.
o Statement of Additional Information dated _____________, 2002 which
relates to this Prospectus/Proxy Statement and the Reorganizations.
THIS DOCUMENT IS AVAILABLE UPON REQUEST AND WITHOUT CHARGE IF YOU
WRITE OR CALL FIRST AMERICAN INVESTMENT FUNDS,
INC. AT THE ADDRESS OR TELEPHONE NUMBER ON THE COVER PAGE OF THIS
PROSPECTUS/PROXY STATEMENT.
You can also obtain copies of any of these documents without charge on
the EDGAR database on the SEC's Internet site at http://www.sec.gov. Copies are
available for a fee by electronic request at the following E-mail address:
publicinfo@sec.gov, or from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549.
Information relating to each Voting Fund and Acquiring Fund contained
in the prospectuses of FAIF dated January 28, 2002, as supplemented (SEC File
No. 811-05309), is incorporated by reference into this document. (This means
that such information is legally considered to be part of this Prospectus/Proxy
Statement.) As indicated above, you will receive a copy of this document with
this Prospectus/Proxy Statement. The Statement of Additional Information dated
__________________, 2002 relating to this Prospectus/Proxy Statement and the
Reorganizations is also incorporated by reference into this document.
3
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OR PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS/PROXY STATEMENT. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING
A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
AN INVESTMENT IN AN ACQUIRING FUND:
o IS NOT A DEPOSIT OF, OR GUARANTEED BY, ANY BANK
o IS NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY
o IS NOT ENDORSED BY U.S. BANK NATIONAL ASSOCIATION, U.S. BANCORP ASSET
MANAGEMENT, INC. OR ANY OF THEIR AFFILIATES OR ANY OTHER BANK OR GOVERNMENT
AGENCY
o INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF THE PURCHASE PRICE OF
YOUR ORIGINAL INVESTMENT
4
TABLE OF CONTENTS
Page
SUMMARY 6
Why are the Reorganizations being proposed?...........................6
What are the key features of the Reorganizations?.....................6
After the Reorganizations, what shares will I own?....................6
Will I have to pay Federal income taxes as a result of the
Reorganizations?......................................................7
How do FAIF's Directors recommend that I vote?........................7
How do the Funds' investment objectives, principal investment
strategies and risks compare?.........................................8
Who will manage my Fund after the Reorganizations?....................8
How do the Funds' fees and expenses compare?..........................8
How do the Funds' performance records compare?.......................15
Will I be able to purchase and redeem shares, exchange my shares
and receive dividends and distributions the same way?................17
What will the management fees be after the Reorganizations?..........18
COMPARATIVE INFORMATION ON INVESTMENT OBJECTIVES, STRATEGIES AND RISKS 18
ADDITIONAL INFORMATION ABOUT THE FUNDS 27
Distribution of Shares...............................................27
Purchase and Redemption Procedures...................................28
Exchange Privileges..................................................29
Dividends and Distributions..........................................30
Additional Information...............................................30
INFORMATION ABOUT THE REORGANIZATIONS 30
Reasons for the Reorganizations......................................30
Agreements and Plans of Reorganization...............................32
Federal Income Tax Consequences......................................33
Pro-forma Capitalization.............................................34
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS 37
VOTING INFORMATION CONCERNING THE MEETING 37
Shareholder Information..............................................39
Control Persons and Principal Holders of Securities..................40
FINANCIAL STATEMENTS AND EXPERTS 40
OTHER BUSINESS 40
EXHIBIT A Form of Agreement and Plan of Reorganization......................A-1
EXHIBIT B Management Discussion of Fund Performance.........................B-1
5
SUMMARY
This section summarizes the primary features and consequences of the
Reorganizations. It may not contain all of the information that is important to
you. To understand the Reorganizations, you should read this entire
Prospectus/Proxy Statement and accompanying exhibit.
This summary is qualified in its entirety by reference to the
additional information contained elsewhere in this Prospectus/Proxy Statement,
the prospectus and Statement of Additional Information relating to the Funds and
a form of the Agreements and Plans of Reorganization, which is attached to this
Prospectus/Proxy Statement as Exhibit A.
WHY ARE THE REORGANIZATIONS BEING PROPOSED?
For the reasons set forth below under "Information About the
Reorganizations - Reasons for the Reorganizations," FAIF's directors, including
such directors who are not "interested persons" (the "Disinterested Directors"),
as such term is defined in the 1940 Act, have concluded that the Reorganizations
would be in the best interests of the shareholders of the Voting Funds and that
the interests of each Voting Fund's existing shareholders would not be diluted
as a result of the transactions contemplated by the Reorganizations. Therefore,
the Board of Directors has approved the Reorganizations and has submitted the
Plan for approval by each Voting Fund's shareholders.
WHAT ARE THE KEY FEATURES OF THE REORGANIZATIONS?
Each Plan sets forth the key features of the Reorganization to which it
relates. The Reorganizations are expected to be completed on or about May 20,
2002. Exhibit A to this Prospectus/Proxy Statement is a form of the Agreement
and Plan of Reorganization, which sets forth the terms and conditions of each
Plan. Each Plan generally provides for the following:
o the transfer of all of the assets of the Voting Fund to the
corresponding Acquiring Fund in exchange for shares of the
corresponding Acquiring Fund;
o the assumption by the corresponding Acquiring Fund of the identified
liabilities of the Voting Fund being acquired (the identified
liabilities consist only of those liabilities reflected on a
statement of assets and liabilities of the Voting Fund determined
immediately preceding the Reorganization); and
o the liquidation of the Voting Fund by distribution of shares of the
corresponding Acquiring Fund to the Voting Fund's shareholders.
6
AFTER THE REORGANIZATIONS, WHAT SHARES WILL I OWN?
If the Reorganizations are approved, you will become a shareholder of
the Acquiring Fund listed opposite your Voting Fund's name in the table below.
You will receive shares of the Acquiring Fund that are of the same class, and
the same total value, as the Voting Fund shares you hold as of the close of
business on the day of the Reorganizations.
- --------------------------------------- ----------------------------------------
Voting Fund Acquiring Fund
----------- --------------
- --------------------------------------- ----------------------------------------
Capital Growth Fund Large Cap Growth Fund
- --------------------------------------- ----------------------------------------
Relative Value Fund Large Cap Value Fund
- --------------------------------------- ----------------------------------------
Growth & Income Fund Equity Income Fund
- --------------------------------------- ----------------------------------------
Science & Technology Fund Technology Fund
- --------------------------------------- ----------------------------------------
WILL I HAVE TO PAY FEDERAL INCOME TAXES AS A RESULT OF THE
REORGANIZATIONS?
The transactions are intended to qualify as tax-free reorganizations
for Federal income tax purposes. Assuming the Reorganizations qualify for such
treatment, shareholders would not recognize taxable gain or loss as a result of
the Reorganizations. The holding period and aggregate tax basis of Acquiring
Fund shares that are received by each Voting Fund shareholder will be the same
as the holding period and aggregate tax basis of the Voting Fund shares
previously held by such shareholders. In addition, the holding period and tax
basis for the assets of a Voting Fund in the hands of the corresponding
Acquiring Fund as a result of a Reorganization will be the same as in the hands
of the Voting Fund immediately prior to the Reorganization.
As a condition to the closing of the Reorganizations, the Voting Funds
will receive an opinion of counsel to the effect that the Reorganizations will
qualify as tax-free reorganizations for Federal income tax purposes. You should
separately consider any state, local and other tax consequences in consultation
with your tax advisor. Opinions of counsel are not binding on the IRS or the
courts. See "Information About the Reorganizations - Federal Income Tax
Consequences" below for more detailed information about Federal income tax
considerations.
HOW DO FAIF'S DIRECTORS RECOMMEND THAT I VOTE?
FAIF's directors, including the Disinterested Directors, have concluded
that the Reorganizations would be in the best interest of the shareholders of
each applicable Voting Fund, and that your interests will not be diluted as a
result of the Reorganizations. Accordingly, FAIF's directors have submitted the
Plans for the approval of the shareholders of each applicable Voting Fund.
Approval of a Reorganization will require the affirmative vote of a
majority of the outstanding shares of each Voting Fund, with all classes of the
Voting Fund voting together and not by class.
7
FAIF'S DIRECTORS RECOMMEND THAT YOU VOTE FOR THE PROPOSED
REORGANIZATION WHICH APPLIES TO YOUR VOTING FUND.
The directors of FAIF have also approved the Plans on behalf of the
Acquiring Funds.
HOW DO THE FUNDS' INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT
STRATEGIES AND RISKS COMPARE?
The investment objectives and policies of each Voting Fund are similar,
and in some cases identical, to those of the corresponding Acquiring Fund. See
"Comparative Information on Investment Objectives, Strategies and Risks" below
for a detailed summary of comparative investment objectives, investment
strategies and risks of each Voting Fund compared with those of the Acquiring
Fund into which it will be combined.
WHO WILL MANAGE MY FUND AFTER THE REORGANIZATIONS?
Each Voting Fund and the corresponding Acquiring Fund have the same
investment adviser, U.S. Bancorp Asset Management, Inc. (the "Adviser").
Pursuant to an Investment Advisory Agreement with FAIF, the Adviser manages the
Funds' business and investment activities, subject to the authority of FAIF's
Board of Directors. A team of portfolio managers employed by the Adviser will
manage each combined Acquiring Fund. The Voting Funds and the Acquiring Funds
also have the same co-administrators (U.S. Bancorp Asset Management, Inc. and
its affiliate U.S. Bancorp Fund Services, LLC) and the same distributor (Quasar
Distributors, LLC).
Facts about the Adviser:
-----------------------------------------------------------------------
o The Adviser is a subsidiary of U.S. Bank National Association
(which, in turn, is a subsidiary of U.S. Bancorp, formerly Firstar
Corporation).
o The Adviser succeeded First American Asset Management ("FAAM"), a
division of U.S. Bank National Association, on May 1, 2001, when the
businesses and assets of FAAM and Firstar Investment Research &
Management Company, LLC ("FIRMCO"), a subsidiary of U.S. Bancorp,
were combined to form the Adviser.
o The Adviser and its affiliates had assets under management of more
than $121 billion as of December 31, 2001.
o The Adviser is located at 800 Nicollet Mall, Minneapolis, Minnesota
55402.
-----------------------------------------------------------------------
HOW DO THE FUNDS' FEES AND EXPENSES COMPARE?
Each Voting Fund and each corresponding Acquiring Fund currently offer
five classes of shares (Classes A, B, C, S and Y). The following tables allow
you to compare the various fees and expenses that you may pay for buying and
holding shares of each Voting Fund and the corresponding Acquiring Fund. The
"Pro Forma" row or column in each table shows you what the fees and expenses are
estimated to be assuming the Reorganizations take place. As reflected in the
tables, the sales charge structure, as well as the contractual fee rates for
management fees and distribution and service (12b-1) fees, are identical for
each Voting Fund and the corresponding Acquiring Fund. Shareholders will not pay
any initial or deferred sales charge in connection with the Reorganizations.
8
SHAREHOLDER FEES
Shareholders pay the following fees directly when they buy or sell
shares. As reflected in the table, the sales charge structure for each Voting
Fund, Acquiring Fund and Pro Forma Combined Fund is identical. This sales charge
structure will not be affected by the Reorganizations.
ALL FUNDS AND PRO FORMA COMBINED FUNDS
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
SHAREHOLDER FEES Class A Class B Class C Class S Class Y
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
Maximum Sales Charge (Load) 5.50% 5.00% 2.00% None None
Maximum sales charge (load) imposed on purchases as a 5.50%(1) 0.00% 1.00% None None
% of offering price
Maximum deferred sales charge (load) as a % of 0.00%(2) 5.00% 1.00% None None
original purchase price or redemption proceeds,
whichever is less
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
Annual Maintenance Fee(3) $25 $25 $25 None None
only charged to accounts with balances below $500
- ------------------------------------------------------------ ---------- ---------- ---------- ---------- -----------
(1)Certain investors may qualify for reduced sales charges. Generally,
Class A share investments will qualify for a reduced sales charge if
the amount of the purchase is from $50,000 to $999,999, and the sales
charge will be eliminated if the purchase is $1 million or more.
(2)Class A share investments of $1 million or more on which no
front-end sales charge is paid may be subject to a 1% contingent
deferred sales charge if they are sold within 18 months of purchase.
(3) Each Fund reserves the right to charge your account an annual
maintenance fee of $25 if your balance falls below $500 as a result of
selling or exchanging shares.
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
Shareholders pay the following fees and expenses when they hold shares.
These fees are paid indirectly since they are deducted from fund assets.
CAPITAL GROWTH FUND AND LARGE CAP GROWTH FUND
- -------------------------------------- -------------- ------------- -------------- ------------- -------------
ANNUAL FUND OPERATING
EXPENSES Class A Class B Class C Class S Class Y
- -------------------------------------- -------------- ------------- -------------- ------------- -------------
Management Fees
Capital Growth Fund 0.65% 0.65% 0.65% 0.65% 0.65%
Large Cap Growth Fund 0.65% 0.65% 0.65% 0.65% 0.65%
Pro Forma Combined Fund 0.65% 0.65% 0.65% 0.65% 0.65%
- -------------------------------------- -------------- ------------- -------------- ------------- -------------
Distribution and Service (12b-1) Fees
Capital Growth Fund 0.25% 1.00% 1.00% None None
Large Cap Growth Fund 0.25% 1.00% 1.00% None None
Pro Forma Combined Fund 0.25% 1.00% 1.00% None None
- -------------------------------------- -------------- ------------- -------------- ------------- -------------
Other Expenses(1)
Capital Growth Fund 0.37% 0.37% 0.37% 0.62% 0.37%
Large Cap Growth Fund 0.33% 0.33% 0.33% 0.58% 0.33%
Pro Forma Combined Fund 0.32% 0.32% 0.32% 0.57% 0.32%
- -------------------------------------- -------------- ------------- -------------- ------------- -------------
9
- -------------------------------------- -------------- ------------- -------------- ------------- -------------
Total Annual Fund Operating Expenses
Capital Growth Fund 1.27% 2.02% 2.02% 1.27% 1.02%
Large Cap Growth Fund 1.23% 1.98% 1.98% 1.23% 0.98%
Pro Forma Combined Fund 1.22% 1.97% 1.97% 1.22% 0.97%
- -------------------------------------- -------------- ------------- -------------- ------------- -------------
Waiver of Fund Expenses
Capital Growth Fund(2) (0.12)% (0.12)% (0.12)% (0.12)% (0.12)%
Large Cap Growth Fund(2) (0.08)% (0.08)% (0.08)% (0.08)% (0.08)%
Pro Forma Combined Fund(3) (0.07)% (0.07)% (0.07)% (0.07)% (0.07)%
- -------------------------------------- -------------- ------------- -------------- ------------- -------------
Net Expenses
Capital Growth Fund(2) 1.15% 1.90% 1.90% 1.15% 0.90%
Large Cap Growth Fund(2) 1.15% 1.90% 1.90% 1.15% 0.90%
Pro Forma Combined Fund(3) 1.15% 1.90% 1.90% 1.15% 0.90%
- -------------------------------------- -------------- ------------- -------------- ------------- -------------
(1)Other expenses includes a 0.25% shareholder servicing fee for
Class S shares of each Fund.
(2)Certain service providers have contractually agreed to waive fees
and reimburse other fund expenses until September 30, 2002, so that
Total Fund Operating Expenses do not exceed 1.15%, 1.90%, 1.90%, 1.15%
and 0.90%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 in the discretion of
the service providers.
(3)In connection with the Reorganizations, the Adviser and FAIF have
entered into an expense limitation agreement which provides that the
Adviser will contractually limit Total Annual Fund Operating Expenses
to not more than 1.15%, 1.90%, 1.90%, 1.15% and 0.90%, respectively,
for Class A, Class B, Class C, Class S and Class Y shares for the
period through June 30, 2003 (after which such expense limitations may
be discontinued or modified by the Adviser in its discretion).
RELATIVE VALUE FUND AND LARGE CAP VALUE FUND
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
ANNUAL FUND OPERATING
EXPENSES Class A Class B Class C Class S Class Y
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Management Fees
Relative Value Fund 0.65% 0.65% 0.65% 0.65% 0.65%
Large Cap Value Fund 0.65% 0.65% 0.65% 0.65% 0.65%
Pro Forma Combined Fund 0.65% 0.65% 0.65% 0.65% 0.65%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Distribution and Service (12b-1) Fees
Relative Value Fund 0.25% 1.00% 1.00% None None
Large Cap Value Fund 0.25% 1.00% 1.00% None None
Pro Forma Combined Fund 0.25% 1.00% 1.00% None None
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Other Expenses(1)
Relative Value Fund 0.30% 0.30% 0.30% 0.55% 0.30%
Large Cap Value Fund 0.28% 0.28% 0.28% 0.53% 0.28%
Pro Forma Combined Fund 0.28% 0.28% 0.28% 0.53% 0.28%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Total Annual Fund Operating Expenses
Relative Value Fund 1.20% 1.95% 1.95% 1.20% 0.95%
Large Cap Value Fund 1.18% 1.93% 1.93% 1.18% 0.93%
Pro Forma Combined Fund 1.18% 1.93% 1.93% 1.18% 0.93%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Waiver of Fund Expenses
Relative Value Fund(2) (0.05)% (0.05)% (0.05)% (0.05)% (0.05)%
Large Cap Value Fund(2) (0.03)% (0.03)% (0.03)% (0.03)% (0.03)%
Pro Forma Combined Fund(3) (0.03)% (0.03)% (0.03)% (0.03)% (0.03)%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Net Expenses
Relative Value Fund(2) 1.15% 1.90% 1.90% 1.15% 0.90%
Large Cap Value Fund(2) 1.15% 1.90% 1.90% 1.15% 0.90%
Pro Forma Combined Fund(3) 1.15% 1.90% 1.90% 1.15% 0.90%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
(1)Other expenses includes a 0.25% shareholder servicing fee for
Class S shares of each Fund.
(2)Certain service providers have contractually agreed to waive fees
and reimburse other fund expenses until September 30, 2002, so that
Total Fund Operating Expenses do not exceed 1.15%, 1.90%, 1.90%, 1.15%
and 0.90%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 in the discretion of
the service providers.
10
(3)In connection with the Reorganizations, the Adviser and FAIF have
entered into an expense limitation agreement which provides that the
Adviser will contractually limit Total Annual Fund Operating Expenses
to not more than 1.15%, 1.90%, 1.90%, 1.15% and 0.90%, respectively,
for Class A, Class B, Class C, Class S and Class Y shares for the
period through June 30, 2003 (after which such expense limitations may
be discontinued or modified by the Adviser in its discretion).
GROWTH & INCOME FUND AND EQUITY INCOME FUND
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
ANNUAL FUND OPERATING
EXPENSES Class A Class B Class C Class S Class Y
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Management Fees
Growth & Income Fund 0.65% 0.65% 0.65% 0.65% 0.65%
Equity Income Fund 0.65% 0.65% 0.65% 0.65% 0.65%
Pro Forma Combined Fund 0.65% 0.65% 0.65% 0.65% 0.65%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Distribution and Service (12b-1) Fees
Growth & Income Fund 0.25% 1.00% 1.00% None None
Equity Income Fund 0.25% 1.00% 1.00% None None
Pro Forma Combined Fund 0.25% 1.00% 1.00% None None
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Other Expenses(1)
Growth & Income Fund 0.30% 0.30% 0.30% 0.55% 0.30%
Equity Income Fund 0.30% 0.30% 0.30% 0.55% 0.30%
Pro Forma Combined Fund 0.29% 0.29% 0.29% 0.54% 0.29%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Total Annual Fund Operating Expenses
Growth & Income Fund 1.20% 1.95% 1.95% 1.20% 0.95%
Equity Income Fund 1.20% 1.95% 1.95% 1.20% 0.95%
Pro Forma Combined Fund 1.19% 1.94% 1.94% 1.19% 0.94%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Waiver of Fund Expenses
Growth & Income Fund(2) (0.05)% (0.05)% (0.05)% (0.05)% (0.05)%
Equity Income Fund(2) (0.05)% (0.05)% (0.05)% (0.05)% (0.05)%
Pro Forma Combined Fund(3) (0.04)% (0.04)% (0.04)% (0.04)% (0.04)%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Net Expenses
Growth & Income Fund(2) 1.15% 1.90% 1.90% 1.15% 0.90%
Equity Income Fund(2) 1.15% 1.90% 1.90% 1.15% 0.90%
Pro Forma Combined Fund(3) 1.15% 1.90% 1.90% 1.15% 0.90%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
(1)Other expenses includes a 0.25% shareholder servicing fee for
Class S shares of each Fund.
(2)Certain service providers have contractually agreed to waive fees
and reimburse other fund expenses until September 30, 2002, so that
Total Fund Operating Expenses do not exceed 1.15%, 1.90%, 1.90%, 1.15%
and 0.90%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 in the discretion of
the service providers.
(3)In connection with the Reorganizations, the Adviser and FAIF have
entered into an expense limitation agreement which provides that the
Adviser will contractually limit Total Annual Fund Operating Expenses
to not more than 1.15%, 1.90%, 1.90%, 1.15% and 0.90%, respectively,
for Class A, Class B, Class C, Class S and Class Y shares for the
period through June 30, 2003 (after which such expense limitations may
be discontinued or modified by the Adviser in its discretion).
11
SCIENCE & TECHNOLOGY FUND AND TECHNOLOGY FUND
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
ANNUAL FUND OPERATING
EXPENSES Class A Class B Class C Class S Class Y
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Management Fees
Science & Technology Fund 0.70% 0.70% 0.70% 0.70% 0.70%
Technology Fund 0.70% 0.70% 0.70% 0.70% 0.70%
Pro Forma Combined Fund 0.70% 0.70% 0.70% 0.70% 0.70%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Distribution and Service (12b-1) Fees
Science & Technology Fund 0.25% 1.00% 1.00% None None
Technology Fund 0.25% 1.00% 1.00% None None
Pro Forma Combined Fund 0.25% 1.00% 1.00% None None
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Other Expenses(1)
Science & Technology Fund 0.71% 0.71% 0.71% 0.96% 0.71%
Technology Fund 0.63% 0.63% 0.63% 0.88% 0.63%
Pro Forma Combined Fund 0.46% 0.46% 0.46% 0.77% 0.46%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Total Annual Fund Operating Expenses
Science & Technology Fund 1.66% 2.41% 2.41% 1.66% 1.41%
Technology Fund 1.58% 2.33% 2.33% 1.58% 1.33%
Pro Forma Combined Fund 1.37% 2.16% 2.16% 1.41% 1.16%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Waiver of Fund Expenses
Science & Technology Fund(2) (0.43)% (0.43)% (0.43)% (0.43)% (0.43)%
Technology Fund(2) (0.35)% (0.35)% (0.35)% (0.35)% (0.35)%
Pro Forma Combined Fund(3) (0.18)% (0.18)% (0.18)% (0.18)% (0.18)%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
Net Expenses
Science & Technology Fund(2) 1.23% 1.98% 1.98% 1.23% 0.98%
Technology Fund(2) 1.23% 1.98% 1.98% 1.23% 0.98%
Pro Forma Combined Fund(3) 1.23% 1.98% 1.98% 1.23% 0.98%
- ------------------------------------------- -------------- ------------- -------------- ------------- -------------
(1)Other expenses includes a 0.25% shareholder servicing fee for
Class S shares of each Fund.
(2)Certain service providers have contractually agreed to waive fees
and reimburse other fund expenses until September 30, 2002, so that
Total Fund Operating Expenses do not exceed 1.23%, 1.98%, 1.98%, 1.23%
and 0.98%, respectively, for Class A, Class B, Class C, Class S and
Class Y shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 in the discretion of
the service providers.
(3)In connection with the Reorganizations, the Adviser and FAIF have
entered into an expense limitation agreement which provides that the
Adviser will contractually limit Total Annual Fund Operating Expenses
to not more than 1.23%, 1.98%, 1.98%, 1.23% and 0.98%, respectively,
for Class A, Class B, Class C, Class S and Class Y shares for the
period through June 30, 2003 (after which such expense limitations may
be discontinued or modified by the Adviser in its discretion).
EXAMPLES OF FUND EXPENSES
The tables below show examples of the total expenses you would pay on a
$10,000 investment over one-, three-, five- and ten-year periods. The examples
are intended to help you compare the cost of investing in each Voting Fund and
corresponding Acquiring Fund, as well as the combined fund on a pro forma
(estimated) basis, assuming the Reorganizations take place. The examples assume
a 5% average annual return and that you reinvest all of your dividends. The
examples also assume that total annual operating expenses remain the same
throughout all periods but that the Adviser discontinues the expense limitation
agreement for each Voting Fund and Acquiring Fund immediately after September
30, 2002, and for each pro forma combined fund immediately after June 30, 2003.
THE EXAMPLES ARE FOR ILLUSTRATION ONLY, AND YOUR ACTUAL COSTS MAY BE HIGHER OR
LOWER.
12
CAPITAL GROWTH FUND AND LARGE CAP GROWTH FUND
- --------------------------------- --------------- --------------- --------------- --------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------- --------------- --------------- --------------- --------------
Capital Growth Fund
Class A $ 661 $ 919 $1,197 $1,988
Class B(1) $ 693 $1,021 $1,276 $2,140
Class B(2) $ 193 $ 621 $1,076 $2,140
Class C(1) $ 391 $ 715 $1,165 $2,413
Class C(2) $ 291 $ 715 $1,165 $2,413
Class S $ 117 $ 391 $ 685 $1,522
Class Y $ 92 $ 312 $ 551 $1,236
- --------------------------------- --------------- --------------- --------------- --------------
Large Cap Growth Fund
Class A $ 661 $ 911 $1,181 $1,949
Class B(1) $ 693 $1,013 $1,259 $2,102
Class B(2) $ 193 $ 613 $1,059 $2,102
Class C(1) $ 391 $ 707 $1,149 $2,375
Class C(2) $ 291 $ 707 $1,149 $2,375
Class S $ 117 $ 382 $ 668 $1,480
Class Y $ 92 $ 304 $ 534 $1,193
- --------------------------------- --------------- --------------- --------------- --------------
Pro Forma Combined Fund
Class A $ 661 $ 904 $1,172 $1,936
Class B(1) $ 693 $1,006 $1,251 $2,092
Class B(2) $ 193 $ 606 $1,051 $2,092
Class C(1) $ 391 $ 700 $1,140 $2,363
Class C(2) $ 291 $ 700 $1,140 $2,363
Class S $ 117 $ 375 $ 658 $1,467
Class Y $ 92 $ 297 $ 524 $1,179
- --------------------------------- --------------- --------------- --------------- --------------
(1)Assumes redemption at the end of each period.
(2)Assumes no redemption at the end of each period.
RELATIVE VALUE FUND AND LARGE CAP VALUE FUND
- --------------------------------- --------------- --------------- --------------- --------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------- --------------- --------------- --------------- --------------
Relative Value Fund
Class A $ 661 $ 905 $1,169 $1,920
Class B(1) $ 693 $1,007 $1,247 $2,073
Class B(2) $ 193 $ 607 $1,047 $2,073
Class C(1) $ 391 $ 701 $1,137 $2,347
Class C(2) $ 291 $ 701 $1,137 $2,347
Class S $ 117 $ 376 $ 655 $1,449
Class Y $ 92 $ 298 $ 520 $1,161
- --------------------------------- --------------- --------------- --------------- --------------
Large Cap Value Fund
Class A $ 661 $ 901 $1,160 $1,900
Class B(1) $ 693 $1,003 $1,239 $2,054
Class B(2) $ 193 $ 603 $1,039 $2,054
Class C(1) $ 391 $ 697 $1,128 $2,328
Class C(2) $ 291 $ 697 $1,128 $2,328
Class S $ 117 $ 372 $ 646 $1,429
Class Y $ 92 $ 293 $ 512 $1,140
- --------------------------------- --------------- --------------- --------------- --------------
Pro Forma Combined Fund
Class A $ 661 $ 899 $1,159 $1,899
Class B(1) $ 693 $1,001 $1,237 $2,055
Class B(2) $ 193 $ 601 $1,037 $2,055
Class C(1) $ 391 $ 695 $1,127 $2,327
Class C(2) $ 291 $ 695 $1,127 $2,327
Class S $ 117 $ 369 $ 644 $1,427
Class Y $ 92 $ 291 $ 510 $1,138
- --------------------------------- --------------- --------------- --------------- --------------
(1)Assumes redemption at the end of each period.
(2)Assumes no redemption at the end of each period.
13
GROWTH & INCOME FUND AND EQUITY INCOME FUND
- --------------------------------- --------------- --------------- --------------- --------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------- --------------- --------------- --------------- --------------
Growth & Income Fund
Class A $ 661 $ 905 $1,169 $1,920
Class B(1) $ 693 $1,007 $1,247 $2,073
Class B(2) $ 193 $ 607 $1,047 $2,073
Class C(1) $ 391 $ 701 $1,137 $2,347
Class C(2) $ 291 $ 701 $1,137 $2,347
Class S $ 117 $ 376 $ 655 $1,449
Class Y $ 92 $ 298 $ 520 $1,161
- --------------------------------- --------------- --------------- --------------- --------------
Equity Income Fund
Class A $ 661 $ 905 $1,169 $1,920
Class B(1) $ 693 $1,007 $1,247 $2,073
Class B(2) $ 193 $ 607 $1,047 $2,073
Class C(1) $ 391 $ 701 $1,137 $2,347
Class C(2) $ 291 $ 701 $1,137 $2,347
Class S $ 117 $ 376 $ 655 $1,449
Class Y $ 92 $ 298 $ 520 $1,161
- --------------------------------- --------------- --------------- --------------- --------------
Pro Forma Combined Fund
Class A $ 661 $ 900 $1,162 $1,908
Class B(1) $ 693 $1,002 $1,241 $2,064
Class B(2) $ 193 $ 602 $1,041 $2,064
Class C(1) $ 391 $ 696 $1,130 $2,336
Class C(2) $ 291 $ 696 $1,130 $2,336
Class S $ 117 $ 371 $ 648 $1,437
Class Y $ 92 $ 293 $ 573 $1,148
- --------------------------------- --------------- --------------- --------------- --------------
(1)Assumes redemption at the end of each period.
(2)Assumes no redemption at the end of each period.
SCIENCE & TECHNOLOGY FUND AND TECHNOLOGY FUND
- --------------------------------- --------------- --------------- --------------- --------------
1 Year 3 Years 5 Years 10 Years
- --------------------------------- --------------- --------------- --------------- --------------
Science & Technology Fund
Class A $ 668 $1,003 $1,361 $2,366
Class B(1) $ 701 $1,108 $1,442 $2,514
Class B(2) $ 201 $ 708 $1,242 $2,514
Class C(1) $ 399 $ 801 $1,330 $2,776
Class C(2) $ 299 $ 801 $1,330 $2,776
Class S $ 125 $ 480 $ 858 $1,922
Class Y $ 100 $ 402 $ 727 $1,647
- --------------------------------- --------------- --------------- --------------- --------------
Technology Fund
Class A $ 668 $ 988 $1,329 $2,291
Class B(1) $ 701 $1,092 $1,410 $2,440
Class B(2) $ 201 $ 692 $1,210 $2,440
Class C(1) $ 399 $ 785 $1,298 $2,704
Class C(2) $ 299 $ 785 $1,298 $2,704
Class S $ 125 $ 463 $ 825 $1,843
Class Y $ 100 $ 386 $ 693 $1,566
- --------------------------------- --------------- --------------- --------------- --------------
Pro Forma Combined Fund
Class A $ 668 $ 942 $1,250 $2,122
Class B(1) $ 701 $1,045 $1,330 $2,277
Class B(2) $ 201 $ 645 $1,130 $2,277
Class C(1) $ 399 $ 739 $1,219 $2,543
Class C(2) $ 299 $ 739 $1,219 $2,543
Class S $ 125 $ 415 $ 741 $1,663
Class Y $ 100 $ 337 $ 607 $1,381
- --------------------------------- --------------- --------------- --------------- --------------
(1)Assumes redemption at the end of each period.
(2)Assumes no redemption at the end of each period.
14
HOW DO THE FUNDS' PERFORMANCE RECORDS COMPARE?
The following tables set forth average annual total return information
for certain classes of each Fund for the periods indicated. The Voting Funds
have not offered Class C shares for a full calendar year and the Acquiring Funds
have not offered Class S shares for a full calendar year. Therefore, there is no
performance information presented in the table for such share classes of these
Funds. The different share classes of each Fund are invested in the same
portfolio of securities, and will have similar returns. However, Class Y shares
have lower operating expenses than the other classes, and will have higher
returns. Class S and Class A shares have similar operating expenses, and will
have similar returns. Class B and Class C shares have higher operating expenses,
and will have lower returns. PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE
RESULTS.
CAPITAL GROWTH FUND AND LARGE CAP GROWTH FUND
- ------------------------------- -----------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 2001
- ------------------------------- -----------------------------------------------------------------
Since
1 Year 5 Years 10 Years Inception(1)
- ------------------------------- -------------- ---------------- ---------------- ----------------
Capital Growth Fund(2)
Class A (28.23)% N/A N/A (25.40)%
Class B (28.42)% 5.58% N/A (11.58)%
Class C(3) N/A N/A N/A N/A
Class S (24.05)% N/A N/A (29.73)%
Class Y (23.86)% N/A N/A 3.07%
- ------------------------------- -------------- ---------------- ---------------- ----------------
Large Cap Growth Fund(4)
Class A (35.58)% 1.86% N/A 5.98%
Class B (35.73)% 2.00% N/A 8.88%
Class C (33.66)% N/A N/A (11.05)%
Class S(3) N/A N/A N/A N/A
Class Y (31.64)% 3.29% N/A 9.85%
- ------------------------------- -------------- ---------------- ---------------- ----------------
(1)Inception dates are March 31, 2000, December 12, 1994, September 24,
2001, December 11, 2000 and August 18, 1997, respectively, for Class A,
Class B, Class C, Class S and Class Y of Capital Growth Fund and
December 18, 1992, August 15, 1994, February 1, 1999, September 24,
2001 and August 2, 1994, respectively, for Class A, Class B, Class C,
Class S and Class Y of Large Cap Growth Fund.
(2)On September 24, 2001, Capital Growth Fund became the successor by
merger to Firstar Large Cap Growth Fund, a series of Firstar Funds,
Inc. Prior to the merger, the First American fund had no assets or
liabilities. Performance presented prior to September 24, 2001
represents that of Firstar Large Cap Growth Fund. Firstar Large Cap
Growth Fund was organized on December 11, 2001 and, prior to that, was
a separate series of Firstar Stellar Funds, Inc.
(3)No information is presented for Class C shares of Capital Growth
Fund or Class S shares of Large Cap Growth Fund because such shares
were not offered for a full calendar year.
(4)Prior to March 25, 1994, Boulevard Bank was the investment adviser
of the fund.
15
RELATIVE VALUE FUND AND LARGE CAP VALUE FUND
- ---------------------------- --------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 2001
- ---------------------------- ----------------- ---------------- ---------------- ----------------
Since
1 Year 5 Years 10 Years Inception(1)
- ---------------------------- ----------------- ---------------- ---------------- ----------------
Relative Value Fund(2)
Class A (10.56)% 7.70% 11.89% N/A
Class B (10.70)% N/A N/A (0.08)%
Class C(3) N/A N/A N/A N/A
Class S (5.37)% N/A N/A (6.35)%
Class Y (5.14)% N/A N/A 5.33%
- ---------------------------- ----------------- ---------------- ---------------- ----------------
Large Cap Value Fund
Class A (12.93)% 4.80% 10.79% N/A
Class B (13.17)% 4.97% N/A 10.95%
Class C (10.41)% N/A N/A (2.03)%
Class S(3) N/A N/A N/A N/A
Class Y (7.71)% 6.27% N/A 11.50%
- ---------------------------- ----------------- ---------------- ---------------- ----------------
(1)Inception dates are June 5, 1991, March 31, 1998, September 24,
2001, December 11, 2000 and August 18, 1997, respectively, for Class A,
Class B, Class C, Class S and Class Y of Relative Value Fund and
December 22, 1987, August 15, 1994, February 1, 1999, September 24,
2001 and February 4, 1994, respectively, for Class A, Class B, Class C,
Class S and Class Y of Large Cap Value Fund.
(2)On September 24, 2001, Relative Value Fund became the successor by
merger to Firstar Relative Value Fund, a series of Firstar Funds, Inc.
Prior to the merger, the First American fund had no assets or
liabilities. Performance presented prior to September 24, 2001
represents that of Firstar Relative Value Fund. Firstar Relative Value
Fund was organized on December 11, 2000 and, prior to that, was a
separate series of Firstar Stellar Funds, Inc.
(3)No information is presented for Class C shares of Relative Value
Fund or Class S shares of Large Cap Value Fund because such shares were
not offered for a full calendar year.
GROWTH & INCOME FUND AND EQUITY INCOME FUND
- ------------------------------- -----------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 2001
- ------------------------------- -----------------------------------------------------------------
Since
1 Year 5 Years 10 Years Inception(1)
- ------------------------------- -------------- ---------------- ---------------- ----------------
Growth & Income Fund(2)
Class A (20.97)% 6.92% N/A 13.05%
Class B (21.13)% N/A N/A (3.81)%
Class C(3) N/A N/A N/A N/A
Class S (16.38)% N/A N/A (15.26)%
Class Y (16.18)% 8.40% 11.01% N/A
- ------------------------------- -------------- ---------------- ---------------- ----------------
Equity Income Fund(4)
Class A (9.62)% 9.23% N/A 10.65%
Class B (9.30)% 9.42% N/A 12.06%
Class C (6.99)% N/A N/A 2.28%
Class S(3) N/A N/A N/A N/A
Class Y (4.25)% 10.78% N/A 13.07%
- ------------------------------- -------------- ---------------- ---------------- ----------------
(1)Inception dates are January 9, 1995, March 1, 1999, September 24,
2001, November 27, 2000 and December 29, 1989, respectively, for Class
A, Class B, Class C, Class S and Class Y of Growth & Income Fund and
December 18, 1992, August 15, 1994, February 1, 1999, September 24,
2001 and August 2, 1994, respectively, for Class A, Class B, Class C,
Class S and Class Y of Equity Income Fund.
(2)On September 24, 2001, Growth & Income Fund became the successor by
merger to Firstar Growth & Income Fund, a series of Firstar Funds, Inc.
Prior to the merger, the First American fund had no assets or
liabilities. Performance presented prior to September 24, 2001
represents that of Firstar Growth & Income Fund.
(3)No information is presented for Class C shares of Growth & Income
Fund or Class S shares of Equity Income Fund because such shares were
not offered for a full calendar year.
(4)Prior to March 25, 1994, Boulevard Bank was the investment adviser
of the fund.
16
SCIENCE & TECHNOLOGY FUND AND TECHNOLOGY FUND
- ------------------------------- -----------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 2001
- ------------------------------- -------------- ---------------- ---------------- ----------------
Since
1 Year 5 Years 10 Years Inception(1)
- ------------------------------- -------------- ---------------- ---------------- ----------------
Science & Technology Fund(2)
Class A (54.30)% N/A N/A (49.64)%
Class B (54.39)% N/A N/A (15.49)%
Class C(3) N/A N/A N/A N/A
Class S (51.63)% N/A N/A (58.65)%
Class Y (51.45)% N/A N/A (13.63)%
- ------------------------------- -------------- ---------------- ---------------- ----------------
Technology Fund
Class A (58.14)% (1.30)% N/A 9.54%
Class B (58.26)% (1.12)% N/A 10.25%
Class C (56.92)% N/A N/A (54.35)%
Class S(3) N/A N/A N/A N/A
Class Y (55.63)% 0.10% N/A 10.59%
- ------------------------------- -------------- ---------------- ---------------- ----------------
(1)Inception dates are March 31, 2000, August 8, 1999, September 24,
2001, December 11, 2000 and August 9, 1999, respectively, for Class A,
Class B, Class C, Class S and Class Y of Science & Technology Fund and
April 4, 1994, August 15, 1994, February 1, 2000, September 24, 2001
and April 4, 1994, respectively, for Class A, Class B, Class C, Class S
and Class Y of Technology Fund.
(2)On September 24, 2001, Science & Technology Fund became the
successor by merger to Firstar Science & Technology Fund, a series of
Firstar Funds, Inc. Prior to the merger, the First American fund had no
assets or liabilities. Performance presented prior to September 24,
2001 represents that of Firstar Science & Technology Fund. Firstar
Science & Technology Fund was organized on December 11, 2000 and, prior
to that, was a separate series of Firstar Stellar Funds, Inc.
(3)No information is presented for Class C shares of Science &
Technology Fund or Class S shares of Technology Fund because such
shares were not offered for a full calendar year.
Information concerning the factors that materially affected each Fund's
performance during the fiscal year ended September 30, 2001, is excerpted from
the Funds' annual report for such year and is included in Exhibit B to this
Prospectus/Proxy Statement.
WILL I BE ABLE TO PURCHASE AND REDEEM SHARES, EXCHANGE MY SHARES AND
RECEIVE DIVIDENDS AND DISTRIBUTIONS THE SAME WAY?
A Reorganization will not affect your right to purchase and redeem
shares, to exchange among other First American funds and to receive dividends
and distributions. For more information, see "Purchase and Redemption
Procedures," "Exchange Privileges" and "Dividends and Distributions" below.
WHAT WILL THE MANAGEMENT FEES BE AFTER THE REORGANIZATIONS?
For its management and supervision of the daily business affairs of
each combined Acquiring Fund, the Adviser will be entitled to receive a monthly
fee at the annual rate of 0.65% for Large Cap Growth Fund, Large Cap Value Fund
and Equity Income Fund, and an annual rate of 0.70% for Technology Fund, of each
Fund's respective average daily net assets.
17
The Adviser may, at its discretion, reduce or waive its fee or
reimburse each Fund for certain of its other expenses in order to reduce the
expense ratios. Unless otherwise agreed upon, the Adviser may also reduce or
cease these voluntary waivers and reimbursements at any time. For the period
from the date of the Reorganizations through June 30, 2003, the Adviser has
contractually agreed to limit the annual total operating expenses of each
combined Acquiring Fund in accordance with the amounts reflected in the tables
under "How do the Funds' fees and expenses compare?" above.
COMPARATIVE INFORMATION ON INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
The following tables are a comparison of each Voting Fund and the
corresponding Acquiring Fund with respect to their investment objectives and
principal investment strategies, as set forth in the prospectus and Statement of
Additional Information relating to the Funds. As more fully set forth below, the
investment objectives and policies of each Voting Fund are similar, and in some
cases identical, to those of the corresponding Acquiring Fund. Please carefully
review the following tables. The investment objectives, policies and
restrictions may have changed for certain funds since their inception. The
investment objectives set forth below reflect the investment objectives as of
the close of business on the day of the Reorganizations whether or not the
Reorganizations are approved.
COMPARATIVE INFORMATION - CAPITAL GROWTH FUND AND LARGE CAP GROWTH FUND
As set forth in the tables below, the investment strategies of Capital
Growth Fund and Large Cap Growth Fund are identical and the investment
objectives are substantially similar.
- ------------------- ------------------------------------------------------------
CAPITAL GROWTH FUND
- ------------------- ------------------------------------------------------------
Investment Maximize long-term returns.
Objective
- ------------------- ------------------------------------------------------------
Principal Under normal market conditions, the fund invests primarily
Investment (at least 80% of its total assets) in common stocks of
Strategies companies that have market capitalizations of at least $5
billion at the time of purchase. The Adviser selects
companies that it believes exhibit the potential for
superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the fund's total assets may be invested in
securities of foreign issuers which are either listed on a
United States stock exchange or represented by American
Depositary Receipts. These securities may be of the same
type as the fund's permissible investments in United States
domestic securities.
- ------------------- ------------------------------------------------------------
18
- ------------------- ------------------------------------------------------------
LARGE CAP GROWTH FUND
- ------------------- ------------------------------------------------------------
Investment Long-term growth of capital.
Objective
- ------------------- ------------------------------------------------------------
Principal Under normal market conditions, the fund invests primarily
Investment (at least 80% of its total assets) in common stocks of
Strategies companies that have market capitalizations of at least $5
billion at the time of purchase. The Adviser selects
companies that it believes exhibit the potential for
superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the fund's total assets may be invested in
securities of foreign issuers which are either listed on a
United States stock exchange or represented by American
Depositary Receipts. The securities may be of the same type
as the fund's permissible investments in United States
domestic securities.
- ------------------- ------------------------------------------------------------
Investments in Capital Growth Fund and Large Cap Growth Fund are
subject to "primary" risks that are similar to each other, including:
o Risks of Common Stocks. Stocks may decline significantly in price
over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular
company, industry, or sector of the market. In addition, growth
stocks and/or large-capitalization stocks may underperform the
market as a whole.
o Foreign Security Risk. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may
involve risks not associated with the securities of domestic
issuers, including the risks of adverse currency fluctuations and of
political or social instability or diplomatic developments that
could adversely affect the securities.
o Risks of Securities Lending. To generate additional income, each
fund may lend securities representing up to one-third of the value
of its total assets to broker-dealers, banks, and other
institutions. When a fund engages in this practice, it is subject to
the risk that the other party to a securities lending agreement will
default on its obligations.
o Risks of Derivative Instruments. Each fund may use derivatives such
as options, futures contracts, and swaps, although the use of these
instruments is not a principal investment strategy of either fund. A
fund will suffer a loss in connection with its use of derivatives if
securities prices do not move in the direction anticipated by the
Adviser when entering into the derivative instrument.
19
COMPARATIVE INFORMATION - RELATIVE VALUE FUND AND LARGE CAP VALUE FUND
As set forth in the tables below, while the investment objectives and
strategies of Relative Value Fund and Large Cap Value Fund are similar, there
are differences. These differences include the application of a minimum market
capitalization threshold to the common stocks in which the Large Cap Value Fund
primarily invests and, with respect to Relative Value Fund, the use of the
Russell 1000 Index to assess relative valuation as well as the use of
quantitative models, together with economic forecasts and other factors, to
assess and maintain risk.
- ------------------- ------------------------------------------------------------
RELATIVE VALUE FUND
- ------------------- ------------------------------------------------------------
Investment Maximize total return from capital appreciation plus income.
Objective
- ------------------- ------------------------------------------------------------
Principal Under normal market conditions, the fund invests primarily
Investment (at least 80% of its total assets) in common stocks of
Strategies companies that cover a broad range of industries and that
have market capitalizations of at least $5 billion at the
time of purchase. In selecting stocks, the Adviser invests
in companies that it believes:
o are undervalued relative to other securities in the
same industry or market.
o exhibit good or improving fundamentals.
o exhibit an identifiable catalyst that could close the
gap between market value and fair value over the next
one to two years.
Up to 25% of the fund's total assets may be invested in
securities of foreign issuers which are either listed on a
United States stock exchange or represented by American
Depositary Receipts. These securities may be of the same
type as the fund's permissible investments in United States
domestic securities.
- ------------------- ------------------------------------------------------------
- ------------------- ------------------------------------------------------------
LARGE CAP VALUE FUND
- ------------------- ------------------------------------------------------------
Investment Capital appreciation as a primary objective, with current
Objective income as a secondary objective.
- ------------------- ------------------------------------------------------------
Principal Under normal market conditions, the fund invests primarily
Investment (at least 80% of its total assets) in common stocks of
Strategies companies that cover a broad range of industries and that
have market capitalizations of at least $5 billion at the
time of purchase. In selecting stocks, the Adviser invests
in companies that it believes:
o are undervalued relative to other securities in the
same industry or market.
o exhibit good or improving fundamentals.
o exhibit an identifiable catalyst that could close the
gap between market value and fair value over the next
one to two years.
Up to 25% of the fund's total assets may be invested in
securities of foreign issuers which are either listed on a
United States stock exchange or represented by American
Depositary Receipts. These securities may be of the same
type as the fund's permissible investments in United States
domestic securities.
- ------------------- ------------------------------------------------------------
20
Investments in Relative Value Fund and Large Cap Value Fund are subject
to "primary" risks that are similar to each other, including:
o Risks of Common Stocks. Stocks may decline significantly in price
over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular
company, industry, or sector of the market. In addition, growth
stocks and/or large-capitalization stocks may underperform the
market as a whole.
o Foreign Security Risk. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may
involve risks not associated with the securities of domestic
issuers, including the risks of adverse currency fluctuations and of
political or social instability or diplomatic developments that
could adversely affect the securities.
o Risks of Securities Lending. To generate additional income, each
fund may lend securities representing up to one-third of the value
of its total assets to broker-dealers, banks, and other
institutions. When a fund engages in this practice, it is subject to
the risk that the other party to a securities lending agreement will
default on its obligations.
o Risks of Derivative Instruments. Each fund may use derivatives such
as options, futures contracts, and swaps, although the use of these
instruments is not a principal investment strategy of either fund. A
fund will suffer a loss in connection with its use of derivatives if
securities prices do not move in the direction anticipated by the
Adviser when entering into the derivative instrument.
COMPARATIVE INFORMATION - GROWTH & INCOME FUND AND EQUITY INCOME FUND
As set forth in the tables below, the investment objectives of Growth &
Income Fund and Equity Income Fund are identical and the investment strategies
are substantially similar.
- ------------------- ------------------------------------------------------------
GROWTH & INCOME FUND
- ------------------- ------------------------------------------------------------
Investment Long-term growth of capital and income.
Objective
- ------------------- ------------------------------------------------------------
Principal Under normal market conditions, the fund invests primarily
Investment (at least 80% of its total assets) in equity securities of
Strategies companies which the Adviser believes are characterized by:
o the ability to grow dividends at an above average
rate.
o the ability to finance expected growth.
o strong management.
The fund will attempt to maintain a dividend that will grow
quickly enough to keep pace with inflation. As a result,
dividend paying equity securities will generally represent
the core holdings of the fund. However, the fund also may
invest in non-dividend paying securities if the Adviser
believes they will help balance the portfolio. The fund's
equity securities include common stocks and preferred
stocks, and corporate debt securities which are convertible
into common stocks. All securities held by the fund will
provide current income at the time of purchase.
- ------------------- ------------------------------------------------------------
21
- ------------------- ------------------------------------------------------------
The fund invests up to 20% of its total assets in
convertible debt securities in pursuit of both long-term
growth of capital and income. The securities' conversion
features provide long-term growth potential, while interest
payments on the securities provide income. The fund may
invest in convertible debt securities without regard to
their ratings, and therefore may hold convertible debt
securities which are rated lower than investment grade.
Up to 25% of the fund's total assets may be invested in
securities of foreign issuers which are either listed on a
United States stock exchange or represented by American
Depositary Receipts. These securities may be of the same
type as the fund's permissible investments in United States
domestic securities.
- ------------------- ------------------------------------------------------------
- ------------------- ------------------------------------------------------------
EQUITY INCOME FUND
- ------------------- ------------------------------------------------------------
Investment Long-term growth of capital and income.
Objective
- ------------------- ------------------------------------------------------------
Principal Under normal market conditions, the fund invests primarily
Investment (at least 80% of its total assets) in equity securities of
Strategies companies which the Adviser believes are characterized by:
o the ability to pay above average dividends.
o the ability to finance expected growth.
o strong management.
The fund will attempt to maintain a dividend that will grow
quickly enough to keep pace with inflation. As a result,
higher-yielding equity securities will generally represent
the core holdings of the fund. However, the fund also may
invest in lower-yielding, higher growth equity securities if
the Adviser believes they will help balance the portfolio.
The fund's equity securities include common stocks and
preferred stocks, and corporate debt securities which are
convertible into common stocks. All securities held by the
fund will provide current income at the time of purchase.
The fund invests up to 20% of its total assets in
convertible debt securities in pursuit of both long-term
growth of capital and income. The securities' conversion
features provide long-term growth potential, while interest
payments on the securities provide income. The fund may
invest in convertible debt securities without regard to
their ratings, and therefore may hold convertible debt
securities which are rated lower than investment grade.
Up to 25% of the fund's total assets may be invested in
securities of foreign issuers which are either listed on a
United States stock exchange or represented by American
Depositary Receipts. These securities may be of the same
type as the fund's permissible investments in United States
domestic securities.
- ------------------- ------------------------------------------------------------
Investments in Growth & Income Fund and Equity Income Fund are subject
to "primary" risks that are similar to each other, including:
22
o Risks of Common Stocks. Stocks may decline significantly in price
over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular
company, industry, or sector of the market.
o Interest Rate Risk. Debt securities typically decrease in value when
interest rates rise. This risk is usually greater for longer-term
debt securities.
o Credit Risk. An issuer of debt securities may not make timely
principal or interest payments on its securities, or the other party
to a contract may default on its obligations.
o Risks of Non-Investment Grade Securities. Each fund may invest up to
20% of its total assets in securities which are rated lower than
investment grade. These securities, which are commonly called
"high-yield" securities or "junk bonds," generally have more
volatile prices and carry more risk to principal than investment
grade securities. High yield securities may be more susceptible to
real or perceived adverse economic conditions than investment grade
securities. In addition, the secondary trading market may be less
liquid.
o Foreign Security Risk. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may
involve risks not associated with the securities of domestic
issuers, including the risks of adverse currency fluctuations and of
political or social instability or diplomatic developments that
could adversely affect the securities.
o Risks of Securities Lending. To generate additional income, each
fund may lend securities representing up to one-third of the value
of its total assets to broker-dealers, banks, and other
institutions. When a fund engages in this practice, it is subject to
the risk that the other party to a securities lending agreement will
default on its obligations.
o Risks of Derivative Instruments. Each fund may use derivatives such
as options, futures contracts, and swaps, although the use of these
instruments is not a principal investment strategy of either fund. A
fund will suffer a loss in connection with its use of derivatives if
securities prices do not move in the direction anticipated by the
Adviser when entering into the derivative instrument.
COMPARATIVE INFORMATION - SCIENCE & TECHNOLOGY FUND AND TECHNOLOGY FUND
As set forth in the tables below, although the investment objectives of
Science & Technology Fund and Technology Fund are identical, there are
differences between the investment strategies. For example, Science and
Technology Fund focuses on companies principally engaged in science or
technology business activities, while Technology Fund invests primarily in
technology-related stocks. In addition, there may be differences in the average
or median market capitalizations of the funds' respective portfolios from time
to time.
23
- ------------------- ------------------------------------------------------------
SCIENCE & TECHNOLOGY FUND
- ------------------- ------------------------------------------------------------
Investment Maximize long-term growth of capital.
Objective
- ------------------- ------------------------------------------------------------
Principal Under normal market conditions, the fund invests primarily
Investment (at least 80% of its total assets) in equity securities of
Strategies companies principally engaged in science and technology
business activities. The fund considers science and
technology sectors to include companies whose primary
business is to provide goods or services in the fields of
science (e.g., health and medical) or technology (e.g.,
computers and communications). These may include companies
that:
o make or sell products used in health care.
o make or sell medical equipment and devices and related
technologies.
o make or sell software or information-based services
and consulting, communications and related services.
o design, manufacture or sell electronic components and
systems.
o research, design, develop, manufacture or distribute
products, processes or services that relate to
hardware technology within the computer industry.
o develop, produce or distribute products or services in
the computer, semi-conductor, electronics,
communications, health care and biotechnology sectors.
o engage in the development, manufacturing or sale of
communications services or communications equipment.
The Adviser believes that because of rapid advances in
technology and science, an investment in companies with
business operations in these areas will offer substantial
opportunities for long-term capital appreciation. The fund's
investments may include development stage companies
(companies that do not have significant revenues) and
small-and mid-capitalization companies.
Under certain market conditions, the fund may frequently
invest in companies at the time of their initial public
offering (IPO). By virtue of its size and institutional
nature, the Adviser may have greater access than individual
investors have to IPOs, including access to so-called "hot
issues" which are generally traded in the aftermarket at
prices in excess of the IPO price. IPOs will frequently be
sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in
securities of foreign issuers which are either listed on a
United States stock exchange or represented by American
Depositary Receipts. These securities may be of the same
type as the fund's permissible investments in United States
domestic securities.
- ------------------- ------------------------------------------------------------
- ------------------- ------------------------------------------------------------
TECHNOLOGY FUND
- ------------------- ------------------------------------------------------------
Investment Long-term growth of capital.
Objective
- ------------------- ------------------------------------------------------------
Principal Under normal market conditions, the fund invests primarily
Investment (at least 80% of its total assets) in common stocks of
Strategies companies which the Adviser believes either have, or will
develop, products, processes or services that will provide
or will benefit significantly from technological
innovations, advances and improvements. These may include:
- ------------------- ------------------------------------------------------------
24
- ------------------- ------------------------------------------------------------
o inexpensive computing power, such as personal
computers.
o improved methods of communications, such as satellite
transmission.
o technology related services such as internet related
marketing services.
The prime emphasis of the fund is to identify companies
which the Adviser believes are positioned to benefit from
technological advances in areas such as semiconductors,
computers, software, communications, and online services.
Companies in which the fund invests may include development
stage companies (companies that do not have significant
revenues) and small capitalization companies. The Adviser
will generally select companies that it believes exhibit
strong management teams, a strong competitive position,
above average growth in revenues and a sound balance sheet.
Under certain market conditions, the fund may frequently
invest in companies at the time of their initial public
offering (IPO). By virtue of its size and institutional
nature, the Adviser may have greater access than individual
investors have to IPOs, including access to so-called "hot
issues" which are generally traded in the aftermarket at
prices in excess of the IPO price. IPOs will frequently be
sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in
securities of foreign issuers which are either listed on a
United States stock exchange or represented by American
Depositary Receipts. These securities may be of the same
type as the fund's permissible investments in United States
domestic securities.
- ------------------- ------------------------------------------------------------
Investments in Science & Technology Fund and Technology Fund are
subject to "primary" risks that are similar to each other, including:
o Risks of Common Stocks. Stocks may decline significantly in price
over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular
company, industry, or sector of the market.
o Risks of Non-Diversification. Each fund is non-diversified. This
means that it may invest a larger portion of its assets in a limited
number of companies than a diversified fund. Because a relatively
high percentage of a fund's assets may be invested in the securities
of a limited number of issuers, and because those issuers will be in
the same or related economic sectors, the fund's portfolio
securities may be more susceptible to any single economic,
technological or regulatory occurrence than the portfolio securities
of a diversified fund.
o Risks of the Technology Sector. Because each fund has a primary
focus in technology related stocks, the funds are particularly
susceptible to risks associated with the technology industry.
Competitive pressures may have a significant effect on the financial
condition of companies in that industry.
25
o Risks of Development Stage, Small Cap and Mid-Cap Stocks. Stocks of
development stage and small capitalization companies involve
substantial risk. These stocks historically have experienced greater
price volatility than stocks of more established and larger
capitalization companies, and they may be expected to do so in the
future. While stocks of mid-cap companies may be slightly less
volatile than those of small-cap companies, they still involve
substantial risk and their prices may be subject to more abrupt or
erratic movements than those of larger, more established companies
of the market averages in general.
o Risks of Initial Public Offerings (IPOs). Companies involved in IPOs
generally have limited operating histories and prospects for future
profitability are uncertain. Prices of IPOs may also be unstable
because of the absence of a prior public market, the small number of
shares available for trading and limited investor information. IPOs
will frequently be sold within 12 months of purchase. This may
result in increased short-term capital gains, which will be taxable
to shareholders as ordinary income.
o Foreign Security Risk. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may
involve risks not associated with the securities of domestic
issuers, including the risks of adverse currency fluctuations and of
political or social instability or diplomatic developments that
could adversely affect the securities.
o Risks of Securities Lending. To generate additional income, each
fund may lend securities representing up to one-third of the value
of its total assets to broker-dealers, banks, and other
institutions. When a fund engages in this practice, it is subject to
the risk that the other party to a securities lending agreement will
default on its obligations.
o Risks of Derivative Instruments. Each fund may use derivatives such
as options, futures contracts, and swaps, although the use of these
instruments is not a principal investment strategy of either fund. A
fund will suffer a loss in connection with its use of derivatives if
securities prices do not move in the direction anticipated by the
Adviser when entering into the derivative instrument.
Science & Technology Fund's prospectus describes the following
additional primary risk associated with investing in that fund:
o Risks of the Science Sector. Because the fund has a primary focus in
science related stocks, it is particularly susceptible to risks
associated with the science industry. Competitive pressures may have
a significant effect on the financial condition of companies in that
industry.
ADDITIONAL COMPARISON INFORMATION
With respect to all of the Reorganizations, each Fund may invest some
or all of its assets in money market instruments or utilize other investment
strategies as a temporary defensive measure during, or in anticipation of,
adverse market conditions. This strategy, which would be employed only in
seeking to avoid losses, is inconsistent with the Funds' principal investment
objectives and strategies, and could result in lower returns and loss of market
opportunities. Although each Voting Fund and the corresponding Acquiring Fund
have similar investment objectives and strategies, the securities held by a
Voting Fund may be sold in significant amounts in order to comply with the
policies and investment practices of the corresponding Acquiring Fund in
connection with a Reorganization.
26
Each Fund has other investment policies, practices and restrictions
which, together with their related risks, are also set forth in the prospectus
and Statement of Additional Information of the Funds and the Statement of
Additional Information relating to this Prospectus/Proxy Statement.
ADDITIONAL INFORMATION ABOUT THE FUNDS
DISTRIBUTION OF SHARES
The distribution arrangements applicable to Class A, Class B, Class C,
Class S and Class Y shares of each Voting Fund are identical to the distribution
arrangements of Class A, Class B, Class C, Class S and Class Y shares,
respectively, of each Acquiring Fund. Quasar Distributors, LLC (the
"Distributor"), an affiliate of the Adviser, is the principal underwriter for
Class A, Class B, Class C, Class S and Class Y shares of each Fund. FAIF has
entered into distribution agreements with the Distributor with respect to each
class. Under Distribution Plans adopted by FAIF with respect to Class A, Class B
and Class C shares pursuant to Rule 12b-1 under the 1940 Act (each, a
"Distribution Plan"), Service Plans adopted by FAIF with respect to Class B and
Class C shares (each, a "Service Plan"), and a Shareholder Service Plan and
Agreement adopted by FAIF with respect to Class S shares (the "Shareholder
Service Plan and Agreement"), the Class A, Class B, Class C and Class S shares
of each Fund are authorized to pay the Distributor certain fees for expenses
incurred in connection with the continuous distribution of shares of the Fund
and/or for shareholder servicing as described below. There is no Distribution
Plan or Service Plan in effect for Class Y shares.
Class A Shares. FAIF has adopted a Distribution Plan for Class A shares
which provides that a Fund may pay to the Distributor a fee of up to 0.25% of
the average daily net assets attributable to Class A shares which the
distributor can use to compensate investment professionals, participating
institutions and "one-stop" mutual fund networks (institutions) for providing
ongoing shareholder services to shareholder accounts. For net asset value sales
of Class A shares on which the institution receives a commission, the
institution does not begin to receive its shareholder servicing fee until one
year after such Class A shares are sold. The Distribution Plan provides that all
or any portion of the total 0.25% fee may be payable as a shareholder servicing
fee and all or any portion of such total fee may be payable as a distribution
fee, as determined from time to time by FAIF's Board of Directors. Until further
action by FAIF's Board of Directors, all of the 0.25% fee is designated and
payable as a shareholder servicing fee.
Class B Shares. FAIF has adopted a Distribution Plan for Class B shares
which provides that a Fund may pay to the Distributor a distribution fee of up
to 0.75% of the average daily net assets attributable to Class B shares, which
the Distributor retains to finance the payment of sales commissions to
institutions which sell Class B shares. Distribution services and expenses
include compensating dealers for sales of Class B shares, payments for other
advertising and promotional expenses, preparation and distribution of sales
literature and expenses incurred in connection with the costs of printing and
mailing prospectuses, statements of additional information and shareholder
reports to prospective investors. The Service Plan for Class B shares further
provides that a Fund may pay the Distributor a shareholder servicing fee of up
to 0.25% of the average daily net assets attributable to Class B shares, which
the distributor can use to compensate investment professionals, participating
institutions and "one-stop" mutual fund networks (institutions) for providing
ongoing shareholder services to shareholder accounts. The Service Plan provides
compensation for personal, ongoing servicing and/or maintenance of shareholder
accounts, including administrative or accounting services.
27
Class C Shares. FAIF has adopted a Distribution Plan for Class C shares
which provides that a Fund may pay to the Distributor a distribution fee of up
to 0.75% of the average daily net assets attributable to Class C shares. The
Distributor may use the distribution fee to provide compensation to institutions
through which shareholders hold their shares beginning one year after purchase.
The Service Plan for Class C shares further provides that a Fund may pay the
Distributor a shareholder servicing fee of up to 0.25% of the average daily net
assets attributable to Class C shares, which the distributor can use to
compensate investment professionals, participating institutions and "one-stop"
mutual fund networks (institutions) for providing ongoing shareholder services
to shareholder accounts. The Service Plan provides compensation for personal,
ongoing servicing and/or maintenance of shareholder accounts, including
administrative or accounting services.
Class S Shares. FAIF has adopted a Shareholder Service Plan and
Agreement for Class S shares which provides that a Fund may pay to the
Distributor a shareholder servicing fee of up to 0.25% of the average daily net
assets attributable to Class S shares. The Distributor can use the shareholder
servicing fee to compensate investment professionals, participating institutions
and "one stop" mutual fund networks (institutions) for providing ongoing
shareholder services to shareholder accounts. The shareholder servicing fee may
be used to provide ongoing service and/or maintenance of shareholder accounts
including administrative or accounting services.
Class Y Shares. Class Y shares are not subject to any 12b-1
(distribution) or shareholder servicing fees.
In addition to distribution and/or shareholder servicing fees paid by
the Funds, the Adviser or one of its affiliates may make payments to investment
professionals and financial institutions, using their own assets, in exchange
for sales and/or administrative services performed on behalf of the investment
professional's or financial institution's customers.
PURCHASE AND REDEMPTION PROCEDURES
Purchases of Class A, Class B and Class C shares of the Funds are made
through dealers, at the net asset value per share next determined after receipt
of the purchase order by the Transfer Agent, plus a sales charge which may be
imposed (i) at the time of purchase (Class A or Class C shares) and/or (ii) on a
deferred basis (Class B or Class C shares).
The minimum initial investment for Class A, Class B and Class C shares
of each Fund is $1,000 ($250 for a retirement plan or a Uniform Gifts to Minors
Act/Uniform Transfers to Minors Act (UGMA/UTMA) account), and the minimum
subsequent investment is $100 for such classes ($25 for a retirement plan or an
UGMA/UTMA account). Class A shares of each Fund are sold with an initial sales
charge of up to 5.50% of the purchase price. Certain investors are eligible to
purchase Class A shares without a sales charge. Class B shares of each Fund are
sold without an initial sales charge but are subject to a contingent deferred
28
sales charge ("CDSC") (declining from 5% to 0% of the lower of the amount
invested or the redemption proceeds) which will be imposed on certain
redemptions made within six years of purchase. This CDSC will be waived under
certain conditions. Although Class B shares are subject to higher ongoing
distribution-related expenses than Class A shares, Class B shares will
automatically convert to Class A shares of the same Fund (which are subject to
lower ongoing distribution-related expenses) eight years after the calendar
month in which the purchase order for Class B shares was accepted. Class C
shares of each Fund are subject to an initial sales charge equal to 1% of the
purchase price and a 1% CDSC on redemptions within 18 months after purchase.
Like Class B shares, the CDSC will be waived under certain conditions. Also like
Class B shares, Class C shares are subject to higher ongoing
distribution-related expenses than Class A shares but, unlike Class B shares,
Class C shares do not convert to another class.
Class S and Class Y shares of each Fund are sold through banks and
other financial institutions that have entered into sales agreements with the
Distributor. Class S and Class Y shares are available to a limited group of
investors, and are typically held pursuant to an omnibus account arrangement
with the transfer agent. Class S and Class Y shares are sold at their net asset
value per share without either an initial sales charge or CDSC.
Shares of each Fund may be redeemed at any time at the net asset value
next determined after the order is accepted by the Fund. As indicated above, the
proceeds of redemptions of Class B and Class C shares (and Class A shares
originally purchased as part of an investment of $1 million or more on which no
front-end sales charge was paid) may be subject to a CDSC.
EXCHANGE PRIVILEGES
The exchange privileges available to Class A, Class B, Class C, Class S
and Class Y shareholders of each Voting Fund are identical to the exchange
privileges of Class A, Class B, Class C, Class S and Class Y shareholders,
respectively, of each Acquiring Fund. Shareholders of each Fund may exchange
shares of the Fund for the same class of shares of any other series of the First
American funds. No fee will be charged upon the exchange of shares. Generally,
shares may be exchanged only for shares of the same class. However, Class A
shares may be exchanged for Class S shares or Class Y shares of the same or
another First American fund when Class A shareholders become eligible to
participate in Class S or Class Y. Shares of a Fund subject to an exchange will
be processed at net asset value per share of each fund at the time of the
exchange. In determining the CDSC applicable to shares being redeemed subsequent
to an exchange or, in the case of Class B shares, calculating when shares
convert to Class A shares, the length of time the shares were held prior to the
exchange will be taken into account.
DIVIDENDS AND DISTRIBUTIONS
Each Fund declares and pays dividends of investment income, if any, at
least quarterly, in the case of Science & Technology Fund, and monthly for the
other Funds, and makes distributions of capital gains, if any, at least
annually. Unless notified otherwise, dividends and capital gains distributions,
if any, will be automatically reinvested in shares of the same Fund and class on
which they were paid at net asset value. Such reinvestments automatically occur
on the payment date of such dividends and capital gains distributions.
Alternatively, shareholders may request that dividends and capital gains
distributions be reinvested in another First American fund or paid in cash. An
Acquired Fund's shareholder's election with respect to reinvestment of dividends
and distributions will be automatically applied with respect to Fund shares he
or she receives pursuant to the respective Plans.
29
The Funds have each qualified and intend to continue to qualify to be
treated as regulated investment companies under the Code. To remain qualified as
a regulated investment company, a Fund must distribute 90% of its taxable and
tax-exempt income and diversify its holdings as required by the 1940 Act and the
Code. While so qualified, so long as each Fund distributes all of its net
investment company taxable and tax-exempt income and any net realized gains to
shareholders, it is expected that a Fund will not be required to pay any federal
income taxes on the amounts distributed to the shareholders.
ADDITIONAL INFORMATION
Information concerning the Funds is incorporated by reference from the
current prospectuses of FAIF related to the designated share classes of each
Voting Fund and Acquiring Fund and dated January 28, 2002, accompanying this
Prospectus/Proxy Statement and forming part of the Registration Statement on
Form N-1A which has been filed with the SEC. FAIF is subject to the
informational requirements of the Securities Exchange Act of 1934 and the 1940
Act, and in accordance therewith file reports and other information including
proxy material and charter documents with the SEC. These items can be inspected
and copied at the Public Reference Facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the SEC's Regional Offices located
at Citicorp Center, 500 West Madison Street, Chicago, Suite 1400, Illinois
60661-2511 and at Woolworth Building, 233 Broadway, New York, New York 10279.
Copies of such materials can also be obtained at prescribed rates from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549.
INFORMATION ABOUT THE REORGANIZATIONS
REASONS FOR THE REORGANIZATIONS
At a meeting held on February 21, 2002, the Board of Directors of FAIF,
including the Disinterested Directors, determined that it is advantageous to
combine each Voting Fund with the corresponding Acquiring Fund. As discussed in
detail above under "Comparative Information on Investment Objectives, Strategies
and Risks," each Voting Fund and corresponding Acquiring Fund has similar
investment objectives, strategies and risks. The Funds also have the same
Adviser and the same distributor, custodian, transfer agent and auditors.
The Board of Directors of FAIF has determined that the Reorganizations
are expected to provide certain benefits to the Voting Funds and the Acquiring
Funds and that each of the Reorganizations is in the best interests of each Fund
and its respective shareholders. The Board of Directors has also determined that
the interests of the existing shareholders of each Fund will not be diluted as a
result of the Reorganizations. In making such determinations, the Board
evaluated and considered extensive information provided by the management of
FAIF, and the Adviser, and reviewed various factors about the Funds and the
proposed Reorganizations.
30
Among other factors, the Board considered:
o the potential opportunity for better investment performance due to
the Adviser's ability to focus its resources on fewer products;
o the potential for reduced operating expenses over time which may
result from fixed and relatively fixed costs associated with
operating each fund being spread over a larger asset base;
o the potential for individual FAIF Funds to use their increased asset
size to achieve greater portfolio diversification and to engage in
block trading and other investment transactions on potentially more
advantageous terms;
o the terms and conditions of each Reorganization;
o the tax-free nature of each Reorganization to each Fund and their
shareholders;
o the fact that in no event will the holders of Voting Fund shares
become subject to a less advantageous total expense "cap" as a
result of the proposed combination of Funds;
o that the Adviser has contractually agreed to limit the total annual
operating expenses of each Acquiring Fund through June 30, 2003;
o the fact that the advisory fees, Rule 12b-1 fees and sales charges
would remain constant for Voting Fund shareholders;
o the potential elimination of confusion among shareholders with
respect to products that may be considered duplicative;
o each Acquiring Fund's agreements that (a) in determining contingent
deferred sales charges applicable to Class B or Class C shares
issued by it in the Reorganization and, with respect to Class B
shares, the date upon which such shares convert to Class A shares,
it shall give credit for the period during which the holders thereof
held the Class B or Class C shares of the Selling Fund in exchange
for which such Acquiring Fund shares were issued; and (b) in the
event that Class A shares of the Acquiring Fund are distributed in
the Reorganization to former holders of Class A shares of the
Selling Fund with respect to which the front-end sales charge was
waived due to a purchase of $1 million or more, it shall give credit
for the period during which the holder thereof held such Selling
Fund shares for purposes in determining whether a deferred sales
charge is payable upon the sale of such Class A shares of the
Acquiring Fund; and
o that the Adviser will bear the expenses associated with the
Reorganizations.
The Board also considered the potential benefits to the Adviser which
could result from the proposed Reorganizations. The Board recognized that to the
extent the Adviser determines to waive advisory fees in the future, to the
extent that the Acquiring Funds realize overall expense ratios before fee
waivers consistent with those before the Reorganizations, the combination of
Funds would have the effect of decreasing the cost to the Adviser of providing
such waivers. The Board also noted, however, that the Adviser is not obligated
to make any such waivers (beyond the contractual period) and that, in any event,
the proposed Reorganizations are expected to provide other benefits to
shareholders.
31
After consideration of the factors noted above, together with other
factors and information considered to be relevant, and recognizing that there
can be no assurance that any operating efficiencies or other benefits will in
fact be realized, the Board of Directors of FAIF concluded that the proposed
Reorganizations, as applicable, would be in the best interests of each Voting
Fund and their respective shareholders. Consequently, they approved the Plans
and directed that the respective Plans be submitted to shareholders of the
Voting Funds for approval.
The directors of FAIF have also approved the Plans on behalf of the
Acquiring Funds.
AGREEMENTS AND PLANS OF REORGANIZATION
The following summary is qualified in its entirety by reference to the
Plans (a form of which is attached as Exhibit A to this Prospectus/Proxy
Statement).
Each Plan provides that all of the assets of the respective Voting Fund
will be acquired by the corresponding Acquiring Fund in exchange for Class A,
Class B, Class C, Class S and Class Y shares of the corresponding Acquiring Fund
and the assumption by the corresponding Acquiring Fund of the identified
liabilities of the Voting Fund on or about May 20, 2002, or such other date as
may be agreed upon by the parties (the "Closing Date"). The Acquiring Funds will
not assume any liabilities or obligations of the respective Voting Fund other
than those reflected in an unaudited statement of assets and liabilities of the
Voting Fund prepared as of the close of regular trading on the New York Stock
Exchange ("NYSE"), normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Closing Date (the "Valuation Time").
At or prior to the Closing Date, the Voting Funds will each declare a
dividend or dividends and distribution or distributions which, together with all
previous dividends and distributions, shall have the effect of distributing to
the Voting Fund's shareholders all of the Voting Fund's investment company
taxable income for the taxable period ending on the Closing Date (computed
without regard to any deduction for dividends paid) and all of its net capital
gains realized in all taxable periods ending on the Closing Date (after
reductions for any capital loss carryovers).
With respect to each Reorganization, the number of full and fractional
Class A, Class B, Class C, Class S and Class Y shares of each corresponding
Acquiring Fund to be received by the shareholders of each Voting Fund will be
determined by multiplying the number of outstanding full and fractional shares
of each class of the Voting Fund by a factor which shall be computed by dividing
the net asset value per share of each class of the Voting Fund by the net asset
value per share of the respective classes of the corresponding Acquiring Fund.
These computations will take place as of the Valuation Time. For each Voting
Fund, its net asset value per share will be determined by dividing assets, less
liabilities, in each case attributable to the respective class, by the total
number of outstanding shares of such class.
The co-administrator for the Voting Funds will compute the value of
each Voting Fund's respective portfolio of securities. The method of valuation
employed will be consistent with the procedures set forth in the prospectus and
Statement of Additional Information relating to the applicable Acquiring Fund,
Rule 22c-1 under the 1940 Act, and with the interpretations of that Rule by the
SEC's Division of Investment Management.
32
Each Voting Fund will liquidate and distribute pro rata to shareholders
of record as of the close of business on the Closing Date the full and
fractional Class A, Class B, Class C, Class S and Class Y shares of voting stock
of the applicable Acquiring Fund received by the Voting Fund. Voting Fund
shareholders will receive Acquiring Fund shares of the same class as their
Voting Fund shares and having a net asset value equal to the total net asset
value of their Voting Fund shares as of the Valuation Time. The liquidation and
distribution will be accomplished by the establishment of accounts in the names
of each Voting Fund's shareholders on the applicable Acquiring Fund's share
records of its transfer agent. Each account will represent the respective pro
rata number of full and fractional Class A, Class B, Class C, Class S and Class
Y shares of voting stock of the applicable Acquiring Fund due to the Voting
Fund's shareholders. All issued and outstanding shares of each Voting Fund will
be canceled. The shares of voting stock of the applicable Acquiring Fund to be
issued will have no preemptive or conversion rights and no share certificates
will be issued. After these distributions and the winding up of its affairs,
each Voting Fund will be terminated.
The consummation of each Reorganization is subject to the conditions
set forth in the Plan, including approval, as applicable, by the Voting Fund's
shareholders, accuracy of various representations and warranties and receipt of
opinions of counsel. Notwithstanding approval of a Voting Fund's shareholders,
the Plan may be terminated with respect to a Reorganization (a) by the mutual
agreement of the Voting Fund and the applicable Acquiring Fund; or (b) at or
prior to the Closing Date by either party (1) because of a breach by the other
party of any representation, warranty, or agreement contained in the Plan to be
performed at or prior to the Closing Date if not cured within 30 days, or (2)
because a condition to the obligation of the terminating party has not been met
and it reasonably appears that it cannot be met.
Whether or not a Reorganization is consummated, the Adviser will pay
the expenses incurred by each Voting Fund and the corresponding Acquiring Fund
in connection with that Reorganization (including the cost of any
proxy-soliciting agent). No portion of the expenses will be borne directly or
indirectly by a Voting Fund, the corresponding Acquiring Fund or their
shareholders.
If a Voting Fund's shareholders do not approve the respective
Reorganization, the directors of FAIF will consider other possible courses of
action which may be in the best interests of shareholders.
FEDERAL INCOME TAX CONSEQUENCES
Each Reorganization is intended to qualify for Federal income tax
purposes as a tax-free reorganization described in Section 368(a) of the
Internal Revenue Code of 1986, as amended ("Code"), with no gain or loss
recognized as a consequence of the Reorganizations by the Voting Funds, the
Acquiring Funds or the shareholders of any Fund. As a condition to the closing
of a Reorganization, the parties will receive a legal opinion to that effect.
That opinion will be based upon certain representations and warranties made by
the Funds and certifications received from each of the Funds and certain of
their service providers.
You should consult your tax advisor regarding the effect, if any, of a
proposed Reorganization in light of your individual circumstances. Since the
foregoing discussion only relates to the Federal income tax consequences of the
Reorganizations, you should also consult your tax advisor as to state and other
local tax consequences, if any, of a Reorganization. It should be noted that no
rulings have been sought from the Internal Revenue Service ("IRS") and that an
opinion of counsel is not binding on the IRS or any court. If the IRS were to
successfully assert that a proposed transaction is taxable, then the proposed
transaction would be treated as a taxable sale of the Voting Fund's assets to
the corresponding Acquiring Fund followed by the taxable liquidation of the
Voting Fund, and shareholders of the Voting Fund would recognize gain or loss as
a result of such transaction.
33
PRO-FORMA CAPITALIZATION
The following tables set forth the capitalization of each Voting Fund
and the corresponding Acquiring Fund as of September 30, 2001 and the
capitalization of the combined Acquiring Fund on a pro forma basis as of that
date, giving effect to the proposed acquisitions of assets of the Voting Fund at
its then current net asset value.
CAPITALIZATION OF CAPITAL GROWTH FUND, LARGE CAP GROWTH FUND
AND PRO FORMA COMBINED FUND
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------- ---------------------- ----------------------- ---------------------
CAPITAL GROWTH LARGE CAP GROWTH PRO FORMA
FUND FUND COMBINED FUND
- ------------------------- ---------------------- ----------------------- ---------------------
TOTAL NET ASSETS
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS A $8,597 $85,443 $94,040
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS B $46,103 $17,976 $64,079
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS C N/A $13,177 $13,177
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS S $11,882 N/A $11,882
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS Y $131,961 $594,163 $726,124
- ------------------------- ---------------------- ----------------------- ---------------------
TOTAL $198,543 $710,759 $909,302
- ------------------------- ---------------------- ----------------------- ---------------------
- ------------------------- ---------------------- ----------------------- ---------------------
NET ASSET VALUE
PER SHARE
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS A $14.68 $9.33 $14.68*
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS B $14.59 $8.96 $14.59*
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS C N/A $9.14 $14.68*
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS S $14.69 $9.33 $14.69*
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS Y $14.77 $9.44 $14.77*
- ------------------------- ---------------------- ----------------------- ---------------------
- ------------------------- ---------------------- ----------------------- ---------------------
SHARES OUTSTANDING
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS A 586 9,156 6,406
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS B 3,159 2,006 4,391
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS C N/A 1,442 898
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS S 809 N/A 809
- ------------------------- ---------------------- ----------------------- ---------------------
CLASS Y 8,932 62,914 49,160
- ------------------------- ---------------------- ----------------------- ---------------------
- ---------------------------
* Following the Reorganization, Large Cap Growth Fund will assume and publish
the investment performance record of Capital Growth Fund.
34
CAPITALIZATION OF RELATIVE VALUE FUND, LARGE CAP VALUE FUND
AND PRO FORMA COMBINED FUND
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------- ---------------------- ----------------------- ----------------------
RELATIVE VALUE LARGE CAP VALUE PRO FORMA
FUND FUND COMBINED FUND
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL NET ASSETS
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $33,288 $94,064 $127,352
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $12,081 $38,108 $50,189
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C N/A $10,141 $10,141
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $34,004 N/A $34,004
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $344,495 $970,190 $1,314,685
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL $423,868 $1,112,503 $1,536,371
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
NET ASSET VALUE
PER SHARE
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $24.09 $15.98 $15.98
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $24.01 $15.71 $15.71
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $24.09 $15.90 $15.90
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $24.06 $15.97 $15.97
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $24.12 $16.02 $16.02
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
SHARES OUTSTANDING
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A 1,382 5,888 7,971
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B 503 2,425 3,194
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C N/A 638 638
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S 1,413 N/A 2,129
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y 14,285 60,564 82,068
- ------------------------- ---------------------- ----------------------- ----------------------
35
CAPITALIZATION OF GROWTH & INCOME FUND, EQUITY INCOME FUND
AND PRO FORMA COMBINED FUND
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------- ---------------------- ----------------------- ----------------------
GROWTH & INCOME EQUITY INCOME PRO FORMA
FUND FUND COMBINED FUND
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL NET ASSETS
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $150,323 $24,557 $174,880
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $11,612 $11,516 $23,128
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C N/A $8,028 $8,028
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $44,821 $328 $45,149
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $497,782 $267,361 $765,143
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL $704,538 $311,790 $1,016,328
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
NET ASSET VALUE
PER SHARE
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $31.16 $12.13 $12.13
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $30.86 $12.07 $12.07
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $31.17 $12.09 $12.09
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $31.14 $12.12 $12.12
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $31.21 $12.20 $12.20
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
SHARES OUTSTANDING
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A 4,824 2,025 14,418
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B 376 954 1,916
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C N/A 664 664
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S 1,439 27 3,725
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y 15,951 21,916 62,718
- ------------------------- ---------------------- ----------------------- ----------------------
36
CAPITALIZATION OF SCIENCE & TECHNOLOGY FUND, TECHNOLOGY FUND
AND PRO FORMA COMBINED FUND
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------- ---------------------- ----------------------- ----------------------
SCIENCE & TECHNOLOGY TECHNOLOGY PRO FORMA
FUND FUND COMBINED FUND
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL NET ASSETS
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $988 $29,084 $30,072
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $3,563 $15,974 $19,537
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C N/A $9,009 $9,009
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $1,858 N/A $1,858
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $28,293 $59,654 $87,947
- ------------------------- ---------------------- ----------------------- ----------------------
TOTAL $34,702 $113,721 $148,423
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
NET ASSET VALUE
PER SHARE
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A $4.70 $6.36 $6.36
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B $4.66 $5.77 $5.77
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C $4.70 $6.28 $6.28
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S $4.70 $6.36 $6.36
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y $4.74 $6.53 $6.53
- ------------------------- ---------------------- ----------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ----------------------
SHARES OUTSTANDING
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS A 210 4,572 4,727
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS B 765 2,771 3,389
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS C N/A 1,435 1,435
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS S 395 N/A 292
- ------------------------- ---------------------- ----------------------- ----------------------
CLASS Y 5,966 9,129 13,462
- ------------------------- ---------------------- ----------------------- ----------------------
The tables set forth above should not be relied upon to reflect the
number of Acquiring Fund shares to be issued in, and outstanding immediately
following, a Reorganization; the actual number of shares to be issued and
outstanding will depend upon the net asset value and number of shares of each
Voting Fund and the corresponding Acquiring Fund at the time of the
Reorganization.
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS
Each of the Voting Funds and the Acquiring Funds is a series of FAIF, a
Maryland corporation. Because each Fund is a series of the same corporation,
your rights as a shareholder of an Acquiring Fund will not differ from your
rights as a shareholder of a Voting Fund.
VOTING INFORMATION CONCERNING THE MEETING
This Prospectus/Proxy Statement is being sent to shareholders of
Capital Growth Fund, Relative Value Fund, Growth & Income Fund and Science &
Technology Fund, each a series of FAIF, in connection with a solicitation of
voting instructions by the directors of FAIF, to be used at the Meeting. This
Prospectus/Proxy Statement, along with a Notice of the Meeting and a proxy card,
is first being mailed to shareholders of the Voting Funds on or about
_________________, 2002.
37
The Board of Directors of FAIF has fixed the close of business on March
18, 2002, as the record date (the "Record Date") for determining the
shareholders of the Voting Funds entitled to receive notice of the Meeting and
to give voting instructions, and for determining the number of shares for which
such instructions may be given, with respect to the Meeting or any adjournment
thereof.
Shares which represent interests in a particular Voting Fund vote
separately on the Reorganization and those matters pertaining only to that
Voting Fund. Approval of a Reorganization will require the affirmative vote of a
majority of the outstanding shares of each Voting Fund, with all classes of the
Voting Fund voting together and not by class. Abstentions will be counted for
purposes of determining a quorum, but will not be included in the amount of
shares voted. Accordingly, an abstention will have the effect of a negative
vote. Approval of a Plan with respect to a Voting Fund will be considered
approval of the amendment to the Amended and Restated Articles of Incorporation
of FAIF required to effect the Reorganization attached to the Plan.
If a proxy that is properly executed and returned represents a broker
"non-vote" (that is, a proxy from a broker or nominee indicating that such
person has not received instructions from the beneficial owner or other person
entitled to vote shares on a Reorganization with respect to which the broker or
nominee does not have discretionary power), the shares represented thereby, will
only be considered present for purposes of determining the existence of a quorum
for the transaction of business and will not be included in determining the
number of votes cast.
The individuals named as proxies on the enclosed proxy card will vote
in accordance with your direction as indicated thereon, if your card is received
properly executed by you or by your duly appointed agent or attorney-in-fact. If
your card is properly executed and you give no voting instructions, your shares
will be voted FOR the applicable Reorganization. You can also vote by telephone,
with a fax or toll-free call to the appropriate number on the proxy card, and
through the Internet Web site stated on the proxy card.
You may revoke any proxy card by giving another proxy or by letter or
telegram revoking the initial proxy. In addition, you can revoke a prior proxy
by simply voting again using the proxy card, by a fax or toll-free call to the
appropriate number on the proxy card, or through the Internet Website stated on
the proxy card. To be effective, your revocation must be received by the
applicable Voting Fund prior to the Meeting and must indicate your name and
account number. In addition, if you attend the Meeting in person you may, if you
wish, vote by ballot at the Meeting, thereby canceling any proxy previously
given.
Proxy solicitations will be made primarily by mail but may also be made
by telephone, through the Internet or personal solicitations conducted by
officers and employees of the Adviser, its affiliates or other representatives
of the Voting Funds (who will not be paid for their soliciting activities). In
addition, proxy solicitations may be made by ____________________________, the
Voting Funds' proxy solicitor. The estimated cost of the proxy solicitations is
approximately $_________________________. The costs of solicitation and the
expenses incurred in connection with preparing this Prospectus/Proxy Statement
and its enclosures will be paid by the Adviser. Neither the Voting Funds or the
Acquiring Funds will bear any costs associated with the Meeting, this proxy
solicitation or any adjourned session.
38
If shareholders of a Voting Fund do not vote to approve the applicable
Reorganization, the directors of FAIF will consider other possible courses of
action in the best interests of shareholders. If a quorum is not present at the
Meeting, or if a quorum is present at the Meeting but sufficient votes to
approve a Reorganization are not received, the persons named as proxies on a
proxy form sent to the Record Holders may propose one or more adjournments of
the Meeting to permit further proxy solicitation. In determining whether to
adjourn the Meeting, the following factors may be considered: the percentage of
votes actually cast, the percentage of negative votes actually cast, the nature
of any further solicitation and the information to be provided to shareholders
with respect to the reasons for the solicitation. Any adjournment will require
an affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy. The persons named as proxies will vote upon such adjournment
after consideration of all circumstances which may bear upon a decision to
adjourn the Meeting.
A shareholder of a Voting Fund who objects to a proposed Reorganization
will not be entitled under either Maryland law or the Articles of Incorporation,
as amended, of FAIF, to demand payment for, or an appraisal of, his or her
shares. However, shareholders should be aware that each Reorganization as
proposed is not expected to result in recognition of gain or loss to
shareholders for federal income tax purposes. In addition, if a Reorganization
is consummated, the rights of shareholders to exchange among other First
American funds or to sell fund shares will not be affected.
FAIF does not hold annual shareholder meetings. If a Reorganization is
not approved, shareholders wishing to submit proposals to be considered for
inclusion in a proxy statement for a subsequent shareholder meeting should send
their written proposals to the Secretary of FAIF at the address set forth on the
cover of this Prospectus/Proxy Statement so that they will be received by FAIF
in a reasonable period of time prior to that meeting.
The votes of the shareholders of each Acquiring Fund are not being
solicited by this Prospectus/Proxy Statement and are not required to carry out
the Reorganizations.
SHAREHOLDER INFORMATION
The Record Holders of each Voting Fund at the close of business on
March 18, 2002 (the Record Date) will be entitled to be present and vote at the
Meeting with respect to shares of the applicable Voting Fund owned as of the
Record Date. As of the Record Date, the total number of shares of each Voting
Fund outstanding and entitled to vote was as follows:
--------------------------- --------------------------
NUMBER OF SHARES
--------------------------- --------------------------
CAPITAL GROWTH FUND [ ]
--------------------------- --------------------------
RELATIVE VALUE FUND [ ]
--------------------------- --------------------------
GROWTH & INCOME FUND [ ]
--------------------------- --------------------------
SCIENCE & TECHNOLOGY FUND [ ]
--------------------------- --------------------------
As of __________________, 2002, the officers and directors of FAIF
beneficially owned as a group less than 1% of the outstanding shares of each
Fund, respectively.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
[insert 5% beneficial owners of any Fund as of Record Date]
39
FINANCIAL STATEMENTS AND EXPERTS
The Annual Report of First American Investment Funds, Inc. for the year
ended and as of September 30, 2001, and the financial statements and financial
highlights for the periods indicated therein, has been incorporated by reference
herein and in the Registration Statement. The financial statements and financial
highlights have been audited by Ernst & Young LLP, independent auditors, as set
forth in their reports incorporated by reference herein, and are included in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
OTHER BUSINESS
FAIF's Board of Directors does not intend to present any other business
at the Meeting. If, however, any other matters are properly brought before the
Meeting, the persons named in the accompanying form of proxy will vote thereon
in accordance with their judgment.
THE BOARD OF DIRECTORS OF FAIF RECOMMENDS APPROVAL OF EACH PLAN AND ANY
UNMARKED PROXY CARDS WITHOUT INSTRUCTIONS TO THE CONTRARY WILL BE VOTED IN FAVOR
OF APPROVAL OF SUCH PLAN.
________________________________________, 2002
40
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this ___ day of February, 2002, by and between First American Investment
Funds, Inc., a Maryland corporation with its principal place of business 800
Nicollet Mall, Minneapolis, Minnesota 55402 ("FAIF"), with respect to its Large
Cap Growth Fund, Large Cap Value Fund, Equity Income Fund and Technology Fund
(each, an "Acquiring Fund"), and FAIF, with respect to its Capital Growth Fund,
Relative Value Fund, Growth & Income Fund and Science & Technology Fund (each, a
"Selling Fund").
The reorganization (the "Reorganization") will consist of (i) the
transfer of all of the assets of each applicable Selling Fund as set forth in
the table in Section 1.1 of this Agreement in exchange for Class A, Class B,
Class C, Class S and Class Y shares of common stock, $.0001 par value per share,
of the corresponding Acquiring Fund, as set forth in the table in Section 1.1 of
this Agreement (the Class A, Class B, Class C, Class S and Class Y shares of
such Acquiring Fund to be issued to the Selling Fund, the "Acquiring Fund
Shares"); (ii) the assumption by each Acquiring Fund of the identified
liabilities of the corresponding Selling Fund; and (iii) the distribution, after
the Closing Date hereinafter referred to, of the applicable Acquiring Fund
Shares to the shareholders of the corresponding Selling Fund in liquidation of
such Selling Fund as provided herein, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, each Selling Fund and each corresponding Acquiring Fund is a
separate investment series of an open-end, registered investment company of the
management type and each Selling Fund owns securities that generally are assets
of the character in which the corresponding Acquiring Fund is permitted to
invest;
WHEREAS, each Selling Fund and the corresponding Acquiring Fund are
authorized to issue their common shares; and
WHEREAS, the Directors of FAIF have determined that the transactions
contemplated herein will be in the best interests of each Acquiring Fund, each
Selling Fund and their respective shareholders and that the interests of the
existing shareholders of the Acquiring Funds and Selling Funds will not be
diluted as a result thereof.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
TRANSFER OF ASSETS OF EACH SELLING FUND IN EXCHANGE FOR
THE CORRESPONDING ACQUIRING FUND SHARES, ASSUMPTION OF EACH
SELLING FUND'S LIABILITIES AND LIQUIDATION OF EACH SELLING FUND
1.1 THE EXCHANGE. Subject to the terms and conditions herein set forth
and on the basis of the representations and warranties contained herein, each
Selling Fund agrees to transfer all of its assets as set forth in paragraph 1.2
to the corresponding Acquiring Fund. Each Selling Fund and the corresponding
Acquiring Fund, each a series of FAIF, is set forth in the following table:
A-1
Selling Fund Corresponding Acquiring Fund
------------ ----------------------------
Capital Growth Fund.................. Large Cap Growth Fund
Relative Value Fund.................. Large Cap Value Fund
Growth & Income Fund................. Equity Income Fund
Science & Technology Fund............ Technology Fund
Each Acquiring Fund agrees, in exchange for the corresponding Selling
Fund's assets (i) to deliver to the Selling Fund the number of Acquiring Fund
Shares, including fractional Acquiring Fund Shares, computed in the manner and
as of the time and date set forth in paragraphs 2.2 and 2.3; and (ii) to assume
the identified liabilities of the Selling Fund, as set forth in paragraph 1.3.
Such transactions shall take place on the Closing Date provided for in paragraph
3.1.
1.2 ASSETS TO BE ACQUIRED. The assets of each Selling Fund to be
acquired by the corresponding Acquiring Fund shall consist of all property,
including, without limitation, all cash, securities, commodities, interests in
futures and dividends or interest receivables, that is owned by the Selling Fund
and any deferred or prepaid expenses shown as an asset on the books of the
Selling Fund on the Closing Date.
Each Selling Fund has provided the corresponding Acquiring Fund with
its most recent audited financial statements, which contain a list of all of the
Selling Fund's assets as of the date thereof. Each Selling Fund hereby
represents that, as of the date of the execution of this Agreement, there have
been no changes in its financial position as reflected in said financial
statements other than those occurring in the ordinary course of its business in
connection with the purchase and sale of securities and the payment of its
normal operating expenses. Each Selling Fund reserves the right to sell any of
such securities, but will not, without the prior written approval of the
corresponding Acquiring Fund, acquire any additional securities other than
securities of the type in which such Acquiring Fund is permitted to invest.
Each Selling Fund will, within a reasonable period of time (not less
than 30 days) prior to the Closing Date, furnish the corresponding Acquiring
Fund with a list of its portfolio securities and other investments (the
"Securities List"). Each Acquiring Fund will, within a reasonable time prior to
the Closing Date, furnish the corresponding Selling Fund with a list of the
securities, if any, on the Selling Fund's Securities List that do not conform to
the Acquiring Fund's investment objectives, policies, and restrictions. If a
Selling Fund holds any investments that the corresponding Acquiring Fund may not
hold (as identified by the Acquiring Fund pursuant hereto), the Selling Fund, if
requested by the Acquiring Fund, will dispose of such securities prior to the
Closing Date. In addition, if it is determined that a Selling Fund and the
corresponding Acquiring Fund portfolios, when aggregated, would contain
investments exceeding certain percentage limitations imposed upon the Acquiring
Fund with respect to such investments, the Selling Fund, if requested by the
Acquiring Fund, will dispose of and/or reinvest a sufficient amount of such
investments as may be necessary to avoid violating such limitations as of the
Closing Date.
A-2
1.3 LIABILITIES TO BE ASSUMED. Each Acquiring Fund shall assume only
those liabilities, expenses, costs, charges and reserves reflected on a
Statement of Assets and Liabilities of the corresponding Selling Fund prepared
on behalf of the Selling Fund, as of the Valuation Date (as defined in paragraph
2.1), in accordance with generally accepted accounting principles consistently
applied from the prior audited period and shall not assume any other
liabilities, whether absolute or contingent, known or unknown, accrued or
unaccrued, all of which shall remain the obligation of the corresponding Selling
Fund.
1.4 LIQUIDATION AND DISTRIBUTION. On the Closing Date, (a) each Selling
Fund will liquidate and distribute pro rata to its shareholders of record,
determined as of the close of business on the Valuation Date (the "Selling Fund
Shareholders"), the corresponding Acquiring Fund Shares received by the Selling
Fund pursuant to paragraph 1.1; and (b) the Selling Fund will thereupon proceed
to terminate as set forth in paragraph 1.8 below. Such liquidation and
distribution will be accomplished by the transfer of the corresponding Acquiring
Fund Shares then credited to the account of the Selling Fund on the books of the
corresponding Acquiring Fund to open accounts on the share records of the
corresponding Acquiring Fund in the names of the Selling Fund Shareholders and
representing the respective pro rata number of the corresponding Acquiring Fund
Shares due such shareholders. All issued and outstanding shares of the Selling
Fund will simultaneously be canceled on the books of the Selling Fund. The
corresponding Acquiring Fund shall not issue certificates representing the
Acquiring Fund Shares in connection with such exchange.
1.5 OWNERSHIP OF SHARES. Ownership of Acquiring Fund Shares will be
shown on the books of each Acquiring Fund's transfer agent. Shares of each
Acquiring Fund will be issued in the manner described in the Prospectus/Proxy
Statement on Form N-14, which has been distributed to shareholders of the
corresponding Selling Fund as described in paragraph 4.1(o).
1.6 TRANSFER TAXES. Any transfer taxes payable upon issuance of the
Acquiring Fund Shares in a name other than the registered holder of the
corresponding Selling Fund shares on the books of the corresponding Selling Fund
as of that time shall, as a condition of such issuance and transfer, be paid by
the person to whom such Acquiring Fund Shares are to be issued and transferred.
1.7 REPORTING RESPONSIBILITY. Any reporting responsibility of a Selling
Fund is and shall remain the responsibility of the Selling Fund up to and
including the Closing Date and such later date on which the Selling Fund is
terminated.
1.8 TERMINATION. Each Selling Fund shall be terminated promptly
following the Closing Date and the making of all distributions pursuant to
paragraph 1.4.
1.9 ARTICLES OF AMENDMENT. FAIF shall, before the Closing Date, (a)
obtain approval pursuant to Maryland law of articles of amendment ("Amendment")
to its Amended and Restated Articles of Incorporation (in substantially the form
attached hereto as Exhibit A) and (b) file same with the Secretary of State of
Maryland.
A-3
1.10 CREDIT FOR SALES CHARGES. Each Acquiring Fund agrees that in
determining contingent deferred sales charges applicable to Class B or Class C
shares issued by it in the Reorganization and, with respect to Class B shares,
the date upon which such shares convert to Class A shares, it shall give credit
for the period during which the holders thereof held the Class B or Class C
shares of the corresponding Selling Fund in exchange for which such Acquiring
Fund shares were issued. In the event that Class A shares of an Acquiring Fund
are distributed in the Reorganization to former holders of Class A shares of the
corresponding Selling Fund with respect to which the front-end sales charge was
waived due to a purchase of $1 million or more, the Acquiring Fund agrees that
in determining whether a deferred sales charge is payable upon the sale of such
Class A shares of the Acquiring Fund it shall give credit for the period during
which the holder thereof held such corresponding Selling Fund shares.
ARTICLE II
VALUATION
2.1 VALUATION OF ASSETS. The value of each Selling Fund's assets to be
acquired by the corresponding Acquiring Fund hereunder shall be the value of
such assets computed as of the close of business on the New York Stock Exchange
on the business day immediately prior to the Closing Date (such time and date
being hereinafter called the "Valuation Date"), using the valuation procedures
set forth in FAIF's Amended and Restated Articles of Incorporation and each
Acquiring Fund's then current prospectus and statement of additional information
or such other valuation procedures as shall be mutually agreed upon by the
parties.
2.2 VALUATION OF SHARES. The net asset value per share of the Acquiring
Fund Shares shall be the net asset value per share computed as of the close of
business on the New York Stock Exchange on the Valuation Date, using the
valuation procedures set forth in FAIF's Amended and Restated Articles of
Incorporation and each Acquiring Fund's then current prospectus and statement of
additional information.
2.3 SHARES TO BE ISSUED. The number of full and fractional Acquiring
Fund Shares of each class to be issued in exchange for each corresponding
Selling Fund's assets shall be determined by multiplying the outstanding shares
of each class of the applicable Selling Fund by the ratio computed by dividing
the net asset value per share attributable to each class of the applicable
Selling Fund by the net asset value per share of the respective classes of the
corresponding Acquiring Fund determined in accordance with paragraph 2.2. The
Selling Fund Shareholders of Class A, Class B, Class C, Class S and Class Y
shares of each Selling Fund will receive Class A, Class B, Class C, Class S and
Class Y shares, respectively, of the corresponding Acquiring Fund.
ARTICLE III
CLOSING AND CLOSING DATE
3.1 CLOSING DATE. The closing of the Reorganization (the "Closing")
shall take place on or about May 20, 2002 or such other date as the parties may
agree to in writing (the "Closing Date"). All acts taking place at the Closing
shall be deemed to take place simultaneously immediately prior to the opening of
business on the Closing Date unless otherwise provided. The Closing shall be
held as of 8:00 a.m. Central time at the offices of FAIF, or at such other time
and/or place as the parties may agree.
A-4
3.2 EFFECT OF SUSPENSION IN TRADING. In the event that on the Valuation
Date (a) the New York Stock Exchange or another primary trading market for
portfolio securities of one or more Acquiring Funds or the applicable Selling
Fund(s) shall be closed to trading or trading thereon shall be restricted; or
(b) trading or the reporting of trading on said Exchange or elsewhere shall be
disrupted so that accurate appraisal of the value of the net assets of one or
more Acquiring Funds or the applicable Selling Fund(s) is impracticable, the
Valuation Date (and the Closing Date) for the affected Acquiring Fund(s) and
Selling Fund(s) shall be postponed until the first business day after the day
when trading shall have been fully resumed and reporting shall have been
restored.
3.3 TRANSFER AGENT'S CERTIFICATE. Each Selling Fund shall cause its
transfer agent to deliver at the Closing a certificate of an authorized officer
stating that its records contain the names and addresses of the Selling Fund
Shareholders of each Selling Fund and the number and percentage ownership of
outstanding shares owned by each such shareholder immediately prior to the
Closing. Each Acquiring Fund shall issue and deliver, or cause its transfer
agent to issue and deliver, to the Secretary of FAIF a confirmation evidencing
the Acquiring Fund Shares to be credited on the Closing Date or provide evidence
satisfactory to each Selling Fund that such Acquiring Fund Shares have been
credited to the Selling Fund's account on the books of such Acquiring Fund. At
the Closing, each party shall deliver to the other such bills of sale, checks,
assignments, share certificates, if any, receipts and other documents as such
other party or its counsel may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE SELLING FUNDS. Each Selling Fund represents
and warrants to the corresponding Acquiring Fund as follows:
(a) The Selling Fund is a separate investment series of FAIF,
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Maryland.
(b) The Selling Fund is a separate investment series of FAIF,
which is registered as an investment company classified as a management company
of the open-end type, and its registration with the Securities and Exchange
Commission (the "Commission") as an investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and under the Securities Act
of 1933, as amended (the "1933 Act"), is in full force and effect.
(c) The Selling Fund has all necessary federal, state and
local authorizations, licenses and approvals necessary or desirable to carry on
its business as such business is now being conducted.
(d) The Selling Fund is not, and the execution, delivery, and
performance of this Agreement (subject to shareholder approval) will not result,
in violation of any provision of FAIF's Amended and Restated Articles of
Incorporation or Bylaws or of any material agreement, indenture, instrument,
contract, lease, or other undertaking to which the Selling Fund is a party or by
which it is bound.
(e) The Selling Fund has no material contracts or other
commitments (other than this Agreement) that will be terminated with liability
to it prior to the Closing Date, except for liabilities, if any, to be
discharged or reflected in the Statement of Assets and Liabilities as provided
in paragraph 1.3 hereof.
A-5
(f) Except as otherwise disclosed in writing to and accepted
by the corresponding Acquiring Fund, no litigation, administrative proceeding,
or investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against the Selling Fund or any of its
properties or assets, which, if adversely determined, would materially and
adversely affect its financial condition, the conduct of its business, or the
ability of the Selling Fund to carry out the transactions contemplated by this
Agreement. The Selling Fund knows of no facts that might form the basis for the
institution of such proceedings and is not a party to or subject to the
provisions of any order, decree, or judgment of any court or governmental body
that materially and adversely affects its business or its ability to consummate
the transactions herein contemplated.
(g) The audited financial statements of the Selling Fund at
September 30, 2001 are in accordance with generally accepted accounting
principles consistently applied, and such statements (copies of which have been
furnished to the corresponding Acquiring Fund) fairly reflect the financial
condition of the Selling Fund as of such date, and there are no material known
contingent liabilities of the Selling Fund as of such date not disclosed
therein.
(h) Since September 30, 2001, there has not been any material
adverse change in the Selling Fund's financial condition, assets, liabilities,
or business other than changes occurring in the ordinary course of business, or
any incurrence by the Selling Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed in
writing to and accepted by the corresponding Acquiring Fund. For the purposes of
this subparagraph (h), a decline in the net asset value of the Selling Fund
shall not constitute a material adverse change.
(i) At the Closing Date, all material federal and other tax
returns and reports of the Selling Fund required by law to have been filed by
such dates shall have been filed, and all federal and other taxes shown due on
said returns and reports shall have been paid, or provision shall have been made
for the payment thereof. To the best of the Selling Fund's knowledge, no such
return is currently under audit, and no assessment has been asserted with
respect to such returns.
(j) For each fiscal year of its operation, the Selling Fund
has met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and has distributed in each such
year all net investment income and realized capital gains.
(k) All issued and outstanding shares of the Selling Fund are,
and at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable by the Selling Fund. All of the issued and outstanding
shares of the Selling Fund will, at the time of the Closing Date, be held by the
persons and in the amounts set forth in the records of the transfer agent as
provided in paragraph 3.3. The Selling Fund does not have outstanding any
options, warrants, or other rights to subscribe for or purchase any of the
Selling Fund shares, nor is there outstanding any security convertible into any
of the Selling Fund shares.
(l) At the Closing Date, the Selling Fund will have good and
marketable title to the Selling Fund's assets to be transferred to the
corresponding Acquiring Fund pursuant to paragraph 1.2 and full right, power,
and authority to sell, assign, transfer, and deliver such assets hereunder, and,
upon delivery and payment for such assets, the corresponding Acquiring Fund will
acquire good and marketable title thereto, subject to no restrictions on the
full transfer thereof, including such restrictions as might arise under the 1933
Act, other than as disclosed in writing to the corresponding Acquiring Fund and
accepted by the Acquiring Fund.
A-6
(m) The execution, delivery, and performance of this Agreement
have been duly authorized by all necessary action on the part of the Selling
Fund and, subject to approval by the Selling Fund's shareholders, this Agreement
constitutes a valid and binding obligation of the Selling Fund, enforceable in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights and to general equity principles.
(n) The information furnished by the Selling Fund for use in
no-action letters, applications for orders, registration statements, proxy
materials, and other documents that may be necessary in connection with the
transactions contemplated hereby is accurate and complete in all material
respects and complies in all material respects with federal securities and other
laws and regulations thereunder applicable thereto.
(o) The Selling Fund has provided the corresponding Acquiring
Fund with information reasonably necessary for the preparation of a prospectus,
which included the proxy statement of the Selling Fund (the "Prospectus/Proxy
Statement"), all of which was included in a Registration Statement on Form N-14
of the corresponding Acquiring Fund (the "Registration Statement"), in
compliance with the 1933 Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act") and the 1940 Act in connection with the meeting of the
shareholders of the Selling Fund to approve this Agreement and the transactions
contemplated hereby. The Prospectus/Proxy Statement included in the Registration
Statement (other than information therein that relates to the corresponding
Acquiring Fund) does not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not misleading (other than as may timely be remedied by further
appropriate disclosure).
4.2 REPRESENTATIONS OF THE ACQUIRING FUNDS. Each Acquiring Fund
represents and warrants to the corresponding Selling Fund as follows:
(a) The Acquiring Fund is a separate investment series of
FAIF, a corporation duly organized, validly existing and in good standing under
the laws of the State of Maryland.
(b) The Acquiring Fund is a separate investment series of
FAIF, a corporation that is registered as an investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect.
(c) The current prospectus and statement of additional
information of the Acquiring Fund conform in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and do not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not result, in violation of FAIF's Amended
and Restated Articles of Incorporation or Bylaws or of any material agreement,
indenture, instrument, contract, lease, or other undertaking to which the
Acquiring Fund is a party or by which it is bound.
A-7
(e) Except as otherwise disclosed in writing to the
corresponding Selling Fund and accepted by the corresponding Selling Fund, no
litigation, administrative proceeding or investigation of or before any court or
governmental body is presently pending or to its knowledge threatened against
the Acquiring Fund or any of its properties or assets, which, if adversely
determined, would materially and adversely affect its financial condition and
the conduct of its business or the ability of the Acquiring Fund to carry out
the transactions contemplated by this Agreement. The Acquiring Fund knows of no
facts that might form the basis for the institution of such proceedings and is
not a party to or subject to the provisions of any order, decree, or judgment of
any court or governmental body that materially and adversely affects its
business or its ability to consummate the transactions contemplated herein.
(f) The audited financial statements of the Acquiring Fund at
September 30, 2001 are in accordance with generally accepted accounting
principles consistently applied, and such statements (copies of which have been
furnished to the corresponding Selling Fund) fairly reflect the financial
condition of the Acquiring Fund as of such date, and there are no known
contingent liabilities of the Acquiring Fund as of such date not disclosed
therein.
(g) Since September 30, 2001, there has not been any material
adverse change in the Acquiring Fund's financial condition, assets, liabilities,
or business other than changes occurring in the ordinary course of business, or
any incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed in
writing to and accepted by the corresponding Selling Fund. For the purposes of
this subparagraph (g), a decline in the net asset value of the Acquiring Fund
shall not constitute a material adverse change.
(h) At the Closing Date, all federal and other tax returns and
reports of the Acquiring Fund required by law then to be filed by such dates
shall have been filed, and all federal and other taxes shown due on said returns
and reports shall have been paid or provision shall have been made for the
payment thereof. To the best of the Acquiring Fund's knowledge, no such return
is currently under audit, and no assessment has been asserted with respect to
such returns.
(i) For each fiscal year of its operation, the Acquiring Fund
has met the requirements of subchapter M of the Code for qualification and
treatment as a regulated investment company and has distributed in each such
year all net investment income and realized capital gains.
(j) All issued and outstanding Acquiring Fund Shares are, and
at the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable. The Acquiring Fund does not have outstanding any options,
warrants, or other rights to subscribe for or purchase any Acquiring Fund
Shares, nor is there outstanding any security convertible into any Acquiring
Fund Shares.
(k) The execution, delivery, and performance of this Agreement
have been duly authorized by all necessary action on the part of the Acquiring
Fund, and this Agreement constitutes a valid and binding obligation of the
Acquiring Fund enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium, and other
laws relating to or affecting creditors' rights and to general equity
principles.
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(l) The Acquiring Fund Shares to be issued and delivered to
the corresponding Selling Fund, for the account of the Selling Fund
Shareholders, pursuant to the terms of this Agreement will, at the Closing Date,
have been duly authorized and, when so issued and delivered, will be duly and
validly issued Acquiring Fund Shares, and will be fully paid and non-assessable.
(m) The information furnished by the Acquiring Fund for use in
no-action letters, applications for orders, registration statements, proxy
materials, and other documents that may be necessary in connection with the
transactions contemplated hereby is accurate and complete in all material
respects and complies in all material respects with federal securities and other
laws and regulations applicable thereto.
(n) The Prospectus/Proxy Statement included in the
Registration Statement (only insofar as it relates to the Acquiring Fund) does
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which such statements were made, not
misleading (other than as may timely be remedied by further appropriate
disclosure).
(o) The Acquiring Fund agrees to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the 1940 Act,
and such of the state Blue Sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF THE ACQUIRING FUNDS AND THE SELLING FUNDS
5.1 OPERATION IN ORDINARY COURSE. Each Acquiring Fund and each Selling
Fund will operate its business in the ordinary course between the date hereof
and the Closing Date, it being understood that such ordinary course of business
will include customary dividends and distributions.
5.2 APPROVAL BY SHAREHOLDERS. FAIF will call a meeting of the
shareholders of each Selling Fund to consider and act upon this Agreement and to
take all other action necessary to obtain approval of the transactions
contemplated herein.
5.3 INVESTMENT REPRESENTATION. Each Selling Fund covenants that the
applicable Acquiring Fund Shares to be issued hereunder are not being acquired
for the purpose of making any distribution thereof other than in accordance with
the terms of this Agreement.
5.4 ADDITIONAL INFORMATION. Each Selling Fund will assist the
corresponding Acquiring Fund in obtaining such information as such Acquiring
Fund reasonably requests concerning the beneficial ownership of the Selling Fund
shares.
5.5 FURTHER ACTION. Subject to the provisions of this Agreement, each
Acquiring Fund and the corresponding Selling Fund will each take, or cause to be
taken, all action, and do or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, including any actions required to be taken after
the Closing Date.
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5.6 STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but
in any case within sixty days after the Closing Date, each Selling Fund shall
furnish the corresponding Acquiring Fund, in such form as is reasonably
satisfactory to such Acquiring Fund, a statement of the earnings and profits of
the Selling Fund for federal income tax purposes that will be carried over by
the Acquiring Fund as a result of Section 381 of the Code, and which will be
reviewed by Ernst & Young LLP and certified by FAIF's President, Vice President
or Treasurer.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING FUNDS
The obligations of each Selling Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
corresponding Acquiring Fund of all the obligations to be performed by it
hereunder on or before the Closing Date, and, in addition thereto, the following
further conditions:
6.1 All representations and warranties of the corresponding Acquiring
Fund contained in this Agreement shall be true and correct as of the date hereof
and as of the Closing Date with the same force and effect as if made on and as
of the Closing Date, and such Acquiring Fund shall have delivered to the
applicable Selling Fund a certificate executed in its name by a duly authorized
officer of FAIF, in form and substance reasonably satisfactory to the Selling
Fund and dated as of the Closing Date, to such effect and as to such other
matters as the Selling Fund shall reasonably request.
6.2 With respect to each Selling Fund, FAIF shall have received on the
Closing Date an opinion of Dorsey & Whitney LLP, dated as of the Closing Date,
in a form reasonably satisfactory to FAIF, covering the following points:
(a) The corresponding Acquiring Fund is a separate investment
series of FAIF, a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland, and has the corporate power to
own all of its properties and assets and to carry on its business as presently
conducted.
(b) FAIF is registered as an investment company under the 1940
Act, and, to such counsel's knowledge, such registration with the Commission as
an investment company under the 1940 Act is in full force and effect.
(c) This Agreement has been duly authorized, executed, and
delivered by the corresponding Acquiring Fund and, assuming due authorization,
execution and delivery of this Agreement by the Selling Fund, is a valid and
binding obligation of such corresponding Acquiring Fund enforceable against the
Acquiring Fund in accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium, and other laws relating to
or affecting creditors' rights generally and to general equity principles.
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(d) Assuming that a consideration therefor not less than the
net asset value thereof has been paid and that the conditions set forth in this
Agreement have been satisfied, the Acquiring Fund Shares to be issued and
delivered to the Selling Fund on behalf of the Selling Fund Shareholders as
provided by this Agreement are duly authorized and upon such delivery will be
legally issued and outstanding and fully paid and non-assessable, and no
shareholder of the corresponding Acquiring Fund has any statutory preemptive
rights in respect thereof.
(e) To the knowledge of such counsel, the Registration
Statement has been declared effective by the Commission and no stop order under
the 1933 Act pertaining thereto has been issued; and to the knowledge of such
counsel, no consent, approval, authorization or order of any court or
governmental authority of the United States or the State of Maryland is required
for consummation by FAIF and the corresponding Acquiring Fund of the
transactions contemplated herein, except such as have been obtained under the
1933 Act and the 1940 Act, and as may be required under state securities laws.
(f) The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated hereby will not, result in a
violation of FAIF's Amended and Restated Articles of Incorporation or Bylaws or
any provision of any material agreement, indenture, instrument, contract, lease
or other undertaking (in each case known to such counsel) to which the
corresponding Acquiring Fund is a party or by which it or any of its properties
may be bound or result in the acceleration of any obligation or the imposition
of any penalty under any agreement, judgment, or decree (in each case known to
such counsel) to which the Acquiring Fund is a party or by which it is bound.
Such opinion shall contain such assumptions and limitations as shall be
in the opinion of Dorsey & Whitney LLP appropriate to render the opinions
expressed therein.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUNDS
The obligations of each Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance by the
corresponding Selling Fund of all the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the following
conditions:
7.1 All representations and warranties of the corresponding Selling
Fund contained in this Agreement shall be true and correct as of the date hereof
and as of the Closing Date with the same force and effect as if made on and as
of the Closing Date, and such Selling Fund shall have delivered to the
applicable Acquiring Fund on the Closing Date a certificate executed in its name
by a duly authorized officer of FAIF, in form and substance satisfactory to the
Acquiring Fund and dated as of the Closing Date, to such effect and as to such
other matters as the Acquiring Fund shall reasonably request.
7.2 Each Selling Fund shall have delivered to the corresponding
Acquiring Fund a statement of the Selling Fund's assets and liabilities,
together with a list of the Selling Fund's portfolio securities showing the tax
costs of such securities by lot and the holding periods of such securities, as
of the Valuation Date, certified by the Treasurer of FAIF.
7.3 With respect to each Acquiring Fund, FAIF shall have received on
the Closing Date an opinion of Dorsey & Whitney LLP, in a form reasonably
satisfactory to FAIF, covering the following points:
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(a) The corresponding Selling Fund is a separate investment
series of FAIF, a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland, and has the corporate power to
own all of its properties and assets and to carry on its business as presently
conducted.
(b) FAIF is registered as an investment company under the 1940
Act, and, to such counsel's knowledge, such registration with the Commission as
an investment company under the 1940 Act is in full force and effect.
(c) This Agreement has been duly authorized, executed and
delivered by the corresponding Selling Fund and, assuming due authorization,
execution, and delivery of this Agreement by the Acquiring Fund, is a valid and
binding obligation of such corresponding Selling Fund enforceable against the
Selling Fund in accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and to general equity principles.
(d) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority of the United
States or the State of Maryland is required for consummation by FAIF and the
corresponding Selling Fund of the transactions contemplated herein, except such
as have been obtained under the 1933 Act and the 1940 Act, and as may be
required under state securities laws.
(e) The execution and delivery of this Agreement did not, and
the consummation of the transactions contemplated hereby will not, result in a
violation of FAIF's Amended and Restated Articles of Incorporation or Bylaws, or
any provision of any material agreement, indenture, instrument, contract, lease
or other undertaking (in each case known to such counsel) to which the
corresponding Selling Fund is a party or by which it or any of its properties
may be bound or result in the acceleration of any obligation or the imposition
of any penalty under any agreement, judgment, or decree (in each case known to
such counsel) to which the Selling Fund is a party or by which it is bound.
(f) Assuming that a consideration therefor of not less than
the net asset value thereof has been paid and assuming that such shares were
issued in accordance with the terms of the corresponding Selling Fund's
registration statement, or any amendment thereto, in effect at the time of such
issuance, all issued and outstanding shares of the Selling Fund are legally
issued and fully paid and non-assessable.
Such opinion shall contain such other assumptions and limitations as
shall be in the opinion of Dorsey & Whitney LLP appropriate to render the
opinions expressed therein.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF
EACH ACQUIRING FUND AND SELLING FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to any Selling Fund or the corresponding Acquiring
Fund, the other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement with respect to the
corresponding Acquiring Fund or Selling Fund (as applicable):
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8.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
each Selling Fund in accordance with the provisions of FAIF's Amended and
Restated Articles of Incorporation and Bylaws, and certified copies of the
resolutions evidencing such approval shall have been delivered to the
corresponding Acquiring Fund. Notwithstanding anything herein to the contrary,
no Acquiring Fund or its corresponding Selling Fund may waive the conditions set
forth in this paragraph 8.1.
8.2 On the Closing Date, the Commission shall not have issued an
unfavorable report under Section 25(b) of the 1940 Act, nor instituted any
proceeding seeking to enjoin the consummation of the transactions contemplated
by this Agreement under Section 25(c) of the 1940 Act and no action, suit or
other proceeding shall be threatened or pending before any court or governmental
agency in which it is sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions contemplated
herein.
8.3 All required consents of other parties and all other consents,
orders, and permits of federal, state and local regulatory authorities
(including those of the Commission and of state Blue Sky securities authorities,
including any necessary "no-action" positions of and exemptive orders from such
federal and state authorities) to permit consummation of the transactions
contemplated hereby shall have been obtained, except where failure to obtain any
such consent, order, or permit would not involve a risk of a material adverse
effect on the assets or properties of any Acquiring Fund or the corresponding
Selling Fund, provided that either party hereto may for itself waive any of such
conditions.
8.4 The Registration Statement shall have become effective under the
1933 Act, and no stop orders suspending the effectiveness of the Registration
Statement shall have been issued and, to the best knowledge of the parties
hereto, no investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the 1933 Act.
8.5 FAIF shall have obtained such exemptive relief from the provisions
of Section 17 of the 1940 Act as may, in the view of counsel, be required in
order to consummate the transactions contemplated hereby.
8.6 The parties shall have received on the Closing Date a favorable
opinion of Faegre & Benson LLP substantially to the effect that for federal
income tax purposes:
(a) The transfer of all the assets of each Selling Fund in
exchange for the corresponding Acquiring Fund Shares and the assumption by the
corresponding Acquiring Fund of the identified liabilities of the Selling Fund
followed by the distribution of the Acquiring Fund Shares to the Selling Fund
Shareholders in dissolution and liquidation of the Selling Fund will constitute
a "reorganization" within the meaning of Section 368(a) of the Code and the
Acquiring Fund and the Selling Fund will each be a "party to a reorganization"
within the meaning of Section 368(b) of the Code.
(b) No gain or loss will be recognized by any Acquiring Fund
upon the receipt of the assets of the corresponding Selling Fund solely in
exchange for the applicable Acquiring Fund Shares and the assumption by the
Acquiring Fund of the identified liabilities of the Selling Fund.
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(c) No gain or loss will be recognized by any Selling Fund
upon the transfer of the Selling Fund assets to the corresponding Acquiring Fund
in exchange for the corresponding Acquiring Fund Shares and the assumption by
the Acquiring Fund of the identified liabilities of the Selling Fund or upon the
distribution (whether actual or constructive) of the Acquiring Fund Shares to
Selling Fund Shareholders in exchange for their shares of the Selling Fund.
(d) No gain or loss will be recognized by any Selling Fund
Shareholders upon the exchange of their Selling Fund shares for the
corresponding Acquiring Fund Shares in liquidation of the Selling Fund. Selling
Fund Shareholders subject to taxation will recognize income upon receipt of any
net investment income or net capital gains of the Selling Fund which are
distributed by the Selling Fund prior to the Closing Date.
(e) The aggregate tax basis for the Acquiring Fund Shares
received by each Selling Fund Shareholder pursuant to the Reorganization will be
the same as the aggregate tax basis of the Selling Fund shares held by such
shareholder immediately prior to the Reorganization, and the holding period of
the Acquiring Fund Shares to be received by each Selling Fund Shareholder will
include the period during which the Selling Fund shares exchanged therefor were
held by such shareholder (provided the Selling Fund shares were held as capital
assets on the date of the Reorganization).
(f) The tax basis of the assets of each Selling Fund acquired
by the corresponding Acquiring Fund will be the same as the tax basis of such
assets to the Selling Fund immediately prior to the Reorganization, and the
holding period of the assets of the Selling Fund in the hands of the Acquiring
Fund will include the period during which those assets were held by the Selling
Fund.
Such opinion shall contain such assumptions and limitations as shall be
in the opinion of Faegre & Benson LLP appropriate to render the opinions
expressed therein.
8.7 The Amendment shall have been filed in accordance with the
applicable provisions of Maryland law.
8.8 The Acquiring Fund's investment adviser shall have paid or agreed
to pay the costs incurred by FAIF in connection with the Reorganization,
including the fees and expenses associated with the preparation and filing of
the application for exemptive relief referred to in paragraph 8.5 above and the
Registration Statement, and the expenses of printing and mailing the
prospectus/proxy statement, soliciting proxies and holding the shareholders
meeting required to approve the transactions contemplated by this Agreement.
ARTICLE IX
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
9.1 Each Acquiring Fund and the corresponding Selling Fund agree that
neither party has made any representation, warranty or covenant not set forth
herein and that this Agreement constitutes the entire agreement between the
parties.
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9.2 The representations, warranties, and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall not survive the consummation of the transactions contemplated hereunder.
ARTICLE X
TERMINATION
10.1 This Agreement may be terminated by the mutual agreement of each
Acquiring Fund and the corresponding Selling Fund. In addition, each Acquiring
Fund or Selling Fund may at its option terminate this Agreement at or prior to
the Closing Date because:
(a) of a breach by the corresponding Selling Fund or Acquiring
Fund, as applicable, of any representation, warranty, or agreement contained
herein to be performed at or prior to the Closing Date, if not cured within 30
days; or
(b) a condition herein expressed to be precedent to the
obligations of the terminating party has not been met and it reasonably appears
that it will not or cannot be met by the corresponding Selling Fund or Acquiring
Fund, as applicable.
10.2 In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of any Acquiring
Fund, any Selling Fund, or FAIF or its Directors or officers, to the other
party.
ARTICLE XI
AMENDMENTS
11.1 This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the authorized officers of
the Acquiring Funds and the Selling Funds; provided, however, that following the
meeting of shareholders of a Selling Fund pursuant to paragraph 5.2 of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of the Acquiring Fund Shares to be issued to such Selling
Fund Shareholders under this Agreement to the detriment of such Selling Fund
Shareholders without their further approval.
ARTICLE XII
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
12.1 The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
12.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
12.3 This Agreement shall be governed by and construed in accordance
with the laws of the State of Minnesota, without giving effect to the conflicts
of laws provisions thereof.
12.4 This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but, except as
provided in this paragraph, no assignment or
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transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm, or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement, all
as of the date first written above.
FIRST AMERICAN INVESTMENT
FUNDS, INC. ON BEHALF OF
ITS LARGE CAP GROWTH FUND, LARGE
CAP VALUE FUND, EQUITY INCOME
FUND AND TECHNOLOGY FUND
By:
-------------------------------------
Name:
Title:
FIRST AMERICAN INVESTMENT
FUNDS, INC. ON BEHALF OF ITS
CAPITAL GROWTH FUND, RELATIVE
VALUE FUND, GROWTH & INCOME
FUND AND SCIENCE & TECHNOLOGY
FUND
By:
-------------------------------------
Name:
Title:
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Exhibit A
ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FIRST AMERICAN INVESTMENT FUNDS, INC.
The undersigned officer of First American Investment Funds, Inc. (the
"Corporation"), a Maryland corporation, hereby certifies that the following
amendments to the Corporation's Amended and Restated Articles of Incorporation
has been adopted by the Board of Directors and by the requisite vote of
shareholders of the Corporation in the manner required by Maryland General
Corporation Law:
WHEREAS, the Corporation is registered as an open-end management
investment company (I.E., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets;
WHEREAS, it is desirable and in the best interests of the holders of
the Class 00 shares of the Corporation (also known as "Capital Growth Fund")
that the assets belonging to such class, subject to all liabilities of such
class be sold to a separate portfolio of the Corporation which is known as
"Large Cap Growth Fund" and which is represented by the Corporation's Class S
shares, in exchange for shares of Large Cap Growth Fund, which shares will be
distributed PRO RATA to the former shareholders of Capital Growth Fund;
WHEREAS, Capital Growth Fund and Large Cap Growth Fund have entered
into an Agreement and Plan of Reorganization providing for the foregoing
transactions; and
WHEREAS, the Agreement and Plan of Reorganization requires that, in
order to bind all holders of shares of Capital Growth Fund to the foregoing
transactions, and in particular to bind such holders to the cancellation and
retirement of the outstanding Capital Growth Fund shares, it is necessary to
adopt an amendment to the Corporation's Amended and Restated Articles of
Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended to add
the following Article IV(G) immediately following Article IV(F) thereof:
ARTICLE IV(G). (a) For the purposes of this Article IV(G), the
following terms shall have the following meanings:
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"Acquired Fund" means the Corporation's Capital Growth Fund,
which is represented by the Corporation's Class 00 shares.
"Class A Acquired Fund Shares" means the Corporation's Class
00 Common Shares.
"Class B Acquired Fund Shares" means the Corporation's Class
00, Series 2 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class
00, Series 3 Common Shares.
"Class S Acquired Fund Shares" means the Corporation's Class
00, Series 5 Common Fund Shares.
"Class Y Acquired Fund Shares" means the Corporation's Class
00, Series 4 Common Shares.
"Acquiring Fund" means the Corporation's Large Cap Growth
Fund, which is represented by the Corporation's Class S shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
S Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
S, Series 2 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
S, Series 4 Common Shares.
"Class S Acquiring Fund Shares" means the Corporation's Class
S, Series 5 Common Fund Shares.
"Class Y Acquiring Fund Shares" means the Corporation's Class
S, Series 3 Common Shares.
"Reorganization Agreement" means that Agreement and Plan of
Reorganization dated _______________, 2002 between the Acquired Fund
and the Acquiring Fund.
"Effective Time" means the date and time at which delivery of
the assets of the Acquired Fund and the shares of the Acquiring Fund to
be issued pursuant to the Reorganization Agreement, and the liquidation
of the Acquired Fund, occurs.
"Valuation Time" means the close of business on the New York
Stock Exchange, normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Effective Time.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Acquiring Fund shares, all pursuant to the
Reorganization Agreement. For purposes of the foregoing, the terms "assets
belonging to," "liabilities belonging to," "General Assets" and "General
Liabilities" have the meanings assigned to them in Article IV, Section 1(d)(i)
and (ii) of the Corporation's Amended and Restated Articles of Incorporation.
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(c) The numbers of Class A, Class B, Class C, Class S and Class Y
Acquiring Fund Shares to be received by the Acquired Fund and distributed by it
to the holders of Class A, Class B, Class C, Class S and Class Y Acquired Fund
Shares shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares, Class C Shares,
Class S Shares and Class Y Shares shall be computed as of the Valuation
Time using the valuation procedures set forth in the Corporation's
Articles of Incorporation and Bylaws and then-current Prospectus and
Statement of Additional Information and as may be required by the
Investment Company Act of 1940, as amended (the "1940 Act").
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class A Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class A Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class A
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class B Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class B Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class B
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class C Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class C Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class C
Acquiring Fund Shares, each as determined pursuant to (i) above.
(v) The total number of Class S Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class S Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class S Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class S
Acquiring Fund Shares, each as determined pursuant to (i) above.
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(vi) The total number of Class Y Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class Y Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class Y Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class Y
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vii) At the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes
PRO RATA within such classes (based upon the ratio that the number of
Acquired Fund shares of the respective classes owned by each Acquired
Fund shareholder bears to the total number of issued and outstanding
Acquired Fund shares of the respective classes) the full and fractional
Acquiring Fund shares of the respective classes received by the
Acquired Fund pursuant to (ii) through (vi) above. Accordingly, each
Class A Acquired Fund shareholder shall receive, at the Effective Time,
Class A Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class A Acquired Fund Shares
owned by such Acquired Fund shareholder; each Class B Acquired Fund
shareholder shall receive, at the Effective Time, Class B Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class B Acquired Fund Shares owned by such
Acquired Fund shareholder; each Class C Acquired Fund shareholder shall
receive, at the Effective Time, Class C Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class C Acquired Fund Shares owned by such Acquired Fund shareholder;
each Class S Acquired Fund shareholder shall receive, at the Effective
Time, Class S Acquiring Fund Shares with an aggregate net asset value
equal to the aggregate net asset value of the Class S Acquired Fund
Shares owned by such Acquired Fund shareholder; and each Class Y
Acquired Fund shareholder shall receive, at the Effective Time, Class Y
Acquiring Fund Shares with an aggregate net asset value equal to the
aggregate net asset value of the Class Y Acquired Fund Shares owned by
such Acquired Fund shareholder.
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by an
instruction, signed by the Corporation's Secretary, to transfer the Acquiring
Fund shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the names of the Acquired Fund shareholders in amounts representing the
respective PRO RATA number of Acquiring Fund shares due each such shareholder
pursuant to the foregoing provisions. All issued and outstanding shares of the
Acquired Fund shall simultaneously be cancelled on the books of the Acquired
Fund and retired.
(e) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (d) above shall have the status of
authorized and unissued Class 00 Common Shares of the Corporation, without
designation as to series.
A-21
WHEREAS, the Corporation is registered as an open-end management
investment company (I.E., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets;
WHEREAS, it is desirable and in the best interests of the holders of
the Class PP shares of the Corporation (also known as "Relative Value Fund")
that the assets belonging to such class, subject to all liabilities of such
class, be sold to a separate portfolio of the Corporation which is known as
"Large Cap Value Fund" and which is represented by the Corporation's Class D
shares, in exchange for shares of Large Cap Value Fund, which shares will be
distributed PRO RATA to the former shareholders of Relative Value Fund;
WHEREAS, Relative Value Fund and Large Cap Value Fund have entered into
an Agreement and Plan of Reorganization providing for the foregoing
transactions; and
WHEREAS, the Agreement and Plan of Reorganization requires that, in
order to bind all holders of shares of Relative Value Fund to the foregoing
transactions, and in particular to bind such holders to the cancellation and
retirement of the outstanding Relative Value Fund shares, it is necessary to
adopt an amendment to the Corporation's Amended and Restated Articles of
Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended to add
the following Article IV(H) immediately following Article IV(G) thereof:
ARTICLE IV(H). (a) For the purposes of this Article IV(H), the
following terms shall have the following meanings:
"Acquired Fund" means the Corporation's Relative Value Fund,
which is represented by the Corporation's Class PP shares.
"Class A Acquired Fund Shares" means the Corporation's Class
PP Common Shares.
"Class B Acquired Fund Shares" means the Corporation's Class
PP, Series 2 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class
PP, Series 3 Common Shares.
"Class S Acquired Fund Shares" means the Corporation's Class
PP, Series 5 Common Fund Shares.
"Class Y Acquired Fund Shares" means the Corporation's Class
PP, Series 4 Common Shares.
A-22
"Acquiring Fund" means the Corporation's Large Cap Value Fund,
which is represented by the Corporation's Class D shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
D Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
D, Series 3 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
D, Series 4 Common Shares.
"Class D Acquiring Fund Shares" means the Corporation's Class
D, Series 5 Common Fund Shares.
"Class Y Acquiring Fund Shares" means the Corporation's Class
D, Series 2 Common Shares.
"Reorganization Agreement" means that Agreement and Plan of
Reorganization dated _______________, 2002 between the Acquired Fund
and the Acquiring Fund.
"Effective Time" means the date and time at which delivery of
the assets of the Acquired Fund and the shares of the Acquiring Fund to
be issued pursuant to the Reorganization Agreement, and the liquidation
of the Acquired Fund, occurs.
"Valuation Time" means the close of business on the New York
Stock Exchange, normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Effective Time.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Acquiring Fund shares, all pursuant to the
Reorganization Agreement. For purposes of the foregoing, the terms "assets
belonging to," "liabilities belonging to," "General Assets" and "General
Liabilities" have the meanings assigned to them in Article IV, Section 1(d)(i)
and (ii) of the Corporation's Amended and Restated Articles of Incorporation.
(c) The numbers of Class A, Class B, Class C, Class S and Class Y
Acquiring Fund Shares to be received by the Acquired Fund and distributed by it
to the holders of Class A, Class B, Class C, Class S and Class Y Acquired Fund
Shares shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares, Class C Shares,
Class S Shares and Class Y Shares shall be computed as of the Valuation
Time using the valuation procedures set forth in the Corporation's
Articles of Incorporation and Bylaws and then-current Prospectus and
Statement of Additional Information and as may be required by the
Investment Company Act of 1940, as amended (the "1940 Act").
A-23
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class A Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class A Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class A
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class B Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class B Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class B
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class C Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class C Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class C
Acquiring Fund Shares, each as determined pursuant to (i) above.
(v) The total number of Class S Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class S Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class S Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class S
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vi) The total number of Class Y Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class Y Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class Y Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class Y
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vii) At the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes
PRO RATA within such classes (based upon the ratio that the number of
Acquired Fund shares of the respective classes owned by each Acquired
A-24
Fund shareholder bears to the total number of issued and outstanding
Acquired Fund shares of the respective classes) the full and fractional
Acquiring Fund shares of the respective classes received by the
Acquired Fund pursuant to (ii) through (vi) above. Accordingly, each
Class A Acquired Fund shareholder shall receive, at the Effective Time,
Class A Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class A Acquired Fund Shares
owned by such Acquired Fund shareholder; each Class B Acquired Fund
shareholder shall receive, at the Effective Time, Class B Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class B Acquired Fund Shares owned by such
Acquired Fund shareholder; each Class C Acquired Fund shareholder shall
receive, at the Effective Time, Class C Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class C Acquired Fund Shares owned by such Acquired Fund shareholder;
each Class S Acquired Fund shareholder shall receive, at the Effective
Time, Class S Acquiring Fund Shares with an aggregate net asset value
equal to the aggregate net asset value of the Class S Acquired Fund
Shares owned by such Acquired Fund shareholder; and each Class Y
Acquired Fund shareholder shall receive, at the Effective Time, Class Y
Acquiring Fund Shares with an aggregate net asset value equal to the
aggregate net asset value of the Class Y Acquired Fund Shares owned by
such Acquired Fund shareholder.
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by an
instruction, signed by the Corporation's Secretary, to transfer the Acquiring
Fund shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the names of the Acquired Fund shareholders in amounts representing the
respective PRO RATA number of Acquiring Fund shares due each such shareholder
pursuant to the foregoing provisions. All issued and outstanding shares of the
Acquired Fund shall simultaneously be cancelled on the books of the Acquired
Fund and retired.
(e) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (d) above shall have the status of
authorized and unissued Class PP Common Shares of the Corporation, without
designation as to series.
WHEREAS, the Corporation is registered as an open-end management
investment company (I.E., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets;
WHEREAS, it is desirable and in the best interests of the holders of
the Class RR shares of the Corporation (also known as "Growth & Income Fund")
that the assets belonging to such class, subject to all liabilities of such
class, be sold to a separate portfolio of the Corporation which is known as
"Equity Income Fund" and which is represented by the Corporation's Class T
shares, in exchange for shares of Equity Income Fund, which shares will be
distributed PRO RATA to the former shareholders of Growth & Income Fund;
WHEREAS, Growth & Income Fund and Equity Income Fund have entered into
an Agreement and Plan of Reorganization providing for the foregoing
transactions; and
A-25
WHEREAS, the Agreement and Plan of Reorganization requires that, in
order to bind all holders of shares of Growth & Income Fund to the foregoing
transactions, and in particular to bind such holders to the cancellation and
retirement of the outstanding Growth & Income Fund shares, it is necessary to
adopt an amendment to the Corporation's Amended and Restated Articles of
Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended to add
the following Article IV(I) immediately following Article IV(H) thereof:
ARTICLE IV(I). (a) For the purposes of this Article IV(I), the
following terms shall have the following meanings:
"Acquired Fund" means the Corporation's Growth & Income Fund,
which is represented by the Corporation's Class RR shares.
"Class A Acquired Fund Shares" means the Corporation's Class
RR Common Shares.
"Class B Acquired Fund Shares" means the Corporation's Class
RR, Series 2 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class
RR, Series 3 Common Shares.
"Class S Acquired Fund Shares" means the Corporation's Class
RR, Series 5 Common Fund Shares.
"Class Y Acquired Fund Shares" means the Corporation's Class
RR, Series 4 Common Shares.
"Acquiring Fund" means the Corporation's Equity Income Fund,
which is represented by the Corporation's Class T shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
T Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
T, Series 2 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
T, Series 4 Common Shares.
"Class T Acquiring Fund Shares" means the Corporation's Class
T, Series 5 Common Fund Shares.
A-26
"Class Y Acquiring Fund Shares" means the Corporation's Class
T, Series 3 Common Shares.
"Reorganization Agreement" means that Agreement and Plan of
Reorganization dated _______________, 2002 between the Acquired Fund
and the Acquiring Fund.
"Effective Time" means the date and time at which delivery of
the assets of the Acquired Fund and the shares of the Acquiring Fund to
be issued pursuant to the Reorganization Agreement, and the liquidation
of the Acquired Fund, occurs.
"Valuation Time" means the close of business on the New York
Stock Exchange, normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Effective Time.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Acquiring Fund shares, all pursuant to the
Reorganization Agreement. For purposes of the foregoing, the terms "assets
belonging to," "liabilities belonging to," "General Assets" and "General
Liabilities" have the meanings assigned to them in Article IV, Section 1(d)(i)
and (ii) of the Corporation's Amended and Restated Articles of Incorporation.
(c) The numbers of Class A, Class B, Class C, Class S and Class Y
Acquiring Fund Shares to be received by the Acquired Fund and distributed by it
to the holders of Class A, Class B, Class C, Class S and Class Y Acquired Fund
Shares shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares, Class C Shares,
Class S Shares and Class Y Shares shall be computed as of the Valuation
Time using the valuation procedures set forth in the Corporation's
Articles of Incorporation and Bylaws and then-current Prospectus and
Statement of Additional Information and as may be required by the
Investment Company Act of 1940, as amended (the "1940 Act").
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class A Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class A Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class A
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class B Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class B Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class B
Acquiring Fund Shares, each as determined pursuant to (i) above.
A-27
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class C Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class C Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class C
Acquiring Fund Shares, each as determined pursuant to (i) above.
(v) The total number of Class S Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class S Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class S Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class S
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vi) The total number of Class Y Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class Y Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class Y Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class Y
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vii) At the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes
PRO RATA within such classes (based upon the ratio that the number of
Acquired Fund shares of the respective classes owned by each Acquired
Fund shareholder bears to the total number of issued and outstanding
Acquired Fund shares of the respective classes) the full and fractional
Acquiring Fund shares of the respective classes received by the
Acquired Fund pursuant to (ii) through (vi) above. Accordingly, each
Class A Acquired Fund shareholder shall receive, at the Effective Time,
Class A Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class A Acquired Fund Shares
owned by such Acquired Fund shareholder; each Class B Acquired Fund
shareholder shall receive, at the Effective Time, Class B Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class B Acquired Fund Shares owned by such
Acquired Fund shareholder; each Class C Acquired Fund shareholder shall
receive, at the Effective Time, Class C Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class C Acquired Fund Shares owned by such Acquired Fund shareholder;
each Class S Acquired Fund shareholder shall receive, at the Effective
Time, Class S Acquiring Fund Shares with an aggregate net asset value
equal to the aggregate net asset value of the Class S Acquired Fund
Shares owned by such Acquired Fund shareholder; and each Class Y
Acquired Fund shareholder shall receive, at the Effective Time, Class Y
Acquiring Fund Shares with an aggregate net asset value equal to the
aggregate net asset value of the Class Y Acquired Fund Shares owned by
such Acquired Fund shareholder.
A-28
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by an
instruction, signed by the Corporation's Secretary, to transfer the Acquiring
Fund shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the names of the Acquired Fund shareholders in amounts representing the
respective PRO RATA number of Acquiring Fund shares due each such shareholder
pursuant to the foregoing provisions. All issued and outstanding shares of the
Acquired Fund shall simultaneously be cancelled on the books of the Acquired
Fund and retired.
(e) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (d) above shall have the status of
authorized and unissued Class RR Common Shares of the Corporation, without
designation as to series.
WHEREAS, the Corporation is registered as an open-end management
investment company (I.E., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets;
WHEREAS, it is desirable and in the best interests of the holders of
the Class VV shares of the Corporation (also known as "Science & Technology
Fund") that the assets belonging to such class, subject to all liabilities of
such class, be sold to a separate portfolio of the Corporation which is known as
"Technology Fund" and which is represented by the Corporation's Class P shares,
in exchange for shares of Technology Fund, which shares will be distributed
PRO RATA to the former shareholders of Science & Technology Fund;
WHEREAS, Science & Technology Fund and Technology Fund have entered
into an Agreement and Plan of Reorganization providing for the foregoing
transactions; and
WHEREAS, the Agreement and Plan of Reorganization requires that, in
order to bind all holders of shares of Science & Technology Fund to the
foregoing transactions, and in particular to bind such holders to the
cancellation and retirement of the outstanding Science & Technology Fund shares,
it is necessary to adopt an amendment to the Corporation's Amended and Restated
Articles of Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Amended and
Restated Articles of Incorporation be, and the same hereby are, amended to add
the following Article IV(J) immediately following Article IV(I) thereof:
ARTICLE IV(J). (a) For the purposes of this Article IV(J), the
following terms shall have the following meanings:
A-29
"Acquired Fund" means the Corporation's Science & Technology
Fund, which is represented by the Corporation's Class VV shares.
"Class A Acquired Fund Shares" means the Corporation's Class
VV Common Shares.
"Class B Acquired Fund Shares" means the Corporation's Class
VV, Series 2 Common Shares.
"Class C Acquired Fund Shares" means the Corporation's Class
VV, Series 3 Common Shares.
"Class S Acquired Fund Shares" means the Corporation's Class
VV, Series 5 Common Fund Shares.
"Class Y Acquired Fund Shares" means the Corporation's Class
VV, Series 4 Common Shares.
"Acquiring Fund" means the Corporation's Technology Fund,
which is represented by the Corporation's Class P shares.
"Class A Acquiring Fund Shares" means the Corporation's Class
P Common Shares.
"Class B Acquiring Fund Shares" means the Corporation's Class
P, Series 3 Common Shares.
"Class C Acquiring Fund Shares" means the Corporation's Class
P, Series 4 Common Shares.
"Class S Acquiring Fund Shares" means the Corporation's Class
P, Series 5 Common Fund Shares.
"Class Y Acquiring Fund Shares" means the Corporation's Class
P, Series 2 Common Shares.
"Reorganization Agreement" means that Agreement and Plan of
Reorganization dated _______________, 2002 between the Acquired Fund
and the Acquiring Fund.
"Effective Time" means the date and time at which delivery of
the assets of the Acquired Fund and the shares of the Acquiring Fund to
be issued pursuant to the Reorganization Agreement, and the liquidation
of the Acquired Fund, occurs.
"Valuation Time" means the close of business on the New York
Stock Exchange, normally 4:00 p.m. Eastern Time, on the business day
immediately prior to the Effective Time.
A-30
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the liabilities belonging to the Acquired Fund, and the General Assets and
General Liabilities allocated to the Acquired Fund, shall be sold to and assumed
by the Acquiring Fund in return for Acquiring Fund shares, all pursuant to the
Reorganization Agreement. For purposes of the foregoing, the terms "assets
belonging to," "liabilities belonging to," "General Assets" and "General
Liabilities" have the meanings assigned to them in Article IV, Section 1(d)(i)
and (ii) of the Corporation's Amended and Restated Articles of Incorporation.
(c) The numbers of Class A, Class B, Class C, Class S and Class Y
Acquiring Fund Shares to be received by the Acquired Fund and distributed by it
to the holders of Class A, Class B, Class C, Class S and Class Y Acquired Fund
Shares shall be determined as follows:
(i) The net asset value per share of the Acquired Fund's and
the Acquiring Fund's Class A Shares, Class B Shares, Class C Shares,
Class S Shares and Class Y Shares shall be computed as of the Valuation
Time using the valuation procedures set forth in the Corporation's
Articles of Incorporation and Bylaws and then-current Prospectus and
Statement of Additional Information and as may be required by the
Investment Company Act of 1940, as amended (the "1940 Act").
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class A Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class A Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class A
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iii) The total number of Class B Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class B Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class B Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class B
Acquiring Fund Shares, each as determined pursuant to (i) above.
(iv) The total number of Class C Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class C Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class C Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class C
Acquiring Fund Shares, each as determined pursuant to (i) above.
A-31
(v) The total number of Class S Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class S Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class S Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class S
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vi) The total number of Class Y Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for assets and
liabilities of the Acquired Fund shall be determined as of the
Effective Time by multiplying the number of Class Y Acquired Fund
Shares outstanding times a fraction, the numerator of which is the net
asset value per share of Class Y Acquired Fund Shares, and the
denominator of which is the net asset value per share of the Class Y
Acquiring Fund Shares, each as determined pursuant to (i) above.
(vii) At the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund shareholders of the respective classes
PRO RATA within such classes (based upon the ratio that the number of
Acquired Fund shares of the respective classes owned by each Acquired
Fund shareholder bears to the total number of issued and outstanding
Acquired Fund shares of the respective classes) the full and fractional
Acquiring Fund shares of the respective classes received by the
Acquired Fund pursuant to (ii) through (vi) above. Accordingly, each
Class A Acquired Fund shareholder shall receive, at the Effective Time,
Class A Acquiring Fund Shares with an aggregate net asset value equal
to the aggregate net asset value of the Class A Acquired Fund Shares
owned by such Acquired Fund shareholder; each Class B Acquired Fund
shareholder shall receive, at the Effective Time, Class B Acquiring
Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Class B Acquired Fund Shares owned by such
Acquired Fund shareholder; each Class C Acquired Fund shareholder shall
receive, at the Effective Time, Class C Acquiring Fund Shares with an
aggregate net asset value equal to the aggregate net asset value of the
Class C Acquired Fund Shares owned by such Acquired Fund shareholder;
each Class S Acquired Fund shareholder shall receive, at the Effective
Time, Class S Acquiring Fund Shares with an aggregate net asset value
equal to the aggregate net asset value of the Class S Acquired Fund
Shares owned by such Acquired Fund shareholder; and each Class Y
Acquired Fund shareholder shall receive, at the Effective Time, Class Y
Acquiring Fund Shares with an aggregate net asset value equal to the
aggregate net asset value of the Class Y Acquired Fund Shares owned by
such Acquired Fund shareholder.
(d) The distribution of Acquiring Fund shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by an
instruction, signed by the Corporation's Secretary, to transfer the Acquiring
Fund shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the names of the Acquired Fund shareholders in amounts representing the
respective PRO RATA number of Acquiring Fund shares due each such shareholder
pursuant to the foregoing provisions. All issued and outstanding shares of the
Acquired Fund shall simultaneously be cancelled on the books of the Acquired
Fund and retired.
A-32
(e) From and after the Effective Time, the Acquired Fund shares
cancelled and retired pursuant to paragraph (d) above shall have the status of
authorized and unissued Class VV Common Shares of the Corporation, without
designation as to series.
The undersigned officer of the Corporation hereby acknowledges, in the
name and on behalf of the Corporation, the foregoing Articles of Amendment to be
the corporate act of the Corporation and further certifies that, to the best of
his or her knowledge, information and belief, the matters and facts set forth
therein with respect to the approval thereof are true in all material respects,
under the penalties of perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be signed in its name and on its behalf by its President or a Vice
President and witnessed by its Secretary or an Assistant Secretary on
____________ __, 2002.
FIRST AMERICAN INVESTMENT FUNDS, INC.
By
---------------------------------
Its
--------------------------------
WITNESS:
- ------------------------------------------------
Secretary, First American Investment Funds, Inc.
A-33
EXHIBIT B
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
(EXCERPTED FROM THE FAIF ANNUAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2001)
CAPITAL GROWTH
INVESTMENT OBJECTIVE: MAXIMIZE LONG-TERM AFTER-TAX RETURNS
The First American Capital Growth Fund lost 43.17% for the 12-month period ended
September 30, 2001(Class A shares declined 43.28% on net asset value). During
the 12 months, the fund's benchmark, the Russell 1000 Growth Index, declined
45.64%.
Throughout the year, the U.S. economy was faced with a significant slowdown.
This severely hampered business prospects for many companies, and led to profit
declines. This also took a toll on stock prices. Hardest hit were growth
companies, which had enjoyed the fruits of a solid run-up in values through the
late 1990s and early 2000. With profit growth drying up, investors had less
enthusiasm for the growth side of the market.
Technology stocks paid the biggest price. Business demand for tech-related
products and services dried up dramatically beginning in 2000 and continuing in
2001. Stocks in that sector, which represented an important position in the
fund, declined dramatically as a result. The fund also lost ground due to a
strong commitment to health care stocks, which proved to be disappointing for
most of the year. Only in the last two months did the health care area show
signs of revival.
The fund did benefit from effective stock selection in many of the sectors in
which it invests. Holdings in the consumer staple, financial, and technology
area tended to perform better than the average stock within their respective
sectors during the period. Few significant changes were made to the portfolio
during the year. As a practice, the fund is generally positioned somewhat
comparable to the overall market for growth stocks in terms of sector
allocations. Value is added primarily through careful stock selection within
each of those sectors.
As the new fiscal year begins, it is clear that the U.S. economy is fighting a
slump that has made for a difficult business environment. In the short term,
this will continue to create a challenge for many companies trying to meet
profit expectations. As signs of an improved economy become more apparent, which
could happen by early 2002, stocks are likely to generate better performance. In
anticipation of that, the fund may be positioned in a more aggressive manner in
order to take advantage of opportunities that are likely to return to the growth
sector of the market.
- --------------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- --------------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(6)
------------------------------------------------------------
1 YEAR 5 YEARS 12/12/1994 8/18/1997 3/31/2000 12/11/2000 9/24/2001
- --------------------------------------------------------------------------------------------------------------
Class A NAV -43.28% -- -- -- -31.88% -- --
- --------------------------------------------------------------------------------------------------------------
Class A POP -46.39% -- -- -- -34.40% -- --
- --------------------------------------------------------------------------------------------------------------
Class B NAV -43.66% 4.95% 10.12% -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Class B POP -46.40% 4.62% 10.12% -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- -- 2.58%
- --------------------------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- -- 0.60%
- --------------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -38.82% --
- --------------------------------------------------------------------------------------------------------------
Class Y -43.17% -- -- 0.29% -- -- --
- --------------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(3) -45.64% 6.50% 12.25% 1.31% -36.88% -30.89% --
- --------------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(4) -26.62% 10.22% 14.80% 5.02% -20.56% -20.39% --
- --------------------------------------------------------------------------------------------------------------
S&P/BARRA 500 Growth Index(5) -35.70% 9.94% 14.96% 4.42% -30.55% -22.79% --
- --------------------------------------------------------------------------------------------------------------
B-1
CAPITAL GROWTH
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
CAPITAL CAPITAL CAPITAL RUSSELL S&P 500 S&P/BARRA
GROWTH FUND, GROWTH FUND, GROWTH FUND, 1000 VALUE COMPOSITE 500 GROWTH
CLASS B NAV CLASS B POP CLASS Y INDEX(3) INDEX(4) INDEX(5)
---------------------------------------------------------------------------------------
CLASS B
12/1994 10,000 10,000 10,000 10,000 10,000
11/1995 12,944 12,944 13,640 13,498 13,658
11/1996 16,483 16,483 17,228 17,258 17,528
11/1997 20,223 20,223 21,796 22,180 23,094
11/1998 24,422 24,422 28,042 27,424 30,885
11/1999 30,590 30,590 36,873 33,152 39,685
10/2000 33,189 33,189 38,250 34,470 38,845
9/2001 19,260 19,260 21,826 25,402 25,643
CLASS Y
9/1997 10,000 10,000 10,000 10,000
11/1997 10,459 10,533 10,667 10,747
11/1998 12,646 13,552 13,190 14,372
11/1999 15,884 17,820 15,944 18,468
10/2000 17,286 18,485 16,579 18,076
9/2001 10,119 10,548 12,217 11,933
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On September 24, 2001, the Capital Growth Fund became the successor by
merger to the Firstar Large Cap Growth Fund, a series of Firstar Funds,
Inc. Prior to the merger, the First American Fund had no assets or
liabilities. Performance presented prior to September 24, 2001, represents
that of the Firstar Large Cap Growth Fund. The Firstar Large Cap Growth
Fund was organized on December 11, 2000, and, prior to that, was a separate
series of Firstar Stellar Funds, Inc.
On September 24, 2001, the fund changed its investment objective to manage
its portfolio of securities on a tax-efficient basis. Performance prior to
this date does not reflect this management strategy.
(2) Performance for Class A, Class C, and Class S shares is not presented.
Performance for Class A and Class S is higher due to lower expenses.
Performance for Class C is substantially similar to Class B due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500
Composite Index and the Standard & Poor's/BARRA 500 Growth Index as
benchmarks. Going forward, the fund will use the Russell 1000 Growth Index
as a comparison because its composition better matches the fund's
investment objective and strategies.
(4) An unmanaged index of large-capitalization stocks.
(5) An unmanaged market-capitalization-weighted index comprised of the stocks
in the Standard & Poor's 500 Composite Index with the highest valuations
and, in the advisor's view, the greatest growth opportunities.
(6) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class C and Class
S represents cumulative total return as the classes have been in operation
less than one year.
B-2
LARGE CAP GROWTH
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL
Growth stocks, the dominant performer of the markets in the late 1990s, bore the
brunt of a severe bear market that began in early 2000. The First American Large
Cap Growth Fund declined 51.31% for the fiscal year ended September 30, 2001
(Class A shares declined 51.45% on net asset value). During the 12-month period,
the fund's benchmark, the S&P 500 Composite Index, declined 26.62%.
While the domestic economy faced a significant slowdown dating back to the
closing months of 2000, the situation was even more severe for many major U.S.
corporations. They found themselves in what can be described as a "profits
recession." Corporate earnings declined dramatically, and stock prices paid a
significant price as a result. Large-cap growth stocks, which had been major
beneficiaries of an unprecedented bull market in the previous decade, were
particularly hard hit. Investors were clearly surprised by the depth of the
profit decline, and a major selloff resulted.
The fund began the fiscal year with a heavy emphasis on technology stocks. That
proved to be damaging to the portfolio in the early months, as technology
stalwarts such as Cisco Systems and Texas Instruments saw their stock prices
plunge. The fund's position in technology was reduced, and stocks the fund
continues to hold in that area tend to be companies that may be less aggressive,
but offer stable profit growth.
The fund put an increased weighting in growth stocks from the health care and
consumer areas. Health care stocks proved to be the best-performing sector in
the marketplace.
Another damaging aspect of the past year's market was a sudden change in the
fortunes of energy stocks. Early in the period, energy stocks looked
particularly attractive, as high demand and reduced supplies resulted in a boost
in oil and natural gas prices. However, as the economy lost steam, demand fell
as well as the values of many energy stocks.
The main issue affecting the fortunes of growth stocks going forward is when the
economy will begin to recover. The events on September 11 have clearly dealt a
setback to hopes for a rapid rebound. Until it becomes evident that corporate
profits can stabilize and improve, the fund will maintain a somewhat defensive
posture in its stock selection. Once it becomes evident that the economy is on
the rise, the market for large-cap growth stocks, a core holding for many
investors, is likely to improve.
- ---------------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ---------------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
--------------------------------------------------------------
1 YEAR 5 YEARS 12/18/1992 8/2/1994 8/15/1994 2/1/1999 9/24/2001
- ---------------------------------------------------------------------------------------------------------------
Class A NAV -51.45% 2.09% 5.39% -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Class A POP -54.11% 0.95% 4.72% -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Class B NAV -51.79% 1.34% -- -- 7.42% -- --
- ---------------------------------------------------------------------------------------------------------------
Class B POP -53.93% 1.09% -- -- 7.42% -- --
- ---------------------------------------------------------------------------------------------------------------
Class C NAV -51.78% -- -- -- -- -15.51% --
- ---------------------------------------------------------------------------------------------------------------
Class C POP -52.70% -- -- -- -- -15.84% --
- ---------------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -- 2.87%
- ---------------------------------------------------------------------------------------------------------------
Class Y -51.31% 2.36% -- 8.38% -- -- --
- ---------------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(3) -45.64% 6.50% 10.01% 11.54% 11.54% -12.54% --
- ---------------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(4) -26.62% 10.22% 12.63% 13.65% 13.65% -5.33% --
- ---------------------------------------------------------------------------------------------------------------
B-3
LARGE CAP GROWTH
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
LARGE CAP LARGE CAP LARGE CAP RUSSELL S&P 500
GROWTH FUND, GROWTH FUND, GROWTH FUND, 1000 GROWTH COMPOSITE
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4)
--------------------------------------------------------------------------
CLASS A
12/1992 10,000 9,452 10,000 10,000
9/1993 8,947 8,457 9,907 10,759
9/1994 9,286 8,777 10,485 11,155
9/1995 12,183 11,515 13,861 14,474
9/1996 14,300 13,516 16,827 17,416
9/1997 18,976 17,935 22,934 24,461
9/1998 19,092 18,045 25,481 26,672
9/1999 25,964 24,541 34,362 34,083
9/2000 32,663 30,873 42,413 38,611
9/2001 15,859 14,989 23,056 28,332
CLASS Y
8/1994 10,000 10,000 10,000
9/1994 10,236 9,863 9,756
9/1995 13,467 13,038 12,657
9/1996 15,835 15,828 15,231
9/1997 21,021 21,574 21,391
9/1998 21,246 23,969 23,325
9/1999 28,970 32,324 29,806
9/2000 36,541 39,897 33,765
9/2001 17,792 21,688 24,777
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On May 18, 1994, the Large Cap Growth Fund became the successor by merger
to the Boulevard Blue Chip Growth Fund. Prior to the merger, the First
American fund had no assets or liabilities. Performance prior to May 18,
1994, is that of the Boulevard Blue Chip Growth Fund.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500
Composite Index and the Standard & Poor's/BARRA 500 Growth Index as
benchmarks. Going forward, the fund will use the Russell 1000 Growth Index
as a comparison because its composition better matches the fund's
investment objective and strategies.
(4) An unmanaged index of large-capitalization stocks.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
B-4
RELATIVE VALUE
INVESTMENT OBJECTIVE: MAXIMIZE AFTER-TAX TOTAL RETURN FROM CAPITAL APPRECIATION
PLUS INCOME
The First American Relative Value Fund declined by 11.97% for the 12-month
period ended September 30, 2001 (Class A shares declined 12.18% on net asset
value). During the 12-month period, the fund's benchmark, the Russell 1000 Value
Index, declined 8.91%.
There were several major trends in the economy and markets that had a
significant impact on the fund's performance over the past 12 months. For
starters, the U.S. economy went into a definite slowdown mode in late 2000, and
continued on that track throughout the first nine months of 2001. The tragedies
on September 11 may have been the catalyst to throw the U.S. economy into a
full-blown recession.
Throughout this period, the stock market continued a cycle that had begun in
2000 as investor interest shifted from a bias toward growth to one that favored
value stocks. While previously red-hot sectors like technology and
telecommunications stocks fell dramatically, sectors featuring a number of
value-oriented names, including financial services, energy, and consumer
companies that are not dependent on a strong economy to succeed, came to the
forefront.
This portfolio is structured with a limited number of stocks (close to 50 at the
end of the fiscal year). These stocks are chosen through a careful process that
seeks to identify issues offering long-term fundamental value. Trading is
limited, as the fund seeks to capture the full value of a stock's upside
potential.
The fund is diversified across most market sectors, though it currently has its
heaviest weighting in financial, energy, and technology stocks. Over the past
fiscal year, a number of stocks in these industries performed well for the fund.
Given the dramatic decline in the markets in the wake of September 11, there
appears to be solid opportunities to buy stocks at attractive prices as the new
fiscal year gets underway. The foundation may have been laid for a positive year
ahead. This fund strives to deliver consistent performance over time, and could
play an important role in a well-diversified portfolio.
- -----------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- -----------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(6)
-----------------------------------------------
1 YEAR 5 YEARS 10 YEARS 3/31/1998 8/18/1997 12/11/2000 9/24/2001
- -----------------------------------------------------------------------------------------------------------
Class A NAV -12.18% 9.55% 12.06% -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Class A POP -17.00% 8.32% 11.42% -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Class B NAV -12.75% -- -- -1.36% -- -- --
- -----------------------------------------------------------------------------------------------------------
Class B POP -17.07% -- -- -2.18% -- -- --
- -----------------------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- -- 3.57%
- -----------------------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- -- 1.52%
- -----------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -13.53% --
- -----------------------------------------------------------------------------------------------------------
Class Y -11.97% -- -- -- 3.73% -- --
- -----------------------------------------------------------------------------------------------------------
Russell 1000 Value Index(3) -8.91% 11.67% 13.85% 1.29% 6.51% -7.67% --
- -----------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(4) -26.62% 10.22% 12.70% -0.34% 5.02% -20.39% --
- -----------------------------------------------------------------------------------------------------------
S&P/BARRA 500 Value Index(5) -16.89% 9.80% 12.68% 0.15% 4.85% -18.22% --
- -----------------------------------------------------------------------------------------------------------
B-5
RELATIVE VALUE
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
RELATIVE RELATIVE RELATIVE RUSSELL S&P 500 S&P/BARRA
VALUE FUND, VALUE FUND, VALUE FUND, 1000 VALUE COMPOSITE 500 VALUE
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4) INDEX(5)
--------------------------------------------------------------------------------------
CLASS A
11/1991 10,000 9,452 10,000 10,000 10,000
11/1992 11,531 10,896 12,048 11,847 11,764
11/1993 13,196 12,469 14,299 13,044 13,968
11/1994 13,066 12,346 14,118 13,181 13,944
11/1995 17,651 16,678 19,273 18,055 18,815
11/1996 22,744 21,490 24,343 23,085 23,983
11/1997 29,045 27,445 31,566 29,668 29,997
11/1998 33,886 32,018 36,329 36,683 33,971
11/1999 37,913 35,823 40,132 44,344 38,203
10/2000 37,884 35,796 42,679 46,108 42,149
9/2001 32,140 30,368 37,943 33,977 34,387
CLASS Y
8/1997 10,000 10,000 10,000 10,000
11/1997 10,393 10,764 10,667 10,586
11/1998 12,154 12,388 13,190 11,988
11/1999 13,637 13,685 15,944 13,481
10/2000 13,671 14,553 16,579 14,874
9/2001 11,627 12,938 12,217 12,135
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On September 24, 2001, the Relative Value Fund became the successor by
merger to the Firstar Relative Value Fund, a series of Firstar Funds, Inc.
Prior to the merger, the First American Fund had no assets or liabilities.
Performance presented prior to September 24, 2001, represents that of the
Firstar Relative Value Fund. The Firstar Relative Value Fund was organized
on December 11, 2000, and, prior to that, was a separate series of Firstar
Stellar Funds, Inc.
On September 24, 2001, the fund changed its investment objective to manage
its portfolio of securities on a tax-efficient basis. Performance prior to
this date does not reflect this management strategy.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500
Composite Index and the Standard & Poor's/BARRA 500 Value Index as
benchmarks. Going forward, the fund will use the Russell 1000 Value Index
as a comparison because its composition better matches the fund's
investment objectives and strategies.
(4) An unmanaged index of large-capitalization stocks.
(5) An unmanaged capitalization-weighted index consisting of approximately 50%
of the market capitalization of the Standard & Poor's Composite Index with
low price-to-book ratios.
(6) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class C and Class
S represents cumulative total return as the classes have been in operation
less than one year.
B-6
LARGE CAP VALUE
INVESTMENT OBJECTIVE: PRIMARY--CAPITAL APPRECIATION; SECONDARY--CURRENT INCOME
In one of the most difficult 12-month periods in recent memory for stocks of
large American companies, the First American Large Cap Value Fund declined
13.53% for the fiscal year ended September 30, 2001 (Class A shares declined
13.72% on net asset value). During the same 12-month period, the fund's
benchmark, the Russell 1000 Value Index, declined 8.91%.
The past 12 months saw investors turn more attention to value-oriented stocks.
This segment of the market struggled through much of the 1990s, at a time when
most investors preferred stocks of growth companies, especially in the
high-flying technology sector. Since the early months of 2000, investor
sentiment has shifted, favoring value issues. While technology stocks were
losing ground, investors were putting more money to work in financial services,
energy, and utilities stocks. Those sectors performed particularly well in the
closing months of 2000.
After a brief spurt by growth stocks in the opening weeks of 2001, value once
again regained leadership, and that trend generally held firm through much of
the rest of the fiscal year. A significant event that occurred regularly
throughout the year was the decision by the Federal Reserve (the Fed) to reduce
short-term interest rates. Typically, in periods where the Fed is cutting rates,
value stocks tend to perform well relative to the rest of the equity market. The
Fed's actions were an effort to keep the U.S. economy from slowing too much.
Despite the Fed's best efforts, the tragic events on September 11 may have
pushed the nation into a recession.
The declining interest-rate environment helped improve prospects for financial
services companies, and the fund was able to capitalize on positive performance.
Basic materials and industrial stocks also performed relatively well, as did a
number of the fund's health care holdings. By contrast, technology stocks
struggled, though the fund's focus on more conservative companies in this sector
tended to perform better than the broad market of technology stocks. Utilities
stocks started the year on a positive track, but struggled through most of 2001,
detracting from the fund's returns.
While the terrorist attacks on America have added a great deal of uncertainty to
the equation, there are positive signs for equities entering the new fiscal
year. What's more, it is possible that value stocks will continue to enjoy a
position of strength within the stock market. Thanks to significant stimulus
from the Fed and from added U.S. government spending and tax cuts, it seems
likely that the economy will turn a corner and begin to enjoy modest growth in
the coming months, which should improve the profit outlook for a number of
companies. Today's market appears to offer fairly attractive value, and that is
likely to benefit investors in the future.
- ----------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ----------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
----------------------------------------------
1 YEAR 5 YEARS 10 YEARS 2/4/1994 8/15/1994 2/1/1999 9/24/2001
- ----------------------------------------------------------------------------------------------------------
Class A NAV -13.72% 6.10% 10.94% -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Class A POP -18.48% 4.91% 10.32% -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Class B NAV -14.42% 5.31% -- -- 9.99% -- --
- ----------------------------------------------------------------------------------------------------------
Class B POP -18.29% 5.08% -- -- 9.99% -- --
- ----------------------------------------------------------------------------------------------------------
Class C NAV -14.36% -- -- -- -- -5.02% --
- ----------------------------------------------------------------------------------------------------------
Class C POP -15.99% -- -- -- -- -5.38% --
- ----------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -- 4.24%
- ----------------------------------------------------------------------------------------------------------
Class Y -13.53% 6.38% -- 10.60% -- -- --
- ----------------------------------------------------------------------------------------------------------
Russell 1000 Value Index(3) -8.91% 11.67% 13.85% 13.42% 13.99% 0.63% --
- ----------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(4) -26.62% 10.22% 12.70% 13.24% 13.73% -5.34% --
- ----------------------------------------------------------------------------------------------------------
B-7
LARGE CAP VALUE
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
LARGE CAP LARGE CAP LARGE CAP RUSSELL S&P 500
VALUE FUND, VALUE FUND, VALUE FUND, 1000 VALUE COMPOSITE
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4)
----------------------------------------------------------------------------
CLASS A
9/1991 10,000 9,452 10,000 10,000
9/1992 10,788 10,197 11,240 11,105
9/1993 12,495 11,810 14,090 12,549
9/1994 13,540 12,798 13,994 13,012
9/1995 16,960 16,031 17,868 16,882
9/1996 21,013 19,861 21,075 20,314
9/1997 29,171 27,571 29,992 28,531
9/1998 26,612 25,153 31,069 31,110
9/1999 32,447 30,669 36,885 39,754
9/2000 32,746 30,951 40,173 45,035
9/2001 28,252 26,703 36,592 33,047
CLASS Y
2/1994 10,000 10,000 10,000
9/1994 10,170 9,935 10,074
9/1995 12,763 12,686 13,070
9/1996 15,867 14,963 15,728
9/1997 22,076 21,294 22,089
9/1998 20,206 22,059 24,086
9/1999 24,707 26,188 30,779
9/2000 24,995 28,523 34,867
9/2001 21,614 25,980 25,585
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500
Composite Index as a benchmark. Going forward, the fund will use the
Russell 1000 Value Index as a comparison because its composition better
matches the fund's investment objectives and strategies.
(4) An unmanaged index of large-capitalization stocks.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
B-8
GROWTH & INCOME
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL AND INCOME
The First American Growth & Income Fund lost 25.30% for the 12-month period
ended September 30, 2001 (Class A shares declined 25.48% on net asset value).
During the 12 months, the fund outpaced its benchmark, the S&P 500 Composite
Index, which declined 26.62%.
The biggest issue confronting the equity markets during the period was continued
slowing in U.S. economic growth, which may have actually reached recession
levels by the end of the fiscal year, particularly following the terrorist
attacks on September 11. In this environment, few companies were able to muster
reasonable profit growth, which sent stock prices tumbling. Even a series of
short-term interest rate cuts by the Federal Reserve, which began in January and
continued right through to the end of the fiscal year, was not enough to stem
the tide of a slowing U.S. economy and weak profit picture.
Among the sectors of the market that were hardest hit in the equity portfolio
were stocks of health care companies. For most of the year, they proved to be a
disappointment, generating poor returns. Only near the end of the year did they
begin to find their way back into favor. Health care stocks represented the
fund's largest equity position. The hardest-hit sector overall was technology,
and that had a negative impact on the fund as well. The fund placed a bigger
emphasis on technology stocks early in 2001, given that they already had
suffered significant losses, but the relentless economy continued to hurt this
area of business more than any other.
Better performance was generated by the fund's holdings in stocks of consumer
product companies that typically don't see their fortunes change with swings in
the economy, such as food and beverage firms and household products companies.
Selected consumer cyclical stocks also performed well.
As the new fiscal year begins, it is clear that the U.S. economy is fighting a
slump that has made for a difficult business environment. In the short term,
that will mean many companies will have to work hard to achieve their profit
expectations. However, it is expected that the economic cycle will eventually
turn positive, probably in the early part of 2002. Once that becomes apparent,
it's likely that stocks will enjoy a rebound. At some point, the fund will
likely be positioned in a more aggressive manner in an effort to take advantage
of an improving environment.
- --------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- --------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(4)
---------------------------------------------
1 YEAR 5 YEARS 10 YEARS 1/9/1995 3/1/1999 11/27/2000 9/24/2001
- --------------------------------------------------------------------------------------------------------
Class A NAV -25.48% 7.85% -- 13.06% -- -- --
- --------------------------------------------------------------------------------------------------------
Class A POP -29.58% 6.64% -- 12.11% -- -- --
- --------------------------------------------------------------------------------------------------------
Class B NAV -26.00% -- -- -- -6.36% -- --
- --------------------------------------------------------------------------------------------------------
Class B POP -29.31% -- -- -- -7.26% -- --
- --------------------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- -- 3.94%
- --------------------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- -- 1.92%
- --------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -23.50% --
- --------------------------------------------------------------------------------------------------------
Class Y -25.30% 8.11% 10.75% -- -- -- --
- --------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(3) -26.62% 10.22% 12.70% 14.56% -6.97% -19.99% --
- --------------------------------------------------------------------------------------------------------
B-9
GROWTH & INCOME
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
GROWTH & INCOME GROWTH & INCOME GROWTH & INCOME S&P 500
FUND, FUND, FUND, COMPOSITE
CLASS A NAV CLASS A POP CLASS Y INDEX(3)
---------------------------------------------------------------
CLASS A
1/1995 10,000 9,452 10,000
10/1995 12,631 11,934 12,603
10/1996 15,992 15,109 15,640
10/1997 20,866 19,714 20,663
10/1998 24,638 23,278 25,204
10/1999 27,550 26,030 31,671
10/2000 30,991 29,280 33,599
9/2001 22,830 21,570 24,760
CLASS Y
10/1991 10,000 10,000
10/1992 10,582 10,995
10/1993 11,632 12,638
10/1994 11,847 13,128
10/1995 14,808 16,599
10/1996 18,789 20,598
10/1997 24,584 27,213
10/1998 29,094 33,193
10/1999 32,618 41,710
10/2000 36,777 44,250
9/2001 27,159 32,608
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Index is for illustrative
purposes only and is not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On September 24, 2001, the Growth & Income Fund became the successor by
merger to the Firstar Growth & Income Fund, a series of Firstar Funds, Inc.
Prior to the merger, the First American fund had no assets or liabilities.
Performance presented prior to September 24, 2001, represents that of
Firstar Growth & Income Fund. Prior to January 10, 1995, the Firstar fund
offered one class of shares to investors without a sales charge or a
distribution or shareholder servicing fee. Performance presented prior to
January 10, 1995, does not reflect these fees.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of large-capitalization stocks.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class C and Class
S represents cumulative total return as the classes have been in operation
less than one year.
B-10
EQUITY INCOME
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL AND INCOME
In a volatile year for stocks, the First American Equity Income Fund finished
the year with a modest decline of 3.71% for the fiscal year ended September 30,
2001 (Class A shares declined 3.89% on net asset value). By comparison, the
fund's benchmarks, the S&P 500 Composite Index and the Lehman Government/Credit
Bond Index, declined 26.62% and gained 15.32% respectively, over the 12-month
period.
Stocks that pay dividends began to draw more investor attention as market
expectations shifted from the belief that the economy would continue to grow at
a solid pace to the expectation that a recession was just around the corner. In
fact, there has been a recession in business capital spending, which began to
dramatically decline during the first months of 2001.
Because the fund was positioned to weather this change in expectations for the
economy, the portfolio held up relatively well. The fund's focus on stocks that
pay dividends helps to provide a cushion in periods when the markets move lower,
as the current yield provides a reliable return that can help offset negative
movement in stock prices.
One reason the fund performed well compared to its competitive group and the
market as a whole was that it avoided significant investments in technology
stocks, which were the hardest hit during the 12-month period.
Going forward, the fund will stick to its discipline of owning dividend-paying
companies and emphasizing yield-oriented sectors of the market. It seems likely,
particularly in the wake of the September 11 attacks, that the U.S. economy will
struggle in the first months of the new fiscal year. While there are efforts
underway to stimulate economic growth, the impact is likely to begin off of a
much lower economic base, as well as a significantly lower level of corporate
profits. The portfolio will be adjusted to favor stocks that can benefit from
positive economic growth as improvement in the economy becomes more visible.
- ----------------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ----------------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
----------------------------------------------------------
1 YEAR 5 YEARS 12/18/1992 8/2/1994 8/15/1994 2/1/1999 9/24/2001
- ----------------------------------------------------------------------------------------------------------------
Class A NAV -3.89% 10.74% 10.95% -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Class A POP -9.19% 9.49% 10.24% -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Class B NAV -4.64% 9.98% -- -- 11.64% -- --
- ----------------------------------------------------------------------------------------------------------------
Class B POP -8.35% 9.72% -- -- 11.64% -- --
- ----------------------------------------------------------------------------------------------------------------
Class C NAV -4.74% -- -- -- -- 0.75% --
- ----------------------------------------------------------------------------------------------------------------
Class C POP -6.40% -- -- -- -- 0.36% --
- ----------------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -- 4.75%
- ----------------------------------------------------------------------------------------------------------------
Class Y -3.71% 11.08% -- 12.64% -- -- --
- ----------------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(3) -26.62% 10.22% 12.63% 13.65% 13.65% -5.33% --
- ----------------------------------------------------------------------------------------------------------------
Lehman Gov't/Credit Bond Index(4) 15.32% 8.05% 7.45% 8.04% 8.04% 7.56% --
- ----------------------------------------------------------------------------------------------------------------
B-11
EQUITY INCOME
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN LEHMAN
EQUITY EQUITY EQUITY S&P 500 GOVERNMENT/
INCOME FUND, INCOME FUND, INCOME FUND, COMPOSITE CREDIT BOND
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4)
--------------------------------------------------------------------------
CLASS A
12/1992 10,000 9,452 10,000 10,000
9/1993 10,377 9,808 10,759 10,861
9/1994 10,885 10,288 11,155 10,681
9/1995 12,851 12,146 14,474 11,885
9/1996 14,960 14,140 17,416 12,494
9/1997 19,622 18,546 24,461 13,518
9/1998 21,265 20,100 26,672 14,926
9/1999 23,337 22,057 34,083 15,020
9/2000 25,929 24,507 38,611 15,956
9/2001 24,919 23,553 28,332 18,013
CLASS Y
8/1994 10,000 10,000 10,000
9/1994 10,045 9,756 9,908
9/1995 11,877 12,657 11,025
9/1996 13,871 15,231 11,590
9/1997 18,234 21,391 12,540
9/1998 19,848 23,325 13,846
9/1999 21,853 29,806 13,933
9/2000 24,358 33,765 14,801
9/2001 23,455 24,777 16,710
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On May 18, 1994, the Equity Income Fund became the successor by merger to
the Boulevard Strategic Balance Fund. Prior to the merger, the First
American fund had no assets or liabilities. Performance prior to May 18,
1994, is that of the Boulevard Strategic Balance Fund.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of large-capitalization stocks.
(4) An unmanaged index of Treasury securities, other securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities,
including U.S. agency mortgage securities and investment-grade corporate
debt securities.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
B-12
SCIENCE & TECHNOLOGY
INVESTMENT OBJECTIVE: LONG-TERM AFTER-TAX GROWTH OF CAPITAL
In one of the worst bear markets any sector has faced in recent history, the
First American Science & Technology Fund sustained a decline of 78.74% for the
12-month period ended September 30, 2001 (Class A shares were down 78.80% on net
asset value). Over the same time frame, the fund's benchmark, the S&P Technology
Composite Index, declined 61.63%.
After experiencing significant growth in the latter part of the 1990s,
technology-oriented stocks began to lose their appeal to investors by March of
2000. As the fiscal year began in October 2000, the virtual free-fall among
stocks in this sector was fully underway. The main culprit was a sudden
turnaround in technology spending by most companies.
A number of firms had invested significant sums upgrading their technology needs
in advance of the Year 2000 conversion. But the purse strings were tightened
after that period, a pattern that continued into 2001. This left a number of
technology firms holding huge inventories of product. Profits dried up
dramatically, and investors shied away from the sector.
Anticipating continued difficulties in this market, the fund focused a
significant portion of its assets on some of the largest companies in the
technology market. A number of stocks, such as Cisco Systems, a darling during
the heyday of technology investing, was hit as hard or harder than many
companies with a less-impressive track record.
The fund also put more emphasis on technology stocks in the health care sector.
While that helped to reduce some of the portfolio's volatility, it was not able
to stem the tide of losses suffered in the rest of the technology marketplace.
The fund's semiconductor holdings provided relatively better performance, but
again, there was little place to hide during this difficult period. The tragic
attacks on September 11 increased the magnitude of the downturn.
The silver lining to the significant market decline is that stocks appear to
have significant upside potential from this point. A number of technology stocks
were trading at very attractive levels by the end of the fiscal year, and that
should create positive opportunities in the months ahead. Demand seems to be
picking up in selected industries like wireless telecommunications, and as the
economy begins to improve, spending on other areas of technology should increase
as well, improving earnings and making these stocks attractive once again.
- ----------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ----------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
------------------------------------------------
1 YEAR 8/9/1999 3/31/2000 12/11/2000 9/24/2001
- ----------------------------------------------------------------------------------------------
Class A NAV -78.80% -- -64.15% -- --
- ----------------------------------------------------------------------------------------------
Class A POP -79.97% -- -65.48% -- --
- ----------------------------------------------------------------------------------------------
Class B NAV -78.91% -29.98% -- -- --
- ----------------------------------------------------------------------------------------------
Class B POP -79.97% -30.97% -- -- --
- ----------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -7.11
- ----------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -8.94
- ----------------------------------------------------------------------------------------------
Class S -- -- -- -73.43 --
- ----------------------------------------------------------------------------------------------
Class Y -78.74% -29.42% -- -- --
- ----------------------------------------------------------------------------------------------
S&P Technology Composite Index(3) -61.63% -31.46% -55.16% -53.08% --
- ----------------------------------------------------------------------------------------------
Nasdaq 100 Index(4) -67.28% -29.12% -58.57% -50.11% --
- ----------------------------------------------------------------------------------------------
B-13
SCIENCE & TECHNOLOGY
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN S&P
SCIENCE & SCIENCE & SCIENCE & TECHNOLOGY
TECHNOLOGY FUND, TECHNOLOGY FUND, TECHNOLOGY FUND, COMPOSITE NASDAQ 100
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4)
------------------------------------------------------------------------------
CLASS A
3/2000 10,000 9,452 10,000 10,000
10/2000 8,860 8,371 7,428 7,463
9/2001 2,143 2,025 3,022 2,657
CLASS Y
8/1999 10,000 10,000 10,000
11/1999 14,560 11,200 12,378
10/2000 19,540 11,250 13,694
9/2001 4,740 4,578 4,875
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment. Sector
funds such as the First American Science & Technology Fund are more
vulnerable to price fluctuation as a result of events that may affect the
industry in which they focus than are funds that invest in multiple
industries. Share prices of sector funds also will fluctuate with changing
market conditions, as will share prices of other stock funds. Sector funds
should not be treated as a core investment; rather, their role is to round
out the growth portion of a well-diversified investment portfolio.
On September 24, 2001, the Science & Technology Fund became the successor
by merger to the Firstar Science & Technology Fund, a series of Firstar
Funds, Inc. Prior to the merger, the First American Fund had no assets or
liabilities. Performance presented prior to September 24, 2001, represents
that of the Firstar Science & Technology Fund. The Firstar Science &
Technology Fund was organized on December 11, 2000, and, prior to that, was
a separate series of Firstar Stellar Funds, Inc.
On September 24, 2001, the fund changed its investment objective to manage
its portfolio of securities on a tax-efficient basis. Performance prior to
this date does not reflect this management strategy.
The Science & Technology Fund's 1999 and 2000 returns were higher due in
part to its strategy of investing in IPOs in a period favorable for IPO
investing. Of course, such favorable returns involve accepting the risk of
volatility, and there is no assurance that the fund's future investment in
IPOs will have the same effect on performance as it had in 1999 and 2000.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index comprised of technology stocks in the S&P 500 Composite
Index, which is an unmanaged index of large-capitalization stocks.
Previously, the fund used the Nasdaq 100 index as a benchmark. Going
forward, the fund will use the S&P Technology Composite Index as a
benchmark because its composition better matches the fund's investment
objective and strategies.
(4) A market-capitalization weighted index that includes 100 of the largest
financial companies, domestic and foreign, in the Nasdaq National Market.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class C
represents cumulative total return as the class has been in operation less
than one year.
B-14
TECHNOLOGY
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL
In what was the worst market for technology stocks in three decades, the First
American Technology Fund declined by 83.26% for the fiscal year ended September
30, 2001 (Class A shares declined 83.30% on net asset value). Over the same
timeframe, the fund's benchmark, the S&P Technology Composite Index, declined
61.63%.
The bear market in technology stocks cut across nearly all business sectors
within that market. Buyers, particularly in the business sector, pulled back
their spending from the record levels seen prior to the onset of the Year 2000
computer issue. This led to a substantial contraction in valuations of
technology stocks. While volatility is common in the technology sector, nothing
this dramatic had been experienced since the mid-1970s, when the United States
faced a severe recession.
Among the hardest hit areas were stocks in the previously flourishing
telecommunications sector. Suddenly, the market faced a glut of capacity, and
spending in that business declined significantly. Internet companies also faced
the reality of invisible profits, and their stocks were buried in the avalanche
of investor selling. The fund's emphasis on owning young, innovative companies
with exciting products proved to be particularly taxing to the fund's return, as
the market punished many of these more speculative securities. While these
stocks can suffer through difficult times like the past year, history indicates
that they can respond more quickly once the market recovers.
The fund also focused on firms and industries where earnings tended to hold up
better despite the difficult economic environment. Those included software firms
and selected communications services companies. But, in both cases, the market
did not relent, and even a number of quality companies suffered significant
damage. Capping the already difficult year were the tragic events on September
11. In the aftermath, another major stock sell-off occurred, hitting technology
stocks particularly hard.
It appears that the market may have found its low point in the closing days of
September. The new fiscal year for the fund begins with an environment of great
uncertainty about the short term. What's needed is a return of confidence for
consumers and corporations. One risk that has been eliminated is the concern
that technology stocks were too highly valued. That doesn't seem to be an issue
after the past year. Over time, the fund's focus on innovative companies should
again prove to be productive for shareholders, but a long-term perspective is
recommended.
- ---------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ---------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(4)
---------------------------------------------
1 YEAR 5 YEARS 4/4/1994 8/15/1994 2/1/2000 9/24/2001
- ---------------------------------------------------------------------------------------------------
Class A NAV -83.30% -7.57% 5.45% -- -- --
- ---------------------------------------------------------------------------------------------------
Class A POP -84.22% -8.61% 4.66% -- -- --
- ---------------------------------------------------------------------------------------------------
Class B NAV -83.42% -8.22% -- 5.15% -- --
- ---------------------------------------------------------------------------------------------------
Class B POP -84.07% -8.40% -- 5.15% -- --
- ---------------------------------------------------------------------------------------------------
Class C NAV -83.43% -- -- -- -67.22% --
- ---------------------------------------------------------------------------------------------------
Class C POP -83.73% -- -- -- -67.42% --
- ---------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -8.49%
- ---------------------------------------------------------------------------------------------------
Class Y -83.26% -7.30% 5.68% -- -- --
- ---------------------------------------------------------------------------------------------------
S&P Technology Composite Index(3) -61.63% 8.12% 15.82% 15.09% -50.70% --
- ---------------------------------------------------------------------------------------------------
B-15
TECHNOLOGY
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN S&P
TECHNOLOGY TECHNOLOGY TECHNOLOGY TECHNOLOGY
FUND, FUND, FUND, COMPOSITE
CLASS A NAV CLASS A POP CLASS Y INDEX(3)
-----------------------------------------------------------------
CLASS A
4/1994 10,000 9,452 10,000
9/1994 11,190 10,577 10,708
9/1995 18,600 17,580 16,739
9/1996 22,060 20,851 20,428
9/1997 25,966 24,542 33,177
9/1998 21,632 20,446 37,563
9/1999 49,474 46,762 65,645
9/2000 89,108 84,223 78,433
9/2001 14,879 14,063 30,165
CLASS Y
4/1994 10,000 10,000
9/1994 11,190 10,708
9/1995 18,600 16,739
9/1996 22,106 20,428
9/1997 26,074 33,177
9/1998 21,794 37,563
9/1999 50,022 65,645
9/2000 90,393 78,433
9/2001 15,131 30,165
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Index is for illustrative
purposes only and is not available for investment. Sector funds such as the
First American Technology Fund are more vulnerable to price fluctuation as
a result of events that may affect the industry in which they focus than
are funds that invest in multiple industries. Share prices of sector funds
also will fluctuate with changing market conditions, as will share prices
of other stock funds. Sector funds should not be treated as a core
investment; rather, their role is to round out the growth portion of a well
diversified investment portfolio.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
The Technology Fund's 1999 and 2000 returns were higher due in part to its
strategy of investing in IPOs and technology-related stocks in a period
favorable for IPO investing. Of course, such favorable returns involve
accepting the risk of volatility, and there is no assurance that the fund's
future investment in IPOs and technology stocks will have the same effect
on performance as it had in 1999 and 2000. Investments in the First
American Technology Fund are more vulnerable to price fluctuation as a
result of the narrow focus of technology investing and the fact that the
products of companies in which the fund invests may be subject to rapid
obsolescence.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of technology stocks in the S&P 500 Composite Index (an
unmanaged index of large-capitalization stocks).
(4) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
B-16
PART B
STATEMENT OF ADDITIONAL INFORMATION DATED ________________, 2002
FIRST AMERICAN INVESTMENT FUNDS, INC.
800 Nicollet Mall
Minneapolis, MN 55402
(800) 677-3863
ACQUISITION OF THE ASSETS OF
CAPITAL GROWTH FUND, RELATIVE VALUE FUND, GROWTH & INCOME FUND AND
SCIENCE & TECHNOLOGY FUND
EACH A SEPARATELY MANAGED SERIES OF
FIRST AMERICAN INVESTMENT FUNDS, INC.
BY AND IN EXCHANGE FOR SHARES OF
LARGE CAP GROWTH FUND, LARGE CAP VALUE FUND, EQUITY INCOME FUND AND
TECHNOLOGY FUND, RESPECTIVELY,
EACH A SEPARATELY MANAGED SERIES OF
FIRST AMERICAN INVESTMENT FUNDS, INC.
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the Prospectus/Proxy
Statement dated ____________, 2002, relating to the proposed reorganization of
Capital Growth Fund, Relative Value Fund, Growth & Income Fund or Science &
Technology Fund (each, a "Voting Fund"), each a separate series of First
American Investment Funds, Inc. ("FAIF"), with and into Large Cap Growth Fund,
Large Cap Value Fund, Equity Income Fund or Technology Fund (each, an "Acquiring
Fund"), respectively, each a separate series of FAIF. A copy of the
Prospectus/Proxy Statement may be obtained without charge by calling or writing
to FAIF at the telephone number or address set forth above. This Statement of
Additional Information has been incorporated by reference into the
Prospectus/Proxy Statement.
Further information about the Acquiring Funds and the Voting Funds is
contained in FAIF's Prospectus dated January 28, 2002, as supplemented, FAIF's
Statement of Additional Information dated January 28, 2002, and the Annual
Report of FAIF for the year ended September 30, 2001.
This Statement of Additional Information incorporates by reference the
following described documents, each of which accompanies this Statement of
Additional Information:
(1) The Statement of Additional Information of FAIF dated January
28, 2002.
(2) Annual Report of FAIF for the year ended September 30, 2001.
FIRST AMERICAN INVESTMENT FUNDS, INC.
REGISTRATION STATEMENT ON FORM N-14
LIST OF DOCUMENTS INCORPORATED BY REFERENCE HEREIN
CURRENT CLASS A/B/C PROSPECTUS OF CAPITAL GROWTH FUND,
RELATIVE VALUE FUND, GROWTH & INCOME FUND,
LARGE CAP GROWTH FUND, LARGE CAP VALUE FUND, AND EQUITY INCOME FUND
CURRENT CLASS A/B/C PROSPECTUS OF SCIENCE & TECHNOLOGY FUND AND TECHNOLOGY FUND
CURRENT CLASS S PROSPECTUS OF CAPITAL GROWTH FUND,
RELATIVE VALUE FUND, GROWTH & INCOME FUND,
LARGE CAP GROWTH FUND, LARGE CAP VALUE FUND, AND EQUITY INCOME FUND
CURRENT CLASS S PROSPECTUS OF SCIENCE & TECHNOLOGY FUND AND TECHNOLOGY FUND
CURRENT CLASS Y PROSPECTUS OF CAPITAL GROWTH FUND,
RELATIVE VALUE FUND, GROWTH & INCOME FUND,
LARGE CAP GROWTH FUND, LARGE CAP VALUE FUND, AND EQUITY INCOME FUND
CURRENT CLASS Y PROSPECTUS OF SCIENCE & TECHNOLOGY FUND AND TECHNOLOGY FUND
STATEMENT OF ADDITIONAL INFORMATION OF FAIF DATED JANUARY 28, 2002
ANNUAL REPORT OF FIRST AMERICAN INVESTMENT FUNDS, INC.
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001
FIRST AMERICAN LARGE CAP GROWTH FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, 2001
(UNAUDITED)
Pro Forma
Combined First
First American First American American Large
Large Cap Capital Growth Cap Growth
Growth Fund Fund Adjustments Fund(1)
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $863,762,
$192,428, and $1,056,190, respectively) $ 716,117 $ 199,191 $ -- $ 915,308
Collateral received for securities loaned, at value 178,486 54,034 -- 232,520
Cash 369 -- -- 369
Accrued income 584 179 -- 763
Receivable for investment securities sold 2,106 2,020 -- 4,126
Capital shares sold 456 352 -- 808
Other assets 328 311 -- 639
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets 898,446 256,087 -- 1,154,533
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Cash overdraft -- 78 -- 78
Payable for investment securities purchased 7,453 2,128 -- 9,581
Payable upon return of securities loaned 178,486 54,034 -- 232,520
Capital shares redeemed 991 369 -- 1,360
Payable to affiliates 754 554 -- 1,308
Written options, at value -- 381 -- 381
Other liabilities 3 -- -- 3
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 187,687 57,544 -- 245,231
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 710,759 $ 198,543 $ -- $ 909,302
==================================================================================================================================
NET ASSETS CONSIST OF:
Paid in capital $ 906,839 $ 206,924 $ -- $ 1,113,763
Accumulated net realized loss on investments (48,435) (14,938) -- (63,373)
Net unrealized appreciation (depreciation) of
investments and options written (147,645) 6,557 -- (141,088)
- ----------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 710,759 $ 198,543 $ -- $ 909,302
==================================================================================================================================
NET ASSETS:
Class A $ 85,443 $ 8,597 $ -- $ 94,040
Class B 17,976 46,103 -- 64,079
Class C 13,177 -- -- 13,177
Class S -- 11,882 -- 11,882
Class Y 594,163 131,961 -- 726,124
- ----------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 710,759 $ 198,543 $ -- $ 909,302
==================================================================================================================================
SHARES OUTSTANDING:
Class A 9,156 586 (3,336)(2) 6,406
Class B 2,006 3,159 (774)(2) 4,391
Class C 1,442 -- (544)(2) 898
Class S -- 809 -- 809
Class Y 62,914 8,932 (22,686)(2) 49,160
- ----------------------------------------------------------------------------------------------------------------------------------
Total shares outstanding 75,518 13,486 (27,340) 61,663
==================================================================================================================================
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE:
Class A $ 9.33 $ 14.68 $ 14.68
Class B $ 8.96 $ 14.59 $ 14.59
Class C $ 9.14 $ 14.68 $ 14.68
Class S $ 9.33 $ 14.69 $ 14.69
Class Y $ 9.44 $ 14.77 $ 14.77
- ----------------------------------------------------------------------------------------------------------------------------------
OFFERING PRICE PER SHARE:
Class A $ 9.87 $ 15.53 $ 15.53
Class B $ 8.96 $ 14.59 $ 14.59
Class C $ 9.23 $ 14.83 $ 14.83
Class S $ 9.33 $ 14.69 $ 14.69
Class Y $ 9.44 $ 14.77 $ 14.77
- ----------------------------------------------------------------------------------------------------------------------------------
(1) The First American Capital Growth Fund will be the accounting survivor.
(2) Reflects new shares issued, net of retired shares of the respective Fund.
See Accompanying Notes to Pro Forma Financial Statements
1
FIRST AMERICAN LARGE CAP VALUE FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, 2001
(UNAUDITED)
First American First American Pro Forma Combined
Large Cap Relative Value First American Large
Value Fund Fund Adjustments Cap Value Fund(1)
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $1,206,095,
$261,524 and $1,467,619, respectively) $ 1,118,733 $ 414,986 $ -- $ 1,533,719
Collateral received for securities loaned, at value 310,972 -- -- 310,972
Cash -- 4 -- 4
Accrued income 1,700 729 -- 2,429
Receivable for investment securities sold -- 7,295.00 -- 7,295
Capital shares sold 739 1,479 -- 2,218
Other assets 239 58 -- 297
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 1,432,383 424,551 -- 1,856,934
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Cash overdraft 548 -- -- 548
Payable upon return of securities loaned 310,972 -- -- 310,972
Capital shares redeemed 6,956 178 -- 7,134
Payable to affiliates 1,404 457 -- 1,861
Other liabilities -- 48 -- 48
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 319,880 683 -- 320,563
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 1,112,503 $ 423,868 $ -- $ 1,536,371
===================================================================================================================================
NET ASSETS CONSIST OF:
Paid in capital $ 1,227,245 $ 264,165 $ -- $ 1,491,410
Undistributed net investment income 350 43 -- 393
Accumulated net realized gain (loss) on investments (27,730) 6,198 -- (21,532)
Net unrealized appreciation (depreciation) of investments (87,362) 153,462 -- 66,100
- -----------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 1,112,503 $ 423,868 $ -- $ 1,536,371
===================================================================================================================================
NET ASSETS:
Class A $ 94,064 $ 33,288 $ -- $ 127,352
Class B 38,108 12,081 -- 50,189
Class C 10,141 -- -- 10,141
Class S -- 34,004 -- 34,004
Class Y 970,190 344,495 -- 1,314,685
- -----------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 1,112,503 $ 423,868 $ -- $ 1,536,371
===================================================================================================================================
SHARES OUTSTANDING:
Class A 5,888 1,382 701 (2) 7,971
Class B 2,425 503 266 (2) 3,194
Class C 638 -- -- (2) 638
Class S -- 1,413 716 2,129
Class Y 60,564 14,285 7,219 (2) 82,068
- -----------------------------------------------------------------------------------------------------------------------------------
Total shares outstanding 69,515 17,583 8,902 96,000
===================================================================================================================================
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE:
Class A $ 15.98 $ 24.09 $ 15.98
Class B $ 15.71 $ 24.01 $ 15.71
Class C $ 15.90 $ 24.09 $ 15.90
Class S $ 15.97 $ 24.06 $ 15.97
Class Y $ 16.02 $ 24.12 $ 16.02
- ------------------------------------------------------------------------------------------------------------------------------------
OFFERING PRICE PER SHARE:
Class A $ 16.91 $ 25.49 $ 16.91
Class B $ 15.71 $ 24.01 $ 15.71
Class C $ 16.06 $ 24.33 $ 16.06
Class S $ 15.97 $ 24.06 $ 15.97
Class Y $ 16.02 $ 24.12 $ 16.02
- ------------------------------------------------------------------------------------------------------------------------------------
REDEMPTION PRICE PER SHARE:
Class A $ 15.98 $ 24.09 $ 15.98
Class B $ 15.71 $ 24.01 $ 15.71
Class C $ 15.90 $ 24.09 $ 15.90
Class S $ 15.97 $ 24.06 $ 15.97
Class Y $ 16.02 $ 24.12 $ 16.02
- -----------------------------------------------------------------------------------------------------------------------------------
(1) The First American Large Cap Value Fund will be the accounting survivor.
(2) Reflects new shares issued, net of retired shares of the respective Fund.
See Accompanying Notes to Pro Forma Financial Statements
2
FIRST AMERICAN EQUITY INCOME FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, 2001
(UNAUDITED)
First American First American Pro Forma Combined
Equity Income Growth & First American Equity
Fund Income Fund Adjustments Income Fund(1)
- ---------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $233,537,
$690,577, and $924,114, respectively) $ 318,285 $ 712,470 $ -- $ 1,030,755
Collateral received for securities loaned, at value 64,855 156,515 -- 221,370
Cash 4,213 10 -- 4,223
Accrued income 598 460 -- 1,058
Receivable for investment securities sold 122 -- -- 122
Capital shares sold 1,077 722 -- 1,799
Other assets 365 278 -- 643
- ---------------------------------------------------------------------------------------------------------------------------------
Total assets 389,515 870,455 -- 1,259,970
- ---------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for investment securities purchased 11,816 3,851 -- 15,667
Payable upon return of securities loaned 64,855 156,515 -- 221,370
Capital shares redeemed 442 4,590 -- 5,032
Payable to affiliates 475 954 -- 1,429
Other liabilities 137 7 -- 144
- ---------------------------------------------------------------------------------------------------------------------------------
Total liabilities 77,725 165,917 -- 243,642
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 311,790 $ 704,538 $ -- $ 1,016,328
=================================================================================================================================
NET ASSETS CONSIST OF:
Paid in capital $ 227,949 $ 705,708 $ -- $ 933,657
Accumulated net investment income (loss) (291) 187 -- (104)
Accumulated net realized loss on investments (616) (23,250) -- (23,866)
Net unrealized appreciation of investments 84,748 21,893 -- 106,641
- ---------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 311,790 $ 704,538 $ -- $ 1,016,328
=================================================================================================================================
NET ASSETS:
Class A $ 24,557 $ 150,323 $ -- $ 174,880
Class B 11,516 11,612 -- 23,128
Class C 8,028 -- -- 8,028
Class S 328 44,821 -- 45,149
Class Y 267,361 497,782 -- 765,143
- ---------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 311,790 $ 704,538 $ -- $ 1,016,328
=================================================================================================================================
SHARES OUTSTANDING:
Class A 2,025 4,824 7,569 (2) 14,418
Class B 954 376 586 (2) 1,916
Class C 664 -- -- 664
Class S 27 1,439 2,259 (2) 3,725
Class Y 21,916 15,951 24,851 (2) 62,718
- ---------------------------------------------------------------------------------------------------------------------------------
Total shares outstanding 25,586 22,590 35,265 83,441
=================================================================================================================================
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE:
Class A $ 12.13 $ 31.16 $ 12.13
Class B $ 12.07 $ 30.86 $ 12.07
Class C $ 12.09 $ 31.17 $ 12.09
Class S $ 12.12 $ 31.14 $ 12.12
Class Y $ 12.20 $ 31.21 $ 12.20
- ---------------------------------------------------------------------------------------------------------------------------------
OFFERING PRICE PER SHARE:
Class A $ 12.84 $ 32.97 $ 12.84
Class B $ 12.07 $ 30.86 $ 12.07
Class C $ 12.21 $ 31.48 $ 12.21
Class S $ 12.12 $ 31.14 $ 12.12
Class Y $ 12.20 $ 31.21 $ 12.20
- ---------------------------------------------------------------------------------------------------------------------------------
(1) The First American Equity Income Fund will be the accounting survivor.
(2) Reflects new shares issued, net of retired shares of the respective Fund.
See Accompanying Notes to Pro Forma Financial Statements
3
FIRST AMERICAN TECHNOLOGY FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
SEPTEMBER 30, 2001
(UNAUDITED)
First American
First American Science & Pro Forma Combined
Technology Technology First American
Fund Fund Adjustments Technology Fund(1)
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost $263,486,
$62,188, and $325,674, respectively) $ 112,424 $ 35,511 $ -- $ 147,935
Cash 1,348 -- -- 1,348
Collateral received for securities loaned, at value 51,214 12,195 -- 63,409
Accrued income 23 11 -- 34
Receivable for investment securities sold 601 1,105 -- 1,706
Capital shares sold 363 54 -- 417
Other assets 205 184 -- 389
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 166,178 49,060 -- 215,238
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Cash overdraft -- 723 -- 723
Payable for investment securities purchased 576 -- -- 576
Payable upon return of securities loaned 51,214 12,195 -- 63,409
Capital shares redeemed 639 138 -- 777
Payable to affiliates 28 234 -- 262
Written options, at value -- 1,068 -- 1,068
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 52,457 14,358 -- 66,815
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 113,721 $ 34,702 $ -- $ 148,423
====================================================================================================================================
NET ASSETS CONSIST OF:
Paid in capital $ 581,972 $ 117,825 $ -- $ 699,797
Accumulated net realized loss on investments and options written (317,189) (55,995) -- (373,184)
Net unrealized depreciation of investments and options written (151,062) (27,128) -- (178,190)
- ------------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 113,721 $ 34,702 $ -- $ 148,423
====================================================================================================================================
NET ASSETS:
Class A $ 29,084 $ 988 $ -- $ 30,072
Class B 15,974 3,563 -- 19,537
Class C 9,009 -- -- 9,009
Class S -- 1,858 -- 1,858
Class Y 59,654 28,293 -- 87,947
- ------------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 113,721 $ 34,702 $ -- $ 148,423
====================================================================================================================================
SHARES OUTSTANDING:
Class A 4,572 210 (55)(2) 4,727
Class B 2,771 765 (147)(2) 3,389
Class C 1,435 -- -- 1,435
Class S -- 395 (103)(2) 292
Class Y 9,129 5,966 (1,633)(2) 13,462
- ------------------------------------------------------------------------------------------------------------------------------------
Total shares outstanding 17,907 7,336 (1,938) 23,305
====================================================================================================================================
NET ASSET VALUE AND REDEPMTION PRICE PER SHARE:
Class A $ 6.36 $ 4.70 $ 6.36
Class B $ 5.77 $ 4.66 $ 5.77
Class C $ 6.28 $ 4.70 $ 6.28
Class S $ 6.36 $ 4.70 $ 6.36
Class Y $ 6.53 $ 4.74 $ 6.53
- ------------------------------------------------------------------------------------------------------------------------------------
OFFERING PRICE PER SHARE:
Class A $ 6.73 $ 4.97 $ 6.73
Class B $ 5.77 $ 4.66 $ 5.77
Class C $ 6.34 $ 4.75 $ 6.34
Class S $ 6.36 $ 4.70 $ 6.36
Class Y $ 6.53 $ 4.74 $ 6.53
- ------------------------------------------------------------------------------------------------------------------------------------
(1) The First American Technology Fund will be the accounting survivor.
(2) Reflects new shares issued, net of retired shares of the respective Fund.
See Accompanying Notes to Pro Forma Financial Statements
4
FIRST AMERICAN LARGE CAP GROWTH FUND
PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2001
(UNAUDITED)
First American First American Pro Forma Combined
Large Cap Growth Capital Growth First American Large
Fund Fund Adjustments Cap Growth Fund(1)
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income $ 2,139 $ 452 $ -- $ 2,591
Dividend income 4,978 1,740 -- 6,718
Income from securities lending 296 24 -- 320
Less: Foreign taxes withheld (17) (4) -- (21)
- ----------------------------------------------------------------------------------------------------------------------------------
Total income 7,396 2,212 -- 9,608
EXPENSES:
Investment advisory fees 6,989 2,378 (1,164)(3) 8,203
Administrator and fund accounting fees 1,127 391 1,427 (3) 2,945
Transfer agent fees 368 231 (93)(3) 506
Custodian fees 299 34 (207)(3) 126
Directors' fees 10 9 (10)(4) 9
Registration fees 10 52 (16)(4) 46
Professional fees 30 53 (30)(4) 53
Printing 60 103 (41)(4) 122
Other 15 8 (6)(4) 17
Distribution and shareholder servicing fees - Class A 346 13 -- 359
Distribution and shareholder servicing fees - Class B 260 641 -- 901
Distribution and shareholder servicing fees - Class C 164 -- -- 164
Shareholder servicing fees - Class S -- 11 -- 11
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 9,678 3,924 (140) 13,462
Less: Waiver of expenses (925) (325) 645 (2) (605)
- ----------------------------------------------------------------------------------------------------------------------------------
NET EXPENSES 8,753 3,599 505 12,857
- ----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (1,357) (1,387) (505) (3,249)
- ----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
AND OPTIONS WRITTEN - NET:
Net realized loss on investments (48,470) (13,666) -- (62,136)
Net realized gain on options written -- 653 653
Net change in unrealized appreciation or depreciation of
investments and options written (668,727) (128,541) -- (797,268)
- ----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS (717,197) (141,554) -- (858,751)
- ----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (718,554) $ (142,941) $ (505) $ (862,000)
==================================================================================================================================
(1) The First American Capital Growth Fund will be the accounting survivor.
(2) Reflects adjustment based on expense limitation for the combined fund.
(3) Adjustment based on contractual agreements with the investment advisor,
administrator, transfer agent and custodian for the combined fund.
(4) Reflects anticipated savings of the merger.
See Accompanying Notes to Pro Forma Financial Statements
5
FIRST AMERICAN LARGE CAP VALUE FUND
PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2001
(UNAUDITED)
First American First American Pro Forma Combined
Large Cap Value Relative Value First American Large
Fund Fund Adjustments Cap Value Fund(1)
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income $ 2,788 $ 412 $ -- $ 3,200
Dividend income 22,361 9,648 -- 32,009
Income from securities lending 291 -- -- 291
Less: Foreign taxes withheld (98) (83) -- (181)
- ---------------------------------------------------------------------------------------------------------------------------------
Total income 25,342 9,977 -- 35,319
EXPENSES:
Investment advisory fees 9,205 3,569 (1,070)(3) 11,704
Administrator and fund accounting fees 1,484 656 2,002 (3) 4,142
Transfer agent fees 574 228 (93)(3) 709
Custodian fees 394 45 (259)(3) 180
Directors' fees 13 9 (9)(4) 13
Registration fees 13 39 (13)(4) 39
Professional fees 40 53 (53)(4) 40
Printing 79 80 (40)(4) 119
Other 21 13 (9)(4) 25
Distribution and shareholder servicing fees - Class A 306 95 -- 401
Distribution and shareholder servicing fees - Class B 467 132 -- 599
Distribution and shareholder servicing fees - Class C 93 -- -- 93
Shareholder servicing fees - Class S -- 27 -- 27
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 12,689 4,946 456 18,091
Less: Waiver and reimbursement of expenses (1,297) (67) 607 (2) (757)
- ---------------------------------------------------------------------------------------------------------------------------------
NET EXPENSES 11,392 4,879 1,063 17,334
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 13,950 5,098 (1,063) 17,985
- ---------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gain (loss) on investments (16,926) 6,186 -- (10,740)
Net change in unrealized appreciation or depreciation of
investments (171,917) (87,060) -- (258,977)
- ---------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS (188,843) (80,874) -- (269,717)
- ---------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (174,893) $ (75,776) $ (1,063) $ (251,732)
=================================================================================================================================
(1) The First American Large Cap Value Fund will be the accounting survivor.
(2) Reflects adjustment based on expense limitation for the combined fund.
(3) Adjustment based on contractual agreements with the investment advisor,
administrator, transfer agent and custodian for the combined fund.
(4) Reflects anticipated savings of the merger.
See Accompanying Notes to Pro Forma Financial Statements
6
FIRST AMERICAN EQUITY INCOME FUND
PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2001
(UNAUDITED)
First American First American Pro Forma Combined
Equity Income Growth & Income First American Equity
Fund Fund Adjustments Income Fund(1)
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income $ 743 $ 3,274 $ -- $ 4,017
Dividend income 8,005 9,336 -- 17,341
Income from securities lending 52 68 -- 120
Less: Foreign taxes withheld -- (8) -- (8)
- -----------------------------------------------------------------------------------------------------------------------------------
Total income 8,800 12,670 -- 21,470
EXPENSES:
Investment advisory fees 2,085 6,162 (822)(3) 7,425
Administrator and fund accounting fees 327 1,103 1,220 (3) 2,650
Transfer agent fees 137 391 (93)(3) 435
Custodian fees 89 85 (60)(3) 114
Directors' fees 3 1 (1)(4) 3
Registration fees 3 50 (13)(4) 40
Professional fees 9 31 (31)(4) 9
Printing 18 153 (43)(4) 128
Other 15 11 (7)(4) 19
Distribution and shareholder servicing fees - Class A 57 462 -- 519
Distribution and shareholder servicing fees - Class B 109 118 -- 227
Distribution and shareholder servicing fees - Class C 43 -- -- 43
Shareholder servicing fees - Class S -- 127 -- 127
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 2,895 8,694 150 11,739
Less: Waiver of expenses (458) (221) 157 (2) (522)
- -----------------------------------------------------------------------------------------------------------------------------------
NET EXPENSES 2,437 8,473 307 11,217
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 6,363 4,197 (307) 10,253
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gain (loss) on investments 34,974 (20,431) -- 14,543
Net change in unrealized appreciation (depreciation) of
investments (48,968) (225,024) -- (273,992)
- -----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS (13,994) (245,455) -- (259,449)
- -----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (7,631) $ (241,258) $ (307) $ (249,196)
===================================================================================================================================
(1) The First American Equity Income Fund will be the accounting survivor.
(2) Reflects adjustment based on expense limitation for the combined fund.
(3) Adjustment based on contractual agreements with the investment advisor,
administrator, transfer agent and custodian for the combined fund.
(4) Reflects anticipated savings of the merger.
See Accompanying Notes to Pro Forma Financial Statements
7
FIRST AMERICAN TECHNOLOGY FUND
PRO FORMA STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS)
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2001
(UNAUDITED)
First American Pro Forma Combined
Science & First American First American
Technology Fund Technology Fund Adjustments Technology Fund(1)
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income $ 246 $ 532 $ -- $ 778
Dividend income 72 73 -- 145
Income from securities lending 12 300 -- 312
- ----------------------------------------------------------------------------------------------------------------------------------
Total income 330 905 -- 1,235
EXPENSES:
Investment advisory fees 767 2,215 (264)(3) 2,718
Administrator and fund accounting fees 138 357 418 (3) 913
Transfer agent fees 81 333 (93)(3) 321
Custodian fees 20 95 (76)(3) 39
Directors' fees 9 3 (9)(4) 3
Registration fees 57 -- (14)(4) 43
Professional fees 54 9 (54)(4) 9
Printing 46 19 (16)(4) 49
Other 4 6 (3)(4) 7
Distribution and shareholder servicing fees - Class A 3 181 -- 184
Distribution and shareholder servicing fees - Class B 73 333 -- 406
Distribution and shareholder servicing fees - Class C -- 195 -- 195
Shareholder Servicing fees - Class S 2 103 -- 105
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 1,254 3,849 (111) 4,992
Less: Waiver of expenses (182) (189) 77 (2) (294)
- ----------------------------------------------------------------------------------------------------------------------------------
NET EXPENSES 1,072 3,660 (34) 4,698
- ----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (742) (2,755) 34 (3,463)
- ----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
AND OPTIONS WRITTEN - NET:
Net realized loss on investments (51,893) (315,453) -- (367,346)
Net realized loss on options written (2,253) -- -- (2,253)
Net change in unrealized appreciation (depreciation) of
investments and options written (51,659) (271,929) -- (323,588)
- ----------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS (105,805) (587,382) -- (693,187)
- ----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (106,547) $ (590,137) $ 34 $ (696,650)
==================================================================================================================================
(1) The First American Technology Fund will be the accounting survivor.
(2) Reflects adjustment based on expense limitation for the combined fund.
(3) Adjustment based on contractual agreements with the investment advisor,
administrator, transfer agent and custodian for the combined fund.
(4) Reflects anticipated savings of the merger.
See Accompanying Notes to Pro Forma Financial Statements
8
FIRST AMERICAN LARGE CAP GROWTH FUND
PRO FORMA SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2001
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
Pro Forma
Pro Forma Combined
Combined First
First American First American First American First American First American American
Large Cap Capital Growth Large Cap Large Cap Capital Growth Large Cap
Growth Fund Fund Growth Fund Growth Fund Fund Growth Fund
Shares Shares Shares(2) Description at Value at Value at Value(2)
- -------------- -------------- -------------- ---------------------------------------- -------------- -------------- ------------
COMMON STOCKS - 97.6%
CONSUMER DISCRETIONARY - 14.4%
708,990 205,000 913,990 AOL Time Warner* $ 23,468 $ 6,786 $ 30,254
124,290 16,500 140,790 Best Buy* 5,649 750 6,399
81,290 47,000 128,290 Clear Channel Communications* 3,231 1,868 5,099
342,750 - 342,750 Cox Communications, Cl A* 14,310 - 14,310
288,977 77,000 365,977 Home Depot 11,088 2,954 14,042
209,735 75,200 284,935 Kohl's* 10,067 3,610 13,677
136,500 - 136,500 Omnicom Group 8,859 - 8,859
123,670 35,000 158,670 Target 3,926 1,111 5,037
502,250 148,000 650,250 Wal-Mart Stores 24,861 7,326 32,187
- 32,100 32,100 Comcast, CI A - 1,151 1,151
- 5,000 5,000 Federated Department Stores - 10 10
-----------------------------------------
105,459 25,566 131,025
-----------------------------------------
CONSUMER STAPLES - 7.5%
92,550 50,000 142,550 Anheuser-Busch 3,876 2,094 5,970
121,840 65,800 187,640 H J Heinz 5,136 2,773 7,909
56,880 50,000 106,880 Kimberly-Clark 3,523 3,100 6,623
216,600 38,500 255,100 Kraft Foods* 7,445 1,323 8,768
294,100 - 294,100 Kroger 7,247 - 7,247
254,950 75,000 329,950 PepsiCo 12,365 3,638 16,003
- 76,244 76,244 Safeway* - 3,028 3,028
303,330 63,200 366,530 Walgreen 10,444 2,176 12,620
-----------------------------------------
50,036 18,132 68,168
-----------------------------------------
ENERGY - 1.7%
- 2,500 2,500 Ashland - 96 96
184,980 42,076 227,056 Exxon Mobil 7,288 1,658 8,946
- 22,800 22,800 Global Marine* - 319 319
- 2,500 2,500 Texaco* - 163 163
182,430 33,400 215,830 USX - Marathon 4,869 887 5,756
-----------------------------------------
12,157 3,123 15,280
-----------------------------------------
FINANCIALS - 7.7%
306,830 103,519 410,349 American International Group 23,933 8,074 32,007
97,350 18,500 115,850 Capital One Financial 4,481 852 5,333
362,730 - 362,730 Charles Schwab 4,171 - 4,171
266,726 73,200 339,926 Citigroup 10,802 2,965 13,767
63,080 25,000 88,080 Federal Home Loan Mortgage 4,100 1,625 5,725
- 21,900 21,900 Merrill Lynch - 889 889
67,810 - 67,810 Morgan Stanley 3,143 - 3,143
83,810 35,000 118,810 Wells Fargo 3,725 1,556 5,281
-----------------------------------------
54,355 15,961 70,316
-----------------------------------------
HEALTH CARE - 28.5%
20,000 20,000 American Home Products - 1,165 1,165
145,350 37,800 183,150 Amgen* 8,542 2,222 10,764
63,600 63,600 Baxter Int'l - 3,501 3,501
439,640 126,000 565,640 Bristol-Myers Squibb 24,426 7,001 31,427
110,680 93,375 204,055 Cardinal Health 8,185 6,905 15,090
376,210 60,000 436,210 Eli Lilly 30,360 1,659 32,019
323,720 37,700 361,420 Genentech* 14,244 908 15,152
20,000 20,000 Genzyme - 1,925 1,925
50,000 50,000 Guidant - 798 798
16,100 16,100 IDEC Pharm. - 1,778 1,778
124,790 32,100 156,890 Johnson & Johnson 6,913 4,842 11,755
426,680 99,530 526,210 Medtronic 18,561 4,330 22,891
463,010 100,000 563,010 Merck 30,836 6,660 37,496
939,370 221,750 1,161,120 Pfizer 37,669 8,892 46,561
268,830 75,400 344,230 Pharmacia 10,904 3,058 13,962
54,500 54,500 Serono SA, ADR - 1,034 1,034
143,480 37,400 180,880 Watson Pharmaceuticals* 7,850 2,046 9,896
43,964 11,000 54,964 Zimmer Holdings 1,220 305 1,525
-----------------------------------------
199,710 59,029 258,739
-----------------------------------------
9
FIRST AMERICAN LARGE CAP GROWTH FUND
PRO FORMA SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2001
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
Pro Forma
Pro Forma Combined
Combined First
First American First American First American First American First American American
Large Cap Capital Growth Large Cap Large Cap Capital Growth Large Cap
Growth Fund Fund Growth Fund Growth Fund Fund Growth Fund
Shares Shares Shares(2) Description at Value at Value at Value(2)
- -------------- -------------- -------------- ---------------------------------------- -------------- -------------- ------------
INDUSTRIALS - 8.7%
151,110 - 151,110 Automatic Data Processing 7,108 - 7,108
306,975 - 306,975 Ecolab 11,152 - 11,152
833,850 235,500 1,069,350 General Electric 31,019 8,761 39,780
- 34,364 34,364 Illinois Tool Works - 1,859 1,859
- 1,695 1,695 Kadant - 22 22
75,130 20,600 95,730 Minnesota Mining & Manufacturing 7,393 2,027 9,420
- 17,300 17,300 Textron - 581 581
163,210 43,400 206,610 Tyco International 7,426 1,975 9,401
-----------------------------------------
64,098 15,225 79,323
-----------------------------------------
INFORMATION TECHNOLOGY - 24.4%
- 26,200 26,200 Adobe Systems - 628 628
91,140 26,000 117,140 Analog Devices* 2,980 850 3,830
- 25,300 25,300 Apple Computer - 392 392
38,200 12,200 50,400 Applied Materials* 1,086 347 1,433
140,700 54,100 194,800 Applied Micro Circuits* 983 378 1,361
309,820 73,700 383,520 BEA Systems* 2,971 707 3,678
47,710 13,600 61,310 Broadcom* 969 276 1,245
122,010 56,300 178,310 Brocade Communications Systems* 1,712 790 2,502
66,560 12,100 78,660 Check Point Software Technologies* 1,442 266 1,708
110,170 - 110,170 Ciena* 1,134 - 1,134
1,637,088 287,400 1,924,488 Cisco Systems* 19,940 3,501 23,441
- 7,300 7,300 Citrix Systems - 145 145
- 79,000 79,000 Corning - 697 697
335,150 95,900 431,050 Dell Computer* 6,210 1,777 7,987
278,960 74,400 353,360 EMC* 3,278 874 4,152
- 46,900 46,900 Flextronic Int'l - 776 776
- 40,000 40,000 Hewlett-Packard - 644 644
116,310 37,000 153,310 IBM 10,735 5,019 15,754
923,100 245,560 1,168,660 Intel 18,868 3,415 22,283
133,790 20,400 154,190 Juniper Networks* 1,298 198 1,496
32,480 7,200 39,680 KLA-Tencor* 1,026 227 1,253
224,290 60,600 284,890 Micron Technology* 4,223 1,141 5,364
618,720 166,000 784,720 Microsoft* 31,660 8,494 40,154
- 18,600 18,600 Millipore - 985 985
406,910 39,500 446,410 Nokia, ADR Cl A 6,368 618 6,986
583,710 107,000 690,710 Nortel Networks 3,275 600 3,875
42,520 10,700 53,220 Novellus Systems* 1,214 306 1,520
47,900 15,800 63,700 NVIDIA* 1,316 434 1,750
790,440 238,000 1,028,440 Oracle Systems* 9,944 2,994 12,938
213,410 46,600 260,010 QUALCOMM* 10,146 2,215 12,361
- 68,800 68,800 RF Micro Devices - 1,142 1,142
214,290 55,500 269,790 Siebel Systems* 2,815 722 3,537
491,320 164,000 655,320 Sun Microsystems* 4,063 1,356 5,419
447,070 116,400 563,470 Texas Instruments 11,168 2,908 14,076
- 27,700 27,700 Thermo Electron - 500 500
152,470 28,500 180,970 VeriSign* 6,388 1,194 7,582
120,260 - 120,260 VERITAS Software* 2,218 - 2,218
166,140 45,000 211,140 Vitesse Semiconductor* 1,288 349 1,637
101,560 25,400 126,960 Xilinx* 2,390 598 2,988
-----------------------------------------
173,108 48,463 221,571
-----------------------------------------
MATERIALS - 0.2%
- 50,000 50,000 Alcoa - 1,551 1,551
-----------------------------------------
- 1,551 1,551
-----------------------------------------
TELECOMMUNICATION SERVICES - 2.6%
313,150 42,400 355,550 Nextel Communications, Cl A* 2,706 366 3,072
262,310 77,100 339,410 Qwest Communications International 4,381 1,288 5,669
343,950 19,200 363,150 Sprint PCS Group* 9,042 505 9,547
76,170 22,072 98,242 Verizon Communications 4,121 1,194 5,315
-----------------------------------------
20,250 3,353 23,603
-----------------------------------------
UTILITIES - 1.9%
- 26,829 26,829 El Paso - 1,115 1,115
263,960 33,000 296,960 Enron 7,188 899 8,087
339,640 44,200 383,840 Mirant 7,438 956 8,394
-----------------------------------------
14,626 2,970 17,596
-----------------------------------------
TOTAL COMMON STOCKS 693,799 193,373 887,172
-----------------------------------------
10
FIRST AMERICAN LARGE CAP GROWTH FUND
PRO FORMA SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2001
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
Pro Forma
Pro Forma Combined
Combined First
First American First American First American First American First American American
Large Cap Capital Growth Large Cap Large Cap Capital Growth Large Cap
Growth Fund Fund Growth Fund Growth Fund Fund Growth Fund
Shares Shares Shares(2) Description at Value at Value at Value(2)
- -------------- -------------- -------------- ---------------------------------------- -------------- -------------- ------------
SHORT-TERM INVESTMENTS - 0.1%
- 75,000 75,000 RNC Money Market Fund - 750 750
-----------------------------------------
TOTAL SHORT-TERM INVESTMENTS - 750 750
-----------------------------------------
RELATED PARTY MONEY MARKET FUND - 3.0%
22,317,901 5,068,031 27,385,932 First American Prime Obligations Fund (1) 22,318 5,068 27,386
-----------------------------------------
TOTAL RELATED PARTY MONEY MARKET FUND 22,318 5,068 27,386
-----------------------------------------
TOTAL INVESTMENTS - 100.6%
-----------------------------------------
(Cost $863,762, $192,428 and $1,056,190,
respectively) $ 716,117 $ 199,191 $ 915,308
=========================================
ADR American Depositary Receipt
Cl Class
* Non-income producing security
(1) This money market fund is advised by U.S. Bancorp Asset Management,
Inc., who also serves as advisor for this fund.
(2) The First American Capital Growth Fund will be the accounting
survivor.
See Accompanying Notes to Pro Forma Financial Statements
11
FIRST AMERICAN LARGE CAP VALUE FUND
PRO FORMA SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2001
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
Pro Forma
Pro Forma Combined
Combined First
First American First American First American First American First American American
Large Cap Relative Large Cap Large Cap Relative Large Cap
Value Fund Value Fund Value Fund Value Fund Value Fund Value Fund
Shares Shares Shares(2) Description at Value at Value at Value(2)
- -------------- -------------- -------------- ---------------------------------------- -------------- -------------- -----------
COMMON STOCKS - 95.2%
CONSUMER DISCRETIONARY - 8.1%
387,100 - 387,100 AOL Time Warner* $ 12,813 $ - $ 12,813
273,000 - 273,000 Federated Department Stores* 7,699 - 7,699
469,791 - 469,791 Ford Motor 8,151 - 8,151
116,400 - 116,400 Gannett 6,997 - 6,997
317,400 - 317,400 Gap 3,793 - 3,793
203,900 65,000 268,900 General Motors 8,747 2,789 11,536
- 50,000 50,000 Johnson Controls - 3,262 3,262
578,100 - 578,100 Liberty Media, Cl A 7,342 - 7,342
275,200 - 275,200 Lowe's* 8,710 - 8,710
529,800 - 529,800 McDonald's 14,379 - 14,379
231,400 - 231,400 McGraw Hill 13,467 - 13,467
261,100 - 261,100 Target 8,290 - 8,290
632,800 - 632,800 Walt Disney 11,783 - 11,783
- 100,000 100,000 Whirlpool - 5,535 5,535
----------------------------------------
112,171 11,586 123,757
----------------------------------------
CONSUMER STAPLES - 7.6%
341,500 - 341,500 Albertson's 10,887 - 10,887
275,000 - 275,000 Coca-Cola 12,884 - 12,884
397,900 - 397,900 ConAgra Foods 8,933 - 8,933
307,600 - 307,600 Kimberly-Clark 19,071 - 19,071
308,900 - 308,900 Kraft Foods* 10,617 - 10,617
165,200 260,000 425,200 Procter & Gamble 12,025 18,925 30,950
- 350,000 - Philip Morris - 16,901 16,901
- 230,000 - Gillette - 6,854 6,854
----------------------------------------
74,417 42,680 117,097
----------------------------------------
ENERGY - 10.1%
106,800 - 106,800 Anadarko Petroleum 5,135 - 5,135
- 114,800 114,800 BP PLC - 5,645 5,645
970,400 390,764 1,361,164 Exxon Mobil 38,234 15,396 53,630
430,400 - 430,400 Halliburton 9,705 9,705
239,900 - 239,900 Phillips Petroleum 12,940 - 12,940
440,300 156,000 596,300 Royal Dutch Petroleum, ADR 22,125 7,839 29,964
262,500 - 262,500 Schlumberger 11,996 - 11,996
248,300 - 248,300 Transocean Sedco Forex* 6,555 - 6,555
- 300,000 300,000 Texaco - 19,500 19,500
----------------------------------------
106,690 48,380 155,070
----------------------------------------
FINANCIALS - 25.7%
482,800 - 482,800 Allstate 18,033 - 18,033
407,800 225,000 632,800 American Express 11,851 6,539 18,390
451,800 - 451,800 American International Group 35,240 35,240
- 243,230 243,230 AmSouth Bancorp - 4,395 4,395
375,300 70,000 445,300 Bank of America 21,917 4,088 26,005
- 300,000 300,000 Bank of New York - 10,500 10,500
350,600 - 350,600 Bank One 11,033 - 11,033
387,400 - 387,400 Charles Schwab 4,455 - 4,455
- 170,000 170,000 Cincinnati Financial - 7,075 7,075
917,302 430,000 1,347,302 Citigroup 37,151 17,415 54,566
400,100 - 400,100 Equity Office Properties 12,803 - 12,803
248,200 - 248,200 Fannie Mae 19,871 - 19,871
- 202,125 202,125 First Financial Bancorp - 3,135 3,135
- 165,000 165,000 First Tennessee National - 6,105 6,105
642,301 - 642,301 Fleet Boston Financial 23,605 - 23,605
178,500 - 178,500 Hartford Financial Services Group 10,485 - 10,485
547,100 - 547,100 JP Morgan Chase & Company 18,683 - 18,683
- 300,000 300,000 KeyCorp - 7,242 7,242
310,500 200,000 510,500 Mellon Financial 10,038 6,466 16,504
312,300 - 312,300 Morgan Stanley Dean Witter 14,475 - 14,475
- 115,000 115,000 National City - 3,444 3,444
- 160,000 160,000 North Fork Bancorp - 4,758 4,758
- 100,000 100,000 PNC Financial Services - 5,725 5,725
- 100,000 100,000 TCF Financial - 4,606 4,606
- 250,000 250,000 Union Planters - 10,725 10,725
315,600 - 315,600 Wachovia 9,784 - 9,784
335,000 - 335,000 Washington Mutual 12,891 - 12,891
362,500 100,000 462,500 Wells Fargo 16,113 4,445 20,558
----------------------------------------
288,428 106,663 395,091
----------------------------------------
HEALTH CARE - 6.0%
488,700 115,000 603,700 Bristol-Myers Squibb 27,152 6,389 33,541
210,100 - 210,100 Guidant* 8,089 - 8,089
93,700 170,000 263,700 Merck 6,240 11,322 17,562
329,291 - 329,291 Pharmacia 13,356 - 13,356
- 200,000 200,000 American Home Products - 11,650 11,650
- 11,500 11,500 Zimmer Holdings - 319 319
- 135,000 135,000 GlaxoSmithKline ADR - 7,576 7,576
----------------------------------------
54,837 37,256 92,093
----------------------------------------
INDUSTRIALS - 8.4%
124,200 - 124,200 Caterpillar 5,564 - 5,564
224,800 - 224,800 Delta Airlines 5,923 - 5,923
12
FIRST AMERICAN LARGE CAP VALUE FUND
PRO FORMA SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2001
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
Pro Forma
Pro Forma Combined
Combined First
First American First American First American First American First American American
Large Cap Relative Large Cap Large Cap Relative Large Cap
Value Fund Value Fund Value Fund Value Fund Value Fund Value Fund
Shares Shares Shares(2) Description at Value at Value at Value(2)
- -------------- -------------- -------------- ---------------------------------------- -------------- -------------- -----------
96,600 - 96,600 Emerson Electric 4,546 - 4,546
141,500 - 141,500 First Data 8,244 - 8,244
164,900 - 164,900 General Dynamics 14,564 - 14,564
402,800 - 402,800 Masco 8,233 - 8,233
203,900 - 203,900 Minnesota Mining & Manufacturing 20,064 - 20,064
285,800 - 285,800 Tyco International 13,004 - 13,004
258,900 - 258,900 Union Pacific 12,142 - 12,142
286,500 - 286,500 United Technologies 13,322 - 13,322
- 450,000 450,000 General Electric - 16,740 16,740
- 240,625 240,625 Honeywell Int'l - 6,353 6,353
----------------------------------------
105,606 23,093 128,699
----------------------------------------
INFORMATION TECHNOLOGY - 10.2%
432,200 - 432,200 Accenture 5,511 - 5,511
898,200 - 898,200 ADC Telecommunications* 3,135 - 3,135
509,300 - 509,300 Advanced Micro Devices* 4,151 - 4,151
632,200 - 632,200 Cisco Systems* 7,700 - 7,700
437,500 - 437,500 Compaq Computers 3,636 - 3,636
271,200 - 271,200 Computer Associates International 6,981 - 6,981
443,000 - 443,000 Dell Computer* 8,209 - 8,209
201,700 - 201,700 Electronic Data Systems 11,614 - 11,614
513,700 - 513,700 Hewlett-Packard 8,271 - 8,271
312,900 800,000 1,112,900 Intel 6,396 16,352 22,748
110,056 300,000 410,056 IBM 10,158 27,690 37,848
152,700 - 152,700 Micron Technology* 2,875 - 2,875
216,700 170,000 386,700 Microsoft* 11,089 8,699 19,788
670,500 - 670,500 Motorola 10,460 - 10,460
732,400 - 732,400 Nortel Networks 4,109 - 4,109
----------------------------------------
104,295 52,741 157,036
----------------------------------------
MATERIALS - 4.9%
738,200 - 738,200 Alcoa 22,892 - 22,892
637,000 135,000 772,000 Dow Chemical 20,868 4,423 25,291
383,800 100,000 483,800 International Paper 13,356 3,480 16,836
170,000 - 170,000 Praxair 7,140 - 7,140
- 250,000 250,000 AK Steel Holdings - 2,113 2,113
----------------------------------------
64,256 10,016 74,272
----------------------------------------
TELECOMMUNICATION SERVICES - 8.8%
611,100 350,000 961,100 AT&T 11,794 6,755 18,549
467,000 - 467,000 Bell South 19,404 - 19,404
570,026 - 570,026 SBC Communications 26,860 - 26,860
398,212 185,440 583,652 Verizon Communications 21,547 10,034 31,581
1,468,100 - 1,468,100 WorldCom* 22,080 - 22,080
- 800,000 800,000 Broadwing - 12,864 12,864
- 195,000 195,000 Vodafone Group, ADR - 4,282 4,282
----------------------------------------
101,685 33,935 135,620
----------------------------------------
UTILITIES - 5.4%
412,000 200,000 612,000 Duke Power 15,594 7,570 23,164
180,200 - 180,200 El Paso 7,487 - 7,487
155,500 - 155,500 FPL Group 8,327 - 8,327
190,100 - 190,100 Public Service Enterprises 8,089 - 8,089
232,600 190,000 422,600 TXU 10,774 8,801 19,575
331,600 - 331,600 Xcel Energy 9,335 - 9,335
- 250,000 250,000 Cinergy - 7,718 7,718
----------------------------------------
59,606 24,089 83,695
----------------------------------------
TOTAL COMMON STOCKS 1,071,991 390,439 1,462,430
----------------------------------------
-
RELATED PARTY MONEY MARKET FUND - 4.6% -
46,742,466 24,547,061 71,289,527 First American Prime Obligations Fund (1) 46,742 24,547 71,289
----------------------------------------
TOTAL RELATED PARTY MONEY MARKET FUND 46,742 24,547 71,289
----------------------------------------
TOTAL INVESTMENTS - 99.8% -
----------------------------------------
(Cost $1,206,095, $261,524 and $1,467,619, $1,118,733 $ 414,986 $ 1,533,719
respectively) ========================================
ADR American Depositary Receipt
Cl Class
* Non-income producing security
(1) This money market fund is advised by U.S.Bancorp Asset Management,
Inc., who also serves as advisor for this fund.
(2) The First American Large Cap Value Fund will be the accounting
survivor.
See Accompanying Notes to Pro Forma Financial Statements
13
FIRST AMERICAN EQUITY INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2001
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
Pro Forma
Pro Forma Combined
Combined First
First American First American First American First American First American American
Growth & Equity Equity Growth & Equity Equity
Income Fund Income Fund Income Fund Income Fund Income Fund Income Fund
Par/Shares Par/Shares Par/Shares(2) Description at Value at Value at Value(2)
- -------------- -------------- -------------- ---------------------------------------- -------------- -------------- -----------
COMMON STOCKS - 97.7%
CONSUMER DISCRETIONARY - 8.9%
502,100 - 502,100 AOL Time Warner* $ 16,620 $ - $ 16,620
41,300 - 41,300 Best Buy* 1,877 - 1,877
57,600 - 57,600 Clear Channel Communications* 2,290 - 2,290
146,900 - 146,900 Comcast, Cl A* 5,269 - 5,269
144,600 - 144,600 Costco Wholesale* 5,142 - 5,142
172,400 127,616 300,016 Ford Motor 2,991 2,214 5,205
151,600 - 151,600 Home Depot 5,817 - 5,817
14,400 - 14,400 Kohl's * 691 - 691
138,200 81,400 219,600 McGraw-Hill 8,043 4,737 12,780
175,200 - 175,200 Target 5,563 - 5,563
186,600 - 186,600 Toys "R" Us* 3,215 - 3,215
194,111 - 194,111 Viacom, Cl B 6,697 - 6,697
163,900 - 163,900 Wal-Mart Stores 8,113 - 8,113
157,600 - 157,600 Walt Disney 2,934 - 2,934
- 129,700 129,700 Maytag - 3,195 3,195
- 35,400 35,400 Omnicom Group - 2,297 2,297
- 35,000 35,000 Sherwin Williams - 778 778
- 23,700 23,700 Tribune Company - 2,138 2,138
-------------------------------------------
75,262 15,359 90,621
-------------------------------------------
CONSUMER STAPLES - 9.0%
95,800 109,100 204,900 Anheuser-Busch 4,012 4,569 8,581
- 70,400 70,400 Avon - 3,256 3,256
40,300 - 40,300 Coca-Cola 1,888 - 1,888
- 48,700 48,700 Colgate Palmolive - 2,837 2,837
89,100 - 89,100 CVS 2,958 - 2,958
32,500 - 32,500 General Mills 1,479 - 1,479
- 22,500 22,500 Gillette - 671 671
- 30,000 30,000 HJ Heinz - 1,265 1,265
60,325 30,000 90,325 Kimberly-Clark 3,740 4,098 7,838
98,900 41,160 140,060 Kraft Foods* 3,399 1,415 4,814
269,960 118,900 388,860 PepsiCo 13,093 5,767 18,860
122,300 - 122,300 Philip Morris 5,906 - 5,906
- 30,000 30,000 Ralston-Ralston Purina - 984 984
305,325 - 305,325 Safeway* 12,128 - 12,128
- 193,200 193,200 Sara-Lee - 4,115 4,115
312,340 30,000 342,340 Sysco 7,977 766 8,743
172,600 - 172,600 Walgreen 5,943 - 5,943
-------------------------------------------
62,523 29,743 92,266
-------------------------------------------
ENERGY - 9.3%
36,800 - 36,800 Anadarko Petroleum 1,769 - 1,769
96,700 - 96,700 Apache 4,158 - 4,158
- 93,096 BP - 4,578 4,578
18,900 38,820 57,720 Chevron 1,602 3,290 4,892
650,938 242,648 893,586 Exxon Mobil 25,647 9,560 35,207
- 10,000 10,000 Murphy Oil - 724 724
122,300 - 122,300 Nabors Industries* 2,565 - 2,565
102,800 27,000 129,800 Phillips Petroleum 5,545 1,456 7,001
- 10,000 - Precision Drilling - 211 211
- 179,200 - Royal Dutch Petroleum, ADR - 9,005 9,005
125,500 - 125,500 Schlumberger 5,735 - 5,735
110,800 - 110,800 Texaco 7,202 - 7,202
389,200 48,000 437,200 USX-Marathon 10,411 1,284 11,695
-------------------------------------------
64,634 30,108 94,742
-------------------------------------------
FINANCIALS - 24.4%
72,800 - 72,800 AFLAC 1,966 - 1,966
54,300 - 54,300 Alliance Capital Management Holding 2,482 - 2,482
183,400 - 183,400 AMB Property 4,493 - 4,493
174,600 - 174,600 Ambac 9,552 - 9,552
106,200 109,000 215,200 American Express 3,086 3,168 6,254
244,950 - 244,950 American International Group 19,106 - 19,106
- 151,600 151,600 Archstone Communities - 3,957 3,957
67,600 75,824 143,424 Bank of America 3,948 4,428 8,376
170,600 106,500 277,100 Bank of New York 5,971 3,728 9,699
48,300 - 48,300 BB&T 1,761 - 1,761
33,000 - 33,000 Capital One Financial 1,519 - 1,519
118,600 - 118,600 Chubb 8,469 - 8,469
465,566 182,786 648,352 Citigroup 18,855 7,403 26,258
- 56,200 56,200 Comerica - 3,113 3,113
- 101,700 101,700 Crescent Real Estate - 2,181 2,181
- 195,172 195,172 Duke Realty - 4,624 4,624
- 26,600 26,600 Equity Residential Property Trust - 1,553 1,553
29,600 56,600 86,200 Fannie Mae 2,370 4,531 6,901
177,600 - 177,600 Federal Home Loan Mortgage 11,544 - 11,544
39,200 - 39,200 Fifth Third Bancorp 2,410 - 2,410
- 10,000 10,000 Hartford Financial - 587 587
- 115,700 115,700 Healthcare Realty Trust - 2,950 2,950
- 71,397 71,397 Household Int'l - 4,025 4,025
- 116,900 116,900 John Hancock Financial - 4,670 4,670
175,500 112,100 287,600 JP Morgan Chase & Company 5,993 3,828 9,821
- 31,600 31,600 Kimco Realty - 1,534 1,534
92,300 - 92,300 Legg Mason 3,670 - 3,670
- 122,550 122,550 Manufactured Home Communities - 3,728 3,728
119,800 - 119,800 Marsh & McLennan 11,585 - 11,585
- 46,000 46,000 MBNA - 1,393 1,393
192,500 160,200 352,700 Mellon Financial 6,224 5,179 11,403
206,400 - 206,400 Merrill Lynch 8,380 - 8,380
81,095 - 81,095 MGIC Investment 5,299 - 5,299
68,800 - 68,800 Morgan Stanley Dean Witter 3,189 - 3,189
- 47,000 47,000 National City - 1,408 1,408
66,050 - 66,050 Northern Trust 3,466 - 3,466
- 22,000 22,000 PNC Financial Services Group - 1,259 1,259
- 48,000 48,000 Prentiss Properties Trust - 1,320 1,320
14
FIRST AMERICAN EQUITY INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2001
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
Pro Forma
Pro Forma Combined
Combined First
First American First American First American First American First American American
Growth & Equity Equity Growth & Equity Equity
Income Fund Income Fund Income Fund Income Fund Income Fund Income Fund
Par/Shares Par/Shares Par/Shares(2) Description at Value at Value at Value(2)
- -------------- -------------- -------------- ---------------------------------------- -------------- -------------- -----------
- 137,200 137,200 Simon Property Group - 3,692 3,692
74,700 - 74,700 SouthTrust 1,902 - 1,902
- 82,610 82,610 St. Paul Companies - 3,405 3,405
- 34,000 34,000 Union Planters - 1,458 1,458
47,500 - 47,500 Washington Mutual 1,828 - 1,828
272,300 - 272,300 Wells Fargo 12,104 - 12,104
- 53,782 53,782 XL Capital Limited, Cl A - 4,249 4,249
- 68,600 68,600 Zions Bancorporation - 3,681 3,681
-------------------------------------------
161,172 87,052 248,224
-------------------------------------------
HEALTH CARE - 11.1%
- 36,000 36,000 Abbot Lab - 1,867 1,867
152,800 110,900 263,700 American Home Products 8,901 6,460 15,361
33,600 - 33,600 Amgen* 1,975 - 1,975
132,800 137,000 269,800 Baxter International 7,311 7,542 14,853
170,832 62,700 233,532 Bristol-Myers Squibb 9,491 3,484 12,975
79,900 - 79,900 Eli Lilly 6,448 - 6,448
24,900 - 24,900 Genentech* 1,096 - 1,096
149,200 - 149,200 HCA - The Healthcare Company 6,611 - 6,611
114,600 105,600 220,200 Johnson & Johnson 6,349 5,850 12,199
42,800 - 42,800 Medtronic 1,862 - 1,862
137,400 32,200 169,600 Merck & Company 9,151 2,145 11,296
271,800 84,300 356,100 Pfizer 10,899 3,380 14,279
- 26,000 26,000 Pharmacia - 1,055 1,055
- 1,597,000 1,597,000 Protein Design Labs* - 1,489 1,489
- 54,200 54,200 Schering Plough - 2,011 2,011
58,200 - 58,200 Wellpoint Health Networks* 6,353 - 6,353
17,083 6,270 23,353 Zimmer Holdings* 474 174 648
-------------------------------------------
76,921 35,457 112,378
-------------------------------------------
INDUSTRIALS - 10.2%
150,700 - 150,700 Automatic Data Processing 7,089 - 7,089
34,804 - 34,804 Avery Dennison 1,647 - 1,647
27,800 - 27,800 Boeing 931 - 931
- 42,750 42,750 Caterpillar - 1,915 1,915
- 77,400 77,400 Deere - 2,911 2,911
257,800 169,900 427,700 Ecolab 9,366 6,172 15,538
- 26,000 26,000 First Data - 1,515 1,515
127,200 - 127,200 General Dynamics 11,234 - 11,234
376,900 119,400 496,300 General Electric 14,021 4,442 18,463
92,100 152,200 244,300 Honeywell International 2,431 4,032 6,463
- 176,500 176,500 Knightsbridge Tanker - 3,091 3,091
- 53,000 53,000 Minnesota Mining & Manufacturing - 5,215 5,215
- 73,900 73,900 Parker Hannifin - 2,535 2,535
316,700 - 316,700 Tyco International 14,410 - 14,410
49,950 76,700 126,650 United Parcel Service, Cl B 2,596 3,978 6,574
- 48,700 48,700 United Technologies - 2,264 2,264
58,700 - 58,700 Waste Management 1,570 - 1,570
-------------------------------------------
65,295 38,070 103,365
-------------------------------------------
INFORMATION TECHNOLOGY - 9.3%
34,500 - 34,500 Adobe Systems 827 - 827
29,300 - 29,300 Analog Devices* 958 - 958
119,200 - 119,200 Applied Materials* 3,390 - 3,390
202,600 - 202,600 Cisco Systems* 2,468 - 2,468
32,200 - 32,200 Corning 284 - 284
319,700 - 319,700 Dell Computer* 5,924 - 5,924
83,800 85,700 169,500 Electronic Data Systems 4,274 4,935 9,209
103,900 - 103,900 Flextronics International* 1,719 - 1,719
364,600 - 364,600 Intel 7,452 - 7,452
92,500 55,730 148,230 IBM 8,538 5,144 13,682
83,100 - 83,100 Lexmark International Group, Cl A* 3,715 - 3,715
139,100 - 139,100 Micron Technology* 2,619 - 2,619
203,500 - 203,500 Microsoft* 10,413 - 10,413
63,300 - 63,300 Millipore 3,351 - 3,351
276,900 - 276,900 Motorola 4,320 - 4,320
101,500 - 101,500 Network Appliance* 690 - 690
57,600 - 57,600 Nortel Networks 323 - 323
17,800 - 17,800 Novellus Systems* 508 - 508
177,000 - 177,000 Oracle Systems* 2,227 - 2,227
19,100 - 19,100 Siebel Systems* 248 - 248
108,150 - 108,150 Sun Microsystems* 894 - 894
319,000 - 319,000 SunGard Data Systems* 7,455 - 7,455
290,900 - 290,900 Texas Instruments 7,266 - 7,266
39,600 - 39,600 Xilinx* 932 - 932
- 16,000 16,000 Alcatel - 186 186
- 188,300 188,300 Hewlett-Packard - 2,995 2,995
-------------------------------------------
80,795 13,260 94,055
-------------------------------------------
15
FIRST AMERICAN EQUITY INCOME FUND
PRO FORMA SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2001
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
Pro Forma
Pro Forma Combined
Combined First
First American First American First American First American First American American
Growth & Equity Equity Growth & Equity Equity
Income Fund Income Fund Income Fund Income Fund Income Fund Income Fund
Par/Shares Par/Shares Par/Shares(2) Description at Value at Value at Value(2)
- -------------- -------------- -------------- ---------------------------------------- -------------- -------------- -----------
MATERIALS - 2.7%
105,400 - 105,400 Alcoa 3,268 - 3,268
189,100 - 189,100 Pharmacia 7,205 - 7,205
202,900 - 202,900 Praxair 8,522 - 8,522
- 62,400 62,400 Dow Chemical - 2,044 2,044
- 66,000 66,000 DuPont De Nemours & Co - 2,476 2,476
- 135,150 135,150 Lyondell Chemical - 1,547 1,547
- 62,800 62,800 Weyerhaeuser - 3,059 3,059
-------------------------------------------
18,995 9,126 28,121
-------------------------------------------
TELECOMMUNICATION SERVICES - 7.3%
91,400 - 91,400 ALLTELL 5,297 - 5,297
83,000 - 83,000 Bell South 3,449 - 3,449
196,000 92,400 288,400 Qwest Communications* 3,273 1,532 4,805
228,900 173,900 402,800 SBC Communications 10,786 8,194 18,980
185,000 101,300 286,300 Sprint 4,442 2,432 6,874
138,400 - 138,400 Sprint (PCS Group)* 3,638 - 3,638
342,500 168,680 511,180 Verizon Communications 18,532 9,127 27,659
- 4,850,000 4,850,000 Nextel Communications - 3,019 3,019
-------------------------------------------
49,417 24,304 73,721
-------------------------------------------
UTILITIES - 5.5%
100,200 10,900 111,100 Constellation Energy 2,425 264 2,689
322,800 48,000 370,800 Duke Power 12,218 1,817 14,035
177,900 - 177,900 Dynegy 6,164 - 6,164
213,300 - 213,300 Enron 5,808 - 5,808
157,000 - 157,000 Exelon 7,002 - 7,002
49,300 119,100 168,400 Reliant Resources* 799 3,135 3,934
114,625 - 114,625 Williams 3,129 - 3,129
- 30,000 30,000 Cinergy - 926 926
- 90,000 90,000 Consolidation Edison - 3,665 3,665
- 10,698 10,698 El Paso - 445 445
- 52,000 52,000 National Fuel Gas - 1,198 1,198
- 239,800 239,800 Xcel Energy - 6,750 6,750
-------------------------------------------
37,545 18,200 55,745
-------------------------------------------
TOTAL COMMON STOCKS 692,559 300,679 993,238
-------------------------------------------
CONVERTIBLE PREFERRED STOCK - 0.4%
141,400 - 141,400 Enron 3,754 - 3,754
-------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCK 3,754 - 3,754
-------------------------------------------
CONVERTIBLE CORPORATE BONDS - 0.2%
Ciena
$ 1,190 $ - $ 1,190 3.750%, 02/01/080 707 - 707
Corning -
$ 2,872 $ - $ 2,872 0.000%, 11/08/15* 1,591 - 1,591
-------------------------------------------
TOTAL CONVERTIBLE CORPORATE BONDS 2,298 - 2,298
-------------------------------------------
RELATED PARTY MONEY MARKET FUND - 3.1%
13,858,802 17,605,502 31,464,304 First American Prime Obligations Fund (1) 13,859 17,606 31,465
-------------------------------------------
TOTAL RELATED PARTY MONEY MARKET FUND 13,859 17,606 31,465
-------------------------------------------
TOTAL INVESTMENTS - 101.4% $ 712,470 $ 318,285 $ 1,030,755
===========================================
(Cost $690,577, $233,537 and $924,114,
respectively)
ADR American Depositary Receipt
Cl Class
* Non-income producing security
(1) This money market fund is advised by U.S. Bancorp Asset Management,
Inc., who also serves as advisor for this fund.
(2) The First American Equity Income Fund will be the accounting
survivor.
See Accompanying Notes to Pro Forma Financial Statements
16
FIRST AMERICAN TECHNOLOGY FUND
PRO FORMA SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2001
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
Pro Forma
Pro Forma Combined
First American Combined First American First
Science & First American Science & American
First American Technology Technology First American Technology Technology
Technology Fund Fund Fund Technology Fund Fund Fund
Shares Shares Shares(2) Description at Value at Value at Value(2)
- --------------- -------------- -------------- ---------------------------------------- --------------- -------------- -----------
COMMON STOCKS - 97.2%
CONSUMER DURABLES & APPAREL - 1.4%
64,000 - 64,000 Sony, ADR $ 2,125 $ - $ 2,125
-------------------------------------------
MEDIA - 3.9%
173,000 - 173,000 AOL Time Warner* 5,726 - 5,726
-------------------------------------------
RETAILING - 1.0%
32,650 - 32,650 eBay* 1,494 - 1,494
-------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES - 0.3%
- 9,000 9,000 Medtronic - 392 392
-------------------------------------------
PHARMACEUTICALS & BIOTECHNOLOGY - 3.5%
- 6,200 6,200 Abgenix* - 141 141
- 11,900 11,900 Amgen* - 699 699
- 2,900 2,900 Andrx* - 188 188
- 6,200 6,200 Bristol-Myers Squibb - 345 345
- 5,800 5,800 Eli Lilly - 468 468
- 10,400 10,400 Genetech* - 458 458
- 6,800 6,800 Genzyme* - 309 309
- 7,900 7,900 IDEC Pharmaceuticals* - 392 392
- 10,600 10,600 Ivax* - 235 235
- 4,600 4,600 King Pharmaceuticals* - 193 193
- 7,000 7,000 MedImmune* - 249 249
- 3,900 3,900 Merck - 260 260
- 10,000 10,000 Millennium Pharmaceuticals* - 178 178
- 9,800 9,800 Pfizer - 393 393
- 10,900 10,900 Pharmacia - 442 442
- 24,200 24,200 Praecis Pharmaceuticals* - 90 90
- 2,800 2,800 Protein Design Labs* - 132 132
-------------------------------------------
- 5,172 5,172
-------------------------------------------
CAPITAL GOODS - 0.4%
- 7,000 7,000 General Dynamics - 618 618
-------------------------------------------
-
TECHNOLOGY HARDWARE & EQUIPMENT 52.9% -
50,200 - 50,200 Advanced Fibre Communications* 733 - 733
506,900 - 506,900 Agere Systems* 2,094 - 2,094
50,250 38,300 88,550 Alpha Industries* 973 742 1,715
- 26,800 26,800 Analog Devices* - 876 876
146,250 61,000 207,250 Applied Micro Circuits* 1,022 426 1,448
- 65,000 65,000 AXT* - 689 689
61,050 12,500 73,550 Broadcom* 1,239 254 1,493
205,150 36,900 242,050 Brocade Communications Systems* 2,878 518 3,396
46,200 - 46,200 Celestica* 1,261 - 1,261
76,100 - 76,100 Centillium Communications* 461 - 461
86,200 - 86,200 Ciena* 887 - 887
380,750 95,600 476,350 Cisco Systems* 4,638 1,164 5,802
- 8,700 8,700 Comverse Technology* - 178 178
- 26,400 26,400 Corning - 233 233
- 9,900 9,900 Cree* - 146 146
- 11,300 11,300 Cypress Semi-Conductor* - 168 168
81,300 40,200 121,500 Dell Computer* 1,507 745 2,252
- 30,100 30,100 EMC* - 354 354
58,450 73,300 131,750 Emcore* 500 627 1,127
- 24,000 24,000 Emulex* - 228 228
557,900 - 557,900 Ericsson, ADR 1,947 - 1,947
77,750 - 77,750 Exfo Electro-Optical Engineering* 700 - 700
31,500 - 31,500 Genesis Microchip* 886 - 886
- 8,200 8,200 IBM - 757 757
40,000 - 40,000 Integrated Circuit System* 511 - 511
- 15,600 15,600 Integrated Device Technologies* - 314 314
50,900 49,300 100,200 Intel 1,040 1,008 2,048
67,720 - 67,720 Intergraph* 606 - 606
- 42,800 42,800 JDS Uniphase* - 271 271
45,900 28,800 74,700 Juniper Networks* 445 279 724
- 12,000 12,000 KLA-Tencor* - 379 379
132,500 - 132,500 Lantronix* 808 - 808
19,050 - 19,050 Linear Technology 625 - 625
107,600 - 107,600 McDATA* 903 - 903
71,450 41,700 113,150 Micron Technology* 1,345 785 2,130
312,850 - 312,850 Motorola 4,880 - 4,880
179,450 - 179,450 Multilink Technology* 928 - 928
123,000 - 123,000 Mykrolis* 1,103 - 1,103
37,700 - 37,700 National Semiconductor* 831 - 831
- 41,000 41,000 Network Appliance* - 279 279
17
FIRST AMERICAN TECHNOLOGY FUND
PRO FORMA SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2001
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
Pro Forma
Pro Forma Combined
First American Combined First American First
Science & First American Science & American
First American Technology Technology First American Technology Technology
Technology Fund Fund Fund Technology Fund Fund Fund
Shares Shares Shares(2) Description at Value at Value at Value(2)
- --------------- -------------- -------------- ---------------------------------------- --------------- -------------- -----------
137,700 18,000 155,700 Nokia, ADR, Cl A 2,155 282 2,437
801,550 40,700 842,250 Nortel Networks 4,497 228 4,725
- 20,900 20,900 Novellus Systems* - 597 597
94,300 - 94,300 O2Micro International* 1,240 - 1,240
- 31,500 31,500 ONI Systems* - 127 127
213,727 - 213,727 Palm* 312 - 312
61,500 - 61,500 PMC-Sierra* 632 - 632
83,200 - 83,200 Powerwave Technologies* 992 - 992
- 10,900 10,900 Qlogic* - 207 207
97,900 16,200 114,100 QUALCOMM* 4,654 770 5,424
59,950 - 59,950 Research In Motion* 964 964
81,000 50,100 131,100 RF Micro Devices* 1,345 832 2,177
95,000 - 95,000 Sanmina* 1,290 1,290
- 12,300 12,300 Scientific - Atlanta - 216 216
88,000 27,700 115,700 Sonus Networks* 264 83 347
179,800 - 179,800 StorageNetworks* 712 - 712
- 75,497 75,497 Sun Microsystems* - 624 624
323,260 - 323,260 Taiwan Semiconductor Manufacturing SP, ADR* 3,068 - 3,068
89,150 - 89,150 Tellium* 440 - 440
- 46,000 46,000 Texas Instruments 1,149 1,149
273,298 - 273,298 United Microelectronics, ADR 1,454 - 1,454
101,900 - 101,900 UTStarcom* 1,656 - 1,656
- 37,700 37,700 Vitesse Semiconductor* - 292 292
- 13,100 13,100 Xilinx* - 308 308
-------------------------------------------
61,426 17,135 78,561
-------------------------------------------
TELECOMMUNICATION SERVICES - 7.0%
12,950 - 12,950 Airgate PCS* 575 - 575
185,350 - 185,350 Allegiance Telecommunications* 558 - 558
75,750 - 75,750 American Tower* 1,052 - 1,052
326,550 - 326,550 Global Crossing* 588 - 588
135,000 - 135,000 Qwest Communications International 2,255 - 2,255
92,700 15,500 108,200 Sprint* 2,437 408 2,845
102,150 - 102,150 Time Warner Telecommunications, Cl A* 741 - 741
22,250 - 22,250 Triton PCS Holdings* 846 - 846
685 - 685 WorldCom - MCI Group* 10 - 10
17,142 31,200 48,342 WorldCom - Worldcom Group* 258 469 727
- 12,400 12,400 Broadwing - 199 199
-------------------------------------------
9,320 1,076 10,396
-------------------------------------------
SOFTWARE & SERVICES - 26.8%
93,400 - 93,400 Actuate Software* 391 - 391
- 17,700 17,700 Adobe Systems - 424 424
46,150 - 46,150 Ariba* 86 - 86
- 64,000 64,000 BEA Systems* - 614 614
97,900 35,000 132,900 Check Point Software Technologies* 2,156 771 2,927
- 30,500 30,500 Citrix Systems* - 604 604
- 22,200 22,200 Computer Sciences* - 736 736
36,200 - 36,200 Earthlink* 551 - 551
54,200 - 54,200 Electronic Data Systems 3,121 - 3,121
466,500 - 466,500 Internap Network Services* 467 - 467
183,850 - 183,850 Liberate Technologies* 1,831 - 1,831
46,500 18,200 64,700 Mercury Interactive* 885 347 1,232
41,700 - 41,700 Micromuse* 237 - 237
126,950 17,500 144,450 Microsoft* 6,496 895 7,391
23,450 - 23,450 Netiq* 534 - 534
- 56,500 56,500 Nuance Communications* - 367 367
- 32,200 32,200 NVIDIA* - 885 885
99,450 25,157 124,607 Openwave System* 1,268 321 1,589
217,250 - 217,250 Oracle* 2,733 - 2,733
- 15,400 15,400 PeopleSoft* - 278 278
89,900 - 89,900 Precise Software Solutions* 993 - 993
- 57,300 57,300 Rational Software* - 496 496
24,450 - 24,450 SAP AG 634 - 634
112,400 48,000 160,400 Siebel Systems* 1,462 625 2,087
79,700 - 79,700 Stellent* 1,148 - 1,148
20,550 - 20,550 Synopsys* 824 - 824
317,600 - 317,600 Tricord Systems* 172 - 172
173,400 - 173,400 UAXS Global Holdings* 128 - 128
- 4,900 4,900 VeriSign* - 205 205
127,100 36,300 163,400 VERITAS Software* 2,344 669 3,013
357,050 - 357,050 Vignette* 1,264 - 1,264
377,500 - 377,500 Vitria Technology* 774 - 774
123,500 - 123,500 Yahoo* 1,088 - 1,088
-------------------------------------------
31,587 8,237 39,824
-------------------------------------------
TOTAL COMMON STOCKS 111,678 32,630 144,308
-------------------------------------------
18
FIRST AMERICAN TECHNOLOGY FUND
PRO FORMA SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2001
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
Pro Forma
Pro Forma Combined
First American Combined First American First
Science & First American Science & American
First American Technology Technology First American Technology Technology
Technology Fund Fund Fund Technology Fund Fund Fund
Shares Shares Shares(2) Description at Value at Value at Value(2)
- --------------- -------------- -------------- ---------------------------------------- --------------- -------------- -----------
RELATED PARTY MONEY MARKET FUND - 2.4%
746,146 2,881,835 3,627,981 First American Prime Obligations Fund (1) 746 2,881 3,627
-------------------------------------------
TOTAL RELATED PARTY MONEY MARKET FUND 746 2,881 3,627
-------------------------------------------
TOTAL INVESTMENTS - 99.6%
(Cost $263,486, $62,188 and $325,674,
respectively) $ 112,424 $ 35,511 $ 147,935
===========================================
ADR American Depositary Receipt
Cl Class
* Non-income producing security
(1) This money market fund is advised by U.S. Bancorp Asset Management,
Inc., who also serves as advisor for this fund.
(2) The First American Technology Fund will be the accounting survivor.
See Accompanying Notes to Pro Forma Financial Statements
19
FIRST AMERICAN INVESTMENT FUNDS, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF COMBINATION
The unaudited pro forma statements of assets and liabilities, statements of
operations, and schedules of investments in securities reflect the accounts
of eight investment portfolios offered by First American Investment Funds,
Inc. (the "Funds") as if the proposed reorganizations occurred as of and
for the year ended September 30, 2001. These statements have been derived
from books and records utilized in calculating daily net asset values at
September 30, 2001. Below are the Funds included in the proposed
reorganizations. The Funds listed in the Surviving Funds column indicates
which Fund will be the accounting survivor of the reorganizations.
---------------------------- --------------------------- -------------------------
ACQUIRED FUNDS ACQUIRING FUNDS SURVIVING FUNDS
---------------------------- --------------------------- -------------------------
Capital Growth Fund Large Cap Growth Fund Capital Growth Fund
---------------------------- --------------------------- -------------------------
Relative Value Fund Large Cap Value Fund Large Cap Value Fund
---------------------------- --------------------------- -------------------------
Growth & Income Fund Equity Income Fund Equity Income Fund
---------------------------- --------------------------- -------------------------
Science & Technology Fund Technology Fund Technology Fund
---------------------------- --------------------------- -------------------------
The Plan of Reorganization provides that at the time the reorganization
becomes effective (the "Effective Time of the Reorganization"),
substantially all of the assets and liabilities of the acquired funds will
be transferred such that at and after the Effective Time of Reorganization,
substantially all of the assets and liabilities of the acquired funds will
become assets and liabilities of the acquiring funds. In exchange for the
transfer of assets and liabilities, the acquiring funds will issue to the
acquired funds full and fractional shares of the designated classes of the
acquiring funds, and the acquired funds will make a liquidating
distribution of such shares to its shareholders. The number of shares of
the acquiring funds so issued will be in equal value to the full and
fractional shares of the acquired funds that are outstanding immediately
prior to the Effective Time of Reorganization. At and after the Effective
Time of Reorganization, all debts, liabilities and obligations of the
acquired funds will attach to the acquiring funds and may thereafter be
enforced against the acquiring funds to the same extent as if they had been
incurred by them. The pro forma statements give effect to the proposed
transfer described above.
Under the purchase method of accounting for business combinations under
accounting principles generally accepted in the United States, the basis on
the part of the acquiring funds of the assets of the acquired funds will be
the fair market value of such on the closing date of the transaction. The
acquiring funds will recognize no gain or loss for federal tax purposes on
its issuance of shares in the reorganization, and the basis to the
acquiring funds of the assets of the acquired funds received pursuant to
the reorganization will equal the fair market value of the consideration
furnished, and costs incurred, by the acquiring funds in the reorganization
- i.e., the sum of the liabilities assumed, the fair market value of the
acquiring funds' shares issued, and such costs. For accounting purposes,
the Surviving Funds are the survivor of this reorganization. The pro forma
statements reflect the combined results of operations of the acquired and
acquiring funds. However, should such reorganization be effected, the
statements of operations of the acquiring funds will not be restated for
precombination period results of the corresponding acquired funds.
20
The pro forma statements of assets and liabilities, statements of
operations, and schedules of investments in securities should be read in
conjunction with the historical financial statements of the First American
Investment Funds, Inc. incorporated by reference in the Statement of
Additional Information.
The Funds are each separate series of the First American Investment Funds,
Inc., which are registered as open-end management investment companies
under the Investment Company Act of 1940.
2. SERVICE PROVIDERS
U.S. Bancorp Asset Management, Inc. (the "Advisor"), a subsidiary of U.S.
Bank National Association ("U.S. Bank"), will serve as the combined Funds'
investment advisor. U.S. Bancorp Asset Management, Inc. and U.S. Bancorp
Fund Services, LLC (the "Co-administrators") will serve as the
co-administrators to the Funds. US Bancorp Fund Services, LLC will serve as
the transfer agent to the Funds. U.S. Bank will serve as the custodian to
the Funds.
3. SHARE CLASSES AND FEES
The Funds have multiple classes of shares which have identical rights and
privileges except with respect to fees paid under shareholder servicing
and/or distribution plans, expenses allocable exclusively to each class of
shares, voting rights on matters affecting a single class of shares, and
the exchange privilege of each class of shares. Class A shares are subject
to a front-end sales charge. Class B shares are subject to a CDSC. Class C
shares are subject to a front-end sales charge and a CDSC. Class S shares
are offered only through banks and other financial institutions that have
entered into sales agreements with the funds' distributor. Class Y shares
are offered only to qualifying institutional investors and are not subject
to a front-end sales charge or CDSC. More information on the classes of
shares offered can be found in the Combined Proxy Statement/Prospectus.
Under the terms of the investment advisory agreement, the advisor is
entitled to receive fees computed at an annual rate of 0.65% of the average
daily net assets of the Large Cap Growth, Capital Growth, Large Cap Value,
Relative Value, Equity Income, and Growth & Income Funds and an annual rate
of 0.70% of the average daily net assets of the Science & Technology and
Technology Funds. Such fees are accrued daily and paid monthly.
Under the terms of the administration agreement, the co-administrators are
entitled to receive for each Fund an administration fee computed at an
annual rate of up to 0.25% of the average daily net assets, plus out of
pocket expenses. Such fees are accrued daily and paid monthly.
4. PRO FORMA ADJUSTMENTS AND PRO FORMA COMBINED COLUMNS
The pro forma adjustments and pro forma combined columns of the statements
of operations reflect the adjustments necessary to show expenses and
waivers at the rates which would have been in effect as if the
reorganizations occurred on October 1, 2000.
The pro forma statements of assets and liabilities and schedules of
investments give effect to the proposed combination as if the
reorganizations had occurred at September 30, 2001.
21
5. PORTFOLIO VALUATION, SECURITIES TRANSACTIONS AND RELATED INCOME
Securities are valued at market value. Short-term investments maturing in
60 days or less are valued at amortized cost, which approximates market
value. Security transactions are accounted for on a trade date basis. Net
realized gains or losses from sales of securities are determined by
comparing the net sale proceeds to an identified cost basis. Interest
income and expenses are recognized on the accrual basis. Dividends are
recorded on the ex-dividend date or as soon as information is available to
the Funds. Discounts are accreted and premiums are amortized on fixed
income securities over the life of the respective security. Discounts are
accreted and premiums are amortized on securities with put provisions to
the earlier of the put or maturity date.
6. CAPITAL SHARES
The pro forma net asset values per share assume the issuance of shares of
the Surviving Funds, which would have occurred at September 30, 2001, in
connection with the proposed reorganization.
7. MERGER COSTS
All costs associated with the Reorganization will be paid by U.S. Bancorp
Asset Management, Inc.
22
[LOGO] FIRST AMERICAN FUNDS(TM) JANUARY 28, 2002
PROSPECTUS
FIRST AMERICAN INVESTMENT FUNDS, INC.
ASSET CLASS -- STOCK FUNDS
LARGE CAP FUNDS
CLASS A, CLASS B, AND CLASS C SHARES
BALANCED FUND
CAPITAL GROWTH FUND
EQUITY INCOME FUND
GROWTH & INCOME FUND
LARGE CAP CORE FUND
LARGE CAP GROWTH FUND
LARGE CAP VALUE FUND
RELATIVE VALUE FUND
AS WITH ALL MUTUAL FUNDS, THE
SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THE
SHARES OF THESE FUNDS, OR DETERMINED
IF THE INFORMATION IN THIS
PROSPECTUS IS ACCURATE OR COMPLETE.
ANY STATEMENT TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Table of
CONTENTS
FUND SUMMARIES
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Balanced Fund 2
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Capital Growth Fund 5
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Equity Income Fund 8
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Growth & Income Fund 10
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Large Cap Core Fund 13
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Large Cap Growth Fund 15
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Large Cap Value Fund 18
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Relative Value Fund 21
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POLICIES & SERVICES
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Buying Shares 24
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Selling Shares 28
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Managing Your Investment 30
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ADDITIONAL INFORMATION
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Management 31
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More About The Funds 32
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Financial Highlights 35
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FOR MORE INFORMATION Back Cover
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Fund Summaries
INTRODUCTION
This section of the prospectus describes the objectives of the First American
Large Cap Funds, summarizes the main investment strategies used by each fund in
trying to achieve its objectives, and highlights the risks involved with these
strategies. It also provides you with information about the performance, fees,
and expenses of the funds.
AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF U.S. BANK NATIONAL ASSOCIATION
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY.
1 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
BALANCED FUND
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OBJECTIVE
Balanced Fund's objective is to maximize total return (capital appreciation plus
income).
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MAIN INVESTMENT STRATEGIES
Balanced Fund invests in a balanced portfolio of stocks and bonds. The mix of
securities will change based on existing and anticipated market conditions. Over
the long term, the fund's asset mix is likely to average approximately 60%
equity securities and 40% debt securities. Under normal market conditions, the
equity securities portion of the fund's portfolio will be invested primarily (at
least 80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks that the advisor believes exhibit the potential for
superior growth based on factors such as:
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the equity portion of the fund may be invested in securities of
foreign issuers that are either listed on a U.S. stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Under normal market conditions, the debt securities portion of the fund's
portfolio will be comprised of securities such as: U.S. government securities
(securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities) including zero coupon bonds; mortgage- and asset-backed
securities; and corporate debt obligations.
In selecting debt securities for the fund, the advisor uses a "top-down"
approach, which begins with the formulation of a general economic outlook.
Following this, various sectors and industries are analyzed and selected for
investment. This is followed by the selection of individual securities.
The fund's debt securities will be rated investment grade at the time or
purchase or, if unrated, determined to be of comparable quality by the fund's
advisor. At least 65% of these securities will be either U.S. government
securities or securities that have received at least an A or equivalent rating.
The fund may invest up to 15% of the debt portion of its portfolio in foreign
securities payable in United States dollars. Under normal market conditions the
fund attempts to maintain a weighted average effective maturity for its
portfolio securities of 15 years or less and an average effective duration of
three to eight years. The fund's weighted average effective maturity and average
effective duration are measures of how the fund may react to interest rate
changes.
To generate additional income, the fund may invest up to 25% of total assets in
dollar roll transactions. In a dollar roll transaction, the fund sells
mortgage-backed securities for delivery in the current month while contracting
with the same party to repurchase similar securities at a future date.
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MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, value stocks, growth stocks, and/or large-capitalization stocks may
underperform the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
INTEREST RATE RISK. Debt securities typically decrease in value when interest
rates rise. This risk is usually greater for longer-term debt securities. One
measure of interest rate risk is effective duration, explained in "More About
The Funds -- Investment Strategies".
INCOME RISK. The fund's income could decline due to falling market interest
rates.
CREDIT RISK. An issuer of debt securities may not make timely principal or
interest payments on its securities, or the other party to a contract may
default on its obligations.
CALL RISK. During periods of falling interest rates, a bond issuer may "call" --
or repay -- its high-yielding bonds before their maturity date. The fund would
then be forced to invest the unanticipated proceeds at lower interest rates,
resulting in a decline in the fund's income.
RISKS OF MORTGAGE- AND ASSET-BACKED SECURITIES. Falling interest rates could
cause faster than expected prepayments of the obligations underlying mortgage-
and asset-backed securities, which the fund would have to invest at lower
interest rates. On the other hand, rising interest rates could cause prepayments
of the obligations to decrease, extending the life of mortgage- and asset-backed
securities with lower interest rates.
RISKS OF DOLLAR ROLL TRANSACTIONS. The use of mortgage dollar rolls could
increase the volatility of the fund's share price. It could also diminish the
fund's investment performance if the advisor does not predict mortgage
prepayments and interest rates correctly.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
2 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
BALANCED FUND CONTINUED
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
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FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they were, returns would be lower.
The table compares the fund's performance for Class A and Class B shares over
different time periods to that of the fund's benchmark indices, which are broad
measures of market performance. No information is presented for Class C shares
because those shares were not offered for a full calendar year. The fund's
performance reflects sales charges and fund expenses; the benchmarks are
unmanaged, have no expenses and are unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these waivers were not in place,
performance would be reduced.
3 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
BALANCED FUND CONTINUED
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FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
12.31% 17.22% 16.20% 4.02% 7.38% -8.58%
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1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending September 30, 1998 14.02%
Worst Quarter: Quarter ending September 30, 2001 (9.94)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since Inception Since Inception
AS OF 12/31/01(1) Date One Year Five Years (Class A) (Class B)
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Balanced Fund (Class A) 1/9/95 (13.61)% 5.63% 9.36% N/A
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Balanced Fund (Class B) 3/1/99 (13.79)% N/A N/A 0.96%
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Standard & Poor's 500 Composite Index(2) (11.88)% 10.70% 15.69% (1.41)%
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Lehman Aggregate Bond Index(3) 8.42% 7.42% 8.17% 7.03%
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(1)On 9/24/01, First American Balanced Fund combined with Firstar Balanced
Growth Fund and Firstar Balanced Income Fund. Performance history prior to
9/24/01 represents that of Firstar Balanced Growth Fund.
(2)An unmanaged index of large-capitalization stocks. The since inception
performance of the index for Class A and Class B shares is calculated from
1/31/95 and 2/28/99, respectively.
(3)An unmanaged index composed of the Lehman Government/Credit Bond Index, the
Lehman Mortgage Backed Securities Index and the Lehman Asset Backed
Securities Index. The Lehman Government/Credit Bond Index is comprised of
Treasury securities, other securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities, including U.S. agency
mortgage securities, and investment grade corporate debt securities. The
Lehman Mortgage Backed Securities Index is comprised of the mortgage-backed
pass through securities of Ginnie Mae, Fannie Mae and Freddie Mac. The Lehman
Asset Backed Index is comprised of debt securities rated investment grade or
higher that are backed by credit card, auto and home equity loans. The since
inception performance of the index for Class A and Class B shares is
calculated from 1/31/95 and 2/28/99, respectively.
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FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
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SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
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MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR REDEMPTION PROCEEDS,
WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
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Management Fees 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.32% 0.32% 0.32%
Total Annual Fund Operating Expenses 1.22% 1.97% 1.97%
Waiver of Fund Expenses(5) (0.17)% (0.17)% (0.17)%
NET EXPENSES(5) 1.05% 1.80% 1.80%
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(1)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a 1% contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.05%, 1.80% and 1.80%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
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EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- -------------------------------------------------------------------------------------------------------------------
1 year $651 $683 $183 $381 $281
3 years $900 $1,001 $601 $695 $695
5 years $1,167 $1,245 $1,045 $1,135 $1,135
10 years $1,930 $2,082 $2,082 $2,356 $2,356
4 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
CAPITAL GROWTH FUND
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OBJECTIVE
Capital Growth Fund's objective is to maximize long-term after-tax returns.
Effective April 1, 2002, Capital Growth Fund's objective is to maximize
long-term returns.
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MAIN INVESTMENT STRATEGIES
Under normal market conditions, Capital Growth Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that have market capitalizations of at
least $5 billion at the time of purchase. The advisor will select companies that
it believes exhibit the potential for superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Effective April 1, 2002, the advisor will no longer utilize the following
tax-efficient strategies in seeking to achieve the fund's objective.
The advisor seeks to achieve high after-tax returns by balancing investment
considerations and tax considerations. The fund seeks to achieve returns
primarily in the form of price appreciation (which is not subject to current
tax) and to minimize income distributions and distributions of realized
short-term gains (taxed as ordinary income). Among the main strategies used in
the tax-efficient management of the fund are the following:
o investing primarily in lower-yielding growth stocks to minimize taxable
dividend income.
o employing a long-term, low turnover approach to investing.
o attempting to avoid net realized short-term gains.
o selling stocks trading below cost to realize losses (when appropriate)
in order to offset realized capital gains that would otherwise have to
be distributed to shareholders.
o selling the highest-cost shares when selling appreciated stocks, in
order to minimize realized capital gains.
o selectively using tax-advantaged hedging techniques as an alternative
to taxable sales (including derivative instruments such as purchased
put options, equity collars, equity swaps, covered short sales, and the
purchase or sale of stock index futures contracts).
As a result of its tax-efficient strategy, the fund can generally be expected to
distribute a smaller percentage of returns each year than most other equity
mutual funds. There can be no assurance, however, that taxable distributions can
always be avoided.
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MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class B shares has varied
from year to year. The performance of Class A shares will be higher than Class B
shares due to their lower expenses. The performance of Class C shares will be
similar to Class B shares due to their similar expenses. Sales charges are not
reflected in the chart; if they were, returns would be lower.
The table compares the fund's performance for Class A and Class B shares over
different time periods to that of the fund's benchmark index, which is a broad
measure of market performance. No information is presented for Class C shares
because those shares were not offered for a full calendar year. The fund's
performance reflects sales charges and fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
5 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
CAPITAL GROWTH FUND CONTINUED
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FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR (Class B)(1)
[BAR CHART]
27.37% 23.35% 25.28% 28.05% 25.42% -12.15% -24.66%
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1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 23.49%
Worst Quarter: Quarter ending March 31, 2001 (20.15)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since Inception Since Inception
AS OF 12/31/01(1) Date One Year Five Years (Class A) (Class B)
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Capital Growth Fund (Class A) 3/31/00 (28.23)% N/A (25.40)% N/A
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Capital Growth Fund (Class B) 12/12/94 (28.42)% 5.58% N/A 11.58%
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Russell 1000 Growth Index(2) (20.42)% 8.27% (27.02)% 14.07%
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Standard & Poor's/BARRA 500 Growth Index(3) (12.70)% 11.09% (21.54)% 16.40%
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(1)On 9/24/01, the Capital Growth Fund became the successor by merger to the
Firstar Large Cap Growth Fund, a series of Firstar Funds, Inc. Prior to the
merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Large Cap Growth
Fund. The Firstar Large Cap Growth Fund was organized on 12/11/00 and, prior
to that, was a separate series of Firstar Stellar Funds, Inc.
(2)The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's/BARRA 500
Growth Index as a benchmark. Going forward, the fund will use the Russell
1000 Growth Index as a comparison, because its composition better matches the
fund's investment objective and strategies. The since inception performance
of the index for Class A and Class B shares is calculated from 3/31/00 and
12/31/94, respectively.
(3)The Standard & Poor's/BARRA 500 Growth Index is an unmanaged market
capitalization weighted index comprised of the stocks in the Standard &
Poor's 500 Composite Index with the highest valuations and, in the adviser's
view, the greatest growth opportunities. The since inception performance of
the indices for Class A and Class B shares is calculated from 3/31/00 and
12/31/94, respectively.
6 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
CAPITAL GROWTH FUND CONTINUED
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FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
- ----------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ----------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ----------------------------------------------------------------------------------------------------------------
Management Fees 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.34% 0.34% 0.34%
Total Annual Fund Operating Expenses 1.24% 1.99% 1.99%
Waiver of Fund Expenses(5) (0.09)% (0.09)% (0.09)%
NET EXPENSES(5) 1.15% 1.90% 1.90%
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(1)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a 1% contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%, 1.90% and 1.90%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- --------------------------------------------------------------------------------------------------------------------
1 year $661 $693 $193 $391 $291
3 years $913 $1,015 $615 $709 $709
5 years $1,185 $1,263 $1,063 $1,153 $1,153
10 years $1,959 $2,112 $2,112 $2,385 $2,385
7 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
EQUITY INCOME FUND
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OBJECTIVE
Equity Income Fund's objective is long-term growth of capital and income.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Equity Income Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in equity securities of companies which the fund's investment advisor
believes are characterized by:
o the ability to pay above average dividends.
o the ability to finance expected growth.
o strong management.
The fund will attempt to maintain a dividend that will grow quickly enough to
keep pace with inflation. As a result, higher-yielding equity securities will
generally represent the core holdings of the fund. However, the fund also may
invest in lower-yielding, higher growth equity securities if the advisor
believes they will help balance the portfolio. The fund's equity securities
include common stocks and preferred stocks, and corporate debt securities which
are convertible into common stocks. All securities held by the fund will provide
current income at the time of purchase.
The fund invests up to 20% of its total assets in convertible debt securities in
pursuit of both long-term growth of capital and income. The securities'
conversion features provide long-term growth potential, while interest payments
on the securities provide income. The fund may invest in convertible debt
securities without regard to their ratings, and therefore may hold convertible
debt securities which are rated lower than investment grade.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
INTEREST RATE RISK. Debt securities typically decrease in value when interest
rates rise. This risk is usually greater for longer-term debt securities.
CREDIT RISK. An issuer of debt securities may not make timely principal or
interest payments on its securities, or the other party to a contract may
default on its obligations.
RISKS OF NON-INVESTMENT GRADE SECURITIES. The fund may invest up to 20% of its
total assets in securities which are rated lower than investment grade. These
securities, which are commonly called "high-yield" securities or "junk bonds,"
generally have more volatile prices and carry more risk to principal than
investment grade securities. High-yield securities may be more susceptible to
real or perceived adverse economic conditions than investment grade securities.
In addition, the secondary trading market may be less liquid.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they were, returns would be lower.
The table compares the fund's performance over different time periods to that of
the fund's benchmark indices, which are broad measures of market performance.
The fund's performance reflects sales charges and fund expenses; the benchmarks
are unmanaged, have no expenses and are unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these waivers were not in place,
performance would be reduced.
8 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
EQUITY INCOME FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
4.70% 3.85% 22.73% 19.80% 27.53% 15.68% 3.86% 12.28% -4.37%
- --------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending June 30, 1997 11.95%
Worst Quarter: Quarter ending September 30, 1999 (8.67)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since Inception Since Inception Since Inception
AS OF 12/31/01(1) Date One Year Five Years (Class A) (Class B) (Class C)
- ------------------------------------------------------------------------------------------------------------------------------
Equity Income Fund (Class A) 12/18/92 (9.62)% 9.23% 10.65% N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------
Equity Income Fund (Class B) 8/15/94 (9.30)% 9.42% N/A 12.06% N/A
- ------------------------------------------------------------------------------------------------------------------------------
Equity Income Fund (Class C) 2/1/99 (6.99)% N/A N/A N/A 2.28%
- ------------------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% 10.70% 13.54% 14.75% (2.44)%
- ------------------------------------------------------------------------------------------------------------------------------
Lehman Gov't/Credit Bond Index(3) 8.48% 7.36% 7.23% 7.75% 5.80%
- ------------------------------------------------------------------------------------------------------------------------------
(1)Prior to 3/25/94, Boulevard Bank was the investment advisor of the fund.
(2)An unmanaged index of large-capitalization stocks. Previously, the fund used
the Lehman Gov't/Credit Bond Index as a benchmark. Going forward, the fund
will use the Standard & Poor's 500 Composite Index as a comparison, because
its composition better matches the fund's investment objective and
strategies. The since inception performance of the index for Class A, Class B
and Class C shares is calculated from 12/31/92, 8/31/94, and 1/31/99,
respectively.
(3)An unmanaged index of Treasury securities, other securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities,
including U.S. agency mortgage securities and investment grade corporate debt
securities. The since inception performance of the index for Class A, Class B
and Class C shares is calculated from 12/31/92, 8/31/94, and 1/31/99,
respectively.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
- ---------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------------------
Management Fees 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.30% 0.30% 0.30%
Total Annual Fund Operating Expenses 1.20% 1.95% 1.95%
Waiver of Fund Expenses(5) (0.05)% (0.05)% (0.05)%
NET EXPENSES(5) 1.15% 1.90% 1.90%
- ---------------------------------------------------------------------------------------------------------------
(1)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a 1% contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%, 1.90% and 1.90%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- --------------------------------------------------------------------------------------------------------------------
1 year $661 $693 $193 $391 $291
3 years $905 $1,007 $607 $701 $701
5 years $1,169 $1,247 $1,047 $1,137 $1,137
10 years $1,920 $2,073 $2,073 $2,347 $2,347
9 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
GROWTH & INCOME FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Growth & Income Fund's objective is long-term growth of capital and income.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Growth & Income Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in equity securities of companies which the fund's investment advisor
believes are characterized by:
o the ability to grow dividends at an above average rate.
o the ability to finance expected growth.
o strong management.
The fund will attempt to maintain a dividend that will grow quickly enough to
keep pace with inflation. As a result, higher-yielding equity securities will
generally represent the core holdings of the fund. However, the fund also may
invest in lower-yielding paying securities if the advisor believes they will
help balance the portfolio. The fund's equity securities include common stocks
and preferred stocks, and corporate debt securities which are convertible into
common stocks. All securities held by the fund will provide current income at
the time of purchase.
The fund invests up to 20% of its total assets in convertible debt securities in
pursuit of both long-term growth of capital and income. The securities'
conversion features provide long-term growth potential, while interest payments
on the securities provide income. The fund may invest in convertible debt
securities without regard to their ratings, and therefore may hold convertible
debt securities which are rated lower than investment grade.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
INTEREST RATE RISK. Debt securities typically decrease in value when interest
rates rise. This risk is usually greater for longer-term debt securities.
CREDIT RISK. An issuer of debt securities may not make timely principal or
interest payments on its securities, or the other party to a contract may
default on its obligations.
RISKS OF NON-INVESTMENT GRADE SECURITIES. The fund may invest up to 20% of its
total assets in securities which are rated lower than investment grade. These
securities, which are commonly called "high-yield" securities or "junk bonds,"
generally have more volatile prices and carry more risk to principal than
investment grade securities. High-yield securities may be more susceptible to
real or perceived adverse economic conditions than investment grade securities.
In addition, the secondary trading market may be less liquid.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they were, returns would be lower.
The table compares the fund's performance for Class A and Class B shares over
different time periods to that of the fund's benchmark index, which is a broad
measure of market performance. No information is presented for Class C shares
because those shares were not offered for a full calendar year. The fund's
performance reflects sales charges and fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
10 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
GROWTH & INCOME FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
24.70% 33.23% 22.44% 2.75% 5.48% -16.38%
- --------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 17.70%
Worst Quarter: Quarter ending September 30, 2001 (14.86)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since Inception Since Inception
AS OF 12/31/01(1) Date One Year Five Years (Class A) (Class B)
- --------------------------------------------------------------------------------------------------------------
Growth & Income Fund (Class A) 1/9/95 (20.97)% 6.92% 13.05% N/A
- --------------------------------------------------------------------------------------------------------------
Growth & Income Fund (Class B) 3/1/99 (21.13)% N/A N/A (3.81)%
- --------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% 10.70% 15.69% (1.41)%
- --------------------------------------------------------------------------------------------------------------
(1)On 9/24/01, the Growth & Income Fund became the successor by merger to the
Firstar Growth & Income Fund, a series of Firstar Funds, Inc. Prior to the
merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Growth & Income
Fund.
(2)An unmanaged index of large-capitalization stocks. The since inception
performance of the index for Class A and Class B shares is calculated from
1/31/95 and 2/28/99, respectively.
11 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
GROWTH & INCOME FUND CONTINUED
- --------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
- ---------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------------------
Management Fees 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.29% 0.29% 0.29%
Total Annual Fund Operating Expenses 1.19% 1.94% 1.94%
Waiver of Fund Expenses(5) (0.04)% (0.04)% (0.04)%
NET EXPENSES(5) 1.15% 1.90% 1.90%
- ---------------------------------------------------------------------------------------------------------------
(1)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a 1% contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%, 1.90% and 1.90%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- -------------------------------------------------------------------------------------------------------------------
1 year $661 $693 $193 $391 $291
3 years $903 $1,005 $605 $699 $699
5 years $1,164 $1,243 $1,043 $1,132 $1,132
10 years $1,910 $2,063 $2,063 $2,338 $2,338
12 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
LARGE CAP CORE FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Large Cap Core Fund's objective is long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Large Cap Core Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that have market capitalizations of at
least $3 billion at the time of purchase. The advisor will select companies that
it believes exhibit the potential for superior growth based on factors such as:
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they were, returns would be lower.
The table compares the fund's performance for Class A and Class B shares over
different time periods to that of the fund's benchmark index, which is a broad
measure of market performance. No information is presented for Class C shares
because those shares were not offered for a full calendar year. The fund's
performance reflects sales charges and fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
13 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
LARGE CAP CORE FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
17.85% 27.63% 30.16% 14.03% -1.48% -22.42%
- --------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 23.97%
Worst Quarter: Quarter ending September 30, 2001 (17.51)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since Inception Since Inception
AS OF 12/31/01(1) Date One Year Five Years (Class A) (Class B)
- ----------------------------------------------------------------------------------------------------------------
Large Cap Core Fund (Class A) 1/9/95 (26.68)% 5.62% 10.54% N/A
- ----------------------------------------------------------------------------------------------------------------
Large Cap Core Fund (Class B) 3/1/99 (26.86)% N/A N/A (5.91)%
- ----------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% 10.70% 15.69% (1.42)%
- ----------------------------------------------------------------------------------------------------------------
(1)On 9/24/01, the Large Cap Core Fund became the successor by merger to the
Firstar Large Cap Core Equity Fund, a series of Firstar Funds, Inc. Prior to
the merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Large Cap Core
Equity Fund.
(2)An unmanaged index of large-capitalization stocks. The since inception
performance of the index for Class A and Class B shares is calculated from
1/31/95 and 2/28/99, respectively.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
- ---------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------------------
Management Fees 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.30% 0.30% 0.30%
Total Annual Fund Operating Expenses 1.20% 1.95% 1.95%
Waiver of Fund Expenses(5) (0.05)% (0.05)% (0.05)%
NET EXPENSES(5) 1.15% 1.90% 1.90%
- ---------------------------------------------------------------------------------------------------------------
(1)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a 1% contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%, 1.90% and 1.90%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- --------------------------------------------------------------------------------------------------------------------
1 year $661 $693 $193 $391 $291
3 years $905 $1,007 $607 $701 $701
5 years $1,169 $1,247 $1,047 $1,137 $1,137
10 years $1,920 $2,073 $2,073 $2,347 $2,347
14 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Large Cap Growth Fund's objective is long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Large Cap Growth Fund invests primarily (at
least 80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that have market capitalizations of at
least $5 billion at the time of purchase. The advisor will select companies that
it believes exhibit the potential for superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they were, returns would be lower.
The table compares the fund's performance over different time periods to that of
the fund's benchmark index, which is a broad measure of market performance. The
fund's performance reflects sales charges and fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
15 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
LARGE CAP GROWTH FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
- -2.15% -1.00% 32.43% 22.93% 21.42% 23.56% 37.76% -17.64% -31.82%
- --------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1999 22.65%
Worst Quarter: Quarter ending March 31, 2001 (25.34)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since Inception Since Inception Since Inception
AS OF 12/31/01(1) Date One Year Five Years (Class A) (Class B) (Class C)
- ------------------------------------------------------------------------------------------------------------------------------
Large Cap Growth Fund (Class A) 12/18/92 (35.58)% 1.86% 5.98% N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------
Large Cap Growth Fund (Class B) 8/15/94 (35.73)% 2.00% N/A 8.88% N/A
- ------------------------------------------------------------------------------------------------------------------------------
Large Cap Growth Fund (Class C) 2/1/99 (33.66)% N/A N/A N/A (11.05)%
- ------------------------------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(2) (20.42)% 8.27% 11.46% 13.29% (8.31)%
- ------------------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(3) (11.88)% 10.70% 13.53% 14.91% (2.44)%
- ------------------------------------------------------------------------------------------------------------------------------
(1)Prior to 3/25/94, Boulevard Bank was the investment advisor of the fund.
(2)The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500 Composite
Index as a benchmark. Going forward, the fund will use the Russell 1000
Growth Index as a comparison, because its composition better matches the
fund's investment objectives and strategies. The since inception performance
of the index for Class A, Class B and Class C shares is calculated from
12/31/92, 8/31/94 and 1/31/99, respectively.
(3)An unmanaged index of large-capitalization stocks. The since inception
performance of the index for Class A, Class B and Class C shares is
calculated from 12/31/92, 8/31/94 and 1/31/99, respectively.
16 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
LARGE CAP GROWTH FUND CONTINUED
- --------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
- ---------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------------------
Management Fees 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.29% 0.29% 0.29%
Total Annual Fund Operating Expenses 1.19% 1.94% 1.94%
Waiver of Fund Expenses(5) (0.04)% (0.04)% (0.04)%
NET EXPENSES(5) 1.15% 1.90% 1.90%
- ---------------------------------------------------------------------------------------------------------------
(1)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a 1% contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%, 1.90% and 1.90%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- ----------------------------------------------------------------------------------------------------------------------
1 year $661 $693 $193 $391 $291
3 years $903 $1,005 $605 $699 $699
5 years $1,164 $1,243 $1,043 $1,132 $1,132
10 years $1,910 $2,063 $2,063 $2,338 $2,338
17 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Large Cap Value Fund's primary objective is capital appreciation. Current income
is a secondary objective of the fund.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Large Cap Value Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that cover a broad range of industries
and that have market capitalizations of at least $5 billion at the time of
purchase. In selecting stocks, the fund's advisor invests in securities that it
believes:
o are undervalued relative to other securities in the same industry or
market.
o exhibit good or improving fundamentals.
o exhibit an identifiable catalyst that could close the gap between
market value and fair value over the next one to two years.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, value stocks and/or large capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they were, returns would be lower.
The table compares the fund's performance over different time periods to that of
the fund's benchmark index, which is a broad measure of market performance. The
fund's performance reflects sales charges and fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
18 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
LARGE CAP VALUE FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR
[BAR CHART]
7.98% 15.10% 4.12% 31.94% 29.10% 22.41% 9.71% 7.91% 0.17% -7.86%
- --------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 16.55%
Worst Quarter: Quarter ending September 30, 1998 (13.91)%
AVERAGE ANNUAL TOTAL RETURNS Inception Ten Years Since Inception Since Inception
AS OF 12/31/01 Date One Year Five Years (Class A) (Class B) (Class C)
- ---------------------------------------------------------------------------------------------------------------------------
Large Cap Value Fund (Class A) 12/22/87 (12.93)% 4.80% 10.79% N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------
Large Cap Value Fund (Class B) 8/15/94 (13.17)% 4.97% N/A 10.95% N/A
- ---------------------------------------------------------------------------------------------------------------------------
Large Cap Value Fund (Class C) 2/1/99 (10.41)% N/A N/A N/A (2.03)%
- ---------------------------------------------------------------------------------------------------------------------------
Russell 1000 Value Index(1) (5.59)% 11.13% 14.16% 14.59% 2.54%
- ---------------------------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% 10.70% 12.93% 14.91% (2.44)%
- ---------------------------------------------------------------------------------------------------------------------------
(1)The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.
Russell 1000 companies include the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard and Poor's 500
Composite Index as a benchmark. Going forward, the fund will use the Russell
1000 Value Index as a comparison, because its composition better matches the
fund's investment objectives and strategies. The since inception performance
of the index for Class B and Class C shares is calculated from 8/31/94 and
1/31/99, respectively.
(2)An unmanaged index of large-capitalization stocks. The since inception
performance of the index for Class B and Class C shares is calculated from
8/31/94 and 1/31/99, respectively.
19 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
LARGE CAP VALUE FUND CONTINUED
- --------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
- ---------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------------------
Management Fees 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.30% 0.30% 0.30%
Total Annual Fund Operating Expenses 1.20% 1.95% 1.95%
Waiver of Fund Expenses(5) (0.05)% (0.05)% (0.05)%
NET EXPENSES(5) 1.15% 1.90% 1.90%
- ---------------------------------------------------------------------------------------------------------------
(1)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a 1% contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%, 1.90% and 1.90%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- ----------------------------------------------------------------------------------------------------------------------
1 year $661 $693 $193 $391 $291
3 years $905 $1,007 $607 $701 $701
5 years $1,169 $1,247 $1,047 $1,137 $1,137
10 years $1,920 $2,073 $2,073 $2,347 $2,347
20 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
RELATIVE VALUE FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Relative Value Fund's objective is to maximize after-tax total return from
capital appreciation plus income. Effective April 1, 2002, Relative Value Fund's
objective is to maximize total return from capital appreciation plus income.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, the fund invests primarily (at least 80% of its
net assets, plus the amount of any borrowings for investment purposes) in common
stocks.
The advisor selects companies that it believes represent the best values within
each industry sector as indicated by the following characteristics and which are
undervalued relative to the stocks comprising the Russell 1000 Index.
o price/earning ratios.
o book value.
o assets to liabilities ratio.
The advisor selects securities and attempts to maintain an acceptable level of
risk largely through the use of automated quantitative models, together with
economic forecasts and assessments of the risk and volatility of the company's
industry. The advisor assesses the earnings and dividend growth prospects of the
various companies' stocks and then considers the risk and volatility of the
companies' industries. The advisor also considers other factors such as product
position or market share.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Effective April 1, 2002, the advisor will no longer utilize the following
tax-efficient strategies in seeking to achieve the fund's objective.
The advisor seeks to achieve high after-tax returns by balancing investment
considerations and tax considerations. The fund seeks to achieve returns
primarily in the form of price appreciation (which is not subject to current
tax) and to a moderate amount of dividend income. Among the main strategies used
in the tax-efficient management of the fund are the following:
o employing a long-term, low turnover approach to investing.
o attempting to avoid net realized short-term gains (taxed as ordinary
income).
o selling stocks trading below cost to realize losses (when appropriate).
o selecting tax-favored share lots when selling appreciated stocks.
o selectively using tax-advantaged hedging techniques as an alternative
to taxable sales (including derivative instruments such as purchased
put options, equity collars, equity swaps, covered short sales, and
stock index futures contracts).
As a result of its tax-efficient strategy, the fund can generally be expected to
distribute a smaller percentage of returns each year than most other equity
mutual funds. There can be no assurance, however, that taxable distributions can
always be avoided.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they were, returns would be lower.
The table compares the fund's performance for Class A and Class B shares over
different time periods to that of the fund's benchmark index, which is a broad
measure of market performance. No information is presented for Class C shares
because those shares were not offered for a full calendar year . The fund's
performance reflects sales charges and fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
21 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
RELATIVE VALUE FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
11.19% 13.73% -2.63% 35.69% 26.45% 32.20% 18.25% 6.96% -3.15% -5.36%
- --------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 21.33%
Worst Quarter: Quarter ending September 30, 2001 (12.29)%
AVERAGE ANNUAL TOTAL RETURNS Inception Ten Years Since Inception
AS OF 12/31/01(1) Date One Year Five Years (Class A) (Class B)
- ------------------------------------------------------------------------------------------------------------
Relative Value Fund (Class A) 6/5/91 (10.56)% 7.70% 11.89% N/A
- ------------------------------------------------------------------------------------------------------------
Relative Value Fund (Class B) 3/31/98 (10.70)% N/A N/A (0.08)%
- ------------------------------------------------------------------------------------------------------------
Russell 1000 Value Index(2) (5.59)% 11.13% 14.16% 3.14%
- ------------------------------------------------------------------------------------------------------------
Standard & Poor's/BARRA 500 Value Index(3) (11.68)% 9.48% 13.09% 2.20%
- ------------------------------------------------------------------------------------------------------------
(1)On 9/24/01, the Relative Value Fund became the successor by merger to the
Firstar Relative Value Fund, a series of Firstar Funds, Inc. Prior to the
merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Relative Value
Fund. The Firstar Relative Value Fund was organized on 12/11/00 and, prior to
that, was a separate series of Firstar Stellar Funds, Inc.
(2)The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.
Russell 1000 companies include the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's/BARRA 500
Value Index as a benchmark. Going forward, the fund will use the Russell 1000
Value Index as a comparison, because its composition better matches the
fund's investment objective and strategies. The since inception performance
of the index for Class B shares is calculated from 3/31/98.
(3)The Standard & Poor's/BARRA 500 Value Index is an unmanaged capitalization
weighted index consisting of approximately 50% of the market capitalization
of the Standard & Poor's 500 Composite Index with low price-to-book ratios.
The since inception performance of the index for Class B shares is calculated
from 3/31/98.
22 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Fund Summaries
RELATIVE VALUE FUND CONTINUED
- --------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
- ---------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------------------
Management Fees 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.30% 0.30% 0.30%
Total Annual Fund Operating Expenses 1.20% 1.95% 1.95%
Waiver of Fund Expenses(5) (0.05)% (0.05)% (0.05)%
NET EXPENSES(5) 1.15% 1.90% 1.90%
- ---------------------------------------------------------------------------------------------------------------
(1)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a 1% contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%, 1.90% and 1.90%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- --------------------------------------------------------------------------------------------------------------------
1 year $661 $693 $193 $391 $291
3 years $905 $1,007 $607 $701 $701
5 years $1,169 $1,247 $1,047 $1,137 $1,137
10 years $1,920 $2,073 $2,073 $2,347 $2,347
23 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Policies & Services
BUYING SHARES
- --------------------------------------------------------------------------------
MULTIPLE CLASS INFORMATION
The funds offer five different classes of shares. This prospectus offers Class
A, Class B and Class C shares. Two additional classes of shares, Class S and
Class Y shares, are made available through separate prospectuses. There are
differences among the fees and expenses for each of the five classes. The
difference in the fee structures between the classes is the result of their
separate arrangements for shareholder and distribution services and not the
result of any difference in amounts charged by the investment advisor for core
investment advisory services. Accordingly, the core investment advisory expenses
do not vary by class. Different fees and expenses will affect performance. Not
everyone is eligible to buy every class. After determining which classes you are
eligible to buy, decide which class best suits your needs.
The following describes the features of each class:
o Class A shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 0.25%.
o Class B shares are sold to the public with a contingent deferred sales
charge (CDSC) and annual distribution and service (12b-1) fees of
1.00%.
o Class C shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 1.00%
(may be subject to a CDSC).
o Class S shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class S
shares are sold without a sales charge or distribution fee, but with an
annual shareholder servicing fee of 0.25%.
o Class Y shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class Y
shares are sold without a sales charge or distribution fee.
THIS PROSPECTUS AND THE RELATED STATEMENT OF ADDITIONAL INFORMATION DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SHARES IN THE
FUNDS, NOR SHALL ANY SUCH SHARES BE OFFERED OR SOLD TO ANY PERSON IN ANY
JURISDICTION IN WHICH AN OFFER, SOLICITATION, PURCHASE OR SALE WOULD BE UNLAWFUL
UNDER THE SECURITIES LAWS OF SUCH JURISDICTION.
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
All funds in this prospectus offer Class A, Class B, and Class C shares.
Each class has its own cost structure. The amount of your purchase and the
length of time you expect to hold your shares will be factors in determining
which class of shares is best for you.
CLASS A SHARES. If you are making an investment that qualifies for a reduced
sales charge, Class A shares may be best for you. Class A shares feature:
o a front-end sales charge, described below.
o lower annual expenses than Class B and Class C shares. See "Fund
Summaries" for more information on fees and expenses.
Because Class A shares will normally be the better choice if your investment
qualifies for a reduced sales charge:
o orders for Class B shares for $250,000 or more will be treated as
orders for Class A shares.
o orders for Class C shares for $1 million or more will be treated as
orders for Class A shares.
o orders for Class B or Class C shares by an investor eligible to
purchase Class A shares without a front-end sales charge will be
treated as orders for Class A shares.
CLASS B SHARES. If you want all your money to go to work for you immediately,
you may prefer Class B shares. Class B shares have no front-end sales charge.
However, Class B shares do have:
o higher annual expenses than Class A shares. See "Fund Summaries-- Fees
and Expenses."
o a back-end sales charge, called a "contingent deferred sales charge,"
if you redeem your shares within six years of purchase.
o automatic conversion to Class A shares approximately eight years after
purchase, thereby reducing future annual expenses.
CLASS C SHARES. These shares combine some of the characteristics of Class A and
Class B shares. Class C shares have a low front-end sales charge of 1%, so more
of your investment goes to work immediately than if you had purchased Class A
shares. However, Class C shares also feature:
o a 1% contingent deferred sales charge if you redeem your shares within
18 months of purchase.
o higher annual expenses than Class A shares. See "Fund Summaries-- Fees
and Expenses."
o no conversion to Class A shares.
Because Class C shares do not convert to Class A shares, they will continue to
have higher annual expenses than Class A shares for as long as you hold them.
- --------------------------------------------------------------------------------
12b-1 FEES
Each fund has adopted a plan under Rule 12b-1 of the Investment Company Act that
allows it to pay the fund's distributor an annual fee for the distribution and
sale of its shares and for services provided to shareholders.
For 12b-1 fees are equal to:
- --------------------------------------------------------------------------------
Class A shares 0.25% of average daily net assets
Class B shares 1% of average daily net assets
Class C shares 1% of average daily net assets
Because these fees are paid out of a fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.
24 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Policies & Services
BUYING SHARES CONTINUED
The Class A share 12b-1 fee is a shareholder servicing fee. For Class B and
Class C shares, a portion of the 12b-1 fee equal to 0.25% of average daily net
assets is a shareholder servicing fee and 0.75% is a distribution fee.
The funds' distributor uses the shareholder servicing fee to compensate
investment professionals, participating institutions and "one-stop" mutual fund
networks (institutions) for providing ongoing services to shareholder accounts.
These institutions receive shareholder servicing fees equal to 0.25% of a fund's
Class A, Class B, and Class C share average daily net assets attributable to
shares sold through them. The funds' distributor also pays institutions that
sell Class C shares a 0.75% annual distribution fee beginning one year after the
shares are sold. The funds' distributor retains the Class B share 0.75% annual
distribution fee in order to finance the payment of sales commissions to
institutions which sell Class B shares. See "Buying Shares -- Class B Shares."
The advisor or the distributor may pay additional fees to institutions out of
their own assets in exchange for sales and/or administrative services performed
on behalf of the institution's customers.
- --------------------------------------------------------------------------------
CALCULATING YOUR SHARE PRICE
Your purchase price will be based on the fund's net asset value (NAV) per share,
which is generally calculated as of the close of regular trading on the New York
Stock Exchange (usually 3 p.m. Central time) every day the exchange is open.
A fund's NAV is equal to the market value of its investments and other assets,
less any liabilities, divided by the number of fund shares. If market prices are
not readily available for an investment or if the advisor believes they are
unreliable, fair value prices may be determined in good faith using methods
approved by the funds' board of directors.
CLASS A SHARES. Your purchase price for Class A shares is typically the net
asset value of your shares, plus a front-end sales charge. Sales charges vary
depending on the amount of your purchase. The funds' distributor receives the
sales charge you pay and reallows a portion of the sales charge to your
investment professional or participating institution.
Maximum
Sales Charge Reallowance
as a % of as a % of as a % of
Purchase Net Amount Purchase
Price Invested Price
- --------------------------------------------------------------------------------
Less than $50,000 5.50% 5.82% 5.00%
$ 50,000 - $ 99,999 4.50% 4.71% 4.00%
$100,000 - $249,999 3.50% 3.63% 3.25%
$250,000 - $499,999 2.50% 2.56% 2.25%
$500,000 - $999,999 2.00% 2.04% 1.75%
$1 million and over 0% 0% 0%
REDUCING YOUR SALES CHARGE. As shown in the preceding tables, larger purchases
of Class A shares reduce the percentage sales charge you pay. You also may
reduce your sales charge in the following ways:
PRIOR PURCHASES. Prior purchases of Class A shares of any First American fund
(except a money market fund) will be factored into your sales charge
calculation. That is, you will receive credit for either the original purchase
price or the current net asset value of the other Class A shares you hold at the
time of your purchase, whichever is greater. For example, let's say you're
making a $10,000 investment and you already own other First American fund Class
A shares that you purchased for $25,000, but are now valued at $45,000. Since
the current net asset value of your shares is greater than their purchase price,
you will receive credit for their current value and your sales charge will be
based on a total purchase amount of $55,000. To receive a reduced sales charge,
you must notify the fund of your prior purchases. This must be done at the time
of purchase, either directly with the fund in writing or by notifying your
investment professional or financial institution.
PURCHASES BY RELATED ACCOUNTS. Concurrent and prior purchases of Class A shares
of any First American fund by certain other accounts also will be combined with
your purchase to determine your sales charge. Each fund will combine purchases
made by an investor, the investor's spouse, and the investor's children when it
calculates the sales charge. In addition, the sales charge, if applicable, is
reduced for purchases made at one time by a trustee or fiduciary for a single
trust estate or a single fiduciary account. To receive a reduced sales charge,
you must notify the funds of purchases by any related accounts. This must be
done at the time of purchase, either directly with the funds in writing or by
notifying your investment professional or financial institution.
LETTER OF INTENT. If you plan to invest $50,000 or more over a 13-month period
in Class A shares of any First American fund except the money market funds, you
may reduce your sales charge by signing a non-binding letter of intent. (If you
do not fulfill the letter of intent, you must pay the applicable sales charge.)
In addition, if you reduce your sales charge to zero under a letter of intent
and then sell your Class A shares within 18 months of their purchase, you may be
charged a contingent deferred sales charge of 1%. See "For Investments of Over
$1 Million."
More information on these ways to reduce your sales charge appears in the
Statement of Additional Information (SAI). The SAI also contains information on
investors who are eligible to purchase Class A shares without a sales charge.
25 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Policies & Services
BUYING SHARES CONTINUED
- --------------------------------------------------------------------------------
FOR INVESTMENTS OF OVER $1 MILLION
There is no initial sales charge on Class A share purchases of $1 million or
more. However, your investment professional or financial institution may
receive a commission of up to 1% on your purchase. If such a commission is
paid, you will be assessed a contingent deferred sales charge (CDSC) of 1% if
you sell your shares within 18 months. To find out whether you will be
assessed a CDSC, ask your investment professional or financial institution.
The funds' distributor receives any CDSC imposed when you sell your Class A
shares. The CDSC is based on the value of your shares at the time of purchase
or at the time of sale, whichever is less. The charge does not apply to
shares you acquired by reinvesting your dividend or capital gain
distributions.
To help lower your costs, shares that are not subject to a CDSC will be sold
first. Other shares will then be sold in an order that minimizes your CDSC.
The CDSC for Class A shares will be waived for:
o redemptions following the death or disability (as defined in the Internal
Revenue Code) of a shareholder.
o redemptions that equal the minimum required distribution from an
individual retirement account or other retirement plan to a shareholder
who has reached the age of 70 1/2.
o redemptions through a systematic withdrawal plan, at a rate of up to 12% a
year of your account's value. During the first year, the 12% annual limit
will be based on the value of your account on the date the plan is
established. Thereafter, it will be based on the value of your account on
the preceding December 31.
o redemptions required as a result of over contribution to an IRA plan.
CLASS B SHARES. Your purchase price for Class B shares is their net asset value
- -- there is no front-end sales charge. However, if you redeem your shares within
six years of purchase, you will pay a back-end sales charge, called a contingent
deferred sales charge (CDSC). Although you pay no front-end sales charge when
you buy Class B shares, the funds' distributor pays a sales commission of 4.25%
of the amount invested to investment professionals and financial institutions
which sell Class B shares. The funds' distributor receives any CDSC imposed when
you sell your Class B shares.
Your CDSC will be based on the value of your shares at the time of purchase or
at the time of sale, whichever is less. The charge does not apply to shares you
acquired by reinvesting your dividend or capital gain distributions. Shares will
be sold in the order that minimizes your CDSC.
CDSC as a % of the
Year since purchase value of your shares
- --------------------------------------------------------------------------------
First 5%
Second 5%
Third 4%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh 0%
Eighth 0%
Your Class B shares and any related shares acquired by reinvesting your dividend
or capital gain distributions will automatically convert to Class A shares eight
years after the beginning of the month in which you purchase the shares.
The CDSC will be waived for:
o redemptions following the death or disability (as defined in the
Internal Revenue Code) of a shareholder.
o redemptions that equal the minimum required distribution from an
individual retirement account or other retirement plan to a shareholder
who has reached the age of 70 1/2.
o redemptions through a systematic withdrawal plan, at a rate of up to
12% a year of your account's value. During the first year, the 12%
annual limit will be based on the value of your account on the date the
plan is established. Thereafter, it will be based on the value of your
account on the preceding December 31.
o redemptions required as a result of over contribution to an IRA plan.
CLASS C SHARES. Your purchase price for Class C shares is their net asset value
plus a front-end sales charge equal to 1% of the purchase price (1.01% of the
net amount invested). If you redeem your shares within 18 months of purchase,
you will be assessed a contingent deferred sales charge (CDSC) of 1% of the
value of your shares at the time of purchase or at the time of sale, whichever
is less. The CDSC does not apply to shares you acquired by reinvesting your
dividend or capital gain distributions. Shares will be sold in the order that
minimizes your CDSC.
Even though your sales charge is only 1%, the funds' distributor pays a
commission equal to an additional 1% of your purchase price to your investment
professional or participating institution. Furthermore, the advisor may pay its
affiliated broker-dealers, U.S. Bancorp Piper Jaffray Inc. and U.S. Bancorp
Investments, Inc., an additional commission of up to 1% of your purchase price.
The distributor receives any CDSC imposed when you sell your Class C shares.
The CDSC for Class C shares will be waived in the same circumstances as the
Class B share CDSC. See "Class B Shares" above.
Unlike Class B shares, Class C shares do not convert to Class A shares after a
specified period of time. Therefore, your shares will continue to have higher
annual expenses than Class A shares.
26 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Policies & Services
BUYING SHARES CONTINUED
- --------------------------------------------------------------------------------
HOW TO BUY SHARES
You may become a shareholder in the fund with an initial investment of $1,000 or
more ($250 for a retirement plan or a Uniform Gifts to Minors Act/Uniform
Transfers to Minors Act (UGMA/UTMA) account). Additional investments can be made
for as little as $100 ($25 for a retirement plan or an UGMA/UTMA account). The
fund has the right to waive these minimum investment requirements for employees
of the fund's advisor and its affiliates. The fund also has the right to reject
any purchase order.
You may buy shares on any day the New York Stock Exchange is open. However
purchases of shares may be restricted in the event of an early or unscheduled
close of the New York Stock Exchange. Your shares will be priced at the next net
asset value calculated after your order is accepted by the fund, plus any
applicable sales charge. "Accepted" means that you placed an order with your
investment professional or financial institution and it has been processed, or
your payment has been received and your application is complete. To make sure
that your order is accepted, follow the directions for purchasing shares given
below.
BY PHONE. You may purchase shares by calling your investment professional or
financial institution, if they have a sales agreement with the funds'
distributor. In many cases, your order will be effective that day if received by
your investment professional or financial institution by the close of regular
trading on the New York Stock Exchange. In some cases, however, investment
professionals or financial institutions may have different cutoff times for
orders to purchase fund shares. In these cases, you will have to transmit your
request by an earlier time in order for your purchase request to be effective
that day. This allows your investment professional or financial institution time
to process your request and transmit it to the fund. Some financial institutions
may charge a fee for helping you purchase shares. Contact your investment
professional or financial institution for more information.
If you are paying by wire, you may purchase shares by calling Investor Services
at 800 677-FUND before the close of regular trading on the New York Stock
Exchange (usually 3 p.m. Central time). All information will be taken over the
telephone, and your order will be placed when the funds receive payment by wire.
Wire federal funds as follows:
U.S. Bank National Association
ABA Number: 0420-00013
Account Number: 112-952-137
Credit to: First American (NAME OF FUND, INVESTOR NAME AND INVESTOR ACCOUNT #)
You cannot purchase shares by wire on days when federally chartered banks are
closed.
BY MAIL. To purchase shares by mail, simply complete and sign a new account
form, enclose a check made payable to the fund you wish to invest in, and mail
both to:
First American Funds
P.O. Box 3011
Milwaukee, WI 53201-3011
Overnight express mail may be sent to:
First American Funds
615 East Michigan Street
Milwaukee, WI 53202
After you have established an account, you may purchase additional shares by
mailing your check to First American Funds at the same address.
Please note the following:
o all purchases must be drawn on a bank located within the United States
and payable in U.S. dollars to First American Funds.
o third-party checks, credit cards, credit card checks, and cash are not
accepted.
o if a check does not clear your bank, the funds reserve the right to
cancel the purchase, and you could be liable for any losses or fees
incurred.
- --------------------------------------------------------------------------------
INVESTING AUTOMATICALLY
To purchase shares as part of a savings discipline, you may add to your
investment on a regular basis:
o by having $100 or more ($25 for a retirement plan or a Uniform Gifts to
Minors Act/Uniform Transfers to Minors Act account) automatically
withdrawn from your bank account on a periodic basis and invested in
fund shares.
o through automatic monthly exchanges of your First American Fund into
another First American Fund of the same class.
You may apply for participation in either of these programs through your
investment professional or financial institution or by calling Investor Services
at 800 677-FUND.
27 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Policies & Services
SELLING SHARES
- --------------------------------------------------------------------------------
HOW TO SELL SHARES
You may sell your shares on any day when the New York Stock Exchange is open.
However, redemption of shares may be restricted in the event of an early or
unscheduled close of the New York Stock Exchange. Your shares will be sold at
the next net asset value calculated after your order is accepted by the fund,
less any applicable contingent deferred sales charge. Be sure to read the
section "Buying Shares" for a description of contingent deferred sales charges.
To make sure that your order is accepted, follow the directions for selling
shares given below.
The proceeds from your sale normally will be mailed or wired within three days,
but in no event more than seven days, after your request is received in proper
form.
To minimize the effect of large redemption requests, each fund reserves the
right to fulfill these redemption requests by distributing readily marketable
securities in the fund's portfolio, rather than paying you in cash. See
"Policies & Services -- Managing Your Investment, Redemption In Kind."
BY PHONE. If you purchased shares through an investment professional or
financial institution, simply call them to sell your shares. In many cases, your
redemption will be effective that day if received by your investment
professional or financial institution by the close of regular trading on the New
York Stock Exchange. In some cases, however, investment professionals or
financial institutions may have different cutoff times for orders to redeem fund
shares. In these cases, you will have to call by an earlier time in order for
your redemption to be effective that day. This allows your investment
professional or financial institution time to process your request and transmit
it to the fund. Contact your investment professional or financial institution
directly for more information.
If you did not purchase shares through an investment professional or financial
institution, you may sell your shares by calling Investor Services at 800
677-FUND. Proceeds can be wired to your bank account (if the proceeds are at
least $1,000 and you have previously supplied your bank account information to
the fund) or sent to you by check. The funds reserve the right to limit
telephone redemptions to $50,000 per day.
If you recently purchased your shares by check or through the Automated Clearing
House (ACH), proceeds from the sale of those shares may not be available until
your check or ACH payment has cleared, which may take up to 15 calendar days
from the date of purchase.
BY MAIL. To sell shares by mail, send a written request to your investment
professional or financial institution, or to the fund at the following address:
First American Funds
P.O. Box 3011
Milwaukee, WI 53201-3011
Overnight express mail may be sent to:
First American Funds
615 East Michigan Street
Milwaukee, WI 53202
Your request should include the following information:
o name of the fund.
o account number.
o dollar amount or number of shares redeemed.
o name on the account.
o signatures of all registered account owners.
Signatures on a written request must be guaranteed if:
o you would like the proceeds from the sale to be paid to anyone other
than to the shareholder of record.
o you would like the check mailed to an address other than the address on
the funds' records.
o your redemption request is for $50,000 or more.
A signature guarantee assures that a signature is genuine and protects
shareholders from unauthorized account transfers. Banks, savings and loan
associations, trust companies, credit unions, broker-dealers, and member firms
of a national securities exchange may guarantee signatures. Call your financial
institution to determine if it has this capability.
Proceeds from a written redemption request will be sent to you by check unless
another form of payment is requested.
- --------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWALS
If your account has a value of $5,000 or more, you may redeem a specific dollar
amount from your account on a regular basis. To set up systematic withdrawals,
contact your investment professional or financial institution.
You should not make systematic withdrawals if you plan to continue investing in
the fund, due to sales charges and tax liabilities.
- --------------------------------------------------------------------------------
REINVESTING AFTER A SALE
If you sell Class A shares of a First American fund, you may reinvest in Class A
shares of that fund or another First American fund within 180 days without a
sales charge. To reinvest in Class A shares at net asset value (without paying a
sales charge), you must notify the fund directly in writing or notify your
investment professional or financial institution.
- --------------------------------------------------------------------------------
ACCOUNTS WITH LOW BALANCES
Except for retirement plans and Uniform Gifts to Minors Act/Uniform Transfers
to Minors Act accounts, if your account balance falls below $500 as a result
of selling or exchanging shares, the fund reserves the right to either:
o deduct a $25 annual account maintenance fee, or
o close your account and send you the proceeds, less any applicable
contingent deferred sales charge.
Before taking any action, however, the fund will send you written notice of
the action it intends to take and give you 30 days to re-establish a minimum
account balance of $500.
28 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Policies & Services
SELLING SHARES CONTINUED
- --------------------------------------------------------------------------------
EXCHANGING SHARES
If your investment goals or your financial needs change, you may move from one
First American fund to another First American fund. There is no fee to exchange
shares. You may exchange your shares on any day when the New York Stock Exchange
is open. However, exchanges of shares may be restricted in the event of an early
or unscheduled close of the New York Stock Exchange.
Generally, you may exchange your shares only for shares of the same class.
However, you may exchange your Class A shares for Class Y shares or Class S
shares of the same or another First American fund if you subsequently become
eligible to participate in that class (for example, by opening a fiduciary,
custody or agency account with a financial institution which invests in Class Y
shares or Class S shares).
Exchanges are made based on the net asset value per share of each fund at the
time of the exchange. When you exchange your Class A shares of one of the funds
for Class A shares of another First American fund, you do not have to pay a
sales charge. When you exchange your Class B or Class C shares for Class B or
Class C shares of another First American fund, the time you held the shares of
the "old" fund will be added to the time you hold the shares of the "new" fund
for purposes of determining your CDSC or, in the case of Class B shares,
calculating when your shares convert to Class A shares.
Before exchanging into any fund, be sure to read its prospectus carefully. A
fund may change or cancel its exchange policies at any time. You will be
notified of any changes. The funds have the right to limit exchanges to four
times per year.
BY PHONE. If both funds have identical shareholder registration, you may
exchange shares by calling your investment professional, your financial
institution, or by calling the funds directly. To request an exchange through
the funds, call Investor Services at 800 677-FUND. Your instructions must be
received before 3 p.m. Central time, or by the time specified by your investment
professional or financial institution, in order for shares to be exchanged the
same day.
BY MAIL. To exchange shares by written request, please follow the procedures
under "Selling Shares." Be sure to include the names of both funds involved in
the exchange.
- --------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
You may buy, sell, or exchange shares by telephone, unless you elected on
your new account form to restrict this privilege. If you wish to reinstate
this option on an existing account, please call Investor Services at 800
677-FUND to request the appropriate form.
The funds and their agents will not be responsible for any losses that may
result from acting on wire or telephone instructions that they reasonably
believe to be genuine. The funds and their agents will each follow reasonable
procedures to confirm that instructions received by telephone are genuine,
which may include taping telephone conversations.
It may be difficult to reach the funds by telephone during periods of unusual
market activity. If you are unable to reach the funds or their agents by
telephone, please consider sending written instructions.
- --------------------------------------------------------------------------------
REDEMPTION IN KIND
Generally, proceeds from redemption requests will be paid in cash. However, to
minimize the effect of large redemption requests on a fund and its remaining
shareholders, each fund reserves the right to pay part or all of the proceeds
from a redemption request in a proportionate share of readily marketable
securities in the fund instead of in cash. In selecting securities for a
redemption in kind, the advisor will consider the best interests of the fund and
the remaining fund shareholders, and will value these securities in accordance
with the pricing methods employed to calculate the fund's net asset value per
share. If you receive redemption proceeds in kind, you should expect to incur
transaction costs upon the disposition of the securities received in the
redemption.
29 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Policies & Services
MANAGING YOUR INVESTMENT
- --------------------------------------------------------------------------------
STAYING INFORMED
SHAREHOLDER REPORTS. Shareholder reports are mailed twice a year, in November
and May. They include financial statements and performance information, and on
an annual basis, a message from your portfolio managers and the auditors'
report.
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailings to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call Investor Services at 800 677-FUND.
STATEMENTS AND CONFIRMATIONS. Statements summarizing activity in your account
are mailed quarterly. Confirmations are mailed following each purchase or sale
of fund shares. Generally, a fund does not send statements for funds held in a
brokerage account.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
Dividends from a fund's net investment income are declared and paid monthly. Any
capital gains are distributed at least once each year.
On the ex-dividend date for a distribution, a fund's share price is reduced by
the amount of the distribution. If you buy shares just before the ex-dividend
date, in effect, you "buy the dividend." You will pay the full price for the
shares and then receive a portion of that price back as a taxable distribution.
Dividend and capital gain distributions will be reinvested in additional shares
of the fund paying the distribution, unless you request that distributions be
reinvested in another First American fund or paid in cash. This request may be
made on your new account form or by contacting your financial institution. If
you request that your distributions be paid in cash but those distributions
cannot be delivered because of an incorrect mailing address, the undelivered
distributions and all future distributions will be reinvested in fund shares at
the current NAV.
- --------------------------------------------------------------------------------
TAXES
Some of the tax consequences of investing in the funds are discussed below. More
information about taxes is in the Statement of Additional Information. However,
because everyone's tax situation is unique, always consult your tax professional
about federal, state, and local tax consequences.
TAXES ON DISTRIBUTIONS. Each fund pays its shareholders dividends from its net
investment income and any net capital gains that it has realized. For most
investors, fund dividends and distributions are considered taxable whether they
are reinvested or taken in cash (unless your investment is in an IRA or other
tax-advantaged account).
Dividends from a fund's net investment income and short-term capital gains are
taxable as ordinary income. Distributions of a fund's long-term capital gains
are taxable as long-term gains, regardless of how long you have held your
shares. Because of their investment objectives and strategies, distributions for
Capital Growth Fund, Large Cap Core Fund, Large Cap Growth Fund, Large Cap Value
Fund and Relative Value Fund are expected to consist primarily of capital gains.
TAXES ON TRANSACTIONS. The sale of fund shares, or the exchange of one fund's
shares for shares of another fund, will be a taxable event and may result in a
capital gain or loss. The gain or loss will be considered long-term if you have
held your shares for more than one year. A gain or loss on shares held for one
year or less is considered short-term and is taxed at the same rates as ordinary
income.
If in redemption of his or her shares a shareholder receives a distribution of
readily marketable securities instead of cash, the shareholder will be treated
as receiving an amount equal to the fair market value of the securities at the
time of the distribution for purposes of determining capital gain or loss on the
redemption, and will also acquire a basis in the shares for federal income tax
purposes equal to their fair market value.
The exchange of one class of shares for another class of shares in the same fund
will not be taxable.
TAX MANAGED STRATEGY. As a result of their tax-efficient strategies, Capital
Growth Fund and Relative Value Fund can generally be expected to distribute a
smaller percentage of returns each year than most other equity mutual funds.
There can be no assurance, however, that taxable distributions can always be
avoided. These tax-efficient strategies will not be in effect after April 1,
2002.
30 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
MANAGEMENT
U.S. Bancorp Asset Management, Inc., is the funds' investment advisor. U.S.
Bancorp Asset Management provides investment management services to individuals
and institutions, including corporations, foundations, pensions and retirement
plans. As of September 30, 2001, U.S. Bancorp Asset Management and its
affiliates had more than $114 billion in assets under management, including
investment company assets of more than $51 billion. As investment advisor, U.S.
Bancorp Asset Management manages the funds' business and investment activities,
subject to the authority of the funds' board of directors.
Each fund pays the investment advisor a monthly fee for providing investment
advisory services. The table below reflects investment advisory fees paid to the
investment advisor, after taking into account any fee waivers, for the funds'
most recently completed fiscal year.(1)
Advisory fee
as a % of
average daily
net assets
- --------------------------------------------------------------------------------
BALANCED FUND 0.68%
CAPITAL GROWTH FUND(2) 0.83%
EQUITY INCOME FUND 0.55%
GROWTH & INCOME FUND(2) 0.72%
LARGE CAP CORE FUND(2) 0.71%
LARGE CAP GROWTH FUND 0.61%
LARGE CAP VALUE FUND 0.60%
RELATIVE VALUE FUND(2) 0.74%
- --------------------------------------------------------------------------------
(1)Prior to May 2, 2001, First American Asset Management (FAAM), a division of
U.S. Bank National Association, served as investment advisor to Balanced
Fund, Equity Income Fund, Large Cap Growth Fund and Large Cap Value Fund;
Firstar Investment Research & Management Company LLC (FIRMCO), an affiliate
of FAAM, served as investment advisor to Capital Growth Fund, Growth & Income
Fund, Large Cap Core Fund and Relative Value Fund. On May 2, 2001, FAAM and
FIRMCO combined advisory operations to form U.S. Bancorp Asset Management,
Inc. The investment advisory fees paid by each fund to U.S. Bancorp Asset
Management did not change as a result of the combination.
(2)On September 24, 2001, Capital Growth Fund, Growth & Income Fund, Large Cap
Core Fund and Relative Value Fund became the successors by merger to Firstar
Large Cap Growth Fund, Firstar Growth & Income Fund, Firstar Large Cap Core
Fund and Firstar Relative Value Fund, respectively. The fiscal year end for
the Firstar funds was October 31; Capital Growth Fund, Growth & Income Fund,
Large Cap Core Fund and Relative Value Fund each has a fiscal year end of
September 30. Information presented in the table has been annualized for the
eleven-month fiscal period ended September 30, 2001.
DIRECT CORRESPONDENCE TO:
First American Funds
P.O. Box 1330
Minneapolis, Minnesota 55440-1330
INVESTMENT ADVISOR
U.S. Bancorp Asset Management, Inc.
800 Nicollet Mall
Minneapolis, Minnesota 55402
DISTRIBUTOR
Quasar Distributors, LLC
615 E. Michigan Street
Milwaukee, WI 53202
ADDITIONAL COMPENSATION
U.S. Bancorp Asset Management and other affiliates of U.S. Bancorp may act as
fiduciary with respect to plans subject to the Employee Retirement Income
Security Act of 1974 (ERISA) and other trust and agency accounts that invest in
the funds. As described above, U.S. Bancorp Asset Management receives
compensation for acting as the funds' investment advisor. U.S. Bancorp Asset
Management and its affiliates also receive compensation in connection with the
following:
CUSTODY SERVICES. U.S. Bank National Association (U.S. Bank) provides or
compensates others to provide custody services to the funds. U.S. Bank is paid
monthly fees equal, on an annual basis, to 0.01% of a fund's average daily net
assets. In addition, U.S. Bank is reimbursed for its out-of-pocket expenses
incurred while providing custody services to the funds.
ADMINISTRATION SERVICES. U.S. Bancorp Asset Management and its affiliate, U.S.
Bancorp Fund Services, LLC (Co-Administrators), provide or compensate others to
provide administrative services to the First American family of funds. These
services include general administrative and accounting services, transfer agency
and dividend disbursing services, blue sky services, and shareholder services.
With respect to the First American open-end mutual funds, the Co-Administrators
receive total fees on an annual basis, of up to 0.25% of the aggregate average
daily net assets of First American Investment Funds, Inc., First American
Strategy Funds, Inc. and First American Insurance Portfolios, Inc., and of up to
0.20% of the aggregate average daily net assets of First American Funds, Inc.
The funds also pay the Co-Administrators fees based upon the number of funds and
accounts maintained. In addition, the Co-Administrators are reimbursed for their
out-of-pocket expenses incurred while providing administration services to the
funds.
DISTRIBUTION SERVICES. Quasar Distributors, LLC, an affiliate of U.S. Bancorp
Asset Management, serves as distributor of the funds and receives out of pocket
expenses incurred while providing distribution and other sub-administrative
services for the funds.
SECURITIES LENDING SERVICES. In connection with lending their portfolio
securities, the funds pay administrative and custodial fees to U.S. Bancorp
Asset Management which are equal to 40% of the funds' income from these
securities lending transactions.
BROKERAGE TRANSACTIONS. When purchasing and selling portfolio securities for the
funds, the funds' investment advisor may place trades through its affiliates,
U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., which will
earn commissions on these transactions.
SHAREHOLDER SERVICING FEES. To the extent that fund shares are held through U.S.
Bancorp Asset Management, U.S. Bank or their broker-dealer affiliates, U.S.
Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., those entities
may receive shareholder servicing fees from the funds' distributor.
PORTFOLIO MANAGEMENT
Each fund's investments are managed by a team of persons associated with U.S.
Bancorp Asset Management.
31 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
MORE ABOUT THE FUNDS
- --------------------------------------------------------------------------------
OBJECTIVES
The funds' objectives, which are described in the "Fund Summaries" section, may
be changed without shareholder approval. If a fund's objectives change, you will
be notified at least 60 days in advance. Please remember: There is no guarantee
that any fund will achieve its objectives.
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
The funds' main investment strategies are discussed in the "Fund Summaries"
section. These are the strategies that the funds' investment advisor believes
are most likely to be important in trying to achieve the funds' objectives. You
should be aware that each fund may also use strategies and invest in securities
that are not described in this prospectus, but that are described in the
Statement of Additional Information (SAI). For a copy of the SAI, call Investor
Services at 800 677-FUND.
TEMPORARY INVESTMENTS. In an attempt to respond to adverse market, economic,
political, or other conditions, each fund may temporarily invest without limit
in cash and in U.S. dollar-denominated high-quality money market instruments and
other short-term securities, including money market funds advised by the funds'
advisor. Being invested in these securities may keep a fund from participating
in a market upswing and prevent the fund from achieving its investment
objectives.
EFFECTIVE DURATION. Balanced Fund normally attempts to maintain an average
effective duration of three to eight years for the debt securities portion of
its portfolio. Effective duration, one measure of interest rate risk, measures
how much the value of a security is expected to change with a given change in
interest rates. The longer a security's effective duration, the more sensitive
its price to changes in interest rates. For example, if interest rates were to
increase by one percentage point, the market value of a bond with an effective
duration of five years would decrease by 5%, with all other factors being
constant. However, all other factors are rarely constant. Effective duration is
based on assumptions and subject to a number of limitations. It is most useful
when interest rate changes are small, rapid and occur equally in short-term and
long-term securities. In addition, it is difficult to calculate precisely for
bonds with prepayment options, such as mortgage- and asset-backed securities,
because the calculation requires assumptions about prepayment rates.
EFFECTIVE MATURITY. Balanced Fund normally attempts to maintain a weighted
average effective maturity for the debt securities in its portfolio of 15 years
or less. Effective maturity differs from actual stated or final maturity, which
may be substantially longer. In calculating effective maturity, the advisor
estimates the effect of expected principal payments and call provisions on
securities held in the portfolio. Effective maturity provides the advisor with a
better estimate of interest rate risk under normal market conditions, but may
underestimate interest rate risk in an environment of adverse (rising) interest
rates.
PORTFOLIO TURNOVER. Portfolio managers for the funds may trade securities
frequently, resulting, from time to time, in an annual portfolio turnover rate
of over 100%. Trading of securities may produce capital gains, which are taxable
to shareholders when distributed. Active trading may also increase the amount of
commissions or mark-ups to broker-dealers that the fund pays when it buys and
sells securities. As a result of their tax efficient strategies, Capital Growth
Fund and Relative Value Fund are expected to have lower portfolio turnover
rates. The "Financial Highlights" section of this prospectus shows each fund's
historical portfolio turnover rate.
- --------------------------------------------------------------------------------
RISKS
The main risks of investing in the funds are summarized in the "Fund Summaries"
section. More information about fund risks is presented below.
MARKET RISK. All stocks are subject to price movements due to changes in general
economic conditions, the level of prevailing interest rates, or investor
perceptions of the market. Prices also are affected by the outlook for overall
corporate profitability.
SECTOR RISK. The stocks of companies within specific industries or sectors of
the economy can periodically perform differently than the overall stock market.
This can be due to changes in such things as the regulatory or competitive
environment or to changes in investor perceptions of a particular industry or
sector.
COMPANY RISK. Individual stocks can perform differently than the overall market.
This may be a result of specific factors such as changes in corporate
profitability due to the success or failure of specific products or management
strategies, or it may be due to changes in investor perceptions regarding a
company.
FOREIGN SECURITY RISK. Each fund may invest up to 25% of its total assets (25%
of the equity portion of its portfolio for Balanced Fund) in securities of
foreign issuers which are either listed on a United States stock exchange or
represented by American Depositary Receipts. In addition, Balanced Fund may
invest up to 15% of the debt portion of its portfolio in foreign securities
payable in United States dollars. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers. For certain foreign
countries, political or social instability, or diplomatic developments could
adversely affect the securities. There is also the risk of loss due to
governmental actions such as a change in tax statutes or the modification of
individual property rights. In addition, individual foreign economies may differ
favorably or unfavorably from the U.S. economy.
RISKS OF ACTIVE MANAGEMENT. Each fund is actively managed and its performance
therefore will reflect in part the advisor's ability to make investment
decisions which are suited
32 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
MORE ABOUT THE FUNDS CONTINUED
to achieving the fund's investment objectives. Due to their active management,
the funds could underperform other mutual funds with similar investment
objectives.
RISKS OF SECURITIES LENDING. When a fund loans its portfolio securities, it will
receive collateral equal to at least 100% of the value of the loaned securities.
Nevertheless, the fund risks a delay in the recovery of the loaned securities,
or even the loss of rights in the collateral deposited by the borrower if the
borrower should fail financially. To reduce these risks, the funds enter into
loan arrangements only with institutions which the funds' advisor has determined
are creditworthy under guidelines established by the funds' board of directors.
RISKS OF DERIVATIVE INSTRUMENTS. The use of derivative instruments exposes a
fund to additional risks and transaction costs. Risks inherent in the use of
derivative instruments include: the risk that securities prices will not move in
the direction that the advisor anticipates; an imperfect correlation between the
price of derivative instruments and movements in the prices of the securities
being hedged; the possible absence of liquid secondary market for any particular
instrument and possible exchange imposed price fluctuation limits, either of
which may make it difficult or impossible to close out a position when desired;
leverage risk, which is the risk that adverse price movements in an instrument
can result in a loss substantially greater than the fund's initial investment in
that instrument; and, particularly, in the case of privately negotiated
instruments, the risk that the counterparty will fail to perform its
obligations, which could leave the fund worse off than if it had not entered
into the position. If a fund uses derivative instruments and the advisor's
judgment proves incorrect, the fund's performance could be worse than if it had
not used these instruments.
- --------------------------------------------------------------------------------
ADDITIONAL RISKS OF BALANCED FUND, EQUITY INCOME FUND AND GROWTH & INCOME FUND
INTEREST RATE RISK. Debt securities in Balanced Fund, Equity Income Fund and
Growth & Income Fund will fluctuate in value with changes in interest rates. In
general, debt securities will increase in value when interest rates fall and
decrease in value when interest rates rise. Longer-term debt securities are
generally more sensitive to interest rate changes.
CREDIT RISK. Balanced Fund, Equity Income Fund and Growth & Income Fund are
subject to the risk that the issuers of debt securities held by a fund will not
make payments on the securities. There is also the risk that an issuer could
suffer adverse changes in financial condition that could lower the credit
quality of a security. This could lead to greater volatility in the price of the
security and in shares of the fund. Also, a change in the credit quality rating
of a bond could affect the bond's liquidity and make it more difficult for the
fund to sell.
Balanced Fund attempts to minimize credit risk by investing in securities
considered at least investment grade at the time of purchase. However, all of
these securities, especially those in the lower investment grade rating
categories, have credit risk. In adverse economic or other circumstances,
issuers of these lower rated securities are more likely to have difficulty
making principal and interest payments than issuers of higher rated securities.
When Balanced Fund purchases unrated securities, it will depend on the advisor's
analysis of credit risk more heavily than usual.
As discussed in the "Fund Summaries" section, Equity Income Fund and Growth &
Income Fund invest in convertible debt securities that are rated below
investment grade and are therefore subject to additional credit risk.
- --------------------------------------------------------------------------------
ADDITIONAL RISKS OF BALANCED FUND
CALL RISK. Many corporate bonds may be redeemed at the option of the issuer, or
"called," before their stated maturity date. In general, an issuer will call its
bonds if they can be refinanced by issuing new bonds which bear a lower interest
rate. Balanced Fund is subject to the possibility that during periods of falling
interest rates, a bond issuer will call its high-yielding bonds. The fund would
then be forced to invest the unanticipated proceeds at lower interest rates,
resulting in a decline in the fund's income.
EXTENSION RISK. Mortgage-backed securities are secured by and payable from pools
of mortgage loans. Similarly, asset-backed securities are supported by
obligations such as automobile loans or home equity loans. These mortgages and
other obligations generally can be prepaid at any time without penalty. As a
result, mortgage- and asset-backed securities are subject to extension risk,
which is the risk that rising interest rates could cause the mortgages or other
obligations underlying the securities to be prepaid more slowly than expected,
resulting in slower prepayments of the securities. This would, in effect,
convert a short- or medium-duration mortgage- or asset-backed security into a
longer-duration security, increasing its sensitivity to interest rate changes
and causing its price to decline.
PREPAYMENT RISK. Mortgage- and asset-backed securities also are subject to
prepayment risk, which is the risk that falling interest rates could cause
prepayments of the securities to occur more quickly than expected. This occurs
because, as interest rates fall, more homeowners refinance the mortgages
underlying mortgage-related securities or prepay the debt obligations underlying
asset-backed securities. Balanced Fund must reinvest the prepayments at a time
when interest rates are falling, reducing the income of the fund. In addition,
when interest rates fall, prices on mortgage- and asset-backed securities may
not rise as much as for other types of comparable debt securities because
investors may anticipate an increase in prepayments.
33 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
MORE ABOUT THE FUNDS CONTINUED
RISKS OF DOLLAR ROLL TRANSACTIONS. In a dollar roll transaction, Balanced Fund
sells mortgage-backed securities for delivery in the current month while
contracting with the same party to repurchase similar securities at a future
date. Because the fund gives up the right to receive principal and interest paid
on the securities sold, a mortgage dollar roll transaction will diminish the
investment performance of the fund unless the difference between the price
received for the securities sold and the price to be paid for the securities to
be purchased in the future, plus any fee income received, exceeds any income,
principal payments and appreciation on the securities sold as part of the
mortgage dollar roll. Whether mortgage dollar rolls will benefit Balanced Fund
may depend upon the advisor's ability to predict mortgage prepayments and
interest rates. In addition, the use of mortgage dollar rolls by the fund
increases the amount of the fund's assets that are subject to market risk, which
could increase the volatility of the price of the fund's shares.
34 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The tables that follow present performance information about the Class A, Class
B and Class C shares of each fund. This information is intended to help you
understand each fund's financial performance for the past five years or, if
shorter, the period of operations for the fund or class of shares. Some of this
information reflects financial results for a single fund share. Total returns in
the tables represent the rate that you would have earned or lost on an
investment in the fund, assuming you reinvested all of your dividends and
distributions.
The financial highlights for the Balanced Fund as set forth herein include the
historical financial highlights of the Firstar Balanced Growth Fund. The assets
of the Firstar Fund were acquired by the First American Balanced Fund on
September 24, 2001. In connection with such acquisition, Class A shares of the
Firstar Balanced Growth Fund were exchanged for Class A shares of the First
American Balanced Fund, and Firstar Class B shares were exchanged for Class B
shares of the First American Fund. Historical per-share amounts have been
adjusted to reflect the conversion ratios utilized for the merger of the
Balanced Fund and Firstar Balanced Growth Fund. Firstar Balanced Growth Fund is
the accounting survivor.
The financial highlights for the Capital Growth Fund as set forth herein include
the historical financial highlights of the Firstar Large Cap Growth Fund. The
assets of the Firstar Fund were acquired by the First American Capital Growth
Fund on September 24, 2001. In connection with such acquisition, Class A shares
of the Firstar Large Cap Growth Fund were exchanged for Class A shares of the
First American Capital Growth Fund, and Firstar Class B shares were exchanged
for Class B shares of the First American Fund.
The financial highlights for the Growth & Income Fund as set forth herein
include the historical financial highlights of the Firstar Growth & Income Fund.
The assets of the Firstar Fund were acquired by the First American Growth &
Income Fund on September 24, 2001. In connection with such acquisition, Class A
shares of the Firstar Growth & Income Fund were exchanged for Class A shares of
the First American Growth & Income Fund, and Firstar Class B shares were
exchanged for Class B shares of the First American Fund.
The financial highlights for the Large Cap Core Fund as set forth herein include
the historical financial highlights of the Firstar Large Cap Core Equity Fund.
The assets of the Firstar Fund were acquired by the First American Large Cap
Core Fund on September 24, 2001. In connection with such acquisition, Class A
shares of the Firstar Large Cap Core Equity Fund were exchanged for Class A
shares of the First American Large Cap Core Fund, and Firstar Class B shares
were exchanged for Class B shares of the First American Fund.
The financial highlights for the Relative Value Fund as set forth herein include
the historical financial highlights of the Firstar Relative Value Fund. The
assets of the Firstar Fund were acquired by the First American Relative Value
Fund on September 24, 2001. In connection with such acquisition, Class A shares
of the Firstar Relative Value Fund were exchanged for Class A shares of the
First American Relative Value Fund, and Firstar Class B shares were exchanged
for Class B shares of the First American Fund.
The information for Equity Income Fund, Large Cap Growth Fund and Large Cap
Value Fund for the fiscal periods ended September 30, 2001, September 30, 2000,
and September 30, 1999, has been derived from the financial statements audited
by Ernst & Young LLP, independent auditors, whose report, along with the funds'
financial statements, is included in the funds' annual report, which is
available upon request. The information for the fiscal periods ended on or
before September 30, 1998, has been audited by other auditors.
The information for Balanced Fund, Capital Growth Fund, Growth & Income Fund,
Large Cap Core Fund, and Relative Value Fund for the fiscal period ended
September 30, 2001, has been derived from the financial statements audited by
Ernst & Young LLP, independent auditors, whose report, along with the funds'
financial statements, is included in the funds' annual report, which is
available upon request. The information for the fiscal periods ended on or
before October 31, 2000, has been audited by other auditors.
35 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
BALANCED FUND
Fiscal period
ended Fiscal year ended October 31,
CLASS A SHARES September 30, 2001(1),(2) 2000 1999 1998 1997
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 13.83 $ 12.39 $ 12.30 $ 12.57 $ 11.54
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Income 0.18 0.23 0.20 0.23 0.24
Net Gains (Losses) on Investments
(both realized and unrealized) (2.24) 2.12 0.49 0.77 1.73
-------- -------- -------- -------- --------
Total From Investment Operations (2.06) 2.35 0.69 1.00 1.97
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) (0.20) (0.22) (0.20) (0.24) (0.24)
Distributions (from capital gains) (2.07) (0.69) (0.40) (1.03) (0.70)
-------- -------- -------- -------- --------
Total Distributions $ 2.27 (0.91) (0.60) (1.27) (0.94)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 9.50 $ 13.83 $ 12.39 $ 12.30 $ 12.57
======== ======== ======== ======== ========
Total Return(3) (17.03)% 19.46% 5.56% 8.60% 18.07%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $127,590 $ 54,380 $ 53,807 $ 59,657 $ 44,026
Ratio of Expenses to Average Net Assets 1.22% 1.22% 1.18% 1.00% 1.00%
Ratio of Net Income to Average Net Assets 1.96% 1.66% 1.59% 1.91% 2.06%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.28% 1.28% 1.25% 1.24% 1.25%
Ratio of Net Income to Average Net Assets (excluding waivers) 1.90% 1.60% 1.52% 1.67% 1.81%
Portfolio Turnover Rate 54% 79% 69% 56% 70%
- ---------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal period
ended Fiscal period ended October 31,
CLASS B SHARES September 30, 2001(1),(2) 2000 1999(3)
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 13.75 $ 12.33 $ 12.37
------- ------- -------
Investment Operations:
Net Investment Income 0.17 0.13 0.07
Net Gains (Losses) on Investments
(both realized and unrealized) (2.29) 2.11 (0.04)
------- ------- -------
Total From Investment Operations (2.12) 2.24 0.03
------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.13) (0.14) (0.07)
Distributions (from capital gains) (2.06) (0.68) --
------- ------- -------
Total Distributions (2.19) (0.82) (0.07)
------- ------- -------
Net Asset Value, End of Period $ 9.44 $ 13.75 $ 12.33
======= ======= =======
Total Return(4) (17.64)% 18.77% 0.25%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $47,150 $ 2,243 $ 630
Ratio of Expenses to Average Net Assets 1.93% 1.97% 1.97%
Ratio of Net Income to Average Net Assets 1.22% 0.91% 0.87%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.99% 2.03% 2.03%
Ratio of Net Income to Average Net Assets (excluding waivers) 1.16% 0.85% 0.81%
Portfolio Turnover Rate 54% 79% 69%
- --------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Class B shares have been offered since March 1, 1999. All ratios for the
period have been annualized, except total return.
(4)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
36 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
BALANCED FUND (CONTINUED)
Fiscal period
ended
CLASS C SHARES September 30, 2001(1),(2)
- --------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 9.29
------
Investment Operations:
Net Investment Income --
Net Gains (Losses) on Investments
(both realized and unrealized) 0.20
------
Total From Investment Operations 0.20
------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
------
Total Distributions --
------
Net Asset Value, End of Period $ 9.49
======
Total Return(3) 2.15%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $2,351
Ratio of Expenses to Average Net Assets 0.94%
Ratio of Net Income to Average Net Assets 2.20%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.94%
Ratio of Net Income to Average Net Assets (excluding waivers) 2.20%
Portfolio Turnover Rate 54%
- --------------------------------------------------------------------------------------------------
(1)Class C shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
37 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
CAPITAL GROWTH FUND
Fiscal period Fiscal period
ended ended
CLASS A SHARES September 30, 2001(1),(2) October 31, 2000(3),(4)
- ---------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $25.92 $26.95
------ ------
Investment Operations:
Net Investment Income (Loss) (0.09) (0.03)
Net Gains (Losses) on Investments
(both realized and unrealized) (10.44) (1.00)
------ ------
Total From Investment Operations (10.53) (1.03)
------ ------
Less Distributions:
Dividends (from net investment income) -- --
Distributions (from capital gains) (0.71) --
------ ------
Total Distributions (0.71) --
------ ------
Net Asset Value, End of Period $14.68 $25.92
====== ======
Total Return(5) (41.57)% (3.82)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $8,598 $1,177
Ratio of Expenses to Average Net Assets 1.39% 1.40%
Ratio of Net Income to Average Net Assets (0.55)% (0.75)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.56% 1.49%
Ratio of Net Income to Average Net Assets (excluding waivers) (0.72)% (0.84)%
Portfolio Turnover Rate 38% 35%
- ---------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Effective in 2000, the Fund's fiscal year end was changed to October 31 from
November 30.
(4)Class A shares have been offered since March 31, 2000. All ratios for the
period have been annualized, except total return.
(5)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal period Fiscal period
ended ended Fiscal year ended November 30,
CLASS B SHARES September 30, 2001(1),(2) October 31, 2000(3) 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 25.92 $ 23.89 $ 19.52 $ 17.17 $ 15.17
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Income (Loss) (0.21) (0.10) (0.04) 0.02 0.19
Net Gains (Losses) on Investments
(both realized and unrealized) (10.41) 2.13 4.88 3.32 2.97
-------- -------- -------- -------- --------
Total From Investment Operations (10.62) 2.03 4.84 3.34 3.16
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) -- -- (0.02) (0.03) (0.14)
Distributions (from capital gains) (0.71) -- (0.45) (0.96) (1.02)
-------- -------- -------- -------- --------
Total Distributions (0.71) -- (0.47) (0.99) (1.16)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 14.59 $ 25.92 $ 23.89 $ 19.52 $ 17.17
======== ======== ======== ======== ========
Total Return(4) (41.97)% 8.5% 25.26% 20.76% 22.65%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 46,103 $100,689 $ 90,468 $ 66,478 $ 45,025
Ratio of Expenses to Average Net Assets 2.07% 1.38% 1.36% 1.34% 1.09%
Ratio of Net Income to Average Net Assets (1.19)% (0.40)% (0.08)% 0.12% 0.86%
Ratio of Expenses to Average Net Assets (excluding waivers) 2.19% 1.48% 1.52% 1.54% 1.29%
Ratio of Net Income to Average Net Assets (excluding waivers) (1.31)% (0.50)% (0.24)% (0.08)% 0.66%
Portfolio Turnover Rate 38% 35% 28% 48% 60%
- ------------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Effective in 2000, the Fund's fiscal year end was changed to October 31 from
November 30. All ratios for the period have been annualized, except total
return.
(4)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
38 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
CAPITAL GROWTH FUND (CONTINUED)
Fiscal period
ended
CLASS C SHARES September 30, 2001(1)
- ------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $14.32
------
Investment Operations:
Net Investment Income (Loss) --
Net Gains (Losses) on Investments
(both realized and unrealized) 0.36
------
Total From Investment Operations 0.36
------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
------
Total Distributions --
------
Net Asset Value, End of Period $14.68
======
Total Return(2) 2.58%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ --
Ratio of Expenses to Average Net Assets 0.00%
Ratio of Net Income to Average Net Assets 0.00%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.00%
Ratio of Net Income to Average Net Assets (excluding waivers) 0.00%
Portfolio Turnover Rate 38%
- ------------------------------------------------------------------------------------------------
(1)Class C shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
39 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
EQUITY INCOME FUND
Fiscal year ended September 30,
CLASS A SHARES 2001(1) 2000 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 16.29 $ 15.94 $ 15.70 $ 15.69 $ 12.65
------- ------- ------- ------- -------
Investment Operations:
Net Investment Income 0.29 0.28 0.36 0.41 0.40
Net Gains (Losses) on Investments
(both realized and unrealized) (0.74) 1.45 1.15 0.86 3.40
------- ------- ------- ------- -------
Total From Investment Operations (0.45) 1.73 1.51 1.27 3.80
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.32) (0.28) (0.37) (0.41) (0.41)
Distributions (from capital gains) (3.39) (1.10) (0.90) (0.85) (0.35)
------- ------- ------- ------- -------
Total Distributions (3.71) (1.38) (1.27) (1.26) (0.76)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 12.13 $ 16.29 $ 15.94 $ 15.70 $ 15.69
======= ======= ======= ======= =======
Total Return(2) (3.89)% 11.11% 9.74% 8.38% 31.16%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $24,557 $20,607 $18,970 $11,018 $ 7,276
Ratio of Expenses to Average Net Assets 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of Net Income to Average Net Assets 1.97% 1.69% 2.01% 2.58% 2.96%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.15% 1.14% 1.13% 1.12% 1.17%
Ratio of Net Income to Average Net Assets (excluding waivers) 1.82% 1.55% 1.88% 2.46% 2.79%
Portfolio Turnover Rate 33% 36% 35% 14% 39%
- -----------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal year ended September 30,
CLASS B SHARES 2001(1) 2000 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 16.24 $ 15.90 $ 15.65 $ 15.62 $ 12.61
------- ------- ------- ------- -------
Investment Operations:
Net Investment Income 0.18 0.18 0.24 0.30 0.29
Net Gains (Losses) on Investments
(both realized and unrealized) (0.75) 1.44 1.16 0.87 3.37
------- ------- ------- ------- -------
Total From Investment Operations (0.57) 1.62 1.40 1.17 3.66
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.21) (0.18) (0.25) (0.29) (0.30)
Distributions (from capital gains) (3.39) (1.10) (0.90) (0.85) (0.35)
------- ------- ------- ------- -------
Total Distributions (3.60) (1.28) (1.15) (1.14) (0.65)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 12.07 $ 16.24 $ 15.90 $ 15.65 $ 15.62
======= ======= ======= ======= =======
Total Return(2) (4.64)% 10.35% 9.10% 7.77% 30.06%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $11,516 $10,366 $10,971 $ 8,570 $ 6,619
Ratio of Expenses to Average Net Assets 1.75% 1.75% 1.75% 1.75% 1.75%
Ratio of Net Income to Average Net Assets 1.20% 0.95% 1.34% 1.81% 2.19%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.90% 1.89% 1.88% 1.87% 1.92%
Ratio of Net Income to Average Net Assets (excluding waivers) 1.05% 0.81% 1.21% 1.69% 2.02%
Portfolio Turnover Rate 33% 36% 35% 14% 39%
- -----------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
40 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
EQUITY INCOME FUND (CONTINUED)
Fiscal period ended September 30,
CLASS C SHARES 2001(1) 2000 1999(2)
- ------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $16.28 $15.93 $16.62
------ ------ ------
Investment Operations:
Net Investment Income 0.18 0.19 0.21
Net Gains (Losses) on Investments
(both realized and unrealized) (0.76) 1.44 (0.70)
------ ------ ------
Total From Investment Operations (0.58) 1.63 (0.49)
------ ------ ------
Less Distributions:
Dividends (from net investment income) (0.22) (0.18) (0.20)
Distributions (from capital gains) (3.39) (1.10) --
------ ------ ------
Total Distributions (3.61) (1.28) (0.20)
------ ------ ------
Net Asset Value, End of Period $12.09 $16.28 $15.93
====== ====== ======
Total Return(3) (4.74)% 10.41% (3.02)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $8,028 $2,511 $1,700
Ratio of Expenses to Average Net Assets 1.75% 1.75% 1.76%
Ratio of Net Income to Average Net Assets 1.20% 0.88% 0.65%
Ratios of Expenses to Average Net Assets (excluding waivers) 1.90% 1.89% 1.88%
Ratio of Net Income to Average Net Assets (excluding waivers) 1.05% 0.74% 0.53%
Portfolio Turnover Rate 33% 36% 35%
- ------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized, except total return.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
41 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
GROWTH & INCOME FUND
Fiscal period
ended Fiscal year ended October 31,
CLASS A SHARES September 30, 2001(1),(2) 2000(2) 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 47.40 $ 46.06 $ 44.41 $ 39.24 $ 33.07
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Income 0.12 0.14 0.29 0.36 0.37
Net Gains (Losses) on Investments
(both realized and unrealized) (11.48) 5.21 4.92 6.55 8.92
-------- -------- -------- -------- --------
Total From Investment Operations (11.36) 5.35 5.21 6.91 9.29
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) (0.12) (0.11) (0.35) (0.35) (0.39)
Distributions (from capital gains) (4.76) (3.90) (3.21) (1.39) (2.73)
-------- -------- -------- -------- --------
Total Distributions (4.88) (4.01) (3.56) (1.74) (3.12)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 31.16 $ 47.40 $ 46.06 $ 44.41 $ 39.24
======== ======== ======== ======== ========
Total Return(3) (26.33)% 12.54% 11.78% 18.08% 30.47%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $150,323 $183,049 $194,089 $190,331 $128,070
Ratio of Expenses to Average Net Assets 1.19% 1.19% 1.17% 1.12% 1.12%
Ratio of Net Income to Average Net Assets 0.35% 0.31% 0.74% 0.86% 1.09%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.22% 1.20% 1.18% 1.19% 1.19%
Ratio of Net Income to Average Net Assets (excluding waivers) 0.32% 0.30% 0.73% 0.79% 1.02%
Portfolio Turnover Rate 51% 89% 62% 49% 31%
- -----------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal period Fiscal year Fiscal period
ended ended ended
CLASS B SHARES September 30, 2001(1) October 31, 2000(2) October 31, 1999(2),(3)
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 47.12 $ 46.03 $ 44.64
------- ------- -------
Investment Operations:
Net Investment Income (Loss) 0.01 (0.22) 0.02
Net Gains (Losses) on Investments
(both realized and unrealized) (11.50) 5.21 1.40
------- ------- -------
Total From Investment Operations (11.49) 4.99 1.42
------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.01) -- (0.03)
Distributions (from capital gains) (4.76) (3.90) --
------- ------- -------
Total Distributions (4.77) (3.90) (0.03)
------- ------- -------
Net Asset Value, End of Period $ 30.86 $ 47.12 $ 46.03
======= ======= =======
Total Return(4) (26.79)% 11.69% 3.19%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $11,613 $ 3,718 $ 1,550
Ratio of Expenses to Average Net Assets 1.93% 1.94% 1.94%
Ratio of Net Income (Loss) to Average Net Assets (0.43)% (0.44)% 0.05%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.96% 1.95% 1.94%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) (0.46)% (0.45)% 0.05%
Portfolio Turnover Rate 51% 89% 62%
- ----------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Class B shares have been offered since March 1, 1999. All ratios for the
period have been annualized, except total return.
(4)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
42 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
GROWTH & INCOME FUND (CONTINUED)
Fiscal period
ended
CLASS C SHARES September 30, 2001(1),(2)
- --------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $29.98
------
Investment Operations:
Net Investment Income (Loss) --
Net Gains (Losses) on Investments
(both realized and unrealized) 1.19
------
Total From Investment Operations 1.19
------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
------
Total Distributions --
------
Net Asset Value, End of Period $31.17
======
Total Return(3) 3.94%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ --
Ratio of Expenses to Average Net Assets 0.00%
Ratio of Net Income (Loss) to Average Net Assets 0.00%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.00%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) 0.00%
Portfolio Turnover Rate 51%
- --------------------------------------------------------------------------------------------------
(1)Class C shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
43 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
LARGE CAP CORE FUND
Fiscal period
ended Fiscal year ended October 31,
CLASS A SHARES September 30, 2001(1),(2) 2000(2) 1999(2) 1998(2) 1997
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 43.33 $ 37.96 $ 35.72 $ 35.27 $ 30.32
------- ------- ------- ------- -------
Investment Operations:
Net Investment Income (Loss) (0.01) (0.15) (0.12) (0.02) (0.05)
Net Gains (Losses) on Investments
(both realized and unrealized) (14.00) 7.55 6.42 5.66 6.30
------- ------- ------- ------- -------
Total From Investment Operations (14.01) 7.40 6.30 5.64 6.25
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) -- -- (0.02) (0.02) --
Distributions (from capital gains) (4.88) (2.03) (4.04) (5.17) (1.30)
------- ------- ------- ------- -------
Total Distributions (4.88) (2.03) (4.06) (5.19) (1.30)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 24.44 $ 43.33 $ 37.96 $ 35.72 $ 35.27
======= ======= ======= ======= =======
Total Return(3) (35.83)% 19.92% 17.92% 18.58% 21.30%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $34,330 $51,232 $47,238 $38,213 $25,043
Ratio of Expenses to Average Net Assets 1.20% 1.20% 1.19% 1.14% 1.14%
Ratio of Net Income (Loss) to Average Net Assets (0.04)% (0.35)% (0.31)% (0.05)% (0.16)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.24% 1.21% 1.20% 1.21% 1.21%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) (0.08)% (0.36)% (0.32)% (0.12)% (0.23)%
Portfolio Turnover Rate 40% 60% 59% 52% 62%
- ----------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal period Fiscal year Fiscal period
ended ended ended
CLASS B SHARES September 30, 2001(1),(2) October 31, 2000(2) October 31, 1999(2),(3)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $42.80 $37.78 $36.92
------ ------ ------
Investment Operations:
Net Investment Income (Loss) (0.22) (0.47) (0.29)
Net Gains (Losses) on Investments
(both realized and unrealized) (13.76) 7.52 1.15
------ ------ ------
Total From Investment Operations (13.98) 7.05 0.86
------ ------ ------
Less Distributions:
Dividends (from net investment income) -- -- --
Distributions (from capital gains) (4.88) (2.03) --
------ ------ ------
Total Distributions (4.88) (2.03) --
------ ------ ------
Net Asset Value, End of Period $23.94 $42.80 $37.78
====== ====== ======
Total Return(4) (36.28)% 19.06% 2.33%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $2,954 $1,483 $ 722
Ratio of Expenses to Average Net Assets 1.93% 1.95% 1.96%
Ratio of Net Income (Loss) to Average Net Assets (0.79)% (1.10)% (1.17)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.97% 1.96% 1.97%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) (0.83)% (1.11)% (1.18)%
Portfolio Turnover Rate 40% 60% 59%
- ------------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Class B shares have been offered since March 1, 1999. All ratios for the
period have been annualized, except total return.
(4)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
44 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
LARGE CAP CORE FUND (CONTINUED)
Fiscal period
ended
CLASS C SHARES September 30, 2001(1),(2)
- -------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $23.75
------
Investment Operations:
Net Investment Income (Loss) --
Net Gains (Losses) on Investments
(both realized and unrealized) 0.69
------
Total From Investment Operations 0.69
------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
------
Total Distributions --
------
Net Asset Value, End of Period $24.44
======
Total Return(3) 2.95%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ --
Ratio of Expenses to Average Net Assets 0.00%
Ratio of Net Income (Loss) to Average Net Assets 0.00%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.00%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) 0.00%
Portfolio Turnover Rate 40%
- -------------------------------------------------------------------------------------------------
(1)Class C shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
45 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
LARGE CAP GROWTH FUND
Fiscal year ended September 30,
CLASS A SHARES 2001(1) 2000 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 21.55 $ 19.75 $ 16.25 $ 17.63 $ 13.63
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Income (Loss) (0.04) (0.09) 0.02 0.09 0.09
Net Gains (Losses) on Investments
(both realized and unrealized) (10.11) 4.87 5.39 (0.02) 4.28
-------- -------- -------- -------- --------
Total From Investment Operations (10.15) 4.78 5.41 0.07 4.37
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) -- -- (0.03) (0.09) (0.10)
Distributions (from capital gains) (2.07) (2.98) (1.88) (1.36) (0.27)
-------- -------- -------- -------- --------
Total Distributions (2.07) (2.98) (1.91) (1.45) (0.37)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 9.33 $ 21.55 $ 19.75 $ 16.25 $ 17.63
======== ======== ======== ======== ========
Total Return(2) (51.45)% 25.74% 36.00% 0.61% 32.69%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 85,443 $208,556 $168,153 $140,948 $ 12,017
Ratio of Expenses to Average Net Assets 1.05% 1.05% 1.05% 1.05% 1.05%
Ratio of Net Income (Loss) to Average Net Assets (0.32)% (0.45)% (0.05)% 0.56% 0.57%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.14% 1.14% 1.14% 1.11% 1.14%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) (0.41)% (0.54)% (0.14)% 0.50% 0.48%
Portfolio Turnover Rate 77% 47% 57% 38% 34%
- -----------------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal year ended September 30,
CLASS B SHARES 2001(1) 2000 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 20.93 $ 19.38 $ 16.06 $ 17.47 $ 13.57
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Income (Loss) (0.14) (0.22) 0.07 0.03 0.01
Net Gains (Losses) on Investments
(both realized and unrealized) (9.76) 4.75 5.13 (0.05) 4.18
-------- -------- -------- -------- --------
Total From Investment Operations (9.90) 4.53 5.20 (0.02) 4.19
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) -- -- -- (0.03) (0.02)
Distributions (from capital gains) (2.07) (2.98) (1.88) (1.36) (0.27)
-------- -------- -------- -------- --------
Total Distributions (2.07) (2.98) (1.88) (1.39) (0.29)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 8.96 $ 20.93 $ 19.38 $ 16.06 $ 17.47
======== ======== ======== ======== ========
Total Return(2) (51.79)% 24.84% 34.99% 0.09% 31.42%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 17,976 $ 36,272 $ 19,011 $ 11,177 $ 9,487
Ratio of Expenses to Average Net Assets 1.80% 1.80% 1.80% 1.80% 1.80%
Ratio of Net Income (Loss) to Average Net Assets (1.06)% (1.20)% (0.83)% (0.20)% (0.18)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.89% 1.89% 1.89% 1.86% 1.89%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) (1.15)% (1.29)% (0.92)% (0.26)% (0.27)%
Portfolio Turnover Rate 77% 47% 57% 38% 34%
- -----------------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
46 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
LARGE CAP GROWTH FUND (CONTINUED)
Fiscal period ended September 30,
CLASS C SHARES 2001(1) 2000 1999(2)
- --------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 21.30 $ 19.67 $ 18.56
------- ------- -------
Investment Operations:
Net Investment Income (Loss) (0.14) (0.09) 0.01
Net Gains (Losses) on Investments
(both realized and unrealized) (9.95) 4.70 1.11
------- ------- -------
Total From Investment Operations (10.09) 4.61 1.12
------- ------- -------
Less Distributions:
Dividends (from net investment income) -- -- (0.01)
Distributions (from capital gains) (2.07) (2.98) --
------- ------- -------
Total Distributions (2.07) (2.98) (0.01)
------- ------- -------
Net Asset Value, End of Period $ 9.14 $ 21.30 $ 19.67
======= ======= =======
Total Return(3) (51.78)% 24.89% 6.04%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $13,177 $17,538 $ 962
Ratio of Expenses to Average Net Assets 1.80% 1.80% 1.80%
Ratio of Net Loss to Average Net Assets (1.04)% (1.20)% (1.09)%
Ratios of Expenses to Average Net Assets (excluding waivers) 1.89% 1.89% 1.89%
Ratio of Net Loss to Average Net Assets (excluding waivers) (1.13)% (1.29)% (1.18)%
Portfolio Turnover Rate 77% 47% 57%
- --------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized, except total return.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
47 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
LARGE CAP VALUE FUND
Fiscal year ended September 30,
CLASS A SHARES 2001(1) 2000 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 20.59 $ 23.12 $ 22.39 $ 28.74 $ 22.59
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Income 0.16 0.17 0.19 0.29 0.33
Net Gains (Losses) on Investments
(both realized and unrealized) (2.67) 0.22 4.44 (2.59) 7.90
-------- -------- -------- -------- --------
Total From Investment Operations (2.51) 0.39 4.63 (2.30) 8.23
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) (0.16) (0.17) (0.20) (0.29) (0.32)
Distributions (from capital gains) (1.94) (2.75) (3.70) (3.76) (1.76)
-------- -------- -------- -------- --------
Total Distributions (2.10) (2.92) (3.90) (4.05) (2.08)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 15.98 $ 20.59 $ 23.12 $ 22.39 $ 28.74
======== ======== ======== ======== ========
Total Return(2) (13.72)% 0.92% 21.93% (8.77)% 38.82%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 94,064 $138,146 $177,251 $170,529 $ 50,381
Ratio of Expenses to Average Net Assets 1.05% 1.05% 1.05% 1.05% 1.05%
Ratio of Net Income (Loss) to Average Net Assets 0.88% (0.45)% 0.82% 1.21% 1.14%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.15% 1.13% 1.15% 1.13% 1.14%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) 0.78% (0.53)% 0.72% 1.13% 1.05%
Portfolio Turnover Rate 64% 68% 61% 74% 57%
- ----------------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal year ended September 30,
CLASS B SHARES 2001(1) 2000 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 20.30 $ 22.87 $ 22.21 $ 28.55 $ 22.50
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Income 0.02 0.05 0.07 0.13 0.18
Net Gains (Losses) on Investments
(both realized and unrealized) (2.63) 0.18 4.36 (2.58) 7.81
-------- -------- -------- -------- --------
Total From Investment Operations (2.61) 0.23 4.43 (2.45) 7.99
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) (0.04) (0.05) (0.07) (0.13) (0.18)
Distributions (from capital gains) (1.94) (2.75) (3.70) (3.76) (1.76)
-------- -------- -------- -------- --------
Total Distributions (1.98) (2.80) (3.77) (3.89) (1.94)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 15.71 $ 20.30 $ 22.87 $ 22.21 $ 28.55
======== ======== ======== ======== ========
Total Return(2) (14.42)% 0.17% 21.07% (9.37)% 37.71%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 38,108 $ 49,662 $ 61,711 $ 56,259 $ 53,420
Ratio of Expenses to Average Net Assets 1.80% 1.80% 1.80% 1.80% 1.80%
Ratio of Net Income (Loss) to Average Net Assets 0.13% (1.20)% 0.07% 0.41% 0.39%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.90% 1.88% 1.90% 1.88% 1.89%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) 0.03% (1.28)% (0.03)% 0.33% 0.30%
Portfolio Turnover Rate 64% 68% 61% 74% 57%
- ----------------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
48 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
LARGE CAP VALUE FUND (CONTINUED)
Fiscal period ended September 30,
CLASS C SHARES 2001(1) 2000 1999(2)
- --------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 20.51 $ 23.09 $ 22.79
------- ------- -------
Investment Operations:
Net Investment Income 0.02 0.06 0.08
Net Gains (Losses) on Investments
(both realized and unrealized) (2.65) 0.17 0.30
------- ------- -------
Total From Investment Operations (2.63) 0.23 0.38
------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.04) (0.06) (0.08)
Distributions (from capital gains) (1.94) (2.75) --
------- ------- -------
Total Distributions (1.98) (2.81) (0.08)
------- ------- -------
Net Asset Value, End of Period $ 15.90 $ 20.51 $ 23.09
======= ======= =======
Total Return(3) (14.36)% 0.17% 1.65%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $10,141 $ 6,551 $ 1,398
Ratio of Expenses to Average Net Assets 1.80% 1.80% 1.80%
Ratio of Net Income (Loss) to Average Net Assets 0.12% (1.20)% 0.00%
Ratios of Expenses to Average Net Assets (excluding waivers) 1.90% 1.88% 1.90%
Ratio of Net Loss to Average Net Assets (excluding waivers) 0.02% (1.28)% (0.10)%
Portfolio Turnover Rate 64% 68% 61%
- --------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized, except total return.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
49 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
RELATIVE VALUE FUND
Fiscal period Fiscal period
ended ended Fiscal year ended November 30,
CLASS A SHARES September 30, 2001(1),(2) October 31, 2000(3) 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 28.87 $ 29.10 $ 26.26 $ 23.48 $ 19.03
------- ------- ------- ------- -------
Investment Operations:
Net Investment Income 0.21 0.20 0.10 0.11 0.67
Net Gains (Losses) on Investments
(both realized and unrealized) (4.55) (0.22) 3.01 3.66 4.45
------- ------- ------- ------- -------
Total From Investment Operations (4.34) (0.02) 3.11 3.77 5.12
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.23) (0.21) (0.16) (0.17) (0.28)
Distributions (from capital gains) (0.21) -- (0.11) (0.82) (0.39)
------- ------- ------- ------- -------
Total Distributions (0.44) (0.21) (0.27) (0.99) (0.67)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 24.09 $ 28.87 $ 29.10 $ 26.26 $ 23.48
======= ======= ======= ======= =======
Total Return(4) (15.16)% (0.07)% 11.89% 16.67% 27.69%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $33,288 $42,853 $54,825 $50,925 $37,748
Ratio of Expenses to Average Net Assets 1.22% 1.36% 1.30% 1.29% 1.01%
Ratio of Net Income to Average Net Assets 0.84% 0.75% 0.52% 0.70% 1.40%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.23% 1.46% 1.46% 1.49% 1.21%
Ratio of Net Income to Average Net Assets (excluding waivers) 0.83% 0.65% 0.36% 0.50% 1.20%
Portfolio Turnover Rate 4% 7% 11% 26% 18%
- ------------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Effective in 2000, the Fund's fiscal year end was changed to October 31 from
November 30. All ratios for the period have been annualized, except total
return.
(4)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal period Fiscal period
ended ended Fiscal period ended November 30,
CLASS B SHARES September 30, 2001(1),(2) October 31, 2000(3) 1999 1998(4)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 28.78 $ 29.09 $ 26.28 $ 26.01
------- ------- ------- -------
Investment Operations:
Net Investment Income 0.04 0.20 0.16 0.14
Net Gains (Losses) on Investments
(both realized and unrealized) (4.54) (0.30) 2.94 0.24
------- ------- ------- -------
Total From Investment Operations (4.50) (0.10) 3.10 0.38
------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.06) (0.21) (0.18) (0.11)
Distributions (from capital gains) (0.21) -- (0.11) --
------- ------- ------- -------
Total Distributions (0.27) (0.21) (0.29) (0.11)
------- ------- ------- -------
Net Asset Value, End of Period $ 24.01 $ 28.78 $ 29.09 $ 26.28
======= ======= ======= =======
Total Return(5) (15.72)% (0.35)% 11.84% 1.50%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $12,081 $15,537 $14,278 $ 7,847
Ratio of Expenses to Average Net Assets 1.91% 1.36% 1.30% 1.04%
Ratio of Net Income to Average Net Assets 0.16% 0.75% 0.57% 0.95%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.92% 1.46% 1.46% 1.24%
Ratio of Net Income to Average Net Assets (excluding waivers) 0.15% 0.65% 0.41% 0.75%
Portfolio Turnover Rate 4% 7% 11% 26%
- ------------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Effective in 2000, the Fund's fiscal year end was changed to October 31 from
November 30. All ratios for the period have been annualized, except total
return.
(4)Class B shares have been offered since March 31, 1998. All ratios for the
period have been annualized, except total return.
(5)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
50 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
RELATIVE VALUE FUND (CONTINUED)
Fiscal period
ended
CLASS C SHARES September 30, 2001(1),(2)
- -------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $23.27
------
Investment Operations:
Net Investment Income --
Net Gains (Losses) on Investments
(both realized and unrealized) 0.82
------
Total From Investment Operations 0.82
------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
------
Total Distributions --
------
Net Asset Value, End of Period $24.09
======
Total Return(3) 3.57%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ --
Ratio of Expenses to Average Net Assets 0.00%
Ratio of Net Income to Average Net Assets 0.00%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.00%
Ratio of Net Income to Average Net Assets (excluding waivers) 0.00%
Portfolio Turnover Rate 4%
- -------------------------------------------------------------------------------------------------
(1)Class C shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
51 PROSPECTUS - First American Large Cap Funds
Class A, Class B, and Class C Shares
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
More information about the funds is available in the funds' Statement of
Additional Information, and annual and semiannual reports, and on the First
American funds' Internet Web site.
- --------------------------------------------------------------------------------
FIRST AMERICAN FUNDS WEB SITE
Information about the First American funds may be viewed on the funds' Internet
Web site at http://www.firstamericanfunds.com.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more details about the funds and their policies. A current SAI
is on file with the Securities and Exchange Commission (SEC) and is incorporated
into this prospectus by reference (which means that it is legally considered
part of this prospectus).
- --------------------------------------------------------------------------------
ANNUAL AND SEMIANNUAL REPORTS
Additional information about the funds' investments is available in the funds'
annual and semiannual reports to shareholders. In the funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the funds' performance during their last fiscal year.
You can obtain a free copy of the funds' SAI and/or free copies of the funds'
most recent annual or semiannual reports by calling Investor Services at 800
677-FUND. The material you request will be sent by first-class mail or other
means designed to ensure equally prompt delivery, within three business days of
receipt of the request.
You can also obtain copies of this information, after paying a duplicating fee,
by electronic request at the following email address: publicinfo@sec.gov, or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. For
more information, call 1-202-942-8090.
Information about the funds is also available on the Internet. Text-only
versions of fund documents can be viewed online or downloaded from the EDGAR
Database on the SEC's Internet site at http://www.sec.gov.
FIRST AMERICAN FUNDS P.O. Box 1330, Minneapolis, MN 55440-1330
U.S. Bancorp Asset Management, Inc., serves as the investment advisor to the
First American Funds.
First American Funds are distributed by Quasar Distributors, LLC, which is
located in Milwaukee, WI 53202, and is an affiliate of the investment advisor.
PROLRGR 1/02
SEC file number: 811-05309
[LOGO] FIRST AMERICAN FUNDS(TM)
[LOGO] FIRST AMERICAN FUNDS(TM) JANUARY 28, 2002
PROSPECTUS
FIRST AMERICAN INVESTMENT FUNDS, INC.
ASSET CLASS -- STOCK FUNDS
LARGE CAP FUNDS
CLASS Y SHARES
BALANCED FUND
CAPITAL GROWTH FUND
EQUITY INCOME FUND
GROWTH & INCOME FUND
LARGE CAP CORE FUND
LARGE CAP GROWTH FUND
LARGE CAP VALUE FUND
RELATIVE VALUE FUND
AS WITH ALL MUTUAL FUNDS, THE
SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THE
SHARES OF THESE FUNDS, OR DETERMINED
IF THE INFORMATION IN THIS
PROSPECTUS IS ACCURATE OR COMPLETE.
ANY STATEMENT TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Table of
CONTENTS
FUND SUMMARIES
- --------------------------------------------------------------------------------
Balanced Fund 2
- --------------------------------------------------------------------------------
Capital Growth Fund 5
- --------------------------------------------------------------------------------
Equity Income Fund 7
- --------------------------------------------------------------------------------
Growth & Income Fund 9
- --------------------------------------------------------------------------------
Large Cap Core Fund 11
- --------------------------------------------------------------------------------
Large Cap Growth Fund 13
- --------------------------------------------------------------------------------
Large Cap Value Fund 15
- --------------------------------------------------------------------------------
Relative Value Fund 17
- --------------------------------------------------------------------------------
POLICIES & SERVICES
- --------------------------------------------------------------------------------
Buying and Selling Shares 19
- --------------------------------------------------------------------------------
Managing Your Investment 21
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Management 22
- --------------------------------------------------------------------------------
More About The Funds 23
- --------------------------------------------------------------------------------
Financial Highlights 26
- --------------------------------------------------------------------------------
FOR MORE INFORMATION Back Cover
- --------------------------------------------------------------------------------
Fund Summaries
INTRODUCTION
This section of the prospectus describes the objectives of the First American
Large Cap Funds, summarizes the main investment strategies used by each fund in
trying to achieve its objectives, and highlights the risks involved with these
strategies. It also provides you with information about the performance, fees,
and expenses of the funds.
AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF U.S. BANK NATIONAL ASSOCIATION
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY.
1 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
BALANCED FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Balanced Fund's objective is to maximize total return (capital appreciation plus
income).
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Balanced Fund invests in a balanced portfolio of stocks and bonds. The mix of
securities will change based on existing and anticipated market conditions. Over
the long term, the fund's asset mix is likely to average approximately 60%
equity securities and 40% debt securities. Under normal market conditions, the
equity securities portion of the fund's portfolio will be invested primarily (at
least 80% of the net assets, plus the amount of any borrowings for investment
purposes) in common stocks that the advisor believes exhibit the potential for
superior growth based on factors such as:
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the equity portion of the fund may be invested in securities of
foreign issuers that are either listed on a U.S. stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Under normal market conditions, the debt securities portion of the fund's
portfolio will be comprised of securities such as: U.S. government securities
(securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities) including zero coupon bonds; mortgage-and asset-backed
securities; and corporate debt obligations.
In selecting debt securities for the fund, the advisor uses a "top-down"
approach, which begins with the formulation of a general economic outlook.
Following this, various sectors and industries are analyzed and selected for
investment. This is followed by the selection of individual securities.
The fund's debt securities will be rated investment grade at the time or
purchase or, if unrated, determined to be of comparable quality by the fund's
advisor. At least 65% of these securities will be either U.S. government
securities or securities that have received at least an A or equivalent rating.
The fund may invest up to 15% of the debt portion of its portfolio in foreign
securities payable in United States dollars. Under normal market conditions the
fund attempts to maintain a weighted average effective maturity for its
portfolio securities of 15 years or less and an average effective duration of
three to eight years. The fund's weighted average effective maturity and average
effective duration are measures of how the fund may react to interest rate
changes.
To generate additional income, the fund may invest up to 25% of total assets in
dollar roll transactions. In a dollar roll transaction, the fund sells
mortgage-backed securities for delivery in the current month while contracting
with the same party to repurchase similar securities at a future date.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, value stocks, growth stocks, and/or large-capitalization stocks may
underperform the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
INTEREST RATE RISK. Debt securities typically decrease in value when interest
rates rise. This risk is usually greater for longer-term debt securities. One
measure of interest rate risk is effective duration, explained in "More About
The Funds -- Investment Strategies".
INCOME RISK. The fund's income could decline due to falling market interest
rates.
CREDIT RISK. An issuer of debt securities may not make timely principal or
interest payments on its securities, or the other party to a contract may
default on its obligations.
CALL RISK. During periods of falling interest rates, a bond issuer may "call" --
or repay -- its high-yielding bonds before their maturity date. The fund would
then be forced to invest the unanticipated proceeds at lower interest rates,
resulting in a decline in the fund's income.
RISKS OF MORTGAGE- AND ASSET-BACKED SECURITIES. Falling interest rates could
cause faster than expected prepayments of the obligations underlying mortgage-
and asset-backed securities, which the fund would have to invest at lower
interest rates. On the other hand, rising interest rates could cause prepayments
of the obligations to decrease, extending the life of mortgage- and asset-backed
securities with lower interest rates.
RISKS OF DOLLAR ROLL TRANSACTIONS. The use of mortgage dollar rolls could
increase the volatility of the fund's share price. It could also diminish the
fund's investment performance if the advisor does not predict mortgage
prepayments and interest rates correctly.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
2 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
BALANCED FUND CONTINUED
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table compares the fund's performance over different time
periods to that of the fund's benchmark indices, which are broad measures of
market performance. The fund's performance reflects fund expenses; the
benchmarks are unmanaged, have no expenses and are unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these waivers were not in place,
the fund's performance would be reduced.
3 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
BALANCED FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
8.24% -4.27% 26.52% 12.63% 17.47% 16.51% 4.28% 7.78% -8.41%
- --------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 14.09%
Worst Quarter: Quarter ending September 30, 2001 (9.93)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Five Years Inception
- ------------------------------------------------------------------------------------------
Balanced Fund 3/30/92 (8.41)% 7.10% 8.91%
- ------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% 10.70% 13.57%
- ------------------------------------------------------------------------------------------
Lehman Aggregate Bond Index(3) 8.42% 7.42% 7.56%
- ------------------------------------------------------------------------------------------
(1)On 9/24/01, First American Balanced Fund combined with Firstar Balanced
Growth Fund and Firstar Balanced Income Fund. Performance history prior to
9/24/01 represents that of Firstar Balanced Growth Fund.
(2)An unmanaged index of large-capitalization stocks. The since inception
performance of the index is calculated from 3/31/92.
(3)An unmanaged index composed of the Lehman Government/Credit Bond Index, the
Lehman Mortgage Backed Securities Index and the Lehman Asset Backed
Securities Index. The Lehman Government/Credit Bond Index is comprised of
Treasury securities, other securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities, including U.S. agency
mortgage securities, and investment grade corporate debt securities. The
Lehman Mortgage Backed Securities Index is comprised of the mortgage-backed
pass through securities of Ginnie Mae, Fannie Mae and Freddie Mac. The Lehman
Asset Backed Index is comprised of debt securities rated investment grade or
higher that are backed by credit card, auto and home equity loans. The since
inception performance of the index is calculated from 3/31/92.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses 0.32%
Total Annual Fund Operating Expenses 0.97%
Waiver of Fund Expenses(2) (0.17)%
NET EXPENSES(2) 0.80%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.80%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $82
3 years $292
5 years $519
10 years $1,172
4 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
CAPITAL GROWTH FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Capital Growth Fund's objective is long-term growth of capital. Effective April
1, 2002, Capital Growth Fund's objective is to maximize long-term returns.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Capital Growth Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that have market capitalizations of at
least $5 billion at the time of purchase. The advisor will select companies that
it believes exhibit the potential for superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Effective April 1, 2002, the advisor will no longer utilize the following
tax-efficient strategies in seeking to achieve the fund's objective.
The advisor seeks to achieve high after-tax returns by balancing investment
considerations and tax considerations. The fund seeks to achieve returns
primarily in the form of price appreciation (which is not subject to current
tax) and to minimize income distributions and distributions of realized
short-term gains (taxed as ordinary income). Among the main strategies used in
the tax-efficient management of the fund are the following:
o investing primarily in lower-yielding growth stocks to minimize taxable
dividend income.
o employing a long-term, low turnover approach to investing.
o attempting to avoid net realized short-term gains.
o selling stocks trading below cost to realize losses (when appropriate)
in order to offset realized capital gains that would otherwise have to
be distributed to shareholders.
o selling the highest-cost shares when selling appreciated stocks, in
order to minimize realized capital gains.
o selectively using tax-advantaged hedging techniques as an alternative
to taxable sales (including derivative instruments such as purchased
put options, equity collars, equity swaps, covered short sales, and
stock index futures contracts).
As a result of its tax-efficient strategy, the fund can generally be expected to
distribute a smaller percentage of returns each year than most other equity
mutual funds. There can be no assurance, however, that taxable distributions can
always be avoided.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table compares the fund's performance over different time
periods to that of the fund's benchmark index, which is a broad measure of
market performance. The fund's performance reflects fund expenses; the benchmark
is unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
5 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
CAPITAL GROWTH FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR GRAPH]
28.22% 25.84% -11.86% -23.86%
- --------------------------------------------------------------------------------
1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 29.76%
Worst Quarter: Quarter ending March 31, 2001 (20.11)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Inception
- ------------------------------------------------------------------------------------
Capital Growth Fund 8/18/97 (23.86)% 3.07%
- ------------------------------------------------------------------------------------
Russell 1000 Growth Index(2) (20.42)% 4.59%
- ------------------------------------------------------------------------------------
Standard & Poor's/BARRA 500 Growth Index(3) (12.70)% 7.13%
- ------------------------------------------------------------------------------------
(1)On 9/24/01, the Capital Growth Fund became the successor by merger to the
Firstar Large Cap Growth Fund, a series of Firstar Funds, Inc. Prior to the
merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Large Cap Growth
Fund. The Firstar Large Cap Growth Fund was organized on 12/11/00 and, prior
to that, was a separate series of Firstar Stellar Funds, Inc.
(2)The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500 Composite
Index and the Standard & Poor's/BARRA 500 Growth Index as benchmarks. Going
forward, the fund will use the Russell 1000 Growth Index as a comparison,
because its composition better matches the fund's investment objectives and
strategies. The since inception performance of the index is calculated from
8/31/97.
(3)The Standard & Poor's/BARRA 500 Growth Index is an unmanaged market
capitalization weighted index comprised of the stocks in the Standard &
Poor's 500 Composite Index with the highest valuations and, in the adviser's
view, the greatest growth opportunities. The since inception performance of
the index is calculated from 8/31/97.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses 0.34%
Total Annual Fund Operating Expenses 0.99%
Waiver of Fund Expenses(2) (0.09)%
NET EXPENSES(2) 0.90%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.90%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $92
3 years $306
5 years $538
10 years $1,204
6 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
EQUITY INCOME FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Equity Income Fund's objective is long-term growth of capital and income.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Equity Income Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in equity securities of companies which the fund's investment advisor
believes are characterized by:
o the ability to pay above average dividends.
o the ability to finance expected growth.
o strong management.
The fund will attempt to maintain a dividend that will grow quickly enough to
keep pace with inflation. As a result, higher-yielding equity securities will
generally represent the core holdings of the fund. However, the fund also may
invest in lower-yielding, higher growth equity securities if the advisor
believes they will help balance the portfolio. The fund's equity securities
include common stocks and preferred stocks, and corporate debt securities which
are convertible into common stocks. All securities held by the fund will provide
current income at the time of purchase.
The fund invests up to 20% of its total assets in convertible debt securities in
pursuit of both long-term growth of capital and income. The securities'
conversion features provide long-term growth potential, while interest payments
on the securities provide income. The fund may invest in convertible debt
securities without regard to their ratings, and therefore may hold convertible
debt securities which are rated lower than investment grade.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
INTEREST RATE RISK. Debt securities typically decrease in value when interest
rates rise. This risk is usually greater for longer-term debt securities.
CREDIT RISK. An issuer of debt securities may not make timely principal or
interest payments on its securities, or the other party to a contract may
default on its obligations.
RISKS OF NON-INVESTMENT GRADE SECURITIES. The fund may invest up to 20% of its
total assets in securities which are rated lower than investment grade. These
securities, which are commonly called "high-yield" securities or "junk bonds,"
generally have more volatile prices and carry more risk to principal than
investment grade securities. High-yield securities may be more susceptible to
real or perceived adverse economic conditions than investment grade securities.
In addition, the secondary trading market may be less liquid.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table compares the fund's performance over different time
periods to that of the fund's benchmark indices, which are broad measures of
market performance. The fund's performance reflects fund expenses; the
benchmarks are unmanaged, have no expenses and are unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these waivers were not in place,
the fund's performance would be reduced.
7 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
EQUITY INCOME FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR
[BAR CHART]
23.00% 20.28% 27.72% 16.22% 4.21% 12.63% -4.25%
- --------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending June 30, 1997 11.99%
Worst Quarter: Quarter ending September 30, 1999 (8.59)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/00 Date One Year Five Years Inception
- -------------------------------------------------------------------------------------------
Equity Income Fund 8/2/94 (4.25)% 10.78% 13.07%
- -------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(1) (11.88)% 10.70% 14.75%
- -------------------------------------------------------------------------------------------
Lehman Gov't/Credit Bond Index(2) 8.48% 7.36% 7.75%
- -------------------------------------------------------------------------------------------
(1)An unmanaged index of large-capitalization stocks. The since inception
performance of the index is calculated from 8/31/94.
(2)An unmanaged index of Treasury securities, other securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities, and
investment grade corporate debt securities. The since inception performance
of the index is calculated from 8/31/94.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses 0.30%
Total Annual Fund Operating Expenses 0.95%
Waiver of Fund Expenses(2) (0.05)%
NET EXPENSES(2) 0.90%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.90%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $92
3 years $298
5 years $520
10 years $1,161
8 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
GROWTH & INCOME FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Growth & Income Fund's objective is long-term growth of capital and income.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Growth & Income Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in equity securities of companies which the fund's investment advisor
believes are characterized by:
o the ability to grow dividends at an above average rate.
o the ability to finance expected growth.
o strong management.
The fund will attempt to maintain a dividend that will grow quickly enough to
keep pace with inflation. As a result, higher-yielding equity securities will
generally represent the core holdings of the fund. However, the fund also may
invest in lower-yielding paying securities if the advisor believes they will
help balance the portfolio. The fund's equity securities include common stocks
and preferred stocks, and corporate debt securities which are convertible into
common stocks. All securities held by the fund will provide current income at
the time of purchase.
The fund invests up to 20% of its total assets in convertible debt securities in
pursuit of both long-term growth of capital and income. The securities'
conversion features provide long-term growth potential, while interest payments
on the securities provide income. The fund may invest in convertible debt
securities without regard to their ratings, and therefore may hold convertible
debt securities which are rated lower than investment grade.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
INTEREST RATE RISK. Debt securities typically decrease in value when interest
rates rise. This risk is usually greater for longer-term debt securities.
CREDIT RISK. An issuer of debt securities may not make timely principal or
interest payments on its securities, or the other party to a contract may
default on its obligations.
RISKS OF NON-INVESTMENT GRADE SECURITIES. The fund may invest up to 20% of its
total assets in securities which are rated lower than investment grade. These
securities, which are commonly called "high-yield" securities or "junk bonds,"
generally have more volatile prices and carry more risk to principal than
investment grade securities. High-yield securities may be more susceptible to
real or perceived adverse economic conditions than investment grade securities.
In addition, the secondary trading market may be less liquid.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table compares the fund's performance over different time
periods to that of the fund's benchmark index, which is a broad measure of
market performance. The fund's performance reflects fund expenses; the
benchmarks are unmanaged, have no expenses and are unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
9 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
GROWTH & INCOME FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
5.48% 6.64% 0.14% 34.83% 25.03% 33.54% 22.77% 3.01% 5.73% -16.18%
- --------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 17.77%
Worst Quarter: Quarter ending September 30, 2001 (14.80)%
AVERAGE ANNUAL TOTAL RETURNS Inception
AS OF 12/31/01(1) Date One Year Five Years Ten Years
- --------------------------------------------------------------------------------------------------
Growth & Income Fund 12/29/89 (16.18)% 8.40% 11.01%
- --------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% 10.70% 12.93%
- --------------------------------------------------------------------------------------------------
(1)On 9/24/01, the Growth & Income Fund became the successor by merger to the
Firstar Growth & Income Fund, a series of Firstar Funds, Inc. Prior to the
merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Growth & Income
Fund.
(2)An unmanaged index of large-capitalization stocks.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses 0.29%
Total Annual Fund Operating Expenses 0.94%
Waiver of Fund Expenses(2) (0.04)%
NET EXPENSES(2) 0.90%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.90%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $92
3 years $295
5 years $516
10 years $1,151
10 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
LARGE CAP CORE FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Large Cap Core Fund's objective is long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Large Cap Core Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that have market capitalizations of at
least $3 billion at the time of purchase. The advisor will select companies that
it believes exhibit the potential for superior growth based on factors such as:
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table compares the fund's performance over different time
periods to that of the fund's benchmark index, which is a broad measure of
market performance. The fund's performance reflects fund expenses; the benchmark
is unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
11 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
LARGE CAP CORE FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
9.98% -5.34% 30.03% 18.15% 22.91% 30.46% 14.29% -1.22% -22.21%
- --------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 24.04%
Worst Quarter: Quarter ending September 30, 2001 (17.48)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Five Years Inception
- --------------------------------------------------------------------------------------------
Large Cap Core Fund 12/29/92 (22.21)% 7.09% 9.49%
- --------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% 10.70% 13.54%
- --------------------------------------------------------------------------------------------
(1)On 9/24/01, the Large Cap Core Fund became the successor by merger to the
Firstar Large Cap Core Equity Fund, a series of Firstar Funds, Inc. Prior to
the merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Large Cap Core
Equity Fund.
(2)An unmanaged index of large capitalization stocks. The since inception
performance of the index is calculated from 12/31/92.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
NONE
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE
OR REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses 0.30%
Total Annual Fund Operating Expenses 0.95%
Waiver of Fund Expenses(2) (0.05)%
NET EXPENSES(2) 0.90%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.90%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $92
3 years $298
5 years $520
10 years $1,161
12 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Large Cap Growth Fund's objective is long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Large Cap Growth Fund invests primarily (at
least 80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that have market capitalizations of at
least $5 billion at the time of purchase. The advisor will select companies that
it believes exhibit the potential for superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table compares the fund's performance over different time
periods to that of the fund's benchmark index, which is a broad measure of
market performance. The fund's performance reflects fund expenses; the benchmark
is unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these waivers were not in place,
the fund's performance would be reduced.
13 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
LARGE CAP GROWTH FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR
[BAR CHART]
32.78% 23.23% 21.61% 24.05% 38.04% -17.40% -31.64%
- --------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1999 22.71%
Worst Quarter: Quarter ending March 31, 2001 (25.29)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01 Date One Year Five Years Inception
- ------------------------------------------------------------------------------------------
Large Cap Growth Fund 8/2/94 (31.64)% 3.29% 9.85%
- ------------------------------------------------------------------------------------------
Russell 1000 Growth Index(1) (20.42)% 8.27% 13.29%
- ------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% 10.70% 14.91%
- ------------------------------------------------------------------------------------------
(1)The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500 Composite
Index as a benchmark. Going forward, the fund will use the Russell 1000
Growth Index as a comparison, because its composition better matches the
fund's investment objectives and strategies. The since inception performance
of the index is calculated from 8/31/94.
(2)An unmanaged index of large-capitalization stocks. The since inception
performance of the index is calculated from 8/31/94.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses 0.29%
Total Annual Fund Operating Expenses 0.94%
Waiver of Fund Expenses(2) (0.04)%
NET EXPENSES(2) 0.90%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.90%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $92
3 years $295
5 years $516
10 years $1,151
14 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Large Cap Value Fund's primary objective is capital appreciation. Current income
is a secondary objective of the fund.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Large Cap Value Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that cover a broad range of industries
and that have market capitalizations of at least $5 billion at the time of
purchase. In selecting stocks, the fund's advisor invests in securities that it
believes:
o are undervalued relative to other securities in the same industry or
market.
o exhibit good or improving fundamentals.
o exhibit an identifiable catalyst that could close the gap between
market value and fair value over the next one to two years.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, value stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table compares the fund's performance over different time
periods to that of the fund's benchmark index, which is a broad measure of
market performance. The fund's performance reflects fund expenses; the benchmark
is unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these waivers were not in place,
the fund's performance would be reduced.
15 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
LARGE CAP VALUE FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR
[BAR CHART]
32.23% 29.47% 22.80% 9.99% 8.20% 0.46% -7.71%
- --------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 16.64%
Worst Quarter: Quarter ending September 30, 1998 (13.85)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01 Date One Year Five Years Inception
- ------------------------------------------------------------------------------------------
Large Cap Value Fund 2/4/94 (7.71)% 6.27% 11.50%
- ------------------------------------------------------------------------------------------
Russell 1000 Value Index(1) (5.59)% 11.13% 13.99%
- ------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% 10.70% 14.19%
- ------------------------------------------------------------------------------------------
(1)The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.
Russell 1000 companies include the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard and Poor's 500
Composite Index as a benchmark. Going forward, the fund will use the Russell
1000 Value Index as a comparison, because its composition better matches the
fund's investment objectives and strategies. The since inception performance
of the index is calculated from 2/28/94.
(2)An unmanaged index of large-capitalization stocks. The since inception
performance of the index is calculated from 2/28/94.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses 0.30%
Total Annual Fund Operating Expenses 0.95%
Waiver of Fund Expenses(2) (0.05)%
NET EXPENSES(2) 0.90%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.90%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $92
3 years $298
5 years $520
10 years $1,161
16 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
RELATIVE VALUE FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Relative Value Fund's objective is to maximize after-tax total return from
capital appreciation plus income. Effective April 1, 2002, Relative Value Fund's
objective is to maximize total return from capital appreciation plus income.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, the fund invests primarily (at least 80% of its
net assets, plus the amount of any borrowings for investment purposes) in common
stocks.
The advisor selects companies that it believes represent the best values within
each industry sector as indicated by the following characteristics and which are
undervalued relative to the stocks comprising the Russell 1000 Index.
o price/earning ratios.
o book value.
o assets to liabilities ratio.
The advisor selects securities and attempts to maintain an acceptable level of
risk largely through the use of automated quantitative models, together with
economic forecasts and assessments of the risk and volatility of the company's
industry. The advisor assesses the earnings and dividend growth prospects of the
various companies' stocks and then considers the risk and volatility of the
companies' industries. The advisor also considers other factors such as product
position or market share.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Effective April 1, 2002, the advisor will no longer utilize the following
tax-efficient strategies in seeking to achieve the fund's objective.
The advisor seeks to achieve high after-tax returns by balancing investment
considerations and tax considerations. The fund seeks to achieve returns
primarily in the form of price appreciation (which is not subject to current
tax) and to moderate amount of dividend income. Among the main strategies used
in the tax-efficient management of the fund are the following:
o employing a long-term, low turnover approach to investing.
o attempting to avoid net realized short-term gains (taxed as ordinary
income).
o selling stocks trading below cost to realize losses (when appropriate).
o selecting tax-favored share lots when selling appreciated stocks.
o selectively using tax-advantaged hedging techniques as an alternative
to taxable sales (including derivative instruments such as purchased
put options, equity collars, equity swaps, covered short sales, and
stock index futures contracts).
As a result of its tax-efficient strategy, the fund can generally be expected to
distribute a smaller percentage of returns each year than most other equity
mutual funds. There can be no assurance, however, that taxable distributions can
always be avoided.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table compares the fund's performance over different time
periods to that of the fund's benchmark index, which is a broad measure of
market performance. The fund's performance reflects fund expenses; the benchmark
is unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
17 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Fund Summaries
RELATIVE VALUE FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
18.50% 7.42% -2.89% -5.14%
- --------------------------------------------------------------------------------
1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 21.37%
Worst Quarter: Quarter ending September 30, 2001 (12.22)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Inception
- -------------------------------------------------------------------------------------
Relative Value Fund 8/18/97 (5.14)% 5.33%
- -------------------------------------------------------------------------------------
Russell 1000 Value Index(2) (5.59)% 7.88%
- -------------------------------------------------------------------------------------
Standard & Poor's/BARRA 500 Value Index(3) (11.68)% 6.42%
- -------------------------------------------------------------------------------------
(1)On 9/24/01, the Relative Value Fund became the successor by merger to the
Firstar Relative Value Fund, a series of Firstar Funds, Inc. Prior to the
merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Relative Value
Fund. The Firstar Relative Value Fund was organized on 12/11/00 and, prior to
that was a separate series of Firstar Stellar Funds, Inc.
(2)The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.
Russell 1000 companies include the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500 Composite
Index and the Standard & Poor's/BARRA 500 Value Index as benchmarks. Going
forward, the fund will use the Russell 1000 Value Index as a comparison,
because its composition better matches the fund's investment objective and
strategies. The since inception performance of the index is calculated from
8/31/97.
(3)The Standard & Poor's/BARRA 500 Value Index is an unmanaged capitalization
weighted index consisting of approximately 50% of the market capitalization
of the Standard & Poor's 500 Composite Index with low price-to-book ratios.
The since inception performance of the index is calculated from 8/31/97.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses 0.30%
Total Annual Fund Operating Expenses 0.95%
Waiver of Fund Expenses(2) (0.05)%
NET EXPENSES(2) 0.90%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.90%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $92
3 years $298
5 years $520
10 years $1,161
18 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Policies & Services
BUYING AND SELLING SHARES
- --------------------------------------------------------------------------------
MULTIPLE CLASS INFORMATION
The funds offer five different classes of shares. This prospectus offers Class Y
shares that are sold through banks and other financial institutions that have
entered into sales agreements with the funds' distributor. Class Y shares are
available to certain accounts for which the financial institution acts in a
fiduciary, agency, or custodial capacity, such as certain trust accounts and
investment advisory accounts. Class Y shares are typically held in an omnibus
account with the transfer agent. While there is no initial or deferred sales
charge on your purchase of Class Y shares, your investment professional or
financial institution may receive a commission of up to 1.25% on your purchase.
To find out whether you may purchase Class Y shares, contact your financial
institution.
Class A, Class B, Class C and Class S shares of the funds are available through
separate prospectuses. There are differences among the fees and expenses for
each of the five classes. The difference in the fee structures between the
classes is the result of their separate arrangements for shareholder and
distribution services and not the result of any difference in amounts charged by
the investment advisor for core investment advisory services. Accordingly, the
core investment advisory expenses do not vary by class. Different fees and
expenses will affect performance.
The following describes the features of each class:
o Class A shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 0.25%.
o Class B shares are sold to the public with a contingent deferred sales
charge (CDSC) and annual distribution and service (12b-1) fees of
1.00%.
o Class C shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 1.00%
(may be subject to a CDSC).
o Class S shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class S
shares are sold without a sales charge or distribution fee, but with an
annual shareholder servicing fee of 0.25%.
o Class Y shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class Y
shares are sold without a sales charge or distribution fee.
THIS PROSPECTUS AND THE RELATED STATEMENT OF ADDITIONAL INFORMATION DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SHARES IN THE
FUNDS, NOR SHALL ANY SUCH SHARES BE OFFERED OR SOLD TO ANY PERSON IN ANY
JURISDICTION IN WHICH AN OFFER, SOLICITATION, PURCHASE OR SALE WOULD BE UNLAWFUL
UNDER THE SECURITIES LAWS OF SUCH JURISDICTION.
- --------------------------------------------------------------------------------
CALCULATING YOUR SHARE PRICE
Your purchase price will be equal to the fund's net asset value (NAV) per share,
which is generally calculated as of the close of regular trading on the New York
Stock Exchange (usually 3 p.m. Central time) every day the exchange is open.
A fund's NAV is equal to the market value of its investments and other assets,
less any liabilities, divided by the number of fund shares. If market prices are
not readily available for an investment or if the advisor believes they are
unreliable, fair value prices may be determined in good faith using methods
approved by the funds' board of directors.
- --------------------------------------------------------------------------------
HOW TO BUY AND SELL SHARES
You may purchase or sell shares by calling your financial institution. When
purchasing shares, payment must be made by wire transfer, which can be arranged
by your financial institution. Shares may be purchased or sold on days when the
New York Stock Exchange is open. Wire federal funds as follows:
U.S. Bank National Association
ABA Number: 0420-00013
Account Number: 112-952-137
Credit to: First American (NAME OF FUND, INVESTOR NAME AND INVESTOR ACCOUNT #)
You may sell your shares on any day when the New York Stock Exchange is open.
Purchase orders and redemption requests must be received by your financial
institution by the time specified by the institution to be assured same day
processing. In order for shares to be purchased at that day's price, the funds
must receive your purchase order by 3:00 p.m. Central time. In order for shares
to be sold at that day's price, the funds must receive your redemption request
by 3:00 p.m. Central time. It is the responsibility of your financial
institution to promptly transmit orders to the funds. Purchase orders and
redemption requests may be restricted in the event of an early or unscheduled
close of the New York Stock Exchange.
If the funds receive your redemption request by 3:00 p.m. Central time, payment
of your redemption proceeds will ordinarily be made by wire on the next business
day. It is possible, however, that payment could be delayed by up to seven days.
To minimize the effect of large redemption requests, each fund reserves the
right to fulfill these redemption requests by distributing readily marketable
securities in the fund's portfolio, rather than paying you in cash. See
"Policies & Services -- Managing Your Investment, Redemption In Kind."
19 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Policies & Services
BUYING AND SELLING SHARES CONTINUED
- --------------------------------------------------------------------------------
HOW TO EXCHANGE SHARES
If your investment goals or your financial needs change, you may exchange your
shares for Class Y shares of another First American fund. Exchanges are made at
the net asset value per share of each fund at the time of the exchange. There is
no fee to exchange shares. If you are no longer eligible to hold Class Y shares,
for example, if you decide to discontinue your fiduciary, agency, or custodian
account, you may exchange your shares for Class A shares at net asset value.
Class A shares currently have higher expenses than Class Y shares.
To exchange your shares, call your financial institution. In order for your
shares to be exchanged the same day, you must call your financial institution by
the time specified by the institution and your exchange order must be received
by the funds by 3:00 p.m. Central time. It is the responsibility of your
financial institution to promptly transmit your exchange order to the funds.
Before exchanging into any fund, be sure to read its prospectus carefully. A
fund may change or cancel its exchange policies at any time. You will be
notified of any changes. The funds have the right to limit exchanges to four
times per year.
- --------------------------------------------------------------------------------
REDEMPTION IN KIND
Generally, proceeds from redemption requests will be paid in cash. However, to
minimize the effect of large redemption requests on a fund and its remaining
shareholders, each fund reserves the right to pay part or all of the proceeds
from a redemption request in a proportionate share of readily marketable
securities in the fund instead of cash. In selecting securities for a redemption
in kind, the advisor will consider the best interests of the fund and the
remaining fund shareholders, and will value these securities in accordance with
the pricing methods employed to calculate the fund's net asset value per share.
If you receive redemption proceeds in kind, you should expect to incur
transaction costs upon disposition of the securities received in the redemption.
20 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Policies & Services
MANAGING YOUR INVESTMENT
- --------------------------------------------------------------------------------
STAYING INFORMED
SHAREHOLDER REPORTS. Shareholder reports are mailed twice a year, in November
and May. They include financial statements and performance information, and on
an annual basis, a message from your portfolio managers and the auditors'
report.
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailings to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call Investor Services at 800 677-FUND.
STATEMENTS AND CONFIRMATIONS. Statements summarizing activity in your account
are mailed quarterly. Confirmations are mailed following each purchase or sale
of fund shares. Generally, a fund does not send statements to individuals who
have their shares held in an omnibus account.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
Dividends from a fund's net investment income are declared and paid monthly. Any
capital gains are distributed at least once each year.
On the ex-dividend date for a distribution, a fund's share price is reduced by
the amount of the distribution. If you buy shares just before the ex-dividend
date, in effect, you "buy the dividend." You will pay the full price for the
shares and then receive a portion of that price back as a taxable distribution.
Dividend and capital gain distributions will be reinvested in additional shares
of the fund paying the distribution, unless you request that distributions be
reinvested in another First American fund or paid in cash. This request may be
made on your new account form or by contacting your financial institution. If
you request that your distributions be paid in cash but those distributions
cannot be delivered because of an incorrect mailing address, the undelivered
distributions and all future distributions will be reinvested in fund shares at
the current NAV.
- --------------------------------------------------------------------------------
TAXES
Some of the tax consequences of investing in the funds are discussed below. More
information about taxes is in the Statement of Additional Information. However,
because everyone's tax situation is unique, always consult your tax professional
about federal, state, and local tax consequences.
TAXES ON DISTRIBUTIONS. Each fund pays its shareholders dividends from its net
investment income and any net capital gains that it has realized. For most
investors, fund dividends and distributions are considered taxable whether they
are reinvested or taken in cash (unless your investment is in an IRA or other
tax-advantaged account).
Dividends from a fund's net investment income and short-term capital gains are
taxable as ordinary income. Distributions of a fund's long-term capital gains
are taxable as long-term gains, regardless of how long you have held your
shares. Because of their investment objectives and strategies, distributions for
Capital Growth Fund, Large Cap Core Fund, Large Cap Growth Fund, Large Cap Value
Fund and Relative Value Fund are expected to consist primarily of capital gains.
TAXES ON TRANSACTIONS. The sale of fund shares, or the exchange of one fund's
shares for shares of another fund, will be a taxable event and may result in a
capital gain or loss. The gain or loss will be considered long-term if you have
held your shares for more than one year. A gain or loss on shares held for one
year or less is considered short-term and is taxed at the same rates as ordinary
income.
If in redemption of his or her shares a shareholder receives a distribution of
readily marketable securities instead of cash, the shareholder will be treated
as receiving an amount equal to the fair market value of the securities at the
time of the distribution for purposes of determining capital gain or loss on the
redemption, and will also acquire a basis in the shares for federal income tax
purposes equal to their fair market value.
The exchange of one class of shares for another class of shares in the same fund
will not be taxable.
TAX MANAGED STRATEGY. As a result of their tax-efficient strategies, Capital
Growth Fund and Relative Value Fund can generally be expected to distribute a
smaller percentage of returns each year than most other equity mutual funds.
There can be no assurance, however, that taxable distributions can always be
avoided. These tax-efficient strategies will not be in effect after April 1,
2002.
21 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Additional Information
MANAGEMENT
U.S. Bancorp Asset Management, Inc., is the funds' investment advisor. U.S.
Bancorp Asset Management provides investment management services to individuals
and institutions, including corporations, foundations, pensions and retirement
plans. As of September 30, 2001, U.S. Bancorp Asset Management and its
affiliates had more than $114 billion in assets under management, including
investment company assets of more than $51 billion. As investment advisor, U.S.
Bancorp Asset Management manages the funds' business and investment activities,
subject to the authority of the funds' board of directors.
Each fund pays the investment advisor a monthly fee for providing investment
advisory services. The table below reflects investment advisory fees paid to the
investment advisor, after taking into account any fee waivers, for the funds'
most recently completed fiscal year.(1)
Advisory fee
as a % of
average daily
net assets
- --------------------------------------------------------------------------------
BALANCED FUND 0.68%
CAPITAL GROWTH FUND(2) 0.83%
EQUITY INCOME FUND 0.55%
GROWTH & INCOME FUND(2) 0.72%
LARGE CAP CORE FUND(2) 0.71%
LARGE CAP GROWTH FUND 0.61%
LARGE CAP VALUE FUND 0.60%
RELATIVE VALUE FUND(2) 0.74%
- --------------------------------------------------------------------------------
(1)Prior to May 2, 2001, First American Asset Management (FAAM), a division of
U.S. Bank National Association, served as investment advisor to Balanced
Fund, Equity Income Fund, Large Cap Growth Fund and Large Cap Value Fund;
Firstar Investment Research & Management Company LLC (FIRMCO), an affiliate
of FAAM, served as investment advisor to Capital Growth Fund, Growth & Income
Fund, Large Cap Core Fund and Relative Value Fund. On May 2, 2001, FAAM and
FIRMCO combined advisory operations to form U.S. Bancorp Asset Management,
Inc. The investment advisory fees paid by each fund to U.S. Bancorp Asset
Management did not change as a result of the combination.
(2)On September 24, 2001, Capital Growth Fund, Growth & Income Fund, Large Cap
Core Fund and Relative Value Fund became the successors by merger to Firstar
Large Cap Growth Fund, Firstar Growth & Income Fund, Firstar Large Cap Core
Fund and Firstar Relative Value Fund, respectively. The fiscal year end for
the Firstar funds was October 31; Capital Growth Fund, Growth & Income Fund,
Large Cap Core Fund and Relative Value Fund each has a fiscal year end of
September 30. Information presented in the table has been annualized for the
eleven-month fiscal period ended September 30, 2001.
DIRECT CORRESPONDENCE TO:
First American Funds
P.O. Box 1330
Minneapolis, Minnesota 55440-1330
INVESTMENT ADVISOR
U.S. Bancorp Asset Management, Inc.
800 Nicollet Mall
Minneapolis, Minnesota 55402
DISTRIBUTOR
Quasar Distributors, LLC
615 E. Michigan Street
Milwaukee, WI 53202
ADDITIONAL COMPENSATION
U.S. Bancorp Asset Management and other affiliates of U.S. Bancorp may act as
fiduciary with respect to plans subject to the Employee Retirement Income
Security Act of 1974 (ERISA) and other trust and agency accounts that invest in
the funds. As described above, U.S. Bancorp Asset Management receives
compensation for acting as the funds' investment advisor. U.S. Bancorp Asset
Management and its affiliates also receive compensation in connection with the
following:
CUSTODY SERVICES. U.S. Bank National Association (U.S. Bank) provides or
compensates others to provide custody services to the funds. U.S. Bank is paid
monthly fees equal, on an annual basis, to 0.01% of a fund's average daily net
assets. In addition, U.S. Bank is reimbursed for its out-of-pocket expenses
incurred while providing custody services to the funds.
ADMINISTRATION SERVICES. U.S. Bancorp Asset Management and its affiliate, U.S.
Bancorp Fund Services, LLC (Co-Administrators), provide or compensate others to
provide administrative services to the First American family of funds. These
services include general administrative and accounting services, transfer agency
and dividend disbursing services, blue sky services, and shareholder services.
With respect to the First American open-end mutual funds, the Co-Administrators
receive total fees on an annual basis, of up to 0.25% of the aggregate average
daily net assets of First American Investment Funds, Inc., First American
Strategy Funds, Inc. and First American Insurance Portfolios, Inc., and of up to
0.20% of the aggregate average daily net assets of First American Funds, Inc.
The funds also pay the Co-Administrators fees based upon the number of funds and
accounts maintained. In addition, the Co-Administrators are reimbursed for their
out-of-pocket expenses incurred while providing administration services to the
funds.
DISTRIBUTION SERVICES. Quasar Distributors, LLC, an affiliate of U.S. Bancorp
Asset Management, serves as distributor of the funds and receives out of pocket
expenses incurred while providing distribution and other sub-administrative
services for the funds.
SECURITIES LENDING SERVICES. In connection with lending their portfolio
securities, the funds pay administrative and custodial fees to U.S. Bancorp
Asset Management which are equal to 40% of the funds' income from these
securities lending transactions.
BROKERAGE TRANSACTIONS. When purchasing and selling portfolio securities for the
funds, the funds' investment advisor may place trades through its affiliates,
U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., which will
earn commissions on these transactions.
SHAREHOLDER SERVICING FEES. To the extent that fund shares are held through U.S.
Bancorp Asset Management, U.S. Bank or their broker-dealer affiliates, U.S.
Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., those entities
may receive shareholder servicing fees from the funds' distributor.
PORTFOLIO MANAGEMENT
Each fund's investments are managed by a team of persons associated with U.S.
Bancorp Asset Management.
22 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Additional Information
MORE ABOUT THE FUNDS
- --------------------------------------------------------------------------------
OBJECTIVES
The funds' objectives, which are described in the "Fund Summaries" section, may
be changed without shareholder approval. If a fund's objectives change, you will
be notified at least 60 days in advance. Please remember: There is no guarantee
that any fund will achieve its objectives.
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
The funds' main investment strategies are discussed in the "Fund Summaries"
section. These are the strategies that the funds' investment advisor believes
are most likely to be important in trying to achieve the funds' objectives. You
should be aware that each fund may also use strategies and invest in securities
that are not described in this prospectus, but that are described in the
Statement of Additional Information (SAI). For a copy of the SAI, call Investor
Services at 800 677-FUND.
TEMPORARY INVESTMENTS. In an attempt to respond to adverse market, economic,
political, or other conditions, each fund may temporarily invest without limit
in cash and in U.S. dollar-denominated high-quality money market instruments and
other short-term securities, including money market funds advised by the funds'
advisor. Being invested in these securities may keep a fund from participating
in a market upswing and prevent the fund from achieving its investment
objectives.
EFFECTIVE DURATION. Balanced Fund normally attempts to maintain an average
effective duration of three to eight years for the debt securities portion of
its portfolio. Effective duration, one measure of interest rate risk, measures
how much the value of a security is expected to change with a given change in
interest rates. The longer a security's effective duration, the more sensitive
its price to changes in interest rates. For example, if interest rates were to
increase by one percentage point, the market value of a bond with an effective
duration of five years would decrease by 5%, with all other factors being
constant. However, all other factors are rarely constant. Effective duration is
based on assumptions and subject to a number of limitations. It is most useful
when interest rate changes are small, rapid and occur equally in short-term and
long-term securities. In addition, it is difficult to calculate precisely for
bonds with prepayment options, such as mortgage-and asset-backed securities,
because the calculation requires assumptions about prepayment rates.
EFFECTIVE MATURITY. Balanced Fund normally attempts to maintain a weighted
average effective maturity for the debt securities in its portfolio of 15 years
or less. Effective maturity differs from actual stated or final maturity, which
may be substantially longer. In calculating effective maturity, the advisor
estimates the effect of expected principal payments and call provisions on
securities held in the portfolio. Effective maturity provides the advisor with a
better estimate of interest rate risk under normal market conditions, but may
underestimate interest rate risk in an environment of adverse (rising) interest
rates.
PORTFOLIO TURNOVER. Portfolio managers for the funds may trade securities
frequently, resulting, from time to time, in an annual portfolio turnover rate
of over 100%. Trading of securities may produce capital gains, which are taxable
to shareholders when distributed. Active trading may also increase the amount of
commissions or mark-ups to broker-dealers that the fund pays when it buys and
sells securities. The "Financial Highlights" section of this prospectus shows
each fund's historical portfolio turnover rate.
- --------------------------------------------------------------------------------
RISKS
The main risks of investing in the funds are summarized in the "Fund Summaries"
section. More information about fund risks is presented below.
MARKET RISK. All stocks are subject to price movements due to changes in general
economic conditions, the level of prevailing interest rates, or investor
perceptions of the market. Prices also are affected by the outlook for overall
corporate profitability.
SECTOR RISK. The stocks of companies within specific industries or sectors of
the economy can periodically perform differently than the overall stock market.
This can be due to changes in such things as the regulatory or competitive
environment or to changes in investor perceptions of a particular industry or
sector.
COMPANY RISK. Individual stocks can perform differently than the overall market.
This may be a result of specific factors such as changes in corporate
profitability due to the success or failure of specific products or management
strategies, or it may be due to changes in investor perceptions regarding a
company.
FOREIGN SECURITY RISK. Each fund may invest up to 25% of its total assets (25%
of the equity portion of its portfolio for Balanced Fund) in securities of
foreign issuers which are either listed on a United States stock exchange or
represented by American Depositary Receipts. In addition, Balanced Fund may
invest up to 15% of the debt portion of its portfolio in foreign securities
payable in United States dollars. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers. For certain foreign
countries, political or social instability, or diplomatic developments could
adversely affect the securities. There is also the risk of loss due to
governmental actions such as a change in tax statutes or the modification of
individual property rights. In addition, individual foreign economies may differ
favorably or unfavorably from the U.S. economy.
RISKS OF ACTIVE MANAGEMENT. Each fund is actively managed and its performance
therefore will reflect in part the advisor's ability to make investment
decisions which are suited to achieving the fund's investment objectives. Due to
their
23 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Additional Information
MORE ABOUT THE FUNDS CONTINUED
active management, the funds could underperform other mutual funds with similar
investment objectives.
RISKS OF SECURITIES LENDING. When a fund loans its portfolio securities, it will
receive collateral equal to at least 100% of the value of the loaned securities.
Nevertheless, the fund risks a delay in the recovery of the loaned securities,
or even the loss of rights in the collateral deposited by the borrower if the
borrower should fail financially. To reduce these risks, the funds enter into
loan arrangements only with institutions which the funds' advisor has determined
are creditworthy under guidelines established by the funds' board of directors.
RISKS OF DERIVATIVE INSTRUMENTS. The use of derivative instruments exposes a
fund to additional risks and transaction costs. Risks inherent in the use of
derivative instruments include: the risk that securities prices will not move in
the direction that the advisor anticipates; an imperfect correlation between the
price of derivative instruments and movements in the prices of the securities
being hedged; the possible absence of liquid secondary market for any particular
instrument and possible exchange imposed price fluctuation limits, either of
which may make it difficult or impossible to close out a position when desired;
leverage risk, which is the risk that adverse price movements in an instrument
can result in a loss substantially greater than the fund's initial investment in
that instrument; and, particularly, in the case of privately negotiated
instruments, the risk that the counterparty will fail to perform its
obligations, which could leave the fund worse off than if it had not entered
into the position. If a fund uses derivative instruments and the advisor's
judgment proves incorrect, the fund's performance could be worse than if it had
not used these instruments.
- --------------------------------------------------------------------------------
ADDITIONAL RISKS OF BALANCED FUND, EQUITY INCOME FUND AND GROWTH & INCOME FUND
INTEREST RATE RISK. Debt securities in Balanced Fund, Equity Income Fund and
Growth & Income Fund will fluctuate in value with changes in interest rates. In
general, debt securities will increase in value when interest rates fall and
decrease in value when interest rates rise. Longer-term debt securities are
generally more sensitive to interest rate changes.
CREDIT RISK. Balanced Fund, Equity Income Fund and Growth & Income Fund are
subject to the risk that the issuers of debt securities held by a fund will not
make payments on the securities. There is also the risk that an issuer could
suffer adverse changes in financial condition that could lower the credit
quality of a security. This could lead to greater volatility in the price of the
security and in shares of the fund. Also, a change in the credit quality rating
of a bond could affect the bond's liquidity and make it more difficult for the
fund to sell.
Balanced Fund attempts to minimize credit risk by investing in securities
considered at least investment grade at the time of purchase. However, all of
these securities, especially those in the lower investment grade rating
categories, have credit risk. In adverse economic or other circumstances,
issuers of these lower rated securities are more likely to have difficulty
making principal and interest payments than issuers of higher rated securities.
When Balanced Fund purchases unrated securities, it will depend on the advisor's
analysis of credit risk more heavily than usual.
As discussed in the "Fund Summaries" section, Equity Income Fund and Growth &
Income Fund invest in convertible debt securities that are rated below
investment grade and are therefore subject to additional credit risk.
- --------------------------------------------------------------------------------
ADDITIONAL RISKS OF BALANCED FUND
CALL RISK. Many corporate bonds may be redeemed at the option of the issuer, or
"called," before their stated maturity date. In general, an issuer will call its
bonds if they can be refinanced by issuing new bonds which bear a lower interest
rate. Balanced Fund is subject to the possibility that during periods of falling
interest rates, a bond issuer will call its high-yielding bonds. The fund would
then be forced to invest the unanticipated proceeds at lower interest rates,
resulting in a decline in the fund's income.
EXTENSION RISK. Mortgage-backed securities are secured by and payable from pools
of mortgage loans. Similarly, asset-backed securities are supported by
obligations such as automobile loans or home equity loans. These mortgages and
other obligations generally can be prepaid at any time without penalty. As a
result, mortgage- and asset-backed securities are subject to extension risk,
which is the risk that rising interest rates could cause the mortgages or other
obligations underlying the securities to be prepaid more slowly than expected,
resulting in slower prepayments of the securities. This would, in effect,
convert a short- or medium-duration mortgage- or asset-backed security into a
longer-duration security, increasing its sensitivity to interest rate changes
and causing its price to decline.
PREPAYMENT RISK. Mortgage- and asset-backed securities also are subject to
prepayment risk, which is the risk that falling interest rates could cause
prepayments of the securities to occur more quickly than expected. This occurs
because, as interest rates fall, more homeowners refinance the mortgages
underlying mortgage-related securities or prepay the debt obligations underlying
asset-backed securities. Balanced Fund must reinvest the prepayments at a time
when interest rates are falling, reducing the income of the fund. In addition,
when interest rates fall, prices on mortgage- and asset-backed securities may
not rise as much as for other types of comparable debt securities because
investors may anticipate an increase in prepayments.
24 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Additional Information
MORE ABOUT THE FUNDS CONTINUED
RISKS OF DOLLAR ROLL TRANSACTIONS. In a dollar roll transaction, Balanced Fund
sells mortgage-backed securities for delivery in the current month while
contracting with the same party to repurchase similar securities at a future
date. Because the fund gives up the right to receive principal and interest paid
on the securities sold, a mortgage dollar roll transaction will diminish the
investment performance of the fund unless the difference between the price
received for the securities sold and the price to be paid for the securities to
be purchased in the future, plus any fee income received, exceeds any income,
principal payments and appreciation on the securities sold as part of the
mortgage dollar roll. Whether mortgage dollar rolls will benefit Balanced Fund
may depend upon the advisor's ability to predict mortgage prepayments and
interest rates. In addition, the use of mortgage dollar rolls by the fund
increases the amount of the fund's assets that are subject to market risk, which
could increase the volatility of the price of the fund's shares.
25 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Additional Information
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The tables that follow present performance information about the Class Y shares
of each fund. This information is intended to help you understand each fund's
financial performance for the past five years or, if shorter, the period of
operations for the fund or class of shares. Some of this information reflects
financial results for a single fund share. Total returns in the tables represent
the rate that you would have earned or lost on an investment in the fund,
assuming you reinvested all of your dividends and distributions.
The financial highlights for the Balanced Fund as set forth herein include the
historical financial highlights of the Firstar Balanced Growth Fund. The assets
of the Firstar Fund were acquired by the First American Balanced Fund on
September 24, 2001. In connection with such acquisition, Firstar Institutional
Class shares were exchanged for Class Y shares of the First American Fund.
Historical per-share amounts have been adjusted to reflect the conversion ratios
utilized for the merger of the Balanced Fund and Firstar Balanced Growth Fund.
Firstar Balanced Growth Fund is the accounting survivor.
The financial highlights for the Capital Growth Fund as set forth herein include
the historical financial highlights of the Firstar Large Cap Growth Fund. The
assets of the Firstar Fund were acquired by the First American Capital Growth
Fund on September 24, 2001. In connection with such acquisition, Firstar Class
Institutional shares were exchanged for Class Y shares of the First American
Fund.
The financial highlights for the Growth & Income Fund as set forth herein
include the historical financial highlights of the Firstar Growth & Income Fund.
The assets of the Firstar Fund were acquired by the First American Growth &
Income Fund on September 24, 2001. In connection with such acquisition, Firstar
Institutional Class shares were exchanged for Class Y shares of the First
American Fund.
The financial highlights for the Large Cap Core Fund as set forth herein include
the historical financial highlights of the Firstar Large Cap Core Equity Fund.
The assets of the Firstar Fund were acquired by the First American Large Cap
Core Fund on September 24, 2001. In connection with such acquisition, Firstar
Institutional Class shares were exchanged for Class Y shares of the First
American Fund.
The financial highlights for the Relative Value Fund as set forth herein include
the historical financial highlights of the Firstar Relative Value Fund. The
assets of the Firstar Fund were acquired by the First American Relative Value
Fund on September 24, 2001. In connection with such acquisition, Firstar
Institutional Class shares were exchanged for Class Y shares of the First
American Fund.
The information for Equity Income Fund, Large Cap Growth Fund and Large Cap
Value Fund for the fiscal years ended September 30, 2001, September 30, 2000,
and September 30, 1999, has been derived from the financial statements audited
by Ernst & Young LLP, independent auditors, whose report, along with the funds'
financial statements, is included in the funds' annual report, which is
available upon request. The information for the fiscal years ended on or before
September 30, 1998, has been audited by other auditors.
The information for Balanced Fund, Capital Growth Fund, Growth & Income Fund,
Large Cap Core Fund, and Relative Value Fund for the fiscal period ended
September 30, 2001 has been derived from the financial statements audited by
Ernst & Young LLP, independent auditors, whose report, along with the funds'
financial statements, is included in the funds' annual report, which is
available upon request. The information for the fiscal periods ended on or
before October 31, 2000, has been audited by other auditors.
26 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
BALANCED FUND
Fiscal period
ended
September 30, Fiscal year ended October 31,
2001(1),(2) 2000 1999 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 13.87 $ 12.43 $ 12.32 $ 12.59 $ 11.55
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Income 0.16 0.26 0.24 0.26 0.27
Net Gains (Losses) on Investments
(both realized and unrealized) (2.20) 2.13 0.49 0.77 1.73
-------- -------- -------- -------- --------
Total From Investment Operations (2.04) 2.39 0.73 1.03 2.00
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) (0.23) (0.26) (0.23) (0.27) (0.27)
Distributions (from capital gains) (2.07) (0.69) (0.39) (1.03) (0.69)
-------- -------- -------- -------- --------
Total Distributions (2.30) (0.95) (0.62) (1.30) (0.96)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 9.53 $ 13.87 $ 12.43 $ 12.32 $ 12.59
======== ======== ======== ======== ========
Total Return(3) (16.84)% 19.94% 5.87% 8.83% 18.39%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $375,983 $163,158 $180,737 $188,123 $164,382
Ratio of Expenses to Average Net Assets 0.97% 0.97% 0.93% 0.75% 0.75%
Ratio of Net Income to Average Net Assets 2.21% 1.91% 1.84% 2.16% 2.31%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.04% 1.03% 1.00% 0.99% 1.00%
Ratio of Net Income to Average Net Assets (excluding waivers) 2.14% 1.85% 1.77% 1.92% 2.06%
Portfolio Turnover Rate 54% 79% 69% 56% 70%
- --------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
CAPITAL GROWTH FUND
Fiscal period Fiscal period
ended ended
September 30, October 31, Fiscal period ended November 30,
2001(1) 2000(2) 1999 1998 1997(3)
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 26.01 $ 23.90 $ 19.51 $ 17.18 $ 16.46
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Income (Loss) (0.05) (0.03) 0.07 0.06 0.03
Net Gains (Losses) on Investments
(both realized and unrealized) (10.48) 2.14 4.83 3.30 0.73
-------- -------- -------- -------- --------
Total From Investment Operations (10.53) 2.11 4.90 3.36 0.76
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) -- -- (0.06) (0.07) (0.04)
Distributions (from capital gains) (0.71) -- (0.45) (0.96) --
-------- -------- -------- -------- --------
Total Distributions (0.71) -- (0.51) (1.03) (0.04)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 14.77 $ 26.01 $ 23.90 $ 19.51 $ 17.18
======== ======== ======== ======== ========
Total Return(4) (41.46)% 8.83% 25.61% 20.91% 4.59%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $131,961 $239,576 $186,177 $121,475 $109,087
Ratio of Expenses to Average Net Assets 1.14% 1.13% 1.11% 1.09% 1.06%
Ratio of Net Income (Loss) to Average Net Assets (0.27)% (0.15)% 0.17% 0.37% 0.68%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.26% 1.23% 1.27% 1.29% 1.26%
Ratio of Net Income (Loss) to Average Net Assets
(excluding waivers) (0.39)% (0.25)% 0.01% 0.17% 0.48%
Portfolio Turnover Rate 38% 35% 28% 48% 60%
- --------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Effective in 2000, the Fund's fiscal year end was changed to October 31 from
November 30. All ratios for the period have been annualized, except total
return.
(3)Commenced operations on August 18, 1997. All ratios for the period have been
annualized, except total return.
(4)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
27 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
EQUITY INCOME FUND
Fiscal year ended September 30,
2001(1) 2000 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 16.37 $ 16.00 $ 15.74 $ 15.70 $ 12.66
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Income 0.33 0.32 0.40 0.46 0.43
Net Gains (Losses) on Investments
(both realized and unrealized) (0.76) 1.47 1.17 0.88 3.40
-------- -------- -------- -------- --------
Total From Investment Operations (0.43) 1.79 1.57 1.34 3.83
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) (0.35) (0.32) (0.41) (0.45) (0.44)
Distributions (from capital gains) (3.39) (1.10) (0.90) (0.85) (0.35)
-------- -------- -------- -------- --------
Total Distributions (3.74) (1.42) (1.31) (1.30) (0.79)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 12.20 $ 16.37 $ 16.00 $ 15.74 $ 15.70
======== ======== ======== ======== ========
Total Return(2) (3.71)% 11.46% 10.10% 8.85% 31.45%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $267,361 $275,436 $350,775 $359,588 $369,919
Ratio of Expenses to Average Net Assets 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of Net Income to Average Net Assets 2.21% 1.99% 2.38% 2.81% 3.12%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.90% 0.89% 0.88% 0.87% 0.92%
Ratio of Net Income to Average Net Assets (excluding waivers) 2.06% 1.85% 2.25% 2.69% 2.95%
Portfolio Turnover Rate 33% 36% 35% 14% 39%
- ----------------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
GROWTH & INCOME FUND
Fiscal period
ended
September 30, Fiscal year ended October 31,
2001(1),(2) 2000(2) 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 47.47 $ 46.12 $ 44.46 $ 39.28 $ 33.08
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Income 0.20 0.26 0.41 0.47 0.46
Net Gains (Losses) on Investments
(both realized and unrealized) (11.49) 5.21 4.92 6.55 8.94
-------- -------- -------- -------- --------
Total From Investment Operations (11.29) 5.47 5.33 7.02 9.40
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) (0.21) (0.22) (0.46) (0.45) (0.47)
Distributions (from capital gains) (4.76) (3.90) (3.21) (1.39) (2.73)
-------- -------- -------- -------- --------
Total Distributions (4.97) (4.12) (3.67) (1.84) (3.20)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 31.21 $ 47.47 $ 46.12 $ 44.46 $ 39.28
======== ======== ======== ======== ========
Total Return(3) (26.15)% 12.83% 12.04% 18.35% 30.83%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $497,781 $524,828 $531,257 $474,603 $366,020
Ratio of Expenses to Average Net Assets 0.93% 0.94% 0.92% 0.87% 0.87%
Ratio of Net Income to Average Net Assets 0.59% 0.56% 0.99% 1.11% 1.34%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.96% 0.95% 0.93% 0.94% 0.94%
Ratio of Net Income to Average Net Assets (excluding waivers) 0.56% 0.55% 0.98% 1.04% 1.27%
Portfolio Turnover Rate 51% 89% 62% 49% 31%
- ----------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
28 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
LARGE CAP CORE FUND
Fiscal period
ended
September 30, Fiscal year ended October 31,
2001(1),(2) 2000(2) 1999(2) 1998(2) 1997
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 44.00 $ 38.42 $ 36.05 $ 35.48 $ 30.43
---------- ---------- ---------- ---------- ----------
Investment Operations:
Net Investment Income (Loss) 0.06 (0.04) (0.02) 0.07 0.04
Net Gains (Losses) on Investments
(both realized and unrealized) (14.25) 7.65 6.47 5.70 6.31
---------- ---------- ---------- ---------- ----------
Total From Investment Operations (14.19) 7.61 6.45 5.77 6.35
---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends (from net investment income) -- -- (0.04) (0.03) --
Distributions (from capital gains) (4.88) (2.03) (4.04) (5.17) (1.30)
---------- ---------- ---------- ---------- ----------
Total Distributions (4.88) (2.03) (4.08) (5.20) (1.30)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 24.93 $ 44.00 $ 38.42 $ 36.05 $ 35.48
========== ========== ========== ========== ==========
Total Return(3) (35.70)% 20.24% 18.18% 18.89% 21.56%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 316,213 $ 339,166 $ 306,832 $ 197,798 $ 181,650
Ratio of Expenses to Average Net Assets 0.94% 0.95% 0.94% 0.89% 0.89%
Ratio of Net Income (Loss) to Average Net Assets 0.20% (0.10)% (0.06)% 0.20% 0.09%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.98% 0.96% 0.95% 0.96% 0.96%
Ratio of Net Income (Loss) to Average Net Assets
(excluding waivers) 0.16% (0.11)% (0.07)% 0.13% 0.02%
Portfolio Turnover Rate 40% 60% 59% 52% 62%
- -----------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
LARGE CAP GROWTH FUND
Fiscal year ended September 30,
2001(1) 2000 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 21.73 $ 19.84 $ 16.30 $ 17.64 $ 13.66
---------- ---------- ---------- ---------- ----------
Investment Operations:
Net Investment Income (Loss) (0.01) (0.04) 0.02 0.13 0.12
Net Gains (Losses) on Investments
(both realized and unrealized) (10.21) 4.91 5.46 0.02 4.26
---------- ---------- ---------- ---------- ----------
Total From Investment Operations (10.22) 4.87 5.48 0.15 4.38
---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends (from net investment income) -- -- (0.06) (0.13) (0.13)
Distributions (from capital gains) (2.07) (2.98) (1.88) (1.36) (0.27)
---------- ---------- ---------- ---------- ----------
Total Distributions (2.07) (2.98) (1.94) (1.49) (0.40)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 9.44 $ 21.73 $ 19.84 $ 16.30 $ 17.64
========== ========== ========== ========== ==========
Total Return(2) (51.31)% 26.13% 36.36% 1.07% 32.75%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 594,163 $1,112,122 $ 854,819 $ 680,143 $ 681,151
Ratio of Expenses to Average Net Assets 0.80% 0.80% 0.80% 0.80% 0.80%
Ratio of Net Income (Loss) to Average Net Assets (0.06)% (0.20)% 0.20% 0.82% 0.77%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.89% 0.89% 0.89% 0.86% 0.89%
Ratio of Net Income (Loss) to Average Net Assets
(excluding waivers) (0.15)% (0.29)% 0.11% 0.76% 0.68%
Portfolio Turnover Rate 77% 47% 57% 38% 34%
- -----------------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
29 PROSPECTUS - First American Large Cap Funds
Class Y Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
LARGE CAP VALUE FUND
Fiscal year ended September 30,
2001(1) 2000 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 20.64 $ 23.17 $ 22.42 $ 28.75 $ 22.60
---------- ---------- ---------- ---------- ----------
Investment Operations:
Net Investment Income 0.21 0.23 0.25 0.35 0.39
Net Gains (Losses) on Investments
(both realized and unrealized) (2.68) 0.21 4.46 (2.57) 7.90
---------- ---------- ---------- ---------- ----------
Total From Investment Operations (2.47) 0.44 4.71 (2.22) 8.29
---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends (from net investment income) (0.21) (0.22) (0.26) (0.35) (0.38)
Distributions (from capital gains) (1.94) (2.75) (3.70) (3.76) (1.76)
---------- ---------- ---------- ---------- ----------
Total Distributions (2.15) (2.97) (3.96) (4.11) (2.14)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 16.02 $ 20.64 $ 23.17 $ 22.42 $ 28.75
========== ========== ========== ========== ==========
Total Return(2) (13.53)% 1.17% 22.28% (8.47)% 39.13%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 970,190 $1,186,787 $1,343,207 $1,253,845 $1,095,262
Ratio of Expenses to Average Net Assets 0.80% 0.80% 0.80% 0.80% 0.80%
Ratio of Net Income (Loss) to Average Net Assets 1.13% (0.20)% 1.07% 1.40% 1.39%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.90% 0.88% 0.90% 0.88% 0.89%
Ratio of Net Income (Loss) to Average Net Assets
(excluding waivers) 1.03% (0.28)% 0.97% 1.32% 1.30%
Portfolio Turnover Rate 64% 68% 61% 74% 57%
- -----------------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
RELATIVE VALUE FUND
Fiscal period Fiscal period
ended ended
September 30, October 31, Fiscal period ended November 30,
2001(1),(2) 2000(3) 1999 1998 1997(4)
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 28.91 $ 29.12 $ 26.27 $ 23.49 $ 22.67
---------- ---------- ---------- ---------- ----------
Investment Operations:
Net Investment Income 0.27 0.26 0.23 0.18 0.08
Net Gains (Losses) on Investments
(both realized and unrealized) (4.56) (0.19) 2.96 3.65 0.81
---------- ---------- ---------- ---------- ----------
Total From Investment Operations (4.29) 0.07 3.19 3.83 0.89
---------- ---------- ---------- ---------- ----------
Less Distributions:
Dividends (from net investment income) (0.29) (0.28) (0.23) (0.23) (0.07)
Distributions (from capital gains) (0.21) -- (0.11) (0.82) --
---------- ---------- ---------- ---------- ----------
Total Distributions (0.50) (0.28) (0.34) (1.05) (0.07)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 24.12 $ 28.91 $ 29.12 $ 26.27 $ 23.49
========== ========== ========== ========== ==========
Total Return(5) (14.95)% 0.25% 12.20% 16.95% 3.93%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 344,495 $ 467,711 $ 466,203 $ 386,405 $ 312,056
Ratio of Expenses to Average Net Assets 0.97% 1.11% 1.05% 1.04% 1.00%
Ratio of Net Income to Average Net Assets 1.09% 1.00% 0.77% 0.95% 1.35%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.98% 1.21% 1.21% 1.24% 1.20%
Ratio of Net Income to Average Net Assets
(excluding waivers) 1.08% 0.90% 0.61% 0.75% 1.15%
Portfolio Turnover Rate 4% 7% 11% 26% 18%
- -----------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Effective in 2000, the Fund's fiscal year end was changed to October 31 from
November 30. All ratios for the period have been annualized, except total
return.
(4)Commenced operations on August 18, 1997. All ratios for the period have been
annualized, except total return.
(5)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
30 PROSPECTUS - First American Large Cap Funds
Class Y Shares
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
More information about the funds is available in the funds' Statement of
Additional Information and annual and semiannual reports.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more details about the funds and their policies. A current SAI
is on file with the Securities and Exchange Commission (SEC) and is incorporated
into this prospectus by reference (which means that it is legally considered
part of this prospectus).
- --------------------------------------------------------------------------------
ANNUAL AND SEMIANNUAL REPORTS
Additional information about the funds' investments is available in the funds'
annual and semiannual reports to shareholders. In the funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the funds' performance during their last fiscal year.
You can obtain a free copy of the funds' SAI and/or free copies of the funds'
most recent annual or semiannual reports by calling Investor Services at 800
677-FUND. The material you request will be sent by first-class mail or other
means designed to ensure equally prompt delivery, within three business days of
receipt of the request.
You can also obtain copies of this information, after paying a duplicating fee,
by electronic request at the following email address: publicinfo@sec.gov, or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. For
more information, call 1-202-942-8090.
Information about the funds is also available on the Internet. Text-only
versions of fund documents can be viewed online or downloaded from the EDGAR
Database on the SEC's Internet site at http://www.sec.gov.
FIRST AMERICAN FUNDS P.O. Box 1330, Minneapolis, MN 55440-1330
U.S. Bancorp Asset Management, Inc., serves as the investment advisor to the
First American Funds.
First American Funds are distributed by Quasar Distributors, LLC, which is
located in Milwaukee, WI 53202, and is an affiliate of the investment advisor.
PROLRGY 1/02
SEC file number: 811-05309
[LOGO] FIRST AMERICAN FUNDS(TM)
[LOGO] FIRST AMERICAN FUNDS(TM) JANUARY 28, 2002
PROSPECTUS
FIRST AMERICAN INVESTMENT FUNDS, INC.
ASSET CLASS -- STOCK FUNDS
LARGE CAP FUNDS
CLASS S SHARES
BALANCED FUND
CAPITAL GROWTH FUND
EQUITY INCOME FUND
GROWTH & INCOME FUND
LARGE CAP CORE FUND
LARGE CAP GROWTH FUND
LARGE CAP VALUE FUND
RELATIVE VALUE FUND
AS WITH ALL MUTUAL FUNDS, THE
SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THE
SHARES OF THESE FUNDS, OR DETERMINED
IF THE INFORMATION IN THIS
PROSPECTUS IS ACCURATE OR COMPLETE.
ANY STATEMENT TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Table of
CONTENTS
FUND SUMMARIES
- --------------------------------------------------------------------------------
Balanced Fund 2
- --------------------------------------------------------------------------------
Capital Growth Fund 5
- --------------------------------------------------------------------------------
Equity Income Fund 7
- --------------------------------------------------------------------------------
Growth & Income Fund 9
- --------------------------------------------------------------------------------
Large Cap Core Fund 11
- --------------------------------------------------------------------------------
Large Cap Growth Fund 13
- --------------------------------------------------------------------------------
Large Cap Value Fund 15
- --------------------------------------------------------------------------------
Relative Value Fund 17
- --------------------------------------------------------------------------------
POLICIES & SERVICES
- --------------------------------------------------------------------------------
Buying and Selling Shares 19
- --------------------------------------------------------------------------------
Managing Your Investment 21
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Management 22
- --------------------------------------------------------------------------------
More About The Funds 23
- --------------------------------------------------------------------------------
Financial Highlights 26
- --------------------------------------------------------------------------------
FOR MORE INFORMATION Back Cover
- --------------------------------------------------------------------------------
Fund Summaries
INTRODUCTION
This section of the prospectus describes the objectives of the First American
Large Cap Funds, summarizes the main investment strategies used by each fund in
trying to achieve its objectives, and highlights the risks involved with these
strategies. It also provides you with information about the performance, fees,
and expenses of the funds.
AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF U.S. BANK NATIONAL ASSOCIATION
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY.
1 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
BALANCED FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Balanced Fund's objective is to maximize total return (capital appreciation plus
income).
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Balanced Fund invests in a balanced portfolio of stocks and bonds. The mix of
securities will change based on existing and anticipated market conditions. Over
the long term, the fund's asset mix is likely to average approximately 60%
equity securities and 40% debt securities. Under normal market conditions, the
equity securities portion of the fund's portfolio will be invested primarily (at
least 80% of the net assets, plus the amount of any borrowings for investment
purposes) in common stocks that the advisor believes exhibit the potential for
superior growth based on factors such as:
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the equity portion of the fund may be invested in securities of
foreign issuers that are either listed on a U.S. stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Under normal market conditions, the debt securities portion of the fund's
portfolio will be comprised of securities such as: U.S. government securities
(securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities) including zero coupon bonds; mortgage- and asset-backed
securities; and corporate debt obligations.
In selecting debt securities for the fund, the advisor uses a "top-down"
approach, which begins with the formulation of a general economic outlook.
Following this, various sectors and industries are analyzed and selected for
investment. This is followed by the selection of individual securities.
The fund's debt securities will be rated investment grade at the time or
purchase or, if unrated, determined to be of comparable quality by the fund's
advisor. At least 65% of these securities will be either U.S. government
securities or securities that have received at least an A or equivalent rating.
The fund may invest up to 15% of the debt portion of its portfolio in foreign
securities payable in United States dollars. Under normal market conditions the
fund attempts to maintain a weighted average effective maturity for its
portfolio securities of 15 years or less and an average effective duration of
three to eight years. The fund's weighted average effective maturity and average
effective duration are measures of how the fund may react to interest rate
changes.
To generate additional income, the fund may invest up to 25% of total assets in
dollar roll transactions. In a dollar roll transaction, the fund sells
mortgage-backed securities for delivery in the current month while contracting
with the same party to repurchase similar securities at a future date.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, value stocks, growth stocks, and/or large-capitalization stocks may
underperform the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
INTEREST RATE RISK. Debt securities typically decrease in value when interest
rates rise. This risk is usually greater for longer-term debt securities. One
measure of interest rate risk is effective duration, explained in "More About
The Funds -- Investment Strategies".
INCOME RISK. The fund's income could decline due to falling market interest
rates.
CREDIT RISK. An issuer of debt securities may not make timely principal or
interest payments on its securities, or the other party to a contract may
default on its obligations.
CALL RISK. During periods of falling interest rates, a bond issuer may "call" --
or repay -- its high-yielding bonds before their maturity date. The fund would
then be forced to invest the unanticipated proceeds at lower interest rates,
resulting in a decline in the fund's income.
RISKS OF MORTGAGE- AND ASSET-BACKED SECURITIES. Falling interest rates could
cause faster than expected prepayments of the obligations underlying mortgage-
and asset-backed securities, which the fund would have to invest at lower
interest rates. On the other hand, rising interest rates could cause prepayments
of the obligations to decrease, extending the life of mortgage- and asset-backed
securities with lower interest rates.
RISKS OF DOLLAR ROLL TRANSACTIONS. The use of mortgage dollar rolls could
increase the volatility of the fund's share price. It could also diminish the
fund's investment performance if the advisor does not predict mortgage
prepayments and interest rates correctly.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
2 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
BALANCED FUND CONTINUED
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart is intended to show you how performance of the fund's shares has
varied from year to year. However, because Class S shares of the fund were first
offered in 2000, only one calendar year of information is available.
The table compares the fund's performance over different time periods to that of
the fund's benchmark index, which is a broad measure of market performance. The
fund's performance reflects fees and expenses; the benchmark is unmanaged, has
no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
3 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
BALANCED FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
-8.60%
- --------------------------------------------------------------------------------
2001
Best Quarter: Quarter ending December 31, 2001 7.48%
Worst Quarter: Quarter ending September 30, 2001 (10.02)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Inception
- -----------------------------------------------------------------------------
Balanced Fund 11/27/00 (8.60)% (6.97)%
- -----------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% (10.58)%
- -----------------------------------------------------------------------------
Lehman Aggregate Bond Index(3) 8.42% 9.57%
- --------------------------------------------------------------------------------
(1)On 9/24/01, First American Balanced Fund combined with Firstar Balanced
Growth Fund and Firstar Balanced Income Fund. Performance history prior to
9/24/01 is that of Firstar Balanced Growth Fund.
(2)An unmanaged index of large-capitalization stocks. The since inception
performance for the index is calculated from 11/30/00.
(3)An unmanaged index composed of the Lehman Government/Credit Bond Index, the
Lehman Mortgage Backed Securities Index and the Lehman Asset Backed
Securities Index. The Lehman Government/Credit Bond Index is comprised of
Treasury securities, other securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities, including U.S. agency
mortgage securities, and investment grade corporate debt securities. The
Lehman Mortgage Backed Securities Index is comprised of the mortgage-backed
pass through securities of Ginnie Mae, Fannie Mae and Freddie Mac. The Lehman
Asset Backed Index is comprised of debt securities rated investment grade or
higher that are backed by credit card, auto and home equity loans. The since
inception performance of the index is calculated from 11/30/00. Previously,
the fund used the Lehman Government/Credit Bond Index as a benchmark. Going
forward, the fund will use the Lehman Aggregate Bond Index as a comparison,
because its composition better matches the fund's investment objective and
strategies.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- --------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- --------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.32%
Total Annual Fund Operating Expenses 1.22%
Waiver of Fund Expenses(2) (0.17)%
NET EXPENSES(2) 1.05%
- --------------------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.05%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $107
3 years $370
5 years $653
10 years $1,460
4 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
CAPITAL GROWTH FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Capital Growth Fund's objective is long-term growth of capital. Effective April
1, 2002, Capital Growth Fund's objective is to maximize long-term returns.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Capital Growth Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that have market capitalizations of at
least $5 billion at the time of purchase. The advisor will select companies that
it believes exhibit the potential for superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Effective April 1, 2002, the advisor will no longer utilize the following
tax-efficient strategies in seeking to achieve the fund's objective.
The advisor seeks to achieve high after-tax returns by balancing investment
considerations and tax considerations. The fund seeks to achieve returns
primarily in the form of price appreciation (which is not subject to current
tax) and to minimize income distributions and distributions of realized
short-term gains (taxed as ordinary income). Among the main strategies used in
the tax-efficient management of the fund are the following:
o investing primarily in lower-yielding growth stocks to minimize taxable
dividend income.
o employing a long-term, low turnover approach to investing.
o attempting to avoid net realized short-term gains.
o selling stocks trading below cost to realize losses (when appropriate)
in order to offset realized capital gains that would otherwise have to
be distributed to shareholders.
o selling the highest-cost shares when selling appreciated stocks, in
order to minimize realized capital gains.
o selectively using tax-advantaged hedging techniques as an alternative
to taxable sales (including derivative instruments such as purchased
put options, equity collars, equity swaps, covered short sales, and the
purchase or sale of stock index futures contracts).
As a result of its tax-efficient strategy, the fund can generally be expected to
distribute a smaller percentage of returns each year than most other equity
mutual funds. There can be no assurance, however, that taxable distributions can
always be avoided.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart is intended to show you how performance of the fund's shares has
varied from year to year. However, because Class S shares of the fund were first
offered in 2000, only one calendar year of information is available.
The table compares the fund's performance over different time periods to that of
the fund's benchmark index, which is a broad measure of market performance. The
fund's performance reflects fund expenses; the benchmark is unmanaged, has no
expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
5 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
CAPITAL GROWTH FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
-24.05%
- --------------------------------------------------------------------------------
2001
Best Quarter: Quarter ending December 31, 2001 12.66%
Worst Quarter: Quarter ending March 31, 2001 (20.15)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Inception
- -----------------------------------------------------------------------------------------------
Capital Growth Fund 12/11/00 (24.05)% (29.73)%
- -----------------------------------------------------------------------------------------------
Russell 1000 Growth Index(2) (20.42)% (20.42)%
- -----------------------------------------------------------------------------------------------
Standard & Poor's/BARRA 500 Growth Stock Index(3) (12.70)% (12.70)%
- -----------------------------------------------------------------------------------------------
(1)On 9/24/01, the Capital Growth Fund became the successor by merger to the
Firstar Large Cap Growth Fund, a series of Firstar Funds, Inc. Prior to the
merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Large Cap Growth
Fund. The Firstar Large Cap Growth Fund was organized on 12/11/00 and, prior
to that, was a separate series of Firstar Stellar Funds, Inc.
(2)The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500 Composite
Index and the Standard & Poor's/BARRA 500 Growth Index as benchmarks. Going
forward, the fund will use the Russell 1000 Growth Index as a comparison,
because its composition better matches the fund's investment objective and
strategies. The since inception performance of the indices is calculated from
12/31/00.
(3)The Standard & Poor's/BARRA 500 Growth Index is an unmanaged market
capitalization weighted index comprised of the stocks in the Standard &
Poor's 500 Composite Index with the highest valuations and, in the adviser's
view, the greatest growth opportunities. The since inception performance of
the indices is calculated from 12/31/00.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- ---------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- ---------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.34%
Total Annual Fund Operating Expenses 1.24%
Waiver of Fund Expenses(2) (0.09)%
NET EXPENSES(2) 1.15%
- ---------------------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $117
3 years $384
5 years $672
10 years $1,491
6 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
EQUITY INCOME FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Equity Income Fund's objective is long-term growth of capital and income.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Equity Income Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in equity securities of companies which the fund's investment advisor
believes are characterized by:
o the ability to pay above average dividends.
o the ability to finance expected growth.
o strong management.
The fund will attempt to maintain a dividend that will grow quickly enough to
keep pace with inflation. As a result, higher-yielding equity securities will
generally represent the core holdings of the fund. However, the fund also may
invest in lower-yielding, higher growth equity securities if the advisor
believes they will help balance the portfolio. The fund's equity securities
include common stocks and preferred stocks, and corporate debt securities which
are convertible into common stocks. All securities held by the fund will provide
current income at the time of purchase.
The fund invests up to 20% of its total assets in convertible debt securities in
pursuit of both long-term growth of capital and income. The securities'
conversion features provide long-term growth potential, while interest payments
on the securities provide income. The fund may invest in convertible debt
securities without regard to their ratings, and therefore may hold convertible
debt securities which are rated lower than investment grade.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
INTEREST RATE RISK. Debt securities typically decrease in value when interest
rates rise. This risk is usually greater for longer-term debt securities.
CREDIT RISK. An issuer of debt securities may not make timely principal or
interest payments on its securities, or the other party to a contract may
default on its obligations.
RISKS OF NON-INVESTMENT GRADE SECURITIES. The fund may invest up to 20% of its
total assets in securities which are rated lower than investment grade. These
securities, which are commonly called "high-yield" securities or "junk bonds,"
generally have more volatile prices and carry more risk to principal than
investment grade securities. High-yield securities may be more susceptible to
real or perceived adverse economic conditions than investment grade securities.
In addition, the secondary trading market may be less liquid.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund has varied from year to
year. The table compares the fund's performance over different time periods to
that of the fund's benchmark index, which is a broad measure of market
performance. The fund's performance reflects fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
Because Class S shares were not offered for a full calendar year, information in
the chart and the table is for the fund's Class A shares, which are offered
through another prospectus. The classes will have substantially similar returns
because they are invested in the same portfolio of securities and have similar
operating expenses.
7 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
EQUITY INCOME FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR (Class A)(1)
[BAR CHART]
4.70% 3.85% 22.73% 19.80% 27.53% 15.68% 3.86% 12.28% -4.37%
- ------------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending June 30, 1997 11.95%
Worst Quarter: Quarter ending September 30, 1999 (8.67)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Five Years Inception
- --------------------------------------------------------------------------------------------------
Equity Income Fund (Class A)(2) 12/18/92 (4.37)% 10.47% 11.34%
- --------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(3) (11.88)% 10.70% 13.53%
- --------------------------------------------------------------------------------------------------
Lehman Gov't/Credit Bond Index(4) 8.48% 7.36% 7.23%
- --------------------------------------------------------------------------------------------------
(1)Prior to 3/25/94, Boulevard Bank was the investment advisor of Equity Income
Fund.
(2)Class A share returns do not reflect the 5.50% front-end sales charge
normally imposed on those shares. Class S shares have no sales charge.
(3)An unmanaged index of large-capitalization stocks. The since inception
performance of the index is calculated from 12/31/92.
(4)An unmanaged index of Treasury securities, other securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities, and
investment grade corporate debt securities. The since inception performance
of the index is calculated from 12/31/92.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- ---------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- ---------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.30%
Total Annual Fund Operating Expenses 1.20%
Waiver of Fund Expenses(2) (0.05)%
NET EXPENSES(2) 1.15%
- ---------------------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $117
3 years $376
5 years $655
10 years $1,449
8 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
GROWTH & INCOME FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Growth & Income Fund's objective is long-term growth of capital and income.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Growth & Income Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in equity securities of companies which the fund's investment advisor
believes are characterized by:
o the ability to grow dividends at an above average rate.
o the ability to finance expected growth.
o strong management.
The fund will attempt to maintain a dividend that will grow quickly enough to
keep pace with inflation. As a result, higher-yielding equity securities will
generally represent the core holdings of the fund. However, the fund also may
invest in lower-yielding paying securities if the advisor believes they will
help balance the portfolio. The fund's equity securities include common stocks
and preferred stocks, and corporate debt securities which are convertible into
common stocks. All securities held by the fund will provide current income at
the time of purchase.
The fund invests up to 20% of its total assets in convertible debt securities in
pursuit of both long-term growth of capital and income. The securities'
conversion features provide long-term growth potential, while interest payments
on the securities provide income. The fund may invest in convertible debt
securities without regard to their ratings, and therefore may hold convertible
debt securities which are rated lower than investment grade.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
INTEREST RATE RISK. Debt securities typically decrease in value when interest
rates rise. This risk is usually greater for longer-term debt securities.
CREDIT RISK. An issuer of debt securities may not make timely principal or
interest payments on its securities, or the other party to a contract may
default on its obligations.
RISKS OF NON-INVESTMENT GRADE SECURITIES. The fund may invest up to 20% of its
total assets in securities which are rated lower than investment grade. These
securities, which are commonly called "high-yield" securities or "junk bonds,"
generally have more volatile prices and carry more risk to principal than
investment grade securities. High-yield securities may be more susceptible to
real or perceived adverse economic conditions than investment grade securities.
In addition, the secondary trading market may be less liquid.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart is intended to show you how performance of the fund's shares has
varied from year to year. However, because Class S shares of the fund were first
offered in 2000, only one calendar year of information is available.
The table compares the fund's performance over different time periods to that of
the fund's benchmark index, which is a broad measure of market performance. The
fund's performance reflects fund expenses; the benchmark is unmanaged, has no
expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
9 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
GROWTH & INCOME FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
-16.38%
- --------------------------------------------------------------------------------
2001
Best Quarter: Quarter ending December 31, 2001 9.08%
Worst Quarter: Quarter ending September 30, 2001 (14.86)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Inception
- -------------------------------------------------------------------------------------
Growth & Income Fund 11/27/00 (16.38)% (15.26)%
- -------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% (10.58)%
- -------------------------------------------------------------------------------------
(1)On 9/24/01, the Growth & Income Fund became the successor by merger to the
Firstar Growth & Income Fund, a series of Firstar Funds, Inc. Prior to the
merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Growth & Income
Fund.
(2)An unmanaged index of large capitalization stocks. The since inception
performance of the index is calculated from 11/30/00.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- ---------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- ---------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.29%
Total Annual Fund Operating Expenses 1.19%
Waiver of Fund Expenses(2) (0.04)%
NET EXPENSES(2) 1.15%
- ---------------------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $117
3 years $374
5 years $650
10 years $1,439
10 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
LARGE CAP CORE FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Large Cap Core Fund's objective is long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Large Cap Core Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that have market capitalizations of at
least $3 billion at the time of purchase. The advisor will select companies that
it believes exhibit the potential for superior growth based on factors such as:
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart is intended to show you how performance of the fund's shares has
varied from year to year. However, because Class S shares of the fund were first
offered in 2000, only one calendar year of information is available
The table compares the fund's performance over different time periods to that of
the fund's benchmark index, which is a broad measure of market performance. The
fund's performance reflects fund expenses; the benchmark is unmanaged, has no
expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
11 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
LARGE CAP CORE FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
-22.40%
- --------------------------------------------------------------------------------
2001
Best Quarter: Quarter ending December 31, 2001 11.43%
Worst Quarter: Quarter ending September 30, 2001 (17.50)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Inception
- -------------------------------------------------------------------------------------
Large Cap Core Fund 11/27/00 (22.40)% (21.66)%
- -------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(2) (11.88)% (10.62)%
- -------------------------------------------------------------------------------------
(1)On 9/24/01, the Large Cap Core Fund became the successor by merger to the
Firstar Large Cap Core Equity Fund, a series of Firstar Funds, Inc. Prior to
the merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Large Cap Core
Equity Fund. Prior to 1/10/95, the Firstar fund offered one class of shares
to investors without a distribution or shareholder servicing fee. Performance
presented prior to 1/10/95 does not reflect these fees.
(2)An unmanaged index of large capitalization stocks. The since inception
performance of the index is calculated from 11/30/00.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- ---------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- ---------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.30%
Total Annual Fund Operating Expenses 1.20%
Waiver of Fund Expenses(2) (0.05)%
NET EXPENSES(2) 1.15%
- ---------------------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $117
3 years $376
5 years $655
10 years $1,449
12 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Large Cap Growth Fund's objective is long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Large Cap Growth Fund invests primarily (at
least 80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that have market capitalizations of at
least $5 billion at the time of purchase. The advisor will select companies that
it believes exhibit the potential for superior growth based on factors such as:
o above average growth in revenue and earnings.
o strong competitive position.
o strong management.
o sound financial condition.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund has varied from year to
year. The table compares the fund's performance over different time periods to
that of the fund's benchmark index, which is a broad measure of market
performance. The fund's performance reflects fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
Because Class S shares were not offered for a full calendar year, information in
the chart and the table is for the fund's Class A shares, which are offered
through another prospectus. The classes will have substantially similar returns
because they are invested in the same portfolio of securities and have similar
operating expenses.
13 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
LARGE CAP GROWTH FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR (Class A)
[BAR CHART]
- -2.15% -1.00% 32.43% 22.93% 21.42% 23.56% 37.76% -17.64% -31.82%
- ---------------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1999 22.65%
Worst Quarter: Quarter ending March 31, 2001 (25.34)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01 Date One Year Five Years Inception
- --------------------------------------------------------------------------------------------------
Large Cap Growth Fund (Class A)(1) 12/18/92 (31.82)% 3.02% 6.64%
- --------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(2) (20.42)% 8.27% 11.46%
- --------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(3) (11.88)% 10.70% 13.53%
- --------------------------------------------------------------------------------------------------
(1)Class A share returns do not reflect the 5.50% front-end sales charge
normally imposed on those shares. Class S shares have no sales charge.
(2)The Russell 1000 Growth Index measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500 Composite
Index as a benchmark. Going forward, the fund will use the Russell 1000
Growth Index as a comparison, because its composition better matches the
fund's investment objective and strategies. The since inception performance
of the index is calculated from 12/31/92.
(3)An unmanaged index of large-capitalization stocks. The since inception
performance of the index is calculated from 12/31/92.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- ---------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- ---------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE) MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.29%
Total Annual Fund Operating Expenses 1.19%
Waiver of Fund Expenses(2) (0.04)%
NET EXPENSES(2) 1.15%
- ---------------------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $117
3 years $374
5 years $650
10 years $1,439
14 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Large Cap Value Fund's primary objective is capital appreciation. Current income
is a secondary objective of the fund.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Large Cap Value Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies that cover a broad range of industries
and that have market capitalizations of at least $5 billion at the time of
purchase. In selecting stocks, the fund's advisor invests in securities that it
believes:
o are undervalued relative to other securities in the same industry or
market.
o exhibit good or improving fundamentals.
o exhibit an identifiable catalyst that could close the gap between
market value and fair value over the next one to two years.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, value stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund has varied from year to
year. The table compares the fund's performance over different time periods to
that of the fund's benchmark index, which is a broad measure of market
performance. The fund's performance reflects fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
Because Class S shares were not offered for a full calendar year, information in
the chart and the table is for the fund's Class A shares, which are offered
through another prospectus. The classes will have substantially similar returns
because they are invested in the same portfolio of securities and have similar
operating expenses.
15 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
LARGE CAP VALUE FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR (Class A)
[BAR CHART]
7.98% 15.10% 4.12% 31.94% 29.10% 22.41% 9.71% 7.91% 0.17% -7.86%
- ------------------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1998 16.55%
Worst Quarter: Quarter ending September 30, 1998 (13.91)%
AVERAGE ANNUAL TOTAL RETURNS Inception
AS OF 12/31/01 Date One Year Five Years Ten Years
- ---------------------------------------------------------------------------------------------------
Large Cap Value Fund (Class A)(1) 12/22/87 (7.86)% 5.99% 11.42%
- ---------------------------------------------------------------------------------------------------
Russell 1000 Value Index(2) (5.59)% 11.13% 14.16%
- ---------------------------------------------------------------------------------------------------
Standard & Poor's 500 Composite Index(3) (11.88)% 10.70% 12.93%
- ---------------------------------------------------------------------------------------------------
(1)Class A share returns do not reflect the 5.50% front-end sales charge
normally imposed on those shares. Class S shares have no sales charge.
(2)The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.
Russell 1000 companies include the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard and Poor's 500
Composite Index as a benchmark. Going forward, the fund will use the Russell
1000 Value Index as a comparison, because its composition better matches the
fund's investment objective and strategies.
(3)An unmanaged index of large-capitalization stocks.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- ---------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- ---------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.30%
Total Annual Fund Operating Expenses 1.20%
Waiver of Fund Expenses(2) (0.05)%
NET EXPENSES(2) 1.15%
- ---------------------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $117
3 years $376
5 years $655
10 years $1,449
16 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
RELATIVE VALUE FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Relative Value Fund's primary objective is capital appreciation. Current income
is a secondary objective of the fund. Effective April 1, 2002, Relative Value
Fund's objective is to maximize total return from capital appreciation plus
income.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, the fund invests primarily (at least 80% of its
net assets, plus the amount of any borrowings for investment purposes) in common
stocks of companies that cover a broad range of industries and that have market
capitalizations of at least $5 billion at the time of purchase. In selecting
stocks, the fund's advisor invests in securities that it believes:
o are undervalued relative to other securities in the same industry or
market.
o exhibit good or improving fundamentals.
o exhibit an identifiable catalyst that could close the gap between
market value and fair value over the next one to two years.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Effective April 1, 2002, the advisor will no longer utilize the following
tax-efficient strategies in seeking to achieve the fund's objective.
The advisor seeks to achieve high after-tax returns by balancing investment
considerations and tax considerations. The fund seeks to achieve returns
primarily in the form of price appreciation (which is not subject to current
tax) and to a moderate amount of dividend income. Among the main strategies used
in the tax-efficient management of the fund are the following:
o employing a long-term, low turnover approach to investing.
o attempting to avoid net realized short-term gains (taxed as ordinary
income).
o selling stocks trading below cost to realize losses (when appropriate).
o selecting tax-favored share lots when selling appreciated stocks.
o selectively using tax-advantaged hedging techniques as an alternative
to taxable sales (including derivative instruments such as purchased
put options, equity collars, equity swaps, covered short sales, and
stock index futures contracts).
As a result of its tax-efficient strategy, the fund can generally be expected to
distribute a smaller percentage of returns each year than most other equity
mutual funds. There can be no assurance, however, that taxable distributions can
always be avoided.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
In addition, growth stocks and/or large-capitalization stocks may underperform
the market as a whole.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart is intended to show you how performance of the fund's shares has
varied from year to year. However, because Class S shares of the fund were first
offered in 2000, only one calendar year of information is available
The table compares the fund's performance over different time periods to that of
the fund's benchmark index, which is a broad measure of market performance. The
fund's performance reflects fund expenses; the benchmark is unmanaged, has no
expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
17 PROSPECTUS - First American Large Cap Funds
Class S Shares
Fund Summaries
RELATIVE VALUE FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
-5.37%
- --------------------------------------------------------------------------------
2001
Best Quarter: Quarter ending December 31, 2001 7.85%
Worst Quarter: Quarter ending September 30, 2001 (12.32)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Inception
- ---------------------------------------------------------------------------------------
Relative Value Fund 12/11/00 (5.37)% (6.35)%
- ---------------------------------------------------------------------------------------
Russell 1000 Value Index(2) (5.59)% (5.59)%
- ---------------------------------------------------------------------------------------
Standard & Poor's/BARRA 500 Value Index(3) (11.68)% (11.68)%
- ---------------------------------------------------------------------------------------
(1)On 9/24/01, the Relative Value Fund became the successor by merger to the
Firstar Relative Value Fund, a series of Firstar Funds, Inc. Prior to the
merger, the First American fund had no assets or liabilities. Performance
presented prior to 9/24/01 represents that of the Firstar Relative Value
Fund. The Firstar Relative Value Fund was organized on 12/11/00. Prior to
12/11/00, the fund was a separate series of Firstar Stellar Funds, Inc.
(2)The Russell 1000 Value Index measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth values.
Russell 1000 companies include the 1,000 largest companies in the Russell
3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures the
performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500 Composite
Index and the Standard & Poor's/BARRA 500 Value Index as benchmarks. Going
forward, the fund will use the Russell 1000 Value Index as a comparison,
because its composition better matches the fund's investment objective and
strategies. The since inception performance of the index is calculated from
12/31/00.
(3)The Standard & Poor's/BARRA 500 Value Index is an unmanaged capitalization
weighted index consisting of approximately 50% of the market capitalization
of the Standard & Poor's 500 Composite Index with low price-to-book ratios.
The since inception performance of the index is calculated from 12/31/00.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- ---------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- ---------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------
Management Fees 0.65%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.30%
Total Annual Fund Operating Expenses 1.20%
Waiver of Fund Expenses(2) (0.05)%
NET EXPENSES(2) 1.15%
- ---------------------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.15%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $117
3 years $376
5 years $655
10 years $1,449
18 PROSPECTUS - First American Large Cap Funds
Class S Shares
Policies & Services
BUYING AND SELLING SHARES
- --------------------------------------------------------------------------------
MULTIPLE CLASS INFORMATION
The funds offer five different classes of shares. This prospectus offers Class S
shares that are sold through banks and other financial institutions that have
entered into sales agreements with the funds' distributor. Class S shares are
available to certain accounts for which the financial institution acts in a
fiduciary, agency, or custodial capacity, such as certain trust accounts and
investment advisory accounts. Class S shares are typically held in an omnibus
account with the transfer agent. While there is no initial or deferred sales
charge on your purchase of Class S shares, there is an annual shareholder
servicing fee of 0.25% and your investment professional or financial institution
may receive a commission of up to 1.25% on your purchase. To find out whether
you may purchase Class S shares, contact your financial institution.
Class A, Class B, Class C and Class Y shares are available through separate
prospectuses. There are differences among the fees and expenses for each of the
five classes. The difference in the fee structures between the classes is the
result of their separate arrangements for shareholder and distribution services
and not the result of any difference in amounts charged by the investment
advisor for core investment advisory services. Accordingly, the core investment
advisory expenses do not vary by class. Different fees and expenses will affect
performance.
The following describes the features of each class:
o Class A shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 0.25%.
o Class B shares are sold to the public with a contingent deferred sales
charge (CDSC) and annual distribution and service (12b-1) fees of
1.00%.
o Class C shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 1.00%
(may be subject to a CDSC).
o Class S shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class S
shares are sold without a sales charge or distribution fee, but with an
annual shareholder servicing fee of 0.25%.
o Class Y shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class Y
shares are sold without a sales charge or distribution fee.
- --------------------------------------------------------------------------------
CALCULATING YOUR SHARE PRICE
Your purchase price will be equal to the fund's net asset value (NAV) per share,
which is generally calculated as of the close of regular trading on the New York
Stock Exchange (usually 3 p.m. Central time) every day the exchange is open.
A fund's NAV is equal to the market value of its investments and other assets,
less any liabilities, divided by the number of fund shares. If market prices are
not readily available for an investment or if the advisor believes they are
unreliable, fair value prices may be determined in good faith using methods
approved by the funds' board of directors.
- --------------------------------------------------------------------------------
HOW TO BUY AND SELL SHARES
You may purchase or sell shares by calling your financial institution. Shares
may be purchased or sold on any day when the New York Stock Exchange is open.
When purchasing shares, payment must be made by wire transfer, which can be
arranged by your financial institution. Wire federal funds as follows:
U.S. Bank National Association
ABA Number: 0420-00013
Account Number: 112-952-137
Credit to: First American (NAME OF FUND, INVESTOR NAME AND INVESTOR ACCOUNT #)
Purchase orders and redemption requests must be received by your financial
institution by the time specified by the institution to be assured same day
processing. In order for shares to be purchased at that day's price, the funds
must receive your purchase order by 3:00 p.m. Central time. In order for shares
to be sold at that day's price, the funds must receive your redemption request
by 3:00 p.m. Central time. It is the responsibility of your financial
institution to promptly transmit orders to the funds. Purchase orders and
redemption requests may be restricted in the event of an early or unscheduled
close of the New York Stock Exchange.
If the funds receive your redemption request by 3:00 p.m. Central time, payment
of your redemption proceeds will ordinarily be made by wire on the next business
day. It is possible, however, that payment could be delayed by up to seven days.
To minimize the effect of large redemption requests, each fund reserves the
right to fulfill these redemption requests by distributing readily marketable
securities in the fund's portfolio, rather than paying you in cash. See
"Policies & Services -- Managing Your Investment, Redemption In Kind."
19 PROSPECTUS - First American Large Cap Funds
Class S Shares
Policies & Services
BUYING AND SELLING SHARES CONTINUED
- --------------------------------------------------------------------------------
COMPENSATION PAID TO FINANCIAL INSTITUTIONS
The fund pays the distributor an annual shareholder servicing fee equal to 0.25%
of the fund's average daily net assets to compensate the distributor for
providing services to shareholders. The distributor may use this fee to
compensate your financial institution for providing ongoing services to your
account. The advisor, the administrator or the distributor may pay additional
fees to financial institutions, using their own assets, in exchange for sales
and/or administrative services performed on behalf of the financial
institution's customers.
- --------------------------------------------------------------------------------
HOW TO EXCHANGE SHARES
If your investment goals or your financial needs change, you may exchange your
shares for Class S shares of another First American fund. Exchanges are made at
the net asset value per share of each fund at the time of the exchange. There is
no fee to exchange shares. If you are no longer eligible to hold Class S shares,
for example, if you decide to discontinue your fiduciary, agency, or custodian
account, you may exchange your shares for Class A shares at net asset value.
To exchange your shares, call your financial institution. In order for your
shares to be exchanged the same day, you must call your financial institution by
the time specified by the institution and your exchange order must be received
by the funds by 3:00 p.m. Central time. It is the responsibility of your
financial institution to promptly transmit your exchange order to the funds.
Before exchanging into any fund, be sure to read its prospectus carefully. A
fund may change or cancel its exchange policies at any time. You will be
notified of any changes. The funds have the right to limit exchanges to four
times per year.
- --------------------------------------------------------------------------------
REDEMPTION IN KIND
Generally, proceeds from redemption requests will be paid in cash. However, to
minimize the effect of large redemption requests on a fund and its remaining
shareholders, each fund reserves the right to pay part or all of the proceeds
from a redemption request in a proportionate share of readily marketable
securities in the fund instead of cash. In selecting securities for a redemption
in kind, the advisor will consider the best interests of the fund and the
remaining fund shareholders, and will value these securities in accordance with
the pricing methods employed to calculate the fund's net asset value per share.
If you receive redemption proceeds in kind, you should expect to incur
transaction costs upon disposition of the securities received in the redemption.
20 PROSPECTUS - First American Large Cap Funds
Class S Shares
Policies & Services
MANAGING YOUR INVESTMENT
- --------------------------------------------------------------------------------
STAYING INFORMED
SHAREHOLDER REPORTS. Shareholder reports are mailed twice a year, in November
and May. They include financial statements and performance information, and on
an annual basis, a message from your portfolio managers and the auditors'
report.
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailings to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call Investor Services at 800 677-FUND.
STATEMENTS AND CONFIRMATIONS. Statements summarizing activity in your account
are mailed quarterly. Confirmations are mailed following each purchase or sale
of fund shares. Generally, a fund does not send statements to individuals who
have their shares held in an omnibus account.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
Dividends from a fund's net investment income are declared and paid monthly. Any
capital gains are distributed at least once each year.
On the ex-dividend date for a distribution, a fund's share price is reduced by
the amount of the distribution. If you buy shares just before the ex-dividend
date, in effect, you "buy the dividend." You will pay the full price for the
shares and then receive a portion of that price back as a taxable distribution.
Dividend and capital gain distributions will be reinvested in additional shares
of the fund paying the distribution, unless you request that distributions be
reinvested in another First American fund or paid in cash. This request may be
made on your new account form or by contacting your financial institution. If
you request that your distributions be paid in cash but those distributions
cannot be delivered because of an incorrect mailing address, the undelivered
distributions and all future distributions will be reinvested in fund shares.
- --------------------------------------------------------------------------------
TAXES
Some of the tax consequences of investing in the funds are discussed below. More
information about taxes is in the Statement of Additional Information. However,
because everyone's tax situation is unique, always consult your tax professional
about federal, state, and local tax consequences.
TAXES ON DISTRIBUTIONS. Each fund pays its shareholders dividends from its net
investment income and any net capital gains that it has realized. For most
investors, fund dividends and distributions are considered taxable whether they
are reinvested or taken in cash (unless your investment is in an IRA or other
tax-advantaged account).
Dividends from a fund's net investment income and short-term capital gains are
taxable as ordinary income. Distributions of a fund's long-term capital gains
are taxable as long-term gains, regardless of how long you have held your
shares. Because of their investment objectives and strategies, distributions for
Capital Growth Fund, Large Cap Core Fund, Large Cap Growth Fund, Large Cap Value
Fund and Relative Value Fund are expected to consist primarily of capital gains.
TAXES ON TRANSACTIONS. The sale of fund shares, or the exchange of one fund's
shares for shares of another fund, will be a taxable event and may result in a
capital gain or loss. The gain or loss will be considered long-term if you have
held your shares for more than one year. A gain or loss on shares held for one
year or less is considered short-term and is taxed at the same rates as ordinary
income.
If in redemption of his or her shares a shareholder receives a distribution of
readily marketable securities instead of cash, the shareholder will be treated
as receiving an amount equal to the fair market value of the securities at the
time of the distribution for purposes of determining capital gain or loss on the
redemption, and will also acquire a basis in the shares for federal income tax
purposes equal to their fair market value.
The exchange of one class of shares for another class of shares in the same fund
will not be taxable.
TAX MANAGED STRATEGY. As a result of their tax-efficient strategies, Capital
Growth Fund and Relative Value Fund can generally be expected to distribute a
smaller percentage of returns each year than most other equity mutual funds.
There can be no assurance, however, that taxable distributions can always be
avoided. These tax-efficient strategies will not be in effect after April 1,
2002.
21 PROSPECTUS - First American Large Cap Funds
Class S Shares
Additional Information
MANAGEMENT
U.S. Bancorp Asset Management, Inc., is the funds' investment advisor. U.S.
Bancorp Asset Management provides investment management services to individuals
and institutions, including corporations, foundations, pensions and retirement
plans. As of September 30, 2001, U.S. Bancorp Asset Management and its
affiliates had more than $114 billion in assets under management, including
investment company assets of more than $51 billion. As investment advisor, U.S.
Bancorp Asset Management manages the funds' business and investment activities,
subject to the authority of the funds' board of directors.
Each fund pays the investment advisor a monthly fee for providing investment
advisory services. The table below reflects investment advisory fees paid to the
investment advisor, after taking into account any fee waivers, for the funds'
most recently completed fiscal year.(1)
Advisory fee
as a % of
average daily
net assets
- ----------------------------------------------
Balanced Fund 0.68%
Capital Growth Fund(2) 0.83%
Equity Income Fund 0.55%
Growth & Income Fund(2) 0.72%
Large Cap Core Fund(2) 0.71%
Large Cap Growth Fund 0.61%
Large Cap Value Fund 0.60%
Relative Value Fund(2) 0.74%
- ----------------------------------------------
(1)Prior to May 2, 2001, First American Asset Management (FAAM), a division of
U.S. Bank National Association, served as investment advisor to Balanced
Fund, Equity Income Fund, Large Cap Growth Fund and Large Cap Value Fund;
Firstar Investment Research & Management Company LLC (FIRMCO), an affiliate
of FAAM, served as investment advisor to Capital Growth Fund, Growth & Income
Fund, Large Cap Core Fund and Relative Value Fund. On May 2, 2001, FAAM and
FIRMCO combined advisory operations to form U.S. Bancorp Asset Management,
Inc. The investment advisory fees paid by each fund to U.S. Bancorp Asset
Management did not change as a result of the combination.
(2)On September 24, 2001, Capital Growth Fund, Growth & Income Fund, Large Cap
Core Fund and Relative Value Fund became the successors by merger to Firstar
Large Cap Growth Fund, Firstar Growth & Income Fund, Firstar Large Cap Core
Fund and Firstar Relative Value Fund, respectively. The fiscal year end for
the Firstar funds was October 31; Capital Growth Fund, Growth & Income Fund,
Large Cap Core Fund and Relative Value Fund each has a fiscal year end of
September 30. Information presented in the table has been annualized for the
eleven-month fiscal period ended September 30, 2001.
DIRECT CORRESPONDENCE TO:
First American Funds
P.O. Box 1330
Minneapolis, Minnesota 55440-1330
INVESTMENT ADVISOR
U.S. Bancorp Asset Management, Inc.
800 Nicollet Mall
Minneapolis, Minnesota 55402
DISTRIBUTOR
Quasar Distributors, LLC
615 E. Michigan Street
Milwaukee, WI 53202
ADDITIONAL COMPENSATION
U.S. Bancorp Asset Management and other affiliates of U.S. Bancorp may act as
fiduciary with respect to plans subject to the Employee Retirement Income
Security Act of 1974 (ERISA) and other trust and agency accounts that invest in
the funds. As described above, U.S. Bancorp Asset Management receives
compensation for acting as the funds' investment advisor. U.S. Bancorp Asset
Management and its affiliates also receive compensation in connection with the
following:
CUSTODY SERVICES. U.S. Bank National Association (U.S. Bank) provides or
compensates others to provide custody services to the funds. U.S. Bank is paid
monthly fees equal, on an annual basis, to 0.01% of a fund's average daily net
assets. In addition, U.S. Bank is reimbursed for its out-of-pocket expenses
incurred while providing custody services to the funds.
ADMINISTRATION SERVICES. U.S. Bancorp Asset Management and its affiliate, U.S.
Bancorp Fund Services (Co-Administrators), provide or compensate others to
provide administrative services to the First American family of funds. These
services include general administrative and accounting services, transfer agency
and dividend disbursing services, blue sky services, and shareholder services.
With respect to the First American open-end mutual funds, the Co-Administrators
receive total fees on an annual basis, of up to 0.25% of the aggregate average
daily net assets of First American Investment Funds, Inc., First American
Strategy Funds, Inc. and First American Insurance Portfolios, Inc., and of up to
0.20% of the aggregate average daily net assets of First American Funds, Inc.
The funds also pay the Co-Administrators fees based upon the number of funds and
accounts maintained. In addition, the Co-Administrators are reimbursed for their
out-of-pocket expenses incurred while providing administration services to the
funds.
DISTRIBUTION SERVICES. Quasar Distributors, LLC, an affiliate of U.S. Bancorp
Asset Management, serves as distributor of the funds and receives out of pocket
expenses incurred while providing distribution and other sub-administrative
services for the funds.
SECURITIES LENDING SERVICES. In connection with lending their portfolio
securities, the funds pay administrative and custodial fees to U.S. Bancorp
Asset Management which are equal to 40% of the funds' income from these
securities lending transactions.
BROKERAGE TRANSACTIONS. When purchasing and selling portfolio securities for the
funds, the funds' investment advisor may place trades through its affiliates,
U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., which will
earn commissions on these transactions.
SHAREHOLDER SERVICING FEES. To the extent that fund shares are held through U.S.
Bancorp Asset Management, U.S. Bank or their broker-dealer affiliates, U.S.
Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., those entities
may receive shareholder servicing fees from the funds' distributor.
PORTFOLIO MANAGEMENT
Each fund's investments are managed by a team of persons associated with U.S.
Bancorp Asset Management.
22 PROSPECTUS - First American Large Cap Funds
Class S Shares
Additional Information
MORE ABOUT THE FUNDS
- --------------------------------------------------------------------------------
OBJECTIVES
The funds' objectives, which are described in the "Fund Summaries" section, may
be changed without shareholder approval. If a fund's objectives change, you will
be notified at least 60 days in advance. Please remember: There is no guarantee
that any fund will achieve its objectives.
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
The funds' main investment strategies are discussed in the "Fund Summaries"
section. These are the strategies that the funds' investment advisor believes
are most likely to be important in trying to achieve the funds' objectives. You
should be aware that each fund may also use strategies and invest in securities
that are not described in this prospectus, but that are described in the
Statement of Additional Information (SAI). For a copy of the SAI, call Investor
Services at 800 677-FUND.
TEMPORARY INVESTMENTS. In an attempt to respond to adverse market, economic,
political, or other conditions, each fund may temporarily invest without limit
in cash and in U.S. dollar-denominated high-quality money market instruments and
other short-term securities, including money market funds advised by the funds'
advisor. Being invested in these securities may keep a fund from participating
in a market upswing and prevent the fund from achieving its investment
objectives.
EFFECTIVE DURATION. Balanced Fund normally attempts to maintain an average
effective duration of three to eight years for the debt securities portion of
its portfolio. Effective duration, one measure of interest rate risk, measures
how much the value of a security is expected to change with a given change in
interest rates. The longer a security's effective duration, the more sensitive
its price to changes in interest rates. For example, if interest rates were to
increase by one percentage point, the market value of a bond with an effective
duration of five years would decrease by 5%, with all other factors being
constant. However, all other factors are rarely constant. Effective duration is
based on assumptions and subject to a number of limitations. It is most useful
when interest rate changes are small, rapid and occur equally in short-term and
long-term securities. In addition, it is difficult to calculate precisely for
bonds with prepayment options, such as mortgage- and asset-backed securities,
because the calculation requires assumptions about prepayment rates.
EFFECTIVE MATURITY. Balanced Fund normally attempts to maintain a weighted
average effective maturity for the debt securities in its portfolio of 15 years
or less. Effective maturity differs from actual stated or final maturity, which
may be substantially longer. In calculating effective maturity, the advisor
estimates the effect of expected principal payments and call provisions on
securities held in the portfolio. Effective maturity provides the advisor with a
better estimate of interest rate risk under normal market conditions, but may
underestimate interest rate risk in an environment of adverse (rising) interest
rates.
PORTFOLIO TURNOVER. Portfolio managers for the funds may trade securities
frequently, resulting, from time to time, in an annual portfolio turnover rate
of over 100%. Trading of securities may produce capital gains, which are taxable
to shareholders when distributed. Active trading may also increase the amount of
commissions or mark-ups to broker-dealers that the fund pays when it buys and
sells securities. The "Financial Highlights" section of this prospectus shows
each fund's historical portfolio turnover rate.
- --------------------------------------------------------------------------------
RISKS
The main risks of investing in the funds are summarized in the "Fund Summaries"
section. More information about fund risks is presented below.
MARKET RISK. All stocks are subject to price movements due to changes in general
economic conditions, the level of prevailing interest rates, or investor
perceptions of the market. Prices also are affected by the outlook for overall
corporate profitability.
SECTOR RISK. The stocks of companies within specific industries or sectors of
the economy can periodically perform differently than the overall stock market.
This can be due to changes in such things as the regulatory or competitive
environment or to changes in investor perceptions of a particular industry or
sector.
COMPANY RISK. Individual stocks can perform differently than the overall market.
This may be a result of specific factors such as changes in corporate
profitability due to the success or failure of specific products or management
strategies, or it may be due to changes in investor perceptions regarding a
company.
FOREIGN SECURITY RISK. Each fund may invest up to 25% of its total assets (25%
of the equity portion of its portfolio for Balanced Fund) in securities of
foreign issuers which are either listed on a United States stock exchange or
represented by American Depositary Receipts. In addition, Balanced Fund may
invest up to 15% of the debt portion of its portfolio in foreign securities
payable in United States dollars. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers. For certain foreign
countries, political or social instability, or diplomatic developments could
adversely affect the securities. There is also the risk of loss due to
governmental actions such as a change in tax statutes or the modification of
individual property rights. In addition, individual foreign economies may differ
favorably or unfavorably from the U.S. economy.
23 PROSPECTUS - First American Large Cap Funds
Class S Shares
Additional Information
MORE ABOUT THE FUNDS CONTINUED
RISKS OF ACTIVE MANAGEMENT. Each fund is actively managed and its performance
therefore will reflect in part the advisor's ability to make investment
decisions which are suited to achieving the fund's investment objectives. Due to
their active management, the funds could underperform other mutual funds with
similar investment objectives.
RISKS OF SECURITIES LENDING. When a fund loans its portfolio securities, it will
receive collateral equal to at least 100% of the value of the loaned securities.
Nevertheless, the fund risks a delay in the recovery of the loaned securities,
or even the loss of rights in the collateral deposited by the borrower if the
borrower should fail financially. To reduce these risks, the funds enter into
loan arrangements only with institutions which the funds' advisor has determined
are creditworthy under guidelines established by the funds' board of directors.
RISKS OF DERIVATIVE INSTRUMENTS. The use of derivative instruments exposes a
fund to additional risks and transaction costs. Risks inherent in the use of
derivative instruments include: the risk that securities prices will not move in
the direction that the advisor anticipates; an imperfect correlation between the
price of derivative instruments and movements in the prices of the securities
being hedged; the possible absence of liquid secondary market for any particular
instrument and possible exchange imposed price fluctuation limits, either of
which may make it difficult or impossible to close out a position when desired;
leverage risk, which is the risk that adverse price movements in an instrument
can result in a loss substantially greater than the fund's initial investment in
that instrument; and, particularly, in the case of privately negotiated
instruments, the risk that the counterparty will fail to perform its
obligations, which could leave the fund worse off than if it had not entered
into the position. If a fund uses derivative instruments and the advisor's
judgment proves incorrect, the fund's performance could be worse than if it had
not used these instruments.
- --------------------------------------------------------------------------------
ADDITIONAL RISKS OF BALANCED FUND, EQUITY INCOME FUND AND GROWTH & INCOME FUND
INTEREST RATE RISK. Debt securities in Balanced Fund, Equity Income Fund and
Growth & Income Fund will fluctuate in value with changes in interest rates. In
general, debt securities will increase in value when interest rates fall and
decrease in value when interest rates rise. Longer-term debt securities are
generally more sensitive to interest rate changes.
CREDIT RISK. Balanced Fund, Equity Income Fund and Growth & Income Fund are
subject to the risk that the issuers of debt securities held by a fund will not
make payments on the securities. There is also the risk that an issuer could
suffer adverse changes in financial condition that could lower the credit
quality of a security. This could lead to greater volatility in the price of the
security and in shares of the fund. Also, a change in the credit quality rating
of a bond could affect the bond's liquidity and make it more difficult for the
fund to sell.
Balanced Fund attempts to minimize credit risk by investing in securities
considered at least investment grade at the time of purchase. However, all of
these securities, especially those in the lower investment grade rating
categories, have credit risk. In adverse economic or other circumstances,
issuers of these lower rated securities are more likely to have difficulty
making principal and interest payments than issuers of higher rated securities.
When Balanced Fund purchases unrated securities, it will depend on the advisor's
analysis of credit risk more heavily than usual.
As discussed in the "Fund Summaries" section, Equity Income Fund and Growth &
Income Fund invest in convertible debt securities that are rated below
investment grade and are therefore subject to additional credit risk.
- --------------------------------------------------------------------------------
ADDITIONAL RISKS OF BALANCED FUND
CALL RISK. Many corporate bonds may be redeemed at the option of the issuer, or
"called," before their stated maturity date. In general, an issuer will call its
bonds if they can be refinanced by issuing new bonds which bear a lower interest
rate. Balanced Fund is subject to the possibility that during periods of falling
interest rates, a bond issuer will call its high-yielding bonds. The fund would
then be forced to invest the unanticipated proceeds at lower interest rates,
resulting in a decline in the fund's income.
EXTENSION RISK. Mortgage-backed securities are secured by and payable from pools
of mortgage loans. Similarly, asset-backed securities are supported by
obligations such as automobile loans or home equity loans. These mortgages and
other obligations generally can be prepaid at any time without penalty. As a
result, mortgage- and asset-backed securities are subject to extension risk,
which is the risk that rising interest rates could cause the mortgages or other
obligations underlying the securities to be prepaid more slowly than expected,
resulting in slower prepayments of the securities. This would, in effect,
convert a short- or medium-duration mortgage- or asset-backed security into a
longer-duration security, increasing its sensitivity to interest rate changes
and causing its price to decline.
PREPAYMENT RISK. Mortgage- and asset-backed securities also are subject to
prepayment risk, which is the risk that falling interest rates could cause
prepayments of the securities to occur more quickly than expected. This occurs
because, as interest rates fall, more homeowners refinance the mortgages
underlying mortgage-related securities or prepay the debt obligations underlying
asset-backed securities. Balanced Fund must reinvest the prepayments at a time
when interest rates are falling, reducing the income of the fund. In addition,
when interest rates fall, prices on mortgage- and asset-backed securities may
not rise as much as for other types of comparable debt securities because
investors may anticipate an increase in prepayments.
24 PROSPECTUS - First American Large Cap Funds
Class S Shares
Additional Information
MORE ABOUT THE FUNDS CONTINUED
RISKS OF DOLLAR ROLL TRANSACTIONS. In a dollar roll transaction, Balanced Fund
sells mortgage-backed securities for delivery in the current month while
contracting with the same party to repurchase similar securities at a future
date. Because the fund gives up the right to receive principal and interest paid
on the securities sold, a mortgage dollar roll transaction will diminish the
investment performance of the fund unless the difference between the price
received for the securities sold and the price to be paid for the securities to
be purchased in the future, plus any fee income received, exceeds any income,
principal payments and appreciation on the securities sold as part of the
mortgage dollar roll. Whether mortgage dollar rolls will benefit Balanced Fund
may depend upon the advisor's ability to predict mortgage prepayments and
interest rates. In addition, the use of mortgage dollar rolls by the fund
increases the amount of the fund's assets that are subject to market risk, which
could increase the volatility of the price of the fund's shares.
25 PROSPECTUS - First American Large Cap Funds
Class S Shares
Additional Information
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The tables that follow present performance information about the Class S shares
of each fund. This information is intended to help you understand each fund's
financial performance for the past five years or, if shorter, the period of
operations for the fund or class of shares. Some of this information reflects
financial results for a single fund share. Total returns in the tables represent
the rate that you would have earned or lost on an investment in the fund,
assuming you reinvested all of your dividends and distributions.
The financial highlights for the Balanced Fund as set forth herein include the
historical financial highlights of the Firstar Balanced Growth Fund. The assets
of the Firstar Fund were acquired by the First American Balanced Fund on
September 24, 2001. In connection with such acquisition, Class Y shares of the
Firstar Balanced Growth Fund were exchanged for Class S shares of the First
American Balanced Fund. Historical per-share amounts have been adjusted to
reflect the conversion ratios utilized for the merger of the Balanced Fund and
Firstar Balanced Growth Fund. Firstar Balanced Growth Fund is the accounting
survivor.
The financial highlights for the Capital Growth Fund as set forth herein include
the historical financial highlights of the Firstar Large Cap Growth Fund. The
assets of the Firstar Fund were acquired by the First American Capital Growth
Fund on September 24, 2001. In connection with such acquisition, Class Y shares
of the Firstar Large Cap Growth Fund were exchanged for Class S shares of the
First American Capital Growth Fund.
The financial highlights for the Growth & Income Fund as set forth herein
include the historical financial highlights of the Firstar Growth & Income Fund.
The assets of the Firstar Fund were acquired by the First American Growth &
Income Fund on September 24, 2001. In connection with such acquisition, Class Y
shares of the Firstar Growth & Income Fund were exchanged for Class S shares of
the First American Growth & Income Fund.
The financial highlights for the Large Cap Core Fund as set forth herein include
the historical financial highlights of the Firstar Large Cap Core Equity Fund.
The assets of the Firstar Fund were acquired by the First American Large Cap
Core Fund on September 24, 2001. In connection with such acquisition, Class Y
shares of the Firstar Large Cap Core Equity Fund were exchanged for Class S
shares of the First American Large Cap Core Fund.
The financial highlights for the Relative Value Fund as set forth herein include
the historical financial highlights of the Firstar Relative Value Fund. The
assets of the Firstar Fund were acquired by the First American Relative Value
Fund on September 24, 2001. In connection with such acquisition, Class Y shares
of the Firstar Relative Value Fund were exchanged for Class S shares of the
First American Relative Value Fund.
The information for the fiscal period ended September 30, 2001, has been derived
from the financial statements audited by Ernst & Young LLP, independent
auditors, whose report, along with the funds' financial statements, is included
in the funds' annual report, which is available upon request.
BALANCED FUND
Fiscal period
ended
September 30, 2001(1,2)
- ---------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 11.27
----------
Investment Operations:
Net Investment Income 0.18
Net Gains (Losses) on Investments (both realized and unrealized) (1.74)
----------
Total From Investment Operations (1.56)
----------
Less Distributions:
Dividends (from net investment income) (0.21)
Distributions (from capital gains) --
----------
Total Distributions (0.21)
----------
Net Asset Value, End of Period $ 9.50
==========
Total Return(3) (14.03)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 39,527
Ratio of Expenses to Average Net Assets 1.22%
Ratio of Net Income to Average Net Assets 1.94%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.28%
Ratio of Net Income to Average Net Assets (excluding waivers) 1.88%
Portfolio Turnover Rate 54%
- ----------------------------------------------------------------------------------------------
(1)Class S shares have been offered since November 27, 2000. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
26 PROSPECTUS - First American Large Cap Funds
Class S Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
CAPITAL GROWTH FUND
Fiscal period
ended
September 30, 2001(1)
- ---------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 24.01
----------
Investment Operations:
Net Investment Income (Loss) (0.08)
Net Gains (Losses) on Investments (both realized and unrealized) (9.24)
----------
Total From Investment Operations (9.32)
----------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
----------
Total Distributions --
----------
Net Asset Value, End of Period $ 14.69
==========
Total Return(2) (38.82)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 11,881
Ratio of Expenses to Average Net Assets 1.39%
Ratio of Net Income (Loss) to Average Net Assets (0.55)%
Ratio of Expenses (Loss) to Average Net Assets (excluding waivers) 1.60%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) (0.76)%
Portfolio Turnover Rate 38%
- --------------------------------------------------------------------------------------
(1)Class S shares have been offered since December 11, 2000. All ratios for the
period have been annualized, except total return.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
EQUITY INCOME FUND
Fiscal period
ended
September 30, 2001(1,2)
- ------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 11.57
-------
Investment Operations:
Net Investment Income (Loss) 0.01
Net Gains (Losses) on Investments (both realized and unrealized) 0.54
-------
Total From Investment Operations 0.55
-------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
-------
Total Distributions --
-------
Net Asset Value, End of Period $ 12.12
=======
Total Return(3) 4.75%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 328
Ratio of Expenses to Average Net Assets 1.23%
Ratio of Net Income to Average Net Assets 4.08%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.42%
Ratio of Net Income to Average Net Assets (excluding waivers) 3.89%
Portfolio Turnover Rate 33%
- ------------------------------------------------------------------------------------------
(1)Class S shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
27 PROSPECTUS - First American Large Cap Funds
Class S Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
GROWTH & INCOME FUND
Fiscal period
ended
September 30, 2001(1,2)
- ----------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 40.86
----------
Investment Operations:
Net Investment Income (Loss) 0.10
Net Gains (Losses) on Investments (both realized and unrealized) (9.68)
----------
Total From Investment Operations (9.58)
----------
Less Distributions:
Dividends (from net investment income) (0.14)
Distributions (from capital gains) --
----------
Total Distributions (0.14)
----------
Net Asset Value, End of Period $ 31.14
==========
Total Return(3) (23.50)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 44,821
Ratio of Expenses to Average Net Assets 1.17%
Ratio of Net Income to Average Net Assets 0.31%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.20%
Ratio of Net Income to Average Net Assets (excluding waivers) 0.28%
Portfolio Turnover Rate 51%
- ---------------------------------------------------------------------------------------------
(1)Class S shares have been offered since November 27, 2000. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
LARGE CAP CORE FUND
Fiscal period
ended
September 30, 2001(1,2)
- --------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 35.53
---------
Investment Operations:
Net Investment Income (Loss) (0.01)
Net Gains (Losses) on Investments (both realized and unrealized) (11.07)
---------
Total From Investment Operations (11.08)
---------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
---------
Total Distributions --
---------
Net Asset Value, End of Period $ 24.45
=========
Total Return(3) (31.16)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 2,802
Ratio of Expenses to Average Net Assets 1.18%
Ratio of Net Income (Loss) to Average Net Assets (0.03)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.22%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) (0.07)%
Portfolio Turnover Rate 40%
- --------------------------------------------------------------------------------------------
(1)Class S shares have been offered since November 27, 2000. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
28 PROSPECTUS - First American Large Cap Funds
Class S Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
LARGE CAP GROWTH FUND
Fiscal period
ended
September 30, 2001(1,2)
- --------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 9.07
------
Investment Operations:
Net Investment Income (Loss) --
Net Gains (Losses) on Investments (both realized and unrealized) 0.26
------
Total From Investment Operations 0.26
------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
------
Total Distributions --
------
Net Asset Value, End of Period $ 9.33
======
Total Return(3) 2.87%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ --
Ratio of Expenses to Average Net Assets 0.00%
Ratio of Net Income to Average Net Assets 0.00%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.00%
Ratio of Net Income to Average Net Assets (excluding waivers) 0.00%
Portfolio Turnover Rate 77%
- -----------------------------------------------------------------------------------------
(1)Class S shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
LARGE CAP VALUE FUND
Fiscal period
ended
September 30, 2001(1,2)
- ----------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $15.32
------
Investment Operations:
Net Investment Income (Loss) --
Net Gains (Losses) on Investments (both realized and unrealized) 0.65
------
Total From Investment Operations 0.65
------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
------
Total Distributions --
------
Net Asset Value, End of Period $15.97
======
Total Return(3) 4.24%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ --
Ratio of Expenses to Average Net Assets 0.00%
Ratio of Net Income to Average Net Assets 0.00%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.00%
Ratio of Net Income to Average Net Assets (excluding waivers) 0.00%
Portfolio Turnover Rate 64%
- -----------------------------------------------------------------------------------------
(1)Class S shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
29 PROSPECTUS - First American Large Cap Funds
Class S Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
RELATIVE VALUE FUND
Fiscal period
ended
September 30, 2001(1,2)
- ----------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 28.11
----------
Investment Operations:
Net Investment Income 0.19
Net Gains (Losses) on Investments (both realized and unrealized) (3.99)
----------
Total From Investment Operations (3.80)
----------
Less Distributions:
Dividends (from net investment income) (0.25)
Distributions (from capital gains) --
----------
Total Distributions (0.25)
----------
Net Asset Value, End of Period $ 24.06
==========
Total Return(3) (13.53)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 34,004
Ratio of Expenses to Average Net Assets 1.20%
Ratio of Net Income to Average Net Assets 0.92%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.21%
Ratio of Net Income to Average Net Assets (excluding waivers) 0.91%
Portfolio Turnover Rate 4%
- ---------------------------------------------------------------------------------------------
(1)Class S shares have been offered since December 11, 2000. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
30 PROSPECTUS - First American Large Cap Funds
Class S Shares
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
More information about the funds is available in the funds' Statement of
Additional Information and annual and semiannual reports.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more details about the funds and their policies. A current SAI
is on file with the Securities and Exchange Commission (SEC) and is incorporated
into this prospectus by reference (which means that it is legally considered
part of this prospectus).
- --------------------------------------------------------------------------------
ANNUAL AND SEMIANNUAL REPORTS
Additional information about the funds' investments is available in the funds'
annual and semiannual reports to shareholders. In the funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the funds' performance during their last fiscal year.
You can obtain a free copy of the funds' SAI and/or free copies of the funds'
most recent annual or semiannual reports by calling Investor Services at 800
677-FUND. The material you request will be sent by first-class mail or other
means designed to ensure equally prompt delivery, within three business days of
receipt of the request.
You can also obtain copies of this information, after paying a duplicating fee,
by electronic request at the following email address: publicinfo@sec.gov, or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. For
more information, call 1-202-942-8090.
Information about the funds is also available on the Internet. Text-only
versions of fund documents can be viewed online or downloaded from the EDGAR
Database on the SEC's Internet site at http://www.sec.gov.
FIRST AMERICAN FUNDS P.O. Box 1330, Minneapolis, MN 55440-1330
U.S. Bancorp Asset Management, Inc., serves as the investment advisor to the
First American Funds.
First American Funds are distributed by Quasar Distributors, LLC, which is
located in Milwaukee, WI 53202, and is an affiliate of the investment advisor.
PROLRGS 1/02
SEC file number: 811-05309
[LOGO] FIRST AMERICAN FUNDS(TM) JANUARY 28, 2002
PROSPECTUS
FIRST AMERICAN INVESTMENT FUNDS, INC.
ASSET CLASS -- STOCK FUNDS
SECTOR FUNDS
CLASS A, CLASS B, AND CLASS C SHARES
HEALTH SCIENCES FUND
REAL ESTATE SECURITIES FUND
SCIENCE & TECHNOLOGY FUND
TECHNOLOGY FUND
AS WITH ALL MUTUAL FUNDS, THE
SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THE
SHARES OF THESE FUNDS, OR DETERMINED
IF THE INFORMATION IN THIS
PROSPECTUS IS ACCURATE OR COMPLETE.
ANY STATEMENT TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Table of
CONTENTS
FUND SUMMARIES
- --------------------------------------------------------------------------------
Health Sciences Fund 2
- --------------------------------------------------------------------------------
Real Estate Securities Fund 5
- --------------------------------------------------------------------------------
Science & Technology Fund 7
- --------------------------------------------------------------------------------
Technology Fund 10
- --------------------------------------------------------------------------------
POLICIES & SERVICES
- --------------------------------------------------------------------------------
Buying Shares 13
- --------------------------------------------------------------------------------
Selling Shares 17
- --------------------------------------------------------------------------------
Managing Your Investment 19
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Management 20
- --------------------------------------------------------------------------------
More About The Funds 21
- --------------------------------------------------------------------------------
Financial Highlights 23
- --------------------------------------------------------------------------------
FOR MORE INFORMATION Back Cover
- --------------------------------------------------------------------------------
Fund Summaries
INTRODUCTION
This section of the prospectus describes the objectives of the First American
Sector Funds, summarizes the main investment strategies used by each fund in
trying to achieve its objectives, and highlights the risks involved with these
strategies. It also provides you with information about the performance, fees,
and expenses of the funds.
AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF U.S. BANK NATIONAL ASSOCIATION
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY.
1 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Fund Summaries
HEALTH SCIENCES FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Health Sciences Fund has an objective of long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Health Sciences Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies which develop, produce, or distribute
products or services connected with health care or medicine, and which derive at
least 50% of their assets, revenues, or profits from these products or services
at the time of investment.
Examples of products or services connected with health care or medicine include:
o pharmaceuticals.
o health care services and administration.
o diagnostics.
o medical equipment and supplies.
o medical technology.
o medical research and development.
The fund's advisor will invest in companies that it believes have the potential
for above average growth in revenue and earnings as a result of new or unique
products, processes or services; increasing demand for a company's products or
services; established market leadership; or exceptional management.
The fund's investments may include development stage companies (companies that
do not have significant revenues) and small- and mid-capitalization companies.
The fund may also invest in real estate investment trusts (REITs) that finance
medical care facilities. REITs are publicly traded corporations or trusts that
acquire, hold and manage real estate.
Under certain market conditions, the fund may frequently invest in companies at
the time of their initial public offering (IPO). By virtue of its size and
institutional nature, the advisor may have greater access to IPOs than
individual investors have, including access to so-called "hot issues" which are
generally traded in the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may affect the market as a whole, or
they may affect only a particular company, industry, or sector of the market.
RISKS OF THE HEALTH SCIENCES SECTOR. Because the fund invests primarily in
stocks related to health care or medicine, it is particularly susceptible to
risks associated with the health sciences industries. Many products and services
in the health sciences industries may become rapidly obsolete due to
technological and scientific advances. In addition, governmental regulation may
have a material effect on the demand for products and services in these
industries.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers will be in the same or related economic sectors, the fund's
portfolio securities may be more susceptible to any single economic,
technological, or regulatory occurrence than the portfolio securities of a
diversified fund.
RISKS OF DEVELOPMENT STAGE, SMALL- AND MID-CAP STOCKS. Stocks of development
stage and small-capitalization companies involve substantial risk. These stocks
historically have experienced greater price volatility than stocks of more
established and larger-capitalization companies, and they may be expected to do
so in the future. While stocks of mid-cap companies may be slightly less
volatile than those of small-cap companies, they still involve substantial risk
and their prices may be subject to more abrupt or erratic movements than those
of larger, more established companies or the market averages in general.
RISKS OF REAL ESTATE INVESTMENT TRUSTS (REITs). REITs will be affected by
changes in the values of and incomes from the properties they own or the credit
quality of the mortgages they hold. REITs are dependent on specialized
management skills which may affect their ability to generate cash flow for
operating purposes and to make distributions to shareholders or unitholders.
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Companies involved in IPOs generally
have limited operating histories and prospects for future profitability are
uncertain. Prices of IPOs may also be unstable because of the absence of a prior
public market, the small number of shares available for trading and limited
investor information. IPOs will frequently be sold within 12 months of purchase.
This may result in increased short-term capital gains, which will be taxable to
shareholders as ordinary income.
2 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Fund Summaries
HEALTH SCIENCES FUND CONTINUED
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they were, returns would be lower.
The table compares the fund's performance over different time periods to that of
the fund's benchmark index, which is a broad measure of market performance. The
fund's performance reflects sales charges and fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
3 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Fund Summaries
HEALTH SCIENCES FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR
[BAR CHART]
16.14% -6.94% -1.32% 46.88% -11.98%
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001
Best Quarter: Quarter ending June 30, 2000 20.06%
Worst Quarter: Quarter ending September 30, 1998 (22.34)%
Since Since Since
AVERAGE ANNUAL TOTAL RETURNS Inception Inception Inception Inception
AS OF 12/31/01 Date One Year Five Year (Class A) (Class B) (Class C)
- --------------------------------------------------------------------------------------------------------------------
Health Sciences Fund (Class A) 1/31/96 (16.83)% 5.44% 4.49% N/A N/A
- --------------------------------------------------------------------------------------------------------------------
Health Sciences Fund (Class B) 1/31/96 (17.01)% 5.54% N/A 4.59% N/A
- --------------------------------------------------------------------------------------------------------------------
Health Sciences Fund (Class C) 2/1/00 (14.39)% N/A N/A N/A 8.55%
- --------------------------------------------------------------------------------------------------------------------
Standard & Poor's Health Care
Composite Index(1) (12.88)% 16.00% 15.67% 15.67% 5.83%
- --------------------------------------------------------------------------------------------------------------------
(1) An unmanaged index comprised of health care stocks in the Standard & Poor's
500 Index (an unmanaged index of large capitalization stocks). The since
inception performance of the index for Class A, Class B and Class C shares
is calculated from 1/31/96, 1/31/96 and 1/31/00, respectively.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
- ---------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------------------------------
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.57% 0.57% 0.57%
Total Annual Fund Operating Expenses 1.52% 2.27% 2.27%
Waiver of Fund Expenses(5) (0.29)% (0.29)% (0.29)%
NET EXPENSES(5) 1.23% 1.98% 1.98%
- ---------------------------------------------------------------------------------------------------------------------------
(1) Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2) Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3) The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4) Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5) Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%, 1.98% and 1.98%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- --------------------------------------------------------------------------------------------------------------------------
1 year $668 $701 $201 $399 $299
3 years $976 $1,080 $680 $773 $773
5 years $1,305 $1,386 $1,186 $1,274 $1,274
10 years $2,235 $2,385 $2,385 $2,650 $2,650
4 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Fund Summaries
REAL ESTATE SECURITIES FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Real Estate Securities Fund's objective is to provide above average current
income and long-term capital appreciation.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Real Estate Securities Fund invests primarily
(at least 80% of its net assets, plus the amount of any borrowings for
investment purposes) in income-producing common stocks of publicly traded
companies engaged in the real estate industry. These companies derive at least
50% of their revenues or profits from the ownership, construction, management,
financing or sale of real estate, or have at least 50% of the fair market value
of their assets invested in real estate. The advisor will select companies that
it believes exhibit strong management teams, a strong competitive position,
above average growth in revenues and a sound balance sheet.
A majority of the fund's total assets will be invested in real estate investment
trusts (REITs). REITs are publicly traded corporations or trusts that acquire,
hold and manage residential or commercial real estate. REITs generally can be
divided into the following three types:
o equity REITs, which invest the majority of their assets directly in
real property and derive their income primarily from rents and capital
gains or real estate appreciation.
o mortgage REITs, which invest the majority of their assets in real
estate mortgage loans and derive their income primarily from interest
payments.
o hybrid REITs, which combine the characteristics of equity REITs and
mortgage REITs.
The fund expects to emphasize investments in equity REITs, although it may
invest in all three kinds of REITs.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
RISKS OF THE REAL ESTATE INDUSTRY. Because the fund invests primarily in the
real estate industry, it is particularly susceptible to risks associated with
that industry. The real estate industry has been subject to substantial
fluctuations and declines on a local, regional, and national basis in the past
and may continue to be in the future.
RISKS OF REAL ESTATE INVESTMENT TRUSTS (REITs). There are risks associated with
direct investments in REITs. Equity REITs will be affected by changes in the
values of and incomes from the properties they own, while mortgage REITs may be
affected by the credit quality of the mortgage loans they hold. REITs are
dependent on specialized management skills which may affect their ability to
generate cash flow for operating purposes and to make distributions to
shareholders or unitholders.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers generally will be in the real estate industry, the fund's
portfolio securities may be more susceptible to any single economic or
regulatory occurrence than the portfolio securities of a diversified fund.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they were, returns would be lower.
The table compares the fund's performance over different time periods to that of
the fund's benchmark index, which is a broad measure of market performance. The
fund's performance reflects sales charges and fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
5 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Fund Summaries
REAL ESTATE SECURITIES FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR
[BAR CHART]
30.63% 19.21% -16.16% -3.91% 31.96% 9.50%
- --------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1996 16.59%
Worst Quarter: Quarter ending September 30, 1998 (9.78)%
Since Since
AVERAGE ANNUAL TOTAL RETURNS Inception One Five Inception Since Inception Inception
AS OF 12/31/01 Date Year Years (Class A) (Class B) (Class C)
- ---------------------------------------------------------------------------------------------------------------------
Real Estate Securities Fund (Class A) 9/29/95 3.51% 5.57% 9.92% N/A N/A
- ---------------------------------------------------------------------------------------------------------------------
Real Estate Securities Fund (Class B) 9/29/95 3.82% 5.68% N/A 10.06% N/A
- ---------------------------------------------------------------------------------------------------------------------
Real Estate Securities Fund (Class C) 2/1/00 6.65% N/A N/A N/A 19.02%
- ---------------------------------------------------------------------------------------------------------------------
Morgan Stanley REIT Index(1) 12.83% 6.12% 10.90% 10.90% 20.16%
- ---------------------------------------------------------------------------------------------------------------------
(1) An unmanaged index of the most actively traded real estate investment
trusts. The since inception performance of the index for Class A, Class B
and Class C shares is calculated from 9/30/95, 9/30/95 and 1/31/00,
respectively.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
- ----------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ----------------------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ----------------------------------------------------------------------------------------------------------------------------
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.42% 0.42% 0.42%
Total Annual Fund Operating Expenses 1.37% 2.12% 2.12%
Waiver of Fund Expenses(5) (0.14)% (0.14)% (0.14)%
NET EXPENSES(5) 1.23% 1.98% 1.98%
- ----------------------------------------------------------------------------------------------------------------------------
(1) Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2) Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3) The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4) Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5) Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%, 1.98% and 1.98%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- ------------------------------------------------------------------------------------------------------------------------
1 year $668 $701 $201 $399 $299
3 years $947 $1,050 $650 $743 $743
5 years $1,245 $1,325 $1,125 $1,214 $1,214
10 years $2,092 $2,244 $2,244 $2,513 $2,513
6 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Fund Summaries
SCIENCE & TECHNOLOGY FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Science & Technology Fund has an objective of long-term after-tax growth of
capital. Effective April 1, 2002, Science & Technology Fund's objective is to
maximize long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Science & Technology Fund invests primarily (at
least 80% of its net assets, plus the amount of any borrowings for investment
purposes) in equity securities of companies principally engaged in science and
technology business activities. The fund considers science and technology
sectors to include companies whose primary business is to provide goods or
services in the fields of science (e.g., health and medical) or technology
(e.g., computers and communications). These may include companies that:
o make or sell products used in health care.
o make or sell medical equipment and devices and related technologies.
o make or sell software or information-based services and consulting,
communications and related services.
o design, manufacture or sell electronic components and systems.
o research, design, develop, manufacture or distribute products,
processes or services that relate to hardware technology within the
computer industry.
o develop, produce or distribute products or services in the computer,
semi-conductor, electronics, communications, health care and
biotechnology sectors.
o engage in the development, manufacturing or sale of communications
services or communications equipment.
The advisor believes that because of rapid advances in technology and science,
an investment in companies with business operations in these areas will offer
substantial opportunities for long-term capital appreciation. The fund's
investments may include development stage companies (companies that do not have
significant revenues) and small- and mid-capitalization companies.
Under certain market conditions, the fund may frequently invest in companies at
the time of their initial public offering (IPO). By virtue of its size and
institutional nature, the advisor may have greater access to IPOs than
individual investors have, including access to so-called "hot issues" which are
generally traded in the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Effective April 1, 2002, the advisor will no longer utilize the following
tax-efficient strategies in seeking to achieve the fund's objective.
The advisor seeks to achieve high after-tax returns by balancing investment
considerations and tax considerations. The fund seeks to achieve returns
primarily in the form of price appreciation (which is not subject to current
tax) and to minimize income distributions and distributions of realized
short-term gains (taxed as ordinary income). Among the main strategies used in
the tax-efficient management of the fund are the following:
o investing primarily in lower-yielding growth stocks to minimize taxable
dividend income.
o employing a long-term, low turnover approach to investing.
o attempting to avoid net realized short-term gains.
o selling stocks trading below cost to realize losses (when appropriate)
in order to offset realized capital gains that would otherwise have to
be distributed to shareholders.
o selling the highest cost shares when selling appreciated stocks in
order to minimize realized capital gains.
o selectively using tax-advantaged hedging techniques as an alternative
to taxable sales (such as purchased put options, equity dollars, equity
swaps, covered short sales, and the purchase or sale of stock index
futures contracts).
As a result of its tax-efficient strategy, the fund can generally be expected to
distribute a smaller percentage of returns each year than most other equity
mutual funds. There can be no assurance, however, that taxable distributions can
always be avoided.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may affect the market as a whole, or
they may affect only a particular company, industry, or sector of the market.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers will be in the same or related economic sectors, the fund's
portfolio securities may be more susceptible to any single economic,
technological or regulatory occurrence than the portfolio securities of a
diversified fund.
7 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Fund Summaries
SCIENCE & TECHNOLOGY FUND CONTINUED
RISKS OF THE SCIENCE AND TECHNOLOGY SECTOR. Because the fund invests primarily
in science and technology related stocks, it is particularly susceptible to
risks associated with the science and technology industry. Competitive pressures
may have a significant effect on the financial condition of companies in that
industry.
RISKS OF DEVELOPMENT STAGE AND SMALL-CAP AND MID-CAP STOCKS. Stocks of
development stage and small-capitalization companies involve substantial risk.
These stocks historically have experienced greater price volatility than stocks
of more established and larger-capitalization companies, and they may be
expected to do so in the future. While stocks of mid-cap companies may be
slightly less volatile than those of small-cap companies, they still involve
substantial risk and their prices may be subject to more abrupt or erratic
movements than those of larger, more established companies or the market
averages in general.
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Companies involved in IPOs generally
have limited operating histories and prospects for future profitability are
uncertain. Prices of IPOs may also be unstable because of the absence of a prior
public market, the small number of shares available for trading and limited
investor information. IPOs will frequently be sold within 12 months of purchase.
This may result in increased short-term capital gains, which will be taxable to
shareholders as ordinary income.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability, or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class B shares has varied
from year to year. The performance of Class A shares will be higher because of
their lower expenses. The performance of Class C shares will be similar to Class
B shares due to their similar expenses. Sales charges are not reflected in the
chart; if they were, returns would be lower.
The table compares the fund's performance for Class A and Class B shares over
different time periods to that of the fund's benchmark index, which is a broad
measure of market performance. No information is presented for Class C shares
because these shares were not offered for a full calendar year. The fund's
performance reflects sales charges and fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
8 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Fund Summaries
SCIENCE & TECHNOLOGY FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR (Class B)(1)
[BAR CHART]
- -20.67% -51.63%
- --------------------------------------------------------------------------------
2000 2001
Best Quarter: Quarter ending December 31, 2001 48.30%
Worst Quarter: Quarter ending September 30, 2001 (48.69)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since Inception Since Inception
AS OF 12/31/01(1) Date One Year (Class A) (Class B)
- -------------------------------------------------------------------------------------------------------------
Science & Technology Fund (Class A) 3/31/00 (54.30)% (49.64)% N/A
- -------------------------------------------------------------------------------------------------------------
Science & Technology Fund (Class B) 8/9/99 (54.39)% N/A (15.49)%
- -------------------------------------------------------------------------------------------------------------
Standard & Poor's Information Technology Index(2) (25.88)% (42.00)% (20.17)%
- -------------------------------------------------------------------------------------------------------------
Nasdaq 100 Index(3) (32.58)% (44.23)% (16.38)%
- -------------------------------------------------------------------------------------------------------------
(1) On 9/24/01, the Science & Technology Fund became the successor by merger to
the Firstar Science & Technology Fund, a series of Firstar Funds, Inc. Prior
to the merger, the First American fund had no assets or liabilities.
Performance presented prior to 9/24/01 represents that of the Firstar
Science & Technology Fund. The Firstar Science & Technology Fund was
organized on 12/11/00 and, prior to that was a separate series of Firstar
Stellar Funds, Inc.
(2) An unmanaged index comprised of information technology stocks in the
Standard & Poor's 500 Index, which is an unmanaged index of
large-capitalization stocks. Previously, the fund used the Nasdaq 100 Index
as a benchmark. Going forward, the fund will use the Standard & Poor's
Information Technology Index as a comparison, because its composition better
matches the fund's investment objective and strategies. The since inception
performance of the index for Class A and Class B shares is calculated from
3/31/00 and 8/31/99, respectively.
(3) A market capitalization-weighted index that includes 100 of the largest
financial companies, domestic and foreign, in the Nasdaq National Market.
The since inception performance of the index for Class A and Class B shares
is calculated from 3/31/00 and 8/31/99, respectively.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
- ----------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ----------------------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ----------------------------------------------------------------------------------------------------------------------------
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.51% 0.51% 0.51%
Total Annual Fund Operating Expenses 1.46% 2.21% 2.21%
Waiver of Fund Expenses(5) (0.23)% (0.23)% (0.23)%
NET EXPENSES(5) 1.23% 1.98% 1.98%
- ----------------------------------------------------------------------------------------------------------------------------
(1) Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2) Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3) The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4) Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5) Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%, 1.98% and 1.98%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- ------------------------------------------------------------------------------------------------------------------------
1 year $668 $701 $201 $399 $299
3 years $964 $1,068 $668 $761 $761
5 years $1,281 $1,361 $1,161 $1,250 $1,250
10 years $2,178 $2,329 $2,329 $2,596 $2,596
9 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Fund Summaries
TECHNOLOGY FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Technology Fund has an objective of long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Technology Fund invests primarily (at least 80%
of its net assets, plus the amount of any borrowings for investment purposes) in
common stocks of companies which the fund's advisor believes either have, or
will develop, products, processes, or services that will provide or will benefit
significantly from technological innovations, advances and improvements. These
may include:
o inexpensive computing power, such as personal computers.
o improved methods of communications, such as satellite transmission.
o technology related services such as internet related marketing
services.
The prime emphasis of the fund is to identify companies which the advisor
believes are positioned to benefit from technological advances in areas such as
semiconductors, computers, software, communications, and online services.
Companies in which the fund invests may include development stage companies
(companies that do not have significant revenues) and small-capitalization
companies. The advisor will generally select companies that it believes exhibit
strong management teams, a strong competitive position, above average growth in
revenues and a sound balance sheet.
Under certain market conditions, the fund may frequently invest in companies at
the time of their initial public offering (IPO). By virtue of its size and
institutional nature, the advisor may have greater access to IPOs than
individual investors have, including access to so-called "hot issues" which are
generally traded in the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may affect the market as a whole, or
they may affect only a particular company, industry, or sector of the market.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers will be in the same or related economic sectors, the fund's
portfolio securities may be more susceptible to any single economic,
technological or regulatory occurrence than the portfolio securities of a
diversified fund.
RISKS OF THE TECHNOLOGY SECTOR. Because the fund invests primarily in technology
related stocks, it is particularly susceptible to risks associated with the
technology industry. Competitive pressures may have a significant effect on the
financial condition of companies in that industry.
RISKS OF DEVELOPMENT STAGE AND SMALL-CAP STOCKS. Stocks of development stage and
small-capitalization companies involve substantial risk. These stocks
historically have experienced greater price volatility than stocks of more
established and larger-capitalization companies, and they may be expected to do
so in the future.
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Companies involved in IPOs generally
have limited operating histories and prospects for future profitability are
uncertain. Prices of IPOs may also be unstable because of the absence of a prior
public market, the small number of shares available for trading and limited
investor information. IPOs will frequently be sold within 12 months of purchase.
This may result in increased short-term capital gains, which will be taxable to
shareholders as ordinary income.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability, or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
10 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Fund Summaries
TECHNOLOGY FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations below provide you with information on the fund's volatility and
performance. Of course, past performance does not guarantee future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they were, returns would be lower.
The table compares the fund's performance over different time periods to that of
the fund's benchmark index, which is a broad measure of market performance. The
fund's performance reflects sales charges and fund expenses; the benchmark is
unmanaged and has no expenses.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
40.93% 22.12% 6.91% 32.47% 191.79% -45.85% -55.71%
- --------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1999 80.60%
Worst Quarter: Quarter ending March 31, 2001 (48.79)%
Since Since Since
AVERAGE ANNUAL TOTAL RETURNS Inception One Five Inception Inception Inception
AS OF 12/31/01(1) Date Year Years (Class A) (Class B) (Class C)
- ------------------------------------------------------------------------------------------------------------------------
Technology Fund (Class A) 4/4/94 (58.14)% (1.30)% 9.54% N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
Technology Fund (Class B) 8/15/94 (58.26)% (1.12)% N/A 10.25% N/A
- ------------------------------------------------------------------------------------------------------------------------
Technology Fund (Class C) 2/1/00 (56.92)% N/A N/A N/A (54.35)%
- ------------------------------------------------------------------------------------------------------------------------
Standard & Poor's Information
Technology Index(2) (25.88)% 12.14% 19.71% 19.16% (32.31)%
- ------------------------------------------------------------------------------------------------------------------------
(1) Technology Fund's 1999 returns were primarily achieved buying IPOs and
technology related stocks in a period favorable for these investments. Of
course, such favorable returns involve accepting the risk of volatility, and
there is no assurance that the fund's future investment in IPOs and
technology stocks will have the same effect on performance as it did in
1999.
(2) An unmanaged index comprised of information technology stocks in the
Standard & Poor's 500 Index (an unmanaged index of large-capitalization
stocks). The since inception performance of the index for Class A, Class B
and Class C shares is calculated from 4/30/94, 8/31/94 and 1/31/00,
respectively.
11 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Fund Summaries
TECHNOLOGY FUND CONTINUED
- --------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets.
- ------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES 5.50%(1) 0.00% 1.00%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) 0.00%(2) 5.00% 1.00%
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR REDEMPTION PROCEEDS,
WHICHEVER IS LESS)
ANNUAL MAINTENANCE FEE(3) $25 $25 $25
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ------------------------------------------------------------------------------------------------------------
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.35% 0.35% 0.35%
Total Annual Fund Operating Expenses 1.30% 2.05% 2.05%
Waiver of Fund Expenses(5) (0.07)% (0.07)% (0.07)%
NET EXPENSES(5) 1.23% 1.98% 1.98%
- ------------------------------------------------------------------------------------------------------------
(1) Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(2) Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3) The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4) Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(5) Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%, 1.98% and 1.98%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- ------------------------------------------------------------------------------------------------------------------------
1 year $668 $701 $201 $399 $299
3 years $933 $1,036 $636 $729 $729
5 years $1,217 $1,296 $1,096 $1,185 $1,185
10 years $2,025 $2,177 $2,177 $2,448 $2,448
12 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Policies & Services
BUYING SHARES
- --------------------------------------------------------------------------------
MULTIPLE CLASS INFORMATION
The funds offer five different classes of shares. This prospectus offers Class
A, Class B and Class C shares. Two additional classes of shares, Class S and
Class Y shares, are made available through separate prospectuses. There are
differences among the fees and expenses for each of the five classes. The
difference in the fee structures between the classes is the result of their
separate arrangements for shareholder and distribution services and not the
result of any difference in amounts charged by the investment advisor for core
investment advisory services. Accordingly, the core investment advisory expenses
do not vary by class. Different fees and expenses will affect performance. Not
everyone is eligible to buy every class. After determining which classes you are
eligible to buy, decide which class best suits your needs.
The following describes the features of each class:
o Class A shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 0.25%.
o Class B shares are sold to the public with a contingent deferred sales
charge (CDSC) and annual distribution and service (12b-1) fees of 1.00%
o Class C shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 1.00%
(may be subject to a CDSC).
o Class S shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class S
shares are sold without a sales or distribution fee, but with an annual
shareholder servicing fee of 0.25%.
o Class Y shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class Y
shares are sold without a sales charge or distribution fee.
THIS PROSPECTUS AND THE RELATED STATEMENT OF ADDITIONAL INFORMATION DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SHARES IN THE
FUNDS, NOR SHALL ANY SUCH SHARES BE OFFERED OR SOLD TO ANY PERSON IN ANY
JURISDICTION IN WHICH AN OFFER, SOLICITATION, PURCHASE OR SALE WOULD BE UNLAWFUL
UNDER THE SECURITIES LAWS OF SUCH JURISDICTION.
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
All funds in this prospectus offer Class A, Class B, and Class C shares.
Each class has its own cost structure. The amount of your purchase and the
length of time you expect to hold your shares will be factors in determining
which class of shares is best for you.
CLASS A SHARES. If you are making an investment that qualifies for a reduced
sales charge, Class A shares may be best for you. Class A shares feature:
o a front-end sales charge, described below.
o lower annual expenses than Class B or Class C shares. See "Fund
Summaries" for more information on fees and expenses.
Because Class A shares will normally be the better choice if your investment
qualifies for a reduced sales charge:
o orders for Class B shares for $250,000 or more will be treated as
orders for Class A shares.
o orders for Class C shares for $1 million or more will be treated as
orders for Class A shares.
o orders for Class B or Class C shares by an investor eligible to
purchase Class A shares without a front-end sales charge will be
treated as orders for Class A shares.
CLASS B SHARES. If you want all your money to go to work for you immediately,
you may prefer Class B shares. Class B shares have no front-end sales charge.
However, Class B shares do have:
o higher annual expenses than Class A shares. See "Fund Summaries -- Fees
and Expenses."
o a back-end sales charge, called a "contingent deferred sales charge,"
if you redeem your shares within six years of purchase.
o automatic conversion to Class A shares approximately eight years after
purchase, thereby reducing future annual expenses.
CLASS C SHARES. These shares combine some of the characteristics of Class A and
Class B shares. Class C shares have a low front-end sales charge of 1%, so more
of your investment goes to work immediately than if you had purchased Class A
shares. However, Class C shares also feature:
o a 1% contingent deferred sales charge if you redeem your shares within
18 months of purchase.
o higher annual expenses than Class A shares. See "Fund Summaries -- Fees
and Expenses."
o no conversion to Class A shares.
Because Class C shares do not convert to Class A shares, they will continue to
have higher annual expenses than Class A shares for as long as you hold them.
- --------------------------------------------------------------------------------
12b-1 FEES
Each fund has adopted a plan under Rule 12b-1 of the Investment Company Act that
allows it to pay the fund's distributor an annual fee for the distribution and
sale of its shares and for services provided to shareholders.
For 12b-1 fees are equal to:
- --------------------------------------------------------------------------------
Class A shares 0.25% of average daily net assets
Class B shares 1% of average daily net assets
Class C shares 1% of average daily net assets
Because these fees are paid out of a fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.
13 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Policies & Services
BUYING SHARES CONTINUED
The Class A share 12b-1 fee is a shareholder servicing fee. For Class B and
Class C shares, a portion of the 12b-1 fee equal to 0.25% of average daily net
assets is a shareholder servicing fee and 0.75% is a distribution fee.
The funds' distributor uses the shareholder servicing fee to compensate
investment professionals, participating institutions, and "one-stop" mutual fund
networks (institutions) for providing ongoing services to shareholder accounts.
These institutions receive shareholder servicing fees equal to 0.25% of a fund's
Class A, Class B, and Class C share average daily net assets attributable to
shares sold through them. The funds' distributor also pays institutions that
sell Class C shares a 0.75% annual distribution fee beginning one year after the
shares are sold. The funds' distributor retains the Class B share 0.75% annual
distribution fee in order to finance the payment of sales commissions to
institutions which sell Class B shares. See "Buying Shares -- Class B shares."
The advisor or the distributor may pay additional fees to institutions out of
their own assets in exchange for sales and/or administrative services performed
on behalf of the institution's customers.
- --------------------------------------------------------------------------------
CALCULATING YOUR SHARE PRICE
Your purchase price will be based on the fund's net asset value (NAV) per share,
which is generally calculated as of the close of regular trading on the New York
Stock Exchange (usually 3 p.m. Central time) every day the exchange is open.
A fund's NAV is equal to the market value of its investments and other assets,
less any liabilities, divided by the number of fund shares. If market prices are
not readily available for an investment or if the advisor believes they are
unreliable, fair value prices may be determined in good faith using methods
approved by the funds' board of directors.
CLASS A SHARES. Your purchase price for Class A shares is typically the net
asset value of your shares, plus a front-end sales charge. Sales charges vary
depending on the amount of your purchase. The funds' distributor receives the
sales charge you pay and reallows a portion of the sales charge to your
investment professional or participating institution.
Maximum
Sales Charge Reallowance
as a % of as a % of as a % of
Purchase Net Amount Purchase
Price Invested Price
- --------------------------------------------------------------------------------
Less than $50,000 5.50% 5.82% 5.00%
$ 50,000 - $ 99,999 4.50% 4.71% 4.00%
$100,000 - $249,999 3.50% 3.63% 3.25%
$250,000 - $499,999 2.50% 2.56% 2.25%
$500,000 - $999,999 2.00% 2.04% 1.75%
$1 million and over 0% 0% 0%
REDUCING YOUR SALES CHARGE. As shown in the preceding tables, larger purchases
of Class A shares reduce the percentage sales charge you pay. You also may
reduce your sales charge in the following ways:
PRIOR PURCHASES. Prior purchases of Class A shares of any First American fund
(except a money market fund) will be factored into your sales charge
calculation. That is, you will receive credit for either the original purchase
price or the current net asset value of the other Class A shares you hold at the
time of your purchase, whichever is greater. For example, let's say you're
making a $10,000 investment and you already own other Class A shares that you
purchased for $25,000 000, but are now valued at $45,000. Since the current net
asset value of your shares is greater than their purchase price, you will
receive credit for their current value and your sales charge will be based on a
total purchase amount of $55,000. To receive a reduced sales charge, you must
notify the fund of your prior purchases. This must be done at the time of
purchase, either directly with the fund in writing or by notifying your
investment professional or financial institution.
PURCHASES BY RELATED ACCOUNTS. Concurrent and prior purchases of Class A shares
of any First American fund by certain other accounts also will be combined with
your purchase to determine your sales charge. Each fund will combine purchases
made by an investor, the investor's spouse, and the investor's children when it
calculates the sales charge. In addition, the sales charge, if applicable, is
reduced for purchases made at one time by a trustee or fiduciary for a single
trust estate or a single fiduciary account. To receive a reduced sales charge,
you must notify the funds of purchases by any related accounts. This must be
done at the time of purchase, either directly with the funds in writing or by
notifying your investment professional or financial institution.
LETTER OF INTENT. If you plan to invest $50,000 or more over a 13-month period
in Class A shares of any First American fund (except the money market funds),
you may reduce your sales charge by signing a non-binding letter of intent. (If
you do not fulfill the letter of intent, you must pay the applicable sales
charge.) In addition, if you reduce your sales charge to zero under a letter of
intent and then sell your Class A shares within 18 months of their purchase, you
may be charged a contingent deferred sales charge of 1%. See "For Investments of
Over $1 Million."
14 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Policies & Services
BUYING SHARES CONTINUED
More information on these ways to reduce your sales charge appears in the
Statement of Additional Information (SAI). The SAI also contains information on
investors who are eligible to purchase Class A shares without a sales charge.
- --------------------------------------------------------------------------------
FOR INVESTMENTS OF OVER $1 MILLION
There is no initial sales charge on Class A share purchases of $1 million or
more. However, your investment professional or financial institution may
receive a commission of up to 1% on your purchase. If such a commission is
paid, you will be assessed a contingent deferred sales charge (CDSC) of 1% if
you sell your shares within 18 months. To find out whether you will be
assessed a CDSC, ask your investment professional or financial institution.
The funds' distributor receives any CDSC imposed when you sell your Class A
shares. The CDSC is based on the value of your shares at the time of purchase
or at the time of sale, whichever is less. The charge does not apply to
shares you acquired by reinvesting your dividend or capital gain
distributions.
To help lower your costs, shares that are not subject to a CDSC will be sold
first. Other shares will then be sold in an order that minimizes your CDSC.
The CDSC for Class A shares will be waived for:
o redemptions following the death or disability (as defined in the Internal
Revenue Code) of a shareholder.
o redemptions that equal the minimum required distribution from an
individual retirement account or other retirement plan to a shareholder
who has reached the age of 70 1/2.
o redemptions through a systematic withdrawal plan, at a rate of up to 12% a
year of your account's value. During the first year, the 12% annual limit
will be based on the value of your account on the date the plan is
established. Thereafter, it will be based on the value of your account on
the preceding December 31.
o redemptions required as a result of over contribution to an IRA plan.
CLASS B SHARES. Your purchase price for Class B shares is their net asset value
- -- there is no front-end sales charge. However, if you redeem your shares within
six years of purchase, you will pay a back-end sales charge, called a contingent
deferred sales charge (CDSC). Although you pay no front-end sales charge when
you buy Class B shares, the funds' distributor pays a sales commission of 4.25%
(4.00% for Technology and Science & Technology Funds) of the amount invested to
investment professionals and financial institutions which sell Class B shares.
The funds' distributor receives any CDSC imposed when you sell your Class B
shares.
Your CDSC will be based on the value of your shares at the time of purchase or
at the time of sale, whichever is less. The charge does not apply to shares you
acquired by reinvesting your dividend or capital gain distributions. Shares will
be sold in the order that minimizes your CDSC.
CDSC as a % of the
Year since purchase value of your shares
- --------------------------------------------------------------------------------
First 5%
Second 5%
Third 4%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh 0%
Eighth 0%
Your Class B shares and any related shares acquired by reinvesting your dividend
or capital gain distributions will automatically convert to Class A shares eight
years after the beginning of the month in which you purchased the shares.
The CDSC will be waived for:
o redemptions following the death or disability (as defined in the
Internal Revenue Code) of a shareholder.
o redemptions that equal the minimum required distribution from an
individual retirement account or other retirement plan to a shareholder
who has reached the age of 70 1/2.
o redemptions through a systematic withdrawal plan, at a rate of up to
12% a year of your account's value. During the first year, the 12%
annual limit will be based on the value of your account on the date the
plan is established. Thereafter, it will be based on the value of your
account on the preceding December 31.
o redemptions required as a result of over contribution to an IRA plan.
CLASS C SHARES. Your purchase price for Class C shares is their net asset value
plus a front-end sales charge equal to 1% of the purchase price (1.01% of the
net amount invested). If you redeem your shares within 18 months of purchase,
you will be assessed a contingent deferred sales charge (CDSC) of 1% of the
value of your shares at the time of purchase or at the time of sale, whichever
is less. The CDSC does not apply to shares you acquired by reinvesting your
dividend or capital gain distributions. Shares will be sold in the order that
minimizes your CDSC.
Even though your sales charge is only 1%, the funds' distributor pays a
commission equal to an additional 1% of your purchase price to your investment
professional or participating institution. Furthermore, the advisor may pay its
affiliated broker-dealers, U.S. Bancorp Piper Jaffray Inc. and U.S. Bancorp
Investments, Inc., an additional commission of up to 1% of your purchase price.
The distributor receives any CDSC imposed when you sell your Class C shares.
15 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Policies & Services
BUYING SHARES CONTINUED
The CDSC for Class C shares will be waived in the same circumstances as the
Class B share CDSC. See "Class B Shares" above.
Unlike Class B shares, Class C shares do not convert to Class A shares after a
specified period of time. Therefore, your shares will continue to have higher
annual expenses than Class A shares.
- --------------------------------------------------------------------------------
HOW TO BUY SHARES
You may become a shareholder in the fund with an initial investment of $1,000 or
more ($250 for a retirement plan or a Uniform Gifts to Minors Act/Uniform
Transfers to Minors Act (UGMA/UTMA) account). Additional investments can be made
for as little as $100 ($25 for a retirement plan or an UGMA/UTMA account). The
fund has the right to waive these minimum investment requirements for employees
of the fund's advisor and its affiliates. The fund also has the right to reject
any purchase order.
You may buy shares on any day the New York Stock Exchange is open. However
purchases of shares may be restricted in the event of an early or unscheduled
close of the New York Stock Exchange. Your shares will be priced at the next net
asset value calculated after your order is accepted by the fund, plus any
applicable sales charge. "Accepted" means that you placed an order with your
investment professional or financial institution and it has been processed, or
your payment has been received and your application is complete. To make sure
that your order is accepted, follow the directions for purchasing shares given
below.
BY PHONE. You may purchase shares by calling your investment professional or
financial institution, if they have a sales agreement with the funds'
distributor. In many cases, your order will be effective that day if received by
your investment professional or financial institution by the close of regular
trading on the New York Stock Exchange. In some cases, however, investment
professionals or financial institutions may have different cutoff times for
orders to purchase fund shares. In these cases, you will have to transmit your
request by an earlier time in order for your purchase request to be effective
that day. This allows your investment professional or financial institution time
to process your request and transmit it to the fund. Some financial institutions
may charge a fee for helping you purchase shares. Contact your investment
professional or financial institution for more information.
If you are paying by wire, you may purchase shares by calling Investor Services
at 800 677-FUND before the close of regular trading on the New York Stock
Exchange (usually 3 p.m. Central time). All information will be taken over the
telephone, and your order will be placed when the funds receive payment by wire.
Wire federal funds as follows:
U.S. Bank National Association
ABA Number: 0420-00013
Account Number: 112-952-137
Credit To: First American (NAME OF FUND, INVESTOR NAME AND INVESTOR ACCOUNT #)
You cannot purchase shares by wire on days when federally chartered banks are
closed.
BY MAIL. To purchase shares by mail, simply complete and sign a new account
form, enclose a check made payable to the fund you wish to invest in, and mail
both to:
First American Funds
P.O. Box 3011
Milwaukee, WI 53201-3011
OVERNIGHT EXPRESS MAIL MAY BE SENT TO:
First American Funds
615 East Michigan Street
Milwaukee, WI 53202
After you have established an account, you may continue to purchase shares by
mailing your check to First American Funds at the same address.
Please note the following:
o all purchases must be drawn on a bank located within the United States
and payable in U.S. dollars to First American Funds.
o third party checks, credit cards, credit card checks, and cash are not
accepted.
o if a check does not clear your bank, the funds reserve the right to
cancel the purchase, and you could be liable for any losses or fees
incurred.
- --------------------------------------------------------------------------------
INVESTING AUTOMATICALLY
To purchase shares as part of a savings discipline, you may add to your
investment on a regular basis:
o by having $100 or more ($25 for a retirement plan or a Uniform Gifts to
Minors Act/Uniform Transfers to Minors Act account) automatically
withdrawn from your bank account on a periodic basis and invested in
fund shares.
o through automatic monthly exchanges of your First American Fund into
another First American Fund of the same class.
You may apply for participation in either of these programs through your
investment professional or financial institution or by calling Investor Services
at 800 677-FUND.
16 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Policies & Services
SELLING SHARES
- --------------------------------------------------------------------------------
HOW TO SELL SHARES
You may sell your shares on any day when the New York Stock Exchange is open.
However redemption of shares may be restricted in the event of an early or
unscheduled close of the New York Stock Exchange. Your shares will be sold at
the next net asset value calculated after your order is accepted by the fund
less any applicable contingent deferred sales charge. Be sure to read the
section "Buying Shares" for a description of contingent deferred sales charges.
To make sure that your order is accepted, follow the directions for selling
shares given below.
The proceeds from your sale normally will be mailed or wired within three days,
but in no event more than seven days, after your request is received in proper
form.
To minimize the effect of large redemption requests, each fund reserves the
right to fulfill these redemption requests by distributing readily marketable
securities in the fund's portfolio, rather than paying you in cash.
See "Policies & Services -- Managing Your Investment, Redemption In Kind."
BY PHONE. If you purchased shares through an investment professional or
financial institution, simply call them to sell your shares. In many cases, your
redemption will be effective that day if received by your investment
professional or financial institution by the close of regular trading on the New
York Stock Exchange. In some cases, however, investment professionals or
financial institutions may have different cutoff times for orders to redeem fund
shares. In these cases, however, you will have to call by an earlier time in
order for your redemption to be effective that day. This allows your investment
professional or financial institution time to process your request and transmit
it to the fund. Contact your investment professional or financial institution
directly for more information.
If you did not purchase shares through an investment professional or financial
institution, you may sell your shares by calling Investor Services at 800
677-FUND. Proceeds can be wired to your bank account (if the proceeds are at
least $1,000 and you have previously supplied your bank account information to
the fund) or sent to you by check. The funds reserve the right to limit
telephone redemptions to $50,000 per day.
If you recently purchased your shares by check or through the Automated Clearing
House (ACH), proceeds from the sale of those shares may not be available until
your check or ACH payment has cleared, which may take up to 15 calendar days
from the date of purchase.
BY MAIL. To sell shares by mail, send a written request to your investment
professional or financial institution, or to the fund at the following address:
First American Funds
P.O. Box 3011
Milwaukee, WI 53201-3011
Overnight express mail may be sent to:
First American Funds
615 East Michigan Street
Milwaukee, WI 53202
Your request should include the following information:
o name of the fund.
o account number.
o dollar amount or number of shares redeemed.
o name on the account.
o signatures of all registered account owner.
Signatures on a written request must be guaranteed if:
o you would like the proceeds from the sale to be paid to anyone other
than to the shareholder of record.
o you would like the check mailed to an address other than the address on
the funds' records.
o your redemption request is for $50,000 or more.
A signature guarantee assures that a signature is genuine and protects
shareholders from unauthorized account transfers. Banks, savings and loan
associations, trust companies, credit unions, broker-dealers, and member firms
of a national securities exchange may guarantee signatures. Call your financial
institution to determine if it has this capability.
Proceeds from a written redemption request will be sent to you by check unless
another form of payment is requested.
- --------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWALS
If your account has a value of $5,000 or more, you may redeem a specific dollar
amount from your account on a regular basis. To set up systematic withdrawals,
contact your investment professional or financial institution.
You should not make systematic withdrawals if you plan to continue investing in
the fund, due to sales charges and tax liabilities.
17 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Policies & Services
SELLING SHARES CONTINUED
- --------------------------------------------------------------------------------
REINVESTING AFTER A SALE
If you sell Class A shares of a First American fund (except money market fund
shares on which you have not paid a sales charge), you may reinvest Class A
shares of that fund or another First American fund within 180 days without a
sales charge. To reinvest in Class A shares at net asset value (without paying a
sales charge), you must notify the fund directly in writing or notify your
investment professional or financial institution.
- --------------------------------------------------------------------------------
ACCOUNTS WITH LOW BALANCES
Except for retirement plans and Uniform Gifts to Minors Act/Uniform Transfers
to Minors Act accounts, if your account balance falls below $500 as a result
of selling or exchanging shares, the fund reserves the right to either:
o deduct a $25 annual account maintenance fee, or
o close your account and send you the proceeds, less any applicable
contingent deferred sales charge.
Before taking any action, however, the fund will send you written notice of
the action it intends to take and give you 30 days to re-establish a minimum
account balance of $500.
- --------------------------------------------------------------------------------
EXCHANGING SHARES
If your investment goals or your financial needs change, you may move from one
First American fund to another First American fund. There is no fee to exchange
shares. You may exchange your shares on any day when the New York Stock Exchange
is open. However, exchanges of shares may be restricted in the event of an early
or unscheduled close of the New York Stock Exchange.
Generally, you may exchange your shares only for shares of the same class.
However, you may exchange your Class A shares for Class Y shares or Class S
shares of the same or another First American fund if you subsequently become
eligible to participate in that class (for example, by opening a fiduciary,
custody or agency account with a financial institution which invests in Class Y
shares or Class S shares).
Exchanges are made based on the net asset value per share of each fund at the
time of the exchange. When you exchange your Class A shares of one of the funds
for Class A shares of another First American fund, you do not have to pay a
sales charge. When you exchange your Class B or Class C shares for Class B or
Class C shares of another First American fund, the time you held the shares of
the "old" fund will be added to the time you hold the shares of the "new" fund
for purposes of determining your CDSC or, in the case of Class B shares,
calculating when your shares convert to Class A shares.
Before exchanging into any fund, be sure to read its prospectus carefully. A
fund may change or cancel its exchange policies at any time. You will be
notified of any changes. The funds have the right to limit exchanges to four
times per year.
BY PHONE. You may exchange shares by calling your investment professional, your
financial institution, or the funds direct, provided that both funds have
identical shareholder registrations. To request an exchange through the funds,
call Investor Services at 800 677-FUND. Your instructions must be received
before 3 p.m. Central time, or by the time specified by your investment
professional or financial institution, in order for shares to be exchanged the
same day.
BY MAIL. To exchange shares by written request, please follow the procedures
under "Selling Shares." Be sure to include the names of both funds involved in
the exchange.
- --------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
You may buy, sell, or exchange shares by telephone, unless you elected on
your new account form to restrict this privilege. If you wish to reinstate
this option on an existing account, please call Investor Services at 800
677-FUND to request the appropriate form.
The funds and their agents will not be responsible for any losses that may
result from acting on wire or telephone instructions that they reasonably
believe to be genuine. The funds and their agents will each follow reasonable
procedures to confirm that instructions received by telephone are genuine,
which may include taping telephone conversations.
It may be difficult to reach the funds by telephone during periods of unusual
market activity. If you are unable to reach the funds or their agents by
telephone, please consider sending written instructions.
- --------------------------------------------------------------------------------
REDEMPTION IN KIND
Generally, proceeds from redemption requests will be paid in cash. However, to
minimize the effect of large redemption requests on a fund and its remaining
shareholders, each fund reserves the right to pay part or all of the proceeds
from a redemption request in a proportionate share of readily marketable
securities in the fund instead of in cash. In selecting securities for a
redemption in kind, the advisor will consider the best interests of the fund and
the remaining fund shareholders, and will value these securities in accordance
with the pricing methods employed to calculate the fund's net asset value per
share. If you receive redemption proceeds in kind, you should expect to incur
transaction costs upon the disposition of the securities received in the
redemption.
18 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Policies & Services
MANAGING YOUR INVESTMENT
- --------------------------------------------------------------------------------
STAYING INFORMED
SHAREHOLDER REPORTS. Shareholder reports are mailed twice a year, in November
and May. They include financial statements and performance information, and on
an annual basis, a message from your portfolio managers and the auditors'
report.
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailings to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call Investor Services at 800 677-FUND.
STATEMENTS AND CONFIRMATIONS. Statements summarizing activity in your account
are mailed quarterly. Confirmations are mailed following each purchase or sale
of fund shares. Generally, a fund does not send statements for funds held in a
brokerage account.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
Dividends from a fund's net investment income are declared and paid quarterly.
Any capital gains are distributed at least once each year.
On the ex-dividend date for a distribution, a fund's share price is reduced by
the amount of the distribution. If you buy shares just before the ex-dividend
date, in effect, you "buy the dividend." You will pay the full price for the
shares and then receive a portion of that price back as a taxable distribution.
Dividend and capital gain distributions will be reinvested in additional shares
of the fund paying the distribution, unless you request that distributions be
reinvested in another First American fund or paid in cash. This request may be
made on your new account form, or by writing to the fund, your investment
professional or your financial institution. If you request that your
distributions be paid in cash but those distributions cannot be delivered
because of an incorrect mailing address, the undelivered distributions and all
future distributions will be reinvested in fund shares at current NAV.
- --------------------------------------------------------------------------------
TAXES
Some of the tax consequences of investing in the funds are discussed below. More
information about taxes is in the Statement of Additional Information. However,
because everyone's tax situation is unique, always consult your tax professional
about federal, state, and local tax consequences.
TAXES ON DISTRIBUTIONS. Each fund pays its shareholders dividends from its net
investment income and any net capital gains that it has realized. For most
investors, fund dividends and distributions are considered taxable whether they
are reinvested or taken in cash (unless your investment is in an IRA or other
tax-advantaged account).
Dividends from a fund's net investment income and short-term capital gains are
taxable as ordinary income. Distributions of a fund's long-term capital gains
are taxable as long-term gains, regardless of how long you have held your
shares. The funds expect that, as a result of their investment objectives and
strategies, their distributions will consist primarily of ordinary income in the
case of Real Estate Securities Fund and capital gains in the case of the other
funds.
TAXES ON TRANSACTIONS. The sale of fund shares, or the exchange of one fund's
shares for shares of another fund, will be a taxable event and may result in a
capital gain or loss. The gain or loss will be considered long-term if you have
held your shares for more than one year. A gain or loss on shares held for one
year or less is considered short-term and is taxed at the same rates as ordinary
income.
If in redemption of his or her shares a shareholder receives a distribution of
readily marketable securities instead of cash, the shareholder will be treated
as receiving an amount equal to the fair market value of the securities at the
time of the distribution for purposes of determining capital gain or loss on the
redemption, and will also acquire a basis in the shares for federal income tax
purposes equal to their fair market value.
The exchange of one class of shares for another class of shares in the same fund
will not be taxable.
TAX MANAGED STRATEGY. As a result of its tax-efficient strategies, the Science &
Technology Fund can generally be expected to distribute a smaller percentage of
returns each year than most other equity mutual funds. There can be no
assurance, however, that taxable distributions can always be avoided. These
tax-efficient strategies will not be in effect after April 1, 2002.
19 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Additional Information
MANAGEMENT
U.S. Bancorp Asset Management, Inc., is the funds' investment advisor. U.S.
Bancorp Asset Management provides investment management services to individuals
and institutions, including corporations, foundations, pensions and retirement
plans. As of September 30, 2001, U.S. Bancorp Asset Management and its
affiliates had more than $114 billion in assets under management, including
investment company assets of more than $51 billion. As investment advisor, U.S.
Bancorp Asset Management manages the funds' business and investment activities,
subject to the authority of the funds' board of directors.
Each fund pays the investment advisor a monthly fee for providing investment
advisory services. The table below reflects investment advisory fees paid to the
investment advisor, after taking into account any fee waivers, for the funds'
most recently completed fiscal year.(1)
Advisory fee
as a % of
average daily
net assets
- --------------------------------------------------------------------------------
HEALTH SCIENCES FUND 0.43%
REAL ESTATE SECURITIES FUND 0.49%
SCIENCE & TECHNOLOGY FUND(2) 0.81%
TECHNOLOGY FUND 0.64%
- --------------------------------------------------------------------------------
(1) Prior to May 2, 2001, First American Asset Management (FAAM), a division of
U.S. Bank National Association, served as investment advisor to Health
Sciences Fund, Real Estate Securities Fund and Technology Fund; Firstar
Investment Research & Management Company LLC (FIRMCO), an affiliate of FAAM,
served as investment advisor to Science & Technology Fund. On May 2, 2001,
FAAM and FIRMCO combined advisory operations to form U.S. Bancorp Asset
Management, Inc. The investment advisory fees paid by each fund to U.S.
Bancorp Asset Management did not change as a result of the combination.
(2) On September 24, 2001, Science & Technology Fund became the successor by
merger to Firstar Science & Technology Fund. The fiscal year end for the
Firstar fund was October 31; Science & Technology Fund has a fiscal year end
of September 30. Information presented in the table has been annualized for
the eleven-month fiscal period ended September 30, 2001.
DIRECT CORRESPONDENCE TO:
First American Funds
P.O. Box 1330
Minneapolis, Minnesota 55440-1330
INVESTMENT ADVISOR
U.S. Bancorp Asset Management, Inc.
800 Nicollet Mall
Minneapolis, Minnesota 55402
DISTRIBUTOR
Quasar Distributors, LLC
615 E. Michigan Street
Milwaukee, WI 53202
ADDITIONAL COMPENSATION
U.S. Bancorp Asset Management and other affiliates of U.S. Bancorp may act as
fiduciary with respect to plans subject to the Employee Retirement Income
Security Act of 1974 (ERISA) and other trust and agency accounts that invest in
the funds. As described above, U.S. Bancorp Asset Management receives
compensation for acting as the funds' investment advisor. U.S. Bancorp Asset
Management and its affiliates also receive compensation in connection with the
following:
CUSTODY SERVICES. U.S. Bank National Association (U.S. Bank) provides or
compensates others to provide custody services to the funds. U.S. Bank is paid
monthly fees equal, on an annual basis, to 0.01% of a fund's average daily net
assets. In addition, U.S. Bank is reimbursed for its out-of-pocket expenses
incurred while providing custody services to the funds.
ADMINISTRATION SERVICES. U.S. Bancorp Asset Management and its affiliate, U.S.
Bancorp Fund Services, LLC (Co-Administrators), provide or compensate others to
provide administrative services to the First American family of funds. These
services include general administrative and accounting services, transfer agency
and dividend disbursing services, blue sky services, and shareholder services.
With respect to the First American open-end mutual funds, the Co-Administrators
receive total fees on an annual basis, of up to 0.25% of the aggregate average
daily net assets of First American Investment Funds, Inc., First American
Strategy Funds, Inc. and First American Insurance Portfolios, Inc., and up to
0.20% of the aggregate average daily net assets of First American Funds, Inc.
The funds also pay the Co-Administrators fees based upon the number of funds and
accounts maintained. In addition, the Co-Administrators are reimbursed for their
out-of-pocket expenses incurred while providing administration services to the
funds.
DISTRIBUTION SERVICES. Quasar Distributors, LLC, an affiliate of U.S. Bancorp
Asset Management, serves as distributor of the funds and receives out of pocket
expenses incurred while providing distribution and other sub-administrative
services for the funds.
SECURITIES LENDING SERVICES. In connection with lending their portfolio
securities, the funds pay administrative and custodial fees to U.S. Bancorp
Asset Management which are equal to 40% of the funds' income from these
securities lending transactions.
BROKERAGE TRANSACTIONS. When purchasing and selling portfolio securities for the
funds, the funds' investment advisor may place trades through its affiliates,
U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., which will
earn commissions on these transactions.
SHAREHOLDER SERVICING FEES. To the extent that fund shares are held through U.S.
Bancorp Asset Management, U.S. Bank or their broker-dealer affiliates, U.S.
Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., those entities
may receive shareholder servicing fees from the funds' distributor.
PORTFOLIO MANAGEMENT
Each fund's investments are managed by a team of persons associated with U.S.
Bancorp Asset Management.
20 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Additional Information
MORE ABOUT THE FUNDS
- --------------------------------------------------------------------------------
OBJECTIVES
The funds' objectives may be changed without shareholder approval. If a fund's
objectives change, you will be notified at least 60 days in advance. Please
remember: There is no guarantee that any fund will achieve its objectives.
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
The funds' main investment strategies are the strategies that the funds'
investment advisor believes are most likely to be important in trying to achieve
the funds' objectives. You should be aware that each fund may also use
strategies and invest in securities that are not described in this prospectus,
but that are described in the Statement of Additional Information (SAI). For a
copy of the SAI, call Investor Services at 800 677-FUND.
TEMPORARY INVESTMENTS. In an attempt to respond to adverse market, economic,
political, or other conditions, each fund may temporarily invest without limit
in cash and in U.S. dollar-denominated high-quality money market instruments and
other short-term securities. Being invested in these securities may keep a fund
from participating in a market upswing and prevent the fund from achieving its
investment objectives.
PORTFOLIO TURNOVER. Fund managers may trade securities frequently, resulting,
from time to time, in an annual portfolio turnover rate of over 100%. Trading of
securities may produce capital gains, which are taxable to shareholders when
distributed. Active trading may also increase the amount of commissions or
mark-ups to broker-dealers that the fund pays when it buys and sells securities.
The "Financial Highlights" section of this prospectus shows each fund's
historical portfolio turnover rate.
- --------------------------------------------------------------------------------
RISKS
The main risks of investing in the funds are summarized in the "Fund Summaries"
section. More information about fund risks is presented below.
MARKET RISK. All stocks are subject to price movements due to changes in general
economic conditions, changes in the level of prevailing interest rates, changes
in investor perceptions of the market, or the outlook for overall corporate
profitability.
COMPANY RISK. Individual stocks can perform differently than the overall market.
This may be a result of specific factors such as changes in corporate
profitability due to the success or failure of specific products or management
strategies, or it may be due to changes in investor perceptions regarding a
company.
SECTOR RISK. The stocks of companies within specific industries or sectors of
the economy can periodically perform differently than the overall stock market.
This can be due to changes in such things as the regulatory or competitive
environment or to changes in investor perceptions of a particular industry or
sector. Each fund is subject to the particular risks of the sector in which it
principally invests.
RISKS OF THE HEALTH SCIENCES SECTOR. Health Sciences Fund and Science &
Technology Fund invest in equity securities of companies which develop, produce
or distribute products or services connected with health care or medicine. Many
products and services in the health sciences industries may become rapidly
obsolete due to technological and scientific advances. In addition, the health
sciences industries generally are subject to greater governmental regulation
than many other industries, so that changes in governmental policies may have a
material effect on the demand for products and services in these industries.
Regulatory approvals generally are required before new drugs, medical devices or
medical procedures can be introduced and before health care providers can
acquire additional facilities or equipment.
RISKS OF THE REAL ESTATE SECTOR. Real Estate Securities Fund invests primarily
in equity securities of publicly traded companies in the real estate industry.
The real estate industry has been subject to substantial fluctuations and
declines on a local, regional and national basis in the past and may continue to
be in the future. Real property values and incomes from real property may
decline due to general and local economic conditions, overbuilding and increased
competition, increases in property taxes and operating expenses, changes in
zoning laws, casualty or condemnation losses, regulatory limitations on rents,
changes in neighborhoods and in demographics, increases in market interest
rates, or other factors. Factors such as these may adversely affect companies
which own and operate real estate directly, companies which lend to them, and
companies which service the real estate industry.
RISKS OF THE TECHNOLOGY SECTOR. Technology Fund and Science & Technology Fund
invest in equity securities of companies in the technology industry. Competitive
pressures may have a significant effect on the financial condition of companies
in this industry. For example, if technology continues to advance at an
accelerated rate and the number of companies and product offerings continues to
expand, these companies could become increasingly sensitive to short product
cycles and aggressive pricing.
RISKS OF DEVELOPMENT STAGE AND SMALL-CAP STOCKS. Health Sciences Fund,
Technology Fund and Science & Technology Fund may have significant investments
in development stage and small-capitalization companies. Stocks of development
stage and small-capitalization companies involve substantial risk. These
companies may lack the management expertise, financial resources, product
diversification and competitive strengths of larger companies. Their stock
prices may be subject to more abrupt or erratic movements than stock prices of
larger, more established companies or the market averages in general. In
addition, the frequency and volume of their trading may be less than is typical
of larger companies, making them subject to wider price fluctuations. In some
cases, there could be difficulties in selling the stocks of
21 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Additional Information
MORE ABOUT THE FUNDS CONTINUED
development stage and small-capitalization companies at the desired time and
price.
RISKS OF MID-CAP STOCKS. While stocks of mid-cap companies may be slightly less
volatile than those of small-cap companies, they still involve substantial risk.
Mid-cap companies may have limited product lines, markets or financial
resources, and they may be dependent on a limited management group. Stocks of
mid-cap companies may be subject to more abrupt or erratic market movements than
those of larger, more established companies or the market averages in general.
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Technology Fund, Health Sciences Fund
and Science & Technology Fund may frequently invest in companies at the time of
their IPO. Most IPOs involve a high degree of risk not normally associated with
offerings of more seasoned companies. Companies involved in IPOs generally have
limited operating histories, and their prospects for future profitability are
uncertain. These companies often are engaged in new and evolving businesses and
are particularly vulnerable to competition and to changes in technology, markets
and economic conditions. They may be dependent on certain key managers and third
parties, need more personnel and other resources to manage growth and require
significant additional capital. They may also be dependent on limited product
lines and uncertain property rights and need regulatory approvals. Investors in
IPOs can be affected by substantial dilution in the value of their shares, by
sales of additional shares and by concentration of control in existing
management and principal shareholders. Stock prices of IPOs can also be highly
unstable, due to the absence of a prior public market, the small number of
shares available for trading and limited investor information.
RISKS OF REAL ESTATE INVESTMENT TRUSTS (REITs). Real Estate Securities Fund
invests a majority of its assets in REITs and Health Sciences Fund also may
invest in REITs. Equity REITs will be affected by changes in the values of and
incomes from the properties they own, while mortgage REITs may be affected by
the credit quality of the mortgage loans they hold. REITs are subject to other
risks as well, including the fact that REITs are dependent on specialized
management skills which may affect their ability to generate cash flow for
operating purposes and to make distributions to shareholders or unitholders.
REITs may have limited diversification and are subject to the risks associated
with obtaining financing for real property.
A REIT can pass its income through to shareholders or unitholders without any
tax at the entity level if it complies with various requirements under the
Internal Revenue Code. There is the risk that a REIT held by the fund will fail
to qualify for this tax-free pass-through treatment of its income.
By investing in REITs indirectly through a fund, in addition to bearing a
proportionate share of the expenses of the fund, you will also indirectly bear
similar expenses of some of the REITs in which the fund invests.
FOREIGN SECURITY RISK. Up to 25% of each fund's total assets may be invested in
securities of foreign issuers which are either listed on a United States stock
exchange or represented by American Depositary Receipts. Securities of foreign
issuers, even when dollar-denominated and publicly traded in the United States,
may involve risks not associated with the securities of domestic issuers. For
certain foreign countries, political, or social instability or diplomatic
developments could adversely affect the securities. There is also the risk of
loss due to governmental actions such as a change in tax statutes or the
modification of individual property rights. In addition, individual foreign
economies may differ favorably or unfavorably from the U.S. economy.
RISKS OF ACTIVE MANAGEMENT. Each fund is actively managed and its performance
therefore will reflect in part the advisor's ability to make investment
decisions which are suited to achieving the fund's investment objectives. Due to
their active management, the funds could underperform other mutual funds with
similar investment objectives.
RISKS OF SECURITIES LENDING. When a fund loans its portfolio securities, it will
receive collateral equal to at least 100% of the value of the loaned securities.
Nevertheless, the fund risks a delay in the recovery of the loaned securities,
or even the loss of rights in the collateral deposited by the borrower if the
borrower should fail financially. To reduce these risks, the funds enter into
loan arrangements only with institutions which the funds' advisor has determined
are creditworthy under guidelines established by the funds' board of directors.
RISKS OF DERIVATIVE INSTRUMENTS. The use of derivative instruments exposes a
fund to additional risks and transaction costs. Risks inherent in the use of
derivative instruments include: the risk that securities prices will not move in
the direction that the advisor anticipates; an imperfect correlation between the
price of derivative instruments and movements in the prices of the securities
being hedged; the possible absence of a liquid secondary market for any
particular instrument and possible exchange imposed price fluctuation limits,
either of which may make it difficult or impossible to close out a position when
desired; leverage risk, which is the risk that adverse price movements in an
instrument can result in a loss substantially greater than the fund's initial
investment in that instrument; and, particularly, in the case of privately
negotiated instruments, the risk that the counterparty will fail to perform its
obligations, which could leave the fund worse off than if it had not entered
into the position. If a fund uses derivative instruments and the advisor's
judgment proves incorrect, the fund's performance could be worse than if it had
not used these instruments.
22 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The tables that follow present performance information about the Class A, Class
B and Class C shares of each fund. This information is intended to help you
understand each fund's financial performance for the past five years or, if
shorter, the period of operations for the fund or class of shares. Some of this
information reflects financial results for a single fund share. Total returns in
the tables represent the rate that you would have earned or lost on an
investment in the fund, excluding sales charges and assuming you reinvested all
of your dividends and distributions.
The financial highlights for the Science & Technology Fund as set forth herein
include the historical financial highlights of the Firstar Science & Technology
Fund. The assets of the Firstar Fund were acquired by the First American Science
& Technology Fund on September 24, 2001. In connection with such acquisition,
Class A shares of the Firstar Science & Technology Fund were exchanged for Class
A shares of the First American Science & Technology Fund, and Firstar Class B
shares were exchanged for Class B shares of the First American Fund.
The information for Health Sciences Fund, Real Estate Securities Fund and
Technology Fund for the fiscal periods ended September 30, 2001, September 30,
2000, and September 30, 1999, has been derived from the financial statements
audited by Ernst & Young LLP, independent auditors, whose report, along with the
funds' financial statements, is included in the funds' annual report, which is
available upon request. The information for the fiscal years ended on or before
September 30, 1998, has been audited by other auditors.
The information for Science & Technology Fund for the fiscal period ended
September 30, 2001, has been derived from the financial statements audited by
Ernst & Young LLP, independent auditors, whose report, along with the fund's
financial statements, is included in the fund's annual report, which is
available upon request. The information for the fiscal periods ended on or
before October 31, 2000, has been audited by other auditors.
HEALTH SCIENCES FUND
Fiscal year ended September 30,
CLASS A SHARES 2001(1) 2000 1999 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 13.34 $ 8.24 $ 7.82 $ 12.05 $ 9.86
--------- --------- --------- --------- ---------
Investment Operations:
Net Investment Income (Loss) (0.03) (0.02) 0.01 0.01 (0.01)
Net Gains (Losses) on Investments
(both realized and unrealized) (2.10) 5.12 0.46 (2.78) 2.30
--------- --------- --------- --------- ---------
Total From Investment Operations (2.13) 5.10 0.47 (2.77) 2.29
--------- --------- --------- --------- ---------
Less Distributions:
Dividends (from net investment income) -- -- (0.01) -- --
Distributions (from capital gains) (1.37) -- (0.04) (1.46) (0.10)
--------- --------- --------- --------- ---------
Total Distributions (1.37) -- (0.05) (1.46) (0.10)
--------- --------- --------- --------- ---------
Net Asset Value, End of Period $ 9.84 $ 13.34 $ 8.24 $ 7.82 $ 12.05
========= ========= ========= ========= =========
Total Return(2) (17.35)% 61.89% 6.08% (25.24)% 23.60%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 6,514 $ 6,645 $ 1,383 $ 2,017 $ 849
Ratio of Expenses to Average Net Assets 1.15% 1.17% 1.16% 1.15% 1.15%
Ratio of Net Income (Loss) to Average Net Assets (0.28)% (0.27)% 0.11% 0.04% (0.20)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.42% 1.46% 1.30% 1.20% 1.29%
Ratio of Net Loss to Average Net Assets (excluding waivers) (0.55)% (0.56)% (0.03)% (0.01)% (0.34)%
Portfolio Turnover Rate 103% 104% 53% 45% 54%
- --------------------------------------------------------------------------------------------------------------------------------
(1) Per share data calculated using average shares outstanding method.
(2) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
23 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
HEALTH SCIENCES FUND (CONTINUED)
Fiscal year ended September 30,
CLASS B SHARES 2001(1) 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 12.89 $ 8.02 $ 7.65 $ 11.90 $ 9.81
--------- --------- --------- --------- ---------
Investment Operations:
Net Investment Income (Loss) (0.11) (0.08) 0.01 (0.02) (0.01)
Net Gains (Losses) on Investments
(both realized and unrealized) (2.01) 4.95 0.40 (2.77) 2.20
--------- --------- --------- --------- ---------
Total From Investment Operations (2.12) 4.87 0.41 (2.79) 2.19
--------- --------- --------- --------- ---------
Less Distributions:
Dividends (from net investment income) -- -- -- -- --
Distributions (from capital gains) (1.37) -- (0.04) (1.46) (0.10)
--------- --------- --------- --------- ---------
Total Distributions (1.37) -- (0.04) (1.46) (0.10)
--------- --------- --------- --------- ---------
Net Asset Value, End of Period $ 9.40 $ 12.89 $ 8.02 $ 7.65 $ 11.90
========= ========= ========= ========= =========
Total Return(2) (17.99)% 60.72% 5.37% (25.80)% 22.69%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 3,496 $ 4,221 $ 1,029 $ 645 $ 516
Ratio of Expenses to Average Net Assets 1.90% 1.92% 1.92% 1.90% 1.90%
Ratio of Net Loss to Average Net Assets (1.04)% (1.02)% (0.64)% (0.73)% (0.94)%
Ratio of Expenses to Average Net Assets (excluding waivers) 2.17% 2.21% 2.05% 1.95% 2.04%
Ratio of Net Loss to Average Net Assets (excluding waivers) (1.31)% (1.31)% (0.77)% (0.78)% (1.08)%
Portfolio Turnover Rate 103% 104% 53% 45% 54%
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Per share data calculated using average shares outstanding method.
(2) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal period ended September 30,
CLASS C SHARES 2001(1) 2000(2)
- -------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 13.29 $ 9.76
--------- ---------
Investment Operations:
Net Investment Income (Loss) (0.11) (0.03)
Net Gains (Losses) on Investments
(both realized and unrealized) (2.08) 3.56
--------- ---------
Total From Investment Operations (2.19) 3.53
--------- ---------
Less Distributions:
Dividends (from net investment income) -- --
Distributions (from capital gains) (1.37) --
--------- ---------
Total Distributions (1.37) --
--------- ---------
Net Asset Value, End of Period $ 9.73 $ 13.29
========= =========
Total Return(3) (17.92)% 36.17%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 5,329 $ 4,347
Ratio of Expenses to Average Net Assets 1.90% 1.92%
Ratio of Net Loss to Average Net Assets (1.04)% (1.02)%
Ratio of Expenses to Average Net Assets (excluding waivers) 2.17% 2.21%
Ratio of Net Loss to Average Net Assets (excluding waivers) (1.31)% (1.31)%
Portfolio Turnover Rate 103% 104%
- -------------------------------------------------------------------------------------------
(1) Per share data calculated using average shares outstanding method.
(2) Commenced operations on February 1, 2000. All ratios for the period have
been annualized, except total return.
(3) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
24 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
REAL ESTATE SECURITIES FUND
Fiscal year ended September 30,
CLASS A SHARES 2001(1) 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 12.71 $ 10.78 $ 12.17 $ 14.97 $ 11.52
------- ------- ------- ------- -------
Investment Operations:
Net Investment Income 0.76 0.74 0.65 0.63 0.72
Net Gains (Losses) on Investments
(both realized and unrealized) 0.32 2.00 (1.36) (2.40) 3.42
------- ------- ------- ------- -------
Total From Investment Operations 1.08 2.74 (0.71) (1.77) 4.14
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.64) (0.79) (0.67) (0.70) (0.65)
Distributions (from capital gains) -- -- -- (0.33) (0.03)
Distributions (from return of capital) (0.03) (0.02) (0.01) -- (0.01)
------- ------- ------- ------- -------
Total Distributions (0.67) (0.81) (0.68) (1.03) (0.69)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 13.12 $ 12.71 $ 10.78 $ 12.17 $ 14.97
======= ======= ======= ======= =======
Total Return(2) 8.69% 26.68% (5.89)% (12.42)% 36.77%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 2,421 $ 2,035 $ 1,518 $ 2,027 $ 2,105
Ratio of Expenses to Average Net Assets 1.04% 1.05% 1.05% 1.05% 1.05%
Ratio of Net Income to Average Net Assets 5.89% 6.59% 5.52% 4.71% 4.46%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.25% 1.24% 1.18% 1.18% 1.30%
Ratio of Net Income to Average Net Assets (excluding waivers) 5.68% 6.40% 5.39% 4.58% 4.21%
Portfolio Turnover Rate 85% 45% 21% 36% 14%
- ------------------------------------------------------------------------------------------------------------------------------
(1) Per share data calculated using average shares outstanding method.
(2) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal year ended September 30,
CLASS B SHARES 2001(1) 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 12.61 $ 10.69 $ 12.08 $ 14.86 $ 11.46
------- ------- ------- ------- -------
Investment Operations:
Net Investment Income 0.65 0.64 0.55 0.52 0.63
Net Gains (Losses) on Investments
(both realized and unrealized) 0.33 2.00 (1.34) (2.37) 3.38
------- ------- ------- ------- -------
Total From Investment Operations 0.98 2.64 0.79 (1.85) 4.01
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.54) (0.69) (0.57) (0.60) (0.57)
Distributions (from capital gains) -- -- -- (0.33) (0.03)
Distributions (from return of capital) (0.03) (0.03) (0.03) -- (0.01)
------- ------- ------- ------- -------
Total Distributions (0.57) (0.72) (0.60) (0.93) (0.61)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 13.02 $ 12.61 $ 10.69 $ 12.08 $ 14.86
======= ======= ======= ======= =======
Total Return(2) 7.93% 25.81% (6.68)% (13.04)% 35.77%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 1,724 $ 1,874 $ 2,192 $ 3,026 $ 3,318
Ratio of Expenses to Average Net Assets 1.79% 1.80% 1.80% 1.80% 1.80%
Ratio of Net Income to Average Net Assets 5.13% 5.79% 4.75% 3.98% 3.61%
Ratio of Expenses to Average Net Assets (excluding waivers) 2.00% 1.99% 1.93% 1.93% 2.00%
Ratio of Net Income to Average Net Assets (excluding waivers) 4.92% 5.60% 4.62% 3.85% 3.41%
Portfolio Turnover Rate 85% 45% 21% 36% 14%
- ------------------------------------------------------------------------------------------------------------------------------
(1) Per share data calculated using average shares outstanding method.
(2) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
25 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
REAL ESTATE SECURITIES FUND (CONTINUED)
Fiscal period ended September 30,
CLASS C SHARES 2001(1) 2000(2)
- -------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 12.68 $ 10.61
------- -------
Investment Operations:
Net Investment Income 0.68 0.50
Net Gains (Losses) on Investments
(both realized and unrealized) 0.30 2.14
------- -------
Total From Investment Operations 0.98 2.64
------- -------
Less Distributions:
Dividends (from net investment income) (0.59) (0.57)
Distributions (from capital gains) -- --
Distributions (from return of capital) -- --
------- -------
Total Distributions (0.59) (0.57)
------- -------
Net Asset Value, End of Period $ 13.08 $ 12.68
======= =======
Total Return(3) 7.93% 25.56%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 341 $ 164
Ratio of Expenses to Average Net Assets 1.79% 1.80%
Ratio of Net Income to Average Net Assets 5.27% 5.79%
Ratio of Expenses to Average Net Assets (excluding waivers) 2.00% 1.99%
Ratio of Net Income to Average Net Assets (excluding waivers) 5.06% 5.60%
Portfolio Turnover Rate 85% 45%
- ------------------------------------------------------------------------------------------
(1) Per share data calculated using average shares outstanding method.
(2) Commenced operations of February 1, 2000. All ratios for the period have
been annualized, except total return.
(3) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
26 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
SCIENCE & TECHNOLOGY FUND
Fiscal period Fiscal period
ended ended
CLASS A SHARES September 30, 2001(1,2) October 31, 2000(3,4)
- ----------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 19.43 $ 21.93
--------- ---------
Investment Operations:
Net Investment Income (Loss) (0.10) (0.07)
Net Gains (Losses) on Investments
(both realized and unrealized) (14.63) (2.43)
--------- ---------
Total From Investment Operations (14.73) (2.50)
--------- ---------
Less Distributions:
Dividends (from net investment income) -- --
Distributions (from capital gains) -- --
--------- ---------
Total Distributions -- --
--------- ---------
Net Asset Value, End of Period $ 4.70 $ 19.43
========= =========
Total Return(5) (75.81)% (11.40)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 988 $ 1,944
Ratio of Expenses to Average Net Assets 1.59% 1.64%
Ratio of Net Income (Loss) to Average Net Assets (1.15)% (1.47)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.84% 1.73%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) (1.40)% (1.56)%
Portfolio Turnover Rate 146% 85%
- ------------------------------------------------------------------------------------------------------------
(1) Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except
total return.
(2) Per share data calculated using average shares outstanding method.
(3) Commenced operations on March 31, 2000.
(4) Effective in 2000, the Fund's fiscal year end was changed to October 31 from
November 30. All ratios for the period have been annualized, except total
return.
(5) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal period Fiscal period Fiscal period
ended ended ended
September 30, October 31, November 30,
CLASS B SHARES 2001(1,2) 2000(2,3) 1999(4)
- -----------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 19.36 $ 14.52 $ 10.00
--------- --------- ---------
Investment Operations:
Net Investment Income (Loss) (0.18) (0.27) --
Net Gains (Losses) on Investments
(both realized and unrealized) (14.52) 5.11 4.52
--------- --------- ---------
Total From Investment Operations (14.70) 4.84 4.52
--------- --------- ---------
Less Distributions:
Dividends (from net investment income) -- -- --
Distributions (from capital gains) -- -- --
--------- --------- ---------
Total Distributions -- -- --
--------- --------- ---------
Net Asset Value, End of Period $ 4.66 $ 19.36 $ 14.52
========= ========= =========
Total Return(5) (75.93)% 33.33% 45.20%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 3,563 $ 13,465 $ 1,345
Ratio of Expenses to Average Net Assets 2.32% 2.09% 1.94%
Ratio of Net Income (Loss) to Average Net Assets (1.87)% (1.63)% (1.19)%
Ratio of Expenses to Average Net Assets (excluding waivers) 2.56% 2.19% 2.09%
Ratio of Net Income (Loss) to Average Net Assets
(excluding waivers) (2.11)% (1.73)% (1.34)%
Portfolio Turnover Rate 146% 85% 16%
- -----------------------------------------------------------------------------------------------------
(1) Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except
total return.
(2) Per share data calculated using average shares outstanding method.
(3) Effective in 2000, the Fund's fiscal year end was changed to October 31 from
November 30. All ratios for the period have been annualized, except total
return.
(4) Commenced operations on August 9, 1999. All ratios for the period have been
annualized, except total return.
(5) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
27 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
SCIENCE & TECHNOLOGY FUND (CONTINUED)
Fiscal period
ended
CLASS C SHARES September 30, 2001(1,2)
- ----------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 5.06
-------
Investment Operations:
Net Investment Income (Loss) --
Net Gains (Losses) on Investments
(both realized and unrealized) (0.36)
--------
Total From Investment Operations (0.36)
--------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
--
Total Distributions --
--
Net Asset Value, End of Period $ 4.70
=======
Total Return(3) (7.11)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ --
Ratio of Expenses to Average Net Assets 0.00%
Ratio of Net Income (Loss) to Average Net Assets 0.00%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.00%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) 0.00%
Portfolio Turnover Rate 146%
- ---------------------------------------------------------------------------------------------------
(1) Class C shares have been offered since September 24, 2001. All ratios for
the period have been annualized, except total return.
(2) Per share data calculated using average shares outstanding method.
(3) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
28 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
TECHNOLOGY FUND
Fiscal year ended September 30,
CLASS A SHARES 2001(1) 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 47.68 $ 34.22 $ 15.60 $ 20.20 $ 19.25
------- ------- ------- ------- -------
Investment Operations:
Net Investment Loss (0.15) (0.35) (0.18) (0.13) (0.11)
Net Gains (Losses) on Investments
(both realized and unrealized) (33.55) 24.87 19.55 (3.26) 3.12
------- ------- ------- ------- -------
Total From Investment Operations (33.70) 24.52 19.37 (3.39) 3.01
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) -- -- -- -- --
Distributions (from capital gains) (7.62) (11.06) (0.75) (1.21) (2.06)
------- ------- ------- ------- -------
Total Distributions (7.62) (11.06) (0.75) (1.21) (2.06)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 6.36 $ 47.68 $ 34.22 $ 15.60 $ 20.20
======= ======= ======= ======= =======
Total Return(2) (83.30)% 80.11% 128.71% (16.69)% 17.71%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $29,084 $155,533 $21,491 $ 7,703 $ 5,564
Ratio of Expenses to Average Net Assets 1.15% 1.15% 1.15% 1.15% 1.15%
Ratio of Net Loss to Average Net Assets (0.88)% (0.93)% (0.80)% (0.60)% (0.59)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.22% 1.15% 1.16% 1.15% 1.17%
Ratio of Net Loss to Average Net Assets (excluding waivers) (0.95)% (0.93)% (0.81)% (0.60)% (0.61)%
Portfolio Turnover Rate 269% 195% 184% 124% 150%
- ------------------------------------------------------------------------------------------------------------------------------
(1) Per share data calculated using average shares outstanding method.
(2) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
Fiscal year ended September 30,
CLASS B SHARES 2001(1) 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 44.40 $ 32.59 $ 14.99 $ 19.58 $ 18.85
------- ------- ------- ------- -------
Investment Operations:
Net Investment Loss (0.26) (0.35) (0.34) (0.24) (0.20)
Net Gains (Losses) on Investments
(both realized and unrealized) (30.75) 23.22 18.69 (3.14) 2.99
------- ------- ------- ------- -------
Total From Investment Operations (31.01) 22.87 18.35 (3.38) 2.79
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) -- -- -- -- --
Distributions (from capital gains) (7.62) (11.06) (0.75) (1.21) (2.06)
------- ------- ------- ------- -------
Total Distributions (7.62) (11.06) (0.75) (1.21) (2.06)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 5.77 $ 44.40 $ 32.59 $ 14.99 $ 19.58
======= ======= ======= ======= =======
Total Return(2) (83.42)% 78.77% 127.09% (17.21)% 16.82%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $15,974 $97,003 $20,866 $ 7,499 $ 8,463
Ratio of Expenses to Average Net Assets 1.90% 1.90% 1.90% 1.90% 1.90%
Ratio of Net Loss to Average Net Assets (1.63)% (1.68)% (1.56)% (1.38)% (1.41)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.97% 1.90% 1.91% 1.90% 1.92%
Ratio of Net Loss to Average Net Assets (excluding waivers) (1.70)% (1.68)% (1.57)% (1.38)% (1.43)%
Portfolio Turnover Rate 269% 195% 184% 124% 150%
- ------------------------------------------------------------------------------------------------------------------------------
(1) Per share data calculated using average shares outstanding method.
(2) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
29 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
TECHNOLOGY FUND (CONTINUED)
Fiscal period ended September 30,
CLASS C SHARES 2001(1) 2000(2)
- ------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 47.49 $ 50.30
---------- ----------
Investment Operations:
Net Investment Loss (0.26) (0.35)
Net Gains (Losses) on Investments
(both realized and unrealized) (33.33) (2.46)
---------- ----------
Total From Investment Operations (33.59) (2.81)
---------- ----------
Less Distributions:
Dividends (from net investment income) -- --
Distributions (from capital gains) (7.62) --
---------- ----------
Total Distributions (7.62) --
---------- ----------
Net Asset Value, End of Period $ 6.28 $ 47.49
========== ==========
Total Return(3) (83.43)% (5.59)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 9,010 $ 33,605
Ratio of Expenses to Average Net Assets 1.90% 1.90%
Ratio of Net Loss to Average Net Assets (1.63)% (1.67)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.98% 1.88%
Ratio of Net Loss to Average Net Assets (excluding waivers) (1.71)% (1.65)%
Portfolio Turnover Rate 269% 195%
- --------------------------------------------------------------------------------------------
(1) Per share data calculated using average shares outstanding method.
(2) Commenced operations on February 1, 2000. All ratios for the period have
been annualized, except total return.
(3) Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
30 PROSPECTUS - First American Sector Funds
Class A, Class B, and Class C Shares
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
More information about the funds is available in the funds' Statement of
Additional Information, and annual and semiannual reports, and on the First
American funds' Internet Web site.
- --------------------------------------------------------------------------------
FIRST AMERICAN FUNDS WEB SITE
Information about the First American funds may be viewed on the funds' Internet
Web site at http://www.firstamericanfunds.com.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more details about the funds and their policies. A current SAI
is on file with the Securities and Exchange Commission (SEC) and is incorporated
into this prospectus by reference (which means that it is legally considered
part of this prospectus).
- --------------------------------------------------------------------------------
ANNUAL AND SEMIANNUAL REPORTS
Additional information about the funds' investments is available in the funds'
annual and semiannual reports to shareholders. In the funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the funds' performance during their last fiscal year.
You can obtain a free copy of the funds' SAI and/or free copies of the funds'
most recent annual or semiannual reports by calling Investor Services at 800
677-FUND. The material you request will be sent by first-class mail or other
means designed to ensure equally prompt delivery, within three business days of
receipt of the request.
You can also obtain copies of this information, after paying a duplicating fee,
by electronic request at the following email address: publicinfo@sec.gov, or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. For
more information, call 1-202-942-8090.
Information about the funds is also available on the Internet. Text-only
versions of fund documents can be viewed online or downloaded from the EDGAR
Database on the SEC's Internet site at http://www.sec.gov.
FIRST AMERICAN FUNDS P.O. Box 1330, Minneapolis, MN 55440-1330
U.S. Bancorp Asset Management, Inc., serves as the investment advisor to the
First American Funds.
First American Funds are distributed by Quasar Distributors, LLC, which is
located in Milwaukee, WI 53202 and is an affiliate of the investment advisor.
PROSECTR 1/02
SEC file number: 811-05309
[LOGO] FIRST AMERICAN FUNDS(TM)
[LOGO] FIRST AMERICAN FUNDS(TM) JANUARY 28, 2002
PROSPECTUS
FIRST AMERICAN INVESTMENT FUNDS, INC.
ASSET CLASS -- STOCK FUNDS
SECTOR FUNDS
CLASS Y SHARES
HEALTH SCIENCES FUND
REAL ESTATE SECURITIES FUND
SCIENCE & TECHNOLOGY FUND
TECHNOLOGY FUND
AS WITH ALL MUTUAL FUNDS, THE
SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THE
SHARES OF THESE FUNDS, OR DETERMINED
IF THE INFORMATION IN THIS
PROSPECTUS IS ACCURATE OR COMPLETE.
ANY STATEMENT TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Table of
CONTENTS
FUND SUMMARIES
- --------------------------------------------------------------------------------
Health Sciences Fund 2
- --------------------------------------------------------------------------------
Real Estate Securities Fund 5
- --------------------------------------------------------------------------------
Science & Technology Fund 7
- --------------------------------------------------------------------------------
Technology Fund 10
- --------------------------------------------------------------------------------
POLICIES & SERVICES
- --------------------------------------------------------------------------------
Buying and Selling Shares 13
- --------------------------------------------------------------------------------
Managing Your Investment 15
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Management 16
- --------------------------------------------------------------------------------
More About The Funds 17
- --------------------------------------------------------------------------------
Financial Highlights 19
- --------------------------------------------------------------------------------
FOR MORE INFORMATION Back Cover
- --------------------------------------------------------------------------------
Fund Summaries
INTRODUCTION
This section of the prospectus describes the objectives of the First American
Sector Funds, summarizes the main investment strategies used by each fund in
trying to achieve its objectives, and highlights the risks involved with these
strategies. It also provides you with information about the performance, fees,
and expenses of the funds.
AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF U.S. BANK NATIONAL ASSOCIATION
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY.
1 PROSPECTUS - First American Sector Funds
Class Y Shares
Fund Summaries
HEALTH SCIENCES FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Health Sciences Fund has an objective of long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Health Sciences Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies which develop, produce or distribute
products or services connected with health care or medicine, and which derive at
least 50% of their assets, revenues or profits from these products or services
at the time of investment.
Examples of products or services connected with health care or medicine include:
o pharmaceuticals.
o health care services and administration.
o diagnostics.
o medical equipment and supplies.
o medical technology.
o medical research and development.
The fund's advisor will invest in companies that it believes have the potential
for above average growth in revenue and earnings as a result of new or unique
products, processes or services; increasing demand for a company's products or
services; established market leadership; or exceptional management.
The fund's investments may include development stage companies (companies that
do not have significant revenues) and small-and mid-capitalization companies.
The fund may also invest in real estate investment trusts (REITs) that finance
medical care facilities. REITs are publicly traded corporations or trusts that
acquire, hold and manage real estate.
Under certain market conditions, the fund may frequently invest in companies at
the time of their initial public offering (IPO). By virtue of its size and
institutional nature, the advisor may have greater access to IPOs than
individual investors have, including access to so-called "hot issues" which are
generally traded in the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may affect the market as a whole, or
they may affect only a particular company, industry, or sector of the market.
RISKS OF THE HEALTH SCIENCES SECTOR. Because the fund invests primarily in
stocks related to health care or medicine, it is particularly susceptible to
risks associated with the health sciences industries. Many products and services
in the health sciences industries may become rapidly obsolete due to
technological and scientific advances. In addition, governmental regulation may
have a material effect on the demand for products and services in these
industries.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers will be in the same or related economic sectors, the fund's
portfolio securities may be more susceptible to any single economic,
technological or regulatory occurrence than the portfolio securities of a
diversified fund.
RISKS OF DEVELOPMENT STAGE, SMALL- AND MID-CAP STOCKS. Stocks of development
stage and small-capitalization companies involve substantial risk. These stocks
historically have experienced greater price volatility than stocks of more
established and larger-capitalization companies, and they may be expected to do
so in the future. While stocks of mid-cap companies may be slightly less
volatile than those of small-cap companies, they still involve substantial risk
and their prices may be subject to more abrupt or erratic movements than those
of larger, more established companies or the market averages in general.
RISKS OF REAL ESTATE INVESTMENT TRUSTS (REITs). REITs will be affected by
changes in the values of and incomes from the properties they own or the credit
quality of the mortgages they hold. REITs are dependent on specialized
management skills which may affect their ability to generate cash flow for
operating purposes and to make distributions to shareholders or unitholders.
2 PROSPECTUS - First American Sector Funds
Class Y Shares
Fund Summaries
HEALTH SCIENCES FUND CONTINUED
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Companies involved in IPOs generally
have limited operating histories and prospects for future profitability are
uncertain. Prices of IPOs may also be unstable because of the absence of a prior
public market, the small number of shares available for trading and limited
investor information. IPOs will frequently be sold within 12 months of purchase.
This may result in increased short-term capital gains, which will be taxable to
shareholders as ordinary income.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund has varied from year to
year. The table compares the fund's performance over different time periods to
that of the fund's benchmark index, which is a broad measure of market
performance. The fund's performance reflects fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these waivers were not in place,
the fund's performance would be reduced.
3 PROSPECTUS - First American Sector Funds
Class Y Shares
Class Y Shares
Fund Summaries
HEALTH SCIENCES FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR
[BAR CHART]
16.50% -6.87% -0.82% 47.09% -11.73
- --------------------------------------------------------------------------------
1997 1998 1999 2000 2001
Best Quarter: Quarter ending June 30, 2000 20.07%
Worst Quarter: Quarter ending September 30, 1998 (22.38)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01 Date One Year Five Years Inception
- -------------------------------------------------------------------------------------------------
Health Sciences Fund 1/31/96 (11.73)% 6.92% 5.76%
- -------------------------------------------------------------------------------------------------
Standard & Poor's Health Care Composite Index(1) (12.88)% 16.00% 15.67%
- -------------------------------------------------------------------------------------------------
(1)An unmanaged index comprised of health care stocks in the Standard & Poor's
500 Index (an unmanaged index of large capitalization stocks). The since
inception performance of the index is calculated from 1/31/96.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses 0.57%
Total Annual Fund Operating Expenses 1.27%
Waiver of Fund Expenses(2) (0.29)%
NET EXPENSES(2) 0.98%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.98%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $100
3 years $373
5 years $667
10 years $1,504
4 PROSPECTUS - First American Sector Funds
Class Y Shares
Fund Summaries
REAL ESTATE SECURITIES FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Real Estate Securities Fund's objective is to provide above average current
income and long-term capital appreciation.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Real Estate Securities Fund invests primarily
(at least 80% of its net assets, plus the amount of any borrowings for
investment purposes) in income-producing common stocks of publicly traded
companies engaged in the real estate industry. These companies derive at least
50% of their revenues or profits from the ownership, construction, management,
financing or sale of real estate, or have at least 50% of the fair market value
of their assets invested in real estate. The advisor will select companies that
it believes exhibit strong management teams, a strong competitive position,
above average growth in revenues and a sound balance sheet.
A majority of the fund's total assets will be invested in real estate investment
trusts (REITs). REITs are publicly traded corporations or trusts that acquire,
hold and manage residential or commercial real estate. REITs generally can be
divided into the following three types:
o equity REITs, which invest the majority of their assets directly in
real property and derive their income primarily from rents and capital
gains or real estate appreciation.
o mortgage REITs, which invest the majority of their assets in real
estate mortgage loans and derive their income primarily from interest
payments.
o hybrid REITs, which combine the characteristics of equity REITs and
mortgage REITs.
The fund expects to emphasize investments in equity REITs, although it may
invest in all three kinds of REITs.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
RISKS OF THE REAL ESTATE INDUSTRY. Because the fund invests primarily in the
real estate industry, it is particularly susceptible to risks associated with
that industry. The real estate industry has been subject to substantial
fluctuations and declines on a local, regional and national basis in the past
and may continue to be in the future.
RISKS OF REAL ESTATE INVESTMENT TRUSTS (REITs). There are risks associated with
direct investments in REITs. Equity REITs will be affected by changes in the
values of and incomes from the properties they own, while mortgage REITs may be
affected by the credit quality of the mortgage loans they hold. REITs are
dependent on specialized management skills which may affect their ability to
generate cash flow for operating purposes and to make distributions to
shareholders or unitholders.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers generally will be in the real estate industry, the fund's
portfolio securities may be more susceptible to any single economic or
regulatory occurrence than the portfolio securities of a diversified fund.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund has varied from year to
year. The table compares the fund's performance over different time periods to
that of the fund's benchmark index, which is a broad measure of market
performance. The fund's performance reflects fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have reinvested.
Performance reflects fee waivers in effect. If these waivers were not in place,
the fund's performance would be reduced.
5 PROSPECTUS - First American Sector Funds
Class Y Shares
Fund Summaries
REAL ESTATE SECURITIES FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR
[BAR CHART]
31.00% 19.60% -15.98% -3.65% 32.23% 9.82%
- --------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1996 16.61%
Worst Quarter: Quarter ending September 30, 1998 (9.71)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01 Date One Year Five Years Inception
- -----------------------------------------------------------------------------------
Real Estate Securities Fund 6/30/95 9.82% 7.05% 11.62%
- -----------------------------------------------------------------------------------
Morgan Stanley REIT Index(1) 12.83% 6.12% 11.15%
- -----------------------------------------------------------------------------------
(1)An unmanaged index of the most actively traded real estate investment trusts.
The since inception performance for the index is calculated from 6/30/95.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses 0.42%
Total Annual Fund Operating Expenses 1.12%
Waiver of Fund Expenses(2) (0.14)%
NET EXPENSES(2) 0.98%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.98%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $100
3 years $342
5 years $603
10 years $1,349
6 PROSPECTUS - First American Sector Funds
Class Y Shares
Fund Summaries
SCIENCE & TECHNOLOGY FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Science & Technology Fund has an objective of long-term after-tax growth of
capital. Effective April 1, 2002, Science & Technology Fund's objective is to
maximize long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Science & Technology Fund invests primarily (at
least 80% of its net assets, plus the amount of any borrowings for investment
purposes) in equity securities of companies principally engaged in science and
technology business activities. The fund considers science and technology
sectors to include companies whose primary business is to provide goods or
services in the fields of science (e.g., health and medical) or technology
(e.g., computers and communications). These may include companies that:
o make or sell products used in health care.
o make or sell medical equipment and devices and related technologies.
o make or sell software or information-based services and consulting,
communications and related services.
o design, manufacture or sell electronic components and systems.
o research, design, develop, manufacture or distribute products,
processes or services that relate to hardware technology within the
computer industry.
o develop, produce or distribute products or services in the computer,
semi-conductor, electronics, communications, health care and
biotechnology sectors.
o engage in the development, manufacturing or sale of communications
services or communications equipment.
The advisor believes that because of rapid advances in technology and science,
an investment in companies with business operations in these areas will offer
substantial opportunities for long-term capital appreciation. The fund's
investments may include development stage companies (companies that do not have
significant revenues) and small-and mid-capitalization companies.
Under certain market conditions, the fund may frequently invest in companies at
the time of their initial public offering (IPO). By virtue of its size and
institutional nature, the advisor may have greater access to IPOs than
individual investors have, including access to so-called "hot issues" which are
generally traded in the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Effective April 1, 2002, the advisor will no longer utilize the following
tax-efficient strategies in seeking to achieve the fund's objective.
The advisor seeks to achieve high after-tax returns by balancing investment
considerations and tax considerations. The fund seeks to achieve returns
primarily in the form of price appreciation (which is not subject to current
tax) and to minimize income distributions and distributions of realized
short-term gains (taxed as ordinary income). Among the main strategies used in
the tax-efficient management of the fund are the following:
o investing primarily in lower-yielding growth stocks to minimize taxable
dividend income.
o employing a long-term, low turnover approach to investing.
o attempting to avoid net realized short-term gains.
o selling stocks trading below cost to realize losses (when appropriate)
in order to offset realized capital gains that would otherwise have to
be distributed to shareholders.
o selling the highest cost shares when selling appreciated stocks in
order to minimize realized capital gains.
o selectively using tax-advantaged hedging techniques as an alternative
to taxable sales (such as purchased put options, equity collars, equity
swaps, covered short sales, and the purchase or sale of stock index
futures contracts).
As a result of its tax-efficient strategy, the fund can generally be expected to
distribute a smaller percentage of returns each year than most other equity
mutual funds. There can be no assurance, however, that taxable distributions can
always be avoided.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may affect the market as a whole, or
they may affect only a particular company, industry, or sector of the market.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers will be in the same or related economic sectors, the fund's
portfolio securities may be more susceptible to any single economic,
technological or regulatory occurrence than the portfolio securities of a
diversified fund.
RISKS OF THE SCIENCE AND TECHNOLOGY SECTOR. Because the fund invests primarily
in science and technology related stocks, it is particularly susceptible to
risks associated with the science and technology industry. Competitive pressures
may have a significant effect on the financial condition of companies in that
industry.
7 PROSPECTUS - First American Sector Funds
Class Y Shares
Fund Summaries
SCIENCE & TECHNOLOGY FUND CONTINUED
RISKS OF DEVELOPMENT STAGE AND SMALL-CAP AND MID-CAP STOCKS. Stocks of
development stage and small-capitalization companies involve substantial risk.
These stocks historically have experienced greater price volatility than stocks
of more established and larger-capitalization companies, and they may be
expected to do so in the future. While stocks of mid-cap companies may be
slightly less volatile than those of small-cap companies, they still involve
substantial risk and their prices may be subject to more abrupt or erratic
movements than those of larger, more established companies or the market
averages in general.
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Companies involved in IPOs generally
have limited operating histories and prospects for future profitability are
uncertain. Prices of IPOs may also be unstable because of the absence of a prior
public market, the small number of shares available for trading and limited
investor information. IPOs will frequently be sold within 12 months of purchase.
This may result in increased short-term capital gains, which will be taxable to
shareholders as ordinary income.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability, or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund has varied from year to
year. The table compares the fund's performance over different time periods to
that of the fund's benchmark index, which is a broad measure of market
performance. The fund's performance reflects fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
8 PROSPECTUS - First American Sector Funds
Class Y Shares
Fund Summaries
SCIENCE & TECHNOLOGY FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
- -20.11% -51.45%
- --------------------------------------------------------------------------------
2000 2001
Best Quarter: Quarter ending December 31, 2001 48.52%
Worst Quarter: Quarter ending September 30, 2001 (48.65)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Inception
- --------------------------------------------------------------------------------------
Science & Technology Fund 8/9/99 (51.45)% (13.63)%
- --------------------------------------------------------------------------------------
Standard & Poor's Information Technology Index(2) (25.88)% (20.17)%
- --------------------------------------------------------------------------------------
Nasdaq 100 Index(3) (32.58)% (16.38)%
- --------------------------------------------------------------------------------------
(1)On 9/24/01, the Science & Technology Fund became the successor by merger to
the Firstar Science & Technology Fund, a series of Firstar Funds, Inc. Prior
to the merger, the First American fund had no assets or liabilities.
Performance presented prior to 9/24/01 represents that of the Firstar Science
& Technology Fund. The Firstar Science & Technology Fund was organized on
12/11/00 and, prior to that was a separate series of Firstar Stellar Funds,
Inc.
(2)An unmanaged index comprised of information technology stocks in the Standard
& Poor's 500 Index, which is an unmanaged index of large capitalization
stocks. Previously, the fund used the Nasdaq 100 Index as a benchmark. Going
forward, the fund will use the Standard & Poor's Information Technology Index
as a comparison, because its composition better matches the fund's investment
objective and strategies. The since inception performance of the index is
calculated from 8/31/99.
(3)A market capitalization-weighted index that includes 100 of the largest
financial companies, domestic and foreign, in the Nasdaq National Market. The
since inception performance of the index is calculated from 8/31/99.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses 0.51%
Total Annual Fund Operating Expenses 1.21%
Waiver of Fund Expenses(2) (0.23)%
NET EXPENSES(2) 0.98%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.98%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $100
3 years $361
5 years $642
10 years $1,442
9 PROSPECTUS - First American Sector Funds
Class Y Shares
Fund Summaries
TECHNOLOGY FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Technology Fund has an objective of long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Technology Fund invests primarily (at least 80%
of its net assets, plus the amount of any borrowings for investment purposes) in
common stocks of companies which the fund's advisor believes either have, or
will develop, products, processes or services that will provide or will benefit
significantly from technological innovations, advances and improvements. These
may include:
o inexpensive computing power, such as personal computers.
o improved methods of communications, such as satellite transmission.
o technology related services such as internet related marketing
services.
The prime emphasis of the fund is to identify companies which the advisor
believes are positioned to benefit from technological advances in areas such as
semiconductors, computers, software, communications, and online services.
Companies in which the fund invests may include development stage companies
(companies that do not have significant revenues) and small capitalization
companies. The advisor will generally select companies that it believes exhibit
strong management teams, a strong competitive position, above average growth in
revenues and a sound balance sheet.
Under certain market conditions, the fund may frequently invest in companies at
the time of their initial public offering (IPO). By virtue of its size and
institutional nature, the advisor may have greater access to IPOs than
individual investors have, including access to so-called "hot issues" which are
generally traded in the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may affect the market as a whole, or
they may affect only a particular company, industry, or sector of the market.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers will be in the same or related economic sectors, the fund's
portfolio securities may be more susceptible to any single economic,
technological or regulatory occurrence than the portfolio securities of a
diversified fund.
RISKS OF THE TECHNOLOGY SECTOR. Because the fund invests primarily in technology
related stocks, it is particularly susceptible to risks associated with the
technology industry. Competitive pressures may have a significant effect on the
financial condition of companies in that industry.
RISKS OF DEVELOPMENT STAGE AND SMALL-CAP STOCKS. Stocks of development stage and
small-capitalization companies involve substantial risk. These stocks
historically have experienced greater price volatility than stocks of more
established and larger capitalization companies, and they may be expected to do
so in the future.
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Companies involved in IPOs generally
have limited operating histories and prospects for future profitability are
uncertain. Prices of IPOs may also be unstable because of the absence of a prior
public market, the small number of shares available for trading and limited
investor information. IPOs will frequently be sold within 12 months of purchase.
This may result in increased short-term capital gains, which will be taxable to
shareholders as ordinary income.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability, or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
10 PROSPECTUS - First American Sector Funds
Class Y Shares
Fund Summaries
TECHNOLOGY FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations below provide you with information on the fund's volatility and
performance. Of course, past performance does not guarantee future results.
The bar chart shows you how performance of the fund has varied from year to
year. The table compares the fund's performance over different time periods to
that of the fund's benchmark index, which is a broad measure of market
performance. The fund's performance reflects fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have reinvested.
Performance reflects fee waivers in effect. If these waivers were not in place,
the fund's performance would be reduced.
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
41.02% 22.43% 7.31% 32.70% 192.59% -45.62% -55.63%
- --------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1999 80.67%
Worst Quarter: Quarter ending March 31, 2001 (48.80)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Five Years Inception
- --------------------------------------------------------------------------------------------------
Technology Fund 4/4/94 (55.63)% 0.10% 10.59%
- --------------------------------------------------------------------------------------------------
Standard & Poor's Information Technology Index(2) (25.88)% 12.14% 19.71%
- --------------------------------------------------------------------------------------------------
(1)Technology Fund's 1999 returns were primarily achieved buying IPOs and
technology related stocks in a period favorable for these investments. Of
course, such favorable returns involve accepting the risk of volatility, and
there is no assurance that the fund's future investment in IPOs and
technology stocks will have the same effect on performance as it did in 1999.
(2)An unmanaged index comprised of information technology stocks in the Standard
& Poor's 500 Index (an unmanaged index of large capitalization stocks). The
since inception performance of the index is calculated from 4/30/94.
11 PROSPECTUS - First American Sector Funds
Class Y Shares
Fund Summaries
TECHNOLOGY FUND CONTINUED
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses 0.35%
Total Annual Fund Operating Expenses 1.05%
Waiver of Fund Expenses(2) (0.07)%
NET EXPENSES(2) 0.98%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.98%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $100
3 years $327
5 years $572
10 years $1,275
12 PROSPECTUS - First American Sector Funds
Class Y Shares
Policies & Services
BUYING AND SELLING SHARES
- --------------------------------------------------------------------------------
MULTIPLE CLASS INFORMATION
The funds offer five different classes of shares. This prospectus offers Class Y
shares that are sold through banks and other financial institutions that have
entered into sales agreements with the funds' distributor. Class Y shares are
available to certain accounts for which the financial institution acts in a
fiduciary, agency, or custodial capacity, such as certain trust accounts and
investment advisory accounts. Class Y shares are typically held in an omnibus
account with the transfer agent. While there is no initial or deferred sales
charge on your purchase of Class Y shares, your investment professional or
financial institution may receive a commission of up to 1.25% on your purchase.
To find out whether you may purchase Class Y shares, contact your financial
institution.
Class A, Class B, Class C and Class S shares of the funds are available through
separate prospectuses. There are differences among the fees and expenses for
each of the five classes. The difference in the fee structures between the
classes is the result of their separate arrangements for shareholder and
distribution services and not the result of any difference in amounts charged by
the investment advisor for core investment advisory services. Accordingly, the
core investment advisory expenses do not vary by class. Different fees and
expenses will affect performance.
The following describes the features of each class:
o Class A shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 0.25%.
o Class B shares are sold to the public with a contingent deferred sales
charge (CDSC) and annual distribution and service (12b-1) fees of
1.00%.
o Class C shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 1.00%
(may be subject to a CDSC).
o Class S shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class S
shares are sold without a sales charge or distribution fee, but with an
annual shareholder servicing fee of 0.25%.
o Class Y shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class Y
shares are sold without a sales charge or distribution fee.
THIS PROSPECTUS AND THE RELATED STATEMENT OF ADDITIONAL INFORMATION DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SHARES IN THE
FUNDS, NOR SHALL ANY SUCH SHARES BE OFFERED OR SOLD TO ANY PERSON IN ANY
JURISDICTION IN WHICH AN OFFER, SOLICITATION, PURCHASE OR SALE WOULD BE UNLAWFUL
UNDER THE SECURITIES LAWS OF SUCH JURISDICTION.
- --------------------------------------------------------------------------------
CALCULATING YOUR SHARE PRICE
Your purchase price will be equal to the fund's net asset value (NAV) per share,
which is generally calculated as of the close of regular trading on the New York
Stock Exchange (usually 3 p.m. Central time) every day the exchange is open.
A fund's NAV is equal to the market value of its investments and other assets,
less any liabilities, divided by the number of fund shares. If market prices are
not readily available for an investment or if the advisor believes they are
unreliable, fair value prices may be determined in good faith using methods
approved by the funds' board of directors.
- --------------------------------------------------------------------------------
HOW TO BUY AND SELL SHARES
You may purchase or sell shares by calling your financial institution. When
purchasing shares, payment must be made by wire transfer, which can be arranged
by your financial institution. Shares may be purchased or sold on days when the
New York Stock Exchange is open. Wire federal funds as follows:
U.S. Bank National Association
ABA Number: 0420-00013
Account Number: 112-952-137
Credit to: First American (NAME OF FUND, INVESTOR NAME AND INVESTOR ACCOUNT #)
Purchase orders and redemption requests must be received by your financial
institution by the time specified by the institution to be assured same day
processing. In order for shares to be purchased at that day's price, the funds
must receive your purchase order by 3:00 p.m. Central time. In order for shares
to be sold at that day's price, the funds must receive your redemption request
by 3:00 p.m. Central time. It is the responsibility of your financial
institution to promptly transmit orders to the funds. Purchase orders and
redemption requests may be restricted in the event of an early or unscheduled
close of the New York Stock Exchange.
If the funds receive your redemption request by 3:00 p.m. Central time, payment
of your redemption proceeds will ordinarily be made by wire on the next business
day. It is possible, however, that payment could be delayed by up to seven days.
To minimize the effect of large redemption requests, each fund reserves the
right to fulfill these redemption requests by distributing readily marketable
securities in the fund's portfolio, rather than paying you in cash. See
"Policies & Services -- Managing Your Investment, Redemption In Kind."
13 PROSPECTUS - First American Sector Funds
Class Y Shares
Policies & Services
BUYING AND SELLING SHARES CONTINUED
- --------------------------------------------------------------------------------
HOW TO EXCHANGE SHARES
If your investment goals or your financial needs change, you may exchange your
shares for Class Y shares of another First American fund. Exchanges are made at
the net asset value per share of each fund at the time of the exchange. There is
no fee to exchange shares. If you are no longer eligible to hold Class Y shares,
for example, if you decide to discontinue your fiduciary, agency or custodian
account, you may exchange your shares for Class A shares at net asset value.
Class A shares have higher expenses than Class Y shares.
To exchange your shares, call your financial institution. In order for your
shares to be exchanged the same day, you must call your financial institution by
the time specified by the institution and your exchange order must be received
by the funds by 3:00 p.m. Central time. It is the responsibility of your
financial institution to promptly transmit your exchange order to the funds.
Before exchanging into any fund, be sure to read its prospectus carefully. A
fund may change or cancel its exchange policies at any time. You will be
notified of any changes. The funds have the right to limit exchanges to four
times per year.
- --------------------------------------------------------------------------------
REDEMPTION IN KIND
Generally, proceeds from redemption requests will be paid in cash. However, to
minimize the effect of large redemption requests on a fund and its remaining
shareholders, each fund reserves the right to pay part or all of the proceeds
from a redemption request in a proportionate share of readily marketable
securities in the fund instead of cash. In selecting securities for a redemption
in kind, the advisor will consider the best interests of the fund and the
remaining fund shareholders, and will value these securities in accordance with
the pricing methods employed to calculate the fund's net asset value per share.
If you receive redemption proceeds in kind, you should expect to incur
transaction costs upon disposition of the securities received in the redemption.
14 PROSPECTUS - First American Sector Funds
Class Y Shares
Policies & Services
MANAGING YOUR INVESTMENT
- --------------------------------------------------------------------------------
STAYING INFORMED
SHAREHOLDER REPORTS. Shareholder reports are mailed twice a year, in November
and May. They include financial statements and performance information, and on
an annual basis, a message from your portfolio managers and the auditors'
report.
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailings to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call Investor Services at 800 677-FUND.
STATEMENTS AND CONFIRMATIONS. Statements summarizing activity in your account
are mailed quarterly. Confirmations are mailed following each purchase or sale
of fund shares. Generally, a fund does not send statements to individuals who
have their shares held in an omnibus account.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
Dividends from a fund's net investment income are declared and paid quarterly.
Any capital gains are distributed at least once each year.
On the ex-dividend date for a distribution, a fund's share price is reduced by
the amount of the distribution. If you buy shares just before the ex-dividend
date, in effect, you "buy the dividend." You will pay the full price for the
shares and then receive a portion of that price back as a taxable distribution.
Dividend and capital gain distributions will be reinvested in additional shares
of the fund paying the distribution, unless you request that distributions be
reinvested in another First American fund or paid in cash. This request may be
made on your new account form or by contacting your financial institution. If
you request that your distributions be paid in cash but those distributions
cannot be delivered because of an incorrect mailing address, the undelivered
distributions and all future distributions will be reinvested in fund shares.
- --------------------------------------------------------------------------------
TAXES
Some of the tax consequences of investing in the funds are discussed below. More
information about taxes is in the Statement of Additional Information. However,
because everyone's tax situation is unique, always consult your tax professional
about federal, state, and local tax consequences.
TAXES ON DISTRIBUTIONS. Each fund pays its shareholders dividends from its net
investment income and any net capital gains that it has realized. For most
investors, fund dividends and distributions are considered taxable whether they
are reinvested or taken in cash (unless your investment is in an IRA or other
tax-advantaged account).
Dividends from a fund's net investment income and short-term capital gains are
taxable as ordinary income. Distributions of a fund's long-term capital gains
are taxable as long-term gains, regardless of how long you have held your
shares. The funds expect that, as a result of their investment objectives and
strategies, their distributions will consist primarily of ordinary income in the
case of Real Estate Securities Fund and capital gains in the case of the other
funds.
TAXES ON TRANSACTIONS. The sale of fund shares, or the exchange of one fund's
shares for shares of another fund, will be a taxable event and may result in a
capital gain or loss. The gain or loss will be considered long-term if you have
held your shares for more than one year. A gain or loss on shares held for one
year or less is considered short-term and is taxed at the same rates as ordinary
income.
If in redemption of his or her shares a shareholder receives a distribution of
readily marketable securities instead of cash, the shareholder will be treated
as receiving an amount equal to the fair market value of the securities at the
time of the distribution for purposes of determining capital gain or loss on the
redemption, and will also acquire a basis in the shares for federal income tax
purposes equal to their fair market value.
The exchange of one class of shares for another class of shares in the same fund
will not be taxable.
TAX MANAGED STRATEGY. As a result of its tax-efficient strategies, the Science &
Technology Fund can generally be expected to distribute a smaller percentage of
returns each year than most other equity mutual funds. There can be no
assurance, however, that taxable distributions can always be avoided. These
tax-efficient strategies will not be in effect after April 1, 2002.
15 PROSPECTUS - First American Sector Funds
Class Y Shares
Additional Information
MANAGEMENT
U.S. Bancorp Asset Management, Inc., is the funds' investment advisor. U.S.
Bancorp Asset Management provides investment management services to individuals
and institutions, including corporations, foundations, pensions and retirement
plans. As of September 30, 2001, U.S. Bancorp Asset Management and its
affiliates had more than $114 billion in assets under management, including
investment company assets of more than $51 billion. As investment advisor, U.S.
Bancorp Asset Management manages the funds' business and investment activities,
subject to the authority of the fund's board of directors.
Each fund pays the investment advisor a monthly fee for providing investment
advisory services. The table below reflects investment advisory fees paid to the
investment advisor, after taking into account any fee waivers, for the funds'
most recently completed fiscal year.(1)
Advisory fee
as a % of
average daily
net assets
- --------------------------------------------------------------------------------
HEALTH SCIENCES FUND 0.43%
REAL ESTATE SECURITIES FUND 0.49%
SCIENCE & TECHNOLOGY FUND(2) 0.81%
TECHNOLOGY FUND 0.64%
- --------------------------------------------------------------------------------
(1)Prior to May 2, 2001, First American Asset Management (FAAM), a division of
U.S. Bank National Association, served as investment advisor to Health
Services Fund, Real Estate Securities Fund and Technology Fund; Firstar
Investment Research & Management Company LLC (FIRMCO), an affiliate of FAAM,
served as investment advisor to Science & Technology Fund. On May 2, 2001,
FAAM and FIRMCO combined advisory operations to form U.S. Bancorp Asset
Management, Inc. The investment advisory fees paid by each fund to U.S.
Bancorp Asset Management did not change as a result of the combination.
(2)On September 24, 2001, Science & Technology Fund became the successor by
merger to Firstar Science & Technology Fund. The fiscal year end for the
Firstar fund was October 31; Science & Technology Fund has a fiscal year end
of September 30. Information presented in the table has been annualized for
the eleven-month fiscal period ended September 30, 2001.
DIRECT CORRESPONDENCE TO:
First American Funds
P.O. Box 1330
Minneapolis, Minnesota 55440-1330
INVESTMENT ADVISOR
U.S. Bancorp Asset Management, Inc.
800 Nicollet Mall
Minneapolis, Minnesota 55402
DISTRIBUTOR
Quasar Distributors, LLC
615 E. Michigan Street
Milwaukee, WI 53202
ADDITIONAL COMPENSATION
U.S. Bancorp Asset Management and other affiliates of U.S. Bancorp may act as
fiduciary with respect to plans subject to the Employee Retirement Income
Security Act of 1974 (ERISA) and other trust and agency accounts that invest in
the funds. As described above, U.S. Bancorp Asset Management receives
compensation for acting as the funds' investment advisor. U.S. Bancorp Asset
Management and its affiliates also receive compensation in connection with the
following:
CUSTODY SERVICES. U.S. Bank National Association (U.S. Bank) provides or
compensates others to provide custody services to the funds. U.S. Bank is paid
monthly fees equal, on an annual basis, to 0.01% of a fund's average daily net
assets. In addition, U.S. Bank is reimbursed for its out-of-pocket expenses
incurred while providing custody services to the funds.
ADMINISTRATION SERVICES. U.S. Bancorp Asset Management and its affiliate, U.S.
Bancorp Fund Services, LLC (Co-Administrators), provide or compensate others to
provide administrative services to the First American family of funds. These
services include general administrative and accounting services, transfer agency
and dividend disbursing services, blue sky services, and shareholder services.
With respect to the First American open-end mutual funds, the Co-Administrators
receive total fees on an annual basis, of up to 0.25% of the aggregate average
daily net assets of First American Investment Funds, Inc., First American
Strategy Funds, Inc. and First American Insurance Portfolios, Inc., and up to
0.20% of the aggregate average daily net assets of First American Funds, Inc.
The funds also pay the Co-Administrators fees based upon the number of funds and
accounts maintained. In addition, the Co-Administrators are reimbursed for their
out-of-pocket expenses incurred while providing administration services to the
funds.
DISTRIBUTION SERVICES. Quasar Distributors, LLC, an affiliate of U.S. Bancorp
Asset Management, serves as distributor of the funds and receives out of pocket
expenses incurred while providing distribution and other sub-administrative
services for the funds.
SECURITIES LENDING SERVICES. In connection with lending their portfolio
securities, the funds pay administrative and custodial fees to U.S. Bancorp
Asset Management which are equal to 40% of the funds' income from these
securities lending transactions.
BROKERAGE TRANSACTIONS. When purchasing and selling portfolio securities for the
funds, the funds' investment advisor may place trades through its affiliates,
U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., which will
earn commissions on these transactions.
SHAREHOLDER SERVICING FEES. To the extent that fund shares are held through U.S.
Bancorp Asset Management, U.S. Bank or their broker-dealer affiliates, U.S.
Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., those entities
may receive shareholder servicing fees from the funds' distributor.
PORTFOLIO MANAGEMENT
Each fund's investments are managed by a team of persons associated with U.S.
Bancorp Asset Management.
16 PROSPECTUS - First American Sector Funds
Class Y Shares
Additional Information
MORE ABOUT THE FUNDS
- --------------------------------------------------------------------------------
OBJECTIVES
The funds' objectives may be changed without shareholder approval. If a fund's
objectives change, you will be notified at least 60 days in advance. Please
remember: There is no guarantee that any fund will achieve its objectives.
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
The funds' main investment strategies are the strategies that the funds'
investment advisor believes are most likely to be important in trying to achieve
the funds' objectives. You should be aware that each fund may also use
strategies and invest in securities that are not described in this prospectus,
but that are described in the Statement of Additional Information (SAI). For a
copy of the SAI, call Investor Services at 800 677-FUND.
TEMPORARY INVESTMENTS. In an attempt to respond to adverse market, economic,
political, or other conditions, each fund may temporarily invest without limit
in cash and in U.S. dollar-denominated high-quality money market instruments and
other short-term securities. Being invested in these securities may keep a fund
from participating in a market upswing and prevent the fund from achieving its
investment objectives.
PORTFOLIO TURNOVER. Fund managers may trade securities frequently, resulting,
from time to time, in an annual portfolio turnover rate of over 100%. Trading of
securities may produce capital gains, which are taxable to shareholders when
distributed. Active trading may also increase the amount of commissions or
mark-ups to broker-dealers that the fund pays when it buys and sells securities.
The "Financial Highlights" section of this prospectus shows each fund's
historical portfolio turnover rate.
- --------------------------------------------------------------------------------
RISKS
The main risks of investing in the funds are summarized in the "Fund Summaries"
section. More information about fund risks is presented below.
MARKET RISK. All stocks are subject to price movements due to changes in general
economic conditions, changes in the level of prevailing interest rates, changes
in investor perceptions of the market, or the outlook for overall corporate
profitability.
COMPANY RISK. Individual stocks can perform differently than the overall market.
This may be a result of specific factors such as changes in corporate
profitability due to the success or failure of specific products or management
strategies, or it may be due to changes in investor perceptions regarding a
company.
SECTOR RISK. The stocks of companies within specific industries or sectors of
the economy can periodically perform differently than the overall stock market.
This can be due to changes in such things as the regulatory or competitive
environment or to changes in investor perceptions of a particular industry or
sector. Each fund is subject to the particular risks of the sector in which it
principally invests.
RISKS OF THE HEALTH SCIENCES SECTOR. Health Sciences Fund and Science &
Technology Fund invest in equity securities of companies which develop, produce
or distribute products or services connected with health care or medicine. Many
products and services in the health sciences industries may become rapidly
obsolete due to technological and scientific advances. In addition, the health
sciences industries generally are subject to greater governmental regulation
than many other industries, so that changes in governmental policies may have a
material effect on the demand for products and services in these industries.
Regulatory approvals generally are required before new drugs, medical devices or
medical procedures can be introduced and before health care providers can
acquire additional facilities or equipment.
RISKS OF THE REAL ESTATE SECTOR. Real Estate Securities Fund invests primarily
in equity securities of publicly traded companies in the real estate industry.
The real estate industry has been subject to substantial fluctuations and
declines on a local, regional and national basis in the past and may continue to
be in the future. Real property values and incomes from real property may
decline due to general and local economic conditions, overbuilding and increased
competition, increases in property taxes and operating expenses, changes in
zoning laws, casualty or condemnation losses, regulatory limitations on rents,
changes in neighborhoods and in demographics, increases in market interest
rates, or other factors. Factors such as these may adversely affect companies
which own and operate real estate directly, companies which lend to them, and
companies which service the real estate industry.
RISKS OF THE TECHNOLOGY SECTOR. Technology Fund and Science & Technology Fund
invest in equity securities of companies in the technology industry. Competitive
pressures may have a significant effect on the financial condition of companies
in this industry. For example, if technology continues to advance at an
accelerated rate and the number of companies and product offerings continues to
expand, these companies could become increasingly sensitive to short product
cycles and aggressive pricing.
RISKS OF DEVELOPMENT STAGE AND SMALL-CAP STOCKS. Health Sciences Fund,
Technology Fund and Science & Technology Fund may have significant investments
in development stage and small-capitalization companies. Stocks of development
stage and small-capitalization companies involve substantial risk. These
companies may lack the management expertise, financial resources, product
diversification and competitive strengths of larger companies. Their stock
prices may be subject to more abrupt or erratic movements than stock prices of
larger, more established companies or the market averages in general. In
addition, the frequency and volume of their trading may be less than is typical
of larger companies, making them subject to wider price fluctuations. In some
cases, there could be difficulties in selling the stocks of
17 PROSPECTUS - First American Sector Funds
Class Y Shares
Additional Information
MORE ABOUT THE FUNDS CONTINUED
development stage and small-capitalization companies at the desired time and
price.
RISKS OF MID-CAP STOCKS. While stocks of mid-cap companies may be slightly less
volatile than those of small-cap companies, they still involve substantial risk.
Mid-cap companies may have limited product lines, markets or financial
resources, and they may be dependent on a limited management group. Stocks of
mid-cap companies may be subject to more abrupt or erratic market movements than
those of larger, more established companies or the market averages in general.
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Technology Fund, Health Sciences Fund
and Science & Technology Fund may frequently invest in companies at the time of
their IPO. Most IPOs involve a high degree of risk not normally associated with
offerings of more seasoned companies. Companies involved in IPOs generally have
limited operating histories, and their prospects for future profitability are
uncertain. These companies often are engaged in new and evolving businesses and
are particularly vulnerable to competition and to changes in technology, markets
and economic conditions. They may be dependent on certain key managers and third
parties, need more personnel and other resources to manage growth and require
significant additional capital. They may also be dependent on limited product
lines and uncertain property rights and need regulatory approvals. Investors in
IPOs can be affected by substantial dilution in the value of their shares, by
sales of additional shares and by concentration of control in existing
management and principal shareholders. Stock prices of IPOs can also be highly
unstable, due to the absence of a prior public market, the small number of
shares available for trading and limited investor information.
RISKS OF REAL ESTATE INVESTMENT TRUSTS (REITs). Real Estate Securities Fund
invests a majority of its assets in REITs and Health Sciences Fund also may
invest in REITs. Equity REITs will be affected by changes in the values of and
incomes from the properties they own, while mortgage REITs may be affected by
the credit quality of the mortgage loans they hold. REITs are subject to other
risks as well, including the fact that REITs are dependent on specialized
management skills which may affect their ability to generate cash flow for
operating purposes and to make distributions to shareholders or unitholders.
REITs may have limited diversification and are subject to the risks associated
with obtaining financing for real property.
A REIT can pass its income through to shareholders or unitholders without any
tax at the entity level if it complies with various requirements under the
Internal Revenue Code. There is the risk that a REIT held by the fund will fail
to qualify for this tax-free pass-through treatment of its income.
By investing in REITs indirectly through a fund, in addition to bearing a
proportionate share of the expenses of the fund, you will also indirectly bear
similar expenses of some of the REITs in which the fund invests.
FOREIGN SECURITY RISK. Up to 25% of each fund's total assets may be invested in
securities of foreign issuers which are either listed on a United States stock
exchange or represented by American Depositary Receipts. Securities of foreign
issuers, even when dollar-denominated and publicly traded in the United States,
may involve risks not associated with the securities of domestic issuers. For
certain foreign countries, political, or social instability or diplomatic
developments could adversely affect the securities. There is also the risk of
loss due to governmental actions such as a change in tax statutes or the
modification of individual property rights. In addition, individual foreign
economies may differ favorably or unfavorably from the U.S. economy.
RISKS OF ACTIVE MANAGEMENT. Each fund is actively managed and its performance
therefore will reflect in part the advisor's ability to make investment
decisions which are suited to achieving the fund's investment objectives. Due to
their active management, the funds could underperform other mutual funds with
similar investment objectives.
RISKS OF SECURITIES LENDING. When a fund loans its portfolio securities, it will
receive collateral equal to at least 100% of the value of the loaned securities.
Nevertheless, the fund risks a delay in the recovery of the loaned securities,
or even the loss of rights in the collateral deposited by the borrower if the
borrower should fail financially. To reduce these risks, the funds enter into
loan arrangements only with institutions which the funds' advisor has determined
are creditworthy under guidelines established by the funds' board of directors.
RISKS OF DERIVATIVE INSTRUMENTS. The use of derivative instruments exposes a
fund to additional risks and transaction costs. Risks inherent in the use of
derivative instruments include: the risk that securities prices will not move in
the direction that the advisor anticipates; an imperfect correlation between the
price of derivative instruments and movements in the prices of the securities
being hedged; the possible absence of a liquid secondary market for any
particular instrument and possible exchange imposed price fluctuation limits,
either of which may make it difficult or impossible to close out a position when
desired; leverage risk, which is the risk that adverse price movements in an
instrument can result in a loss substantially greater than the fund's initial
investment in that instrument; and, particularly, in the case of privately
negotiated instruments, the risk that the counterparty will fail to perform its
obligations, which could leave the fund worse off than if it had not entered
into the position. If a fund uses derivative instruments and the advisor's
judgment proves incorrect, the fund's performance could be worse than if it had
not used these instruments.
18 PROSPECTUS - First American Sector Funds
Class Y Shares
Additional Information
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The tables that follow present performance information about the Class Y shares
of each fund. This information is intended to help you understand each fund's
financial performance for the past five years or, if shorter, the period of the
fund's operations. Some of this information reflects financial results for a
single fund share. Total returns in the tables represent the rate that you would
have earned or lost on an investment in the fund, assuming you reinvested all of
your dividends and distributions.
The financial highlights for the Science & Technology Fund as set forth herein
include the historical financial highlights of the Firstar Science & Technology
Fund. The assets of the Firstar Fund were acquired by the First American Science
& Technology Fund on September 24, 2001. In connection with such acquisition,
Firstar Institutional Class shares were exchanged for Class Y shares of the
First American Fund.
The information for Health Sciences Fund, Real Estate Securities Fund and
Technology Fund for the fiscal years ended September 30, 2001, September 30,
2000, and September 30, 1999, has been derived from the financial statements
audited by Ernst & Young LLP, independent auditors, whose report, along with the
funds' financial statements, is included in the funds' annual report, which is
available upon request. The information for the fiscal years ended on or before
September 30, 1998, has been audited by other auditors.
The information for Science & Technology Fund for the fiscal period ended
September 30, 2001, has been derived from the financial statements audited by
Ernst & Young LLP, independent auditors, whose report, along with the fund's
financial statements, is included in the fund's annual report, which is
available upon request. The information for the fiscal periods ended on or
before October 31, 2000, has been audited by other auditors.
HEALTH SCIENCES FUND
Fiscal year ended September 30,
2001(1) 2000 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 13.42 $ 8.28 $ 7.84 $ 12.08 $ 9.87
------- ------- ------- ------- -------
Investment Operations:
Net Investment Income (Loss) -- -- 0.04 0.03 (0.01)
Net Gains (Losses) on Investments
(both realized and unrealized) (2.12) 5.14 0.48 (2.78) 2.33
------- ------- ------- ------- -------
Total From Investment Operations (2.12) 5.14 0.52 (2.75) 2.32
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) -- -- (0.04) (0.03) (0.01)
Distributions (from capital gains) (1.37) -- (0.04) (1.46) (0.10)
------- ------- ------- ------- -------
Total Distributions (1.37) -- (0.08) (1.49) (0.11)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 9.93 $ 13.42 $ 8.28 $ 7.84 $ 12.08
======= ======= ======= ======= =======
Total Return(2) (17.15)% 62.10% 6.59% (25.10)% 23.89%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $17,141 $19,175 $12,192 $21,977 $41,243
Ratio of Expenses to Average Net Assets 0.90% 0.92% 0.90% 0.90% 0.90%
Ratio of Net Income (Loss) to Average Net Assets (0.04)% (0.02)% 0.38% 0.27% 0.06%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.17% 1.21% 1.05% 0.95% 1.04%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) (0.31)% (0.31)% 0.23% 0.22% (0.08)%
Portfolio Turnover Rate 103% 104% 53% 45% 54%
- ----------------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
19 PROSPECTUS - First American Sector Funds
Class Y Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
REAL ESTATE SECURITIES FUND
Fiscal year ended September 30,
2001(1) 2000 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 12.73 $ 10.80 $ 12.19 $ 14.99 $ 11.53
------- ------- ------- ------- -------
Investment Operations:
Net Investment Income 0.84 0.77 0.68 0.67 0.74
Net Gains (Losses) on Investments
(both realized and unrealized) 0.28 2.00 (1.35) (2.40) 3.43
------- ------- ------- ------- -------
Total From Investment Operations 1.12 2.77 (0.67) (1.73) 4.17
------- ------- ------- ------- -------
Less Distributions:
Dividends (from net investment income) (0.68) (0.81) (0.69) (0.74) (0.67)
Distributions (from capital gains) -- -- -- (0.33) (0.03)
Distributions (from return of capital) (0.02) (0.03) (0.03) -- (0.01)
------- ------- ------- ------- -------
Total Distributions (0.70) (0.84) (0.72) (1.07) (0.71)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 13.15 $ 12.73 $ 10.80 $ 12.19 $ 14.99
======= ======= ======= ======= =======
Total Return(2) 9.01% 26.95% (5.64)% (12.18)% 37.07%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $96,263 $56,347 $51,181 $58,275 $40,501
Ratio of Expenses to Average Net Assets 0.80% 0.80% 0.80% 0.80% 0.80%
Ratio of Net Income to Average Net Assets 6.50% 6.79% 5.78% 5.06% 4.57%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.01% 0.99% 0.93% 0.93% 1.05%
Ratio of Net Income to Average Net Assets (excluding waivers) 6.29% 6.60% 5.65% 4.93% 4.32%
Portfolio Turnover Rate 85% 45% 21% 36% 14%
- -----------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
SCIENCE & TECHNOLOGY FUND
Fiscal period Fiscal period Fiscal period
ended ended ended
September 30, 2001(1),(2) October 31, 2000(3) November 30, 1999(4)
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 19.54 $ 14.56 $ 10.00
-------- -------- --------
Investment Operations:
Net Investment Income (Loss) (0.09) (0.13) --
Net Gains (Losses) on Investments
(both realized and unrealized) (14.71) 5.11 4.56
-------- -------- --------
Total From Investment Operations (14.80) 4.98 4.56
-------- -------- --------
Less Distributions:
Dividends (from net investment income) -- -- --
Distributions (from capital gains) -- -- --
-------- -------- --------
Total Distributions -- -- --
-------- -------- --------
Net Asset Value, End of Period $ 4.74 $ 19.54 $ 14.56
======== ======== ========
Total Return(5) (75.74)% 34.20% 45.60%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 28,293 $121,767 $ 40,936
Ratio of Expenses to Average Net Assets 1.34% 1.36% 1.69%
Ratio of Net Income (Loss) to Average Net Assets (0.90)% (0.90)% (0.94)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.58% 1.46% 1.84%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) (1.14)% (1.00)% (1.09)%
Portfolio Turnover Rate 146% 85% 16%
- -----------------------------------------------------------------------------------------------------------------------------------
(1)Effective in 2001, the Fund's fiscal year end was changed to September 30
from October 31. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Effective in 2000, the Fund's fiscal year end was changed to October 31 from
November 30. All ratios for the period have been annualized, except total
return.
(4)Commenced operations on August 9, 1999. All ratios for the period have been
annualized, except total return.
(5)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
20 PROSPECTUS - First American Sector Funds
Class Y Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
TECHNOLOGY FUND
Fiscal year ended September 30,
2001(1) 2000 1999 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 48.60 $ 34.64 $ 15.73 $ 20.29 $ 19.29
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Loss (0.11) (0.34) (0.13) (0.08) (0.06)
Net Gains (Losses) on Investments
(both realized and unrealized) (34.34) 25.36 19.79 (3.27) 3.12
-------- -------- -------- -------- --------
Total From Investment Operations (34.45) 25.02 19.66 (3.35) 3.06
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from net investment income) -- -- -- -- --
Distributions (from capital gains) (7.62) (11.06) (0.75) (1.21) (2.06)
-------- -------- -------- -------- --------
Total Distributions (7.62) (11.06) (0.75) (1.21) (2.06)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 6.53 $ 48.60 $ 34.64 $ 15.73 $ 20.29
======== ======== ======== ======== ========
Total Return(2) (83.26)% 80.71% 129.52% (16.41)% 17.95%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 59,653 $436,938 $214,620 $100,985 $148,659
Ratio of Expenses to Average Net Assets 0.90% 0.90% 0.90% 0.90% 0.90%
Ratio of Net Loss to Average Net Assets (0.62)% (0.67)% (0.53)% (0.38)% (0.41)%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.96% 0.90% 0.91% 0.90% 0.92%
Ratio of Net Loss to Average Net Assets (excluding waivers) (0.67)% (0.67)% (0.54)% (0.38)% (0.43)%
Portfolio Turnover Rate 269% 195% 184% 124% 150%
- --------------------------------------------------------------------------------------------------------------------------------
(1)Per share data calculated using average shares outstanding method.
(2)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
21 PROSPECTUS - First American Sector Funds
Class Y Shares
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
More information about the funds is available in the funds' Statement of
Additional Information and annual and semiannual reports.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more details about the funds and their policies. A current SAI
is on file with the Securities and Exchange Commission (SEC) and is incorporated
into this prospectus by reference (which means that it is legally considered
part of this prospectus).
- --------------------------------------------------------------------------------
ANNUAL AND SEMIANNUAL REPORTS
Additional information about the funds' investments is available in the funds'
annual and semiannual reports to shareholders. In the funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the funds' performance during their last fiscal year.
You can obtain a free copy of the funds' SAI and/or free copies of the funds'
most recent annual or semiannual reports by calling Investor Services at 800
677-FUND. The material you request will be sent by first-class mail or other
means designed to ensure equally prompt delivery, within three business days of
receipt of the request.
You can also obtain copies of this information, after paying a duplicating fee,
by electronic request at the following email address: publicinfo@sec.gov, or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. For
more information, call 1-202-942-8090.
Information about the funds is also available on the Internet. Text-only
versions of fund documents can be viewed online or downloaded from the EDGAR
Database on the SEC's Internet site at http://www.sec.gov.
FIRST AMERICAN FUNDS P.O. Box 1330, Minneapolis, MN 55440-1330
U.S. Bancorp Asset Management, Inc., serves as the investment advisor to the
First American Funds.
First American Funds are distributed by Quasar Distributors, LLC, which is
located in Milwaukee, WI 53202, and is an affiliate of the investment advisor.
PROSECTY 1/02
SEC file number: 811-05309
[LOGO] FIRST AMERICAN FUNDS(TM)
[LOGO] FIRST AMERICAN FUNDS(TM) JANUARY 28, 2002
PROSPECTUS
FIRST AMERICAN INVESTMENT FUNDS, INC.
ASSET CLASS -- STOCK FUNDS
SECTOR FUNDS
CLASS S SHARES
HEALTH SCIENCES FUND
REAL ESTATE SECURITIES FUND
SCIENCE & TECHNOLOGY FUND
TECHNOLOGY FUND
AS WITH ALL MUTUAL FUNDS, THE
SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THE
SHARES OF THESE FUNDS, OR DETERMINED
IF THE INFORMATION IN THIS
PROSPECTUS IS ACCURATE OR COMPLETE.
ANY STATEMENT TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Table of
CONTENTS
FUND SUMMARIES
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Health Sciences Fund 2
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Real Estate Securities Fund 5
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Science & Technology Fund 7
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Technology Fund 10
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POLICIES & SERVICES
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Buying and Selling Shares 13
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Managing Your Investment 15
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ADDITIONAL INFORMATION
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Management 16
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More About The Funds 17
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Financial Highlights 19
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FOR MORE INFORMATION Back Cover
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Fund Summaries
INTRODUCTION
This section of the prospectus describes the objectives of the First American
Sector Funds, summarizes the main investment strategies used by each fund in
trying to achieve its objectives, and highlights the risks involved with these
strategies. It also provides you with information about the performance, fees,
and expenses of the funds.
AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF U.S. BANK NATIONAL ASSOCIATION
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY.
1 PROSPECTUS - First American Sector Funds
Class S Shares
Fund Summaries
HEALTH SCIENCES FUND
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OBJECTIVE
Health Sciences Fund has an objective of long-term growth of capital.
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MAIN INVESTMENT STRATEGIES
Under normal market conditions, Health Sciences Fund invests primarily (at least
80% of its net assets, plus the amount of any borrowings for investment
purposes) in common stocks of companies which develop, produce or distribute
products or services connected with health care or medicine, and which derive at
least 50% of their assets, revenues or profits from these products or services
at the time of investment.
Examples of products or services connected with health care or medicine include:
o pharmaceuticals.
o health care services and administration.
o diagnostics.
o medical equipment and supplies.
o medical technology.
o medical research and development.
The fund's advisor will invest in companies that it believes have the potential
for above average growth in revenue and earnings as a result of new or unique
products, processes or services; increasing demand for a company's products or
services; established market leadership; or exceptional management.
The fund's investments may include development stage companies (companies that
do not have significant revenues) and small- and mid-capitalization companies.
The fund may also invest in real estate investment trusts (REITs) that finance
medical care facilities. REITs are publicly traded corporations or trusts that
acquire, hold and manage real estate.
Under certain market conditions, the fund may frequently invest in companies at
the time of their initial public offering (IPO). By virtue of its size and
institutional nature, the advisor may have greater access to IPOs than
individual investors have, including access to so-called "hot issues" which are
generally traded in the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
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MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may affect the market as a whole, or
they may affect only a particular company, industry, or sector of the market.
RISKS OF THE HEALTH SCIENCES SECTOR. Because the fund invests primarily in
stocks related to health care or medicine, it is particularly susceptible to
risks associated with the health sciences industries. Many products and services
in the health sciences industries may become rapidly obsolete due to
technological and scientific advances. In addition, governmental regulation may
have a material effect on the demand for products and services in these
industries.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers will be in the same or related economic sectors, the fund's
portfolio securities may be more susceptible to any single economic,
technological or regulatory occurrence than the portfolio securities of a
diversified fund.
RISKS OF DEVELOPMENT STAGE, SMALL- AND MID-CAP STOCKS. Stocks of development
stage and small-capitalization companies involve substantial risk. These stocks
historically have experienced greater price volatility than stocks of more
established and larger-capitalization companies, and they may be expected to do
so in the future. While stocks of mid-cap companies may be slightly less
volatile than those of small-cap companies, they still involve substantial risk
and their prices may be subject to more abrupt or erratic movements than those
of larger, more established companies or the market averages in general.
RISKS OF REAL ESTATE INVESTMENT TRUSTS (REITs). REITs will be affected by
changes in the values of and incomes from the properties they own or the credit
quality of the mortgages they hold. REITs are dependent on specialized
management skills which may affect their ability to generate cash flow for
operating purposes and to make distributions to shareholders or unitholders.
2 PROSPECTUS - First American Sector Funds
Class S Shares
Fund Summaries
HEALTH SCIENCES FUND CONTINUED
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Companies involved in IPOs generally
have limited operating histories and prospects for future profitability are
uncertain. Prices of IPOs may also be unstable because of the absence of a prior
public market, the small number of shares available for trading and limited
investor information. IPOs will frequently be sold within 12 months of purchase.
This may result in increased short-term capital gains, which will be taxable to
shareholders as ordinary income.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
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FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund has varied from year to
year. The table compares the fund's performance over different time periods to
that of the fund's benchmark index, which is a broad measure of market
performance. The fund's performance reflects fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
Because Class S shares were not offered for a full calendar year, information in
the chart and the table is for the fund's Class A shares, which are offered
through another prospectus. The classes will have substantially similar returns
because they are invested in the same portfolio of securities and have similar
operating expenses.
3 PROSPECTUS - First American Sector Funds
Class S Shares
Fund Summaries
HEALTH SCIENCES FUND CONTINUED
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FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR (Class A)
[BAR CHART]
16.14% -6.94% -1.32% 46.88% -11.98%
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1997 1998 1999 2000 2001
Best Quarter: Quarter ending June 30, 2000 20.06%
Worst Quarter: Quarter ending September 30, 1998 (22.34)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01 Date One Year Five Years Inception
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Health Sciences Fund (Class A)(1) 1/31/96 (11.98)% 6.64% 5.49%
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Standard & Poor's Health Care Composite Index(2) (12.88)% 16.00% 15.67%
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(1)Class A share returns do not reflect the 5.50% front-end sales charge
normally imposed on those shares. Class S shares have no sales charge.
(2)An unmanaged index comprised of health care stocks in the Standard & Poor's
500 Composite Index, which is an unmanaged index of large capitalization
stocks. The since inception performance of the index is calculated from
1/31/96.
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FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
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SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
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MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
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Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.57%
Total Annual Fund Operating Expenses 1.52%
Waiver of Fund Expenses(2) (0.29)%
NET EXPENSES(2) 1.23%
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(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
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EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
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1 year $125
3 years $451
5 years $799
10 years $1,783
4 PROSPECTUS - First American Sector Funds
Class S Shares
Fund Summaries
REAL ESTATE SECURITIES FUND
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OBJECTIVE
Real Estate Securities Fund's objective is to provide above average current
income and long-term capital appreciation.
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MAIN INVESTMENT STRATEGIES
Under normal market conditions, Real Estate Securities Fund invests primarily
(at least 80% of its net assets, plus the amount of any borrowings for
investment purposes) in income-producing common stocks of publicly traded
companies engaged in the real estate industry. These companies derive at least
50% of their revenues or profits from the ownership, construction, management,
financing or sale of real estate, or have at least 50% of the fair market value
of their assets invested in real estate. The advisor will select companies that
it believes exhibit strong management teams, a strong competitive position,
above average growth in revenues and a sound balance sheet.
A majority of the fund's total assets will be invested in real estate investment
trusts (REITs). REITs are publicly traded corporations or trusts that acquire,
hold and manage residential or commercial real estate. REITs generally can be
divided into the following three types:
o equity REITs, which invest the majority of their assets directly in
real property and derive their income primarily from rents and capital
gains or real estate appreciation.
o mortgage REITs, which invest the majority of their assets in real
estate mortgage loans and derive their income primarily from interest
payments.
o hybrid REITs, which combine the characteristics of equity REITs and
mortgage REITs.
The fund expects to emphasize investments in equity REITs, although it may
invest in all three kinds of REITs.
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MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may occur in the market as a whole, or
they may occur in only a particular company, industry, or sector of the market.
RISKS OF THE REAL ESTATE INDUSTRY. Because the fund invests primarily in the
real estate industry, it is particularly susceptible to risks associated with
that industry. The real estate industry has been subject to substantial
fluctuations and declines on a local, regional and national basis in the past
and may continue to be in the future.
RISKS OF REAL ESTATE INVESTMENT TRUSTS (REITs). There are risks associated with
direct investments in REITs. Equity REITs will be affected by changes in the
values of and incomes from the properties they own, while mortgage REITs may be
affected by the credit quality of the mortgage loans they hold. REITs are
dependent on specialized management skills which may affect their ability to
generate cash flow for operating purposes and to make distributions to
shareholders or unitholders.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers generally will be in the real estate industry, the fund's
portfolio securities may be more susceptible to any single economic or
regulatory occurrence than the portfolio securities of a diversified fund.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund has varied from year to
year. The table compares the fund's performance over different time periods to
that of the fund's benchmark index, which is a broad measure of market
performance. The fund's performance reflects fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
Because Class S shares were not offered for a full calendar year, information in
the chart and the table is for the fund's Class A shares, which are offered
through another prospectus. The classes will have substantially similar returns
because they are invested in the same portfolio of securities and have similar
operating expenses.
5 PROSPECTUS - First American Sector Funds
Class S Shares
Fund Summaries
REAL ESTATE SECURITIES FUND CONTINUED
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FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR (Class A)
[BAR CHART]
30.63% 19.21% -16.16% -3.91% 31.96% 9.50%
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1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1996 16.59%
Worst Quarter: Quarter ending September 30, 1998 (9.78)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01 Date One Year Five Years Inception
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Real Estate Securities Fund (Class A)(1) 9/29/95 9.50% 6.77% 10.92%
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Morgan Stanley REIT Index(2) 12.83% 6.12% 10.90%
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(1)Class A share returns do not reflect the 5.50% front-end sales charge
normally imposed on those shares. Class S shares have no sales charge.
(2)An unmanaged index of the most actively traded real estate investment trusts.
The since inception performance for the index is calculated from 9/30/95.
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FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.42%
Total Annual Fund Operating Expenses 1.37%
Waiver of Fund Expenses(2) (0.14)%
NET EXPENSES(2) 1.23%
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(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $125
3 years $420
5 years $736
10 years $1,632
6 PROSPECTUS - First American Sector Funds
Class S Shares
Fund Summaries
SCIENCE & TECHNOLOGY FUND
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OBJECTIVE
Science & Technology Fund has an objective of long-term after tax growth of
capital. Effective April 1, 2002, Science & Technology Fund's objective is to
maximize long-term growth of capital.
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MAIN INVESTMENT STRATEGIES
Under normal market conditions, Science & Technology Fund invests primarily (at
least 80% of its net assets, plus the amount of any borrowings for investment
purposes) in equity securities of companies principally engaged in science and
technology business activities. The fund considers science and technology
sectors to include companies whose primary business is to provide goods or
services in the fields of science (e.g., health and medical) or technology
(e.g., computers and communications). These may include companies that:
o make or sell products used in health care.
o make or sell medical equipment and devices and related technologies.
o make or sell software or information-based services and consulting,
communications and related services.
o design, manufacture or sell electronic components and systems.
o research, design, develop, manufacture or distribute products,
processes or services that relate to hardware technology within the
computer industry.
o develop, produce or distribute products or services in the computer,
semi-conductor, electronics, communications, health care and
biotechnology sectors.
o engage in the development, manufacturing or sale of communications
services or communications equipment.
The advisor believes that because of rapid advances in technology and science,
an investment in companies with business operations in these areas will offer
substantial opportunities for long-term capital appreciation. The fund's
investments may include development stage companies (companies that do not have
significant revenues) and small- and mid-capitalization companies.
Under certain market conditions, the fund may frequently invest in companies at
the time of their initial public offering (IPO). By virtue of its size and
institutional nature, the advisor may have greater access to IPOs than
individual investors have, including access to so-called "hot issues" which are
generally traded in the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
Effective April 1, 2002, the advisor will no longer utilize the following
tax-efficient strategies in seeking to achieve the fund's objective.
The advisor seeks to achieve high after-tax returns by balancing investment
considerations and tax considerations. The fund seeks to achieve returns
primarily in the form of price appreciation (which is not subject to current
tax) and to minimize income distributions and distributions of realized
short-term gains (taxed as ordinary income). Among the main strategies used in
the tax-efficient management of the fund are the following:
o investing primarily in lower-yielding growth stocks to minimize taxable
dividend income.
o employing a long-term, low turnover approach to investing.
o attempting to avoid net realized short-term gains.
o selling stocks trading below cost to realize losses (when appropriate)
in order to offset realized capital gains that would otherwise have to
be distributed to shareholders.
o selling the highest cost shares when selling apperciated stocks in
order to minimize realized capital gains.
o selectively using tax-advantaged hedging techniques as an alternative
to taxable sales (such as purchased put options, equity collars, equity
swaps, covered short sales, and the purchase or sale of stock index
futures contracts).
As a result of its tax-efficient strategy, the fund can generally be expected to
distribute a smaller percentage of returns each year than most other equity
mutual funds. There can be no assurance, however, that taxable distributions can
always be avoided.
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MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may affect the market as a whole, or
they may affect only a particular company, industry, or sector of the market.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers will be in the same or related economic sectors, the fund's
portfolio securities may be more susceptible to any single economic,
technological or regulatory occurrence than the portfolio securities of a
diversified fund.
7 PROSPECTUS - First American Sector Funds
Class S Shares
Fund Summaries
SCIENCE & TECHNOLOGY FUND CONTINUED
RISKS OF THE SCIENCE AND TECHNOLOGY SECTOR. Because the fund invests primarily
in science and technology related stocks, it is particularly susceptible to
risks associated with the science and technology industry. Competitive pressures
may have a significant effect on the financial condition of companies in that
industry.
RISKS OF DEVELOPMENT STAGE AND SMALL-CAP AND MID-CAP STOCKS. Stocks of
development stage and small-capitalization companies involve substantial risk.
These stocks historically have experienced greater price volatility than stocks
of more established and larger-capitalization companies, and they may be
expected to do so in the future. While stocks of mid-cap companies may be
slightly less volatile than those of small-cap companies, they still involve
substantial risk and their prices may be subject to more abrupt or erratic
movements than those of larger, more established companies or the market
averages in general.
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Companies involved in IPOs generally
have limited operating histories and prospects for future profitability are
uncertain. Prices of IPOs may also be unstable because of the absence of a prior
public market, the small number of shares available for trading and limited
investor information. IPOs will frequently be sold within 12 months of purchase.
This may result in increased short-term capital gains, which will be taxable to
shareholders as ordinary income.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability, or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart is intended to show you how performance of the fund has varied
from year to year. However, because Class S shares of the fund were first
offered in 2000, only one calendar year of performance information is
available.The table compares the fund's performance over different time periods
to that of the fund's benchmark index, which is a broad measure of market
performance. The fund's performance reflects fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
8 PROSPECTUS - First American Sector Funds
Class S Shares
Fund Summaries
SCIENCE & TECHNOLOGY FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
- -51.63%
- --------------------------------------------------------------------------------
2001
Best Quarter: Quarter ending December 31, 2001 48.30%
Worst Quarter: Quarter ending September 30, 2001 (48.69)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Inception
- ---------------------------------------------------------------------------------------
Science & Technology Fund 12/11/00 (51.63)% (58.65)%
- ---------------------------------------------------------------------------------------
Standard & Poor's Information Technology Index(2) (25.88)% (25.88)%
- ---------------------------------------------------------------------------------------
Nasdaq 100 Index(3) (32.58)% (32.58)%
- ---------------------------------------------------------------------------------------
(1)On 9/24/01, the Science & Technology Fund became the successor by merger to
the Firstar Science & Technology Fund, a series of Firstar Funds, Inc. Prior
to the merger, the First American fund had no assets or liabilities.
Performance presented prior to 9/24/01 represents that of the Firstar Science
& Technology Fund. The Firstar Science & Technology Fund was organized on
12/11/00 and, prior to that was a separate series of Firstar Stellar Funds,
Inc.
(2)An unmanaged index comprised of information technology stocks in the Standard
& Poor's 500 Composite Index, which is an unmanaged index of
large-capitalization stocks. Previously, the fund used the Nasdaq 100 Index
as a benchmark. Going forward, the fund will use the Standard & Poor's
Information Technology Index as a comparison, because its composition better
matches the fund's investment objective and strategies. The since inception
performance of the index is calculated from 12/31/00.
(3)A market capitalization-weighted index that includes 100 of the largest
financial companies, domestic and foreign, in the Nasdaq National Market. The
since inception performance of the index is calculated from 12/31/00.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.51%
Total Annual Fund Operating Expenses 1.46%
Waiver of Fund Expenses(2) (0.23)%
NET EXPENSES(2) 1.23%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $125
3 years $438
5 years $774
10 years $1,723
9 PROSPECTUS - First American Sector Funds
Class S Shares
Fund Summaries
TECHNOLOGY FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Technology Fund has an objective of long-term growth of capital.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Technology Fund invests primarily (at least 80%
of its net assets, plus the amount of any borrowings for investment purposes) in
common stocks of companies which the fund's advisor believes either have, or
will develop, products, processes or services that will provide or will benefit
significantly from technological innovations, advances and improvements. These
may include:
o inexpensive computing power, such as personal computers.
o improved methods of communications, such as satellite transmission.
o technology related services such as internet related marketing
services.
The prime emphasis of the fund is to identify companies which the advisor
believes are positioned to benefit from technological advances in areas such as
semiconductors, computers, software, communications, and online services.
Companies in which the fund invests may include development stage companies
(companies that do not have significant revenues) and small capitalization
companies. The advisor will generally select companies that it believes exhibit
strong management teams, a strong competitive position, above average growth in
revenues and a sound balance sheet.
Under certain market conditions, the fund may frequently invest in companies at
the time of their initial public offering (IPO). By virtue of its size and
institutional nature, the advisor may have greater access to IPOs than
individual investors have, including access to so-called "hot issues" which are
generally traded in the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. These securities may be of the same type as the
fund's permissible investments in United States domestic securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS. Stocks may decline significantly in price over short or
extended periods of time. Price changes may affect the market as a whole, or
they may affect only a particular company, industry, or sector of the market.
RISKS OF NON-DIVERSIFICATION. The fund is non-diversified. This means that it
may invest a larger portion of its assets in a limited number of companies than
a diversified fund. Because a relatively high percentage of the fund's assets
may be invested in the securities of a limited number of issuers, and because
those issuers will be in the same or related economic sectors, the fund's
portfolio securities may be more susceptible to any single economic,
technological or regulatory occurrence than the portfolio securities of a
diversified fund.
RISKS OF THE TECHNOLOGY SECTOR. Because the fund invests primarily in technology
related stocks, it is particularly susceptible to risks associated with the
technology industry. Competitive pressures may have a significant effect on the
financial condition of companies in that industry.
RISKS OF DEVELOPMENT STAGE AND SMALL-CAP STOCKS. Stocks of development stage and
small-capitalization companies involve substantial risk. These stocks
historically have experienced greater price volatility than stocks of more
established and larger-capitalization companies, and they may be expected to do
so in the future.
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Companies involved in IPOs generally
have limited operating histories and prospects for future profitability are
uncertain. Prices of IPOs may also be unstable because of the absence of a prior
public market, the small number of shares available for trading and limited
investor information. IPOs will frequently be sold within 12 months of purchase.
This may result in increased short-term capital gains, which will be taxable to
shareholders as ordinary income.
FOREIGN SECURITY RISK. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers, including the risks of
adverse currency fluctuations and of political or social instability, or
diplomatic developments that could adversely affect the securities.
RISKS OF SECURITIES LENDING. To generate additional income, the fund may lend
securities representing up to one-third of the value of its total assets to
broker-dealers, banks, and other institutions. When the fund engages in this
practice, it is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
RISKS OF DERIVATIVE INSTRUMENTS. The fund will suffer a loss in connection with
its use of derivatives such as options, futures contracts, and options on
futures contracts if securities prices do not move in the direction anticipated
by the fund's advisor when entering into the derivative instrument.
10 PROSPECTUS - First American Sector Funds
Class S Shares
Fund Summaries
TECHNOLOGY FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations below provide you with information on the fund's volatility and
performance. Of course, past performance does not guarantee future results.
The bar chart shows you how performance of the fund has varied from year to
year. The table compares the fund's performance over different time periods to
that of the fund's benchmark index, which is a broad measure of market
performance. The fund's performance reflects fund expenses; the benchmark is
unmanaged, has no expenses and is unavailable for investment.
Both the chart and the table assume that all distributions have been reinvested.
Performance reflects fee waivers in effect. If these fee waivers were not in
place, the fund's performance would be reduced.
Because Class S shares were not offered for a full calendar year, information in
the chart and the table is for the fund's Class A shares, which are offered
through another prospectus. The classes will have substantially similar returns
because they are invested in the same portfolio of securities and have similar
operating expenses.
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR (Class A)(1)
[BAR CHART]
40.93% 22.12% 6.91% 32.47% 191.79% -45.85% -55.71
- --------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001
Best Quarter: Quarter ending December 31, 1999 80.60%
Worst Quarter: Quarter ending March 31, 2001 (48.79)%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/01(1) Date One Year Five Years Inception
- ---------------------------------------------------------------------------------------------------
Technology Fund (Class A)(2) 4/4/94 (55.71)% (0.18)% 10.35%
- ---------------------------------------------------------------------------------------------------
Standard & Poor's Information Technology Index(3) (25.88)% 12.14% 19.71%
- ---------------------------------------------------------------------------------------------------
(1)Technology Fund's 1999 returns were primarily achieved buying IPOs and
technology related stocks in a period favorable for these investments. Of
course, such favorable returns involve accepting the risk of volatility, and
there is no assurance that the fund's future investment in IPOs and
technology stocks will have the same effect on performance as it did in 1999.
(2)Class A share returns do not reflect the 5.50% front-end sales charge
normally imposed on those shares. Class S shares have no sales charge.
(3)An unmanaged index comprised of information technology stocks in the Standard
& Poor's 500 Index, which is an unmanaged index of large-capitalization
stocks. The since inception performance of the index is calculated from
4/30/94.
11 PROSPECTUS - First American Sector Funds
Class S Shares
Fund Summaries
TECHNOLOGY FUND CONTINUED
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -----------------------------------------------------------------------------------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -----------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------
Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.35%
Total Annual Fund Operating Expenses 1.30%
Waiver of Fund Expenses(2) (0.07)%
NET EXPENSES(2) 1.23%
- -----------------------------------------------------------------------------------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $125
3 years $405
5 years $706
10 years $1,561
12 PROSPECTUS - First American Sector Funds
Class S Shares
Policies & Services
BUYING AND SELLING SHARES
- --------------------------------------------------------------------------------
MULTIPLE CLASS INFORMATION
The funds offer five different classes of shares. This prospectus offers Class S
shares that are sold through banks and other financial institutions that have
entered into sales agreements with the funds' distributor. Class S shares are
available to certain accounts for which the financial institution acts in a
fiduciary, agency, or custodial capacity, such as certain trust accounts and
investment advisory accounts. Class S shares are typically held in an omnibus
account with the transfer agent. While there is no initial or deferred sales
charge on your purchase of Class S shares, there is an annual shareholder
servicing fee of 0.25% and your investment professional or financial institution
may receive a commission of up to 1.25% on your purchase. To find out whether
you may purchase Class S shares, contact your financial institution.
Class A, Class B, Class C and Class Y shares are available through separate
prospectuses. There are differences among the fees and expenses for each of the
five classes. The difference in the fee structures between the classes is the
result of their separate arrangements for shareholder and distribution services
and not the result of any difference in amounts charged by the investment
advisor for core investment advisory services. Accordingly, the core investment
advisory expenses do not vary by class. Different fees and expenses will affect
performance.
The following describes the features of each class:
o Class A shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 0.25%.
o Class B shares are sold to the public with a contingent deferred sales
charge (CDSC) and annual distribution and service (12b-1) fees of
1.00%.
o Class C shares are sold to the public with a sales charge at the time
of purchase and annual distribution and service (12b-1) fees of 1.00%
(may be subject to a CDSC).
o Class S shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class S
shares are sold without a sales charge or distribution fee, but with an
annual shareholder servicing fee of 0.25%.
o Class Y shares are available to certain accounts for which qualifying
institutions act in a fiduciary, agency or custodial capacity. Class Y
shares are sold without a sales charge or distribution fee.
THIS PROSPECTUS AND THE RELATED STATEMENT OF ADDITIONAL INFORMATION DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SHARES IN THE
FUNDS, NOR SHALL ANY SUCH SHARES BE OFFERED OR SOLD TO ANY PERSON IN ANY
JURISDICTION IN WHICH AN OFFER, SOLICITATION, PURCHASE OR SALE WOULD BE UNLAWFUL
UNDER THE SECURITIES LAWS OF SUCH JURISDICTION.
- --------------------------------------------------------------------------------
CALCULATING YOUR SHARE PRICE
Your purchase price will be equal to the fund's net asset value (NAV) per share,
which is generally calculated as of the close of regular trading on the New York
Stock Exchange (usually 3 p.m. Central time) every day the exchange is open.
A fund's NAV is equal to the market value of its investments and other assets,
less any liabilities, divided by the number of fund shares. If market prices are
not readily available for an investment or if the advisor believes they are
unreliable, fair value prices may be determined in good faith using methods
approved by the funds' board of directors.
- --------------------------------------------------------------------------------
HOW TO BUY AND SELL SHARES
You may purchase or sell shares by calling your financial institution. Shares
may be purchased or sold on any day when the New York Stock Exchange is open.
When purchasing shares, payment must be made by wire transfer, which can be
arranged by your financial institution. Wire federal funds as follows:
U.S. Bank National Association
ABA Number: 0420-00013
Account Number: 112-952-137
Credit to: First American (NAME OF FUND, INVESTOR NAME AND INVESTOR ACCOUNT #)
Purchase orders and redemption requests must be received by your financial
institution by the time specified by the institution to be assured same day
processing. In order for shares to be purchased at that day's price, the funds
must receive your purchase order by 3:00 p.m. Central time. In order for shares
to be sold at that day's price, the funds must receive your redemption request
by 3:00 p.m. Central time. It is the responsibility of your financial
institution to promptly transmit orders to the funds. Purchase orders and
redemption requests may be restricted in the event of an early or unscheduled
close of the New York Stock Exchange.
If the funds receive your redemption request by 3:00 p.m. Central time, payment
of your redemption proceeds will ordinarily be made by wire on the next business
day. It is possible, however, that payment could be delayed by up to seven days.
To minimize the effect of large redemption requests, each fund reserves the
right to fulfill these redemption requests by distributing readily marketable
securities in the fund's portfolio, rather than paying you in cash. See
"Policies & Services -- Managing Your Investment, Redemption In Kind."
- --------------------------------------------------------------------------------
COMPENSATION PAID TO FINANCIAL INSTITUTIONS
The fund pays the distributor an annual shareholder servicing fee equal to 0.25%
of the fund's average daily net assets to compensate the distributor for
providing services to shareholders. The distributor may use this fee to
compensate your investment professional or financial institution for providing
ongoing services to your account. The advisor, the administrator or the
distributor may pay additional fees to investment professionals and financial
institutions, using their own assets, in exchange for sales and/or
administrative services performed on behalf of the investment professional's or
financial institution's customers.
13 PROSPECTUS - First American Sector Funds
Class S Shares
Policies & Services
BUYING AND SELLING SHARES CONTINUED
- --------------------------------------------------------------------------------
HOW TO EXCHANGE SHARES
If your investment goals or your financial needs change, you may exchange your
shares for Class S shares of another First American fund. Exchanges are made at
the net asset value per share of each fund at the time of the exchange. There is
no fee to exchange shares. If you are no longer eligible to hold Class S shares,
for example, if you decide to discontinue your fiduciary, agency, or custodian
account, you may exchange your shares for Class A shares at net asset value.
To exchange your shares, call your financial institution. In order for your
shares to be exchanged the same day, you must call your financial institution by
the time specified by the institution and your exchange order must be received
by the funds by 3:00 p.m. Central time. It is the responsibility of your
financial institution to promptly transmit your exchange order to the funds.
Before exchanging into any fund, be sure to read its prospectus carefully. A
fund may change or cancel its exchange policies at any time. You will be
notified of any changes. The funds have the right to limit exchanges to four
times per year.
- --------------------------------------------------------------------------------
REDEMPTION IN KIND
Generally, proceeds from redemption requests will be paid in cash. However, to
minimize the effect of large redemption requests on a fund and its remaining
shareholders, each fund reserves the right to pay part or all of the proceeds
from a redemption request in a proportionate share of readily marketable
securities in the fund instead of cash. In selecting securities for a redemption
in kind, the advisor will consider the best interests of the fund and the
remaining fund shareholders, and will value these securities in accordance with
the pricing methods employed to calculate the fund's net asset value per share.
If you receive redemption proceeds in kind, you should expect to incur
transaction costs upon disposition of the securities received in the redemption.
14 PROSPECTUS - First American Sector Funds
Class S Shares
Policies & Services
MANAGING YOUR INVESTMENT
- --------------------------------------------------------------------------------
STAYING INFORMED
SHAREHOLDER REPORTS. Shareholder reports are mailed twice a year, in November
and May. They include financial statements and performance information, and on
an annual basis, a message from your portfolio managers and the auditors'
report.
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailings to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call Investor Services at 800 677-FUND.
STATEMENTS AND CONFIRMATIONS. Statements summarizing activity in your account
are mailed quarterly. Confirmations are mailed following each purchase or sale
of fund shares. Generally, a fund does not send statements to individuals who
have their shares held in an omnibus account.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
Dividends from a fund's net investment income are declared and paid quarterly.
Any capital gains are distributed at least once each year.
On the ex-dividend date for a distribution, a fund's share price is reduced by
the amount of the distribution. If you buy shares just before the ex-dividend
date, in effect, you "buy the dividend." You will pay the full price for the
shares and then receive a portion of that price back as a taxable distribution.
Dividend and capital gain distributions will be reinvested in additional shares
of the fund paying the distribution, unless you request that distributions be
reinvested in another First American fund or paid in cash. This request may be
made on your new account form or by contacting your financial institution. If
you request that your distributions be paid in cash but those distributions
cannot be delivered because of an incorrect mailing address, the undelivered
distributions and all future distributions will be reinvested in fund shares at
the current NAV.
- --------------------------------------------------------------------------------
TAXES
Some of the tax consequences of investing in the funds are discussed below. More
information about taxes is in the Statement of Additional Information. However,
because everyone's tax situation is unique, always consult your tax professional
about federal, state, and local tax consequences.
TAXES ON DISTRIBUTIONS. Each fund pays its shareholders dividends from its net
investment income and any net capital gains that it has realized. For most
investors, fund dividends and distributions are considered taxable whether they
are reinvested or taken in cash (unless your investment is in an IRA or other
tax-advantaged account).
Dividends from a fund's net investment income and short-term capital gains are
taxable as ordinary income. Distributions of a fund's long-term capital gains
are taxable as long-term gains, regardless of how long you have held your
shares. The funds expect that, as a result of their investment objectives and
strategies, their distributions will consist primarily of ordinary income in the
case of Real Estate Securities Fund and capital gains in the case of the other
funds.
TAXES ON TRANSACTIONS. The sale of fund shares, or the exchange of one fund's
shares for shares of another fund, will be a taxable event and may result in a
capital gain or loss. The gain or loss will be considered long-term if you have
held your shares for more than one year. A gain or loss on shares held for one
year or less is considered short-term and is taxed at the same rates as ordinary
income.
If in redemption of his or her shares a shareholder receives a distribution of
readily marketable securities instead of cash, the shareholder will be treated
as receiving an amount equal to the fair market value of the securities at the
time of the distribution for purposes of determining capital gain or loss on the
redemption, and will also acquire a basis in the shares for federal income tax
purposes equal to their fair market value.
The exchange of one class of shares for another class of shares in the same fund
will not be taxable.
TAX MANAGED STRATEGY. As a result of its tax-efficient strategies, the Science &
Technology Fund can generally be expected to distribute a smaller percentage of
returns each year than most other equity mutual funds. There can be no
assurance, however, that taxable distributions can always be avoided. These
tax-efficient strategies will not be in effect after April 1, 2002.
15 PROSPECTUS - First American Sector Funds
Class S Shares
Additional Information
MANAGEMENT
U.S. Bancorp Asset Management, Inc., is the funds' investment advisor. U.S.
Bancorp Asset Management provides investment management services to individuals
and institutions, including corporations, foundations, pensions and retirement
plans. As of September 30, 2001, U.S. Bancorp Asset Management and its
affiliates had more than $114 billion in assets under management, including
investment company assets of more than $51 billion. As investment advisor, U.S.
Bancorp Asset Management manages the funds' business and investment activities,
subject to the authority of the funds' board of directors.
Each fund pays the investment advisor a monthly fee for providing investment
advisory services. The table below reflects investment advisory fees paid to the
investment advisor, after taking into account any fee waivers, for the funds'
most recently completed fiscal year.(1)
Advisory fee
as a % of
average daily
net assets
- --------------------------------------------------------------------------------
HEALTH SCIENCES FUND 0.43%
REAL ESTATE SECURITIES FUND 0.49%
SCIENCE & TECHNOLOGY FUND(2) 0.81%
TECHNOLOGY FUND 0.64%
- --------------------------------------------------------------------------------
(1)Prior to May 2, 2001, First American Asset Management (FAAM), a division of
U.S. Bank National Association, served as investment advisor to Health
Sciences Fund, Real Estate Securities Fund and Technology Fund; Firstar
Investment Research & Management Company LLC (FIRMCO), an affiliate of FAAM,
served as investment advisor to Science & Technology Fund. On May 2, 2001,
FAAM and FIRMCO combined advisory operations to form U.S. Bancorp Asset
Management, Inc. The investment advisory fees paid by each fund to U.S.
Bancorp Asset Management did not change as a result of the combination.
(2)On September 24, 2001, Science & Technology Fund became the successor by
merger to Firstar Science & Technology Fund. The fiscal year end for the
Firstar fund was October 31; Science & Technology Fund has a fiscal year end
of September 30. Information presented in the table has been annualized for
the eleven-month fiscal period ended September 30, 2001.
DIRECT CORRESPONDENCE TO:
First American Funds
P.O. Box 1330
Minneapolis, Minnesota 55440-1330
INVESTMENT ADVISOR
U.S. Bancorp Asset Management, Inc.
800 Nicollet Mall
Minneapolis, Minnesota 55402
DISTRIBUTOR
Quasar Distributors, LLC
615 E. Michigan Street
Milwaukee, WI 53202
ADDITIONAL COMPENSATION
U.S. Bancorp Asset Management and other affiliates of U.S. Bancorp may act as
fiduciary with respect to plans subject to the Employee Retirement Income
Security Act of 1974 (ERISA) and other trust and agency accounts that invest in
the funds. As described above, U.S. Bancorp Asset Management receives
compensation for acting as the funds' investment advisor. U.S. Bancorp Asset
Management and its affiliates also receive compensation in connection with the
following:
CUSTODY SERVICES. U.S. Bank National Association (U.S. Bank) provides or
compensates others to provide custody services to the funds. U.S. Bank is paid
monthly fees equal, on an annual basis, to 0.01% of a fund's average daily net
assets. In addition, U.S. Bank is reimbursed for its out-of-pocket expenses
incurred while providing custody services to the funds.
ADMINISTRATION SERVICES. U.S. Bancorp Asset Management and its affiliate, U.S.
Bancorp Fund Services, LLC (Co-Administrators), provide or compensate others to
provide administrative services to the First American family of funds. These
services include general administrative and accounting services, transfer agency
and dividend disbursing services, blue sky services, and shareholder services.
With respect to the First American open-end mutual funds, the Co-Administrators
receive total fees on an annual basis, of up to 0.25% of the aggregate average
daily net assets of First American Investment Funds, Inc., First American
Strategy Funds, Inc. and First American Insurance Portfolios, Inc., and up to
0.20% of the aggregate average daily net assets of First American Funds, Inc.
The funds also pay the Co-Administrators fees based upon the number of funds and
accounts maintained. In addition, the Co-Administrators are reimbursed for their
out-of-pocket expenses incurred while providing administration services to the
funds.
DISTRIBUTION SERVICES. Quasar Distributors, LLC, an affiliate of U.S. Bancorp
Asset Management, serves as distributor of the funds and receives out of pocket
expenses incurred while providing distribution and other sub-administrative
services for the funds.
SECURITIES LENDING SERVICES. In connection with lending their portfolio
securities, the funds pay administrative and custodial fees to U.S. Bancorp
Asset Management which are equal to 40% of the funds' income from these
securities lending transactions.
BROKERAGE TRANSACTIONS. When purchasing and selling portfolio securities for the
funds, the funds' investment advisor may place trades through its affiliates,
U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., which will
earn commissions on these transactions.
SHAREHOLDER SERVICING FEES. To the extent that fund shares are held through U.S.
Bancorp Asset Management, U.S. Bank or their broker-dealer affiliates, U.S.
Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc., those entities
may receive shareholder servicing fees from the funds' distributor.
PORTFOLIO MANAGEMENT
Each fund's investments are managed by a team of persons associated with U.S.
Bancorp Asset Management.
16 PROSPECTUS - First American Sector Funds
Class S Shares
Additional Information
MORE ABOUT THE FUNDS
- --------------------------------------------------------------------------------
OBJECTIVES
The funds' objectives may be changed without shareholder approval. If a fund's
objectives change, you will be notified at least 60 days in advance. Please
remember: There is no guarantee that any fund will achieve its objectives.
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
The funds' main investment strategies are the strategies that the funds'
investment advisor believes are most likely to be important in trying to achieve
the funds' objectives. You should be aware that each fund may also use
strategies and invest in securities that are not described in this prospectus,
but that are described in the Statement of Additional Information (SAI). For a
copy of the SAI, call Investor Services at 800 677-FUND.
TEMPORARY INVESTMENTS. In an attempt to respond to adverse market, economic,
political, or other conditions, each fund may temporarily invest without limit
in cash and in U.S. dollar-denominated high-quality money market instruments and
other short-term securities. Being invested in these securities may keep a fund
from participating in a market upswing and prevent the fund from achieving its
investment objectives.
PORTFOLIO TURNOVER. Fund managers may trade securities frequently, resulting,
from time to time, in an annual portfolio turnover rate of over 100%. Trading of
securities may produce capital gains, which are taxable to shareholders when
distributed. Active trading may also increase the amount of commissions or
mark-ups to broker-dealers that the fund pays when it buys and sells securities.
The "Financial Highlights" section of this prospectus shows each fund's
historical portfolio turnover rate.
- --------------------------------------------------------------------------------
RISKS
The main risks of investing in the funds are summarized in the "Fund Summaries"
section. More information about fund risks is presented below.
MARKET RISK. All stocks are subject to price movements due to changes in general
economic conditions, changes in the level of prevailing interest rates, changes
in investor perceptions of the market, or the outlook for overall corporate
profitability.
COMPANY RISK. Individual stocks can perform differently than the overall market.
This may be a result of specific factors such as changes in corporate
profitability due to the success or failure of specific products or management
strategies, or it may be due to changes in investor perceptions regarding a
company.
SECTOR RISK. The stocks of companies within specific industries or sectors of
the economy can periodically perform differently than the overall stock market.
This can be due to changes in such things as the regulatory or competitive
environment or to changes in investor perceptions of a particular industry or
sector. Each fund is subject to the particular risks of the sector in which it
principally invests.
RISKS OF THE HEALTH SCIENCES SECTOR. Health Sciences Fund and Science &
Technology Fund invest in equity securities of companies which develop, produce
or distribute products or services connected with health care or medicine. Many
products and services in the health sciences industries may become rapidly
obsolete due to technological and scientific advances. In addition, the health
sciences industries generally are subject to greater governmental regulation
than many other industries, so that changes in governmental policies may have a
material effect on the demand for products and services in these industries.
Regulatory approvals generally are required before new drugs, medical devices or
medical procedures can be introduced and before health care providers can
acquire additional facilities or equipment.
RISKS OF THE REAL ESTATE SECTOR. Real Estate Securities Fund invests primarily
in equity securities of publicly traded companies in the real estate industry.
The real estate industry has been subject to substantial fluctuations and
declines on a local, regional and national basis in the past and may continue to
be in the future. Real property values and incomes from real property may
decline due to general and local economic conditions, overbuilding and increased
competition, increases in property taxes and operating expenses, changes in
zoning laws, casualty or condemnation losses, regulatory limitations on rents,
changes in neighborhoods and in demographics, increases in market interest
rates, or other factors. Factors such as these may adversely affect companies
which own and operate real estate directly, companies which lend to them, and
companies which service the real estate industry.
RISKS OF THE TECHNOLOGY SECTOR. Technology Fund and Science & Technology Fund
invest in equity securities of companies in the technology industry. Competitive
pressures may have a significant effect on the financial condition of companies
in this industry. For example, if technology continues to advance at an
accelerated rate and the number of companies and product offerings continues to
expand, these companies could become increasingly sensitive to short product
cycles and aggressive pricing.
RISKS OF DEVELOPMENT STAGE AND SMALL-CAP STOCKS. Health Sciences Fund,
Technology Fund and Science & Technology Fund may have significant investments
in development stage and small-capitalization companies. Stocks of development
stage and small-capitalization companies involve substantial risk. These
companies may lack the management expertise, financial resources, product
diversification and competitive strengths of larger companies. Their stock
prices may be subject to more abrupt or erratic movements than stock prices of
larger, more established companies or the market averages in general. In
addition, the frequency and volume of their trading may be less than is typical
of larger companies, making them subject to wider price fluctuations.
17 PROSPECTUS - First American Sector Funds
Class S Shares
Additional Information
MORE ABOUT THE FUNDS CONTINUED
In some cases, there could be difficulties in selling the stocks of development
stage and small-capitalization companies at the desired time and price.
RISKS OF MID-CAP STOCKS. While stocks of mid-cap companies may be slightly less
volatile than those of small-cap companies, they still involve substantial risk.
Mid-cap companies may have limited product lines, markets or financial
resources, and they may be dependent on a limited management group. Stocks of
mid-cap companies may be subject to more abrupt or erratic market movements than
those of larger, more established companies or the market averages in general.
RISKS OF INITIAL PUBLIC OFFERINGS (IPOs). Technology Fund, Health Sciences Fund
and Science & Technology Fund may frequently invest in companies at the time of
their IPO. Most IPOs involve a high degree of risk not normally associated with
offerings of more seasoned companies. Companies involved in IPOs generally have
limited operating histories, and their prospects for future profitability are
uncertain. These companies often are engaged in new and evolving businesses and
are particularly vulnerable to competition and to changes in technology, markets
and economic conditions. They may be dependent on certain key managers and third
parties, need more personnel and other resources to manage growth and require
significant additional capital. They may also be dependent on limited product
lines and uncertain property rights and need regulatory approvals. Investors in
IPOs can be affected by substantial dilution in the value of their shares, by
sales of additional shares and by concentration of control in existing
management and principal shareholders. Stock prices of IPOs can also be highly
unstable, due to the absence of a prior public market, the small number of
shares available for trading and limited investor information.
RISKS OF REAL ESTATE INVESTMENT TRUSTS (REITs). Real Estate Securities Fund
invests a majority of its assets in REITs and Health Sciences Fund also may
invest in REITs. Equity REITs will be affected by changes in the values of and
incomes from the properties they own, while mortgage REITs may be affected by
the credit quality of the mortgage loans they hold. REITs are subject to other
risks as well, including the fact that REITs are dependent on specialized
management skills which may affect their ability to generate cash flow for
operating purposes and to make distributions to shareholders or unitholders.
REITs may have limited diversification and are subject to the risks associated
with obtaining financing for real property.
A REIT can pass its income through to shareholders or unitholders without any
tax at the entity level if it complies with various requirements under the
Internal Revenue Code. There is the risk that a REIT held by the fund will fail
to qualify for this tax-free pass-through treatment of its income.
By investing in REITS indirectly through a fund, in addition to bearing a
proportionate share of the expenses of the fund, you will also indirectly bear
similar expenses of some of the REITs in which the fund invests.
FOREIGN SECURITY RISK. Up to 25% of each fund's total assets may be invested in
securities of foreign issuers which are either listed on a United States stock
exchange or represented by American Depositary Receipts. Securities of foreign
issuers, even when dollar-denominated and publicly traded in the United States,
may involve risks not associated with the securities of domestic issuers. For
certain foreign countries, political, or social instability or diplomatic
developments could adversely affect the securities. There is also the risk of
loss due to governmental actions such as a change in tax statutes or the
modification of individual property rights. In addition, individual foreign
economies may differ favorably or unfavorably from the U.S. economy.
RISKS OF ACTIVE MANAGEMENT. Each fund is actively managed and its performance
therefore will reflect in part the advisor's ability to make investment
decisions which are suited to achieving the fund's investment objectives. Due to
their active management, the funds could underperform other mutual funds with
similar investment objectives.
RISKS OF SECURITIES LENDING. When a fund loans its portfolio securities, it will
receive collateral equal to at least 100% of the value of the loaned securities.
Nevertheless, the fund risks a delay in the recovery of the loaned securities,
or even the loss of rights in the collateral deposited by the borrower if the
borrower should fail financially. To reduce these risks, the funds enter into
loan arrangements only with institutions which the funds' advisor has determined
are creditworthy under guidelines established by the funds' board of directors.
RISKS OF DERIVATIVE INSTRUMENTS. The use of derivative instruments exposes a
fund to additional risks and transaction costs. Risks inherent in the use of
derivative instruments include: the risk that securities prices will not move in
the direction that the advisor anticipates; an imperfect correlation between the
price of derivative instruments and movements in the prices of the securities
being hedged; the possible absence of a liquid secondary market for any
particular instrument and possible exchange imposed price fluctuation limits,
either of which may make it difficult or impossible to close out a position when
desired; leverage risk, which is the risk that adverse price movements in an
instrument can result in a loss substantially greater than the fund's initial
investment in that instrument; and, particularly, in the case of privately
negotiated instruments, the risk that the counterparty will fail to perform its
obligations, which could leave the fund worse off than if it had not entered
into the position. If a fund uses derivative instruments and the advisor's
judgment proves incorrect, the fund's performance could be worse than if it had
not used these instruments.
18 PROSPECTUS - First American Sector Funds
Class S Shares
Additional Information
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The table below presents performance information about the Class S shares of
each fund. This information is intended to help you understand the fund's
financial performance for the past five years or, if shorter, the period of the
fund's operations. Some of this information reflects financial results for a
single fund share. Total returns in the table represent the rate that you would
have earned or lost on an investment in the fund, assuming you reinvested all of
your dividends and distributions.
The financial highlights for the Science & Technology Fund as set forth herein
include the historical financial highlights of the Firstar Science & Technology
Fund. The assets of the Firstar Fund were acquired by the First American Science
& Technology Fund on September 24, 2001. In connection with such acquisition,
Class Y shares of the Firstar Science & Technology Fund were exchanged for Class
S shares of the First American Science & Technology Fund.
The information for the fiscal period ended September 30, 2001, has been derived
from the financial statements audited by Ernst & Young LLP, independent
auditors, whose report, along with the funds' financial statements, is included
in the funds' annual report, which is available upon request.
HEALTH SCIENCES FUND
Fiscal period
ended
September 30, 2001(1),(2)
- --------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 9.06
------
Investment Operations:
Net Investment Income (Loss) --
Net Gains (Losses) on Investments
(both realized and unrealized) 0.78
------
Total From Investment Operations 0.78
------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
------
Total Distributions --
------
Net Asset Value, End of Period $ 9.84
======
Total Return(3) 8.61%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ --
Ratio of Expenses to Average Net Assets 0.00%
Ratio of Net Income (Loss) to Average Net Assets 0.00%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.00%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) 0.00%
Portfolio Turnover Rate 103%
- --------------------------------------------------------------------------------------------------
(1)Class S shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
19 PROSPECTUS - First American Sector Funds
Class S Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
REAL ESTATE SECURITIES FUND
Fiscal period
ended
September 30, 2001(1),(2)
- --------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $12.52
------
Investment Operations:
Net Investment Income (Loss) 0.11
Net Gains (Losses) on Investments
(both realized and unrealized) 0.49
------
Total From Investment Operations 0.60
------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
------
Total Distributions --
------
Net Asset Value, End of Period $13.12
======
Total Return(3) 4.87%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 320
Ratio of Expenses to Average Net Assets 0.56%
Ratio of Net Income (Loss) to Average Net Assets 43.93%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.01%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) 43.48%
Portfolio Turnover Rate 85%
- --------------------------------------------------------------------------------------------------
(1)Class S shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
SCIENCE & TECHNOLOGY FUND
Fiscal period
ended
September 30, 2001(1),(2)
- --------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $17.69
------
Investment Operations:
Net Investment Income (Loss) (0.07)
Net Gains (Losses) on Investments
(both realized and unrealized) (12.92)
------
Total From Investment Operations (12.99)
------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
------
Total Distributions --
------
Net Asset Value, End of Period $ 4.70
======
Total Return(3) (73.43)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $1,858
Ratio of Expenses to Average Net Assets 1.56%
Ratio of Net Income (Loss) to Average Net Assets (1.19)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.90%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) (1.53)%
Portfolio Turnover Rate 146%
- --------------------------------------------------------------------------------------------------
(1)Class S shares have been offered since December 11, 2000. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
20 PROSPECTUS - First American Sector Funds
Class S Shares
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
TECHNOLOGY FUND
Fiscal period
ended
September 30, 2001(1),(2)
- --------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 6.95
------
Investment Operations:
Net Investment Income (Loss) --
Net Gains (Losses) on Investments
(both realized and unrealized) (0.59)
------
Total From Investment Operations (0.59)
------
Less Distributions:
Dividends (from net investment income) --
Distributions (from capital gains) --
------
Total Distributions --
------
Net Asset Value, End of Period $ 6.36
======
Total Return(3) (8.49)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ --
Ratio of Expenses to Average Net Assets 0.00%
Ratio of Net Income (Loss) to Average Net Assets 0.00%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.00%
Ratio of Net Income (Loss) to Average Net Assets (excluding waivers) 0.00%
Portfolio Turnover Rate 269%
- --------------------------------------------------------------------------------------------------
(1)Class S shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
21 PROSPECTUS - First American Sector Funds
Class S Shares
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
More information about the funds is available in the funds' Statement of
Additional Information and annual and semiannual reports.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more details about the funds and their policies. A current SAI
is on file with the Securities and Exchange Commission (SEC) and is incorporated
into this prospectus by reference (which means that it is legally considered
part of this prospectus).
- --------------------------------------------------------------------------------
ANNUAL AND SEMIANNUAL REPORTS
Additional information about the funds' investments is available in the funds'
annual and semiannual reports to shareholders. In the funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the funds' performance during their last fiscal year.
You can obtain a free copy of the funds' SAI and/or free copies of the funds'
most recent annual or semiannual reports by calling Investor Services at 800
677-FUND. The material you request will be sent by first-class mail or other
means designed to ensure equally prompt delivery, within three business days of
receipt of the request.
You can also obtain copies of this information, after paying a duplicating fee,
by electronic request at the following email address: publicinfo@sec.gov, or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. For
more information, call 1-202-942-8090.
Information about the funds is also available on the Internet. Text-only
versions of fund documents can be viewed online or downloaded from the EDGAR
Database on the SEC's Internet site at http://www.sec.gov.
FIRST AMERICAN FUNDS P.O. Box 1330, Minneapolis, MN 55440-1330
U.S. Bancorp Asset Management, Inc., serves as the investment advisor to the
First American Funds.
First American Funds are distributed by Quasar Distributors, LLC, which is
located in Milwaukee, WI 53202, and is an affiliate of the investment advisor.
PROSECTS 1/02
SEC file number: 811-05309
[LOGO] FIRST AMERICAN FUNDS(TM)
FIRST AMERICAN INVESTMENT FUNDS, INC.
First American Large Cap Growth Funds
Supplement Dated February 20, 2002,*
To Prospectus Dated January 28, 2002
THIS INFORMATION SUPPLEMENTS THE PROSPECTUS DATED JANUARY 28, 2002.
THIS SUPPLEMENT AND THE PROSPECTUS CONSTITUTE A CURRENT PROSPECTUS. TO REQUEST
A COPY OF THE PROSPECTUS, PLEASE CALL 800-677-FUND.
FOR CAPITAL GROWTH FUND, CLASS S AND CLASS Y SHARE PROSPECTUSES:
The following replaces the text under "Objective:"
Capital Growth Fund's objective is to maximize long-term after-tax returns.
Effective April 1, 2002, Capital Growth Fund's objective is to maximize
long-term returns.
FOR RELATIVE VALUE FUND, CLASS S SHARE PROSPECTUS:
The following replaces the text under "Objective:"
Relative Value Fund's objective is to maximize after-tax return from capital
appreciation plus income. Effective April 1, 2002, Relative Value Fund's
objective is to maximize total return from capital appreciation plus income.
FOR RELATIVE VALUE FUND, CLASS A, CLASS B, CLASS C AND CLASS Y SHARE
PROSPECTUSES:
The following paragraph replaces the first three paragraphs under "Main
Investment Strategies:"
Under normal market conditions, the fund invests primarily (at least 80% of its
net assets, plus the amount of any borrowings for investment purposes) in common
stocks of companies that cover a broad range of industries and that have market
capitalizations of at least $5 billion at the time of purchase. In selecting
stocks, the fund's advisor invests in securities that it believes:
o are undervalued relative to other securities in the same
industry or market.
o exhibit good or improving fundamentals.
o exhibit an identifiable catalyst that could close the gap
between market value and fair value over the next one or two
years.
* Valid until next prospectus update.
- --------------------------------------------------------------------------------
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
- --------------------------------------------------------------------------------
U.S. BANCORP ASSET MANAGEMENT, INC. SERVES AS INVESTMENT ADVISOR TO THE FIRST
AMERICAN FUNDS. FIRST AMERICAN FUNDS ARE DISTRIBUTED BY QUASAR DISTRIBUTORS,
LLC, AN AFFILIATE OF THE INVESTMENT ADVISOR. FOR A PROSPECTUS CONTAINING
COMPLETE INFORMATION ON ANY OF THE FIRST AMERICAN FUNDS, INCLUDING INVESTMENT
POLICIES, FEES, AND EXPENSES, PLEASE CONTACT YOUR INVESTMENT PROFESSIONAL, CALL
FIRST AMERICAN FUNDS INVESTOR SERVICES AT 800-677-FUND, OR VISIT US ON THE WEB
AT firstamericanfunds.com. PLEASE READ THE PROSPECTUSES CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
FAIF -LC
FIRST AMERICAN INVESTMENT FUNDS, INC.
First American Sector Funds
Supplement Dated February 20, 2002,*
To Prospectus Dated January 28, 2002
THIS INFORMATION SUPPLEMENTS THE PROSPECTUS DATED JANUARY 28, 2002.
THIS SUPPLEMENT AND THE PROSPECTUS CONSTITUTE A CURRENT PROSPECTUS. TO REQUEST
A COPY OF THE PROSPECTUS, PLEASE CALL 800-677-FUND.
------------------------------
FOR TECHNOLOGY FUND, CLASS A, CLASS B, CLASS C, CLASS S AND CLASS Y SHARE
PROSPECTUSES:
The following replaces the paragraph under "Main Risks" relating to "Risks of
Development Stage and Small-Cap Stocks":
RISKS OF DEVELOPMENT STAGE AND SMALL-CAP AND MID-CAP STOCKS
Stocks of development stage and small-capitalization companies involve
substantial risk. These stocks have experienced greater price
volatility than stocks of more established and larger-capitalization
companies, and they may be expected to do so in the future. While
stocks of mid-cap companies may be slightly less volatile than those of
small-cap companies, they still involve substantial risk and their
prices may be subject to more abrupt or erratic movements than those of
larger, more established companies or the market averages in general.
* Valid until next prospectus update.
- --------------------------------------------------------------------------------
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
- --------------------------------------------------------------------------------
U.S. BANCORP ASSET MANAGEMENT, INC. SERVES AS INVESTMENT ADVISOR TO THE FIRST
AMERICAN FUNDS. FIRST AMERICAN FUNDS ARE DISTRIBUTED BY QUASAR DISTRIBUTORS,
LLC, AN AFFILIATE OF THE INVESTMENT ADVISOR. FOR A PROSPECTUS CONTAINING
COMPLETE INFORMATION ON ANY OF THE FIRST AMERICAN FUNDS, INCLUDING INVESTMENT
POLICIES, FEES, AND EXPENSES, PLEASE CONTACT YOUR INVESTMENT PROFESSIONAL, CALL
FIRST AMERICAN FUNDS INVESTOR SERVICES AT 800-677-FUND, OR VISIT US ON THE WEB
AT firstamericanfunds.com. PLEASE READ THE PROSPECTUSES CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
SECT STK 02
FIRST AMERICAN INVESTMENT FUNDS, INC.
CAPITAL GROWTH FUND
GROWTH & INCOME FUND
RELATIVE VALUE FUND
Supplement Dated February 22, 2002,
To Prospectus Dated January 28, 2002
THIS INFORMATION SUPPLEMENTS THE PROSPECTUS DATED JANUARY 28, 2002.
THIS SUPPLEMENT AND THE PROSPECTUS CONSTITUTE A CURRENT PROSPECTUS.
TO REQUEST A COPY OF THE PROSPECTUS, PLEASE CALL 800-677-FUND.
-------------------------------
Effective February 22, 2002, Capital Growth Fund, Growth & Income Fund and
Relative Value Fund will be closed to new investors. If you have questions,
please contact your investment professional, or you may call First American
Funds Investor Services at 800-677-FUND.
- ---------------------- -------------------------------- ------------------------
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
- ---------------------- -------------------------------- ------------------------
U.S. Bancorp Asset Management, Inc. serves as investment advisor to the First
American Funds. First American Funds are distributed by Quasar Distributors,
LLC, an affiliate of the investment advisor.
LG CP STICK
FIRST AMERICAN INVESTMENT FUNDS, INC.
SCIENCE & TECHNOLOGY FUND
Supplement Dated February 22, 2002,
To Prospectus Dated January 28, 2002
THIS INFORMATION SUPPLEMENTS THE PROSPECTUS DATED JANUARY 28, 2002.
THIS SUPPLEMENT AND THE PROSPECTUS CONSTITUTE A CURRENT PROSPECTUS.
TO REQUEST A COPY OF THE PROSPECTUS, PLEASE CALL 800-677-FUND.
---------------------------------
Effective February 22, 2002, Science & Technology Fund will be closed to new
investors. If you have questions, please contact your investment professional,
or you may call First American Funds Investor Services at 800-677-FUND.
- ------------------------- ------------------------------ -----------------------
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
- ------------------------- ------------------------------ -----------------------
U.S. Bancorp Asset Management, Inc. serves as investment advisor to the First
American Funds. First American Funds are distributed by Quasar Distributors,
LLC, an affiliate of the investment advisor.
SECT STICK
FIRST AMERICAN INVESTMENT FUNDS, INC.
Class A, Class B and Class C Shares
Supplement dated February 28, 2002 to the Prospectus
dated January 28, 2002
THIS INFORMATION SUPPLEMENTS THE PROSPECTUS DATED JANUARY 28, 2002. THIS
SUPPLEMENT AND THE PROSPECTUS CONSTITUTE A CURRENT PROSPECTUS. TO REQUEST A COPY
OF THE PROSPECTUS, PLEASE CALL 1-800-637-2548
-------------------------
Effective February 28, 2002, the Fees and Expenses section of the First American
Investment Funds, Inc. Prospectus relating to Science and Technology Fund and
Technology Fund will be amended as follows. The following disclosures relating
to Fees and Expense will replace the disclosures found in the funds' current
prospectus.
SCIENCE & TECHNOLOGY FUND
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you by,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- ----------------------------------------------------------------------- ----------- ---------- ---------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ----------------------------------------------------------------------- ----------- ---------- ---------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(AS A PERCENTAGE OF OFFERING PRICE) 5.50%(1) 0.00% 1.00%
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR REDEMPTION PROCEEDS,
WHICHEVER IS LESS) 0.00%(2) 5.00% 1.00%
ANNUAL MAINTENANCE FEE(3)
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500 $25 $25 $25
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED
FROM FUND ASSETS) (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ----------------------------------------------------------------------- ----------- ---------- ---------
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.71% 0.71% 0.71%
Total Annual Fund Operating Expenses 1.66% 2.41% 2.41%
Waiver of Fund Expenses(2) (0.43)% (0.43)% (0.43)%
NET EXPENSES(5) 1.23% 1.98% 1.98%
- ----------------------------------------------------------------------- ----------- ---------- ---------
(1)Certain investors may qualify for reduced sales charges. See "Buying Shares--
Calculating Your Share Price."
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4)Annual Fund Operating Expenses are based on the fund' most recently completed
fiscal year, restated to reflect current fees.
(5)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%, 1.98% and 1.98%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
- --------------------------------------------------------------------------------
FAIF-ABC
TECHNOLOGY FUND
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you by,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- ----------------------------------------------------------------------- ----------- ---------- ---------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A CLASS B CLASS C
- ----------------------------------------------------------------------- ----------- ---------- ---------
MAXIMUM SALES CHARGE (LOAD) 5.50% 5.00% 2.00%
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES
(AS A PERCENTAGE OF OFFERING PRICE) 5.50%(1) 0.00% 1.00%
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR REDEMPTION PROCEEDS,
WHICHEVER IS LESS) 0.00%(2) 5.00% 1.00%
ANNUAL MAINTENANCE FEE(3)
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500 $25 $25 $25
ANNUAL FUND OPERATING EXPENSES(4) (EXPENSES THAT ARE DEDUCTED
FROM FUND ASSETS) (AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ----------------------------------------------------------------------- ----------- ---------- ---------
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.63% 0.63% 0.63%
Total Annual Fund Operating Expenses 1.58% 2.33% 2.33%
Waiver of Fund Expenses(2) (0.35)% (0.35)% (0.35)%
NET EXPENSES(5) 1.23% 1.98% 1.98%
- ----------------------------------------------------------------------- ----------- ---------- ---------
(1)Certain investors may qualify for reduced sales charges. See "Buying Shares--
Calculating Your Share Price."
(2)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(3)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
(4)Annual Fund Operating Expenses are based on the fund' most recently completed
fiscal year, restated to reflect current fees.
(5)Certain service providers have contractually agreed to waive fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%, 1.98% and 1.98%, respectively, for Class A, Class B and
Class C shares. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
FIRST AMERICAN FUNDS P.O. Box 1330 Minneapolis, MN 55440-1330
U.S. Bancorp Asset Management, Inc., serves as the
investment adviser to the First American Funds
First American Funds are distributed by Quasar
Distributors, LLC which is located in Milwaukee, WI 53202
and is an affiliate of the investment advisor.
SEC file number: 811-05309
FIRST AMERICAN INVESTMENT FUNDS, INC.
Class S Shares
Supplement dated February 28, 2002 to the Prospectus
dated January 28, 2002
THIS INFORMATION SUPPLEMENTS THE PROSPECTUS DATED JANUARY 28, 2002. THIS
SUPPLEMENT AND THE PROSPECTUS CONSTITUTE A CURRENT PROSPECTUS. TO REQUEST A COPY
OF THE PROSPECTUS, PLEASE CALL 1-800-637-2548
---------------------
Effective February 28, 2002, the Fees and Expenses section of the First American
Investment Funds, Inc. Prospectus relating to Science and Technology Fund and
Technology Fund will be amended as follows. The following disclosures relating
to Fees and Expense will replace the disclosures found in the funds' current
prospectus.
SCIENCE & TECHNOLOGY FUND
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -------------------------------------------------------------------------------------- ------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -------------------------------------------------------------------------------------- ------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -------------------------------------------------------------------------------------- ------------
Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.71%
Total Annual Fund Operating Expenses 1.66%
Waiver of Fund Expenses(2) (0.43)%
NET EXPENSES(2) 1.23%
- -------------------------------------------------------------------------------------- ------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waiver fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
- --------------------------------------------------------------------------------
FAIF-S
TECHNOLOGY FUND
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -------------------------------------------------------------------------------------- ------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -------------------------------------------------------------------------------------- ------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -------------------------------------------------------------------------------------- ------------
Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses
Shareholder Servicing Fee 0.25%
Miscellaneous 0.63%
Total Annual Fund Operating Expenses 1.58%
Waiver of Fund Expenses(2) (0.35)%
NET EXPENSES(2) 1.23%
- -------------------------------------------------------------------------------------- ------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waiver fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 1.23%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
FIRST AMERICAN FUNDS P.O. Box 1330 Minneapolis, MN 55440-1330
U.S. Bancorp Asset Management, Inc., serves as the
investment adviser to the First American Funds
First American Funds are distributed by Quasar
Distributors, LLC which is located in Milwaukee, WI 53202
and is an affiliate of the investment advisor.
SEC file number: 811-05309
FIRST AMERICAN INVESTMENT FUNDS, INC.
Class Y Shares
Supplement dated February 28, 2002 to the Prospectus
dated January 28, 2002
-------------------------
THIS INFORMATION SUPPLEMENTS THE PROSPECTUS DATED JANUARY 28, 2002. THIS
SUPPLEMENT AND THE PROSPECTUS CONSTITUTE A CURRENT PROSPECTUS. TO REQUEST A COPY
OF THE PROSPECTUS, PLEASE CALL 1-800-637-2548
Effective February 28, 2002, the Fees and Expenses section of the First American
Investment Funds, Inc. Prospectus relating to Science and Technology Fund and
Technology Fund will be amended as follows. The following disclosures relating
to Fees and Expense will replace the disclosures found in the funds' current
prospectus.
SCIENCE & TECHNOLOGY FUND
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you by,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -------------------------------------------------------------------------------------- ------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -------------------------------------------------------------------------------------- ------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- -------------------------------------------------------------------------------------- ------------
Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses 0.71%
Total Annual Fund Operating Expenses 1.41%
Waiver of Fund Expenses(2) (0.43)%
NET EXPENSES(2) 0.98%
- -------------------------------------------------------------------------------------- ------------
(1)Annual Fund Operating Expenses are based on the funds' most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waiver fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.98%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
- --------------------------------------------------------------------------------
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
- --------------------------------------------------------------------------------
FAIF-Y
TECHNOLOGY FUND
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets.
- -------------------------------------------------------------------------------------- ------------
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -------------------------------------------------------------------------------------- ------------
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON PURCHASES NONE
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
(AS A PERCENTAGE OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS)
ANNUAL FUND OPERATING EXPENSES(1) (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
- ---------------------------------------------------------------------------------------------------
Management Fees 0.70%
Distribution and Service (12b-1) Fees None
Other Expenses 0.63%
Total Annual Fund Operating Expenses 1.33%
Waiver of Fund Expenses(2) (0.35)%
NET EXPENSES(2) 0.98%
- -------------------------------------------------------------------------------------- ------------
(1)Annual Fund Operating Expenses are based on the fund's most recently
completed fiscal year, restated to reflect current fees.
(2)Certain service providers have contractually agreed to waiver fees and
reimburse other fund expenses until September 30, 2002, so that Net Expenses
do not exceed 0.98%. These fee waivers and expense reimbursements may be
terminated at any time after September 30, 2002 at the discretion of the
service providers.
FIRST AMERICAN FUNDS P.O. Box 1330 Minneapolis, MN 55440-1330
U.S. Bancorp Asset Management, Inc., serves as the
investment adviser to the First American Funds
First American Funds are distributed by Quasar
Distributors, LLC which is located in Milwaukee, WI 53202
and is an affiliate of the investment advisor.
SEC file number: 811-05309
FIRST AMERICAN INVESTMENT FUNDS, INC.
STATEMENT OF ADDITIONAL INFORMATION
DATED JANUARY 28, 2002
BALANCED FUND SCIENCE & TECHNOLOGY FUND
CAPITAL GROWTH FUND TECHNOLOGY FUND
EQUITY INCOME FUND BOND IMMDEX FUND
GROWTH & INCOME FUND CORPORATE BOND FUND
LARGE CAP CORE FUND FIXED INCOME FUND
LARGE CAP GROWTH FUND INTERMEDIATE TERM BOND FUND
LARGE CAP VALUE FUND SHORT TERM BOND FUND
RELATIVE VALUE FUND STRATEGIC INCOME FUND
EQUITY INDEX FUND U.S. GOVERNMENT SECURITIES FUND
MID CAP INDEX FUND ARIZONA TAX FREE FUND
SMALL CAP INDEX FUND CALIFORNIA INTERMEDIATE TAX FREE FUND
MICRO CAP FUND CALIFORNIA TAX FREE FUND
MID CAP CORE FUND COLORADO INTERMEDIATE TAX FREE FUND
MID CAP GROWTH FUND COLORADO TAX FREE FUND
MID CAP VALUE FUND INTERMEDIATE TAX FREE FUND
SMALL CAP CORE FUND MINNESOTA INTERMEDIATE TAX FREE FUND
SMALL CAP GROWTH FUND MINNESOTA TAX FREE FUND
SMALL CAP VALUE FUND MISSOURI TAX FREE FUND
EMERGING MARKETS FUND NEBRASKA TAX FREE FUND
INTERNATIONAL FUND OREGON INTERMEDIATE TAX FREE FUND
REAL ESTATE SECURITIES FUND TAX FREE FUND
HEALTH SCIENCES FUND HIGH YIELD BOND FUND
This Statement of Additional Information relates to the Class A, Class
B, Class C, Class S and Class Y Shares of the funds named above (the "Funds"),
each of which is a series of First American Investment Funds, Inc. ("FAIF").
This Statement of Additional Information is not a prospectus, but should be read
in conjunction with the Funds' current Prospectuses dated January 28, 2002. The
financial statements included as part of the Funds' Annual Report to
shareholders for the fiscal year ended September 30, 2001 are incorporated by
reference into this Statement of Additional Information. This Statement of
Additional Information is incorporated into the Funds' Prospectuses by
reference. To obtain copies of Prospectuses or the Funds' Annual Report(s) at no
charge, write the Funds' distributor, Quasar Distributors, LLC, 615 East
Michigan Street, Milwaukee, WI 53202, or call Investor Services at 800 677-FUND.
Please retain this Statement of Additional Information for future reference.
TABLE OF CONTENTS
PAGE
----
GENERAL INFORMATION..................................................................................................1
ADDITIONAL INFORMATION CONCERNING FUND INVESTMENTS...................................................................2
Short-Term Investments......................................................................................2
U.S. Government Securities..................................................................................3
Repurchase Agreements.......................................................................................3
When-Issued and Delayed Delivery Transactions...............................................................4
Lending of Portfolio Securities.............................................................................4
Options Transactions........................................................................................5
Futures and Options on Futures..............................................................................7
Fixed Income Securities-- Equity Funds......................................................................7
Foreign Securities..........................................................................................8
Foreign Currency Transactions..............................................................................10
Mortgage-Backed Securities.................................................................................11
Real Estate Investment Trust ("REIT") Securities...........................................................14
Asset-Backed Securities....................................................................................14
Municipal Bonds and Other Municipal Obligations............................................................15
Temporary Taxable Investments..............................................................................16
Inverse Floating Rate Municipal Obligations................................................................16
Zero Coupon Securities.....................................................................................16
Adjustable Rate Mortgage Securities........................................................................17
Interest Rate Transactions.................................................................................17
Guaranteed Investment Contracts............................................................................17
Debt Obligations - Rated Less Than Investment Grade........................................................17
Debt Obligations-- Strategic Income Fund...................................................................18
Floating Rate Debt Obligations.............................................................................18
Fixed Rate Corporate Debt Obligations......................................................................18
Payment-In-Kind Debentures and Delayed Interest Securities.................................................19
Preferred Stock............................................................................................19
Participation Interests....................................................................................19
Closed-End Investment Companies............................................................................19
U.S. Treasury Inflation-Protection Securities..............................................................20
Special Factors Affecting Arizona Tax Free Fund............................................................20
Special Factors Affecting California Intermediate Tax Free Fund and California Tax Free Fund...............21
Special Factors Affecting Colorado Intermediate Tax Free Fund and Colorado Tax Free Fund...................25
Special Factors Affecting Minnesota Intermediate Tax Free Fund and Minnesota Tax Free Fund.................26
Special Factors Affecting Missouri Tax Free Fund...........................................................27
Special Factors Affecting Nebraska Tax Free Fund...........................................................29
Special Factors Affecting Oregon Intermediate Tax Free Fund................................................30
CFTC Information...........................................................................................34
INVESTMENT RESTRICTIONS.............................................................................................35
FUND NAMES..........................................................................................................36
PORTFOLIO TURNOVER..................................................................................................36
DIRECTORS AND EXECUTIVE OFFICERS....................................................................................37
Directors..................................................................................................37
Executive Officers.........................................................................................38
Compensation...............................................................................................39
i
CODE OF ETHICS......................................................................................................40
INVESTMENT ADVISORY AND OTHER SERVICES FOR THE FUNDS................................................................40
Investment Advisor.........................................................................................40
Sub-Advisors for Emerging Markets Fund,
International Fund and Strategic Income Fund...............................................................44
Administrator..............................................................................................46
Distributor................................................................................................48
Custodian and Auditors.....................................................................................55
PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE..................................................................57
CAPITAL STOCK.......................................................................................................60
NET ASSET VALUE AND PUBLIC OFFERING PRICE..........................................................................109
FUND PERFORMANCE...................................................................................................115
TAXATION...........................................................................................................128
REDUCING SALES CHARGES.............................................................................................130
Class A Sales Charge......................................................................................130
Sales of Class A Shares and Class C Shares at Net Asset Value.............................................130
ADDITIONAL INFORMATION ABOUT SELLING SHARES........................................................................131
By Telephone..............................................................................................131
By Mail...................................................................................................132
Redemptions Before Purchase Instruments Clear.............................................................132
RATINGS............................................................................................................133
FINANCIAL STATEMENTS...............................................................................................136
ii
GENERAL INFORMATION
First American Investment Funds, Inc. ("FAIF") was incorporated in the
State of Maryland on August 20, 1987 under the name "SECURAL Mutual Funds, Inc."
The Board of Directors and shareholders, at meetings held January 10, 1991, and
April 2, 1991, respectively, approved amendments to the Articles of
Incorporation providing that the name "SECURAL Mutual Funds, Inc." be changed to
"First American Investment Funds, Inc."
FAIF is organized as a series fund and currently issues its shares in
44 series. Each series of shares represents a separate investment portfolio with
its own investment objective and policies (in essence, a separate mutual fund).
The series of FAIF to which this Statement of Additional Information relates are
named on the cover. These series are referred to in this Statement of Additional
Information as the "Funds."
For purposes of this Statement of Additional Information, "Equity
Funds" shall constitute Balanced Fund, Equity Income Fund, Equity Index Fund,
Large Cap Growth Fund, Large Cap Value Fund, Mid Cap Growth Fund, Mid Cap Value
Fund, Small Cap Growth Fund, Small Cap Value Fund, Emerging Markets Fund,
International Fund, Health Sciences Fund, Real Estate Securities Fund,
Technology Fund, Mid Cap Index Fund, Small Cap Index Fund, Science & Technology
Fund, Micro Cap Fund, Small Cap Core Fund, Mid Cap Core Fund, Capital Growth
Fund, Relative Value Fund, Large Cap Core Fund and Growth & Income Fund. "Bond
Funds" shall constitute Corporate Bond Fund, Fixed Income Fund, Intermediate
Term Bond Fund, Short Term Bond Fund, Strategic Income Fund, Bond IMMDEX Fund,
High Yield Bond Fund and U.S. Government Securities Fund. "Tax Free Funds" shall
constitute Arizona Tax Free Fund, California Intermediate Tax Free Fund,
California Tax Free Fund, Colorado Intermediate Tax Free Fund, Colorado Tax Free
Fund, Intermediate Tax Free Fund, Tax Free Fund, Minnesota Intermediate Tax Free
Fund, Minnesota Tax Free Fund, Oregon Intermediate Tax Free Fund, Nebraska Tax
Free Fund and Missouri Tax Free Fund. Each of the Funds are open-end management
investment companies and, except for the Tax Free Funds (other than Tax Free
Fund and Intermediate Tax Free Fund), Health Sciences Fund, Real Estate
Securities Fund, Technology Fund and Science & Technology Fund, are diversified
investment companies. The Tax Free Funds (other than Tax Free Fund and
Intermediate Tax Free Fund), Health Sciences Fund, Real Estate Securities Fund,
Technology Fund and Science & Technology Fund are non-diversified investment
companies.
Shareholders may purchase shares of each Fund through five separate
classes, Class A, Class B (except for the Tax Free Funds and certain Bond
Funds), Class C (except certain Bond Funds and certain Tax Free Funds), Class S
(except for the Tax Free Funds) and Class Y, which provide for variations in
distribution costs, shareholder servicing fees, voting rights and dividends. To
the extent permitted by the 1940 Act, the Funds may also provide for variations
in other costs among the classes although they have no present intention to do
so. In addition, a sales load is imposed on the sale of Class A, Class B and
Class C Shares of the Funds. Except for differences among the classes pertaining
to distribution costs and shareholder servicing fees, each share of each Fund
represents an equal proportionate interest in that Fund.
The Articles of Incorporation and Bylaws of FAIF provide that meetings
of shareholders be held as determined by the Board of Directors and as required
by the 1940 Act. Maryland corporation law requires a meeting of shareholders to
be held upon the written request of shareholders holding 10% or more of the
voting shares of FAIF, with the cost of preparing and mailing the notice of such
meeting payable by the requesting shareholders. The 1940 Act requires a
shareholder vote for, among other things, all amendments to fundamental
investment policies and restrictions, for approval of all investment advisory
contracts and amendments thereto, and for all amendments to Rule 12b-1
distribution plans.
This Statement of Additional Information may also refer to affiliated
investment companies, including: First American Funds, Inc. ("FAF"); First
American Strategy Funds, Inc. ("FASF"); First American Insurance Portfolios,
Inc. ("FAIP"); and eleven separate closed-end funds (American Strategic Income
Portfolio Inc., American Strategic Income Portfolio Inc. II, American Strategic
Income Portfolio Inc. III, American Municipal Income Portfolio Inc., Minnesota
Municipal Income Portfolio Inc., American Select Portfolio Inc., American
Municipal Term Trust Inc. II, American Municipal Term Trust Inc. III, Minnesota
Municipal Term Trust Inc., Minnesota Municipal Term Trust Inc. II, and American
Income Fund, Inc.), collectively referred to as the First American Closed-End
Funds ("FACEF").
1
ADDITIONAL INFORMATION CONCERNING FUND INVESTMENTS
The main investment strategies of each Fund are set forth in each
Fund's Prospectus. Additional information concerning main investment strategies
of the Funds, and other investment strategies which may be used by the Funds, is
set forth below. The Funds have attempted to identify investment strategies that
will be employed in pursuing each Fund's investment objective. However, in the
absence of an affirmative limitation, a Fund may utilize any strategy or
technique that is consistent with its investment objective. The Funds do not
anticipate that any such strategy or technique would exceed 5% of a Fund's
assets absent specific identification of that practice. Additional information
concerning the Funds' investment restrictions is set forth below under
"Investment Restrictions."
If a percentage limitation on investments by a Fund stated in this
section or in "Investment Restrictions" below is adhered to at the time of an
investment, a later increase or decrease in percentage resulting from changes in
asset value will not be deemed to violate the limitation except in the case of
the limitations on borrowing. A Fund which is limited to investing in securities
with specified ratings or of a certain credit quality is not required to sell a
security if its rating is reduced or its credit quality declines after purchase,
but the Fund may consider doing so. However, in no event will more than 5% of
any Fund's net assets (other than Corporate Bond Fund, Strategic Income Fund
and, to the extent they can invest in convertible debt securities, Equity Income
Fund and Growth & Income Fund) be invested in non-investment grade securities.
Descriptions of the rating categories of Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. and Moody's Investors Service, Inc.
are contained in "Ratings" below.
SHORT-TERM INVESTMENTS
Most of the Funds can invest in a variety of short-term instruments
such as rated commercial paper and variable amount master demand notes; United
States dollar-denominated time and savings deposits (including certificates of
deposit); bankers' acceptances; obligations of the United States Government or
its agencies or instrumentalities; repurchase agreements collateralized by
eligible investments of a Fund; securities of other mutual funds that invest
primarily in debt obligations with remaining maturities of 13 months or less
(which investments also are subject to the advisory fee); and other similar
high-quality short-term United States dollar-denominated obligations. The other
mutual funds in which the Funds may so invest include money market funds advised
by U.S. Bancorp Asset Management, Inc., the Funds' investment advisor ("U.S.
Bancorp Asset Management" or the "Advisor"), subject to certain restrictions
contained in an exemptive order issued by the Securities and Exchange Commission
("SEC") with respect thereto.
Tax Free Funds, Bond Funds and the Balanced Fund may also invest in
Eurodollar Certificates of Deposit issued by foreign branches of United States
or foreign banks; Eurodollar Time Deposits, which are United States
dollar-denominated deposits in foreign branches of United States or foreign
banks; and Yankee Certificates of Deposit, which are United States
dollar-denominated certificates of deposit issued by United States branches of
foreign banks and held in the United States. In each instance, these Funds may
only invest in bank instruments issued by an institution which has capital,
surplus and undivided profits of more than $100 million or the deposits of which
are insured by the Bank Insurance Fund or the Savings Association Insurance
Fund.
Short-term investments and repurchase agreements may be entered into on
a joint basis by the Funds and other funds advised by the Advisor to the extent
permitted by an exemptive order issued by the Securities and Exchange Commission
with respect to the Funds. A brief description of certain kinds of short-term
instruments follows:
COMMERCIAL PAPER. Commercial paper consists of unsecured promissory
notes issued by corporations. Issues of commercial paper normally have
maturities of less than nine months and fixed rates of return. Subject to the
limitations described in the Prospectuses, the Funds may purchase commercial
paper (including the Tax Free Funds, which may purchase tax-exempt commercial
paper) consisting of issues rated at the time of purchase within the two highest
rating categories by Standard & Poor's Rating Services, a division of the
McGraw-Hill Companies, Inc. ("Standard & Poor's") or Moody's Investors Service,
Inc. ("Moody's"), or which have been assigned an equivalent rating by another
nationally recognized statistical rating organization. The Funds also may invest
in commercial paper that is not rated but that is determined by the Advisor to
be of comparable quality to instruments that are so rated. For a description of
the rating categories of Standard & Poor's and Moody's, see "Ratings."
2
BANKERS' ACCEPTANCES. Bankers' acceptances are credit instruments
evidencing the obligation of a bank to pay a draft drawn on it by a customer.
These instruments reflect the obligation both of the bank and of the drawer to
pay the full amount of the instrument upon maturity.
VARIABLE AMOUNT MASTER DEMAND NOTES. Variable amount master demand
notes are unsecured demand notes that permit the indebtedness thereunder to vary
and provide for periodic adjustments in the interest rate according to the terms
of the instrument. Because master demand notes are direct lending arrangements
between a Fund and the issuer, they are not normally traded. Although there is
no secondary market in the notes, a Fund may demand payment of principal and
accrued interest at any time. While the notes are not typically rated by credit
rating agencies, issuers of variable amount master demand notes (which are
normally manufacturing, retail, financial, and other business concerns) must
satisfy the same criteria as set forth above for commercial paper. The Advisor
or the applicable Funds' investment sub-advisor will consider the earning power,
cash flow and other liquidity ratios of the issuers of such notes and will
continuously monitor their financial status and ability to meet payment on
demand.
VARIABLE RATE DEMAND OBLIGATIONS. Variable rate demand obligations
("VRDO") are securities in which the interest rate is adjusted at pre-designated
periodic intervals. VRDOs may include a demand feature which is a put that
entitles the holder to receive the principal amount of the underlying security
or securities and which may be exercised either at any time on no more than 30
days' notice or at specified intervals not exceeding 397 calendar days on no
more than 30 days' notice.
U.S. GOVERNMENT SECURITIES
The U.S. government securities in which the Funds may invest are either
issued or guaranteed by the U.S. government, its agencies or instrumentalities.
The U.S. government securities in which the Funds invest principally are:
o direct obligations of the U.S. Treasury, such as U.S. Treasury
bills, notes, and bonds;
o notes, bonds, and discount notes issued and guaranteed by U.S.
government agencies and instrumentalities supported by the full
faith and credit of the United States;
o notes, bonds, and discount notes of U.S. government agencies or
instrumentalities which receive or have access to federal funding;
and
o notes, bonds, and discount notes of other U.S. government
instrumentalities supported only by the credit of the
instrumentalities.
The government securities in which the Funds may invest are backed in a
variety of ways by the U.S. government or its agencies or instrumentalities.
Some of these securities, such as Government National Mortgage Association
("GNMA") mortgage-backed securities, are backed by the full faith and credit of
the U.S. government. Other securities, such as obligations of the Federal
National Mortgage Association ("FNMA") or the Federal Home Loan Mortgage
Corporation ("FHLMC") are backed by the credit of the agency or instrumentality
issuing the obligations but not the full faith and credit of the U.S.
government. No assurances can be given that the U.S. government will provide
financial support to these other agencies or instrumentalities because it is not
obligated to do so. See "-- Mortgage-Backed Securities" below for a description
of these securities and the Funds that may invest in such securities.
REPURCHASE AGREEMENTS
The Funds may invest in repurchase agreements. A repurchase agreement
involves the purchase by a Fund of securities with the agreement that after a
stated period of time, the original seller will buy back the same securities
("collateral") at a predetermined price or yield. Repurchase agreements involve
certain risks not associated with direct investments in securities. If the
original seller defaults on its obligation to repurchase as a result of its
bankruptcy or otherwise, the purchasing Fund will seek to sell the collateral,
which could involve costs or delays. Although collateral (which may consist of
any fixed income security which is an eligible investment for the Fund entering
into the repurchase agreement) will at all times be maintained in an amount
3
equal to the repurchase price under the agreement (including accrued interest),
a Fund would suffer a loss if the proceeds from the sale of the collateral were
less than the agreed-upon repurchase price. The Advisor or, in the case of
Emerging Markets Fund and International Fund, such Fund's investment
sub-advisor, will monitor the creditworthiness of the firms with which the Funds
enter into repurchase agreements. In the case of Strategic Income Fund, the
Advisor and the Fund's investment sub-advisor will monitor the creditworthiness
of the firms with which the Fund enters into repurchase agreements.
The Funds' custodian will hold the securities underlying any repurchase
agreement, or the securities will be part of the Federal Reserve/Treasury Book
Entry System. The market value of the collateral underlying the repurchase
agreement will be determined on each business day. If at any time the market
value of the collateral falls below the repurchase price under the repurchase
agreement (including any accrued interest), the appropriate Fund will promptly
receive additional collateral (so the total collateral is an amount at least
equal to the repurchase price plus accrued interest).
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
Each of the Funds (excluding Equity Index Fund, Mid Cap Index Fund and
Small Cap Index Fund) may purchase securities on a when-issued or delayed
delivery basis. When such a transaction is negotiated, the purchase price is
fixed at the time the purchase commitment is entered, but delivery of and
payment for the securities take place at a later date. A Fund will not accrue
income with respect to securities purchased on a when-issued or delayed delivery
basis prior to their stated delivery date. Pending delivery of the securities,
each Fund will maintain in a segregated account cash or liquid high-grade
securities in an amount sufficient to meet its purchase commitments.
The purchase of securities on a when-issued or delayed delivery basis
exposes a Fund to risk because the securities may decrease in value prior to
delivery. In addition, a Fund's purchase of securities on a when-issued or
delayed delivery basis while remaining substantially fully invested could
increase the amount of the Fund's total assets that are subject to market risk,
resulting in increased sensitivity of net asset value to changes in market
prices. A seller's failure to deliver securities to a Fund could prevent the
Fund from realizing a price or yield considered to be advantageous.
In connection with their ability to purchase securities on a
when-issued or delayed delivery basis, Balanced Fund (with respect to its fixed
income assets) and the Bond Funds may enter into mortgage "dollar rolls" in
which a Fund sells securities and simultaneously contracts with the same
counterparty to repurchase similar (same type, coupon and maturity) but not
identical securities on a specified future date. In a mortgage dollar roll, a
Fund gives up the right to receive principal and interest paid on the securities
sold. However, the Fund would benefit to the extent of any difference between
the price received for the securities sold and the lower forward price for the
future purchase plus any fee income received. Unless such benefits exceed the
income, capital appreciation and gain or loss due to mortgage prepayments that
would have been realized on the securities sold as part of the mortgage dollar
roll, the use of this technique will diminish the investment performance of the
Fund compared with what such performance would have been without the use of
mortgage dollar rolls. The Fund will hold and maintain in a segregated account
until the settlement date cash or liquid securities in an amount equal to the
forward purchase price.
When a Fund agrees to purchase securities on a when-issued or delayed
delivery basis, the Fund's custodian will maintain in a segregated account cash
or liquid securities in an amount sufficient to meet the Fund's purchase
commitments. It may be expected that a Fund's net assets will fluctuate to a
greater degree when it sets aside securities to cover such purchase commitments
than when it sets aside cash. In addition, because a Fund will set aside cash or
liquid securities to satisfy its purchase commitments in the manner described
above, its liquidity and the ability of the Advisor or a Fund's investment
sub-advisor, if any, to manage it might be affected in the event its commitments
to purchase when-issued or delayed delivery securities ever exceeded 25% of the
value of its total assets. Under normal market conditions, however, a Fund's
commitments to purchase when-issued or delayed delivery securities will not
exceed 25% of the value of its total assets.
LENDING OF PORTFOLIO SECURITIES
In order to generate additional income, each of the Funds may lend
portfolio securities representing up to one-third of the value of its total
assets to broker-dealers, banks or other institutional borrowers of securities.
As with other
4
extensions of credit, there may be risks of delay in recovery of the securities
or even loss of rights in the collateral should the borrower of the securities
fail financially. However, the Funds will only enter into loan arrangements with
broker-dealers, banks, or other institutions which the Advisor or, in the case
of Emerging Markets Fund, International Fund or Strategic Income Fund, such
Fund's sub-advisor has determined are creditworthy under guidelines established
by the Board of Directors. The Funds will pay a portion of the income earned on
the lending transaction to the placing broker and may pay administrative and
custodial fees in connection with these loans.
The Advisor may act as securities lending agent for the Funds and
receive separate compensation for such services, subject to compliance with
conditions contained in an SEC exemptive order permitting the Advisor to provide
such services and receive such compensation. The Advisor currently receives fees
equal to 40% of the Funds' income from securities lending transactions.
In these loan arrangements, the Funds will receive collateral in the
form of cash, United States government securities or other high-grade debt
obligations equal to at least 100% of the value of the securities loaned. This
collateral must be valued daily by the Advisor or the applicable Fund's
sub-advisor and, if the market value of the loaned securities increases, the
borrower must furnish additional collateral to the lending Fund. During the time
portfolio securities are on loan, the borrower pays the lending Fund any
dividends or interest paid on the securities. Loans are subject to termination
at any time by the lending Fund or the borrower. While a Fund does not have the
right to vote securities on loan, it would terminate the loan and regain the
right to vote if that were considered important with respect to the investment.
OPTIONS TRANSACTIONS
To the extent set forth below, the Funds may purchase put and call
options on equity securities, stock indices, interest rate indices and/or
foreign currencies on securities that they own or have the right to acquire.
These transactions will be undertaken for the purpose of reducing risk to the
Funds; that is, for "hedging" purposes. Options on futures contracts are
discussed below under "-- Futures and Options on Futures."
OPTIONS ON SECURITIES. The Equity Funds (other than Equity Index Fund,
Mid Cap Index Fund and Small Cap Index Fund), Tax Free Funds, Strategic Income
Fund and High Yield Bond Fund may purchase put and call options on securities
they own or have the right to acquire. A put option on a security gives the
purchaser of the option the right (but not the obligation) to sell, and the
writer of the option the obligation to buy, the underlying security at a stated
price (the "exercise price") at any time before the option expires. A call
option on a security gives the purchaser the right (but not the obligation) to
buy, and the writer the obligation to sell, the underlying security at the
exercise price at any time before the option expires. The purchase price for a
put or call option is the "premium" paid by the purchaser for the right to sell
or buy.
A Fund may purchase put options to hedge against a decline in the value
of its portfolio. By using put options in this way, a Fund would reduce any
profit it might otherwise have realized in the underlying security by the amount
of the premium paid for the put option and by transaction costs. In similar
fashion, a Fund may purchase call options to hedge against an increase in the
price of securities that the Fund anticipates purchasing in the future. The
premium paid for the call option plus any transaction costs will reduce the
benefit, if any, realized by the Fund upon exercise of the option, and, unless
the price of the underlying security rises sufficiently, the option may expire
unexercised.
OPTIONS ON STOCK INDICES. The Equity Funds (other than Equity Index
Fund, Mid Cap Index Fund and Small Cap Index Fund), Strategic Income Fund, High
Yield Bond Fund and Corporate Bond Fund may purchase put and call options on
stock indices. Options on stock indices are similar to options on individual
stocks except that, rather than the right to take or make delivery of stock at a
specified price, an option on a stock index gives the holder the right to
receive, upon exercise of the option, an amount of cash if the closing value of
the stock index upon which the option is based is greater than, in the case of a
call, or lesser than, in the case of a put, the exercise price of the option.
This amount of cash is equal to the difference between the closing price of the
index and the exercise price of the option expressed in dollars times a
specified multiple (the "multiplier"). The writer of the option is obligated, in
return for the premium received, to make delivery of this amount. Unlike stock
options, all settlements for stock index options are in cash, and gain or loss
depends on price movements in the stock market generally (or in a particular
industry or segment of the market) rather than price movements in individual
stocks. The multiplier for an index option performs a function similar to the
unit of trading for a stock option. It determines the total dollar value per
contract of each point in the
5
difference between the underlying stock index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different stock indices may
have different multipliers.
OPTIONS ON INTEREST RATE INDICES. The Bond Funds and Tax Free Funds may
purchase put and call options on interest rate indices. An option on an interest
rate index gives the holder the right to receive, upon exercise of the option,
an amount of cash if the closing value of the interest rate index upon which the
option is based is greater than, in the case of a call, or less than, in the
case of a put, the exercise price of the option. This amount of cash is equal to
the difference between the closing price of the index and the exercise price of
the option expressed in dollars times a specified multiple (the "multiplier").
The writer of the option is obligated, for the premium received, to make
delivery of this amount. Unlike interest rate futures options contracts,
settlements for interest rate index options are always in cash. Gain or loss
depends on interest rate movements with respect to specific financial
instruments. As with stock index options, the multiplier for interest rate index
options determines the total dollar value per contract of each point in the
difference between the exercise price of an option and the current value of the
underlying interest rate index. Options on different interest rate indices may
have different multipliers.
WRITING OF CALL OPTIONS. The Equity Funds (other than Equity Index
Fund, Mid Cap Index Fund and Small Cap Index Fund), High Yield Bond Fund and
Strategic Income Fund may write (sell) covered call options. These transactions
would be undertaken principally to produce additional income. Depending on the
Fund, these transactions may include the writing of covered call options on
equity securities or (only in the case of Emerging Markets Fund, International
Fund and Strategic Income Fund) on foreign currencies. The Equity Funds (other
than Emerging Markets Fund and International Fund) may write (sell) covered call
options covering up to 25% of the equity securities owned by such Funds, and, in
the case of Emerging Markets Fund and International Fund, covering up to 50% of
the equity securities owned by such Funds. Strategic Income Fund may write
(sell) covered call options on equity securities covering up to 25% of its net
assets.
When a Fund sells a covered call option, it is paid a premium by the
purchaser. If the market price of the security covered by the option does not
increase above the exercise price before the option expires, the option
generally will expire without being exercised, and the Fund will retain both the
premium paid for the option and the security. If the market price of the
security covered by the option does increase above the exercise price before the
option expires, however, the option is likely to be exercised by the purchaser.
In that case the Fund will be required to sell the security at the exercise
price, and it will not realize the benefit of increases in the market price of
the security above the exercise price of the option. These Funds may also write
call options on stock indices the movements of which generally correlate with
those of the respective Funds' portfolio holdings. These transactions, which
would be undertaken principally to produce additional income, entail the risk of
an imperfect correlation between movements of the index covered by the option
and movements in the price of the Fund's portfolio securities.
The writer (seller) of a call option has no control over when the
underlying securities must be sold; the writer may be assigned an exercise
notice at any time prior to the termination of the option. If a call option is
exercised, the writer experiences a profit or loss from the sale of the
underlying security. The writer of a call option that wishes to terminate its
obligation may effect a "closing purchase transaction." This is accomplished by
buying an option on the same security as the option previously written. If a
Fund was unable to effect a closing purchase transaction in a secondary market,
it would not be able to sell the underlying security until the option expires or
it delivers the underlying security upon exercise.
LIMITATIONS. None of the Funds other than Mid Cap Growth Fund, Emerging
Markets Fund and International Fund will invest more than 5% of the value of its
total assets in purchased options, provided that options which are "in the
money" at the time of purchase may be excluded from this 5% limitation. A call
option is "in the money" if the exercise price is lower than the current market
price of the underlying security or index, and a put option is "in the money" if
the exercise price is higher than the current market price. A Fund's loss
exposure in purchasing an option is limited to the sum of the premium paid and
the commission or other transaction expenses associated with acquiring the
option.
The use of purchased put and call options involves certain risks. These
include the risk of an imperfect correlation between market prices of securities
held by a Fund and the prices of options, and the risk of limited liquidity in
the event that a Fund seeks to close out an options position before expiration
by entering into an offsetting transaction.
6
FUTURES AND OPTIONS ON FUTURES
The Funds may engage in futures transactions and options on futures,
including stock and interest rate index futures contracts and options thereon.
A futures contract on a security obligates one party to purchase, and
the other to sell, a specified security at a specified price on a date certain
in the future. A futures contract on an index obligates the seller to deliver,
and entitles the purchaser to receive, an amount of cash equal to a specific
dollar amount times the difference between the value of the index at the
expiration date of the contract and the index value specified in the contract.
The acquisition of put and call options on futures contracts will, respectively,
give a Fund the right (but not the obligation), for a specified exercise price,
to sell or to purchase the underlying futures contract at any time during the
option period.
At the same time a futures contract is purchased or sold, a Fund
generally must allocate cash or securities as a deposit payment ("initial
deposit"). It is expected that the initial deposit would be approximately 1-1/2%
to 5% of a contract's face value. Daily thereafter, the futures contract is
valued and the payment of "variation margin" may be required, since each day the
Fund would provide or receive cash that reflects any decline or increase in the
contract's value. Futures transactions also involve brokerage costs and require
a Fund to segregate liquid assets, such as cash, United States Government
securities or other liquid high grade debt obligations equal to at least 100% of
its performance under such contracts.
A Fund may use futures contracts and options on futures in an effort to
hedge against market risks and, in the case of Emerging Markets Fund and
International Fund, as part of its management of foreign currency transactions.
In addition, Equity Index Fund, Mid Cap Index Fund and Small Cap Index Fund may
use stock index futures and options on futures to maintain sufficient liquidity
to meet redemption requests and increase the level of Fund assets devoted to
replicating the composition of , respectively, the S&P 500 Composite Index, the
S&P MidCap 400 Index or the Russell 2000 Index .
Aggregate initial margin deposits for futures contracts, and premiums
paid for related options, may not exceed 5% of a Fund's total assets, and the
value of securities that are the subject of such futures and options (both for
receipt and delivery) may not exceed 1/3 of the market value of a Fund's total
assets. Futures transactions will be limited to the extent necessary to maintain
each Fund's qualification as a regulated investment company under the Code.
Where a Fund is permitted to purchase options on futures, its potential
loss is limited to the amount of the premiums paid for the options. As stated
above, this amount may not exceed 5% of a Fund's total assets. Where a Fund is
permitted to enter into futures contracts obligating it to purchase securities,
currency or an index in the future at a specified price, such Fund could lose
100% of its net assets in connection therewith if it engaged extensively in such
transactions and if the market value or index value of the subject securities,
currency or index at the delivery or settlement date fell to zero for all
contracts into which a Fund was permitted to enter. Where a Fund is permitted to
enter into futures contracts obligating it to sell securities or currencies (as
is the case with respect only to Emerging Markets Fund, International Fund and
Strategic Income Fund), its potential losses are unlimited if it does not own
the securities or currencies covered by the contracts and it is unable to close
out the contracts prior to the settlement date.
Futures transactions involve brokerage costs and require a Fund to
segregate assets to cover contracts that would require it to purchase securities
or currencies. A Fund may lose the expected benefit of futures transactions if
interest rates, exchange rates or securities prices move in an unanticipated
manner. Such unanticipated changes may also result in poorer overall performance
than if the Fund had not entered into any futures transactions. In addition, the
value of a Fund's futures positions may not prove to be perfectly or even highly
correlated with the value of its portfolio securities or foreign currencies,
limiting the Fund's ability to hedge effectively against interest rate, exchange
rate and/or market risk and giving rise to additional risks. There is no
assurance of liquidity in the secondary market for purposes of closing out
futures positions.
FIXED INCOME SECURITIES -- EQUITY FUNDS
The fixed income securities in which the Equity Funds may invest
include securities issued or guaranteed by the United States Government or its
agencies or instrumentalities, nonconvertible preferred stocks, nonconvertible
7
corporate debt securities, and short-term obligations of the kinds described
above. Investments in nonconvertible preferred stocks and nonconvertible
corporate debt securities will be limited to securities which are rated at the
time of purchase not less than BBB by Standard & Poor's or Baa by Moody's (or
equivalent short-term ratings), or which have been assigned an equivalent rating
by another nationally recognized statistical rating organization, or which are
of comparable quality in the judgment of the Advisor. Obligations rated BBB, Baa
or their equivalent, although investment grade, have speculative characteristics
and carry a somewhat higher risk of default than obligations rated in the higher
investment grade categories.
In addition, Equity Income Fund may invest up to 25% of its total
assets, Growth & Income Fund may invest up to 20% of its total assets, and each
of the other Funds may invest up to 5% of its net assets, in less than
investment grade convertible debt obligations. For a description of such
obligations and the risks associated therewith, see "-- Debt Obligations Rated
Less Than Investment Grade."
The fixed income securities specified above are subject to (i) interest
rate risk (the risk that increases in market interest rates will cause declines
in the value of debt securities held by a Fund); (ii) credit risk (the risk that
the issuers of debt securities held by a Fund default in making required
payments); and (iii) call or prepayment risk (the risk that a borrower may
exercise the right to prepay a debt obligation before its stated maturity,
requiring a Fund to reinvest theprepayment at a lower interest rate).
FOREIGN SECURITIES
GENERAL. Under normal market conditions Emerging Markets Fund and
International Fund invest principally in foreign securities (Strategic Income
Fund invests significantly in foreign securities), and certain other Funds may
invest lesser proportions of their assets in securities of foreign issuers that
are either listed on a United States securities exchange or represented by
American Depositary Receipts. In addition, Large Cap Growth Fund, Large Cap
Value Fund, Equity Income Fund, Mid Cap Growth Fund, Mid Cap Value Fund, Small
Cap Growth Fund, Small Cap Value Fund, Health Sciences Fund, Real Estate
Securities Fund, Small Cap Core Fund, Mid Cap Core Fund, Micro Cap Fund, Large
Cap Core Fund, Capital Growth Fund, Relative Value Fund, Science & Technology
Fund, Growth & Income Fund and Technology Fund each may invest up to 25% of its
total assets (25% of the equity portion of the Balanced Fund) in securities of
foreign issuers which are either listed on a United States securities exchange
or represented by American Depositary Receipts.
Furthermore, Short Term Bond Fund, Bond IMMDEX Fund, Intermediate Term
Bond Fund and Fixed Income Fund may invest up to 15%, and Corporate Bond Fund
and High Yield Bond Fund may invest up to 25%, of total assets in foreign
securities payable in United States dollars. These securities may include
securities issued or guaranteed by (i) the Government of Canada, any Canadian
Province or any instrumentality and political subdivision thereof; (ii) any
other foreign government agency or instrumentality; (iii) foreign subsidiaries
of U.S. corporations and (iv) bonds of foreign issuers having total capital and
surplus at the time of investment of at least $1 billion.
Investment in foreign securities is subject to special investment risks
that differ in some respects from those related to investments in securities of
United States domestic issuers. These risks include political, social or
economic instability in the country of the issuer, the difficulty of predicting
international trade patterns, the possibility of the imposition of exchange
controls, expropriation, limits on removal of currency or other assets,
nationalization of assets, foreign withholding and income taxation, and foreign
trading practices (including higher trading commissions, custodial charges and
delayed settlements). Foreign securities also may be subject to greater
fluctuations in price than securities issued by United States corporations. The
principal markets on which these securities trade may have less volume and
liquidity, and may be more volatile, than securities markets in the United
States.
In addition, there may be less publicly available information about a
foreign company than about a United States domiciled company. Foreign companies
generally are not subject to uniform accounting, auditing and financial
reporting standards comparable to those applicable to United States domestic
companies. There is also generally less government regulation of securities
exchanges, brokers and listed companies abroad than in the United States.
Confiscatory taxation or diplomatic developments could also affect investment in
those countries. In addition, foreign branches of United States banks, foreign
banks and foreign issuers may be subject to less stringent reserve requirements
and to different accounting, auditing, reporting, and recordkeeping standards
than those applicable to domestic branches of United States banks and United
States domestic issuers.
8
EMERGING MARKETS. Emerging Markets Fund, International Fund and
Strategic Income Fund may invest in securities issued by the governmental and
corporate issuers that are located in emerging market countries. Investments in
securities of issuers in emerging market countries may be subject to potentially
higher risks than investments in developed countries. These risks include (i)
less social, political and economic stability; (ii) the small current size of
the markets for such securities and the currently low or nonexistent volume of
trading, which may result in a lack of liquidity and in greater price
volatility; (iii) certain national policies which may restrict the Fund's
investment opportunities, including restrictions on investment in issuers or
industries deemed sensitive to national interests; (iv) foreign taxation; (v)
the absence of developed structures governing private or foreign investment or
allowing for judicial redress for injury to private property; (vi) the limited
development and recent emergence, in certain countries, of a capital market
structure or market-oriented economy; and (vii) the possibility that recent
favorable economic developments in certain countries may be slowed or reversed
by unanticipated political or social events in such countries.
Despite the dissolution of the Soviet Union, the Communist Party may
continue to exercise a significant role in certain (particularly Eastern
European) countries. To the extent of the Communist Party's influence,
investments in such countries will involve risks of nationalization,
expropriation and confiscatory taxation. The communist governments of a number
of such countries expropriated large amounts of private property in the past, in
many cases without adequate compensation, and there can be no assurance that
such expropriation will not occur in the future. In the event of such
expropriation, a Fund could lose a substantial portion of any investments it has
made in the affected countries. Further, no accounting standards exist in many
developing countries. Finally, even though certain currencies may be convertible
into U.S. dollars, the conversion rates may be artificial to the actual market
values and may be adverse to Fund shareholders.
Certain countries, which do not have market economies, are
characterized by an absence of developed legal structures governing private and
foreign investments and private property. Certain countries require governmental
approval prior to investments by foreign persons, or limit the amount of
investment by foreign persons in a particular company, or limit the investment
of foreign persons to only a specific class of securities of a company that may
have less advantageous terms than securities of the company available for
purchase by nationals.
Authoritarian governments in certain countries may require that a
governmental or quasi-governmental authority act as custodian of a Fund's assets
invested in such country. To the extent such governmental or quasi-governmental
authorities do not satisfy the requirements of the 1940 Act to act as foreign
custodians of the Fund's cash and securities, the Fund's investment in such
countries may be limited or may be required to be effected through
intermediaries. The risk of loss through governmental confiscation may be
increased in such countries.
AMERICAN DEPOSITARY RECEIPTS AND EUROPEAN DEPOSITARY RECEIPTS. For many
foreign securities, United States dollar-denominated American Depositary
Receipts, which are traded in the United States on exchanges or
over-the-counter, are issued by domestic banks. American Depositary Receipts
represent the right to receive securities of foreign issuers deposited in a
domestic bank or a correspondent bank. American Depositary Receipts do not
eliminate all the risk inherent in investing in the securities of foreign
issuers. However, by investing in American Depositary Receipts rather than
directly in foreign issuers' stock, a Fund can avoid currency risks during the
settlement period for either purchases or sales. In general, there is a large,
liquid market in the United States for many American Depositary Receipts. The
information available for American Depositary Receipts is subject to the
accounting, auditing and financial reporting standards of the domestic market or
exchange on which they are traded, which standards are more uniform and more
exacting than those to which many foreign issuers may be subject. Emerging
Markets Fund, International Fund and Strategic Income Fund also may invest in
European Depositary Receipts, which are receipts evidencing an arrangement with
a European bank similar to that for American Depositary Receipts and which are
designed for use in the European securities markets. European Depositary
Receipts are not necessarily denominated in the currency of the underlying
security.
Certain American Depositary Receipts and European Depositary Receipts,
typically those denominated as unsponsored, require the holders thereof to bear
most of the costs of the facilities while issuers of sponsored facilities
normally pay more of the costs thereof. The depository of an unsponsored
facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited securities or to pass
through the voting
9
rights to facility holders in respect to the deposited securities, whereas the
depository of a sponsored facility typically distributes shareholder
communications and passes through voting rights.
FOREIGN SECURITIES EXCHANGES. Fixed commissions on foreign securities
exchanges are generally higher than negotiated commissions on United States
exchanges. Foreign markets also have different clearance and settlement
procedures, and in some markets there have been times when settlements have been
unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when a portion of the assets of Emerging Markets Fund,
International Fund or Strategic Income Fund is uninvested. In addition,
settlement problems could cause such Funds to miss attractive investment
opportunities or to incur losses due to an inability to sell or deliver
securities in a timely fashion. In the event of a default by an issuer of
foreign securities, it may be more difficult for a Fund to obtain or to enforce
a judgment against the issuer.
FOREIGN CURRENCY TRANSACTIONS
Emerging Markets Fund, International Fund and Strategic Income Fund
invest in securities which are purchased and sold in foreign currencies. The
value of their assets as measured in United States dollars therefore may be
affected favorably or unfavorably by changes in foreign currency exchange rates
and exchange control regulations. These Funds also will incur costs in
converting United States dollars to local currencies, and vice versa.
Emerging Markets Fund, International Fund and Strategic Income Fund
will conduct their foreign currency exchange transactions either on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency exchange
market, or through forward contracts to purchase or sell foreign currencies. A
forward foreign currency exchange contract involves an obligation to purchase or
sell an amount of a specific currency at a specific price on a future date
agreed upon by the parties. These forward currency contracts are traded directly
between currency traders (usually large commercial banks) and their customers.
Emerging Markets Fund, International Fund and Strategic Income Fund may
enter into forward currency contracts in order to hedge against adverse
movements in exchange rates between currencies. These Funds may engage in
"transaction hedging" to protect against a change in the foreign currency
exchange rate between the date the Fund contracts to purchase or sell a security
and the settlement date, or to "lock in" the United States dollar equivalent of
a dividend or interest payment made in a foreign currency. It also may engage in
"portfolio hedging" to protect against a decline in the value of its portfolio
securities as measured in United States dollars which could result from changes
in exchange rates between the United States dollar and the foreign currencies in
which the portfolio securities are purchased and sold. Emerging Markets Fund,
International Fund and Strategic Income Fund also may hedge foreign currency
exchange rate risk by engaging in currency futures and options transactions.
Although a foreign currency hedge may be effective in protecting the
Fund from losses resulting from unfavorable changes in exchanges rates between
the United States dollar and foreign currencies, it also would limit the gains
which might be realized by the Fund from favorable changes in exchange rates.
The applicable Fund's investment sub-advisor's decision whether to enter into
currency hedging transactions will depend in part on its view regarding the
direction and amount in which exchange rates are likely to move. The forecasting
of movements in exchange rates is extremely difficult, so that it is highly
uncertain whether a hedging strategy, if undertaken, would be successful. To the
extent that their respective investment sub-advisor's view regarding future
exchange rates proves to have been incorrect, Emerging Markets Fund,
International Fund and Strategic Income Fund may realize losses on their foreign
currency transactions.
As stated above, Emerging Markets Fund, International Fund and
Strategic Income Fund may engage in a variety of foreign currency transactions
in connection with their investment activities. These include forward foreign
currency exchange contracts, foreign currency futures, and foreign currency
options.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time of the contract.
These contracts are traded directly between currency traders (usually large
commercial banks) and their customers. The Funds will not enter into such
forward contracts or maintain a net exposure in such contracts where the Funds
would be obligated to deliver an amount of foreign currency in excess of the
value of the Fund's securities or other assets denominated in that currency. The
10
Funds will comply with applicable SEC announcements requiring them to segregate
assets to cover the Funds' commitments with respect to such contracts. At the
present time, these announcements generally require a fund with a long position
in a forward foreign currency contract to establish with its custodian a
segregated account containing cash or liquid high grade debt securities equal to
the purchase price of the contract, and require a fund with a short position in
a forward foreign currency contract to establish with its custodian a segregated
account containing cash or liquid high grade debt securities that, when added to
any margin deposit, equal the market value of the currency underlying the
forward contract. These requirements will not apply where a forward contract is
used in connection with the settlement of investment purchases or sales or to
the extent that the position has been "covered" by entering into an offsetting
position. The Funds (except Strategic Income Fund) generally will not enter into
a forward contract with a term longer than one year, and Strategic Income Fund
will not enter into a forward contract with a term longer than six months.
FOREIGN CURRENCY FUTURES TRANSACTIONS. Unlike forward foreign currency
exchange contracts, foreign currency futures contracts and options on foreign
currency futures contracts are standardized as to amount and delivery period and
may be traded on boards of trade and commodities exchanges or directly with a
dealer which makes a market in such contracts and options. It is anticipated
that such contracts may provide greater liquidity and lower cost than forward
foreign currency exchange contracts. As part of their financial futures
transactions, Emerging Markets Fund, International Fund and Strategic Income
Fund may use foreign currency futures contracts and options on such futures
contracts. Through the purchase or sale of such contracts, these Funds may be
able to achieve many of the same objectives as through investing in forward
foreign currency exchange contracts.
FOREIGN CURRENCY OPTIONS. A foreign currency option provides the option
buyer with the right to buy or sell a stated amount of foreign currency at the
exercise price at a specified date or during the option period. A call option
gives its owner the right, but not the obligation, to buy the currency, while a
put option gives its owner the right, but not the obligation, to sell the
currency. The option seller (writer) is obligated to fulfill the terms of the
option sold if it is exercised. However, either seller or buyer may close its
position during the option period in the secondary market for such options at
any time prior to expiration.
A foreign currency call option rises in value if the underlying
currency appreciates. Conversely, a foreign currency put option rises in value
if the underlying currency depreciates. While purchasing a foreign currency
option may protect Emerging Markets Fund, International Fund or Strategic Income
Fund against an adverse movement in the value of a foreign currency, it would
not limit the gain which might result from a favorable movement in the value of
the currency. For example, if a Fund were holding securities denominated in an
appreciating foreign currency and had purchased a foreign currency put to hedge
against a decline in the value of the currency, it would not have to exercise
its put. In such an event, however, the amount of the Fund's gain would be
offset in part by the premium paid for the option. Similarly, if a Fund entered
into a contract to purchase a security denominated in a foreign currency and
purchased a foreign currency call to hedge against a rise in the value of the
currency between the date of purchase and the settlement date, the Fund would
not need to exercise its call if the currency instead depreciated in value. In
such a case, the Fund could acquire the amount of foreign currency needed for
settlement in the spot market at a lower price than the exercise price of the
option.
MORTGAGE-BACKED SECURITIES
As described in the respective Prospectuses, Balanced Fund and the Bond
Funds also may invest in mortgage-backed securities. Each of these Funds will
invest only in mortgage-backed securities that are Agency Pass-Through
Certificates or collateralized mortgage obligations ("CMOs"), as defined and
described below. In addition, Balanced Fund and the Bond Funds may invest in
private pass-through securities. Furthermore, Strategic Income Fund may invest
in Real Estate Mortgage Investment Conduits ("REMICs").
Agency Pass-Through Certificates are mortgage pass-through certificates
representing undivided interests in pools of residential mortgage loans.
Distribution of principal and interest on the mortgage loans underlying an
Agency Pass-Through Certificate is an obligation of or guaranteed by GNMA, FNMA
or FHLMC. GNMA is a wholly-owned corporate instrumentality of the United States
within the Department of Housing and Urban Development. The guarantee of GNMA
with respect to GNMA certificates is backed by the full faith and credit of the
United States, and GNMA is authorized to borrow from the United States Treasury
in an amount which is at any time sufficient to enable GNMA, with no limitation
as to amount, to perform its guarantee.
11
FNMA is a federally chartered and privately owned corporation organized
and existing under federal law. Although the Secretary of the Treasury of the
United States has discretionary authority to lend funds to FNMA, neither the
United States nor any agency thereof is obligated to finance FNMA's operations
or to assist FNMA in any other manner.
FHLMC is a federally chartered corporation organized and existing under
federal law, the common stock of which is owned by the Federal Home Loan Banks.
Neither the United States nor any agency thereof is obligated to finance FHLMC's
operations or to assist FHLMC in any other manner.
The mortgage loans underlying GNMA certificates are partially or fully
guaranteed by the Federal Housing Administration or the Veterans Administration,
while the mortgage loans underlying FNMA certificates and FHLMC certificates are
conventional mortgage loans which are, in some cases, insured by private
mortgage insurance companies. Agency Pass-Through Certificates may be issued in
a single class with respect to a given pool of mortgage loans or in multiple
classes.
The residential mortgage loans evidenced by Agency Pass-Through
Certificates and upon which CMOs are based generally are secured by first
mortgages on one- to four-family residential dwellings. Such mortgage loans
generally have final maturities ranging from 15 to 30 years and provide for
monthly payments in amounts sufficient to amortize their original principal
amounts by the maturity dates. Each monthly payment on such mortgage loans
generally includes both an interest component and a principal component, so that
the holder of the mortgage loans receives both interest and a partial return of
principal in each monthly payment. In general, such mortgage loans can be
prepaid by the borrowers at any time without any prepayment penalty. In
addition, many such mortgage loans contain a "due-on-sale" clause requiring the
loans to be repaid in full upon the sale of the property securing the loans.
Because residential mortgage loans generally provide for monthly amortization
and may be prepaid in full at any time, the weighted average maturity of a pool
of residential mortgage loans is likely to be substantially shorter than its
stated final maturity date. The rate at which a pool of residential mortgage
loans is prepaid may be influenced by many factors and is not predictable with
precision.
Private mortgage pass-through securities ("Private Pass-Throughs") are
structured similarly to GNMA, FNMA and FHLMC mortgage pass-through securities
and are issued by originators of and investors in mortgage loans, including
savings and loan associations, mortgage bankers, commercial banks, investment
banks and special purpose subsidiaries of the foregoing. These securities
usually are backed by a pool of commercial fixed rate, conventional fixed rate
or adjustable loans. Since Private Pass-Throughs typically are not guaranteed by
an entity having the credit status of GNMA, FNMA or FHLMC, such securities
generally are structured with one or more types of credit enhancement. Such
credit support falls into two categories: (i) liquidity protection and (ii)
protection against losses resulting from ultimate default by an obligor on the
underlying assets. Liquidity protection refers to the provisions of advances,
generally by the entity administering the pool of assets, to ensure that the
pass-through of payments due on the underlying pool occurs in a timely fashion.
Protection against losses resulting from ultimate default enhances the
likelihood of ultimate payment of the obligations on at least a portion of the
assets in the pool. Such protection may be provided through guarantees,
insurance policies or letters of credit obtained by the issuer or sponsor from
third parties, through various means of structuring the transaction or through a
combination of such approaches. The Funds will not pay any additional fees for
such credit support, although the existence of credit support may increase the
price of a security.
The ratings of securities for which third-party credit enhancement
provides liquidity protection or protection against losses from default are
generally dependent upon the continued creditworthiness of the enhancement
provider. The ratings of such securities could be subject to reduction in the
event of deterioration in the creditworthiness of the credit enhancement
provider even in cases where the delinquency and loss experience on the
underlying pool of assets is better than expected.
CMOs are debt obligations typically issued by a private special-purpose
entity and collateralized by residential or commercial mortgage loans or Agency
Pass-Through Certificates. The Funds will invest only in CMOs which are rated in
one of the four highest rating categories by a nationally recognized statistical
rating organization or which are of comparable quality in the judgment of the
Advisor. Because CMOs are debt obligations of private entities, payments on CMOs
generally are not obligations of or guaranteed by any governmental entity, and
their ratings and creditworthiness
12
typically depend, among other factors, on the legal insulation of the issuer and
transaction from the consequences of a sponsoring entity's bankruptcy.
CMOs generally are issued in multiple classes, with holders of each
class entitled to receive specified portions of the principal payments and
prepayments and/or of the interest payments on the underlying mortgage loans.
These entitlements can be specified in a wide variety of ways, so that the
payment characteristics of various classes may differ greatly from one another.
For instance, holders may hold interests in CMO tranches called Z-tranches which
defer interest and principal payments until one or other classes of the CMO have
been paid in full. In addition, for example:
o In a sequential-pay CMO structure, one class is entitled to
receive all principal payments and prepayments on the underlying
mortgage loans (and interest on unpaid principal) until the
principal of the class is repaid in full, while the remaining
classes receive only interest; when the first class is repaid in
full, a second class becomes entitled to receive all principal
payments and prepayments on the underlying mortgage loans until
the class is repaid in full, and so forth.
o A planned amortization class ("PAC") of CMOs is entitled to
receive principal on a stated schedule to the extent that it is
available from the underlying mortgage loans, thus providing a
greater (but not absolute) degree of certainty as to the schedule
upon which principal will be repaid.
o An accrual class of CMOs provides for interest to accrue and be
added to principal (but not be paid currently) until specified
payments have been made on prior classes, at which time the
principal of the accrual class (including the accrued interest
which was added to principal) and interest thereon begins to be
paid from payments on the underlying mortgage loans.
o As discussed above with respect to Agency Pass-Through
Certificates, an interest-only class of CMOs entitles the holder
to receive all of the interest and none of the principal on the
underlying mortgage loans, while a principal-only class of CMOs
entitles the holder to receive all of the principal payments and
prepayments and none of the interest on the underlying mortgage
loans.
o A floating rate class of CMOs entitles the holder to receive
interest at a rate which changes in the same direction and
magnitude as changes in a specified index rate. An inverse
floating rate class of CMOs entitles the holder to receive
interest at a rate which changes in the opposite direction from,
and in the same magnitude as or in a multiple of, changes in a
specified index rate. Floating rate and inverse floating rate
classes also may be subject to "caps" and "floors" on adjustments
to the interest rates which they bear.
o A subordinated class of CMOs is subordinated in right of payment
to one or more other classes. Such a subordinated class provides
some or all of the credit support for the classes that are senior
to it by absorbing losses on the underlying mortgage loans before
the senior classes absorb any losses. A subordinated class which
is subordinated to one or more classes but senior to one or more
other classes is sometimes referred to as a "mezzanine" class. A
subordinated class generally carries a lower rating than the
classes that are senior to it, but may still carry an investment
grade rating.
REMICs are offerings of multiple class real estate mortgage-backed
securities which qualify and elect treatment as such under provisions of the
Internal Revenue Code. Issuers of REMICs may take several forms, such as trusts,
partnerships, corporations, associations, or segregated pools of mortgages. Once
REMIC status is elected and obtained, the entity is not subject to federal
income taxation. Instead, income is passed through the entity and is taxed to
the person or persons who hold interests in the REMIC. A REMIC interest must
consist of one or more classes of "regular interests," some of which may offer
adjustable rates of interest (the type in which Strategic Income Fund primarily
invests), and a single class of "residual interests." To qualify as a REMIC,
substantially all the assets of the entity must be in assets directly or
indirectly secured principally by real property.
It generally is more difficult to predict the effect of changes in
market interest rates on the return on mortgage-backed securities than to
predict the effect of such changes on the return of a conventional fixed-rate
debt instrument, and the magnitude of such effects may be greater in some cases.
The return on interest-only and principal-only mortgage-backed securities is
particularly sensitive to changes in interest rates and prepayment speeds. When
interest
13
rates decline and prepayment speeds increase, the holder of an interest-only
mortgage-backed security may not even recover its initial investment. Similarly,
the return on an inverse floating rate CMO is likely to decline more sharply in
periods of increasing interest rates than that of a fixed-rate security. For
these reasons, interest-only, principal-only and inverse floating rate
mortgage-backed securities generally have greater risk than more conventional
classes of mortgage-backed securities. None of the Funds (except Short Term Bond
Fund) will invest more than 10% of their total assets in interest-only,
principal-only, inverse interest only or inverse floating rate mortgage-backed
securities. Short Term Bond Fund will not invest in interest-only,
principal-only, inverse interest-only or inverse floating rate mortgage-backed
securities.
REAL ESTATE INVESTMENT TRUST ("REIT") SECURITIES
A majority of Real Estate Securities Fund's total assets will be
invested in securities of real estate investment trusts. Health Sciences Fund
may also invest in REITs. REITs are publicly traded corporations or trusts that
specialize in acquiring, holding, and managing residential, commercial or
industrial real estate. A REIT is not taxed at the entity level on income
distributed to its shareholders or unitholders if it distributes to shareholders
or unitholders at least 95% of its taxable income for each taxable year and
complies with regulatory requirements relating to its organization, ownership,
assets and income.
REITs generally can be classified as Equity REITs, Mortgage REITs and
Hybrid REITs. An Equity REIT invests the majority of its assets directly in real
property and derives its income primarily from rents and from capital gains on
real estate appreciation which are realized through property sales. A Mortgage
REIT invests the majority of its assets in real estate mortgage loans and
services its income primarily from interest payments. A Hybrid REIT combines the
characteristics of an Equity REIT and a Mortgage REIT. Although the Fund can
invest in all three kinds of REITs, its emphasis is expected to be on
investments in Equity REITs.
Because Real Estate Securities Fund invests primarily in the real
estate industry, it is particularly subject to risks associated with that
industry. The real estate industry has been subject to substantial fluctuations
and declines on a local, regional and national basis in the past and may
continue to be in the future. Real property values and income from real property
may decline due to general and local economic conditions, overbuilding and
increased competition, increases in property taxes and operating expenses,
changes in zoning laws, casualty or condemnation losses, regulatory limitations
on rents, changes in neighborhoods and in demographics, increases in market
interest rates, or other factors. Factors such as these may adversely affect
companies which own and operate real estate directly, companies which lend to
such companies, and companies which service the real estate industry.
Because the Fund may invest a substantial portion of its assets in
REITs, it also is subject to risks associated with direct investments in REITs.
Equity REITs will be affected by changes in the values of and income from the
properties they own, while Mortgage REITs may be affected by the credit quality
of the mortgage loans they hold. In addition, REITs are dependent on specialized
management skills and on their ability to generate cash flow for operating
purposes and to make distributions to shareholders or unitholders. REITs may
have limited diversification and are subject to risks associated with obtaining
financing for real property, as well as to the risk of self-liquidation. REITs
also can be adversely affected by their failure to qualify for tax-free
pass-through treatment of their income under the Code or their failure to
maintain an exemption from registration under the 1940 Act. By investing in
REITs indirectly through the Fund, a shareholder bears not only a proportionate
share of the expenses of the Fund, but also may indirectly bear similar expenses
of some of the REITs in which it invests.
ASSET-BACKED SECURITIES
Balanced Fund and the Bond Funds may invest in asset-backed securities.
Asset-backed securities generally constitute interests in, or obligations
secured by, a pool of receivables other than mortgage loans, such as automobile
loans and leases, credit card receivables, home equity loans and trade
receivables. Asset-backed securities generally are issued by a private
special-purpose entity. Their ratings and creditworthiness typically depend on
the legal insulation of the issuer and transaction from the consequences of a
sponsoring entity's bankruptcy, as well as on the credit quality of the
underlying receivables and the amount and credit quality of any third-party
credit enhancement supporting the underlying receivables or the asset-backed
securities. Asset-backed securities and their underlying receivables generally
are not issued or guaranteed by any governmental entity.
14
MUNICIPAL BONDS AND OTHER MUNICIPAL OBLIGATIONS
The Tax Free Funds may invest in municipal bonds and other municipal
obligations. These bonds and other obligations are issued by the states and by
their local and special-purpose political subdivisions. The term "municipal
bond" includes short-term municipal notes issued by the states and their
political subdivisions.
MUNICIPAL BONDS. The two general classifications of municipal bonds are
"general obligation" bonds and "revenue" bonds. General obligation bonds are
secured by the governmental issuer's pledge of its faith, credit and taxing
power for the payment of principal and interest upon a default by the issuer of
its principal and interest payment obligations. They are usually paid from
general revenues of the issuing governmental entity. Revenue bonds, on the other
hand, are usually payable only out of a specific revenue source rather than from
general revenues. Revenue bonds ordinarily are not backed by the faith, credit
or general taxing power of the issuing governmental entity. The principal and
interest on revenue bonds for private facilities are typically paid out of rents
or other specified payments made to the issuing governmental entity by a private
company which uses or operates the facilities. Examples of these types of
obligations are industrial revenue bond and pollution control revenue bonds.
Industrial revenue bonds are issued by governmental entities to provide
financing aid to community facilities such as hospitals, hotels, business or
residential complexes, convention halls and sport complexes. Pollution control
revenue bonds are issued to finance air, water and solids pollution control
systems for privately operated industrial or commercial facilities.
Revenue bonds for private facilities usually do not represent a pledge
of the credit, general revenues or taxing powers of issuing governmental entity.
Instead, the private company operating the facility is the sole source of
payment of the obligation. Sometimes, the funds for payment of revenue bonds
come solely from revenue generated by operation of the facility. Revenue bonds
which are not backed by the credit of the issuing governmental entity frequently
provide a higher rate of return than other municipal obligations, but they
entail greater risk than obligations which are guaranteed by a governmental unit
with taxing power. Federal income tax laws place substantial limitations on
industrial revenue bonds, and particularly certain specified private activity
bonds issued after August 7, 1986. In the future, legislation could be
introduced in Congress which could further restrict or eliminate the income tax
exemption for interest on debt obligations in which the Funds may invest.
REFUNDED BONDS. With the exception of Nebraska Tax Free Fund, the Tax
Free Funds may not invest more than 25% of fund assets in unrated securities.
Investments in refunded bonds are excluded from this limitation. Refunded bonds
may have originally been issued as general obligation or revenue bonds, but
become refunded when they are secured by an escrow fund, usually consisting
entirely of direct U.S. government obligations and/or U.S. government agency
obligations sufficient for paying the bondholders. For the purposes of excluding
refunded bonds from the 25% limitation on unrated securities in the Tax Free
Funds, there are two types of refunded bonds: pre-refunded bonds and
escrowed-to-maturity ("ETM") bonds.
The escrow fund for a pre-refunded municipal bond may be structured so
that the refunded bonds are to be called at the first possible date or a
subsequent call date established in the original bond debenture. The call price
usually includes a premium from one to three percent above par. This type of
structure usually is used for those refundings that either reduce the issuer's
interest payment expenses or change the debt maturity schedule. In escrow funds
for ETM refunded municipal bonds, the maturity schedules of the securities in
the escrow funds match the regular debt-service requirements on the bonds as
originally stated in the bond indentures.
DERIVATIVE MUNICIPAL SECURITIES. Tax Free Funds may also acquire
derivative municipal securities, which are custodial receipts of certificates
underwritten by securities dealers or banks that evidence ownership of future
interest payments, principal payments or both on certain municipal securities.
The underwriter of these certificates or receipts typically purchases municipal
securities and deposits them in an irrevocable trust or custodial account with a
custodian bank, which then issues receipts or certificates that evidence
ownership of the periodic unmatured coupon payments and the final principal
payment on the obligation.
The principal and interest payments on the municipal securities
underlying custodial receipts may be allocated in a number of ways. For example,
payments may be allocated such that certain custodial receipts may have variable
or floating interest rates and others may be stripped securities which pay only
the principal or interest due on the underlying municipal securities. Tax Free
Funds may each invest up to 10% of their total assets in custodial receipts
which have inverse floating interest rates.
15
MUNICIPAL LEASES. The Tax Free Funds also may purchase participation
interests in municipal leases. Participation interests in municipal leases are
undivided interests in a lease, installment purchase contract or conditional
sale contract entered into by a state or local governmental unit to acquire
equipment or facilities. Municipal leases frequently have special risks which
generally are not associated with general obligation bonds or revenue bonds.
Municipal leases and installment purchase or conditional sales
contracts (which usually provide for title to the leased asset to pass to the
governmental issuer upon payment of all amounts due under the contract) have
evolved as a means for governmental issuers to acquire property and equipment
without meeting the constitutional and statutory requirements for the issuance
of municipal debt. The debt issuance limitations are deemed to be inapplicable
because of the inclusion in many leases and contracts of "non-appropriation"
clauses that provide that the governmental issuer has no obligation to make
future payments under the lease or contract unless money is appropriated for
this purpose by the appropriate legislative body on a yearly or other periodic
basis. Although these kinds of obligations are secured by the leased equipment
or facilities, the disposition of the pledged property in the event of
non-appropriation or foreclosure might, in some cases, prove difficult and
time-consuming. In addition, disposition upon non-appropriation or foreclosure
might not result in recovery by a Fund of the full principal amount represented
by an obligation.
In light of these concerns, the Tax Free Funds have adopted and follow
procedures for determining whether municipal lease obligations purchased by the
Funds are liquid and for monitoring the liquidity of municipal lease securities
held in each Fund's portfolio. These procedures require that a number of factors
be used in evaluating the liquidity of a municipal lease security, including the
frequency of trades and quotes for the security, the number of dealers willing
to purchase or sell the security and the number of other potential purchasers,
the willingness of dealers to undertake to make a market in security, the nature
of the marketplace in which the security trades, and other factors which the
Advisor may deem relevant. As set forth in "Investment Restrictions" below, each
such Fund is subject to limitations on the percentage of illiquid securities it
can hold.
TEMPORARY TAXABLE INVESTMENTS
The Tax Free Funds may make temporary taxable investments. Temporary
taxable investments will include only the following types of obligations
maturing within 13 months from the date of purchase: (i) obligations of the
United States Government, its agencies and instrumentalities (including zero
coupon securities); (ii) commercial paper rated not less than A-1 by Standard &
Poor's or P-1 by Moody's or which has been assigned an equivalent rating by
another nationally recognized statistical rating organization; (iii) other
short-term debt securities issued or guaranteed by corporations having
outstanding debt rated not less than BBB by Standard & Poor's or Baa by Moody's
or which have been assigned an equivalent rating by another nationally
recognized statistical rating organization; (iv) certificates of deposit of
domestic commercial banks subject to regulation by the United States Government
or any of its agencies or instrumentalities, with assets of $500 million or more
based on the most recent published reports; and (v) repurchase agreements with
domestic banks or securities dealers involving any of the securities which the
Fund is permitted to hold.
INVERSE FLOATING RATE MUNICIPAL OBLIGATIONS
Each of the Tax Free Funds may invest up to 10% of its total assets in
inverse floating rate municipal obligations. An inverse floating rate obligation
entitles the holder to receive interest at a rate which changes in the opposite
direction from, and in the same magnitude as or in a multiple of, changes in a
specified index rate. Although an inverse floating rate municipal obligation
would tend to increase portfolio income during a period of generally decreasing
market interest rates, its value would tend to decline during a period of
generally increasing market interest rates. In addition, its decline in value
may be greater than for a fixed-rate municipal obligation, particularly if the
interest rate borne by the floating rate municipal obligation is adjusted by a
multiple of changes in the specified index rate. For these reasons, inverse
floating rate municipal obligations have more risk than more conventional
fixed-rate and floating rate municipal obligations.
ZERO COUPON SECURITIES
The Bond Funds and Tax Free Funds may invest in zero coupon, fixed
income securities. Zero coupon securities pay no cash income to their holders
until they mature and are issued at substantial discounts from their value
16
at maturity. When held to maturity, their entire return comes from the
difference between their purchase price and their maturity value. Because
interest on zero coupon securities is not paid on a current basis, the values of
securities of this type are subject to greater fluctuations than are the value
of securities that distribute income regularly and may be more speculative than
such securities. Accordingly, the values of these securities may be highly
volatile as interest rates rise or fall.
ADJUSTABLE RATE MORTGAGE SECURITIES
The Bond Funds and Balanced Fund may invest in adjustable rate mortgage
securities ("ARMS"). ARMS are pass-through mortgage securities collateralized by
mortgages with interest rates that are adjusted from time to time. ARMS also
include adjustable rate tranches of CMOs. The adjustments usually are determined
in accordance with a predetermined interest rate index and may be subject to
certain limits. While the values of ARMS, like other debt securities, generally
vary inversely with changes in market interest rates (increasing in value during
periods of declining interest rates and decreasing in value during periods of
increasing interest rates), the values of ARMS should generally be more
resistant to price swings than other debt securities because the interest rates
of ARMs move with market interest rates. The adjustable rate feature of ARMS
will not, however, eliminate fluctuations in the prices of ARMS, particularly
during periods of extreme fluctuations in interest rates.
ARMS typically have caps which limit the maximum amount by which the
interest rate may be increased or decreased at periodic intervals or over the
life of the loan. To the extent interest rates increase in excess of the caps,
ARMS can be expected to behave more like traditional debt securities and to
decline in value to a greater extent than would be the case in the absence of
such caps. Also, since many adjustable rate mortgages only reset on an annual
basis, it can be expected that the prices of ARMS will fluctuate to the extent
changes in prevailing interest rates are not immediately reflected in the
interest rates payable on the underlying adjustable rate mortgages. The extent
to which the prices of ARMS fluctuate with changes in interest rates will also
be affected by the indices underlying the ARMS.
INTEREST RATE TRANSACTIONS
Tax Free Funds may purchase or sell interest rate caps and floors to
preserve a return or a spread on a particular investment or portion of its
portfolio or for other non-speculative purposes. The purchase of an interest
rate cap entitles the purchaser, to the extent a specified index exceeds a
predetermined interest rate, to receive payments of interest on a
contractually-based principal amount from the party selling such interest rate
cap. The purchase of an interest rate floor entitles the purchaser, to the
extent a specified index falls below a predetermined interest rate, to receive
payments of interest on a contractually-based principal amount from the party
selling such interest rate floor.
GUARANTEED INVESTMENT CONTRACTS
Short Term Bond Fund also may purchase investment-type insurance
products such as Guaranteed Investment Contracts ("GICs"). A GIC is a deferred
annuity under which the purchaser agrees to pay money to an insurer (either in a
lump sum or in installments) and the insurer promises to pay interest at a
guaranteed rate for the life of the contract. GICs may have fixed or variable
interest rates. A GIC is a general obligation of the issuing insurance company.
The purchase price paid for a GIC becomes part of the general assets of the
insurer, and the contract is paid at maturity from the general assets of the
insurer. In general, GICs are not assignable or transferable without the
permission of the issuing insurance companies and can be redeemed before
maturity only at a substantial discount or penalty. GICs, therefore, are usually
considered to be illiquid investments. Short Term Bond Fund will purchase only
GICs which are obligations of insurance companies with a policyholder's rating
of A or better by A.M. Best Company.
DEBT OBLIGATIONS -- RATED LESS THAN INVESTMENT GRADE
Strategic Income Fund and Corporate Bond Fund may invest in both
investment grade and non-investment grade debt obligations. High Yield Bond Fund
invests primarily in non-investment grade bonds. Debt obligations rated BB, B or
CCC by Standard & Poor's or Ba, B or Caa by Moody's are considered to be less
than "investment grade" and are sometimes referred to as "junk bonds." Corporate
Bond Fund may invest in non-investment grade bonds rated at least B by Standard
& Poor's or Moody's or which have been assigned an equivalent rating by another
nationally recognized statistical rating organization, or in unrated securities
determined to be of comparable quality by the Advisor. There are no minimum
rating requirements for investments by Strategic Income Fund or High Yield Bond
17
Fund (which means that the Funds may invest in bonds in default). From time to
time, the Fund's portfolio may consist primarily of non-investment grade debt
obligations.
The "equity securities" in which certain Funds may invest include
corporate debt obligations which are convertible into common stock. These
convertible debt obligations may include non-investment grade obligations.
Yields on non-investment grade debt obligations will fluctuate over
time. The prices of such obligations have been found to be less sensitive to
interest rate changes than higher rated obligations, but more sensitive to
adverse economic changes or individual corporate developments. Also, during an
economic downturn or period of rising interest rates, highly leveraged issuers
may experience financial stress which could adversely affect their ability to
service principal and interest payment obligations, to meet projected business
goals, and to obtain additional financing. In addition, periods of economic
uncertainty and changes can be expected to result in increased volatility of
market prices of non-investment grade debt obligations. If the issuer of a
security held by a Fund defaulted, the Fund might incur additional expenses to
seek recovery.
In addition, the secondary trading market for non-investment grade debt
obligations may be less developed than the market for investment grade
obligations. This may make it more difficult for a Fund to value and dispose of
such obligations. Adverse publicity and investor perceptions, whether or not
based on fundamental analysis, may decrease the values and liquidity of
non-investment grade obligations, especially in a thin secondary trading market.
Certain risks also are associated with the use of credit ratings as a
method for evaluating non-investment grade debt obligations. For example, credit
ratings evaluate the safety of principal and interest payments, not the market
value risk of such obligations. In addition, credit rating agencies may not
timely change credit ratings to reflect current events. Thus, the success of a
Fund's use of non-investment grade debt obligations may be more dependent on the
Advisor's and applicable sub-advisor's own credit analysis than is the case with
investment grade obligations.
DEBT OBLIGATIONS -- STRATEGIC INCOME FUND AND HIGH YIELD BOND FUND
The Funds' investments may include U.S. dollar-denominated debt
obligations known as "Brady Bonds," which are issued for the exchange of
existing commercial bank loans to foreign entities for new obligations that are
generally collateralized by zero coupon Treasury securities having the same
maturity. Certain debt obligations in which the Funds invest may involve equity
characteristics. A Fund may, for example, invest in unit offerings that combine
debt securities and common stock equivalents such as warrants, rights and
options. It is anticipated that the majority of the value attributable to the
unit will relate to its debt component.
FLOATING RATE DEBT OBLIGATIONS
The Bond Funds and Balanced Fund expect to invest in floating rate debt
obligations issued, assumed, or guaranteed by corporations, trusts,
partnerships, governmental agencies or creators, or other such special purpose
entities, including increasing rate securities. Floating rate securities are
generally offered at an initial interest rate which is at or above prevailing
market rates. The interest rate paid on these securities is then reset
periodically (commonly every 90 days) to an increment over some predetermined
interest rate index. Commonly utilized indices include the three-month Treasury
bill rate, the 180-day Treasury bill rate, the one-month or three-month London
Interbank Offered Rate (LIBOR), the prime rate of a bank, the commercial paper
rates, or the longer-term rates on U.S. Treasury securities.
FIXED RATE DEBT OBLIGATIONS
The Bond Funds and Balanced Fund will invest in fixed rate debt
obligations issued, assumed, or guaranteed by corporations, trusts,
partnerships, governmental agencies or creators, or other such special purpose
entities. Fixed rate securities tend to exhibit more price volatility during
times of rising or falling interest rates than securities with floating rates of
interest. This is because floating rate securities, as described above, behave
like short-term instruments in that the rate of interest they pay is subject to
periodic adjustments based on a designated interest rate index. Fixed rate
securities pay a fixed rate of interest and are more sensitive to fluctuating
interest rates. In periods of rising interest rates the value of a fixed rate
security is likely to fall. Fixed rate securities with short-term
characteristics are not subject to
18
the same price volatility as fixed rate securities without such characteristics.
Therefore, they behave more like floating rate securities with respect to price
volatility.
PAYMENT-IN-KIND DEBENTURES AND DELAYED INTEREST SECURITIES
Strategic Income Fund, High Yield Bond Fund and Corporate Bond Fund may
invest in debentures the interest on which may be paid in other securities
rather than cash ("PIKs"). Typically, during a specified term prior to the
debenture's maturity, the issuer of a PIK may provide for the option or the
obligation to make interest payments in debentures, common stock or other
instruments (i.e., "in kind" rather than in cash). The type of instrument in
which interest may or will be paid would be known by the Fund at the time of
investment. While PIKs generate income for purposes of generally accepted
accounting standards, they do not generate cash flow and thus could cause the
Fund to be forced to liquidate securities at an inopportune time in order to
distribute cash, as required by the Internal Revenue Code of 1986 (the "Code").
Unlike PIKs, delayed interest securities do not pay interest for a
specified period. Because values of securities of this type are subject to
greater fluctuations than are the values of securities that distribute income
regularly, they may be more speculative than such securities.
PREFERRED STOCK
The Equity Funds, Strategic Income Fund, High Yield Bond Fund and
Corporate Bond Fund may invest in preferred stock. Preferred stock, unlike
common stock, offers a stated dividend rate payable from the issuer's earnings.
Preferred stock dividends may be cumulative or non-cumulative, participating, or
auction rate. If interest rates rise, the fixed dividend on preferred stocks may
be less attractive, causing the price of preferred stocks to decline. Preferred
stock may have mandatory sinking fund provisions, as well as call/redemption
provisions prior to maturity, a negative feature when interest rates decline.
Although the Bond Funds (except Strategic Income Fund, High Yield Bond
Fund and Corporate Bond Fund) will not make direct purchases of common or
preferred stocks or rights to acquire common or preferred stocks, they may
invest in debt securities which are convertible into or exchangeable for, or
which carry warrants or other rights to acquire, such stocks. Equity interests
acquired through conversion, exchange or exercise of rights to acquire stock
will be disposed of by the Bond Funds as soon as practicable in an orderly
manner.
PARTICIPATION INTERESTS
Strategic Income Fund, High Yield Bond Fund and Corporate Bond Fund may
acquire participation interests in senior, fully secured floating rate loans
that are made primarily to U.S. companies. Each Fund's investments in
participation interests are subject to its limitation on investments in illiquid
securities. The Funds may purchase only those participation interests that
mature in one year or less, or, if maturing in more than one year, have a
floating rate that is automatically adjusted at least once each year according
to a specified rate for such investments, such as a published interest rate or
interest rate index. Participation interests are primarily dependent upon the
creditworthiness of the borrower for payment of interest and principal. Such
borrowers may have difficulty making payments and may have senior securities
rated as low as C by Moody's, or D by Standard & Poor's.
CLOSED-END INVESTMENT COMPANIES
The Tax Free Funds may invest up to 10% of their total assets in common
or preferred shares of closed-end investment companies that invest in municipal
bonds and other municipal obligations. Shares of certain closed-end investment
companies may at times be acquired only at market prices representing premiums
to their net asset values. In the event that shares acquired at a premium
subsequently decline in price relative to their net asset value or the value of
portfolio investments held by such closed-end companies declines, the Tax Free
Funds and their shareholders may experience a loss. If a Fund acquires shares of
closed-end investment companies, Fund shareholders would bear both their
proportionate share of the expenses in the Fund (including management and
advisory fees) and, indirectly, the expenses of such closed-end investment
companies.
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U.S. TREASURY INFLATION-PROTECTION SECURITIES
To the extent they may invest in fixed-income securities, the Funds may
invest in U.S. Treasury inflation-protection securities, which are issued by the
United States Department of Treasury ("Treasury") with a nominal return linked
to the inflation rate in prices. The index used to measure inflation is the
non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All
Urban Consumers ("CPI-U").
The value of the principal is adjusted for inflation, and pays interest
every six months. The interest payment is equal to a fixed percentage of the
inflation-adjusted value of the principal. The final payment of principal of the
security will not be less than the original par amount of the security at
issuance.
The principal of the inflation-protection security is indexed to the
non-seasonally adjusted CPI-U. To calculate the inflation-adjusted principal
value for a particular valuation date, the value of the principal at issuance is
multiplied by the index ratio applicable to that valuation date. The index ratio
for any date is the ratio of the reference CPI applicable to such date to the
reference CPI applicable to the original issue date. Semiannual coupon interest
is determined by multiplying the inflation-adjusted principal amount by one-half
of the stated rate of interest on each interest payment date.
Inflation-adjusted principal or the original par amount, whichever is
larger, is paid on the maturity date as specified in the applicable offering
announcement. If at maturity the inflation-adjusted principal is less than the
original principal value of the security, an additional amount is paid at
maturity so that the additional amount plus the inflation-adjusted principal
equals the original principal amount. Some inflation-protection securities may
be stripped into principal and interest components. In the case of a stripped
security, the holder of the stripped principal component would receive this
additional amount. The final interest payment, however, will be based on the
final inflation-adjusted principal value, not the original par amount.
SPECIAL FACTORS AFFECTING ARIZONA TAX FREE FUND
As described in the Prospectuses relating to Arizona Tax Free Fund,
except during temporary defensive periods, the fund will invest most of its
total assets in Arizona municipal obligations. The fund therefore is susceptible
to political, economic and regulatory factors affecting issuers of Arizona
municipal obligations. The following information provides only a brief summary
of the complex factors affecting the financial situation in Arizona. This
information is derived from sources that are generally available to investors
and is based in part on information obtained from the State of Arizona.
ECONOMIC OVERVIEW. Arizona's main economic sectors include services,
trade and manufacturing. Mining and agriculture are also significant although
they tend to be more capital intensive than labor intensive. The single largest
economic sector is services, employing more than 720,000 people. Wholesale and
retail trade provide more than 530,000 jobs. Many of these jobs are directly
related to tourism, an industry that injects almost $12 billion into the State's
economy each year. Tourism generates more than 115,000 jobs and supports an
additional 185,000 indirectly.
In 2001, manufacturing accounted for 213,400 jobs, or approximately 9.5
percent of the State's employment, and has historically generated almost 15
percent of wages and salaries. Arizona has been particularly successful in
attracting high-technology industries, which have a total economic impact of $33
billion in Arizona. Nearly 56 percent of all manufacturing employment is in this
sector.
The construction sector, also very important to Arizona's economy,
accounted for 167,500 jobs or 7.44 percent of the State's employment in 2001.
This sector has experienced a substantial increase in construction activity over
the past few years. The market grew from $5.5 billion in 1994 to $11.2 billion
in 1998, reflecting the increasing demand for commercial space in Arizona.
EMPLOYMENT GROWTH. Fueled by multiple, consecutive years of substantial
tax reductions, Arizona's economy continues to be the envy of the nation. Since
1992, personal income taxes have been slashed by 31 percent across the board,
and in 2001 the State's corporate income tax was reduced to 6.9 percent from 7.9
percent. From 1993 through 1997, the strongest five-year period of job growth in
Arizona history, more than 400,000 private sector jobs were created. Arizona is
the second fastest growing State in the nation, with a projected population of
6.2 million by 2010.
20
REVENUE. Arizona relies on a combination of taxes assessed on income,
sales and property valuations to meet expenditures. For nine consecutive years,
Arizona has reduced taxes and passed legislation favorable to business. Some
aspects of the tax code include no corporate franchise tax, no business
inventory tax, no income tax on dividends from out-of-state subsidiaries, no
worldwide unitary tax, aggressive accelerated depreciation schedules, virtually
all services exempt from sales tax, and 100 percent of NOL may be carried
forward for five subsequent years.
With the additional variable of a significant rate reduction, from 8
percent to 7 percent, which resulted from triggered fiscal events, the State has
indicated that forecasting corporate income tax will prove difficult. FY 1999
closed the books with $545 million, or a 3.28 percent gain over the prior year.
The revised revenue projection holds collections relatively constant at the FY
1999 level and adjusts solely for the anticipated negative impact of the tax
rate reduction, for a change of $5 million and ($37 million) for FY 2000 and FY
2001, respectively.
STATE AND LOCAL GOVERNMENT BOND ISSUE. Under its constitution, the
State of Arizona is not permitted to issue general obligation bonds secured by
the full faith and credit of the State. However, certain agencies and
instrumentalities of the State are authorized to issue bonds secured by revenues
from specific projects and activities. The State enters into certain lease
transactions that are subject to annual renewal at the option of the State.
Local governmental units in the State are also authorized to incur indebtedness.
The major source of financing for such local government indebtedness is an ad
valorem property tax. In addition, in order to finance public projects, local
governments in the State can issue revenue bonds payable from the revenues of a
utility or enterprise or from the proceeds of an excise tax, or assessment bonds
payable from special assessments. Arizona local governments have also financed
public projects through leases, which are subject to annual appropriation at the
option of the local government.
There is a statutory restriction on the amount of annual increases in
taxes that can be levied by the various taxing jurisdictions in the State
without voter approval. This restriction does not apply to taxes levied to pay
general obligation debt.
SPECIAL FACTORS AFFECTING CALIFORNIA INTERMEDIATE TAX FREE FUND AND CALIFORNIA
TAX FREE FUND
As described in the Prospectuses relating to California Intermediate
Tax Free Fund and California Tax Free Fund, except during temporary defensive
periods, the funds will invest most of their total assets in California
municipal obligations. The funds therefore are susceptible to political,
economic and regulatory factors affecting issuers of California municipal
obligations. The following information provides only a brief summary of the
complex factors affecting the financial situation in California. This
information is derived from sources that are generally available to investors
and is based in part on information obtained from various State and local
agencies in California. It should be noted that the creditworthiness of
obligations issued by local California issuers may be unrelated to the
creditworthiness of obligations issued by the State of California, and that
there is no obligation on the part of California to make payment on such local
obligations in the event of default.
GENERAL ECONOMIC CONDITIONS. The Twentieth Century ended on a high note
for both the U.S. and California economies. Nationally, economic growth, as
measured by real (inflation-adjusted) gross domestic product (GDP) exceeded 5
percent, the largest gain in 16 years. The strong performance was all the more
remarkable for having occurred in the record-breaking ninth year of sustained
economic growth.
California's economy significantly outpaced the strong national
performance. Personal income rose more than 11 percent, also the largest gain in
16 years, and far above the nation's 6.5 percent increase. Nonfarm employment
increased 3.6 percent, the largest gain since 1985 and nearly double the
nation's 2 percent rise.
Despite the robust full year figures, the final weeks of 2000 brought
unsettling news on several fronts, most notably from the consumer sector.
November retail sales declined unexpectedly, following a flat October report;
consumer confidence dropped sharply in November and early December on both the
Conference Board and University of Michigan surveys; and several personal
computer makers reported disappointing holiday season sales.
Accompanying these reports has been a steady rise in initial
unemployment claims from the near-record low levels of last spring, a sharp drop
in factory orders, and announcements of production cutbacks from major U.S.
automakers who seem to be bearing the brunt of the sudden pullback in household
spending. The strong upward surge
21
in the stock market, which helped fuel household spending in 1999 and the early
part of 2000, has clearly ended, and in particular, the technology-heavy NASDAQ
market lost nearly half its value from early March through early December. The
sudden reversal in these key economic indicators has raised concerns--thus far
largely confined to the mainstream media--that this record-long economic
expansion may be nearing an end. In contrast, most economic observers have
concluded that the recent statistics signal the long-awaited and even welcome
moderation of growth that will allow the upswing to continue in 2001 and
possibly beyond. In its December 10, 2000 release, only one (UCLA-Anderson) of
the 50 forecasters surveyed by BLUE CHIP ECONOMIC INDICATORS believed a
recession to be the most likely outcome for 2001.
It is often difficult to differentiate between a slowing of growth and
the beginnings of an economic reversal. But the recent statistics need to be
placed in some perspective. As noted, the automobile industry is the source of
much of the apparent weakness in consumer spending. Excluding autos, sales rose
during both October and November, albeit at a more moderate pace than in
previous months. Retailers commonly gauge sales results on a year-to-year basis,
and in November, retail sales excluding autos were up more than 7 percent from
the 1999 month, after taking into account the effects of 2000's early
Thanksgiving weekend. (Without the holiday adjustment, sales were up almost 9
percent.) The key general merchandise, apparel, and home furnishings sector
(GAF), where most holiday purchases are concentrated, also posted a solid 7
percent increase. Since there is virtually no inflation in GAF goods--apparel
prices, for example, were down 1.3 percent over the year, while November apparel
store sales were up 8.6 percent, implying a 10 percent increase in physical
volume--these gains hardly portray a weak or faltering consumer.
ENERGY. Apart from the possibility of a national downturn, a
significant risk to the California outlook comes from the energy sector. The
current electric power situation results from a complex set of circumstances
arising from a steep rise in demand throughout the Western United States,
sharply higher natural gas prices exacerbated in California by the break in a
key pipeline last summer, and a dysfunctional wholesale electricity market in
which prices have soared to levels several times the actual cost of the least
efficient, most expensive production in the region.
BUDGETARY PROCESS. The State's fiscal year begins on July 1 and ends on
June 30. The annual budget is proposed by the Governor by January 10 of each
year for the next fiscal year (the "Governor's Budget"). Under State law, the
annual proposed Governor's Budget cannot provide for projected expenditures in
excess of projected revenues and balances available from prior fiscal years.
Under the State Constitution, money may be drawn from the Treasury only through
an appropriation made by law. The primary source of the annual expenditure
authorizations is the Budget Act as approved by the Legislature and signed by
the Governor. The Budget Act must be approved by a two-thirds majority vote of
each House of the Legislature. The Governor may reduce or eliminate specific
line items in the Budget Act or any other appropriations bill without vetoing
the entire bill. Such individual line-item vetoes are subject to override by a
two-thirds majority vote of each House of the Legislature.
Appropriations also may be included in legislation other than the
Budget Act. Bills containing appropriations (except K-14 education) must be
approved by a two-thirds majority vote in each House of the Legislature and be
signed by the Governor. Bills containing K-14 education appropriations only
require a simple majority vote. Continuing appropriations, available without
regard to fiscal year, may also be provided by statute or the State
Constitution. Funds necessary to meet an appropriation need not be in the State
Treasury at the time such appropriation is enacted; revenues may be appropriated
in anticipation of their receipt.
REVENUES AND EXPENDITURES. The moneys of the State are segregated into
the General Fund and approximately 600 Special Funds. The General Fund consists
of revenues received by the State Treasury and not required by law to be
credited to any other fund, as well as earnings from the investment of State
moneys not allocable to another fund. The General Fund is the principal
operating fund for the majority of governmental activities and is the depository
of most of the major revenue sources of the State. The General Fund may be
expended as a consequence of appropriation measures enacted by the Legislature
and approved by the Governor, as well as appropriations pursuant to various
constitutional authorizations and initiative statutes.
A year of robust revenue growth in fiscal year 2000-01 is expected to
moderate somewhat in 2001-02. Since enactment of the 2000 Budget Act, the
General Fund revenue forecast for the past and current-year period has increased
by $3.8 billion. In addition, General Fund revenues in 2001-02 are expected to
be up $2.54 billion or 3.3 percent from 2000-01, reaching almost $80 billion.
22
This revenue strength builds on exceptionally strong gains in fiscal
years 1999 and 2000. General Fund collections are expected to increase 6.9
percent on a year-over-year basis in 2000-01, bringing revenues to $76.9
billion. For 1999-00, total revenues were up 22.7 percent or $13.3 billion, to
reach $71.9 billion, particularly impressive growth given the significant
General Fund tax relief enacted over the last three years. The past year's
growth in part reflects the fact that 1999-00 was the first year in which
California received revenue from tobacco company litigation. In 1999-00, $515
million was received from this source, and $393 million and $468 million are
expected in the current and budget years, respectively.
California's remarkable employment and income growth during 2000 were
reflected strongly in revenues. Through November, personal income tax
withholding paid in 2000 was over 19 percent above the previous year. The first
three estimated payments for the personal income tax were up 39 percent. Taxable
sales grew at a faster pace in inflation-adjusted terms than at any time since
the early 1980s.
Much of the State's revenue surge in recent years results from the
extraordinary gains in the stock market. Taxpayers have realized record-level
capital gains that have grown at year-over-year rates of between 22 and 58
percent for the last five years. In addition, stock options have become an
increasingly common component in wage packages--particularly in California's
high tech sector. Taxpayers deriving income from retirement saving vehicles,
such as Individual Retirement Accounts and 401(k)s, have also benefited from
this growth. Together, these factors account for much of the rapid growth in
personal income tax revenues. The stock market has also contributed to a sense
of wealth among consumers, continuing to result in dramatic increases in sales
tax revenue.
While this revenue surge has allowed the State to address critical
needs such as education and transportation, the fact remains that revenues
supporting the budget are increasingly dependent upon the stock market. Capital
gains alone contribute about 11 percent of total General Fund revenues, and
revenue from stock options represents another 10 percent. To put this in
perspective, these two factors combined contributed less than 5 percent of
General Fund revenues as recently as 1994-95. These market-driven revenue
sources represent a significant fraction of the total Budget and a major portion
of the State's discretionary income. Although accumulated gains in the stock
market continue to be substantial, the market stalled overall for the 2000 year.
Moreover, on a daily basis the market remained volatile through the year. In one
day alone last year, the high-tech NASDAQ index fell 10 percent. Therefore, the
market's ongoing influence on General Fund revenues--both positive and
negative--must be recognized.
IMPACT OF 2000 TAX REDUCTION. Last year, for the second year of this
Administration, significant tax relief measures were enacted. This package of
bills provided taxpayers with approximately $1.6 billion and $2.3 billion in tax
savings in 2000-01 and 2001-02, respectively. These tax reductions are in
addition to the substantial tax relief provided to both individual and corporate
taxpayers under preexisting law. Based on the Department of Finance 2000-01 TAX
EXPENDITURE REPORT, these provisions are estimated to reduce State revenues by
$21 billion annually--including $16 billion in personal income tax relief, $4
billion in corporate tax relief, and $1 billion in sales tax relief.
Key areas of tax reduction for individual taxpayers include the
deductions for home mortgage interest and charitable contributions, the
exclusion of employer contributions to health and pension plans, and the
exclusion of capital gains on the sale of a principal residence and at death. On
the corporate side, key areas of relief include a reduced rate of taxation for
all corporations, special rate provisions for subchapter S corporations,
carryover of net operating losses, and credits for manufacturing investment and
research and development. Substantial reductions have also been enacted in
vehicle license fees in recent years. Beginning with the 2001 calendar year, the
State will pay 67.5 percent of local vehicle license fees, saving motor vehicle
owners $3.7 billion in 2001-02.
SPECIAL FUND REVENUE. The California Constitution, codes, and statutes
specify the uses of certain revenues, with receipts accounted for in various
special funds. In general, special fund revenues comprise three categories of
income:
o Receipts from tax levies that are allocated to specified functions
such as motor vehicle taxes and fees.
o Charges for special services provided for specific functions,
including such items as business and professional license fees.
o Rental royalties and other receipts designated for particular
purposes--for example, oil and gas royalties.
23
Taxes and fees related to motor vehicles comprise over 50 percent of
all special fund revenue. Principal sources are motor vehicle fuel taxes,
registration and weight fees, and vehicle license fees. During 2001-02, $8.7
billion in revenues will be derived from the ownership or operation of motor
vehicles, a 4.7 percent increase above the 2000-01 level. Approximately 53
percent of this revenue will be returned to local governments. The remaining
portion will be available for various State programs related to transportation
and services to vehicle owners.
Chapter 85, Statutes of 1991, created the Local Revenue Fund for the
purpose of local program realignment. Revenue attributable to a 0.5 percent
sales tax rate is transferred to this special fund. During 2001-02, local
governments are expected to receive $2.4 billion from this revenue source, up
4.5 percent from 2000-01. In addition to this revenue, approximately 24 percent
of all vehicle license fees are transferred to the Local Revenue Fund.
Beginning in 1998-99, legislation reduced total vehicle license fees
(VLF) and established a VLF offset program. For 2000-01 and 2001-02, vehicle
license fees are reduced by 35 percent. An additional 32.5 percent reduction for
these years will be returned to taxpayers in the form of a rebate. The total tax
relief provided by the VLF offset and rebate is estimated to be $2.724 billion
in 2000-01 and $3.680 billion in 2001-02.
Chapter 861, Statutes of 2000, replaces the current weight fee schedule
for commercial trucks, which is based on unladen weight, with a gross vehicle
weight schedule. This change was necessary to conform to the federal
International Registration Plan by January 1, 2002. Chapter 861 also provided
that the vehicle license fee will no longer be charged on commercial trailers,
and the loss in revenue to local governments from that exclusion will be
backfilled by the General Fund. As noted earlier, tobacco-related taxes are
collected primarily to support early childhood development programs as specified
in Proposition 10. These proceeds are deposited in the California Children and
Families First Trust Fund and are estimated at $672 million in 2000-01 and $662
million in 2001-02. Funds from the Proposition 99 tobacco-related taxes are
allocated to a special fund for distribution to a variety of accounts as
determined by the measure. Receipts for this fund are estimated at $360 million
in 2000-01 and $355 million in 2001-02. An additional $26 million for breast
cancer research will be generated in 2000-01 by the 2 cents per pack cigarette
tax enacted in 1993, while $25.6 million will be generated in 2001-02 for this
purpose. The original 10 cents per pack tax on cigarettes is allocated to the
General Fund.
STATE APPROPRIATIONS LIMIT. The State is subject to an annual
appropriations limit imposed by Article XIII B of the State Constitution (the
"Appropriations Limit"). The Appropriations Limit does not restrict
appropriations to pay debt service on voter-authorized bonds. Article XIII B
prohibits the State from spending "appropriations subject to limitation" in
excess of the Appropriations Limit. "Appropriations subject to limitation," with
respect to the State, are authorizations to spend "proceeds of taxes," which
consist of tax revenues, and certain other funds, including proceeds from
regulatory licenses, user charges or other fees to the extent that such proceeds
exceed "the cost reasonably borne by that entity in providing the regulation,
product or service," but "proceeds of taxes" exclude most State subventions to
local governments, tax refunds and some benefit payments such as unemployment
insurance. No limit is imposed on appropriations of funds which are not
"proceeds of taxes," such as reasonable user charges or fees and certain other
non-tax funds.
Not included in the Appropriations Limit are appropriations for the
debt service costs of bonds existing or authorized by January 1, 1979, or
subsequently authorized by the voters, appropriations required to comply with
mandates of courts or the federal government, appropriations for qualified
capital outlay projects, appropriations of revenues derived from any increase in
gasoline taxes and motor vehicle weight fees above January 1, 1990 levels, and
appropriation of certain special taxes imposed by initiative (e.g., cigarette
and tobacco taxes). The Appropriations Limit may also be exceeded in cases of
emergency.
LITIGATION GENERALLY. The State is a party to numerous legal
proceedings, many of which normally occur in governmental operations. In 1998,
the State signed a settlement with the four major cigarette manufacturers. The
State agreed to drop its lawsuit and not to sue in the future. Tobacco
manufacturers agreed to billions of dollars in payments and restrictions in
marketing activities. Under the settlement, the companies agreed to pay
California governments approximately $25 billion over a period of 25 years.
DEBT ADMINISTRATION AND LIMITATION. The State Treasurer is responsible
for the sale of debt obligations of the State and its various authorities and
agencies. The State Constitution prohibits the creation of indebtedness of the
State unless a bond law is approved by a majority of the electorate voting at a
general election or a direct primary. General
24
obligation bond acts provide that debt service on general obligation bonds shall
be appropriated annually from the General Fund and all debt service on general
obligation bonds is paid from the General Fund. Under the State Constitution,
debt service on general obligation bonds is the second charge to the General
Fund after the application of moneys in the General Fund to the support of the
public school system and public institutions of higher education. Certain
general obligation bond programs receive revenues from sources other than the
sale of bonds or the investment of bond proceeds. The State had $21.0 billion
aggregate principal amount of general obligation bonds outstanding, and $14.4
billion authorized and unissued, as of September 1, 2000. Outstanding lease
revenue bonds totaled $6.7 billion as of September 1, 2000.
The General Obligation Bond Law permits the State to issue as variable
rate indebtedness, up to 20 percent of the aggregate amount of long - term
general obligation bonds outstanding. As of September 1, 2000, there was no
variable rate indebtedness outstanding; however, the State plans to issue such
indebtedness in the future.
SPECIAL FACTORS AFFECTING COLORADO INTERMEDIATE TAX FREE FUND AND COLORADO TAX
FREE FUND
As described in the Prospectuses relating to Colorado Intermediate Tax
Free Fund and Colorado Tax Free Fund, except during temporary defensive periods,
each Fund will invest most of its total assets in Colorado municipal
obligations. The Funds are therefore susceptible to political, economic and
regulatory factors affecting issuers of Colorado municipal obligations. The
following information provides only a brief summary of the complex factors
affecting the financial situation in Colorado. This information is derived from
sources that are generally available to investors and is based in part on
information obtained from various State and local agencies in Colorado. It
should be noted that the creditworthiness of obligations issued by local
Colorado issuers may be unrelated to the creditworthiness of obligations issued
by the State of Colorado, and that there is no obligation on the part of the
State of Colorado to make payment on such local obligations in the event of
default.
ECONOMIC OVERVIEW. While Colorado's economy continues to outperform the
nation, the State is seeing evidence of the national slowdown. A combination of
factors will lead the State to the lowest level of employment growth experienced
since the early 1990s. Layoff announcements have been numerous, while
announcements of job gains have been few. In all industries Statewide, over
20,000 announced layoffs have been counted compared with only about 3,500
announced gains.
The advanced technology sector, which has been a leader in growth for
Colorado during the last decade, is experiencing difficult times and many local
technology companies have been shedding jobs. Many of these companies are being
impacted negatively by significant declines in available venture capital in the
State and deteriorating stock market conditions. Additionally, many new
companies that tried to get on the bandwagon of advanced-tech's promises have
dissolved. As an indicator of Colorado's prominence in the sector, the American
Electronics Association reported that Colorado had the highest concentration of
high-tech workers in the nation with nearly one our of every ten workers
employed in the industry in 2000.
The construction sector is also experiencing a slowdown as downsizing
companies need less space and consumers become more cautious in their household
decisions. Sales rates and prices for housing, especially at the high-end, have
slowed considerably this year.
Another area of importance to Colorado that will experience
difficulties during the coming year is tourism. The nationwide economic slowdown
will impact vacation decisions of many would-be visitors to Colorado, reducing
the number of people visiting ski resorts and other destination areas in the
State. In addition, the Winter Olympics in Utah will draw visitors who otherwise
would have come to Colorado. The recent terrorist activities in the United
States will also provide a negative impact to Colorado's tourism sector as
people curb travel plans and flying potentially becomes more difficult and
expensive.
Finally, the economy in Colorado will be dragged down by a dramatic
decrease in consumer spending in 2001. Consumers propped up the economy in 2000
by increasing retail trade sales 11.5 percent. Consumers slowed their spending
in the State to a 2.7 percent pace during the first half of 2001. Consumer
spending was one of the most important parts of economic growth during the
1990s.
25
One important factor that may help to offset the slowdown in Colorado
is interest rates. Mortgage rates have remained at low levels in Colorado and it
is likely that the Federal Reserve Board will further cut rates during the rest
of the year. If mortgage rates continue to fall, a new round of refinancing
could be set in motion, providing consumers with money to help maintain spending
levels of reduce debt.
POPULATION AND EMPLOYMENT. After seeing the State's population increase
at rates between 2.4 percent and 3.3 percent every year from 1992 through 2000,
Colorado will experience a slowdown in growth over the next several years as the
State's economic advantage over other areas of the nation diminishes and
migration slows. The State's population will increase 2.2 percent in 2001,
followed by growth rates of 2.1 percent in 2002 and 2.0 percent in 2003.
The previously mentioned job losses and slowing population growth in
the State will lead to a dramatic slowdown in employment this year. After
employment increased at a compound average annual growth rate of 3.8 percent
between 1990 and 2000, the State will see its job base grow by only 2.5 percent
in 2001 and 2.6 percent in 2002. In addition, the job mix will change somewhat
as the State adds fewer high-paying advanced technology and finance jobs and
more low wage service positions. Accordingly, the State's unemployment rate will
climb from an unsustainable low 2.7 percent in 2000 to 3.1 percent in 2001 and
3.5 percent in 2002. While these rates are significantly higher than the past
two years, they are still quite low by historical standards. The State
experienced a 6.0 percent unemployment rate in 1992 at the start of the
employment boom.
GENERAL FUND. General Fund revenue will decrease by 1.3 percent in FY
2001-02, following a 3.7 percent gain in FY 2000-01. We decreased our revenue
forecast for the current year by $188.2 million below the June 2001 forecast.
Three factors cause the reduction in the revenue forecast for FY 2001-02. First,
the Colorado economy is weaker than previously anticipated. While Colorado job
growth is up 3.0 percent through July, continued layoffs and reduced hiring by
employers have led to only a 1.7 percent gain in jobs in July 2001 versus July
2000. Consumer spending has slowed significantly leading to
less-than-anticipated sales tax receipts. Second, the over refund of the TABOR
surplus will reduce revenues in the current year by $33.4 million more than
anticipated. Finally, the income tax accruals for FY 2000-01 were much larger
than anticipated in the June 2001 forecast. We believe that these accruals will
reduce revenues for FY 2001-02, contrary to our expectations in the previous
forecast. This will dampen revenues by $21.3 million relative to the June
revenue estimate.
The poor General Fund revenue outlook for FY 2001-02 leads to a bleak
General Fund overview for this year. The Senate Bill 97-1 diversion of 10.355
percent of sales and use tax revenues cannot be made at all. If revenue growth
were sufficient, $208.8 million would be diverted to the Highway Users Tax Fund.
Our June forecast indicated that approximately one-half of the diversion would
occur. The diversion is reduced when revenue growth is insufficient such that
General Fund appropriations cannot increase by the statutory six percent
maximum. Even if no sales and use tax revenue is diverted, General Fund
appropriations for the operations budget would still have to be reduced by an
estimated $97.8 million.
After FY 2001-02, the General Fund overview has a healthier picture.
The full Senate Bill 97-1 diversion can be made and appropriations can increase
by six percent throughout the rest of the forecast period. The excess reserve in
the General Fund is still a low $63.1 million in FY 2002-03, but will recover to
more than $2.4 billion by FY 2006-07.
SPECIAL FACTORS AFFECTING MINNESOTA INTERMEDIATE TAX FREE FUND AND MINNESOTA TAX
FREE FUND
As described in the Prospectuses relating to Minnesota Intermediate Tax
Free Fund and Minnesota Tax Free Fund, except during temporary defensive
periods, these Funds will invest most of their total assets in Minnesota
municipal obligations. These Funds therefore are susceptible to political,
economic and regulatory factors affecting issuers of Minnesota municipal
obligations. The following information provides only a brief summary of the
complex factors affecting the financial situation in Minnesota. The summary is
based primarily upon one or more publicly available offering statements relating
to debt offerings of the State of Minnesota and releases issued by the Minnesota
Department of Finance. It should be noted that the creditworthiness of
obligations issued by local Minnesota issuers may be unrelated to the
creditworthiness of obligations issued by the State of Minnesota, and that there
is no obligation on the part of Minnesota to make payment on such local
obligations in the event of default.
Diversity and a significant natural resource base are two important
characteristics of the Minnesota economy. Generally, the structure of the
State's economy parallels the structure of the United States economy as a whole.
There
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are, however, employment concentrations in the manufacturing categories of
industrial machinery, instruments and miscellaneous, food, paper and related
industries, and printing and publishing. During the period from 1980 to 1990,
overall employment growth in Minnesota lagged behind national employment growth,
in large part due to declining agricultural employment. The rate of non-farm
employment growth in Minnesota exceeded the rate of national growth, however, in
the period of 1990 to 1996, and since 1996 Minnesota and U.S. employment have
expanded at about the same rate. The State's unemployment rate continues to be
substantially less than the national unemployment rate. Since 1980, Minnesota
per capita income generally has remained above the national average.
The State relies heavily on a progressive individual income tax and a
retail sales tax for revenue, which results in a fiscal system that is sensitive
to economic conditions. The current U.S. economic recession has had a
disproportionate effect on projected State revenues. The Economic Forecast
released by the Minnesota Department of Finance on December 4, 2001 has
projected, under current laws, a general fund deficit of $1.953 billion for the
current biennium ending June 30, 2003. The deficit is attributable primarily to
projected revenue shortfalls, but projected spending increases also are
projected. The projected deficit does not take into account the State's $350
million cash flow account balance of the State's $653 million budget reserve.
Use of the budget reserve is not triggered automatically when a deficit is
forecast. Total General Fund expenditures and transfers for the biennium are now
projected to be $27.807 billion. The Department's planning estimates for the
biennium ending June 30, 2005, which previously projected a surplus, now show
projected spending exceeding projected revenues by $2.534 billion, under current
laws. The Department of Finance has asked State departments and agencies to
begin work on options to trim their general fund budgets by 5 percent and by 10
percent. In addition, the Commissioner of Finance has directed other
commissioners and agency heads temporarily not to enter into any new grant
agreements, pending review of budgetary considerations. On a number of occasions
in previous years, State legislation has addressed projected budget deficits by
raising additional revenue, reducing expenditures, including aids to political
subdivisions and higher education, reducing the State's budget reserve, imposing
a sales tax on purchases by local governmental units, and making other budgetary
adjustments.
The State is party to a variety of civil actions that could adversely
affect the State's General Fund. In addition, substantial portions of State and
local revenues are derived from federal expenditures, and reductions in federal
aid to the State and its political subdivisions and other federal spending cuts
may have substantial adverse effects on the economic and fiscal condition of the
State and its local governmental units. Risks are inherent in making revenue and
expenditure forecasts. Economic or fiscal conditions less favorable than those
reflected in State budget forecasts may create additional budgetary pressures.
State grants and aids represent a large percentage of the total
revenues of cities, towns, counties and school districts in Minnesota, but
generally the State has no obligation to make payments on local obligations in
the event of a default. Even with respect to revenue obligations, no assurance
can be given that economic or other fiscal difficulties and the resultant impact
on State and local government finances will not adversely affect the ability of
the respective obligors to make timely payment of the principal and interest on
Minnesota Municipal Bonds that are held by the Fund or the value or
marketability of such obligations.
Certain Minnesota tax legislation and possible future changes in
federal and State income tax laws, including rate reductions, could adversely
affect the value and marketability of Minnesota Municipal Bonds that are held by
the Funds. See "Taxation."
SPECIAL FACTORS AFFECTING MISSOURI TAX FREE FUND
As described in the Prospectuses relating to Missouri Tax Free Fund,
except during temporary defensive periods, the Fund will invest most of its
total assets in Missouri municipal obligations. This Fund is therefore
susceptible to general or particular economic, political or regulatory factors
that may affect issuers of Missouri obligations. This information is derived
from sources that are generally available to investors and is based in part on
information obtained from various State and local agencies in Missouri. No
independent verification has been made of any of the following information. It
should be noted that the creditworthiness of obligations issued by local
Missouri issuers may be unrelated to the creditworthiness of obligations issued
by the State of Missouri, and that there is no obligation on the part of
Missouri to make payment on such local obligations in the event of such default.
Also note that the information does not apply to "conduit" obligations on which
the public issuer itself has no financial responsibility.
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POPULATION. The State total resident population in Census 2000 was
5,595,211, ranking Missouri 17th among all U.S. States. St. Louis County
remained the State's largest county, surpassing the million-population
threshold.
Missouri's population grew by 478,138 persons since 1990--a growth rate
of 9.3 percent. This growth was larger than in any other decade this past
century. As in recent decades, there were substantial population gains in the
Ozarks and in the State's metropolitan areas. But there also was new growth in
many rural counties north and south. Regional population shifts show a continued
expansion outward from older, larger urban centers. In fact, the population
outside Missouri's combined municipal areas grew at a faster rate in the 1990s
(12.1 percent) than the combined population within them (7.9 percent).
REVENUE. The Missouri Department of Revenue recently released taxable
sales estimates for the 2nd Quarter of 2001. During the quarter, $16.3 billion
in taxable transactions occurred in the State, an increase of 2.0 percent from
the same quarter of 2000. This is much lower than the 3.7 percent annual growth
realized during the 2nd quarter of 2000, as well as the 3.4 percent growth
during the first quarter of this year.
Analysis by the Missouri Economic Research and Information Center
(MERIC) shows that if seasonal and inflationary effects are removed from the
data, further evidence of sluggish sales can be seen. Year-to-year growth during
the second quarter of 2001 was -1.3 percent. This marks the fourth consecutive
quarter of zero-to-negative growth in taxable sales in Missouri.
The Department of Revenue has declined to speculate on taxable sales in
Missouri during the third quarter of this year, the period of time that includes
September 11th and the final weeks of that month. At the national level,
consensus estimates indicate retail sales dropped an estimated 1 percent in
September as spending dramatically slowed. Spending is expected to rebound
slowly during October. Clearly, this data implies continued fiscal struggles for
the State of Missouri, as sales tax comprises a significant portion of State
revenue.
State general revenue collections net of refunds for September 2001,
increased by .15 percent over those for September 2000 collections. General
revenue year-to-date collections net of refunds have increased by 3.7 percent
over the same period last year. Sales and use tax collections increased 2.3
percent for the month and increased 1.8 percent for the year-to-date, from
$449.9 million last year to $457.9 million this year. Individual income tax
collections decreased .7 percent for the month and increased 1.7 percent
year-to-date, from $956.2 million last year to $972.1 million this year.
Corporate income tax collections decreased 11.2 percent for the month and
decreased 13.7 percent year-to-date from $96.7 million last year to $83.4
million this year. All other collections were down 9.7 percent for the month and
up 21.0 percent for the year.
COST OF LIVING. In the 1st quarter of 2001, Missouri had the 4th lowest
cost of living in the United States (of the 46 States and the District of
Columbia surveyed by ACCRA). In general, the most expensive areas to live are
Alaska, New England, California, and Nevada. The least expensive areas continue
to be the Midwest and Southern States.
Missouri dropped one spot in the rankings since the 4th quarter of
2000, when the State had the 3rd lowest cost of living. While Missouri's ranking
dropped, Missouri's COL index actually decreased to 92.6 from the previous
quarter's 92.7. This is due mostly to declines in Health Care and Miscellaneous
Goods and Services cost categories.
Missouri's larger metropolitan areas had COL indices that were close to
the national average in the 1st quarter, but no city had an index over 100. In
general, however, the metropolitan areas are the most expensive areas in
Missouri to reside. Chambers of Commerce in cities across the nation participate
in ACCRA's survey on a volunteer basis. No cities in HI, ME, NJ and RI
participate.
There are additional risks associated with investment in the Missouri
Tax-Exempt Bond Fund because it invests its assets predominantly in Missouri
municipal securities. The Missouri Constitution imposes a limit on the amount of
taxes that may be imposed by the General Assembly during any fiscal year. No
assurances can be given that the amount of revenue derived from taxes will
remain at its current level or that the amount of federal grants previously
provided to the State will continue. The State of Missouri is barred by its
constitution from issuing debt instruments to fund government operations,
although it is authorized to issue bonds to finance or refinance the cost of
capital projects upon approval by the voters. In the past, the State has issued
two types of bonds to raise capital: general obligation bonds and revenue bonds.
Payments on general obligation bonds are made from the General Revenue Fund.
Therefore, if the State is unable to increase
28
its tax revenues, the State's ability to make the payments on the existing
obligations may be adversely affected. The State also is authorized to issue
revenue bonds, which generally provide funds for a specific project, and
payments are generally limited to the revenue from that project. Therefore, a
reduction of revenues on a project financed by revenue bonds may adversely
affect the State's ability to make payments on such bonds. The State may,
however, enact a tax specifically to repay the State's revenue bonds.
SPECIAL FACTORS AFFECTING NEBRASKA TAX FREE FUND
As described in the Prospectuses relating to the Fund, except during
temporary defensive periods, the Fund will invest most of its total assets in
Nebraska municipal obligations. The fund therefore is susceptible to political,
economic and regulatory factors affecting issuers of Nebraska municipal
obligations. The following information provides only a brief summary of the
complex factors affecting the financial situation in Nebraska. This information
is derived from sources that are generally available to investors and is based
on information obtained from the State of Nebraska.
ECONOMIC OVERVIEW. Nebraska's economy revolves around its agriculture
industry. In 1999, more than 93 percent of the State's land, some 46 million
acres, was farm and ranch land, most of it privately owned. Producers have taken
advantage of the State's fertile soil, abundant water, intensive cultivation and
advanced farming methods to produce record-high crop yields in recent years. In
1998, gross cash receipts from farm marketings totaled $8.8 billion, and
Nebraska had 55,000 farms that produced food for consumers in the United States
and abroad.
Although agriculture dominates Nebraska's economy, more and more of
Nebraska's income has come from other industries in recent years. Manufacturing,
which employed more than 117,000 workers in 1999, is a major employer among
nonfarm industries, with most manufacturing sites located in the State's large
urban areas. Douglas, Lancaster, Hall and Platte counties employ more than
63,000 workers in manufacturing. Food processing is the leading type of
manufacturing, followed by industrial machinery and electronic equipment.
The service sector, which includes health services and business
services, generates the most earnings in Nebraska. Government ranks second in
earnings generated, while manufacturing is third. The service sector also
employs more workers than any other industry. Wholesale and retail trades, taken
together, employ the second-most number of workers, with eating and drinking
establishments being the largest employer among retail stores in the State.
Government jobs, many of which are in Lincoln, employ the next highest number of
workers.
Lincoln is a major employer in education, led by the University of
Nebraska-Lincoln and other institutions of higher education. Omaha is a major
center for food processing, healthcare, insurance, trade, transportation and
telecommunications. Livestock and grain exchanges also are in Nebraska's largest
city. Six Nebraska-based businesses are in the Fortune 500, FORTUNE magazine's
annual list of the largest industrial and service corporations in the United
States based on revenue. All of these corporations have their headquarters in
Omaha.
GENERAL FUND. The State's fiscal year ended on June 30, 2001. Total gross
General Fund receipts for fiscal year 2000-2001 were $2,984,181,599. This
represents a 3.1 percent increase over fiscal year 1999-2000 totals, and 0.8
percent below the fiscal year 2000-2001 projected amount of $3,007,415,000.
Gross General Fund receipts were ahead of FY1999-2000 for Sales and Use and
Individual Income taxes by 2.8 and 4.5 percent, respectively. Gross receipts
from Corporate Income and Miscellaneous taxes were below FY1999-2000 levels by
1.3 and 1.5 percent, respectively. Compared to the certified forecast for
FY2000-2001, gross receipts for Sales and Use, Individual Income, and Corporate
Income taxes were below projections by 2.3, 0.1, and 2.4 percent, respectively.
Total refunds for fiscal year 2000-2001 were $527,319,744, which is 7.4
percent more than last fiscal year, and 0.1 percent above the projected amount
of $526,713,000.
Total net receipts for the fiscal year ending June 30, were
$2,456,861,855, ahead of FY1999-2000 collections by $52.9 million, or 2.2
percent. Compared with forecasted net receipts, total net receipts for FY2000-01
were below the certified forecast of $2,480,707,000 by $23,845,145, or 1.0
percent. Net Sales and Use and Individual Income tax receipts were ahead of
FY1999-00 receipts by 0.5 and 4.5 percent, respectively. At the same time, only
Individual Income and Miscellaneous tax net receipts exceeded the certified
forecast, by 0.3 and 6.1 percent, respectively. Sales
29
and Use and Corporate Income tax receipts ended the year behind the certified
forecast by 3.8 and 2.1 percent, respectively.
State appropriations for the 1999-2000 fiscal year totaled
$5,313,608,444 for the operation of State government, including capital
construction and aid to individuals, local governments and other entities. This
amount includes supplemental appropriations (deficits) provided by the 2000
Legislature.
Of the total 1999-2000 appropriation, $2,339,081,677 was appropriated
from the State general fund, which is financed by sales and use taxes, corporate
and individual income taxes, and several other taxes, including liquor,
cigarette and pari-mutuel taxes. Other appropriation amounts were:
$1,105,960,607 from cash funds, which include receipts from motor fuel taxes,
hunting and fishing licenses, tuition at the University of Nebraska and State
colleges, commodity checkoff collections, and other fees and charges;
$1,396,017,895 from federal funds; and $472,548,265 from revolving funds, which
account for financial transactions between State agencies.
Fiscal year 2000-01 appropriations totaled $5,536,701,415, consisting
of $2,458,788,690 from the State general fund, $1,138,591,060 from cash funds,
$1,472,042,292 from federal funds and $467,279,373 from revolving funds. Under
biennial budgeting, these appropriations originally were made by the 1999
Legislature, with adjustments during the 2000 legislative session. These
appropriation figures for 2000-01 do not, however, include supplemental
appropriations that may be provided by the 2001 Legislature.
REVENUE. State revenue estimates for fiscal year 2001-2002 forecast
approximately 51.1 percent of the tax dollar coming from individual income tax,
36.8 percent from sales tax, 5.7 percent from corporate income tax, and 6.4
percent from miscellaneous receipts. Forecasted appropriations include 36.3
percent of collected taxes to go to local tax relief, 21.0 percent for aid to
individuals, 20.7 percent for government operations, 16.9 percent for
postsecondary education operating, 3.8 percent for other State aid, and 1.3
percent for capital construction.
SPECIAL FACTORS AFFECTING OREGON INTERMEDIATE TAX FREE FUND
As described in the Prospectus relating to Oregon Intermediate Tax Free
Fund, except during temporary defensive periods, Oregon Intermediate Tax Free
Fund will invest most of its total assets in Oregon municipal obligations. This
Fund therefore is susceptible to political, economic and regulatory factors
affecting issuers of Oregon municipal obligations. The following information
provides only a brief summary of the complex factors affecting the financial
situation in Oregon. This information is derived from sources that are generally
available to investors and is based in part on information obtained from various
State and local agencies in Oregon. It should be noted that the creditworthiness
of obligations issued by local Oregon issuers may be unrelated to the
creditworthiness of obligations issued by the State of Oregon, and that there is
no obligation on the part of Oregon to make payment on such local obligations in
the event of default.
OVERVIEW OF THE ECONOMY. In the past decade, Oregon resumed the steady
economic and population growth that has characterized its history. But today the
economy is much different--the State overall is less reliant on forest products
or any single industry. Oregon's historically high rural incomes have declined
markedly with the reduction of logging and the closure of many mills. These
economic shifts have created the need for job replacement, retraining and
economic diversification for smaller, rural communities and those that are
distressed. These shifts also present more urban areas with growth management
and labor-scarcity challenges.
Fifty years ago, the State's manufacturing sector was highly
concentrated in lumber and wood products and food processing. Since then, it has
diversified into industries such as electronic equipment, transportation
equipment, metals, printing and plastics. Outside of manufacturing, the State
has added many jobs in other export-oriented industries such as professional
services, software development and tourism. This increase in economic diversity
should help stabilize the State's economy.
30
Forest products, agriculture and fisheries each have experienced
serious problems in the past few years. Both forest products and fisheries
industries have reduced harvests. More recently, farms and forest products
businesses are seeing reduced export demand for their products and stiff
competition from foreign producers. Many of the local economies of Oregon's
rural areas are concentrated in these natural resource industries, and the
citizens of these areas face difficult challenges to maintaining their
employment, adequate income and quality of life.
DEMOGRAPHIC FORECAST. Oregon's population will increase from 3.3
million in 1999, to 3.6 million in 2007, a 9.2 percent increase. Population
changes within age groups will reflect the historical shifts in births and
migration flows. During this period, the fastest growth will occur in the 45-64
and 18-24 age groups, the result of baby-boomers and their children entering
these age groups. The 25-44 year age group will decline and the 5-17 age group
will increase slightly. The elderly population as a whole will increase by 8.7
percent. The number of young elderly in the 65-74 age group has been declining.
This trend will reverse only after the year 2002. On the other hand, the number
of oldest elderly (85 and older), has been growing very rapidly. This group will
continue to grow at a very high rate, increasing 33.8 percent between 1999 and
2007.
BUDGET. During the 1990s, Oregon's economy experienced a period of
exceptional growth. After adjusting for inflation, wages grew 18.5 percent and
per capita income grew faster than the rest of the nation. The profitability of
companies operating in Oregon also rose sharply.
State revenues benefitted directly from this growth. During the last
decade, revenues from personal income taxes grew an average of nearly 10 percent
annually. Corporate income tax collection more than doubled from less than $150
million in 1990 to more than $400 million in 2000. In addition, capital gains
income, mostly from the stock market, grew at an incredible rate during the
1990s.
Oregon's economy diversified substantially during this period. High
technology companies, particularly those involved in semiconductor production,
helped Oregon become increasingly connected to international markets. Asian
markets, in particular, made up six of the top 10 destinations for Oregon
products in 1999. At the same time, agricultural, lumber, and wood products
continued to play a significant role in Oregon's economy. In addition, Oregon's
population grew at a faster pace than the national average during the
1990s--16.1 percent compared to 9.6 percent respectively. Some of this growth
came from in-migrants, particularly for individuals between the ages of 18-64
years. And while Oregon's population continues to be predominately White (93.4
percent of the total population), its population is slowly becoming more
diverse. Oregon's Black, Asian, and Hispanic populations all grew at a
signficantly faster rate than the majority White, Non-Hispanic population.
However, at the beginning of a new century, the rapid growth in
Oregon's economy is beginning to stabilize. Growth in jobs, wages, and profits
are all slowing down. This slowdown is expected to reduce Oregon's rate of
growth in both personal and corporate income taxes. With the Asian financial
crisis in the past, exports in high technology, timber, and agricultural
products should improve. However, factors could hinder Oregon's economy: a
recession or inflation; a downturn in global economies, particularly in major
export markets like Japan or Korea; a dramatic rise in energy prices; or a stock
market crash.
Also, changes in demographics could affect Oregon's public services.
Children under the age of five and school age populations are growing more
slowly than in the 1990s. Their growth will continue to slow as the baby-boomers
children exit this age group. Young adults aged 18-24 years, who comprise the
"baby-boom echo," will continue to grow. And while Oregon's elderly population
has slowed in recent years, those over age 65 have more than tripled since 1950.
In particular, growth for those ages 75 years and older is expected to rise.
Each of the populations consume a range of State services--from day care, to
educational services, to health care.
Several factors linked to the economy have the potential to increase or
reduce the funds available to the Legislative Assembly for this State budget.
Therefore, quarterly economic forecasts made during the legislative session may
be especially important to State budgeting. Among the factors in uncertainty
are:
o State economy. In the short run, Oregon's economy will grow slowly
through 2001, and is projected to gain strength as it reaches the
end of the 2001-03 biennium. The long-term outlook for the next
five years calls for slow to moderate growth.
31
o National economy. Like Oregon, the U.S. economy is expected to
slow significantly in 2001, and then accelerate in 2002 and 2003.
While the stock market correction in April of 1999 did not lead to
a market crash, the risk of a further correction still exists.
This potential correction, along with rising energy prices, are
the largest risks to the national economy.
o Asian economies. It appears that Asian economies have recovered
from the financial crisis of the last decade. Asia's economic
well-being is important to Oregon because their economies
significantly affect our own. They import a range of products
produced in Oregon, including timber, and agricultural, and high
technology products.
o Special tax refunds. A special refund could cause some
uncertainty. The current revenue forecast anticipates a two
percent surplus Kicker refund for personal income taxpayers to be
paid out in 2001 on tax year 2000 liability. Corporate Kicker
refunds are anticipated and will be credited in the 2001-03
biennium.
o Ballot Measure impacts. Ballot Measure 88 raises the maximum
deduction of federal income taxes that may be deducted on Oregon
income tax returns. It raises the maximum deduction allowed from
$3,000 to $5,000 effective January 1, 2002. This change is
anticipated to reduce revenue collections by $159.2 million in the
2001-03 biennium.
BUDGET PROCESS. As mandated under State law, the Governor Budget is
required to balance and rely only on the revenues predicted under current laws.
In addition, the budget also proposes plans to meet the challenges we face in
education, early childhood development, health care and rural and community
infrastructure needs. These issues are addressed without new or increased taxes.
The budget process is an ongoing one. State agencies continually gather
information on performance and outcomes in order to engage in a meaningful
planning process with their stakeholders. Agency information is then submitted
to the Governor. He reviews the information presented by all agencies and then
crafts a budget recommendation for consideration by the Legislative Assembly.
These agency requests generally include:
o Funding to continue the services provided under current laws. The
costs are adjusted for estimated inflation and caseloads.
o Funding for any proposed new or expanded services.
o Suggestions on what services are no longer needed and what to cut
if State funds prove insufficient.
The State economist forecasts how much the State will have under
current laws to fund the State budget. The total agency requests always equal
more than forecast State funding could cover. Therefore, the Governor must
decide what increases and decreases he will recommend to stay within available
funds. He may propose new funding, shifts in funding, or cuts in some programs
so the State can pay for other needs. The Governor's Recommended Budget sets a
balanced plan for State funding priorities. The Legislature evaluates the
Governor's Recommended Budget and hears public testimony for and against each
part of the proposed plan. The Legislature then deliberates to a final budget
that it enacts as a series of laws. Those laws then control State spending for
the next two years.
STATE RESOURCES. The State uses money from five sources to pay for
State services. The sources are grouped as General Fund, Other Funds (including
Lottery), and Federal Funds. Property taxes are not a source that funds the
State budget. They are the main source of funding for cities, counties, and some
special districts. They are also the second largest source of local school
funding.
The General Fund covers only 33 percent of what is spent in the State
budget. However, it is the money that the Legislature can apply anywhere it is
needed. The General Fund comes largely from our income taxes-- about 85 percent
from personal income tax and eight percent from corporate income tax. The rest
comes from the insurance premium tax, gift and inheritance tax, cigarette tax,
liquor tax, other minor sources, and the Fund's investment earnings. General
Fund resources are estimated at $11.1 billion for 2001-03.
Other Funds account for about 46 percent of what is spent in the State
budget. Other Funds are mostly monies dedicated to certain purposes. They
include some taxes, chiefly those related to highway use, employment, and
forests. They include State licensing fees. Other Funds also include the State's
business-like incomes. Examples include tuition and other fees for services,
inmate workforce products, and many funds related to loans or bonds.
32
Federal Funds cover about 19 percent of what is spent in the State
budget. The federal government limits the State's choices about where and how
Federal Funds may be used. Most federal funding has specific conditions, such as
requiring the State to keep certain service levels, or providing matching funds.
Lottery Funds account for a little less than two percent of total State
spending. The forecast for Lottery Funds in the 2001-03 budget period is
slightly higher than that for the previous biennium. Several reasons account for
this increase. First, the beginning balance for 2001-03 is forecast to be
slightly higher than that available for 1999-2001. Second, the Lottery is
retaining gaming revenues above the 1999-2001 Close of Session (COS) forecast in
a Lottery Contingency Fund for the purchase of new video terminals. Total
transfers to the Economic Development Fund, therefore, will remain at the COS
level of $580.4 million for the 1999-2001 biennium. No such agreement exists for
the 2001-03 budget period. Third, Lottery will transfer $15 million related to
administrative actions during the 2001-03 budget period. Although the total
amount of Lottery Funds will increase slightly, the amount available for
allocation will be lower. Increasing amounts of Lottery Funds are spent on
dedicated distributions. These dedicated distributions include amounts for
Sports Action, county economic development, the Education Endowment Fund, the
Parks and Natural Resources Fund, as well as funds dedicated for debt service
and gambling addiction allocations.
In November of 1998 a national settlement agreement was reached between
the tobacco industry and 46 States including Oregon. The November 1998
agreement, known as the Master Settlement Agreement (MSA), represented the
largest financial recovery in the nation's history. It requires the tobacco
industry to make payments to the States in perpetuity. Oregon's share of the
payments through the year 2025 are an estimated $2.2 billion. Oregon has
received $92.7 million in MSA payments as of November 1, 2000.
The Governor's Recommended Budget for 2001-03 proposes the following
uses of Oregon tobacco settlement payments expected to be received through
2001-03:
o $110.0 million--K-12 School Improvement Fund
o $ 10.0 million--Bio-science Research Facility at Oregon Health
Sciences University
o $ 22.0 million--Family Health Insurance Assistance Program
subsidies
o $ 7.0 million--Department of Human Resources, Health Division
programs
o $100.0 million--Health Care Trust Account
o $ 99.2 million--General Fund
DEBT ADMINISTRATION AND LIMITATION. Oregon statutes give the State
Treasurer authority to review and approve the terms and conditions of sale for
State agency bonds. The Governor, by statute, seeks the advice of the State
Treasurer when recommending the total biennial bonding level for State programs.
Agencies may not request that the Treasurer issue bonds or certificates of
requirements for State agencies on proposed and outstanding debt. Statutes
contain management and reporting requirements for State agencies on proposed and
outstanding debt.
A variety of general obligation and revenue bond programs have been
approved in Oregon to finance public purpose programs and projects. General
obligation bond authority requires voter approval or a constitutional amendment,
while revenue bonds may be issued under statutory authority. However, under the
Oregon Constitution the State may issue up to $50,000 of general obligation debt
without specific voter approval. The State Legislative Assembly has the right to
place limits on general obligation bond programs which are more restrictive than
those approved by the voters. General obligation authorizations are normally
expressed as a percentage of Statewide True Cash Value ("TCV") of taxable
property. Revenue bonds usually are limited by the Legislative Assembly to a
specific dollar amount.
The State's constitution authorizes the issuance of general obligation
bonds for financing community colleges, highway construction, and pollution
control facilities. Higher education institutions and activities and community
colleges are financed through an appropriation from the General Fund. Facilities
acquired under the pollution control program are required to conservatively
appear to be at least 70 percent self-supporting and self-liquidating from
revenues, gifts, federal government grants, user charges, assessments, and other
fees.
33
Additionally, the State's constitution authorizes the issuance of
general obligation bonds to make farm and home loans to veterans, provide loans
for State residents to construct water development projects, provide credit for
multi-family housing for elderly and disabled persons, and for small scale local
energy projects. These bonds are self-supporting and are accounted for as
enterprise funds. Certain provisions of the Water Resources general obligation
bond indenture conflict with State statutes. Upon the advice of the Attorney
General, the method of handling investment interest is in compliance with the
statutes rather than the bond indenture. Currently there is litigation pending
against the State concerning this treatment of the investment interest.
The State's constitution further authorizes the issuance of general
obligation bonds for financing higher education building projects, facilities,
institutions, and activities. In addition to general obligation and direct
revenue bonds, the State of Oregon issues industrial development revenue bonds
("IDBs"), Oregon Mass Transportation Financing Authority revenue bonds and
Health, Housing, Educational and Cultural Facilities Authority ("HHECFA")
revenue bonds. The IDBs are issued to finance the expansion, enhancement or
relocation of private industry in the State. Before such bonds are issued, the
project application must be reviewed and approved by both the Oregon State
Treasury and the Oregon Economic Development Commission. Strict guidelines for
eligibility have been developed to ensure that the program meets a clearly
defined development objective. IDBs issued by the State are secured solely by
payments from the private company and there is no obligation, either actual or
implied, to provide State funds to secure the bonds. The Oregon Mass
Transportation Financing Authority ("OMTFA") reviews financing requests from
local mass transit districts and may authorize issuance of revenue bonds to
finance eligible projects. The State has no financial obligation for these
bonds, which are secured solely by payments from local transit districts.
The State is statutorily authorized to enter into financing agreements
through the issuance of certificates of participation. Certificates of
participation have been used for the acquisition of computer systems by the
Department of Transportation, Department of Administrative Services, and the
Department of Higher Education. Also, certificates of participation have been
used for the acquisition or construction of buildings by the Department of
Administrative Services, Department of Fish and Wildlife, Department of
Corrections, State Police, and Department of Higher Education. Further,
certificates of participation were used in the acquisition of telecommunication
systems by the Department of Administrative Services and the Adult & Family
Services Division.
HHECFA is a public corporation created in 1989, and modified in 1991,
to assist with the assembling and financing of lands for health care, housing,
educational and cultural uses and for the construction and financing of
facilities for such uses. The Authority reviews proposed projects and makes
recommendations to the State Treasurer as to the issuance of bonds to finance
proposed projects. The State has no financial obligation for these bonds, which
are secured solely by payments from the entities for which the projects were
financed.
The Treasurer on behalf of the State may also issue federally taxable
bonds in those situations where securing a federal tax exemption is unlikely or
undesirable; regulate "current" as well as "advance" refunding bonds; enter into
financing agreements, including lease purchase agreements, installment sales
agreements and loan agreements to finance real or personal property and approve
certificates of participation with respect to the financing agreements. Amounts
payable by the State under a financing agreement are limited to funds
appropriated or otherwise made available by the Legislative Assembly for such
payment. The principal amount of such financing agreements are treated as bonds
subject to maximum annual bonding levels established by the Legislative Assembly
under Oregon statute.
CFTC INFORMATION
The Commodity Futures Trading Commission (the "CFTC"), a federal
agency, regulates trading activity pursuant to the Commodity Exchange Act, as
amended. The CFTC requires the registration of "commodity pool operators," which
are defined as any person engaged in a business which is of the nature of an
investment trust, syndicate or a similar form of enterprise, and who, in
connection therewith, solicits, accepts or receives from others funds,
securities or property for the purpose of trading in a commodity for future
delivery on or subject to the rules of any contract market. The CFTC has adopted
Rule 4.5, which provides an exclusion from the definition of commodity pool
operator for any registered investment company which (i) will use commodity
futures or commodity options contracts solely for bona fide hedging purposes
(provided, however, that in the alternative, with respect to each long position
in a commodity future or commodity option contract, an investment company may
meet certain other tests set forth in Rule 4.5); (ii) will not enter into
commodity futures and commodity options contracts for which the aggregate
initial margin and premiums exceed 5% of its assets; (iii) will not be marketed
to the public as a commodity pool or as a
34
vehicle for investing in commodity interests; (iv) will disclose to its
investors the purposes of and limitations on its commodity interest trading; and
(v) will submit to special calls of the CFTC for information. Any investment
company desiring to claim this exclusion must file a notice of eligibility with
both the CFTC and the National Futures Association. FAIF has made such notice
filings with respect to those Funds which may invest in commodity futures or
commodity options contracts.
INVESTMENT RESTRICTIONS
In addition to the investment objectives and policies set forth in the
Prospectus and under the caption "Additional Information Concerning Fund
Investments" above, each of the Funds is subject to the investment restrictions
set forth below. The investment restrictions set forth in paragraphs 1 through 6
below are fundamental and cannot be changed with respect to a Fund without
approval by the holders of a majority of the outstanding shares of that Fund as
defined in the 1940 Act, i.e., by the lesser of the vote of (a) 67% of the
shares of the Fund present at a meeting where more than 50% of the outstanding
shares are present in person or by proxy, or (b) more than 50% of the
outstanding shares of the Fund.
None of the Funds will:
1. Concentrate its investments in a particular industry, except
that each Fund with one or more industry concentrations
implied by its name shall, in normal market conditions,
concentrate in securities of issues within that industry or
industries. For purposes of this limitation, the U.S.
Government, and state or municipal governments and their
political subdivisions are not considered members of any
industry. Whether a Fund is concentrating in an industry shall
be determined in accordance with the 1940 Act, as interpreted
or modified from time to time by any regulatory authority
having jurisdiction.*
2. Borrow money or issue senior securities, except as permitted
under the 1940 Act, as interpreted or modified from time to
time by any regulatory authority having jurisdiction.
3. Purchase physical commodities or contracts relating to
physical commodities.
4. Purchase or sell real estate unless as a result of ownership
of securities or other instruments, but this shall not prevent
the Funds from investing in securities or other instruments
backed by real estate or interests therein or in securities of
companies that deal in real estate or mortgages.
5. Act as an underwriter of securities of other issuers, except
to the extent that, in connection with the disposition of
portfolio securities, it may be deemed an underwriter under
applicable laws.
6. Make loans except as permitted under the 1940 Act, as
interpreted or modified from time to time by any regulatory
authority having jurisdiction.
The following restrictions are non-fundamental and may be changed by
FAIF's Board of Directors without a shareholder vote:
None of the Funds will:
1. Invest more than 15% of its net assets in all forms of
illiquid investments.
2. Borrow money in an amount exceeding 10% of the borrowing
Fund's total assets except that Strategic Income Fund may
borrow up to one-third of its total assets and pledge up to
15% of its total assets to secure such borrowings. None of the
Funds will borrow money for leverage purposes. For the purpose
of this investment restriction, the use of options and futures
transactions and the purchase of securities on a when-issued
or delayed delivery basis shall not be deemed the borrowing of
money. No Fund will make additional investments while its
borrowings exceed 5% of total assets.
3. Make short sales of securities.
35
4. Lend portfolio securities representing in excess of one-third
of the value of its total assets.
- -----------------------------------
* According to the present interpretation by the Securities and Exchange
Commission, the Fund would be concentrated in an industry if more than 25% of
its total assets, based on current market value at the time of purchase, were
invested in that industry.
The Board of Directors has adopted guidelines and procedures under
which the Funds' investment advisor is to determine whether the following types
of securities which may be held by certain Funds are "liquid" and to report to
the Board concerning its determinations: (i) securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933; (ii) commercial paper
issued in reliance on the "private placement" exemption from registration under
Section 4(2) of the Securities Act of 1933, whether or not it is eligible for
resale pursuant to Rule 144A; (iii) interest-only and principal-only, inverse
floaters and inverse interest-only securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities; and (iv) municipal leases and
securities that represent interests in municipal leases.
For determining compliance with its investment restriction relating to
industry concentration, each Fund classifies asset-backed securities in its
portfolio in separate industries based upon a combination of the industry of the
issuer or sponsor and the type of collateral. The industry of the issuer or
sponsor and the type of collateral will be determined by the Advisor. For
example, an asset-backed security known as "Money Store 94-D A2" would be
classified as follows: the issuer or sponsor of the security is The Money Store,
a personal finance company, and the collateral underlying the security is
automobile receivables. Therefore, the industry classification would be Personal
Finance Companies -- Automobile. Similarly, an asset-backed security known as
"Midlantic Automobile Grantor Trust 1992-1 B" would be classified as follows:
the issuer or sponsor of the security is Midlantic National Bank, a banking
organization, and the collateral underlying the security is automobile
receivables. Therefore, the industry classification would be Banks --
Automobile. Thus, an issuer or sponsor may be included in more than one
"industry" classification, as may a particular type of collateral.
FUND NAMES
With respect to any Fund that has adopted an investment strategy
pursuant to Rule 35d-1 of the 1940 Act, whereby at least 80% of the Fund's net
assets (plus the amount of any borrowings for investment purposes) must be
invested in a strategy suggested by the Fund's name, a policy has been adopted
by the Funds to provide shareholders with at least 60 days notice in the event
of a planned change to the investment strategy. Such notice to shareholders will
meet the requirements of Rule 35d-1(c).
PORTFOLIO TURNOVER
Small Cap Core Fund, Small Cap Index Fund, Science & Technology Fund,
and Technology Fund have each experienced significant increases in their rates
of portfolio turnover over the two most recently completed fiscal years.
o Small Cap Core Fund's portfolio turnover rate increased from 91%
to 204%, respectively, for the fiscal periods ended October 31,
2000 and September 30, 2001. This variation is attributable
primarily to the general volatility of small cap stocks over the
past year. These factors have led to increased buying and selling
opportunities for the Funds.
o Small Cap Index Fund's portfolio turnover rate increased from 32%
to 102%, respectively, for the fiscal periods ended October 31,
2000 and September 30, 2001. This variation is attributable
primarily to the fact that the Fund changed the index to which it
attempts to match its performance. Currently, the Fund's objective
is to provide investment results that correspond to the
performance of the Russell 2000 Index. Previously, the Fund
attempted to replicate the performance of the S&P SmallCap 600
Index.
o Science & Technology Fund's portfolio turnover rate increased from
85% to 146%, respectively, for the fiscal periods ended October
31, 2000 and September 30, 2001 and Technology Fund's portfolio
turnover rate increased from 195% to 269%, respectively, for the
fiscal years ended September 30, 2000 and September 30, 2001. For
both Funds, this variation is attributable primarily to the
volatility of the technology sector, especially prevalent during
periods of economic recession.
36
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of FAIF are listed below, together
with their business addresses and their principal occupations during the past
five years. The Board of Directors is generally responsible for the overall
operation and management of FAIF. Directors who are "interested persons" (as
that term is defined in the 1940 Act) of FAIF are identified with an asterisk.
DIRECTORS
Robert J. Dayton, 5140 Wells Fargo Center, Minneapolis, Minnesota
55402: Director of FAF since December 1994, of FAIF since September 1994, of
FASF since June 1996, and of FAIP since August 1999; Retired Chief Executive
Officer, Okabena Company, a private family financial services office; Chairman,
Okabena Company Board (1989-present); Chief Executive Officer, Okabena Company
(1993-June 2001). Age: 59.
Roger A. Gibson, 1020 15th Street, Suite 41A, Denver, Colorado 80202:
Director of FAF, FAIF and FASF since October 1997, and of FAIP since August
1999; Vice President and Chief Operating Officer, United Airlines World Wide
Cargo Operations, since July 2001; Vice President, North America-Mountain Region
for United Airlines (1995-2001). Age: 55.
Andrew M. Hunter III, 537 Harrington Road, Wayzata, Minnesota 55391:
Director of FAIF, FAF and FASF since January 1997, and of FAIP since August
1999; Chairman, Hunter, Keith Industries, a diversified manufacturing and
services management company, since 1975. Age: 54.
Leonard W. Kedrowski, 16 Dellwood Avenue, Dellwood, Minnesota 55110:
Director of FAF and FAIF since November 1993, of FASF since July 1996, and of
FAIP since August 1999; Owner, Executive and Management Consulting, Inc., a
management consulting firm, since 1992; Chief Executive Officer, Creative
Promotions International, LLC, a promotional award programs and products
company, since 1999; Board member, GC McGuiggan Corporation (DBA Smyth
Companies), manufacturer of designer doors; acted as CEO of Graphics Unlimited
from 1996-1998. Age: 60.
* John M. Murphy, Jr., 601 Second Avenue South, Minneapolis, Minnesota
55402: Director of FAIF, FAF and FASF since June 1999, and of FAIP since August
1999; Chairman and Chief Investment Officer, First American Asset Management and
U.S. Bank Trust, N.A., and Executive Vice President, U.S. Bancorp (1991-1999);
Executive Vice President, U.S. Bancorp since January 1999; Chairman Minnesota -
U.S. Bancorp since 2000. Age: 60.
Richard K. Riederer, 741 Chestnut Road, Sewickley, Pennsylvania 15143:
Director of FAF, FAIF, FASF and FAIP since August 2001; Retired; President and
Chief Executive Officer, Weirton Steel (1995-2001); Director, Weirton Steel
(1993-2001); Executive Vice President and Chief Financial Officer, Weirton
Steel, (1994-1995); Vice President of Finance and Chief Financial Officer,
Weirton Steel (1989-1994). Age: 57.
Joseph D. Strauss, 8525 Edinbrook Crossing, Suite 5, Brooklyn Park,
Minnesota 55443: Director of FAF since 1984, of FAIF since April 1991, of FASF
since June 1996, and of FAIP since August 1999; Chairman of FAF's and FAIF's
Boards from 1993 to September 1997 and of FASF's Board from June 1996 to
September 1997; President of FAF and FAIF from June 1989 to November 1989; Owner
and Executive Officer, ExcensusTM LLC, a consulting firm, since 2001; Owner and
President, Strauss Management Company, since 1993; Owner, Chairman and Chief
Executive Officer, Community Resource Partnerships, Inc., a strategic planning,
operations management, government relations, transportation planning and public
relations organization, since 1993; attorney at law. Age: 61.
Virginia L. Stringer, 712 Linwood Avenue, St. Paul, Minnesota 55105:
Chair of FAIF's, FAF's and FASF's Boards since September 1997, and of FAIP's
Board since 1999; Director of FAIF since August 1987, of FAF since April 1991,
of FASF since June 1996, and of FAIP since August 1999; Owner and President,
Strategic Management Resources, Inc., since 1993; Executive Consultant for State
Farm Insurance Company since 1997; formerly President
37
and Director, The Inventure Group, a management consulting and training company;
President, Scott's, Inc., a transportation company, and Vice President of Human
Resources, The Pillsbury Company. Age: 57.
James M. Wade, 2802 Wind Bluff Circle, Wilmington, North Carolina
28409: Director of FAIF, FAF, FASF and FAIP since August 2001; Owner and
President, Jim Wade Homes, a homebuilding company, since 1999; Vice President
and Chief Financial Officer, Johnson Controls, Inc., a controls manufacturing
company (1987-1991). Age: 58.
EXECUTIVE OFFICERS
Thomas S. Schreier, Jr., U.S. Bancorp Asset Management, Inc., 800
Nicollet Mall, Minneapolis, Minnesota 55402; President of FAIF, FAF, FASF, and
FAIP since February 28, 2001; Chief Executive Officer of U.S. Bancorp Asset
Management, Inc. since May 2001; Chief Executive Officer of First American Asset
Management from December 2000 through May 2001 and of Firstar Investment &
Research Management Company from February 2001 through May 2001; Senior Managing
Director and Head of Equity Research of U.S. Bancorp Piper Jaffray through
December 2000; Senior Airline Analyst and Director of Equity Research of Credit
Suisse First Boston through 1998. Age: 39.
Mark S. Jordahl, U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall,
Minneapolis, Minnesota 55402; Vice President - Investments, FAIF, FAF, FASF and
FAIP since September 19, 2001; Chief Investment Officer of U.S. Bancorp Asset
Management, Inc. since September 2001; President and Chief Investment Officer,
ING Investment Management - Americas (September 2000 to present); Senior Vice
President and Chief Investment Officer, ReliaStar Financial Corp. (January 1998
to September 2000); Executive Vice President and Managing Director, Washington
Square Advisers (January 1996 to December 1997); Senior Vice President, Private
Placements, Washington Square Capital, Inc. (January 1992 to January 1996). Age:
41.
Peter O. Torvik, U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall,
Minneapolis, Minnesota 55402; Vice President - Marketing of FAIF, FAF, FASF and
FAIP since September 20, 2000; Executive Vice President of U.S. Bancorp Asset
Management since May 2001; Executive Vice President of First American Asset
Management from February 2001 through May 2001; President and partner of DPG
Group, a Florida-based partnership engaged in affinity marketing through 2000.
Age: 47.
Jeffery M. Wilson, U.S. Bancorp Asset Management, Inc. 800 Nicollet
Mall, Minneapolis, Minnesota 55402; Vice President - Administration of FAIF,
FAF, FASF and FAIP since March 11, 2000; Senior Vice President of U.S. Bancorp
Asset Management since May 2001; Senior Vice President of First American Asset
Management through May 2001. Age: 45.
Robert H. Nelson, U.S. Bancorp Asset Management, Inc. 800 Nicollet
Mall, Minneapolis, Minnesota 55402; Treasurer of FAIF, FAF, FASF and FAIP since
March 11, 2000; Senior Vice President of U.S. Bancorp Asset Management since May
2001; Senior Vice President of First American Asset Management from 1998 through
May 2001 and of Firstar Investment & Research Management Company from February
2001 through May 2001; Senior Vice President of Piper Capital Management Inc.
through 1998. Age: 38.
James L. Chosy, U.S. Bancorp Asset Management, Inc. 800 Nicollet Mall,
Minneapolis, Minnesota 55402; Secretary of FAIF, FAF, FASF and FAIP since
February 2001; Associate General Counsel of U.S. Bancorp since 1996. Age: 38.
Michael J. Radmer, 50 South Sixth Street, Suite 1500, Minneapolis,
Minnesota 55402; Assistant Secretary of FAIF, FAF, FASF and FAIP since March
2000; Partner, Dorsey & Whitney LLP, a Minneapolis-based law firm and general
counsel of FAIF, FAF and FASF. Age: 56.
James D. Alt, 50 South Sixth Street, Suite 1500, Minneapolis, Minnesota
55402; Assistant Secretary of FAF, FAIF and FASF since September 1998, and of
FAIP since September 1999; Partner, Dorsey & Whitney LLP, a Minneapolis- based
law firm. Age: 50.
38
Kathleen L. Prudhomme, 50 South Sixth Street, Suite 1500, Minneapolis,
Minnesota 55402; Assistant Secretary of FAF, FAIF and FASF since September 1998,
and of FAIP since September 1999; Partner, Dorsey & Whitney LLP, a Minneapolis-
based law firm. Age: 48.
Douglas G. Hess, 612 E. Michigan Street, Milwaukee, WI 53202; Assistant
Secretary for FAIF, FAF, FASF and FAIP since September 19, 2001; Assistant Vice
President, Fund Compliance Administrator, U.S. Bancorp Fund Services, LLC (FKA
Firstar Mutual Fund Services, LLC) since March 1997. Age: 34.
COMPENSATION
The First American Family of Funds, which includes FAIF, FAF, FASF,
FAIP and the FACEF, currently pays only to directors of the funds who are not
paid employees or affiliates of the funds, a fee of $27,000 per year ($40,500 in
the case of the Chair) plus $4,000 ($6,000 in the case of the Chair) per meeting
of the Board attended and $1,200 per committee meeting attended ($1,800 in the
case of a committee chair) and reimburses travel expenses of directors and
officers to attend Board meetings. In the event of telephonic Board or committee
meetings, each director receives a fee of $500 per Board or committee meeting
($750 in the case of the Chair or committee chair). In addition, directors may
receive a per diem fee of $1,500 per day, plus travel expenses when directors
travel out of town on Fund business. However, directors do not receive the
$1,500 per diem amount plus the foregoing Board or committee fee for an
out-of-town committee or Board meeting but instead receive the greater of the
total per diem fee or meeting fee. Legal fees and expenses are also paid to
Dorsey & Whitney LLP, the law firm of which Michael J. Radmer, James D. Alt, and
Kathleen L. Prudhomme, Assistant Secretaries of FAIF, FAF, FASF, FAIP and FACEF,
are partners. The following table sets forth information concerning aggregate
compensation paid to each director of FAIF (i) by FAIF (column 2), and (ii) by
FAIF, FAF, FASF, FAIP and FACEF collectively (column 5) during the fiscal year
ended September 30, 2001. No executive officer or affiliated person of FAIF
received any compensation from FAIF in excess of $60,000 during such fiscal
year:
(1) (2) (3) (4) (5)
NAME OF PERSON, POSITION AGGREGATE PENSION OR ESTIMATED ANNUAL TOTAL COMPENSATION
COMPENSATION RETIREMENT BENEFITS UPON FROM REGISTRANT AND
FROM REGISTRANT(1) BENEFITS ACCRUED RETIREMENT FUND COMPLEX PAID
AS PART OF FUND TO DIRECTORS(2)
EXPENSES
Robert J. Dayton, Director $23,146 -0- -0- $63,600
Andrew S. Duff, Director (3, 4, 5) N/A N/A N/A N/A
Roger A. Gibson, Director 20,713 -0- -0- 60,600
Andrew M. Hunter III, Director 20,953 -0- -0- 65,550
Leonard W. Kedrowski, Director 24,725 -0- -0- 76,150
Robert L. Spies, Director (3) 23,352 -0- -0- 66,350
John M. Murphy, Jr., Director (4) N/A N/A N/A N/A
Richard K. Riederer, Director (3) 2,821 -0- -0- 7,750
Joseph D. Strauss, Director 27,448 -0- -0- 77,300
Virginia L. Stringer, Director 30,430 -0- -0- 92,300
James M. Wade, Director (3) 3,002 -0- -0- 8,250
- ----------------------------
(1) Included in the Aggregate Compensation From Registrant under column 2
are amounts deferred by Directors pursuant to the Deferred Compensation
Plan discussed below. Pursuant to this Plan, compensation was deferred
for the following directors: Roger A. Gibson, $9,685.24; Andrew M.
Hunter III, $20,953; Leonard W. Kedrowski, $21,568; Robert L. Spies,
$5,738; Joseph D. Strauss, $4,942; and Virginia L. Stringer, $22,815.
(2) Deferred compensation is included in the Total Compensation under
column 5 for the following directors: Roger A. Gibson, $30,300; Andrew
M. Hunter III, $65,550; Leonard W. Kedrowski, $67,475; Robert L. Spies,
$17,950; Joseph D. Strauss, $15,460; and Virginia L. Stringer, $71,375.
(3) Robert L. Spies did not stand for re-election at the August 30, 2001
shareholder meeting. At that same meeting, Andrew S. Duff, Richard K.
Riederer and James M. Wade were elected to the Board of Directors.
(4) As "interested persons," Andrew S. Duff and John M. Murphy do not
receive compensation from FAIF, FAF, FASF, FAIP or FACEF for their
position on the Board of Directors.
(5) Andrew S. Duff resigned from the Board of Directors on December 5,
2001.
39
The directors may elect to defer payment of up to 100% of the fees they
receive in accordance with a Deferred Compensation Plan (the "Plan"). Under the
Plan, a director may elect to have his or her deferred fees treated as if they
had been invested in the shares of one or more funds and the amount paid to the
director under the Plan will be determined based on the performance of such
investments. Distributions may be taken in a lump sum or over a period years.
The Plan will remain unfunded for federal income tax purposes under the Internal
Revenue Code of 1986, as amended. Deferral of director fees in accordance with
the Plan will have a negligible impact on fund assets and liabilities and will
not obligate the funds to retain any director or pay any particular level of
compensation.
CODE OF ETHICS
First American Investment Funds, Inc., U.S. Bancorp Asset Management,
Inc., Marvin & Palmer Associates, Inc., Federated Global Investment Management
Corp., Clay Finlay Inc. and Quasar Distributors, LLC have each adopted a Code of
Ethics pursuant to Rule 17j-1 of the 1940 Act. Each of these Codes of Ethics
permits personnel to invest in securities for their own accounts, including
securities that may be purchased or held by the Funds. These Codes of Ethics are
on public file with, and are available from, the Securities and Exchange
Commission.
INVESTMENT ADVISORY AND OTHER SERVICES FOR THE FUNDS
INVESTMENT ADVISOR
U.S. Bancorp Asset Management, Inc. (the "Advisor") (FKA U.S. Bancorp
Piper Jaffray Asset Management, Inc.), 800 Nicollet Mall, Minneapolis, Minnesota
55402, serves as the investment advisor and manager of the Funds. The Advisor is
a wholly owned subsidiary of U.S. Bank, 800 Nicollet Mall, Minneapolis,
Minnesota 55402, a national banking association that has professionally managed
accounts for individuals, insurance companies, foundations, commingled accounts,
trust funds, and others for over 75 years. U.S. Bank is, in turn, a subsidiary
of U.S. Bancorp, 800 Nicollet Mall, Minneapolis, Minnesota 55402, which is a
regional multi-state bank holding company headquartered in Minneapolis,
Minnesota that primarily serves the Midwestern, Rocky Mountain and Northwestern
states. U.S. Bancorp operates four banks and eleven trust companies with banking
offices in twenty-four contiguous states. U.S. Bancorp also has various other
subsidiaries engaged in financial services. At September 30, 2001, U.S. Bancorp
and its consolidated subsidiaries had consolidated assets of approximately
$167.8 billion, consolidated deposits of $103.8 billion and shareholders' equity
of $16.8 billion.
Pursuant to an Investment Advisory Agreement dated April 2, 1991 (the
"Advisory Agreement") as amended, the Funds engaged U.S. Bank, through its First
American Asset Management division ("FAAM"), to act as investment Advisor for
and to manage the investment of the Funds' assets. The Advisory Agreement was
assigned to the Advisor on May 2, 2001. The monthly fees paid to the Advisor are
calculated on an annual basis based on the Fund's average daily net assets
(before any waivers), as set forth in the table below:
GROSS ADVISORY FEE EFFECTIVE GROSS ADVISORY FEE PRIOR TO
NAME OF FUND OCTOBER 1, 2001 OCTOBER 1, 2001
Balanced Fund 0.65% 0.65%
Capital Growth Fund 0.65 0.65
Equity Income Fund 0.65 0.70
Growth & Income Fund 0.65 0.65
Large Cap Core Fund 0.65 0.65
Large Cap Growth Fund 0.65 0.70
Large Cap Value Fund 0.65 0.70
Relative Value Fund 0.65 0.65
Equity Index Fund 0.25 0.70
Mid Cap Index Fund 0.25 0.70
Small Cap Index Fund 0.40 0.40
Micro Cap Fund 1.40 1.40
Mid Cap Core Fund 0.70 0.70
Mid Cap Growth Fund 0.70 0.70
Mid Cap Value Fund 0.70 0.70
Small Cap Core Fund 0.70 0.70
Small Cap Growth Fund 0.70 0.70
Small Cap Value Fund 0.70 0.70
Emerging Markets Fund 1.15 0.70
40
International Fund 1.10 1.10
Health Sciences Fund 0.70 0.70
Real Estate Securities Fund 0.70 0.70
Science & Technology Fund 0.70 0.70
Technology Fund 0.70 0.70
Bond IMMDEX Fund 0.30 0.30
Corporate Bond Fund 0.70 0.70
Fixed Income Fund 0.50 0.70
High Yield Bond Fund 0.70 0.70
Intermediate Term Bond Fund 0.50 0.50
Short Term Bond Fund 0.50 0.70
Strategic Income Fund 0.70 0.70
U.S. Government Securities Fund 0.50 0.50
Arizona Tax Free Fund 0.50 0.70
California Intermediate Tax Free Fund 0.50 0.70
California Tax Free Fund 0.50 0.70
Colorado Intermediate Tax Free Fund 0.50 0.70
Colorado Tax Free Fund 0.50 0.70
Intermediate Tax Free Fund 0.50 0.70
Minnesota Intermediate Tax Free Fund 0.50 0.70
Minnesota Tax Free Fund 0.50 0.70
Missouri Tax Free Fund 0.50 0.50
Nebraska Tax Free Fund 0.50 0.70
Oregon Intermediate Tax Free Fund 0.50 0.70
Tax Free Fund 0.50 0.50
On February 8, 2001, Firstar Investment Research & Management Co., a
Wisconsin limited liability company ("FIRMCO"), became affiliated with FAAM when
its parent corporation, Firstar Corporation merged with U.S. Bancorp. On May 2,
2001, FAAM and FIRMCO combined operations to form the Advisor, and assigned to
the Advisor all related advisory agreements. Prior to May 2, 2001, the Equity
Funds (except for Capital Growth Fund, Growth & Income Fund, Large Cap Core
Fund, Relative Value Fund, Mid Cap Index Fund, Small Cap Index Fund, Micro Cap
Fund, Mid Cap Core Fund, Small Cap Core Fund and Science & Technology Fund), the
Bond Funds (except Bond IMMDEX Fund and U.S. Government Securities Fund), and
the Tax Free Funds (except Missouri Tax Free Fund), were advised by, and paid
fees to, FAAM. Prior to May 2, 2001, Mid Cap Index Fund (successor by merger to
Firstar MidCap Index Fund), Small Cap Index Fund (successor by merger to Firstar
Small Cap Index Fund), Science & Technology Fund (successor by merger to Firstar
Science & Technology Fund), International Fund (successor by merger to Firstar
International Growth Fund), Micro Cap Fund (successor by merger to Firstar
MicroCap Fund), Mid Cap Core Fund (successor by merger to Firstar MidCap Core
Equity Fund), Small Cap Core Fund (successor by merger to Firstar Small Cap Core
Equity Fund), Capital Growth Fund (successor by merger to Firstar Large Cap
Growth Fund), Relative Value Fund (successor by merger to Firstar Relative Value
Fund), Large Cap Core Fund (successor by merger to Firstar Large Cap Core Equity
Fund), Growth & Income Fund (successor by merger to Firstar Growth & Income
Fund), Bond IMMDEX Fund (successor by merger to Firstar Bond IMMDEX Fund), U.S.
Government Securities Fund (successor by merger to Firstar U.S. Government
Securities Fund), and Missouri Tax Free Fund (successor by merger to Firstar
Missouri Tax Exempt Bond Fund), were advised by, and paid fees to, FIRMCO.
On November 27, 2000, the Firstar U.S. Government Securities Fund,
International Growth Fund, and Small Cap Core Equity Fund became the successors
by merger to the Mercantile U.S. Government Securities Portfolio, International
Equity Portfolio and Small Cap Equity Portfolio, respectively. On December 11,
2000, the Firstar Missouri Tax Exempt Bond Fund and Small Cap Index Fund became
the successors by merger to the Mercantile Missouri Tax-Exempt Bond Portfolio
and Small Cap Equity Index Portfolio, respectively. Prior to March 1, 2000,
investment advisory services for the Mercantile Funds were provided by
Mississippi Valley Advisors, Inc. ("MVA"), an indirect wholly-owned subsidiary
of Mercantile Bancorporation, Inc.
On December 11, 2000, the Firstar Science & Technology Fund, Large Cap
Growth Fund, and Relative Value Fund became the sucessors by merger to the
Firstar Stellar Science & Technology Fund, Growth Equity Fund, and Relative
Value Fund, respectively. Prior to April 1, 2000, investment advisory services
for the Firstar Stellar Funds were provided by the Capital Management Division
of Firstar Bank National Association ("Capital Management"), a subsidiary of
Firstar Corporation.
The Advisory Agreement requires the Advisor to arrange, if requested by
FAIF, for officers or employees of the Advisor to serve without compensation
from the Funds as directors, officers, or employees of FAIF if duly elected
41
to such positions by the shareholders or directors of FAIF. The Advisor has the
authority and responsibility to make and execute investment decisions for the
Funds within the framework of the Funds' investment policies, subject to review
by the Board of Directors of FAIF. The Advisor is also responsible for
monitoring the performance of the various organizations providing services to
the Funds, including the Funds' distributor, shareholder services agent,
custodian, and accounting agent, and for periodically reporting to FAIF's Board
of Directors on the performance of such organizations. The Advisor will, at its
own expense, furnish the Funds with the necessary personnel, office facilities,
and equipment to service the Funds' investments and to discharge its duties as
investment advisor of the Funds.
In addition to the investment advisory fee, each Fund pays all of its
expenses that are not expressly assumed by the Advisor or any other organization
with which the Fund may enter into an agreement for the performance of services.
Each Fund is liable for such nonrecurring expenses as may arise, including
litigation to which the Fund may be a party. FAIF may have an obligation to
indemnify its directors and officers with respect to such litigation. The
Advisor will be liable to the Funds under the Advisory Agreement for any
negligence or willful misconduct by the Advisor other than liability for
investments made by the Advisor in accordance with the explicit direction of the
Board of Directors or the investment objectives and policies of the Funds. The
Advisor has agreed to indemnify the Funds with respect to any loss, liability,
judgment, cost or penalty that a Fund may suffer due to a breach of the Advisory
Agreement by the Advisor.
The Advisor has agreed to a contractual fee waiver for each of the
Funds through September 30, 2002. This waiver is set forth in the Funds'
Prospectuses. Additionally, the Advisor may, at its option, waive any or all of
its fees, or reimburse expenses, with respect to any Fund from time to time. Any
such waiver or reimbursement is voluntary and may be discontinued at any time.
The Advisor also may absorb or reimburse expenses of the Funds from time to
time, in its discretion, while retaining the ability to be reimbursed by the
Funds for such amounts prior to the end of the fiscal year. This practice would
have the effect of lowering a Fund's overall expense ratio and of increasing
yield to investors, or the converse, at the time such amounts are absorbed or
reimbursed, as the case may be.
The following table sets forth the contractual fee caps to which the
Advisor has agreed through September 30, 2002 for each of the Funds' share
classes. These expense limits on the annual operating expenses of the share
classes within each Fund may be terminated at any time after September 30, 2002
upon prior notice to FAIF's Board of Directors.
CONTRACTUAL FEE CAPS, OCTOBER 1, 2001 - SEPTEMBER 30, 2002
CLASS A CLASS B CLASS C CLASS S CLASS Y
Balanced Fund 1.05% 1.80% 1.80% 1.05% 0.80%
Capital Growth Fund 1.15 1.90 1.90 1.15 0.90
Equity Income Fund 1.15 1.90 1.90 1.15 0.90
Growth & Income Fund 1.15 1.90 1.90 1.15 0.90
Large Cap Core Fund 1.15 1.90 1.90 1.15 0.90
Large Cap Growth Fund 1.15 1.90 1.90 1.15 0.90
Large Cap Value Fund 1.15 1.90 1.90 1.15 0.90
Relative Value Fund 1.15 1.90 1.90 1.15 0.90
Equity Index Fund 0.62 1.37 1.37 0.62 0.37
Mid Cap Index Fund 0.75 1.50 1.50 0.75 0.50
Small Cap Index Fund 0.93 1.68 1.68 0.93 0.68
Micro Cap Fund 1.93 2.68 2.68 1.93 1.68
Mid Cap Core Fund 1.20 1.95 1.95 1.20 0.95
Mid Cap Growth Fund 1.20 1.95 1.95 1.20 0.95
Mid Cap Value Fund 1.20 1.95 1.95 1.20 0.95
Small Cap Core 1.21 1.96 1.96 1.21 0.96
Small Cap Growth Fund 1.23 1.98 1.98 1.23 0.98
Small Cap Value Fund 1.23 1.98 1.98 1.23 0.98
Emerging Markets Fund 1.70 2.45 2.45 1.70 1.45
International Fund 1.60 2.35 2.35 1.60 1.35
Health Sciences Fund 1.23 1.98 1.98 1.23 0.98
Real Estate Securities Fund 1.23 1.98 1.98 1.23 0.98
Science & Technology Fund 1.23 1.98 1.98 1.23 0.98
Technology Fund 1.23 1.98 1.98 1.23 0.98
Bond IMMDEX Fund 0.73 1.48 1.48 0.73 0.48
Corporate Bond Fund 1.00 1.75 1.75 1.00 0.75
Fixed Income Fund 0.95 1.70 1.70 0.95 0.70
High Yield Bond Fund 1.23 1.98 1.98 1.23 0.98
42
Intermediate Term Bond Fund 0.75 NA NA 0.75 0.60
Short Term Bond Fund 0.75 NA NA 0.75 0.60
Strategic Income Fund 1.20 1.95 1.95 1.20 0.95
U.S. Government Securities Fund 0.95 1.70 1.70 0.95 0.70
Arizona Tax Free Fund 0.75 NA 1.15 NA 0.50
California Intermediate Tax Free Fund 0.85 NA NA NA 0.70
California Tax Free Fund 0.75 NA 1.15 NA 0.50
Colorado Intermediate Tax Free Fund 0.85 NA NA NA 0.70
Colorado Tax Free Fund 0.75 NA 1.15 NA 0.50
Intermediate Tax Free Fund 0.85 NA NA NA 0.70
Minnesota Intermediate Tax Free Fund 0.85 NA NA NA 0.70
Minnesota Tax Free Fund 0.95 NA 1.35 NA 0.70
Missouri Tax Free Fund 0.95 NA 1.35 NA 0.70
Nebraska Tax Free Fund 0.75 NA 1.15 NA 0.50
Oregon Intermediate Tax Free Fund 0.85 NA NA NA 0.70
Tax Free Fund 0.95 NA 1.35 NA 0.70
The following table sets forth total advisory fees before waivers and
after waivers for each of the Funds for the fiscal years/periods ended September
30, 1999, September 30, 2000 and September 30, 2001 (unless a different fiscal
year/period is indicated in note (1) below):
FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED
SEPTEMBER 30, 1999(1) SEPTEMBER 30, 2000(1) SEPTEMBER 30, 2001
ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE
BEFORE WAIVERS AFTER WAIVERS BEFORE WAIVERS AFTER WAIVERS BEFORE WAIVERS AFTER WAIVERS
Balanced Fund(2) $1,952,603 $1,796,430 $1,879,282 $1,734,918 $1,873,731 $1,707,103
Capital Growth Fund(2) 1,781,768 1,781,768 2,271,505 2,271,505 2,261,044 1,957,638
Equity Income Fund 2,834,648 2,308,494 2,354,420 1,874,263 2,084,988 1,626,650
Growth & Income Fund 5,586,780 5,581,009 5,335,470 5,294,525 5,763,080 5,542,266
Large Cap Core Fund 2,381,414 2,378,404 2,835,795 2,813,264 2,898,939 2,730,259
Large Cap Growth Fund 6,862,041 6,000,262 8,886,280 7,813,499 6,988,876 6,064,258
Large Cap Value Fund 11,515,418 9,940,990 10,257,162 8,700,104 9,205,397 7,908,712
Relative Value Fund(2) 3,788,262 3,788,262 3,692,344 3,692,344 3,331,527 3,283,965
Equity Index Fund 10,005,115 2,309,440 11,687,402 2,720,425 10,651,265 2,490,967
Mid Cap Index Fund * * 247,864 97,159 448,266 379,218
Small Cap Index Fund(3, 7) 97,603 74,849 262,983 262,983 282,842 269,425
Mid Cap Core Fund 4,218,565 4,187,456 3,762,856 3,681,552 3,812,758 3,697,178
Mid Cap Growth Fund 2,483,590 2,244,808 3,912,054 3,780,104 3,312,806 3,124,381
Mid Cap Value Fund 2,891,610 2,750,842 2,068,403 1,950,974 2,361,812 2,353,406
Small Cap Core Fund(3) 942,833 942,833 1,032,417 1,032,417 2,336,093 2,247,159
Small Cap Growth Fund 1,575,724 1,546,633 3,333,951 3,333,468 3,298,995 3,298,995
Small Cap Value Fund 2,549,308 2,528,873 2,857,406 2,768,459 3,595,223 3,583,356
Emerging Markets Fund 429,305 330,597 787,463 668,908 692,097 572,448
International Fund(3) 785,618 784,585 1,227,755 1,159,402 1,688,229 1,483,313
Health Sciences Fund 131,449 103,060 146,307 85,262 233,301 144,241
Real Estate Securities Fund 445,053 364,865 376,470 275,661 449,460 312,183
Science & Technology Fund(2, 8) 67,931 67,931 899,433 899,433 744,490 574,261
Technology Fund 1,253,307 1,228,286 4,307,127 4,301,127 2,215,012 2,025,879
Bond IMMDEX Fund 1,578,420 1,577,620 1,592,702 1,578,650 1,847,907 1,670,581
Corporate Bond Fund(4) * * 297,420 89,400 710,544 266,580
Fixed Income Fund 9,864,222 7,188,015 9,724,384 7,109,545 9,467,284 7,049,515
High Yield Bond Fund (6) * * * * 6,319 3,872
Intermediate Term Bond Fund(2) 1,586,952 1,165,094 1,943,772 1,443,332 2,339,758 1,850,869
Short Term Bond Fund 1,046,735 637,281 1,132,777 335,843 1,268,971 269,988
Strategic Income Fund 1,142,576 1,086,065 1,706,086 1,673,605 1,593,338 1,555,914
U.S. Government Securities Fund(3) 479,599 479,599 272,596 272,596 1,082,701 823,696
Arizona Tax Free Fund(4) * * 40,166 -- 132,167 --
California Intermediate Tax
Free Fund 287,232 198,408 305,743 205,673 324,629 205,184
California Tax Free Fund(4) * * 37,816 -- 184,428 --
Colorado Intermediate Tax
Free Fund 447,143 321,469 413,509 232,673 387,657 174,235
Colorado Tax Free Fund(4) * * 38,773 -- 140,831 --
Intermediate Tax Free Fund 3,296,007 2,509,362 2,831,496 2,149,546 2,520,600 1,895,567
Minnesota Intermediate Tax
Free Fund 2,219,324 1,681,218 1,884,664 1,415,791 1,813,242 1,348,943
Minnesota Tax Free Fund 906,461 626,135 926,645 624,518 1,073,107 719,891
Missouri Tax Free Fund(3) 586,025 586,025 578,126 578,126 635,857 564,562
43
Nebraska Tax Free Fund (5) * * * * 94,020 --
Oregon Intermediate Tax
Free Fund 1,324,741 1,004,343 1,215,544 905,584 1,116,830 815,653
Tax Free Fund(3) 2,017,683 2,017,683 1,365,130 1,365,130 2,053,898 2,053,898
Micro Cap Fund 1,942,576 1,941,648 5,060,648 5,060,648 4,793,689 4,620,581
- -------------------------------------
* Fund was not in operation during this fiscal year/period.
(1) Information for the predecessor funds of Mid Cap Index Fund, Micro Cap
Fund, Mid Cap Core Fund, Large Cap Core Fund, Growth & Income Fund,
Bond IMMDEX Fund, Intermediate Term Bond, and Balanced Fund is for the
fiscal years/periods ended October 31, 1999 and 2000. Information for
the predecessor funds of U.S. Government Securities Fund, Missouri Tax
Free Fund, Tax Free Fund, Relative Value Fund, Capital Growth Fund,
International Fund, Small Cap Index Fund, Small Cap Core Fund, and
Science & Technology Fund is for the fiscal years/periods ended October
31, 2000 and November 30, 1999. Information includes fees paid by the
predecessor funds to FIRMCO, MVA, and Capital Management.
(2) Investment advisory services prior to May 2, 2001, were provided by
FIRMCO. Investment advisory services prior to April 1, 2000 were
provided by Capital Management.
(3) Investment advisory services prior to May 2, 2001, were provided by
FIRMCO. Investment advisory services prior to March 1, 2000 were
provided by MVA.
(4) Commenced operations on February 1, 2000.
(5) Commenced operations on February 28, 2001.
(6) Commenced operations on August 30, 2001.
(7) Commenced operations on December 30, 1998.
(8) Commenced operations on August 9, 1999.
SUB-ADVISORS FOR EMERGING MARKETS FUND, INTERNATIONAL FUND AND STRATEGIC INCOME
FUND
Marvin & Palmer Associates, Inc., 1201 North Market Street, Suite 2300,
Wilmington, Delaware 19801 ("Marvin & Palmer") is sub-advisor for Emerging
Markets Fund under an agreement with the Advisor (the "Marvin & Palmer
Sub-Advisory Agreement"). David F. Marvin and Stanley Palmer founded Marvin &
Palmer, a privately held company, in 1986. Marvin & Palmer is engaged in the
management of global, non-United States, United States and emerging markets
equity portfolios principally for institutional accounts. As of September 30,
2001, Marvin & Palmer managed a total of approximately, $6.6 billion in
investments. Pursuant to the Marvin & Palmer Sub-Advisory Agreement, Marvin &
Palmer is responsible for the investment and reinvestment of Emerging Markets
Fund's assets and the placement of brokerage transactions in connection
therewith. Under the Marvin & Palmer Sub-Advisory Agreement, Marvin & Palmer is
required, among other things, to report to the Advisor or the Board regularly at
such times and in such detail as the Advisor or the Board may from time to time
request in order to permit the Advisor and the Board to determine the adherence
of Emerging Markets Fund to their respective investment objectives, policies and
restrictions. The Marvin & Palmer Sub-Advisory Agreement also requires Marvin &
Palmer to provide all office space, personnel and facilities necessary and
incident to Marvin & Palmer's performance of its services under the Marvin &
Palmer Sub-Advisory Agreement.
For its services to Emerging Markets Fund under the Marvin & Palmer
Sub-Advisory Agreement, Marvin & Palmer is paid a monthly fee by the Advisor
calculated on an annual basis equal to 0.85% of the first $100 million of
Emerging Markets Fund's average daily net assets, 0.60% of Emerging Markets
Fund's average daily net assets in excess of $100 million up to $300 million,
0.55% of Emerging Markets Fund's average daily net assets in excess of $300
million up to $500 million, and 0.50% of Emerging Markets Fund's average daily
net assets in excess of $500 million.
The following table sets forth total sub-advisory fees before waivers
and after waivers for the Emerging Markets Fund for the fiscal years ended
September 30, 1999, September 30, 2000 and September 30, 2001:
FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 2000 SEPTEMBER 30, 2001
ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE
BEFORE WAIVERS AFTER WAIVERS BEFORE WAIVERS AFTER WAIVERS BEFORE WAIVERS AFTER WAIVERS
Emerging Markets Fund NA NA NA NA $471,594 $471,594
Clay Finlay Inc. ("Clay Finlay"), 200 Park Avenue, New York, New York,
10166, is the sub-advisor to the International Fund under an agreement with the
Advisor (the "Clay Finlay Sub Advisory Agreement"), and is responsible for the
investment and reinvestment of the fund's assets and the placement of brokerage
transaction for the
44
fund. Clay Finlay has been retained by the fund's investment advisor and is paid
a portion of the advisory fee. Clay Finlay, an international equity investment
management firm, headquartered in New York, was founded in 1982, and has a
network of offices in London, Geneva, Melbourne and Tokyo. International equity
investment management has always been Clay Finlay's only business. Clay Finlay
offers a full range of Global, International (Diversified and Concentrated) and
regional (Europe, Continental Europe, Japan, Pacific Basin ex Japan and Global
Emerging Markets) equity mandates. Clay Finlay is a wholly owned subsidiary of
Old Mutual plc. Old Mutual is a publicly owned international financial services
group listed on the London Stock Exchange. As of September 30, 2001, Clay Finlay
had $4.6 billion in assets under management.
For its services to International Fund under the Clay Finlay
Sub-Advisory Agreement, Clay Finlay is paid a monthly fee by the Advisor
calculated on an annual basis equal to 0.25% of the first $500 million of
International Fund's average daily net assets, 0.10% of International Fund's
average daily net assets in excess of $500 million.
Prior to May 2, 2001, Clay Finlay was the sub-advisor to the Firstar
International Growth Fund (predecessor to the First American International Fund)
under an agreement with FIRMCO. For the services provided and expenses assumed
pursuant to its sub-advisory agreement with FIRMCO, Clay Finlay received a fee
from FIRMCO, computed daily and payable monthly, at the annual rate of 0.75% of
the first $50 million of the International Growth Fund's average daily net
assets, plus 0.50% of the next $50 million of average daily net assets, plus
0.25% of average daily net assets in excess of $100 million. Clay Finlay was
responsible for all expenses incurred by it in connection with its services
under the sub-advisory agreement. On November 27, 2000, the Firstar Core
International Equity Fund and the predecessor Mercantile International Equity
Portfolio reorganized into the Firstar International Growth Fund. Prior to
November 27, 2000, the Glenmede Trust Company served as sub-advisor to the
Firstar Core International Equity Fund
The following table sets forth total sub-advisory fees before waivers
and after waivers for the International Fund for the fiscal years/periods ended
November 30, 1999, October 31, 2000, and September 30, 2001:
FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED
NOVEMBER 30, 1999 OCTOBER 31, 2000 SEPTEMBER 30, 2001
ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE
BEFORE WAIVERS AFTER WAIVERS BEFORE WAIVERS AFTER WAIVERS BEFORE WAIVERS AFTER WAIVERS
International Fund(1) $526,364 $526,364 $659,914 $659,914 $3,129,697 $3,129,697
- -------------------------------
(1) On September 24, 2001, the International Fund merged with the Firstar
International Growth Fund. Historical information presented is for the
Firstar International Growth Fund.
Federated Global Investment Management Corp., 175 Water Street, New
York, New York 10038-4965 ("Federated Global"), a subsidiary of Federated
Investors, Inc. ("Federated"), is a sub-advisor for Strategic Income Fund under
an agreement with the Advisor (the "Federated Sub-Advisory Agreement").
Federated Global, which is a Delaware corporation, is a registered investment
advisor under the Investment Adviser's Act of 1940. As of September 30, 2001,
Federated Global, and such other subsidiaries of Federated rendered investment
advice regarding over $125 billion of assets. Pursuant to the Federated
Sub-Advisory Agreement, Federated Global is responsible for the investment of
the international portion of Strategic Income Fund's assets. Under the Federated
Sub-Advisory Agreement, Federated Global is required, among other things, to
report to the Advisor or the Board regularly at such times and in such detail as
the Advisor or the Board may from time to time request in order to permit the
Advisor and the board to determine the adherence of Strategic Income Fund to its
investment objectives, policies and restrictions. The Federated Sub-Advisory
Agreement also requires Federated Global to provide all office space, personnel
and facilities necessary and incident to Federated Global's performance of its
services under the Federated Sub-Advisory Agreement.
For its services under the Sub-Advisory Agreement, Federated Global is
paid a monthly fee by the Advisor calculated on an annual basis equal to 0.40%
of the first $25 million of Strategic Income Fund's average daily net assets,
0.33% of Strategic Income Fund's average daily net assets in excess of $25
million up to $50 million, 0.26%] of Strategic Income Fund's average daily net
assets in excess of $50 million up to $100 million and 0.21% of Strategic Income
Fund's average daily net assets in excess of $100 million.
45
The following table sets forth total sub-advisory fees before waivers
and after waivers for the Strategic Income Fund for the fiscal years ended
September 30, 1999, September 30, 2000 and September 30, 2001:
FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 2000 SEPTEMBER 30, 2001
ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE ADVISORY FEE
BEFORE WAIVERS AFTER WAIVERS BEFORE WAIVERS AFTER WAIVERS BEFORE WAIVERS AFTER WAIVERS
Strategic Income Fund NA NA NA NA $290,786 $290,786
ADMINISTRATOR
U.S. Bancorp Asset Management, Inc. and U.S. Bancorp Fund Services, LLC
("UBFS") (FKA Firstar Mutual Fund Services, LLC), 615 East Michigan Street,
Milwaukee, WI 53202 (collectively the "Administrators"), serve as
co-Administrators pursuant to a Co-Administration Agreement between the
Administrators and the Funds, dated as of October 1, 2001 ("Co-Administration
Agreement"). The Administrators will provide administration services to the Fund
and serve as the Funds' Administrators. U.S. Bancorp Fund Services is a
subsidiary of U.S. Bancorp. Under the Co-Administration Agreement, the
Administrators provide, or compensate others to provide, services to the Funds.
These services include various oversight and legal services, accounting
services, dividend disbursing services and shareholder services. Pursuant to the
Co-Administration Agreement, UBFS will also serve as each Fund's transfer agent.
The Funds pay the Administrators fees which are calculated daily and paid
monthly, equal to each fund's pro rata share of an amount equal, on an annual
basis, to 0.25% of the aggregate average daily assets of all open-end mutual
funds in the First American fund family up to $8 billion, 0.235% on the next $17
billion of aggregate average daily assets, 0.22% on the next $25 billion of
aggregate average daily assets, and 0.20% of the aggregate average daily net
assets of all open-end mutual funds in the First American fund family in excess
of $50 billion. (For the purposes of this Agreement, the First American fund
family includes all series of FAF, FASF, FAIF and FAIP.) In addition, the Funds
pay annual fees of $18,500 per CUSIP, shareholder account maintenance fees of $9
to $15 per account, closed account fees of $3.50 per account, and Individual
Retirement Account fees of $15 per account.
Between January 1, 2000 and September 30, 2001 U.S. Bank served as the
sole administrator for the Funds. The Funds paid U.S. Bank fees which were
calculated daily and paid monthly, equal to each Fund's pro rata share of an
amount equal, on an annual basis, to 0.12% of the aggregate average daily assets
of all open-end mutual funds in the First American fund family up to $8 billion
and 0.105% of the aggregate average daily net assets of all open-end mutual
funds in the First American fund family in excess of $8 billion. In addition,
the Funds paid U.S. Bank annual fees of $18,500 per CUSIP, shareholder account
fees of $15 per account, closed account fees of $3.50 per account, and
Individual Retirement Account fees of $15 per account.
Prior to January 1, 2000, SEI Investments Management Corporation served
as the administrator for the Funds. SEI Investments Management Corporation is a
wholly-owned subsidiary of SEI Investments Company. The Funds paid to SEI
Investment Management a fee equal to (i) 0.070% of each Fund's average daily net
assets until aggregate net assets of all Funds exceeded $8 billion and (ii)
0.055% to the extent aggregate net assets of all Funds exceeded $8 billion.
Prior to February 8, 2001, UBFS served as the administrator to the
predecessor funds of Mid Cap Index Fund, Small Cap Index Fund, Science &
Technology Fund, Micro Cap Fund, Mid Cap Core Fund, Small Cap Core Fund, Capital
Growth Fund, Relative Value Fund, Large Cap Core Fund, Growth & Income Fund,
Bond IMMDEX Fund, U.S. Government Securities Fund, Missouri Tax Free Fund, Tax
Free Fund, International Fund, Intermediate Term Bond Fund, and Balanced Fund.
The predecessor funds paid a fee to UBFS for its administrative services. This
fee was computed daily and payable monthly at the annual rate of 0.125% of the
funds' first $2 billion of average aggregate daily net assets, plus 0.10% of the
Fund's average aggregate daily net assets in excess of $2 billion.
From January 1, 1995 until August 1, 2000, B.C. Ziegler, a Wisconsin
based integrated financial services company ("Ziegler") and UBFS served as
co-administrators to the predecessor funds of Mid Cap Index Fund, Science &
Technology Fund, Micro Cap Fund, Mid Cap Core Fund, Capital Growth Fund,
Relative Value Fund, Large Cap Core Fund, Growth & Income Fund, and Bond IMMDEX
Fund. Prior to January 1, 2000, BISYS Fund Services Ohio, Inc. ("BISYS") served
as administrator to the predecessor funds of U.S. Government Securities Fund,
Missouri Tax
46
Free Fund, International Fund, Small Cap Index Fund, and Small Cap Core Fund.
From January 1, 2000 to December 11, 2000, BISYS and UBFS served as
co-administrators of those same funds.
The following table sets forth total administrative fees (including
fund accounting fees), after waivers, paid by each of the Funds listed below to
U.S. Bank, SEI Investment Management Corporation, UBFS, Ziegler, and BISYS, as
applicable, for the fiscal years/periods ended September 30, 1999, September 30,
2000 and September 30, 2001 (unless a different fiscal year/period is indicated
in note (1) below):
FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED
SEPTEMBER 30, 1999(1) SEPTEMBER 30, 2000(1) SEPTEMBER 30, 2001
Balanced Fund $ 340,659 $ 340,669 $ 381,766
Equity Income Fund 441,096 366,080 324,272
Equity Index Fund 1,556,165 1,815,695 1,657,529
Large Cap Growth Fund 1,067,331 1,380,471 1,086,534
Large Cap Value Fund 1,791,165 1,593,660 1,431,250
Mid Cap Growth Fund 386,256 607,344 515,088
Mid Cap Value Fund 450,594 321,389 367,155
Small Cap Growth Fund 245,043 518,615 513,290
Small Cap Value Fund 396,552 443,111 559,760
Small Cap Index Fund(5) 55,027 90,796 95,638
Emerging Markets Fund 48,097 68,505 60,301
International Fund 158,382 125,220 294,554
Health Sciences Fund 20,450 22,782 36,270
Real Estate Securities Fund 69,228 58,485 69,887
Technology Fund 195,024 662,991 344,195
Corporate Bond Fund(2) * 46,333 110,393
Fixed Income Fund 1,534,330 1,510,277 1,472,204
High Yield Bond Fund(4) * * 984
Intermediate Term Bond Fund 301,650 541,154 676,915
Short Term Bond Fund 162,836 175,466 196,546
Strategic Income Fund 178,298 264,860 247,743
Arizona Tax Free Fund(2) * 6,257 20,661
California Intermediate Tax Free Fund 44,676 47,517 50,465
California Tax Free Fund(2) * 5,891 28,669
Colorado Intermediate Tax Free Fund 69,551 64,249 69,273
Colorado Tax Free Fund(2) * 6,039 21,650
Intermediate Tax Free Fund 512,689 439,959 391,669
Minnesota Intermediate Tax Free Fund 344,973 294,726 283,836
Minnesota Tax Free Fund 140,995 143,964 167,679
Nebraska Tax Free Fund(3) * * 14,641
Oregon Intermediate Tax Free Fund 206,058 188,630 174,504
Tax Free Fund 740,949 258,136 525,717
Science & Technology Fund(6) 21,434 170,763 130,431
Micro Cap Fund 168,052 427,277 447,031
Mid Cap Core Fund 603,930 616,414 655,029
Relative Value Fund 672,743 650,428 572,327
Growth & Income Fund 816,014 855,804 962,147
U.S. Government Securities Fund 122,657 76,672 293,722
Mid Cap Index Fund(7) * 156,507 267,000
Small Cap Core Fund 129,009 143,717 408,198
Capital Growth Fund 334,595 412,917 348,499
Large Cap Core Fund 375,732 479,773 516,311
Bond IMMDEX Fund 626,163 712,203 852,266
Missouri Tax Free Fund 140,312 139,426 224,447
Nebraska Tax Free Fund(3) * * 14,641
- ------------------------------
* Fund was not in operation during this fiscal year/period.
(1) Information for the predecessor funds of Mid Cap Index Fund, Micro Cap
Fund, Mid Cap Core Fund, Large Cap Core Fund, Growth & Income Fund,
Bond IMMDEX Fund, Intermediate Term Bond, and Balanced Fund is for the
fiscal years/periods ended October 31, 1999 and 2000. Information for
the predecessor funds of U.S. Government Securities Fund, Missouri Tax
Free Fund, Tax Free Fund, Relative Value Fund, Capital Growth Fund,
International Fund, Small Cap Index Fund, Small Cap Core Fund, and
Science & Technology Fund is for the fiscal years/periods ended
November 30, 1999 and October 31, 2000.
(2) Commenced operations on February 1, 2000.
47
(3) Commenced operations on February 28, 2001
(4) Commenced operations on August 30, 2001.
(5) Commenced operations on December 30, 1998.
(6) Commenced operations on August 9, 1999.
(7) Commenced operations on November 4, 1999.
DISTRIBUTOR
Quasar Distributors, LLC ("Quasar" or the "Distributor") serves as the
distributor for the Funds' shares. The Distributor is a wholly-owned subsidiary
of U.S. Bancorp. Prior to October 1, 2001 SEI Investments Distribution Co.
served as the distributor for the Funds. Prior to September 24, 2001, Quasar
served as the distributor for the predecessor funds of Balanced Fund, Capital
Growth Fund, Growth & Income Fund, Large Cap Core Fund, Relative Value Fund, Mid
Cap Index Fund, Small Cap Index Fund, Micro Cap Fund, Mid Cap Core Fund, Small
Cap Core Fund, International Fund, Science & Technology Fund, Bond IMMDEX Fund,
Intermediate Term Bond Fund, U.S. Government Securities Fund, Missouri Tax Free
Fund and Tax Free Fund. From April 1, 1999 to August 1, 2000, Edgewood Services,
Inc. ("Edgewood"), served as the distributor for the predecessor funds of
Capital Growth Fund, Relative Value Fund and Science & Technology Fund; prior to
April 1, 1999, B.C. Ziegler & Company ("Ziegler"), served as distributor of
these funds. Prior to December 11, 2000, BISYS Fund Services Limited Partnership
("BISYS"), served as the distributor for the predecessor funds of Small Cap
Index Fund, Small Cap Core Fund, International Fund, U.S. Government Securities
Fund, Missouri Tax Free Fund and Tax Free Fund.
The Distributor serves as distributor for the Class A, Class S and
Class Y Shares pursuant to a Distribution Agreement dated October 1, 2001 (the
"Distribution Agreement") between itself and the Funds, as distributor for the
Class B Shares pursuant to a Distribution and Service Agreement dated October 1,
2001, (the "Class B Distribution and Service Agreement") between itself and the
Funds, and as distributor for the Class C Shares pursuant to a Distribution and
Service Agreement dated October 1, 2001 ("Class C Distribution and Service
Agreement") between itself and the Funds. These agreements are referred to
collectively as the "Distribution Agreements."
Fund shares and other securities distributed by the Distributor are not
deposits or obligations of, or endorsed or guaranteed by, U.S. Bank or its
affiliates, and are not insured by the Bank Insurance Fund, which is
administered by the Federal Deposit Insurance Corporation.
Under the Distribution Agreements, the Distributor has agreed to
perform all distribution services and functions of the Funds to the extent such
services and functions are not provided to the Funds pursuant to another
agreement. The Distribution Agreements provide that shares of the Funds are
distributed through the Distributor and, with respect to Class A, Class B, Class
C and Class S Shares, through securities firms, financial institutions
(including, without limitation, banks) and other industry professionals (the
"Participating Institutions") which enter into sales agreements with the
Distributor to perform share distribution or shareholder support services.
Participating Institutions that enter into sales agreements with the Funds'
Distributor to perform share distribution services may receive a commission on
such sales of the Funds (except Equity Index Fund, Mid Cap Index Fund, and Small
Cap Index Fund) equal to 1.00% of the first $3 million, 0.75% of shares
purchased in excess of $3 million up to $5 million, and 0.50% of shares
purchased in excess of $5 million.
Firstar Investment Services, Inc. ("FIS"), U.S. Bancorp Investment
Services, Inc. ("USBI") and U.S. Bancorp Piper Jaffray Inc. ("Piper"),
broker-dealers affiliated with the Advisor, are Participating Institutions. The
Advisor pays FIS, USBI and Piper up to 0.25% of the portion of each Fund's
average daily net assets attributable to Class Y Shares for which FIS, USBI or
Piper are responsible, respectively, in connection with FIS's, USBI's or Piper's
provision of shareholder support services. Such amounts paid to FIS, USBI and
Piper, by the Advisor, will not affect any agreement by the Advisor to limit
expenses of each Fund.
The Class A Shares pay to the Distributor a shareholder servicing fee
at an annual rate of 0.25% of the average daily net assets of the Class A
Shares. The fee may be used by the Distributor to provide compensation for
shareholder servicing activities with respect to the Class A Shares. The
shareholder servicing fee is intended to compensate the Distributor for ongoing
servicing and/or maintenance of shareholder accounts and may be used by the
Distributor to provide compensation to institutions through which shareholders
hold their shares for ongoing servicing and/or maintenance of shareholder
accounts. This fee is calculated and paid each month based on average daily net
assets of Class A Shares each fund for that month.
48
The Class B Shares pay to the Distributor a shareholder servicing fee
at the annual rate of 0.25% of the average daily net assets of the Class B
Shares. The fee may be used by the Distributor to provide compensation for
shareholder servicing activities with respect to the Class B Shares beginning
one year after purchase. The Class B Shares also pay to the Distributor a
distribution fee at the annual rate of 0.75% of the average daily net assets of
the Class B Shares. The distribution fee is intended to compensate the
distributor for advancing a commission to institutions purchasing Class B
Shares.
The Class C Shares pay to the Distributor a shareholder servicing fee
at the annual rate of 0.25% of the average daily net assets of the Class C
Shares. The fee may be used by the Distributor to provide compensation for
shareholder servicing activities with respect to the Class C Shares. This fee is
calculated and paid each month based on average daily net assets of the Class C
Shares. The Class C Shares also pay to the Distributor a distribution fee at the
annual rate of 0.75% of the average daily net assets of the Class C Shares. The
Distributor may use the distribution fee to provide compensation to institutions
through which shareholders hold their shares beginning one year after purchase.
The Class S Shares pay to the Distributor a shareholder servicing fee
at the annual rate of 0.25% of the average daily net assets of Class S Shares.
The fee may be used by the Distributor to provide compensation for shareholder
servicing activities with respect to the Class S Shares. This fee is calculated
and paid each month based on average daily net assets of the Class S Shares.
The Distributor receives no compensation for distribution of the Class
Y Shares.
The Distribution Agreements provide that they will continue in effect
for a period of more than one year from the date of their execution only so long
as such continuance is specifically approved at least annually by the vote of a
majority of the Board members of FAIF and by the vote of the majority of those
Board members of FAIF who are not interested persons of FAIF and who have no
direct or indirect financial interest in the operation of FAIF's Rule 12b-1
Plans of Distribution or in any agreement related to such plans.
The following tables set forth the amount of underwriting commissions
paid by certain Funds and the amount of such commissions retained by the Funds'
Distributor and principal underwriter (Quasar, SEI Investments Distribution Co.,
Ziegler, Edgewood or BISYS, as applicable), during the fiscal years/periods
ended September 30, 1999, September 30, 2000 and September 30, 2001 (unless
otherwise indicated in note (1) below):
TOTAL UNDERWRITING COMMISSIONS
FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED
SEPTEMBER 30, 1999(1) SEPTEMBER 30, 2000(1) SEPTEMBER 30, 2001
Balanced Fund $ 148,658 $ 208,751 $ 91,334
Capital Growth Fund 199,902 57,705 5,810
Equity Income Fund 340,653 214,922 89,047
Growth & Income Fund 516,521 571,452 15,103
Large Cap Core Fund 236,106 264,378 10,187
Large Cap Growth Fund 297,655 1,129,446 149,582
Large Cap Value Fund 618,524 564,986 104,371
Relative Value Fund 129,193 64,183 4,275
Equity Index Fund 3,181,754 2,543,808 291,755
Mid Cap Index Fund * 11,542 1,642
Small Cap Index Fund 515 1,111 419
Micro Cap Fund 49,217 156,400 22,628
Mid Cap Core Fund 114,996 155,009 12,497
Mid Cap Growth Fund 23,734 260,048 100,435
Mid Cap Value Fund 343,008 147,698 56,884
Small Cap Core Fund 10,769 7,875 3,942
Small Cap Growth Fund 59,024 388,839 52,426
Small Cap Value Fund 65,337 195,887 63.936
Emerging Markets Fund 872 5,559 13,218
International Fund 7,400 7,883 136,186
Health Sciences Fund 23,080 157,910 24,604
Real Estate Securities Fund 68,564 30,775 12,208
49
Science & Technology Fund * 64,403 4,124
Technology Fund 281,667 6,088,104 176,189
Bond IMMDEX Fund 447,140 418,903 29,636
Corporate Bond Fund (2) * 12,137 65,982
Fixed Income Fund 440,550 274,713 303,305
High Yield Bond Fund (3) * * 199
Intermediate Term Bond Fund 81,222 79,827 111,830
Short Term Bond Fund 3,541 12,675 72,768
Strategic Income Fund 43,472 37,674 4,626
U.S. Government Securities Fund 16,850 258 2
Arizona Tax Free Fund (2) * 389 213
California Intermediate Tax Free Fund 7,172 10,506 13,543
California Tax Free Fund (2) * 14,561 83,519
Colorado Intermediate Tax Free Fund 3,429 4,880 23,552
Colorado Tax Free Fund (2) * 14,333 59,822
Intermediate Tax Free Fund 50,529 8,250 10,023
Minnesota Intermediate Tax Free Fund 19,630 7,601 14,024
Minnesota Tax Free Fund 49,395 47,023 99,951
Missouri Tax Free Fund 121,876 32,696 704
Nebraska Tax Free Fund (4) * * 0
Oregon Intermediate Tax Free Fund 4,724 3,405 3,034
Tax Free Fund 29,010 378 71,297
- --------------------------------------------
* Fund was not in operation during this fiscal year/period.
(1) Information for the predecessor funds of Balanced Fund, Capital Growth
Fund, Growth & Income Fund, Large Cap Core Fund, Relative Value Fund,
Mid Cap Index Fund, Small Cap Index Fund, Micro Cap Fund, Mid Cap Core
Fund, Small Cap Core Fund, Science & Technology Fund, International
Fund, Bond IMMDEX Fund, Intermediate Term Bond Fund, U.S. Government
Securities Fund, Missouri Tax Free Fund and Tax Free Fund is for the
fiscal year/period ended October 31, 2000; Information for the
predecessor funds of Capital Growth Fund, Relative Value Fund, Small
Cap Core Fund, Small Cap Index Fund, Science & Technology Fund,
International Fund, U.S. Government Securities Fund, Missouri Tax Free
Fund and Tax Free Fund is for the fiscal year/period ended November 30,
1999.
(2) Commenced operations on February 1, 2000.
(3) Commenced operations on August 30, 2001.
(4) Commenced operations on February 28, 2001.
UNDERWRITING COMMISSIONS RETAINED BY THE (APPLICABLE) UNDERWRITER
FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED
SEPTEMBER 30, 1999(1) SEPTEMBER 30, 2000(1) SEPTEMBER 30, 2001
Balanced Fund $ 0 $ 0 $ 0
Capital Growth Fund 0 0 0
Equity Income Fund 6,101 2,497 7,674
Growth & Income Fund 0 0 0
Large Cap Core Fund 0 0 0
Large Cap Growth Fund 14,761 9,423 12,899
Large Cap Value Fund 24,770 10,876 8,980
Relative Value Fund 0 0 0
Equity Index Fund 21,564 12,393 25,144
Mid Cap Index Fund 0 0 0
Small Cap Index Fund 190 411 0
Micro Cap Fund 0 0 0
Mid Cap Core Fund 0 0 0
Mid Cap Growth Fund 5,342 4,146 8,653
Mid Cap Value Fund 6,219 2,193 4,898
Small Cap Core Fund 1,347 1,024 0
Small Cap Growth Fund 3,390 3,533 4,572
Small Cap Value Fund 5,983 3,029 6,039
Emerging Markets Fund 0 467 1,143
International Fund 682 709 0
Health Sciences Fund 283 155 2,123
Real Estate Securities Fund 957 399 980
Science & Technology Fund 0 0 0
Technology Fund 2,695 4,567 15,184
Bond IMMDEX Fund 0 0 0
Corporate Bond Fund (2) * 475 5,715
Fixed Income Fund 21,217 10,307 26,124
High Yield Bond Fund (3) * * 0
50
Intermediate Term Bond Fund 0 0 0
Short Term Bond Fund 2,251 1,201 6,368
Strategic Income Fund 2 1,808 327
U.S. Government Securities Fund 1,786 28 0
Arizona Tax Free Fund (2) * 64 0
California Intermediate Tax Free Fund 618 324 1,143
California Tax Free Fund (2) * 60 7,184
Colorado Intermediate Tax Free Fund 962 438 1,959
Colorado Tax Free Fund (2) * 62 5,225
Intermediate Tax Free Fund 7,089 3,002 816
Minnesota Intermediate Tax Free Fund 4,773 1,998 1,143
Minnesota Tax Free Fund (4) 1,955 982 8,653
Missouri Tax Free Fund 12,209 3,270 0
Nebraska Tax Free Fund * * 0
Oregon Intermediate Tax Free Fund 2,857 1,287 327
Tax Free Fund 1,881 23 0
- -------------------------------
* Fund was not in operation during this fiscal year/period.
(1) Information for the predecessor funds of Balanced Fund, Capital Growth
Fund, Growth & Income Fund, Large Cap Core Fund, Relative Value Fund,
Mid Cap Index Fund, Small Cap Index Fund, Micro Cap Fund, Mid Cap Core
Fund, Small Cap Core Fund, Science & Technology Fund, International
Fund, Bond IMMDEX Fund, Intermediate Term Bond Fund, U.S. Government
Securities Fund, Missouri Tax Free Fund and Tax Free Fund is for the
fiscal year/period ended October 31, 2000; Information for the
predecessor funds of Capital Growth Fund, Relative Value Fund, Small
Cap Core Fund, Small Cap Index Fund, Science & Technology Fund,
International Fund, U.S. Government Securities Fund, Missouri Tax Free
Fund and Tax Free Fund is for the fiscal year/period ended November 30,
1999.
(2) Commenced operations on February 1, 2000.
(3) Commenced operations on August 30, 2001.
(4) Commenced operations on February 28, 2001.
The Distributor, an affiliate, received the following compensation from
certain Funds during its most recent fiscal year (Funds with "NA" designation
were not distributed by the Distributor until October 1, 2001).
NET UNDERWRITING COMPENSATION ON BROKERAGE OTHER
DISCOUNTS AND REDEMPTIONS AND COMMISSIONS COMPENSATION
COMMISSIONS REPURCHASES
Balanced Fund $ 15,611 $ -- -- --
Capital Growth Fund 5,518 -- -- --
Equity Income Fund NA NA -- --
Growth & Income Fund 18,385 -- -- --
Large Cap Core Fund 9,405 -- -- --
Large Cap Growth Fund NA NA -- --
Large Cap Value Fund NA NA -- --
Relative Value Fund 11,016 -- -- --
Equity Index Fund NA NA -- --
Mid Cap Index Fund 5,122 -- -- --
Small Cap Index Fund 1,995 -- -- --
Micro Cap Fund 8,776 -- -- --
Mid Cap Core Fund 13,759 -- -- --
Mid Cap Growth Fund NA NA -- --
Mid Cap Value Fund NA NA -- --
Small Cap Core Fund 8,994 -- -- --
Small Cap Growth Fund NA NA -- --
Small Cap Value Fund NA NA -- --
Emerging Markets Fund NA NA -- --
International Fund 20,418 -- -- --
Health Sciences Fund NA NA -- --
Real Estate Securities Fund NA NA -- --
Science & Technology Fund 991 -- -- --
Technology Fund NA NA -- --
Bond IMMDEX Fund 19,540 -- -- --
Corporate Bond Fund NA NA -- --
Fixed Income Fund NA NA -- --
High Yield Bond Fund NA NA -- --
Intermediate Term Bond Fund 24,276 -- -- --
Short Term Bond Fund NA NA -- --
Strategic Income Fund NA NA -- --
U.S. Government Securities Fund 5,445 -- --
51
Arizona Tax Free Fund NA NA -- --
California Intermediate Tax Free Fund NA NA -- --
California Tax Free Fund NA NA -- --
Colorado Intermediate Tax Free Fund NA NA -- --
Colorado Tax Free Fund NA NA -- --
Intermediate Tax Free Fund NA NA -- --
Minnesota Intermediate Tax Free Fund NA NA -- --
Minnesota Tax Free Fund NA NA -- --
Missouri Tax Free Fund 4,301 -- -- --
Nebraska Tax Free Fund NA NA -- --
Oregon Intermediate Tax Free Fund NA NA -- --
Tax Free Fund 14,425 -- -- --
FAIF has entered into a Shareholder Service Plan and Agreement with the
Distributor, under which the Distributor has agreed to provide FAIF, or will
enter into written agreements with other service providers pursuant to which the
service providers will provide FAIF, one or more specified shareholder services
to beneficial owners of Class S Shares. The Distributor has agreed that the
services provided pursuant to the Shareholder Service Plan and Agreement will in
no event be primarily intended to result in the sale of Class S Shares. Pursuant
to the Shareholder Service Plan and Agreement, the Funds have agreed to pay the
Distributor a fee at an annual rate of 0.25% of the average net asset value of
the Class S Shares, computed daily and paid monthly. The Distributor is to pay
any shareholder service providers with which it enters into written agreements
out of this amount.
The following table sets forth the total shareholder servicing fees,
after waivers, paid by Class S shares of the Funds listed below for the fiscal
years/periods ended September 30, 1999, September 30, 2000 and September 30,
2001 (unless a different fiscal year/period is indicated in note (1) below):
CLASS S SHARE
SHAREHOLDER SERVICING FEES
FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED
SEPTEMBER 30, 1999(1) SEPTEMBER 30, 2000(1) SEPTEMBER 30, 2001
Balanced Fund $ * $ * $86,447
Capital Growth Fund * * 8,012
Equity Income Fund * * 19
Growth & Income Fund * * 116,767
Large Cap Core Fund * * 7,514
Large Cap Growth Fund * * --
Large Cap Value Fund * * --
Relative Value Fund * * 19,128
Equity Index Fund * * 2,163
Mid Cap Index Fund * * 4,268
Small Cap Index Fund 44,955 86,025
Micro Cap Fund * * 1,567
Mid Cap Core Fund * * 939
Mid Cap Growth Fund * * --
Micro Cap Value Fund * * --
Small Cap Core Fund 10,750 9,646
Small Cap Growth Fund * * --
Small Cap Value Fund * * --
Emerging Markets Fund * * --
International Fund * 42,710 27,904
Health Sciences Fund * * 7,734
Real Estate Securities Fund * * --
Science & Technology Fund * * 1,456
Technology Fund * * --
Bond IMMDEX Fund * * 6,618
Corporate Bond Fund * * 140
Fixed Income Fund * * 1,455
High Yield Bond Fund * * --
Intermediate Term Bond Fund * * 575
Short Term Bond Fund * * 21
Strategic Income Fund * * --
U.S. Government Securities Fund * 18,705 18,665
Arizona Tax Free Fund * * *
California Intermediate Tax Free Fund * * *
52
California Tax Free Fund * * *
Colorado Intermediate Tax Free Fund * * *
Colorado Tax Free Fund * * *
Intermediate Tax Free Fund * * *
Minnesota Intermediate Tax Free Fund * * *
Minnesota Tax Free Fund * * *
Missouri Tax Free Fund * * *
Nebraska Tax Free Fund * * *
Oregon Intermediate Tax Free Fund * * *
Tax Free Fund * * *
- -----------------------------
* Fund did not offer share class during time period indicated.
(1) Information for the predecessor funds of Small Cap Index Fund, Small
Cap Core Fund, International Fund and U.S. Government Securities Fund
is for the fiscal years/periods ended November 30, 1999 and October 31,
2000.
FAIF has also adopted Plans of Distribution with respect to the Class
A, Class B and Class C Shares of the Funds, respectively, pursuant to Rule 12b-1
under the 1940 Act (collectively, the "Plans"). Rule 12b-1 provides in substance
that a mutual fund may not engage directly or indirectly in financing any
activity which is primarily intended to result in the sale of shares, except
pursuant to a plan adopted under the Rule. The Plans authorize the Distributor
to retain the sales charges paid upon purchase of Class A, Class B and Class C
Shares. Each of the Plans is a "compensation-type" plan under which the
Distributor is entitled to receive the distribution fee regardless of whether
its actual distribution expenses are more or less than the amount of the fee.
The distribution fees under each of the plans are used for sole-primary purpose
of compensating broker-dealers for their sales of the Funds. The Class B and C
Plans authorize the Distributor to retain the contingent deferred sales charge
applied on redemptions of Class B and C Shares, respectively, except that
portion which is reallowed to Participating Institutions. The Plans recognize
that the Distributor, any Participating Institution, the Administrator, and the
Advisor, in their discretion, may from time to time use their own assets to pay
for certain additional costs of distributing Class A, Class B and Class C
Shares. Any such arrangements to pay such additional costs may be commenced or
discontinued by the Distributor, any Participating Institution, the
Administrator, or the Advisor at any time.
The following table sets forth the total Rule 12b-1 fees, after
waivers, paid by certain of the Funds for the fiscal years/periods ended
September 30, 1999, September 30, 2000 and September 30, 2001 (unless a
different fiscal year/period is indicated in note (1) below) with respect to the
Class A Shares, Class B and Class C Shares of the Funds. As noted above, no
distribution fees are paid with respect to Class Y Shares or Class S Shares of
the Funds.
FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED FISCAL YEAR/PERIOD ENDED
SEPTEMBER 30, 1999(1) SEPTEMBER 30, 2000(1) SEPTEMBER 30, 2001
RULE 12B-1 FEES RULE 12B-1 FEES RULE 12B-1 FEES
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES SHARES
Balanced Fund(2) $ 0 $ $ * $ 0 $ 7,139 $ * 0 40,876 0
Capital Growth Fund(3) * 1,386 376,366 * 207 453,400
Equity Income Fund 38,215 106,918 5,448 49,563 107,612 23,251 57,005 109,340 42,616
Growth & Income Fund(2) 0 * 0 20,149 * 0 80,757 0
Large Cap Core Fund(2) 0 * 0 7,753 * 0 22,108 0
Large Cap Growth Fund 399,312 157,837 2,166 497,601 304,917 43,582 346,471 259,936 164,199
Large Cap Value Fund 471,235 642,319 3,830 393,041 558,644 25,710 305,933 467,203 93,181
Relative Value Fund(3) 179,039 57,305 7,425 91,986
Equity Index Fund 216,796 765,724 58,857 329,995 1,182,240 282,765 298,231 1,050,073 343,013
Mid Cap Index Fund * * 0 8,688 0
Small Cap Index Fund(4) 457 0 * 39 340
Micro Cap Fund(2) 0 * 0 6,476 * 0 18,662 0
Mid Cap Core Fund(2) 0 * 0 1,905 * 0 11,988 0
Mid Cap Growth Fund 469,354 2,012 1,281 597,113 22,497 21,742 428,367 35,979 76,801
Mid Cap Value Fund 67,755 271,088 428 36,468 137,614 6,653 37,148 94,531 24,357
Small Cap Core Fund(4) * 26,547 11,414 * 1,966 13,570
Small Cap Growth Fund 31,105 8,807 346 60,647 84,665 4,579 112,209 68,446 77,400
Small Cap Value Fund 93,532 108,104 29,066
53
Emerging Markets Fund 12,993 2 60 12,685 622 25 8,810 2,028 1,721
International Fund(4) * 11,344 7,334 * 760 7,889
Health Sciences Fund 3,065 7,476 * 8,920 24,587 7,204 16,482 31,301 48,928
Real Estate Securities Fund 4,640 28,059 * 3,786 17,681 118 5,517 18,133 2,640
Science & Technology Fund(3) * 2,910 84,375 * 321 53,967
Technology Fund 31,222 133,633 * 275,943 750,675 105,623 181,168 327,294 194,798
Bond IMMDEX Fund(2) 0 * 0 14,309 * 0 34,518
Corporate Bond Fund(5) * * * 965 211 539 4,755 12,733 20,776
Fixed Income Fund 403,885 165,060 1,424 299,104 127,407 5,522 280,209 124,064 26,451
High Yield Bond Fund (6) * * * * * * 5 8 1,899
Intermediate Term Bond Fund(2) 0 * * 0 1,655 * 0 2,334 *
Short Term Bond Fund 0 * * 79,070 * * 124,540 * *
Strategic Income Fund 91,594 3,984 1,618 52,656 11,361 8,203 52,634 17,773 20,164
U.S. Government Securities Fund(4) * 10,753 1,712 * 771 10,960
Arizona Tax Free Fund(5) * * * 11,675 * 52 35,635 * 4,399
California Intermediate Tax Free Fund 0 * * 0 * * 0 * *
California Tax Free Fund(5) * * * 7,348 * 8 45,467 * 1,966
Colorado Intermediate Tax Free Fund 0 * * 0 * * 0 * *
Colorado Tax Free Fund(5) * * * 10,741 * 243 42,347 * 4,866
Intermediate Tax Free Fund 0 * * 0 * * 0 * *
Minnesota Intermediate Tax Free Fund 0 * * 0 * * 0 * *
Minnesota Tax Free Fund 289,760 * 4,527 238,852 * 10,044 256,263 * 22,713
Missouri Tax Free Fund(4) * 37,196 28,842 * 2,813 12,175
Nebraska Tax Free Fund (7) * * * * * * 6,301 * 291
Oregon Intermediate Tax Free Fund 0 * * 0 * * 0 * *
Tax Free Fund(4) * * 2,780 6,159 * 216 3,077 0
- ----------------------------------------
* Fund or class was not in operation during this fiscal year/period.
(1) Information for the predecessor funds of Balanced Fund, Capital Growth
Fund, Growth & Income Fund, Large Cap Core Fund, Relative Value Fund,
Mid Cap Index Fund, Small Cap Index Fund, Micro Cap Fund, Mid Cap Core
Fund, Small Cap Core Fund, Science & Technology Fund, International
Fund, Bond IMMDEX Fund, Intermediate Term Bond Fund, U.S. Government
Securities Fund, Missouri Tax Free Fund and Tax Free Fund is for the
fiscal year/period ended October 31, 2000; Information for the
predecessor funds of Capital Growth Fund, Relative Value Fund, Small
Cap Core Fund, Small Cap Index Fund, Science & Technology Fund,
International Fund, U.S. Government Securities Fund, Missouri Tax Free
Fund and Tax Free Fund is for the fiscal year/period ended November 30,
1999.
(2) For Class A Shares for the fiscal year ended October 31, 2000, the
predecessor funds for Balanced Fund, Growth & Income Fund, Large Cap
Core Fund, Micro Cap Fund, Mid Cap Core Fund, Bond IMMDEX Fund and
Intermediate Term Bond Fund waived all 12b-1 fees, but paid a 0.25%
shareholder servicing fees of $137,578, $456,483, $129,968, $102,125,
$212,188, $217, 425 and $72,386, respectively. Of these amounts,
$12,855, $20,760, $16,055, $23,272, $39,203, $35,843 and $24,681,
respectively, were paid to affiliated organizations. For Class B Shares
for the fiscal year ended October 31, 2000, the predecessor funds of
Balanced Fund, Growth & Income Fund, Large Cap Core Fund, Micro Cap
Fund, Mid Cap Core Fund, Bond IMMDEX Fund and Intermediate Term Bond
Fund waived all 12b-1 fees, but paid a 0.25% shareholder servicing fees
of $10,208, $28,645, $11,189, $9,473, $2,766, $20,304 and $2,355,
respectively. Of these amounts, $7,139, $20,419, $7,753, $6,476,
$1,905, $14,309 and $1,655, respectively, were paid to affiliated
organizations.
(3) Information is presented for the predecessor funds of Capital Growth
Fund, Relative Value Fund and Science & Technology Fund.
(4) Information for the predecessor funds of Small Cap Index Fund, Small
Cap Core Fund, International Fund, U.S. Government Securities Fund,
Missouri Tax Free Fund and Tax Free Fund includes fees paid to
affiliated organizations. For Class A Shares for the fiscal year ended
October 31, 2000, $15, $9,479, $4,325, $4,570, $10,346 and $463, were
paid to affiliated organizations. For Class B Shares for the fiscal
year ended October 31, 2000, $0, $11,414, $7,334, $1,712, $28,842 and
$6,159, were paid to affiliated organizations. Additionally, for the
fiscal year ended October 31, 2000, $35,911, $8,711, $36,270, and $17,
835, for the predecessor funds of Small Cap Index Fund, Small Cap Core
Fund, International Fund and U.S. Government Securities Fund,
respectively, were paid pursuant to an Administrative Services Plan
adopted by the predecessor funds.
(5) Commenced operations February 1, 2000.
(6) Commenced operations on August 30, 2001.
(7) Commenced operations on February 8, 2001.
The following table sets forth the Rule 12b-1 fees the Funds paid to
affiliated organizations for the fiscal year/period ended September 30, 2001
with respect to the Class A shares, Class B shares and Class C shares of the
Funds.
54
FISCAL YEAR/PERIOD ENDED SEPTEMBER 30, 2001
CLASS A SHARES CLASS B SHARES CLASS C SHARES
Balanced Fund $221,704 $129,453 $7,511
Capital Growth Fund 11,504 578,283 -
Equity Income Fund 34,197 22,900 15,123
Growth & Income Fund 430,617 99,422 -
Large Cap Core Fund 105,131 27,406 -
Large Cap Growth Fund 268,637 51,893 29,335
Large Cap Value Fund 236,708 99,498 18,618
Relative Value Fund 80,927 122,737 -
Equity Index Fund 199,695 171,387 84,977
Mid Cap Index Fund 7,371 10,654 -
Small Cap Index Fund 638 420 -
Micro Cap Fund 98,785 21,895 -
Mid Cap Core Fund 229,520 14,215 -
Mid Cap Growth Fund 359,335 8,107 13,805
Mid Cap Value Fund 24,445 26,357 7,065
Small Cap Core Fund 44,610 18,765 -
Small Cap Growth Fund 87,394 12,547 13,004
Small Cap Value Fund 52,074 28,205 5,763
Emerging Markets Fund 6,386 173 625
International Fund 144,652 29,348 37,811
Health Sciences Fund 13,894 6,265 8,180
Real Estate Securities Fund 3,731 2,921 476
Science & Technology Fund 3,559 68,217 -
Technology Fund 86,701 45,861 16,876
Bond IMMDEX Fund 194,790 41,226 -
Corporate Bond Fund 3,792 1,022 3,295
Fixed Income Fund 136,721 24,696 4,160
High Yield Bond Fund - - -
Intermediate Term Bond Fund 96,248 3,119 -
Short Term Bond Fund 31,478 - -
Strategic Income Fund 15,703 3,381 4,604
U.S. Government Securities Fund 14,001 14,326 -
Arizona Tax Free Fund 34,431 - 824
California Intermediate Tax - - -
Free Fund
California Tax Free Fund 45,332 - 366
Colorado Intermediate Tax Free - - -
Fund
Colorado Tax Free Fund 38,953 - 1,065
Intermediate Tax Free Fund - - -
Minnesota Intermediate Tax - - -
Free Fund
Minnesota Tax Free Fund 224,154 - 6,222
Missouri Tax Free Fund 47,172 18,461 -
Nebraska Tax Free Fund 3,004 - 8
Oregon Intermediate Tax Free Fund - - -
Tax Free Fund 92,735 4,181 766
CUSTODIAN AND AUDITORS
CUSTODIAN. The custodian of the Funds' assets is U.S. Bank (the
"Custodian"), 415 Walnut Street, Cincinnati, OH 45202. The Custodian is a
subsidiary of U.S. Bancorp. The Custodian takes no part in determining the
investment policies of the Funds or in deciding which securities are purchased
or sold by the Funds. All of the instruments representing the investments of the
Funds and all cash are held by the Custodian or, for Emerging Markets Fund and
International Fund, by a sub-custodian with respect to such Fund. The Custodian
or such sub-custodian delivers securities against payment upon sale and pays for
securities against delivery upon purchase. The Custodian also remits Fund assets
in payment of Fund expenses, pursuant to instructions of FAIF's officers or
resolutions of the Board of Directors.
As compensation for its services to the Funds, the Custodian is paid a
monthly fee calculated on an annual basis equal to 0.01%. Sub-custodian fees
with respect to Emerging Markets Fund and International Fund are paid by the
55
Custodian out of its fees from such Fund. In addition, the Custodian is
reimbursed for its out-of-pocket expenses incurred while providing its services
to the Funds. The Custodian continues to serve so long as its appointment is
approved at least annually by the Board of Directors including a majority of the
directors who are not interested persons (as defined under the 1940 Act) of
FAIF.
AUDITORS. Ernst & Young LLP, 1400 Pillsbury Center, Minneapolis,
Minnesota 55402, serves as the Funds' independent auditors, providing audit
services, including audits of the annual financial statements and assistance and
consultation in connection with SEC filings for the years ended September 30,
1999, September 30, 2000 and September 30, 2001.
PricewaterhouseCoopers LLP, 100 E. Wisconsin Avenue, Suite 1500,
Milwaukee Wisconsin 53202, served as the independent auditors for the
predecessor funds of Mid Cap Index Fund, Small Cap Index Fund, Science &
Technology Fund, International Fund, Micro Cap Fund, Mid Cap Core Fund, Small
Cap Core Fund, Capital Growth Fund, Relative Value Fund, Large Cap Core Fund,
Growth & Income Fund, Bond IMMDEX Fund, U.S. Government Securities Fund,
Missouri Tax Free Fund, Balanced Fund, Tax Free Fund, and Intermediate Term Bond
Fund, providing audit services, including audits of the annual financial
statements and assistance and consultation in connection with SEC filings for
the fiscal period ended as of October 31, 2000.
Arthur Andersen LLP, 225 North Michigan Avenue, Chicago, Illinois
60601, served as the independent accountants for the predecessor funds of
Relative Value Fund, Capital Growth Fund and Science & Technology Fund,
providing audit services, including audits of the annual financial statements
and assistance and consultation in connection with SEC filings for the fiscal
period ended as of November 30, 1999.
KPMG LLP, 90 South Seventh Street, Minneapolis, Minnesota 55402, served
as the independent auditors for the predecessor funds of U.S. Government
Securities Fund, Missouri Tax Free Fund, Tax Free Fund, International Fund,
Small Cap Index Fund, and Small Cap Core Fund providing audit services,
including audits of the annual financial statements and assistance and
consultation in connection with SEC filings for the fiscal period ended as of
November 30, 1999.
56
PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE
Decisions with respect to which securities are to be bought or sold,
the total amount of securities to be bought or sold, the broker-dealer with or
through which the securities transactions are to be effected and the commission
rates applicable to the trades are made by the Advisor or, in the case of
Emerging Markets Fund, International Fund and Strategic Income Fund, their
respective subadvisor (each, a "Subadvisor").
In selecting a broker-dealer to execute securities transactions, the
Advisor and each Subadvisor considers a variety of factors, including the
execution capability, financial responsibility and responsiveness of the
broker-dealer in seeking best price and execution. However, in the case of the
Advisor, a predominant factor in selecting a broker-dealer to execute securities
transactions is often the nature and quality of any brokerage and research
services provided by the broker-dealer. The Funds may pay a broker-dealer a
commission in excess of that which another broker-dealer might have charged for
effecting the same transaction (a practice commonly referred to as "paying up").
The Funds may pay up in recognition of the value of brokerage and research
services provided to the Advisor or Subadvisors by the broker-dealer. In such
cases, the Funds are in effect paying for the brokerage and research services in
so-called "soft-dollars". However, the Advisor and Subadvisors would authorize
the Funds to pay an amount of commission for effecting a securities transaction
in excess of the amount of commission another broker or dealer would have
charged only if the Advisor or Subadvisor determined in good faith that the
amount of such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall responsibilities of
the Advisor or Subadvisor with respect to the Funds.
The types of brokerage services the Advisor or Subadvisors receive from
broker-dealers include automated equity trade order entry and execution systems
and systems which provide an automated DTC interface to facilitate securities
trading, clearance and settlement. Such brokerage services may be provided as a
part of a product that bundles many separate and distinct brokerage, execution,
investment management, custodial and record-keeping services into one package.
The types of research services the Advisor or Subadvisors receive include
economic analysis and forecasts, financial market analysis and forecasts,
industry and company specific analysis, performance monitoring, interest rate
forecasts, arbitrage relative valuation analysis of various debt securities,
analysis of U.S. Treasury securities, research-dedicated computer hardware and
software and related consulting services and other services that assist in the
investment decisionmaking process. Research services are received primarily in
the form of written reports, computer-generated services, telephone contacts and
personal meetings with security analysts. Research services may also be provided
in the form of meetings arranged with corporate and industry spokespersons or
may be generated by third parties but are provided to the Adviser or Subadvisors
by, or through, broker-dealers.
The research products and services the Advisor or Subadvisors receive
from broker-dealers are supplemental to, and do not necessarily reduce, the
Advisor's or Subadvisors' own normal research activities. As a practical matter,
however, it would be impossible for the Advisor or Subadvisors to generate all
of the information presently provided by broker-dealers. The expenses of the
Advisor or Subadvisors would be materially increased if they attempted to
generate such additional information through their own staffs. To the extent
that the Advisor or Subadvisors could use cash to purchase many of the brokerage
and research products and services received for allocating securities
transactions to broker-dealers, the Advisor and Subadvisors are relieved of
expenses that they might otherwise bear when such services are provided by
broker-dealers.
As a general matter, the brokerage and research products and services
the Advisor and Subadvisors receive from broker-dealers are used to service all
of their respective accounts. However, any particular brokerage and research
product or service may not be used to service each and every client account, and
may not benefit the particular accounts that generated the brokerage
commissions.
In some cases, the Advisor and Subadvisors may receive brokerage or
research products or services that are used for both brokerage or research
purposes and other purposes, such as accounting, record-keeping, administration
or marketing. In such cases, the respective Advisor or Subadvisor will make a
good faith effort to decide the relative proportion of the cost of such products
or services used for non-brokerage or research purposes and will pay for such
portion from its own funds. In such circumstance, the Advisor or Subadvisor has
a conflict of interest in making such decisions. Subject to their best price and
execution responsibilities, the Advisor and Subadvisors may consider the
placement of orders by securities firms for the purchase of Fund shares as a
factor in allocating portfolio transactions.
57
The Advisor effects equity securities transactions on behalf of the
Funds through its trading desks in Minneapolis and Milwaukee. Each trading desk
makes its own determinations regarding allocation of brokerage among the various
broker-dealers it uses to execute trades, including evaluations of the quality
of execution, the research products and services received and the commissions
paid. The trading desks communicate with each other, and each has access to the
trade blotter of the other, but they otherwise operate independently. One
trading desk may therefore be selling a given security at the same time that the
other trading desk is buying the security.
Many of the Funds' portfolio transactions involve payment of a
brokerage commission by the appropriate Fund. In some cases, transactions are
with dealers or issuers who act as principal for their own accounts and not as
brokers. Transactions effected on a principal basis, other than certain
transactions effected on a so-called riskless principal basis, are made without
the payment of brokerage commissions but at net prices which usually include a
spread or markup. In effecting transactions in over-the-counter securities, the
Funds typically deal with market makers unless it appears that better price and
execution are available elsewhere.
It is expected that Emerging Markets Fund, International Fund and
Strategic Income Fund will purchase most foreign equity securities in the
over-the-counter markets or stock exchanges located in the countries in which
the respective principal offices of the issuers of the various securities are
located if that is the best available market. The fixed commission paid in
connection with most such foreign stock transactions generally is higher than
negotiated commissions on United States transactions. There generally is less
governmental supervision and regulation of foreign stock exchanges than in the
United States. Foreign securities settlements may in some instances be subject
to delays and related administrative uncertainties.
Foreign equity securities may be held in the form of American
Depositary Receipts, or ADRs, European Depositary Receipts, or EDRs, or
securities convertible into foreign equity securities. ADRs and EDRs may be
listed on stock exchanges or traded in the over-the-counter markets in the
United States or overseas. The foreign and domestic debt securities and money
market instruments in which the Funds may invest are generally traded in the
over-the-counter markets.
The Funds do not effect any brokerage transactions in their portfolio
securities with any broker or dealer affiliated directly or indirectly with the
Advisor, any sub-advisor or the Distributor unless such transactions, including
the frequency thereof, the receipt of commission payable in connection
therewith, and the selection of the affiliated broker or dealer effecting such
transactions are not unfair or unreasonable to the shareholders of the Funds, as
determined by the Board of Directors. Any transactions with an affiliated broker
or dealer must be on terms that are both at least as favorable to the Funds as
the Funds can obtain elsewhere and at least as favorable as such affiliated
broker or dealer normally gives to others.
When two or more clients of the Advisor, Federated Global, Clay Finlay
or Marvin & Palmer are simultaneously engaged in the purchase or sale of the
same security, the prices and amounts are allocated in accordance with a formula
considered by the Advisor, Federated Global, Clay Finlay or Marvin & Palmer to
be equitable to each client. In some cases, this system could have a detrimental
effect on the price or volume of the security as far as each client is
concerned. In other cases, however, the ability of the clients to participate in
volume transactions may produce better executions for each client.
The following table sets forth the aggregate brokerage commissions paid
by certain of the Funds during the fiscal years ended September 30, 1999,
September 30, 2000 and September 30, 2001:
FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 2000 SEPTEMBER 30, 2001
Balanced Fund $ 560,619 $ 458,667 380,473
Equity Income Fund 315,203 393,204 319,497
Equity Index Fund 173,116 223,952 48,156
Large Cap Growth Fund 1,057,964 841,441 1,467,336
Large Cap Value Fund 2,605,857 2,592,112 2,467,114
Mid Cap Growth Fund 415,391 1,279,373 2,277,775
Mid Cap Value Fund 186,139 63,071 1,218,065
Small Cap Growth Fund (2) 174,400 993,808 2,067,210
Small Cap Value Fund 628,439 609,670 559,374
Emerging Markets Fund 343,748 613,829 458,578
58
International Fund 3,029,581 5,721,083 6,819,850
Health Sciences Fund 31,919 32,418 46,831
Real Estate Securities Fund 73,017 148,732 274,933
Technology Fund 153,043 280,498 610,550
Corporate Bond Fund(4) * 10,260 29,262
Fixed Income Fund -- 71,329 73,091
High Yield Bond Fund (5) * * --
Intermediate Term Bond Fund -- 45,450 16,411
Short Term Bond Fund -- 10,793 --
Strategic Income Fund 5,174 11,794 101,747
Arizona Tax Free Fund(4) * -- --
California Intermediate Tax Free Fund -- -- --
California Tax Free Fund(4) * -- --
Colorado Intermediate Tax Free Fund -- 3,667 4,500
Colorado Tax Free Fund(4) * -- 300
Intermediate Tax Free Fund 8,125 30,208 4,993
Minnesota Intermediate Tax Free Fund 3,000 1,500 1,250
Minnesota Tax Free Fund 11,683 14,130 14,071
Nebraska Tax Free Fund (6) * * --
Oregon Intermediate Tax Free Fund -- -- --
Tax Free Fund 22,669 21,008 10,429
Mid Cap Index Fund(7) -- 67,421 63,431
Small Cap Index Fund(8) 98,519** 18,766 139,701
Science & Technology Fund(9) 21,635** 71,478 96,693
Micro Cap Fund(10) 171,579 311,350 472,445
Small Cap Core Fund(11) 319,318** 244,212 1,088,077
Mid Cap Core Fund(12) 1,732,758 1,618,878 1,741,723
Capital Growth Fund(13) 305,414** 227,042 149,202
Relative Value Fund(14) 219,478** 129,016 90,196
Large Cap Core Fund(15) 347,203 296,518 310,893
Growth & Income Fund(16) 944,299 1,119,522 831,237
Bond IMMDEX Fund(17) 0 0 --
U.S. Government Securities Fund(18) 0** 0** --
Missouri Tax Free Fund(19) 0** 0** --
- ---------------------------
* Fund was not in operation during this fiscal year.
** Fiscal year ends were November 30, 1999 and 1998.
(1) Includes brokerage commissions paid by the Fund's predecessor arising
from a merger transaction between certain FAIF Funds and Piper Funds
Inc., Piper Funds Inc. - II, Piper Institutional Funds Inc. and Piper
Global Funds Inc.
(2) Small Cap Growth Fund is the financial reporting survivor of Piper
Small Company Growth Fund. Piper Small Company Growth Fund paid
aggregate brokerage commissions during the fiscal years ended September
30, 1995, September 30, 1996 and September 30, 1997, of $125,638,
$65,924 and $4,020, respectively.
(3) For the ten month period from December 1, 1997 to September 30, 1998.
(4) Commenced operations February 1, 2000.
(5) Commenced operations on August 30, 2001.
(6) Commenced operations on February 28, 2001.
(7) Firstar Mid Cap Index Fund is the accounting survivor of the
reorganization transaction with First American Mid Cap Index Fund.
Firstar Mid Cap Index Fund paid brokerage commissions during the fiscal
years ended October 31, 1998, October 31, 1999 and October 31, 2000.
(8) Firstar Small Cap Index Fund is the accounting survivor of the
reorganization transaction with First American Small Cap Index Fund.
Firstar Small Cap Index Fund paid brokerage commissions during the
fiscal years ended November 30, 1998, November, 1999 and October 31,
2000.
(9) Firstar Science & Technology Fund is the accounting survivor of the
reorganization transaction with First American Science & Technology
Fund. Firstar Science & Technology Fund paid brokerage commissions
during the fiscal years ended November 30, 1998, November, 1999 and
October 31, 2000.
(10) Firstar Micro Cap Fund is the accounting survivor of the reorganization
transaction with First American Micro Cap Fund. Firstar Micro Cap Fund
paid brokerage commissions during the fiscal years ended October 31,
1998, October 31, 1999 and October 31, 2000.
(11) Firstar Small Cap Core Fund is the accounting survivor of the
reorganization transaction with First American Small Cap Core Fund.
Firstar Small Cap Core Fund paid brokerage commissions during the
fiscal years ended November 30, 1998, November, 1999 and October 31,
2000.
(12) Firstar Mid Cap Core Fund is the accounting survivor of the
reorganization transaction with First American Mid Cap Core Fund.
Firstar Mid Cap Core Fund paid brokerage commissions during the fiscal
years ended October 31, 1998, October 31, 1999 and October 31, 2000.
59
(13) Firstar Large Cap Growth Fund is the accounting survivor of the
reorganization transaction with First American Capital Growth Fund.
Firstar Large Cap Growth Fund paid brokerage commissions during the
fiscal years ended November 30, 1998, November, 1999 and October 31,
2000.
(14) Firstar Relative Value Fund is the accounting survivor of the
reorganization transaction with First American Relative Value Fund.
Firstar Relative Value Fund paid brokerage commissions during the
fiscal years ended November 30, 1998, November, 1999 and October 31,
2000.
(15) Firstar Large Cap Core Fund is the accounting survivor of the
reorganization transaction with First American Large Cap Core Fund.
Firstar Large Cap Core Fund paid brokerage commissions during the
fiscal years ended October 31, 1998, October 31, 1999 and October 31,
2000.
(16) Firstar Growth & Income Fund is the accounting survivor of the
reorganization transaction with First American Growth & Income Fund.
Firstar Growth & Income Fund paid brokerage commissions during the
fiscal years ended October 31, 1998, October 31, 1999 and October 31,
2000.
(17) Firstar Bond IMMDEX Fund is the accounting survivor of the
reorganization transaction with First American Bond IMMDEX Fund.
Firstar Bond IMMDEX Fund paid brokerage commissions during the fiscal
years ended October 31, 1998, October 31, 1999 and October 31, 2000.
(18) Firstar U.S. Government Securities Fund is the accounting survivor of
the reorganization transaction with First American U.S. Government
Securities Fund. Firstar U.S. Government Securities Fund paid brokerage
commissions during the fiscal years ended November 30, 1998, November,
1999 and October 31, 2000.
(19) Firstar Missouri Tax Exempt Bond Fund is the accounting survivor of the
reorganization transaction with First American Missouri Tax Free Fund.
Firstar Missouri Tax Exempt Bond Fund paid brokerage commissions during
the fiscal years ended November 30, 1998, November, 1999 and October
31, 2000.
At September 30, 2000, Balanced Fund held equity securities of Chase
Manhattan in the amount of $2,540,313, equity securities of Morgan Stanley in
the amount of $1,984,194, and mortgage-backed securities of Merrill Lynch in the
amount of $6,004,099; Equity Income Fund held equity securities of J.P. Morgan
in the amount of $3,777,230; Equity Index Fund held equity securities of Chase
Manhattan in the amount of $7,955,935, equity securities of J.P. Morgan in the
amount of $2,755,646, equity securities of Merrill Lynch in the amount of
$6,858,852, equity securities of Morgan Stanley in the amount of $13,521,229,
and equity securities of Paine Webber in the amount of $1,314,676; Large Cap
Growth Fund held equity securities of Morgan Stanley in the amount of
$16,723,919; Large Cap Value Fund held equity securities of Chase Manhattan in
the amount of $32,516,000 and equity securities of Morgan Stanley in the amount
of $12,243,481; Corporate Bond Fund held mortgage-backed securities of Morgan
Stanley in the amount of $973,891; Fixed Income Fund held corporate obligations
of Goldman Sachs in the amount $14,193,750, mortgage-backed securities of J.P.
Morgan in the amount of $10,378,682, mortgage-backed securities of Merrill Lynch
in the amount of $21,350,154, and mortgage-backed securities of Morgan Stanley
in the amount of $10,745,385; Intermediate Term Bond Fund held mortgage-backed
securities of Merrill Lynch in the amount of $6,004,099, mortgage-backed
securities of Morgan Stanley in the amount of $5,263,046, and corporate
obligations of Salomon Smith Barney in the amount of $1,988,840; Short Term Bond
Fund held asset-backed securities of Chase Manhattan in the amount of
$2,558,259, corporate obligations of Goldman Sachs in the amount of $1,472,570,
corporate obligations of Merrill Lynch in the amount of $688,856, corporate
obligations of Morgan Stanley in the amount of $2,017,280, and mortgage-backed
securities of Merrill Lynch in the amount of $4,853,782; and Strategic Income
Fund held corporate obligations of Merrill Lynch in the amount of $910,580 and
mortgage-backed securities of Morgan Stanley in the amount of $1,947,783, all of
which are deemed to be "regular brokers or dealers" of the Funds.
CAPITAL STOCK
Each share of a Fund's $.0001 par value common stock is fully paid,
nonassessable, and transferable. Shares may be issued as either full or
fractional shares. Fractional shares have pro rata the same rights and
privileges as full shares. Shares of the Funds have no preemptive or conversion
rights.
Each share of a Fund has one vote. On some issues, such as the election
of directors, all shares of all Funds vote together as one series. The shares do
not have cumulative voting rights. Consequently, the holders of more than 50% of
the shares voting for the election of directors are able to elect all of the
directors if they choose to do so. On issues affecting only a particular Fund or
class of shares, the shares of that Fund or class will vote as a separate
series. Examples of such issues would be proposals to alter a fundamental
investment restriction pertaining to a Fund or to approve, disapprove or alter a
distribution plan pertaining to a class of shares.
Under the laws of the state of Maryland and FAIF's Bylaws, FAIF is not
required to hold shareholder meetings unless they (i) are required by the 1940
Act, or (ii) are requested in writing by the holders of 10% or more of the
outstanding shares of FAIF.
As of January 2, 2001, the Funds were aware that the following persons
owned of record five percent or more of the outstanding shares of each class of
stock of the Funds:
60
- ------------------------------------------------- ------------------------------------------------------------
PERCENTAGE OF OUTSTANDING SHARES
- ------------------------------------------------- ------------------------------------------------------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CLASS A CLASS B CLASS C CLASS Y CLASS S
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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BALANCED FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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BALANCED A OMNIBUS ACCOUNT 13.27%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BALANCE B OMNIBUS ACCOUNT 27.99%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BALANCE C OMNIBUS ACCOUNT 80.69%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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VAR AND CO. 8.02%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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US BANK NATIONAL ASSOCIATION CUST 35.95%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 E 5TH ST
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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MUGGS AND CO. 30.79%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND AND CO. 7.62%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 15.56%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
61
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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BALANCED FUND
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US BANK NA CUST 76.64%
DIANE L SCHMIDT
IRA ROLLOVER
6863 CURTIS WAY
FLORENCE KY 41042-1312
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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MAURICE A BOLAND 23.36%
4245 VALLEY QUAIL BLVD N
WESTERVILLE OH 43081-3734
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US BANK NA CUST 100.00%
MICHAEL J BASIE ROTH IRA
9342 CLOPTON CT
MENTOR OH 44060-1784
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62
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EQUITY INCOME FUND
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EQUITY INCOME A OMNIBUS ACCOUNT 23.86%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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EQUITY INCOME B OMNIBUS ACCOUNT 35.38%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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EQUITY INCOME C OMNIBUS ACCOUNT 90.47%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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VAR AND CO. 71.75%
P.O. BOX 64482
ST PAUL, MN 55164-0482
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US BANK NATIONAL ASSOCIATION CUST 5.77%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 E 5TH ST
ST PAUL, MN 55101-2672
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BANK AND CO 9.28%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
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CAPINCO 7.96%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
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BISYS BD SERVICES INC 21.91%
STEWART G SWIFT PO BOX 4054
CONCORD CA 94524-4054
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CAPINCO C/O FIRSTAR 77.55%
PO BOX 1787
MILWAUKEE WI 53201-1787
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63
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
EQUITY INDEX FUND
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
EQUITY INDEX A OMNIBUS ACCOUNT 16.64%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
EQUITY INDEX B OMNIBUS ACCOUNT 30.51%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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EQUITY INDEX C OMNIBUS ACCOUNT 43.93%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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VAR AND CO. 27.82%
P.O. BOX 64482
ST PAUL, MN 55164-0482
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 14.59%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
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METLIFE DEFINED CONTRIBUTION GROUP 9.20%
AS AGENT FOR FIRST TR NATL ASSOC TR
FBO UTD HEALTHCARE CORP 401 (K) SP
2 MONTGOMERY ST #3
JERSEY CITY NJ 07302-3802
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US BANK TR 11.25%
US BANCORP CAP
U/A 01-01-1984
180 EAST 5TH ST STE SPEN0502
SAINT PAUL, MN 550101-2672
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS AND CO. 12.06%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
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CAPINCO 15.27%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
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FIRSTAR BANK TR 33.20%
MERCANTILE BANCORPORATION INC- HORIZEN
ATTN GREG ANTRAINER
PO BOX 387
ST LOUIS MO 63166-0387
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MUGGS AND CO 23.70%
C/O FIRSTAR EAST
PO BOX 1787
MILWAUKEE WI 53201-1787
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 39.02%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
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64
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LARGE CAP GROWTH FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LARGE CAP GROWTH A OMNIBUS ACCOUNT 62.54%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 5.29%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
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LARGE CAP GROWTH B OMNIBUS ACCOUNT 35.08%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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LARGE CAP GROWTH C OMNIBUS ACCOUNT 87.23%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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VAR AND CO. 80.63%
P.O. BOX 64482
ST PAUL, MN 55164-0482
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US BANK NATIONAL ASSOCIATION CUST 7.35%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 10.60%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
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65
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LARGE CAP VALUE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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LARGE CAP VALUE A OMNIBUS ACCOUNT 57.96%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LARGE CAP VALUE B OMNIBUS ACCOUNT 39.91%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LARGE CAP VALUE C OMNIBUS ACCOUNT 89.42%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 65.06%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 9.33%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 23.92%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
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FIRST AMERICAN FUNDS 100.00%
ATTN TEENA LARSON MPFP 1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
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66
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MICRO CAP
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MICRO CAP A OMNIBUS ACCOUNT 7.07%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CHARLES SCHWAB AND CO INC FOR THE EXCLUSIVE 35.92%
BENEFIT OF ITS CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94101-4122
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MICRO CAP C OMNIBUS ACCOUNT 99.94%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
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VAR AND CO. 18.07%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS AND CO 5.80%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND AND CO 10.63%
C/O FIRSTAR TRUST CO
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
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- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 55.31%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 5.55%
C/O FIRSTAR TRUST
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 13.54%
ATTN MUTUAL FUNDS/INCOM
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS AND CO 64.01%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND AND CO 18.30%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
67
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP GROWTH FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP GROWTH A OMNIBUS ACCOUNT 72.72%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP GROWTH B OMNIBUS ACCOUNT 42.41%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP GROWTH C OMNIBUS ACCOUNT 79.91%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 18.12%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 42.42%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 9.84%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 8.21%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK TR 8.18%
US BANCORP CAP
U/A 01-01-1984
180 EAST 5TH ST STE SPEN0502
SAINT PAUL, MN 550101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 11.64%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRST AMERICAN FUNDS 5.43%
ATTN TEENA LARSON BCMNH05M
800 NICOLLET MALL
MINNEAPOLIS MN 55402
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS AND CO. 94.57%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
68
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP VALUE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP VALUE A OMNIBUS ACCOUNT 30.57%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP GROWTH B OMNIBUS ACCOUNT 39.51%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP GROWTH C OMNIBUS ACCOUNT 70.73%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 61.95%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 13.73%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK TR 13.82%
US BANCORP CAP
U/A 01-01-1984
180 EAST 5TH ST STE SPEN0502
SAINT PAUL, MN 550101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 9.71%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS AND CO. 99.98%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
69
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP GROWTH FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP GROWTH A OMNIBUS ACCOUNT 59.63%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
10.11%
US BANK NATIONAL ASSOCIATION CUST
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP GROWTH B OMNIBUS ACCOUNT 37.39%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP GROWTH C OMNIBUS ACCOUNT 81.79%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 83.04%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 7.20%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK TR 5.63%
USBANCORP CAP
U/A 01-01-1984
180 5TH ST E STE SPEN0502
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRST AMERICAN FUNDS 9.42%
ATTN TEENA LARSON
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS AND CO. 90.58%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
70
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP VALUE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP VALUE A OMNIBUS ACCOUNT 19.17%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
UMB BANK NA 27.52%
ANDERSON CORPORATION 401 (K)
C/O JP MORGAN / AMERICAN CENTURY
RETIREMENT PLAN SERVICES
PO BOX 419784
KANSAS CITY, MO 64141-6784
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP VALUE B OMNIBUS ACCOUNT 38.55%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP VALUE C OMNIBUS ACCOUNT 81.59%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. VAR AND CO. 14.40%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 39.24%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 13.28%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 6.58
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK TR 18.03%
USBANCORP CAP
U/A 01-01-1984
180 5TH ST E STE SPEN0502
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRST AMERICAN FUNDS 100.00%
ATTN TEENA LARSON BCMNH05M
800 NICOLLET MALL
MINNEAPOLIS MN 55402
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
71
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
EMERGING MARKETS FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
EMERGING MARKETS A OMNIBUS ACCOUNT 68.19%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
EMERGING MARKETS B OMNIBUS ACCOUNT 16.55%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
RBC DAIN RAUSCHER CUSTODIAN 8.08%
DANA LALLO
INDIVIDUAL RETIREMENT ACCOUNT
6838 W ELM HURST AVE
LITTLETON, CO 80128-5611
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BEAR STEARNS SECURITIES CORP 40.70%
FBO 748-52940-24
1 METROTECH CENTER NORTH
BROOKLYN, NY 11201-3870
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
EMERGING MARKETS C OMNIBUS ACCOUNT 93.00%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 18.65%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 48.53%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 6.66%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 23.70%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRST AMERICAN FUNDS 100.00%
ATTN TEENA LARSON
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
72
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
STRATEGIC INCOME FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
28.70%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
STRATEGIC INCOME B OMNIBUS ACCOUNT
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
6.14%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANCORP INVESTMENTS
FBO 35268231
100 S 5TH ST STE 1400
MINNEAPOLIS, MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
5.35%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO MER-112577
EDNA E WORKER
WORKER TTEE
420 S KIRKWOOD RD APT 310
KIRKWOOD. MO 63122-6164
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
7.23%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO #M22-801461
CLARA A LIVENSPARGER TTEE
CLAR A LIVENSPARGER T
DTD U/A 9/24/98
826 SAPPINGTON RD
CRESTWOOD, MO 63126-1003
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 63.43%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 14.23%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 15.45%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
73
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
ARIZONA TAX FREE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
ARIZONA TAX FREE A OMNIBUS ACCOUNT 91.08%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
ARIZONA TAX FREE C OMNIBUS ACCOUNT 94.33%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 79.73%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 15.72%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
74
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CALIFORNIA INTERMEDIATE TAX FREE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANCORP INVESTMENTS 47.36%
FBO 118602021
100 S 5TH ST STE 1400
MINNEAPOLIS, MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 99.99%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
OHIO TAX FREE
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
STEPHEN L SAHLFELD 8.55%
3615 BRENTWOOD AVE
CINCINNATTI OH 45208-1925
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
UNITED MEDICAL RESOURCES 76.83%
5151 PFEIFFER RD
CINCINNATTI OH 45242-4854
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK NA 97.60%
ATTN ACH DEPT SL-TW-17TF
PO BOX 387
ST LOUIS MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
GOVERNMENT OBLIGATIONS FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
DONALDSON LUFKIN JENRETTE 5.85%
SECURITES CORP INC
PO BOX 2052
JERSEY CITY NJ 07303-2052
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA 44.94%
US BANK TRUST CENTER
ATTN LINDA FRITZ SPER0603
180 5TH ST E
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE 41.10%
BENEFIT OF CUSTOMERS OF FBS INVESTMENTS
SERVICES INC.
100 S 5TH ST STE 1400
ATTN: MONEY FUND UNIT R/R
MINNEAPOLIS, MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK 8.85%
PO BOX 387
ST LOUIS, MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND AND CO 99.90%
ATTN ACM DEPT SL-TW-17TF
PO BOX 387
ST LOUIS MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MN TAX FREE OMNIBUS ACCOUNT 77.02%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MN TAX FREE Y OMNIBUS ACCOUNT 8.42%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 77.76%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 5.49%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
75
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TAX FREE OBLIGATIONS FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TAX FREE OBLIGATIONS OMNIBUS ACCOUNT 63.76%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA 24.63%
ATTN: LYNN FLAGSTAD
800 NICOLLET AVE BC-MN-H18U
MINNEAPOLIS, MN 55402-7020
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA 87.72%
US BANK TRUST CENTER
ATTN LINDA FRITZ SPER0603
180 5TH ST E
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK 9.07%
PO BOX 387
ST LOUIS, MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK DISC 98.39%
ATTN ACH DEPT SL-TW-17TF
PO BOX 387
ST LOUIS MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
76
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NEBRASKA TAX FREE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NEBRASKA TX/FR A OMNIBUS ACCOUNT 28.27%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
DEAN WITTER FOR THE BENEFIT OF MARCUS YOUNG 9.61%
PO BOX 250 CHURCH ST STATION
NEW YORK NY 10008-0250
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
DEAN WITTER FBO 9.61
COZAD TELEPHONE CO.
PO BOX 250 CHURCH ST STATION
NW YORK NY 1008-0250
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANCORP INVESTMENTS 9.61%
FBO 170111561
100 S 5TH ST STE 1400
MINNEAPOLIS MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
UBATCO AND CO 27.40%
ATTN TRUST OPERATIONS
PO BOX 82535
LINCOLN NE 68501-2535
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NEBRASKA TX/FR COMNIBUS ACCOUNT 72.59%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
PRIMEVEST FINANCIAL SERVICES FBO 11.98%
BRIAN J ENGEL
29129173
400 FIRST STREET SO SUITE 300
PO BOX 283
ST CLOUD MN 56302-0283
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
DONALDSON LUFKIN JENRETTE 11.91%
SECURITES CORP INC
PO BOX 2052
JERSEY CITY NJ 07303-2052
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 97.56%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
77
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
OREGON INTERMEDIATE TAX FREE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
ORE INTMED TX/FR A OMNIBUS ACCOUNT 13.90%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
DOROTHY L HART 5.33%
1605OAK ST
LA GRANDE OR 97850-1435
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FLORENCE L HART 5.33%
1310 WALNUT ST
LA GRANDE OR 97850-1435
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BANK OF CASCADES 12.59%
TTEES FRO MARY S DEFREMERY
1125 NW BOND ST
BEND OR 97701-1925
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VERB AND CO. 9.90%
4380 SW MACADAM AVE STE 450
PORTLAND OR 97201-6407
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
REDE AND CO. 16.08%
4380 SW MACADAM AVE STE 450
PORTLAND OR 97201-6407
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 93.45%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
78
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TAX FREE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TAX FREE A OMNIBUS ACCOUNT 68.72%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TAX FREE C OMNIBUS ACCOUNT 39.77%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # BAH-352918 52.61%
KAREN A SWANSON
WESLEY G SWANSON JTTEN
277 CTY ROAD B
WOODVILLE WI 54028
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 10.65%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 5.76%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND AND CO. 77.80%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
79
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP INDEX FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP INDEX A OMNIBUS ACCOUNT 18.51%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
6.63%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # BCD-032360
NFSC/FMTC IRA ROLLOVER
FBO MARYE ZENZOLA
2204 MAGNOLIA CT W
BUFFALO GROVE IL 60089-6644
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
DAVID A GLASS 7.17%
1121 BRONZE MEDAL RD
OKLAHOMA CITY OK 73160-7975
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP INDEX C OMNIBUS ACCOUNT 55.51%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LPL FINANCIAL SERVICES 32.73%
A/C 3414-7693
9785 TOWNE CENTER DRIVE
SAN DIEGO CA 92121-1968
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 34.65%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS AND CO. 14.97%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND AND CO. 18.26%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 22.98%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS AND CO. 49.24%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND AND CO.
C/O FIRSTAR 31.23%
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 19.53%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
80
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
PRIME OBLIGATIONS FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
PRIME OBLIGATIONS A OMNIBUS ACCOUNT 68.93%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA 7.91%
US BANK TRUST CENTER
ATTN LINDA FRITZ SPER0603
180 5TH ST E
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE 19.22%
BENEFIT OF CUSTOMERS OF FBS
INVESTMENTS SERVICES INC.
100 S 5TH ST STE 1400
ATTN: MONEY FUND UNIT R/R
MINNEAPOLIS, MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
30.95%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
PRIME OBLIGATIONS B OMNIBUS ACCOUNT
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
PRIME OBLIGATIONS C OMNIBUS ACCOUNT 72.07%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
C/O RON WAUTERS 5.04%
NFSC FEBO #MER-031062
PELLA REGIONAL HEALTH CENTER
HILLTOP
404 JEFFERSON
PELLA IA 50219-1257
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
PRIME OBLIGATIONS INST Y OMNIBUS ACCOUNT 9.44%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA 36.97%
US BANK TRUST CENTER
ATTN LINDA FRITZ SPER0603
180 5TH ST E
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SPECIALCUSTODY ACCOUNT FOR THE EXCLUSIVE 40.57%
BENEFIT OF CUSTOMERS OF FBS INVESTMENTS
SERVICES INC.
100 S 5TH ST STE 1400
ATTN: MONEY FUND UNIT R/R
MINNEAPOLIS, MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK 7.34%
PO BOX 387
ST LOUIS, MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK 100.00%
PO BOX 387
ST LOUIS MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
81
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP INDEX FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP INDEX A OMNIBUS ACCOUNT 38.87%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO M22-901857 12.49%
FNSC FMTC IRA
FBO BERNARD N FRANK
14052 AGUSTA DR
CHESTERFIELD MO 63017-3302
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
6.83%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA CUST
EUNICE I WATERS IRA ROLLOVER
2118 GLENSIDE AVE
CINCINNATTI OH 45212-1140
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
6.50%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO BAH-889083
FNSC FMTC ROLLOVER IRA
FBO PAULA M ROHRER
1730 CROSS ST
MANITOWOC WI 54220-1837
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
6.45%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # MRA-03842
FNSC FMTC IRA
FBO JANIS KAY DONNELL
2827 PLATTIN RD
FESTUS MO 63028-3957
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
6.39%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO BCC-098094
ELIZABETH PASEK
515 KAREN DR
BEREA OH 44017-1635
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
6.01%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA CUSTOMER
ARCHIE BRIDGES IRA ROLLOVER
PO BOX 5518
VERNON HILLS IL 60061-5518
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
7.89%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO BCD-059277
NFS/FMTC IRA
FBO ROBERT MCGAHEY
9 STUBBLEFIELD RD
WAYNESBORO VA 22980-9239
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
12.96%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
USBANCORP PIPER JAFFRAY
A/C 4533-4053
US BANCORP CENTER
800 NICOLLET MALL
MINNEAPOLIS MN 55402-7000
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
8.35%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
DR KEUHSUN LEW MD CUST
DR KEUHSUN LEW MD INC PENSION PLAN
1724 HIDDEN OAK TRAIL
MANSFIELD OH 44906-3559
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
DAVID A GLASS 11.67%
1121 BRONZE MEDAL RD
OKLAHOMA CITY OK 73160-7975
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP INDEX C OMNIBUS ACCOUNT 30.74%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LPL FINANCIAL SERVICES 20.06%
A/C 6142-6279
9785 TOWNE CENTER DR
SAN DIEGO CA 92121-1968
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LPL FINANCIAL SERVICES 22.43%
A/C 4092-9446
9785 TOWNE CENTER DR
SAN DIEGO CA 92121-1968
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LPL FINANCIAL SERVICES 13.27%
A/C 3414-7693
9785 TOWNE CENTER DR
SAN DIEGO CA 92121-1968
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 72.54%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND AND CO 8.45%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 9.57%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK 90.06%
TRUSTEE OF THE MERCANTILE BANCORPORATION INC-
HORIZEN
ATTN GREG ANTRAINER
PO BOX 387
ST LOUIS MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
82
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SCIENCE & TECHNOLOGY FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SCIENCE AND TECHNOLOGY A OMNIBUS ACCOUNT 9.85%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO #BCD-033529 8.56%
NFS/FMTC IRA
FBO RICHARD WOLDING
PO BOX 68
NELSONVILLE WI 54458-0068
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO #BCC-101869 6.93%
AVAI EILON
3701 COMMERCIAL AVE #12
NORTHBROOK IL 60062-1835
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SCIENCE AND TECHNOLOGY C OMNIBUS ACCOUNT 94.00%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 7.02%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS AND CO 46.02%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND AND CO 22.81%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 14.66%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS AND CO 88.70%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 6.60%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE, WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
83
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TREASURY OBLIGATIONS FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TREASURY OBLIGATIONS A OMNIBUS ACCOUNT 5.00%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA 43.19%
US BANK TRUST CENTER
ATTN LINDA FRITZ SPER0603
180 5TH ST E
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE 44.53%
BENEFIT OF CUSTOMERS OF FBS
INVESTMENTS SERVICES INC.
800 NICOLLET MALL
ATTN: MONEY FUND UNIT R/R
MINNEAPOLIS, MN 55402-7020
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK 6.32%
PO BOX 387
ST LOUIS, MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA 60.06%
US BANK TRUST CENTER
ATTN LINDA FRITZ SPER0603
180 5TH ST E
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SPECIAL CUSTODY ACCOUNT FOR THE EXCLUSIVE 20.55%
BENEFIT OF CUSTOMERS OF FBS INVESTMENTS
SERVICES INC.
100 S 5TH ST STE 1400
ATTN: MONEY FUND UNIT R/R
MINNEAPOLIS, MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK 18.31%
PO BOX 387
ST LOUIS, MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK NA 67.36%
ATTN ACH DEPT SL-TW-17TF
PO BOX 387
ST LOUIS MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK NA CINCINATTI 29.84%
ATTN ACH DEPT SL-TW-17TF
PO BOX 387
ST LOUIS MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
84
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TREASURY RESERVE
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA 70.69%
ATTN LIDA FLAGSTAD
800 NICOLLET AVE BC-MN-H18U
MINNEAPOLIS MN 55402-7020
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NATIONAL FINANCIAL SERVICES CORP 13.38%
FOR EXCL BEN OF CUSTOMERS
ATTN MUTUAL FUNDS DEPT 5TH FLOOR
200 LIBERTY ST
1 WORLD FINANCIAL CTR
NEW YORK NY 10281-1003
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK NA CINCINNATTI 15.30%
ATTN ACM DEPT SL-TW-17TF
PO BOX 387
ST LOUIS MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MICRO CAP VALUE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
100.00%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
THOMAS J THIEM
3121 HASENUER CT
NORTH PLATTE NE 69101-0909
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
OHIO TAX EXEMPT MONEY MARKET
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRST AMERICAN FUNDS 100.00%
ATTN TEENA LARSEN BCMNH05M
800 NICOLLET MALL
MINNEAPOLIS MN 55402
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
85
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TECHNOLOGY FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TECHNOLOGY A OMNIBUS ACCOUNT 35.01%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 8.28%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 E 5TH ST
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIDELITY INVESTMENTS INSTL OPS CO 5.09%
AGENT FOR CERTAIN EMPLOYEE BENE PLN
100 MAGELLAN WAY-KWIC
COVINTON KY 41015-1999
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CHARLES SCHWAB & CO INC 8.68%
SPECIAL CUSTODY ACCOUNT
FOR BENEFIT OF CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4122
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TECHNOLOGY B OMNIBUS ACCOUNT 31.46%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
TECHNOLOGY C OMNIBUS ACCOUNT 74.26%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 19.63%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 11.19%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 41.98%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH STREET
ST PAUL MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 15.55%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 8.05%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRST AMERICAN FUNDS 100.00%
ATTN TEENA LARSON MPFP 1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
86
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
HEALTH SCIENCES FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
HEALTH SCIENCE A OMNIBUS ACCOUNT 43.04%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 7.34%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
U S BANCORP INVESTMENTS INC 8.50%
FBO 130266871
100 SOUTH FIFTH STREET SUITE 1400
MINNEAPOLIS MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
HEALTH SCIENCE B OMNIBUS ACCOUNT 36.95%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
HEALTH SCIENCE C OMNIBUS ACCOUNT 83.99%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 23.17%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 12.27%
DAILY VALUED RETIREMENT SERVICES
ATTN RECONCILIATION SPFT0401
180 EAST 5TH STREET
ST PAUL MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 53.18%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRST AMERICAN FUNDS 78.46%
ATTN TEENA LARSON MPFP 1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 21.54%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
87
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
REAL ESTATE SECURITIES FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
REAL ESTATE SEC A OMNIBUS ACCOUNT 27.50%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
UNIFIED TRUST COMPANY NA OMNIBUS 19.33%
2353 ALEXANDRIA DR STE 100
LEXINGTON KY 40504-3208
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
REAL ESTATE SEC B OMNIBUS ACCOUNT 40.66%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
REAL ESTATE SEC C OMNIBUS ACCOUNT 92.97%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 33.06%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 9.45%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 20.66%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 19.70%
C/O FIRSTAR BANK
PI BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 8.43%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 44.24%
C/O FIRSTAR TRUST CO
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 54.71%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
88
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
INTERNATIONAL FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
INTERNATIONAL A OMNIBUS ACCOUNT 50.25%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 6.14%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CHARLES SCHWAB & CO INC 5.90%
SPECIAL CUSTODY ACCOUNT
FOR BENEFIT OF CUSTOMERS
ATTN MUTUAL FUNDS
101 MONTGOMERY ST
SAN FRANCISCO CA 94104-4122
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
INTERNATIONAL B OMNIBUS ACCOUNT 48.37%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
INTERNATIONAL C OMNIBUS ACCOUNT 80.73%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 17.42%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 25.91%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 7.13%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH STREET
ST PAUL MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 14.12%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK TR 6.31%
US BANCORP CAP
U/A 01-01-1984
180 5TH ST E STE SPEN0502
SAINT PAUL MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 8.47%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WE 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 13.34%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK 51.86%
TRUSTEE OF THE MERCANTILE
BANCORPORATION INC - HORIZEN
ATTN GREG ANTRAINER
PO BOX 387
SAINT LOUIS MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 20.01%
C/O FIRSTAR EAST
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 5.96%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 15.95%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 6.04%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
89
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CORPORATE BOND FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CORP BOND C OMNIBUS ACCOUNT 84.45%
USBANCORP PIPER JAFFRAY FOR THE
EXCLUSIVE BENEFITS OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 36.60%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR & CO 10.73%
P O BOX 64482
ST PAUL MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 6.17%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 39.16%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 45.64%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 51.10%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIXED INCOME FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIXED INCOME A OMNIBUS ACCOUNT 36.35%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIXED INCOME B OMNIBUS ACCOUNT 29.94%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIXED INCOME C OMNIBUS ACCOUNT 71.02%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # BCC-083275 8.08%
TIMOTHY F MADDEN TTEE
ROSEBUD CHAR REMAINDER UNITRUST
U/A 12/22/00
1876 GLUEK LANE
ROSEVILLE MN 55113-3851
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 49.26%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATIONAL ASSOCIATION CUST 10.07%
DAILY VALUED RETIREMENT PROGRAMS
ATTN RECONCILIATION SPFT0401
180 EAST 5TH ST
ST PAUL, MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 7.09%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 14.20%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 12.50%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK 30.62%
TRUSTEE OF THE MERCANTILE
BANCORPORATION INC - HORIZEN
ATTN GREG ANTRAINER
PO BOX 387
SAINT LOUIS MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
REXTEX & CO 20.59%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 46.63%
C/O FIRSTAR TRUST CO
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
90
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
HIGH YIELD BOND FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
HIGH YIELD A OMNIBUS ACCOUNT 82.31%
USBANCORP PIPER JAFFRAY FOR THE
EXCLUSIVE BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
HIGH YIELD B OMNIBUS ACCOUNT 59.45%
USBANCORP PIPER JAFFRAY FOR THE
EXCLUSIVE BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # BAH-678848 8.06%
HELEN R FREYMARK TTEE
HELEN R FREYMARK LIV TRUST
U/A 7/23/98
441 NORTH PARK BLVD UNIT 2G
GLEN ELLYN IL 60137-4614
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US CLEARING CORP 20.36%
FBO 172-04798-13
26 BROADWAY
NEW YORK NY 10004-1703
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
HIGH YIELD C OMNIBUS ACCOUNT 99.00%
USBANCORP PIPER JAFFRAY FOR THE
EXCLUSIVE BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFT 1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 91.64%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRST AMERICAN FUNDS 100.00%
ATTN TEENA LARSON MPFP1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
91
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
INTERMEDIATE TERM BOND FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
INTER TERM INC A OMNIBUS ACCOUNT 28.17%
USBANCORP PIPER JAFFRAY FOR THE
EXCLUSIVE BENEFIT OF ITS CUSTOMERS
ATTN: TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MCWOOD & CO 13.15%
PO BOX 29522
RALEIGH NC 27626-0522
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 6.74%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 46.23%
C/O FIRSTAR EAST
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 25.63%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 20.77%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 7.20%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SHORT TERM BOND FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LTD TERM INC A OMNIBUS ACCOUNT 14.72%
USBANCORP PIPER JAFFRAY FOR THE
EXCLUSIVE BENEFIT OF ITS CUSTOMERS
ATTN: TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 6.04%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 21.95%
C/O FIRSTAR TRUST CO
ATTN MUTUAL FUNDS/INCOME
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 50.44%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 27.61%
A PARTNERSHIP
ATTN MUTUAL FUNDS/INCOME
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
92
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CALIFORNIA TAX FREE
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
Calif TAX FREE OMNIBUS ACCOUNT 41.96%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
Calif TAX FREE C OMNIBUS ACCOUNT 89.71%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANCORP INVESTMENTS 10.00%
FBO 124245781
100 SOUTH FIFTH STREET SUITE 1400
MINNEAPOLIS MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 59.88%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 21.97%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SAND & CO 18.15%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
93
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
COLORADO INTERMEDIATE TAX FREE
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
COLO INTER TX/FR A OMNIBUS ACCOUNT 11.61%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
UMBSC & CO 17.96%
IC GEORGE R WEBSTER TRUST
A/C #51-1504-00-3
PO BOX 419260
KANSAS CITY MO 64141-6260
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANCORP INVESTMENTS 8.88%
FBO 180642381
100 SOUTH FIFTH STREET SUITE 1400
MINNEAPOLIS MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANCORP INVESTMENTS 8.83%
FBO 124245781
100 SOUTH FIFTH STREET SUITE 1400
MINNEAPOLIS MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 36.56%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 56.88%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
94
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
COLORADO TAX FREE
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
COLO TAX FREE OMNIBUS ACCOUNT 43.27%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANCORP INVESTMENTS 5.36%
FBO 111200371
100 SOUTH FIFTH STREET SUITE 1400
MINNEAPOLIS MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANCORP INVESTMENTS 5.07%
FBO 124024421
100 SOUTH FIFTH STREET SUITE 1400
MINNEAPOLIS MN 55402-1217
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
INVESTORS INDEPENDENT TRUST CO 5.66%
FBO VISTA BANK
507 CANYON BLVD
BOULDER CO 80302-5058
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
COLO TAX FREE C OMNIBUS ACCOUNT 90.41%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LPL FINANCIAL SERVICES 6.24%
A/C 1245-1496
9785 TOWNE CENTRE DRIVE
SAN DIEGO CA 92121-1968
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 66.60%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 18.45%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 12.93%
% FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
95
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
INTERMEDIATE TAX FREE
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
INTER TX/FR A OMNIBUS ACCOUNT 13.61%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 49.06%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 17.30%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 21.40%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MINNESOTA INTERMEDIATE TAX FREE
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MN INTER TX/FR A OMNIBUS ACCOUNT 36.58%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
ALFRED P GALE 10.69%
2350 HIGHLAND RD
MAPLE PLAIN MN 55359-9570
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
DEAN WITTER FBO 11.09%
RALPH J HAFNER MARITAL TRUST
PO BOX 250 CHURCH STREET STATION
NEW YORK NY 10008-0250
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 89.58%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
96
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MINNESOTA TAX FREE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MN TAX FREE OMNIBUS ACCOUNT 77.02%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MN TAX FREE Y OMNIBUS ACCOUNT 8.42%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 77.76%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 5.49%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
97
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP CORE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
SMALL CAP CORE C OMNIBUS ACCOUNT 47.31%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # BCD-059064 28.93%
NFS/FMTC IRA R/O
FBO BEVERLY NIEMI
4206 N WILSON DRIVE APT # 5
SHOREWOOD WI 53211-1439
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATL ASSN CUST 12.78%
IRA A/C DARREL TUTEWOHL
2150 AZTEC LN
MENDOTA HTS MN 55120-1608
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 41.88%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 7.37%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 15.51%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 20.63%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 5.91%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
REXTEX & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
98
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MID CAP CORE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # BCC-273813 95.86%
MARTHA M WALSH REVOC TRUST
MARTHA M WALSH TTEE
1840 N PROSPECT AVENUE APT # 402
MILWUAKEE WI 53202-1961
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 21.31%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK TR 7.38%
US BANCORP CAP
U/A 01-01-1984
180 5TH ST E STE SPEN502
SAINT PAUL MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 17.63%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 17.20%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 22.45%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
14.28%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 6.87%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
52.62%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
10.45%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
21.87%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
99
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPITAL GROWTH FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATL ASSN CUST 14.78%
IRA A/C PEGGY KLITSCH
1721 W BURNSVILLE PKWY APT 317
BURNSVILLE MN 55337-2439
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATL ASSN CUST 60.73%
IRA A/C DARREL TUTEWOHL
2150 AZTEC LN
MENDOTA HTS MN 55120-1608
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATL ASSN CUST 20.91%
IRA A/C SUE A TUTEWOHL
2150 AZTEC LN
MENDOTA HTS MN 55120-1608
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 7.83%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK TR 17.33%
US BANCORP CAP
U/A 01-01-1984
180 5TH ST E STE SPEN502
SAINT PAUL MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 21.54%
C/O FIRSTAR TRUST CO
ATTN MUTUAL FUNDS/INCOME
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 39.46%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
83.48%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 5.59%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
5.60%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO
% FIRSTAR TRUST CO
ATTN MUTUAL FUNDS/INCOME
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
6.36%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO
C/O FIRSTAR TRUST CO
ATTN MUTUAL FUNDS/INCOME
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
100
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
RELATIVE VALUE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRST AMERICAN FUNDS 9.80%
ATTN TEENA LARSON MPFP 1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
RELATIVE VALUE C OMNIBUS ACCOUNT 90.20%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK TR 32.66%
US BANCORP CAP
U/A 01-01-1984
180 5TH ST E STE SPEN502
SAINT PAUL MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 29.09%
C/O FIRSTAR TRUST CO
ATTN MUTUAL FUNDS/INCOME
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 25.41%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
101
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LARGE CAP CORE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
70.32%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
LARGE CAP CORE C OMNIBUS ACCOUNT 28.79%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
26.92%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 18.96%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 14.44%
C/O WISCONSON TRUST CO
ATTN MUTUAL FUNDS/INCOME
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 29.07%
C/O FIRSTAR BANK
ATTN MUTUAL FUNDS/INCOME
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 23.66%
C/O FIRSTAR BANK
ATTN MUTUAL FUNDS/INCOME
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 9.84%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
80.26%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
18.29%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
102
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BOND IMMDEX
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BOND IMMEX C OMNIBUS ACCOUNT 14.44%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # BAH-233617 13.22%
DEBORAH A PITZKA
W63 N 1015 HOLLY LN
CEDARBURG WI 53012-1283
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # BCC-263125 27.93%
MILTON F GUTGLASS
PAULA GUTGLASS
FIRSTAR BANK COLLATERAL AGENT
491 DESERT HOLLY DR
PALM DESERT CA 92211-7412
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # MRA-014583 8.88%
NFS/FMTC IRA
FBO JOHN C DUKE
1913 LYNWOOD
BENTON AR 72015-3182
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # BCD-059064 8.21%
NFS/FMTC IRA R/O
FBO BEVERLY NIEMI
4206 N WILSON DRIVE APT # 5
SHOREWOOD WI 53211-1439
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NFSC FEBO # BCC-273813 14.36%
DEBORAH A PITZKA
W63 N 1015 HOLLY LN
CEDARBURG WI 53012-1283
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK TR 13.45%
US BANCORP CAP
U/A 01-01-1984
180 5TH ST E STE SPEN502
SAINT PAUL MN 55101-2672
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
28.79%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 17.47%
ATTN MUTUAL FUNDS/INCOME
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
18.54%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 33.09%
ATTN MUTUAL FUNDS/INCOME
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
50.89%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 20.94%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 8.29%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
103
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
GROWTH AND INCOME
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
GROWTH & INCOME C OMNIBUS ACCOUNT 98.47%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
VAR AND CO. 23.97%
P.O. BOX 64482
ST PAUL, MN 55164-0482
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 16.74%
C/O FIRST WISCONSIN TRUST CO
ATTN MUTUAL FUNDS/INCOME
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 22.50%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO 23.49%
C/O FIRSTAR BANK
ATTN MUTUAL FUNDS/INCOME
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 8.69%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR BANK TR
MERCANTILE BANCORPORATION
INC - HOIZEN
ATTN GREG ANTRAINER
PO BOX 387
SAINT LOUIS MO 63166-0387
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
68.71%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
REXTEX & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
17.52%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
13.77%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
U.S. GOVERNMENT SECURITIES FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA CUST 6.94%
ROBERT W DAVIS IRA ROLLOVER
818 BROADWAY EXT
ELSBERRY MO 63343-1109
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MAYTON CONSTRUCTION TR 6.10%
MAYTON CONST PFT SHARING PL
122 CENTRAL LN
MALVERN AR 72104-6739
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NA CUST 11.51%
KATHLEEN M HYLAND
IRA ROLLOVER
3367 PARKCREST LN APT 1
CINCINNATI OH 45211-6324
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
GOV'T SECURITIES CL C OMNIBUS ACCOUNT 88.18%
USBANCORP PIPER JAFFRAY FOR THE EXCLUSIVE
BENEFIT OF ITS CUSTOMERS
ATTN TA SERVICES MPFP 1922
601 2ND AVE S
MINNEAPOLIS, MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
US BANK NATL ASSN CUST 6.26%
IRA A/C THEODORE R ECKSTROM
2335 DECATUR AVE N
GOLDEN VALLEY MN 55427-3214
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO 12.42%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 79.11%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
80.79%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
REXTEX & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
7.13%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MUGGS & CO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
6.88%
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
CAPINCO
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
104
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
MISSOURI TAX FREE FUND
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRST AMERICAN FUNDS 100%
ATTN TEENA LARSON MPFP 1922
601 2ND AVE S
MINNEAPOLIS MN 55402-4303
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
BAND & CO 84.41%
C/O FIRSTAR BANK
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
FIRSTAR TRUST 13.21%
C/O FIRSTAR
PO BOX 1787
MILWAUKEE WI 53201-1787
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
- ------------------------------------------------- ----------- ----------- ----------- ----------- ------------
NET ASSET VALUE AND PUBLIC OFFERING PRICE
The public offering price of the shares of a Fund generally equals the
Fund's net asset value plus any applicable sales charge. A summary of any
applicable sales charge assessed on Fund share purchases is set forth in the
Fund's Prospectuses. The public offering price of each Fund's Class A and Class
C Shares as of September 30, 2001 was as set forth below. Please note that the
public offering prices of Class B, Class Y and Class S Shares are the same as
net asset value since no sales charges are imposed on the purchase of such
shares.
PUBLIC OFFERING PRICE
CLASS A CLASS C
Balanced Fund $10.05 $9.59
Capital Growth Fund 15.53 14.83
Equity Income Fund 12.84 12.21
Growth & Income Fund 32.97 31.48
Large Cap Core Fund 25.86 24.69
Large Cap Growth Fund 9.87 9.23
Large Cap Value Fund 16.91 16.06
Relative Value Fund 25.49 24.33
Equity Index Fund 20.64 19.61
Mid Cap Index Fund 9.93 9.47
Small Cap Index Fund 10.24 9.78
Micro Cap Fund 17.87 17.07
Mid Cap Core Fund 29.98 28.62
Mid Cap Growth Fund 5.96 5.52
Mid Cap Value Fund 14.54 13.77
Small Cap Core Fund 12.67 12.09
Small Cap Growth Fund 11.94 11.13
Small Cap Value Fund 14.18 13.26
Emerging Markets Fund 6.21 5.86
International Fund 9.48 8.84
Health Sciences Fund 10.41 9.83
Real Estate Securities Fund 13.88 13.21
Science & Technology Fund 4.97 4.75
Technology Fund 6.73 6.34
Bond IMMDEX Fund 30.44 29.44
Corporate Bond Fund 10.45 10.07
Fixed Income Fund 11.87 11.45
High Yield Bond Fund 9.71 9.40
Intermediate Term Bond Fund 10.50 *
Short Term Bond Fund 10.51 *
Strategic Income Fund 8.74 8.43
U.S. Government Securities Fund 11.50 11.11
Arizona Tax Free Fund 11.48 11.09
California Intermediate Tax Free Fund 10.65 *
California Tax Free Fund 11.67 11.29
Colorado Intermediate Tax Free Fund 11.04 *
Colorado Tax Free Fund 11.58 11.19
Intermediate Tax Free Fund 11.20 *
Minnesota Intermediate Tax Free Fund 10.45 *
Minnesota Tax Free Fund 11.55 11.15
Missouri Tax Free Fund 12.58 12.17
Nebraska Tax Free Fund 10.65 10.24
Oregon Intermediate Tax Free Fund 10.41 *
Tax Free Fund 11.48 11.07
* Class C shares not offered.
The net asset value of each Fund's shares is determined on each day
during which the New York Stock Exchange (the "NYSE") is open for business. The
NYSE is not open for business on the following holidays (or on the nearest
Monday or Friday if the holiday falls on a weekend): New Year's Day, Martin
Luther King, Jr. Day, Washington's Birthday (observed), Good Friday, Memorial
Day (observed), Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Each year the NYSE may designate different dates for the observance of these
holidays as well as designate other holidays for closing in the future. To the
extent that the securities held by a Fund are traded on days that the Fund is
not open for business, such Fund's net asset value per share may be affected on
days
105
when investors may not purchase or redeem shares. This may occur, for example,
where a Fund holds securities which are traded in foreign markets.
On September 30, 2001, the net asset values per share for each class of
shares of the Funds were calculated as follows. No Class S Shares were
outstanding as of such date.
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
NET ASSETS SHARES NET ASSET
OUTSTANDING VALUE PER SHARE
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
CAPITAL GROWTH FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $8,597,419 585,477 $14.68
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $46,102,673 3,159,313 $14.59
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $15 1 $14.68
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $11,881,420 808,873 $14.69
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $131,961,269 8,932,173 $14.77
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
BALANCED FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $127,589,370 13,424,418 $9.50
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $47,150,082 4,994,827 $9.44
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $2,351,099 247,870 $9.49
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $39,527,170 4,160,114 $9.50
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $375,983,024 39,462,084 $9.53
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
EQUITY INCOME FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $24,556,888 2,025,021 $12.13
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $11,515,811 954,459 $12.07
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $8,028,153 663,841 $12.09
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $328,293 27,077 $12.12
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $267,361,074 21,916,302 $12.20
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
GROWTH & INCOME FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $150,322,727 4,823,641 $31.16
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $11,612,659 376,347 $30.86
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $31 1 $31.17
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $44,820,935 1,439,147 $31.14
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $497,781,661 15,950,663 $31.21
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
LARGE CAP CORE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $34,330,009 1,404,520 $24.44
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $2,954,372 123,425 $23.94
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $24 1 $24.44
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $2,801,567 114,589 $24.45
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $316,212,815 12,684,845 $24.93
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
LARGE CAP GROWTH FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $85,443,548 9,155,837 $9.33
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $17,975,597 2,005,850 $8.96
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $13,177,028 1,441,909 $9.14
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $9 1 $9.33
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $594,162,913 62,913,602 $9.44
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
LARGE CAP VALUE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $94,064,434 5,887,747 $15.98
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $38,107,807 2,425,497 $15.71
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $10,140,728 637,960 $15.90
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $16 1 $15.97
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $970,189,970 60,564,491 $16.02
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
106
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
RELATIVE VALUE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $33,287,813 1,381,987 $24.09
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $12,081,297 503,145 $24.01
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $24 1 $24.09
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $34,004,063 1,413,130 $24.06
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $344,494,811 14,284,925 $24.12
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
EQUITY INDEX FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $188,410,393 9,660,241 $19.50
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $95,585,724 4,955,350 $19.29
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $29,559,782 1,523,153 $19.41
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $38,220,187 1,959,911 $19.50
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $1,567,607,003 80,422,440 $19.49
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
MID CAP INDEX FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $2,971,894 316,726 $9.38
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $1,265,396 135,638 $9.33
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $10 1 $9.38
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $4,301,259 458,748 $9.38
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $176,856,990 18,854,877 $9.38
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
SMALL CAP INDEX FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $340,863 35,219 $9.68
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $106,870 11,101 $9.63
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $10 1 $9.68
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $13,885,734 1,439,877 $9.64
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $54,168,505 5,586,165 $9.70
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
MICRO CAP FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $45,233,153 2,678,010 $16.89
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $3,164,937 192,521 $16.44
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $549 32 $16.90
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $2,014,459 119,270 $16.89
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $266,115,427 15,310,783 $17.38
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
MID CAP CORE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $82,042,954 2,895,811 $28.33
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $2,607,874 94,534 $27.59
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $28 1 $28.33
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $1,483,880 52,458 $28.29
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $406,349,006 13,958,718 $29.11
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
MID CAP GROWTH FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $102,836,791 18,256,764 $5.63
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $3,518,344 650,555 $5.41
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $6,245,581 1,144,880 $5.46
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $10 2 $5.63
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $227,034,638 39,244,797 $5.79
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
MID CAP VALUE
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $13,582,984 988,816 $13.74
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $11,310,967 845,702 $13.37
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $3,311,943 242,902 $13.63
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $44,268 3,222 $13.74
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $291,931,685 21,197,518 $13.77
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
SMALL CAP CORE
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $17,351,342 1,449,925 $11.97
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $1,978,651 175,452 $11.28
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $12 1 $11.97
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $3,721,357 311,721 $11.94
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $291,701,705 23,789,500 $12.26
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
SMALL CAP GROWTH FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $31,913,370 2,829,384 $11.28
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $5,008,934 479,813 $10.44
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $6,377,964 578,706 $11.02
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $11 1 $11.28
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $330,917,100 28,775,417 $11.50
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
107
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
SMALL CAP VALUE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $34,291,712 2,559,602 $13.40
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $12,391,788 952,846 $13.01
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $4,547,448 346,465 $13.13
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $13 1 $13.40
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $434,096,950 32,192,203 $13.48
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
EMERGING MARKETS FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $3,243,862 552,985 $5.87
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $173,389 30,258 $5.73
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $89,530 15.,436 $5.80
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $10 2 $5.87
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $40,281,933 6,803,758 $5.92
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
INTERNATIONAL FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $64,906,904 7,242,301 $8.96
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $10,857,648 1,285,176 $8.45
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $17,805,855 2,036,043 $8.75
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $9,461,078 1,055,586 $8.96
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $661,885,927 73,300,055 $9.03
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
HEALTH SCIENCES FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $6,513,580 661,782 $9.84
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $3,496,574 371,931 $9.40
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $5,328,752 547,847 $9.73
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $10 1 $9.84
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $17,140,889 1,725,852 $9.93
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
REAL ESTATE SECURITIES FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $2,421,259 184,515 $13.12
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $1,723,778 132,408 $13.02
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $340,898 26,058 $13.08
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $320,169 24.401 $13.12
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $96,262,502 7,319,112 $13.15
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
SCIENCE & TECHNOLOGY FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $987,958 210,077 $4.70
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $3,562,681 765,303 $4.66
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $9 2 $4.70
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $1,858,248 395,201 $4.70
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $28,292,777 5,966,475 $4.74
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
TECHNOLOGY FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $29,083,997 4,572,482 $6.36
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $15,973,878 2,770,538 $5.77
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $9,009,603 1,434,645 $6.28
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $6 1 $6.36
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $59,653,581 9,128,705 $6.53
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
BOND IMMDEX FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $87,775,292 3,011,589 $29.15
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $8,505,089 292,012 $29.13
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $46,666 1,601 $29.15
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $10,329,627 354,331 $29.15
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $645,133,581 22,118,904 $29.17
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
CORPORATE BOND FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $9,820,143 981,215 $10.01
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $22,607,801 2,266,065 $9.98
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $5,208,666 522,284 $9.97
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $3,236,975 323,453 $10.01
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $185,392,260 18,532,315 $10.00
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
108
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
FIXED INCOME FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $119,066,686 10,475,579 $11.37
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $15,070,977 1,334,309 $11.29
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $7,147,845 630,570 $11.34
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $35,061,764 3,084,817 $11.37
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $1,368,812,037 120,435,165 $11.37
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
HIGH YIELD BOND FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $161,422 17,354 $9.30
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $40,015 4,299 $9.31
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $3,748,732 402,640 $9.31
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $10 1 $9.30
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $8,308,189 892,004 $9.31
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
INTERMEDIATE TERM BOND FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $61,224,846 5,968,238 $10.26
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $723,924 70,566 $10.26
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $878,694,893 85,865,062 $10.23
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
SHORT TERM BOND FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $133,177,128 12,969,918 $10.27
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $361,654 35,221 $10.27
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $277,244,125 26,988,623 $10.27
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
STRATEGIC INCOME FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $19,014,344 2,270,485 $8.37
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $2,426,230 290,755 $8.35
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $4,240,198 508,018 $8.35
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $10 1 $8.38
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $155,145,944 18,515,459 $8.38
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
U.S. GOVERNMENT SECURITIES FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $7,751,175 703,874 $11.01
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class B $2,038,570 184,861 $11.03
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $105,064 9,555 $11.00
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class S $19,091,875 1,740,230 $10.97
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $183,883,100 16,701,670 $11.01
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
ARIZONA TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $13,971,265 1,270,984 $10.99
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $2,002,869 182,386 $10.98
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $5,822,154 529,615 $10.99
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
CALIFORNIA INTERMEDIATE TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $3,391,505 325,655 $10.41
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $43,647,16 4,185,868 $10.43
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
CALIFORNIA TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $18,138,778 1,624,086 $11.17
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $646,915 57,855 $11.18
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $6,725,731 602,107 $11.17
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
COLORADO INTERMEDIATE TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $8,320,191 771,057 $10.79
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $47,906,344 4,450,251 $10.76
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
COLORADO TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $20,549,753 1,853,424 $11.09
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $1,697,502 153,255 $11.08
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $1,923,249 173,215 $11.10
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
109
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
INTERMEDIATE TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $23,235,789 2,122,898 $10.95
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $458,743,332 41,977,133 $10.93
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
MINNESOTA INTERMEDIATE TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $12,408,088 1,215,832 $10.21
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $255,939,402 25,177,896 $10.17
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
MINNESOTA TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $107,259,933 9,694,950 $11.06
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $6,382,094 578,185 $11.04
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $49,078,488 4,441,070 $11.05
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
MISSOURI TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $22,573,277 1,872,991 $12.05
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $12 1 $12.05
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $129,714,782 10,759,964 $12.06
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
NEBRASKA TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $5,090,056 499,238 $10.20
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $226,344 22,323 $10.14
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $22,442,773 2,201,973 $10.19
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
OREGON INTERMEDIATE TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $5,476,732 538,204 $10.18
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $153,951,419 15,123,653 $10.18
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
TAX FREE FUND
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class A $48,768,821 4,436,528 $10.99
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class C $4,493,750 410,091 $10.96
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
Class Y $501,360,539 45,572,313 $11.00
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
- ------------------------------------------------------ -- ----------------- -- ----------------- -- ----------------- --
110
FUND PERFORMANCE
LINKED PERFORMANCE. Advertisements and other sales literature for the
Funds' Class Y shares may include linked performance where there is a
performance history of less than five years. That is, in situations where a Fund
has a share class with an inception date reflecting a performance history longer
than five years, but that same Fund's Class Y shares have an inception date
reflecting a shorter performance history, the Fund may advertise Class Y share
performance "linked" to the inception date of the older share class. This
performance presentation will not be adjusted to reflect actual Class Y share
fees and expenses, and the Fund will (additionally) provide performance based on
the Fund's actual Class Y share inception date. Fund prospectuses and annual
report(s) will continue to reflect actual share class performance from actual
inception dates.
PERFORMANCE PRESENTATION. Advertisements and other sales literature for
the Funds may refer to a Fund's "average annual total return" and "cumulative
total return." In addition, each Fund may provide yield calculations in
advertisements and other sales literature. All such yield and total return
quotations are based on historical earnings and are not intended to indicate
future performance. The return on and principal value of an investment in any of
the Funds will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
AVERAGE ANNUAL TOTAL RETURN. Average annual total return is the average
annual compounded rate of return on a hypothetical $1,000 investment made at the
beginning of the advertised period. Average annual total return figures are
computed according to the following formula:
n
P(1 + T) = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the
period of a hypothetical $1,000 payment
made at the beginning of such period
This calculation deducts the maximum sales charge from the initial hypothetical
$1,000 investment, assumes all dividends and capital gains distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the applicable Prospectus, and includes all recurring fees, such as
investment advisory and management fees, charged to all shareholder accounts.
For Class B and Class C Shares, the calculation assumes the maximum deferred
sales load is deducted at the times, in the amounts and under the terms
disclosed in the applicable Prospectus. Average annual total return quotations
may be accompanied by quotations that do not reflect the sales charges, and
therefore will be higher.
The Advisor and Distributor have waived a portion of their fees on a
voluntary basis, thereby increasing total return and yield. These fees may or
may not be waived in the future in the Advisor's or Distributor's discretion.
CUMULATIVE TOTAL RETURN. Cumulative total return is calculated by
subtracting a hypothetical $1,000 investment in a Fund from the redeemable value
of such investment at the end of the advertised period, dividing such difference
by $1,000 and multiplying the quotient by 100. Cumulative total return is
computed according to the following formula:
CTR = (ERV-P) 100
------
P
Where: CTR = Cumulative total return;
ERV = ending redeemable value at the end of
the period of a hypothetical $1,000
payment made at the beginning of such
period; and
P = initial payment of $1,000.
This calculation assumes all dividends and capital gain distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the applicable Prospectus and includes all recurring fees, such as investment
advisory and management fees, charged to all shareholder accounts.
111
Based on the foregoing, the cumulative and the average annual total
returns for each class of the Funds from inception through September 30, 2001,
were as set forth below. The performance for Class A, Class B, Class C and Class
S Shares will normally be lower than for Class Y Shares because Class A, Class
B, Class C and Class S Shares are subject to sales and distribution charges
and/or shareholder servicing fees not charged to Class Y Shares. Inception dates
of Share Classes are listed in parentheses.
- --------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Cumulative Average Annual Average Annual Average Annual Average Annual
Since Inception Since Inception One Year Five Year Ten Year
- --------------------- ------------------- ------------------- ------------------- ------------------- -------------------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Without With Without With Without With Without With Without With
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Sales Charge Sales Charge Sales Charge Sales Charge Sales Charge
- --------------------- ------------------- ------------------- ------------------- ------------------- -------------------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
% % % % % % % % % %
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
CAPITAL GROWTH FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (3/31/00) (43.80) (46.90) (31.88) (34.40) (43.28) (46.39) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B 92.60 92.60 10.12 10.12 (43.66) (46.40) 4.95 4.62 -- --
(12/29/94)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 2.58 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (38.82) -- -- -- -- -- -- -- -- --
(12/11/00)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/18/97) 1.19 -- 0.29 -- (43.17) -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
BALANCED FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A 83.80 73.63 9.48 8.55 (18.38) (22.88) 5.99 4.80 -- --
(12/14/92)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (8/15/94) (1.94) (4.22) (0.75) (1.66) (19.00) (22.37) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) 2.15 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) (14.03) -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/4/94) 113.89 -- 8.33 -- (18.14) -- 6.29 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
EQUITY INCOME FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A 149.19 135.53 10.95 10.24 (3.89) (9.19) 10.74 9.49 -- --
(12/18/92)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (8/15/94) 119.18 119.18 11.64 11.64 (4.64) (8.35) 9.98 9.72 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) 2.00 0.97 0.75 0.36 (4.74) (6.40) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 4.75 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/2/94) 134.55 -- 12.64 -- (3.71) -- 11.08 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
GROWTH & INCOME
FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (1/9/95) 128.30 115.70 13.06 12.11 (25.48) (29.58) 7.85 6.64 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (3/1/99) (15.62) (17.70) (6.36) (7.26) (26.00) (29.31) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 3.94 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (23.50) -- -- -- -- -- -- -- -- --
(11/27/00)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y 217.42 -- 10.33 -- (25.30) -- 8.11 -- 10.75 --
(12/29/89)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
LARGE CAP CORE FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (1/9/95) 91.03 80.49 10.11 9.18 (37.47) (40.92) 5.36 4.18 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (3/1/99) (22.41) (24.35) (9.35) (10.24) (37.95) (40.67) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 2.95 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (31.27) -- -- -- -- -- -- -- -- --
(11/27/00)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y 102.88 -- 8.42 -- (37.34) -- 5.62 -- -- --
(12/29/92)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
LARGE CAP GROWTH
FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A 58.59 49.89 5.39 4.72 (51.45) (54.11) 2.09 0.95 -- --
(12/18/92)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (8/15/94) 66.56 66.56 7.42 7.42 (51.79) (53.93) 1.34 1.09 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) (36.14) (36.78) (15.51) (15.84) (51.78) (52.70) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 2.87 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/2/94) 77.92 -- 8.38 -- (51.31) -- 2.36 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
LARGE CAP VALUE FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A 333.35 309.60 11.23 10.78 (13.72) (18.48) 6.10 4.91 10.94 10.32
(12/22/87)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (8/15/94) 97.15 97.15 9.99 9.99 (14.42) (18.29) 5.31 5.08 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) (12.80) (13.67) (5.02) (5.38) (14.36) (15.99) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 4.24 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/4/94) 116.14 -- 10.60 -- (13.53) -- 6.38 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
112
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
RELATIVE VALUE FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (6/5/91) 207.54 190.67 11.50 10.89 (12.18) (17.00) 9.55 8.32 12.06 11.42
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (3/3/98) (4.67) (7.44) (1.36) (2.18) (12.75) (17.07) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 3.57 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (13.53) -- -- -- -- -- -- -- -- --
(12/11/00)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/18/97) 16.27 -- 3.73 -- (11.97) -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
EQUITY INDEX FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A 171.55 156.67 12.03 11.31 (26.95) (30.98) 9.55 8.32 -- --
(12/14/92)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (8/15/94) 132.25 132.25 12.55 12.55 (27.49) (31.00) 8.73 8.44 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) (18.68) (19.51) (7.48) (7.83) (27.50) (28.92) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 3.72 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/4/94) 148.10 -- 12.61 -- (26.78) -- 9.83 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
MID CAP INDEX FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (11/4/99) 4.22 (1.50) 2.19 (0.79) (20.51) (24.90) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (11/4/99) 2.85 (0.88) 1.48 (0.46) (21.05) (24.64) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 3.42 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (14.77) -- -- -- -- -- -- -- -- --
(11/27/00)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (11/4/99) 4.67 -- 2.42 -- (20.26) -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
SMALL CAP INDEX
FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A 8.25 2.32 2.92 0.84 (12.33) (17.16) -- -- -- --
(12/30/98)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (12.11) (16.50) -- -- -- -- -- -- -- --
(12/11/00)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 2.11 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S 7.80 -- 2.77 -- (12.39) -- -- -- -- --
(12/30/98)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y 8.76 -- 3.10 -- (12.13) -- -- -- -- --
(12/30/98)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
MICRO CAP FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (8/1/95) 352.15 327.36 27.73 26.57 (29.23) (33.13) 21.35 19.99 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (3/1/99) 128.99 125.99 37.81 37.10 (29.79) (32.19) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 3.43 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S 68.90 -- -- -- -- -- -- -- -- --
(12/11/00)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/1/95) 359.43 -- 28.06 -- (29.07) -- 21.67 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
MID CAP CORE FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (1/9/95) 98.26 87.36 10.72 9.79 (22.64) (26.89) 5.66 4.47 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (3/1/99) 16.20 14.00 5.98 5.20 (23.28) (25.75) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 3.39 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (20.87) -- -- -- -- -- -- -- -- --
(12/11/00)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y 266.39 -- 11.68 -- (22.46) -- 5.91 -- 10.09 --
(12/28/89)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
MID CAP GROWTH FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (7/31/98) 281.96 261.02 12.43 11.88 (49.38) (52.17) 4.36 3.18 10.63 10.01
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (7/31/98) (2.08) (3.25) (0.66) (1.04) (49.65) (51.11) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) (9.29) (10.23) (3.60) (3.97) (49.73) (50.53) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 1.81 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (7/31/98) 26.04 -- 5.14 -- (49.22) -- 4.64 -- 10.77 --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
MID CAP VALUE
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A 314.38 291.67 10.87 10.42 (5.41) (10.61) 2.94 1.78 10.24 9.61
(12/22/87)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (8/15/94) 62.70 62.70 7.07 7.07 (6.21) (10.90) 2.18 1.94 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) 0.30 (0.72) 0.11 (0.27) (6.17) (8.05) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 3.23 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/4/94) 78.00 -- 7.83 -- (5.37) -- 3.20 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
113
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
SMALL CAP CORE*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (5/6/92) 159.24 145.03 10.66 10.00 (15.56) (20.20) 6.66 5.46 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (3/6/95) 61.17 61.17 7.54 7.54 (16.14) (19.36) 5.94 5.66 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 2.13 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S 80.2 -- 7.90 -- (15.42) -- 6.72 -- -- --
(12/31/93)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (5/6/92) 164.62 -- 10.90 -- (15.37) -- 6.98 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
SMALL CAP GROWTH
FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (7/31/98) 254.04 254.04 9.08 9.08 (41.71) (44.90) 9.58 8.34 9.85 9.85
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (7/31/98) 9.05 6.77 2.77 2.09 (42.14) (44.40) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) 0.42 (0.61) 0.16 (0.23) (42.14) (43.16) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 0.98 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (7/31/98) 12.67 -- 3.84 -- (41.55) -- 9.75 -- 9.94 --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
SMALL CAP VALUE FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (8/1/94) 129.99 117.38 12.33 11.45 (6.36) (11.49) 6.30 5.11 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (9/24/97) 0.16 (1.98) 0.04 (0.52) (7.24) (11.12) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) 16.92 15.71 6.05 5.64 (7.08) (8.78) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 4.36 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/1/94) 133.47 -- 12.56 -- (6.25) -- 6.54 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
EMERGING MARKETS
FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (7/31/98) (41.12) (44.34) (6.49) (7.16) (30.94) (34.71) (7.83) (8.87) -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (7/31/98) (21.18) (23.55) (7.28) (8.18) (31.54) (34.96) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) (41.77) (42.35) (27.76) (28.19) (31.44) (32.84) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 2.62 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (7/31/98) (18.57) -- (6.32) -- (30.84) -- (7.67) -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
INTERNATIONAL FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (4/7/94) 33.65 26.32 3.99 3.20 (32.27) (35.98) 2.89 1.73 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (8/15/94) 34.64 34.64 4.63 4.63 (32.77) (35.77) 2.13 1.84 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) -- -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 35.91 -- 4.21 -- (32.25) -- 2.87 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (4/4/94) 38.13 -- 4.41 -- (32.09) -- 3.18 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
HEALTH SCIENCES FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (1/31/96) 29.43 22.34 4.66 3.62 (17.35) (21.91) 5.58 4.40 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (1/31/96) 24.17 23.23 3.89 3.76 (17.99) (21.64) 4.82 4.50 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/00) 11.77 10.64 6.92 6.27 (17.92) (19.44) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 8.61 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (1/31/96) 31.24 -- 4.91 -- (17.15) -- 5.84 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
REAL ESTATE
SECURITIES FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (9/29/95) 83.41 73.38 10.63 9.60 8.69 2.71 9.19 7.96 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (9/29/95) 75.05 75.05 9.78 9.78 7.93 2.93 8.39 8.10 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/00) 35.51 34.12 20.05 19.31 7.93 5.85 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 4.87 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (6/30/95) 96.01 -- 11.36 -- 9.01 -- 9.47 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
SCIENCE &
TECHNOLOGY FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (3/31/00) (78.57) (79.75) (64.15) (65.48) (78.80) (79.97) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (8/9/99) (53.40) (54.80) (29.98) (30.97) (78.91) (79.97) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) (7.11) -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (73.43) -- -- -- -- -- -- -- -- --
(12/11/00)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/9/99) (52.60) -- (29.42) -- (78.74) -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
114
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TECHNOLOGY FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (4/4/94) 48.79 40.63 5.45 4.66 (83.30) (84.22) (7.57) (8.61) -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (8/15/94) 43.03 43.03 5.15 5.15 (83.42) (84.07) (8.22) (8.40) -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/00) (84.35) (84.51) (67.22) (67.42) (83.43) (83.73) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) (8.49) -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (4/4/94) 51.31 -- 5.68 -- (83.26) -- (7.30) -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
BOND IMMDEX FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (1/9/95) 72.78 65.45 8.47 7.78 12.62 7.84 7.76 6.83 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (3/1/99) 18.30 15.30 6.72 5.67 11.81 6.81 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 0.66 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S 9.56 -- -- -- -- -- -- -- -- --
(12/11/00)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y 156.70 -- 8.35 -- 12.89 -- 8.03 -- 7.92 --
(12/29/89)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
CORPORATE BOND FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (2/1/00) 16.68 11.76 9.72 6.92 10.94 6.18 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (2/1/00) 15.23 10.24 8.90 6.04 10.06 5.08 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/00) 15.10 13.96 8.83 8.18 10.10 8.02 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 0.81 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/1/01) 156.70 -- 8.35 -- 12.89 -- 8.03 -- 7.92 --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
FIXED INCOME FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A 182.01 170.12 7.82 7.48 12.50 7.76 7.19 6.26 7.12 6.66
(12/22/87)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (8/15/94) 56.99 56.99 6.53 6.53 11.59 6.59 6.40 6.09 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) 14.57 13.47 5.25 4.86 11.68 9.55 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 0.80 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (4/4/94) 64.28 -- 6.70 -- 12.76 -- 7.47 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
HIGH YIELD BOND FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (8/30/01) (6.61) (8.71) -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (8/30/01) (6.51) (11.17) -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (8/30/01) (6.55) (8.39) -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) (1.90) -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/30/01) (6.51) -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
INTERMEDIATE TERM
BOND FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A 64.71 61.01 7.70 7.34 12.01 9.53 7.16 6.68 -- --
(12/14/92)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 10.58 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/4/94) 78.05 -- 6.83 -- 12.08 -- 7.40 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
SHORT TERM BOND FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A 64.04 60.35 5.79 5.52 10.46 7.95 6.54 6.05 -- --
(12/14/92)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) 0.20 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/4/94) 57.19 -- 6.09 -- 10.62 -- 6.59 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
STRATEGIC INCOME
FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (7/20/98) 6.82 2.31 2.09 0.72 1.99 (2.39) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (7/20/98) 4.37 1.86 1.35 0.58 1.17 (3.53) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) 5.95 4.85 2.20 1.80 1.04 (0.90) -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (9/24/01) (0.24) -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (7/20/98) 7.62 -- 2.33 -- 2.12 -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
U.S. GOVERNMENT
SECURITIES FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (6/2/88) 155.63 144.85 7.30 6.95 11.37 6.67 6.55 5.62 6.42 5.96
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class B (5/11/95) 42.87 42.87 5.74 5.74 10.68 5.68 5.87 5.55 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 0.36 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class S (6/7/94) 58.29 -- 6.48 -- 11.44 -- 6.54 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/1/91) 105.24 -- 6.98 -- 11.67 -- 6.86 -- 6.74 --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
115
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
ARIZONA TAX FREE
FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (2/1/00) 19.45 16.77 11.28 9.77 10.50 8.02 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/00) 18.83 17.65 10.93 10.27 10.15 8.01 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/1/00) 20.02 -- 11.60 -- 10.76 -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
CALIFORNIA
INTERMEDIATE TAX
FREE FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (8/8/97) 24.44 21.65 5.42 4.84 8.41 5.98 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/8/97) 24.68 -- 5.47 -- 8.39 -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
CALIFORNIA TAX FREE
FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (2/1/00) 20.96 15.86 12.12 9.25 9.73 5.10 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/00) 20.30 19.11 11.76 11.09 9.42 7.31 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/1/00) 21.41 -- 12.37 -- 9.99 -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
COLORADO
INTERMEDIATE TAX
FREE FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (4/4/94) 53.54 50.09 5.89 5.57 9.75 7.25 5.50 5.02 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (4/4/94) 53.17 -- 5.86 -- 9.67 -- 5.45 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
COLORADO TAX FREE
FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (2/1/00) 20.50 15.42 11.86 9.01 11.78 7.05 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/00) 19.79 18.60 11.47 10.80 11.41 9.26 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/1/00) 21.04 -- 12.17 -- 12.02 -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
INTERMEDIATE TAX
FREE FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A 115.93 111.08 5.75 5.57 9.19 6.74 5.42 4.93 5.44 5.20
(12/22/87)
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/4/94) 43.86 -- 4.87 -- 9.20 -- 5.40 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
MINNESOTA
INTERMEDIATE TAX
FREE FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (2/25/94) 44.88 41.62 5.00 4.69 8.85 6.35 5.33 4.85 -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/28/94) 44.40 -- 4.96 -- 8.89 -- 5.26 -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
MINNESOTA TAX FREE
FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (7/11/98) 141.99 131.79 6.91 6.56 9.24 4.62 5.84 4.93 6.50 6.04
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) 10.07 9.02 3.67 3.30 8.88 6.78 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/1/97) 24.69 -- 5.44 -- 9.52 -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
MISSOURI TAX FREE
FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (7/15/88) 104.88 96.16 6.73 6.31 9.61 4.94 5.53 4.61 6.17 5.71
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (9/24/01) 0.17 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (7/15/88) 148.28 -- 7.13 -- 9.96 -- 5.76 -- 6.38 --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
NEBRASKA TAX FREE
FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (2/28/01) 4.48 0.08 -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/28/01) 3.71 1.69 -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (2/28/01) 4.51 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
116
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
OREGON INTERMEDIATE
TAX FREE FUND
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (8/8/97) 11.77 9.21 4.27 3.37 9.08 6.68 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/8/97) 22.47 -- 5.01 -- 9.08 -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
TAX FREE FUND*
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class A (7/11/88) 31.71 26.12 5.81 4.87 9.75 5.11 -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class C (2/1/99) 0.27 -- -- -- -- -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Class Y (8/3/98) 32.89 -- 6.00 -- 10.15 -- -- -- -- --
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
- --------------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
* Firstar Large Cap Growth Fund is the accounting survivor of the
reorganization transaction with First American Capital Growth Fund,
consummated on September 24, 2001. Firstar Balanced Fund is the
accounting survivor of the reorganization transaction with First
American Balanced Fund, consummated on September 24, 2001. Firstar
Growth & Income Fund is the accounting survivor of the reorganization
transaction with First American Growth & Income Fund, consummated on
September 24, 2001. Firstar Large Cap Core Fund is the accounting
survivor of the reorganization transaction with First American Large
Cap Core Fund, consummated on September 24, 2001. Firstar Relative
Value Fund is the accounting survivor of the reorganization transaction
with First American Relative Value Fund, consummated on September 24,
2001. Firstar Mid Cap Index Fund is the accounting survivor of the
reorganization transaction with First American Mid Cap Index Fund,
consummated on September 24, 2001. Firstar Small Cap Index Fund is the
accounting survivor of the reorganization transaction with First
American Small Cap Index Fund, consummated on September 24, 2001.
Firstar Micro Cap Fund is the accounting survivor of the reorganization
transaction with First American Micro Cap Fund, consummated on
September 24, 2001. Firstar Mid Cap Core Fund is the accounting
survivor of the reorganization transaction with First American Mid Cap
Core Fund, consummated on September 24, 2001. Firstar Small Cap Core
Fund is the accounting survivor of the reorganization transaction with
First American Small Cap Core Fund, consummated on September 24, 2001.
Piper Small Company Growth Fund, which consummated a reorganization
transaction with Small Cap Growth Fund on July 31, 1998. Piper Small
Company Growth Fund is the accounting survivor. Effective September 12,
1996, shareholders of Piper Small Company Growth Fund approved a change
in the Fund's investment objective from high total investment return
consistent with prudent investment risk to long-term capital
appreciation. In connection with this change, the fund's investment
policies were revised accordingly. Firstar International Growth Fund is
the accounting survivor of the reorganization transaction with First
American International Fund, consummated on September 24, 2001. Firstar
Science & Technology Fund is the accounting survivor of the
reorganization transaction with First American Science & Technology
Fund, consummated on September 24, 2001. Firstar Bond IMMDEX Fund is
the accounting survivor of the reorganization transaction with First
American Bond IMMDEX Fund, consummated on September 24, 2001. Firstar
Intermediate Bond Fund is the accounting survivor of the reorganization
transaction with First American Intermediate Term Bond Fund,
consummated on September 24, 2001. Firstar U.S. Government Securities
Fund is the accounting survivor of the reorganization transaction with
First American U.S. Government Securities Fund, consummated on
September 24, 2001. Firstar Missouri Tax Exempt Bond Fund is the
accounting survivor of the reorganization transaction with First
American Missouri Tax Free Fund, consummated on September 24, 2001.
Firstar National Municipal Bond Fund is the accounting survivor of the
reorganization transaction with First American Tax Free Fund,
consummated on September 24, 2001.
YIELD. Yield is computed by dividing the net investment income per
share (as defined under Securities and Exchange Commission rules and
regulations) earned during the advertised period by the offering price per share
(including the maximum sales charge) on the last day of the period. The result
will then be "annualized" using a formula that provides for semi-annual
compounding of income. Yield is computed according to the following formula:
6
YIELD = 2[(a-b + 1) - 1]
(--- )
( cd )
Where: a = dividends and interest earned during the
period;
b = expenses accrued for the period (net of
reimbursements);
c = the average daily number of shares
outstanding during the period that were
entitled to receive dividends; and
d = the maximum offering price per share on the
last day of the period.
117
Based upon the 30-day period ended September 30, 2001, the yields for
the Class A, Class B, Class C, Class S and Class Y Shares of the Funds were as
set forth below.
CLASS A CLASS B CLASS Y CLASS C
Capital Growth Fund* -- -- -- --
Balanced Fund* 5.87% 3.53% 6.69% --
Equity Income Fund 2.05% 1.34% 2.29% 1.36%
Growth & Income Fund* 1.06% -- 1.07% --
Large Cap Core Fund* -- -- -- --
Large Cap Growth Fund -- -- -- --
Large Cap Value Fund 1.10% 0.34% 1.37% 0.33%
Relative Value Fund* 3.62% 1.25% 4.40% --
Equity Index Fund 0.77% 0.08% 1.04% 0.08%
Mid Cap Index Fund* 1.56% -- 2.36% --
Small Cap Index Fund* -- -- -- --
Micro Cap Fund* -- -- -- --
Mid Cap Core Fund* -- -- -- --
Mid Cap Growth Fund -- -- -- --
Mid Cap Value Fund 1.01% 0.26% 1.27% 0.26%
Small Cap Core Fund* -- -- -- --
Small Cap Growth Fund -- -- -- --
Small Cap Value Fund -- -- -- --
Emerging Markets Fund -- -- -- --
International Fund* -- -- -- --
Health Sciences Fund -- -- -- --
Real Estate Securities Fund 11.79% 9.61% 12.50% 9.45%
Science & Technology Fund* -- -- -- --
Technology Fund -- -- -- --
Bond IMMDEX Fund* 3.75% 3.23% 3.92% --
Corporate Bond Fund 7.35% 6.62% 7.60% 6.64%
Fixed Income Fund 5.34% 4.72% 5.56% 4.72%
High Yield Bond Fund 5.23% 5.21% 5.23% 4.78%
Intermediate Term Bond Fund* 4.30% -- 4.52% --
Short Term Bond Fund 5.78% -- 5.92% --
Strategic Income Fund 7.74% 7.01% 7.99% 7.01%
U.S. Government Securities Fund* 3.54% 3.02% 3.70% --
Arizona Tax Free Fund 5.18% -- 5.42% 4.79%
California Intermediate Tax Free Fund 4.21% -- 4.20% --
California Tax Free Fund 4.74% -- 5.01% 4.27%
Colorado Intermediate Tax Free Fund 4.28% -- 4.30% --
Colorado Tax Free Fund 5.15% -- 5.37% 4.82%
Intermediate Tax Free Fund 3.63% -- 3.64% --
Minnesota Intermediate Tax Free Fund 4.17% -- 4.19% --
Minnesota Tax Free Fund 4.38% -- 4.62% 4.03%
Missouri Tax Free Fund* 2.84% -- 3.01% --
Nebraska Tax Free Fund 3.77% -- 4.00% 3.64%
Oregon Intermediate Tax Free Fund 4.42% -- 4.42% --
Tax Free Fund* 3.36% -- 3.7% --
- ----------------------
* Reflects information for predecessor funds. Firstar Large Cap Growth
Fund is the accounting survivor of the reorganization transaction with
First American Capital Growth Fund, consummated on September 24, 2001.
Firstar Balanced Fund is the accounting survivor of the reorganization
transaction with First American Balanced Fund, consummated on September
24, 2001. Firstar Growth & Income Fund is the accounting survivor of
the reorganization transaction with First
118
American Growth & Income Fund, consummated on September 24, 2001.
Firstar Large Cap Core Fund is the accounting survivor of the
reorganization transaction with First American Large Cap Core Fund,
consummated on September 24, 2001. Firstar Relative Value Fund is the
accounting survivor of the reorganization transaction with First
American Relative Value Fund, consummated on September 24, 2001.
Firstar Mid Cap Index Fund is the accounting survivor of the
reorganization transaction with First American Mid Cap Index Fund,
consummated on September 24, 2001. Firstar Small Cap Index Fund is the
accounting survivor of the reorganization transaction with First
American Small Cap Index Fund, consummated on September 24, 2001.
Firstar Micro Cap Fund is the accounting survivor of the reorganization
transaction with First American Micro Cap Fund, consummated on
September 24, 2001. Firstar Mid Cap Core Fund is the accounting
survivor of the reorganization transaction with First American Mid Cap
Core Fund, consummated on September 24, 2001. Firstar Small Cap Core
Fund is the accounting survivor of the reorganization transaction with
First American Small Cap Core Fund, consummated on September 24, 2001;
Firstar International Growth Fund is the accounting survivor of the
reorganization transaction with First American International Fund,
consummated on September 24, 2001. Firstar Science & Technology Fund is
the accounting survivor of the reorganization transaction with First
American Science & Technology Fund, consummated on September 24, 2001.
Firstar Bond IMMDEX Fund is the accounting survivor of the
reorganization transaction with First American Bond IMMDEX Fund,
consummated on September 24, 2001. Firstar Intermediate Bond Fund is
the accounting survivor of the reorganization transaction with First
American Intermediate Term Bond Fund, consummated on September 24,
2001. Firstar U.S. Government Securities Fund is the accounting
survivor of the reorganization transaction with First American U.S.
Government Securities Fund, consummated on September 24, 2001. Firstar
Missouri Tax Exempt Bond Fund is the accounting survivor of the
reorganization transaction with First American Missouri Tax Free Fund,
consummated on September 24, 2001. Firstar National Municipal Bond Fund
is the accounting survivor of the reorganization transaction with First
American Tax Free Fund, consummated on September 24, 2001.
TAX-EXEMPT VS. TAXABLE INCOME. The tables below show the approximate
yields that taxable securities must earn to equal yields that are (i) exempt
from federal income taxes; (ii) exempt from both federal and Arizona income
taxes; (iii) exempt from both federal and California income taxes; (iv) exempt
from both federal and Colorado income taxes; (v) exempt from both federal and
Minnesota income taxes; (vi) exempt from both federal and Missouri income taxes;
(vii) exempt from both federal and Nebraska income taxes; and (viii) exempt from
both federal and Oregon income taxes, under selected income tax brackets
scheduled to be in effect in 2002. All of the tables assume that the investor is
subject to a 27%, 30%, 35%, or 38.6% federal income tax rate in 2002.
Furthermore, the combined federal/Arizona rates assume that the investor is
subject to the maximum 5.04% Arizona income tax rate. The combined
federal/California rates assume that the investor is subject to the maximum 9.3%
marginal California income tax rate. The federal/Colorado rates assume that the
investor is subject to a 4.63% Colorado income tax rate. The combined
federal/Minnesota rates assume that the investor is subject to the maximum 7.85%
Minnesota income tax rate. The combined federal/Missouri rates assume that the
investor is subject to the maximum 6% Missouri income tax rate. The combined
federal/Nebraska rates assume that the investor is subject to the maximum 6.68%
Nebraska income tax rate. The combined federal/Oregon rates assume that the
investor is subject to the maximum 9% Oregon income tax rate.
FEDERAL TAX RATE ARIZONA & FEDERAL COMBINED RATE
TAX 27.00% 30.00% 35.00% 38.60% 30.70% 33.50% 38.30% 41.70%
EXEMPT
YIELDS TAX EQUIVALENT YIELDS TAX EQUIVALENT YIELDS
3.0% 4.11% 4.29% 4.62% 4.89% 4.33% 4.51% 4.86% 5.15%
3.5% 4.79% 5.00% 5.38% 5.70% 5.05% 5.26% 5.67% 6.00%
4.0% 5.48% 5.71% 6.15% 6.51% 5.77% 6.02% 6.48% 6.86%
4.5% 6.16% 6.43% 6.92% 7.33% 6.49% 6.77% 7.29% 7.72%
5.0% 6.85% 7.14% 7.69% 8.14% 7.22% 7.52% 8.10% 8.58%
5.5% 7.53% 7.86% 8.46% 8.96% 7.94% 8.27% 8.91% 9.43%
6.0% 8.22% 8.57% 9.23% 9.77% 8.66% 9.02% 9.72% 10.29%
6.5% 8.90% 9.29% 10.00% 10.59% 9.38% 9.77% 10.53% 11.15%
CALIFORNIA & FEDERAL COMBINED RATE MISSOURI & FEDERAL COMBINED RATE
TAX 33.80% 36.5% 41.00% 44.30% 31.40% 34.20% 38.90% 42.30%
EXEMPT
YIELDS TAX EQUIVALENT YIELDS TAX EQUIVALENT YIELDS
3.0% 4.53% 4.72% 5.08% 5.39% 4.37% 4.56% 4.91% 5.20%
3.5% 5.29% 5.51% 5.93% 6.28% 5.10% 5.32% 5.73% 6.07%
4.0% 6.04% 6.30% 6.78% 7.18% 5.83% 6.08% 6.55% 6.93%
4.5% 6.80% 7.09% 7.63% 8.08% 6.56% 6.84% 7.36% 7.80%
5.0% 7.55% 7.87% 8.47% 8.98% 7.29% 7.60% 8.18% 8.67%
5.5% 8.31% 8.66% 9.32% 9.87% 8.02% 8.36% 9.00% 9.53%
6.0% 9.06% 9.45% 10.17% 10.77% 8.75% 9.12% 9.82% 10.40%
6.5% 9.82% 10.24% 11.02% 11.67% 9.48% 9.88% 10.64% 11.27%
119
MINNESOTA & FEDERAL COMBINED RATE COLORADO & FEDERAL COMBINED RATE
TAX 32.7% 35.50% 40.10% 43.40% 30.40% 33.2% 38.00% 41.40%
EXEMPT
YIELDS TAX EQUIVALENT YIELDS TAX EQUIVALENT YIELDS
3.0% 4.46% 4.65% 5.01% 5.30% 4.31% 4.49% 4.84% 5.12%
3.5% 5.20% 5.43% 5.84% 6.18% 5.03% 5.24% 5.65% 5.97%
4.0% 5.95% 6.20% 6.68% 7.07% 5.75% 5.99% 6.45% 6.83%
4.5% 6.69% 6.98% 7.51% 7.95% 6.47% 6.74% 7.26% 7.68%
5.0% 7.43% 7.75% 8.35% 8.83% 7.18% 7.49% 8.06% 8.53%
5.5% 8.18% 8.53% 9.18% 9.72% 7.90% 8.24% 8.87% 9.39%
6.0% 8.92% 9.30% 10.02% 10.60% 8.62% 8.99% 9.68% 10.24%
6.5% 9.66% 10.08% 10.85% 11.48% 9.34% 9.74% 10.48% 11.09%
NEBRASKA & FEDERAL COMBINED RATE OREGON & FEDERAL COMBINED RATE
TAX 31.90% 34.70% 39.30% 42.70% 33.60% 36.60% 40.90% 44.10%
EXEMPT
YIELDS TAX EQUIVALENT YIELDS TAX EQUIVALENT YIELDS
3.0% 4.41% 4.59% 4.94% 5.24% 4.52% 4.73% 5.08% 5.37%
3.5% 5.14% 5.36% 5.77% 6.11% 5.27% 5.52% 5.92% 6.26%
4.0% 5.87% 6.13% 6.59% 6.98% 6.02% 6.31% 6.77% 7.16%
4.5% 6.61% 6.89% 7.41% 7.85% 6.78% 7.10% 7.61% 8.05%
5.0% 7.34% 7.66% 8.24% 8.73% 7.53% 7.89% 8.46% 8.94%
5.5% 8.08% 8.42% 9.06% 9.60% 8.28% 8.68% 9.31% 9.84%
6.0% 8.81% 9.19% 9.88% 10.47% 9.04% 9.46% 10.15% 10.73%
6.5% 9.54% 9.95% 10.71% 11.34% 9.79% 10.25% 11.00% 11.63%
TAX-EQUIVALENT YIELD FOR TAX FREE FUNDS. Tax-equivalent yield is the
yield that a taxable investment must generate in order to equal a Fund's yield
for an investor in a stated federal or combined federal/state income tax
bracket. The tax-equivalent yield for each tax-free Fund named below is computed
by dividing that portion of such Fund's yield (computed as described above) that
is tax-exempt by one minus the stated federal or combined federal/state income
tax rate, and adding the resulting number to that portion, if any, of such
Fund's yield that is not tax exempt. The combined federal/state income tax rates
take into account the deductibility of state income taxes in calculating federal
tax rates. Based upon the maximum federal income tax rate of 38.6% and the
combined maximum federal/state tax rates of 41.7% for Arizona, 44.3% for
California, 41.4% for Colorado, 43.4% for Minnesota, 42.3% for Missouri, 42.7%
for Nebraska and 44.1% for Oregon, the tax equivalent yields for the Tax Free
Funds named below for the 30-day period ended September 30, 2001, computed as
described above, were as follows:
CLASS A CLASS C CLASS Y
Arizona Tax Free Fund 8.89% 8.22% 9.30%
California Intermediate Tax Free Fund 7.56 * 7.54
California Tax Free Fund 8.51 7.67 8.99
Colorado Intermediate Tax Free Fund 7.30 * 7.34
Colorado Tax Free Fund 8.79 8.23 9.16
Intermediate Tax Free Fund 5.91 * 5.93
Minnesota Intermediate Tax Free Fund 7.37 * 7.40
Minnesota Tax Free Fund 7.74 7.12 8.16
Oregon Intermediate Tax Free Fund 7.91 * 7.91
Tax Free Fund 5.47 * 6.03
Nebraska Tax Free Fund 6.58 6.35 6.98
Missouri Tax Free Fund(1) 4.92 * 5.22
- --------------------
(1) Reflects information of Firstar Missouri Tax Exempt Bond Fund which
consummated a reorganization transaction with First American Missouri
Tax Free Fund on September 24, 2001. Firstar Missouri Tax Exempt Bond
Fund is the accounting survivor.
120
CERTAIN PERFORMANCE COMPARISONS. In addition to advertising total
return and yield, comparative performance information may be used from time to
time in advertising the Funds' shares, including data from Lipper, Inc.
("Lipper"), Morningstar, other industry publications and other entities or
organizations which track the performance of investment companies. The
performance of each Fund may be compared to that of its unmanaged benchmark
index and to the performance of similar funds as reported by Lipper or such
other database services.
HISTORICAL DISTRIBUTION RATES. The Funds' historical annualized
distribution rates are computed by dividing the income dividends of a Fund for a
stated period by the maximum offering price on the last day of such period. For
the one-year period ended September 30, 2001, the historical distribution rates
of the Class A, Class B, Class C, Class Y and Class S Shares of the Funds were
as set forth below.
CLASS A CLASS B CLASS C CLASS Y CLASS S
Capital Growth Fund* -- -- -- -- --
Balanced Fund* 2.67% 1.98% 2.52% 3.09% 1.40%
Equity Income Fund 2.47 1.77 1.80 2.90 --
Growth & Income Fund* 0.37 0.03 -- 0.68 0.26
Large Cap Core Fund* -- -- -- -- --
Large Cap Growth Fund -- -- -- -- --
Large Cap Value Fund 0.95 0.24 0.24 1.29 --
Relative Value Fund* 0.89 0.25 -- 1.22 0.87
Equity Index Fund 0.79 0.12 0.12 1.18 --
Mid Cap Index Fund* 0.51 -- -- 0.80 0.64
Small Cap Index Fund* 0.02 0.02 -- 0.18 --
Micro Cap Fund* -- -- -- -- --
Mid Cap Core Fund* -- -- -- -- --
Mid Cap Growth Fund -- -- -- -- --
Mid Cap Value Fund 0.66 0.18 0.18 0.95 --
Small Cap Core Fund* -- -- -- -- --
Small Cap Growth Fund -- -- -- -- --
Small Cap Value Fund 0.32 -- 0.09 0.56 --
Emerging Markets Fund -- -- -- -- --
International Fund* -- -- -- -- 1.23
Health Sciences Fund -- -- -- -- --
Real Estate Securities Fund 4.82 4.38 4.44 5.33 --
Science & Technology Fund* -- -- -- -- --
Technology Fund -- -- -- -- --
Bond IMMDEX Fund* 5.27 4.83 -- 5.74 4.57
Corporate Bond Fund 6.79 6.50 6.48 7.51 --
Fixed Income Fund 5.13 4.73 4.68 5.67 --
High Yield Bond Fund 0.42 0.48 0.44 0.48 --
Intermediate Term Bond Fund* 5.38 -- -- 5.67 0.50
Short Term Bond Fund 6.06 -- -- 6.43 --
Strategic Income Fund 8.16 8.35 7.72 8.77 --
U.S. Government Securities Fund* 5.08 4.62 -- 1.95 4.91
Arizona Tax Free Fund 4.76 -- 4.51 5.10 --
California Intermediate Tax Free Fund 4.09 -- -- 4.18 --
California Tax Free Fund 4.33 -- 4.12 4.75 --
Colorado Intermediate Tax Free Fund 4.28 -- -- 4.06 --
Colorado Tax Free Fund 4.57 -- 4.40 4.95 --
Intermediate Tax Free Fund 4.21 -- -- 4.32 --
Minnesota Intermediate Tax Free Fund 4.22 -- -- 4.33 --
Minnesota Tax Free Fund 4.69 -- 4.52 5.14 --
Missouri Tax Free Fund* 3.88 -- -- 4.24 --
Nebraska Tax Free Fund 2.27 -- 2.20 2.50 --
Oregon Intermediate Tax Free Fund 4.12 -- -- 4.21 --
Tax Free Fund* 4.67 -- 4.50 5.11 --
- -------------------
* Reflects information for predecessor funds. Firstar Large Cap Growth
Fund is the accounting survivor of the reorganization transaction with
First American Capital Growth Fund, consummated on September 24, 2001.
Firstar Balanced Fund is the accounting survivor of the reorganization
transaction with First American Balanced Fund, consummated on September
24, 2001. Firstar Growth & Income Fund is
121
the accounting survivor of the reorganization transaction with First
American Growth & Income Fund, consummated on September 24, 2001.
Firstar Large Cap Core Fund is the accounting survivor of the
reorganization transaction with First American Large Cap Core Fund,
consummated on September 24, 2001. Firstar Relative Value Fund is the
accounting survivor of the reorganization transaction with First
American Relative Value Fund, consummated on September 24, 2001.
Firstar Mid Cap Index Fund is the accounting survivor of the
reorganization transaction with First American Mid Cap Index Fund,
consummated on September 24, 2001. Firstar Small Cap Index Fund is the
accounting survivor of the reorganization transaction with First
American Small Cap Index Fund, consummated on September 24, 2001.
Firstar Micro Cap Fund is the accounting survivor of the reorganization
transaction with First American Micro Cap Fund, consummated on
September 24, 2001. Firstar Mid Cap Core Fund is the accounting
survivor of the reorganization transaction with First American Mid Cap
Core Fund, consummated on September 24, 2001. Firstar Small Cap Core
Fund is the accounting survivor of the reorganization transaction with
First American Small Cap Core Fund, consummated on September 24, 2001;
Firstar International Growth Fund is the accounting survivor of the
reorganization transaction with First American International Fund,
consummated on September 24, 2001. Firstar Science & Technology Fund is
the accounting survivor of the reorganization transaction with First
American Science & Technology Fund, consummated on September 24, 2001.
Firstar Bond IMMDEX Fund is the accounting survivor of the
reorganization transaction with First American Bond IMMDEX Fund,
consummated on September 24, 2001. Firstar Intermediate Bond Fund is
the accounting survivor of the reorganization transaction with First
American Intermediate Term Bond Fund, consummated on September 24,
2001. Firstar U.S. Government Securities Fund is the accounting
survivor of the reorganization transaction with First American U.S.
Government Securities Fund, consummated on September 24, 2001. Firstar
Missouri Tax Exempt Bond Fund is the accounting survivor of the
reorganization transaction with First American Missouri Tax Free Fund,
consummated on September 24, 2001. Firstar National Municipal Bond Fund
is the accounting survivor of the reorganization transaction with First
American Tax Free Fund, consummated on September 24, 2001.
ANNUALIZED CURRENT DISTRIBUTION RATES. The Funds' annualized current
distribution rates are computed by dividing a Fund's income dividends for a
specified month (or three-month period, in the case of an Equity Fund) by the
number of days in that month (or three-month period, in the case of an Equity
Fund) and multiplying by 365, and dividing the resulting figure by the maximum
offering price on the last day of the specified period. The annualized current
distribution rates for the one or three-month period (as appropriate) ended
September 30, 2001, were as set forth below.
CLASS A CLASS B CLASS C CLASS Y CLASS S
Capital Growth Fund* --% --% --% --% --%
Balanced Fund* 2.22 1.61 8.01 2.59 --
Equity Income Fund 1.91 1.32 1.33 2.26 --
Growth & Income Fund* 0.33 -- -- 0.61 0.35
Large Cap Core Fund* -- -- -- -- --
Large Cap Growth Fund -- -- -- -- --
Large Cap Value Fund 1.03 0.34 0.32 1.35 --
Relative Value Fund* 1.12 0.41 -- 1.36 1.27
Equity Index Fund 0.23 -- -- 1.02 --
Mid Cap Index Fund* 0.48 -- -- 0.78 0.53
Small Cap Index Fund* -- -- -- -- --
Micro Cap Fund* -- -- -- -- --
Mid Cap Core Fund* -- -- -- -- --
Mid Cap Growth Fund -- -- -- -- --
Mid Cap Value Fund 0.94 0.26 0.25 1.25 --
Small Cap Core Fund* -- -- -- -- --
Small Cap Growth Fund -- -- -- -- --
Small Cap Value Fund -- -- -- -- --
Emerging Markets Fund -- -- -- -- --
International Fund* -- -- -- -- --
Health Sciences Fund -- -- -- -- --
Real Estate Securities Fund 3.66 3.16 3.08 4.11 --
Science & Technology Fund* -- -- -- -- --
Technology Fund -- -- -- -- --
Bond IMMDEX Fund* 3.54 3.19 -- 3.86 3.70
Corporate Bond Fund 4.94 4.83 4.80 7.50 --
Fixed Income Fund 3.99 3.88 4.61 5.49 --
High Yield Bond Fund 5.07 5.79 5.31 5.80 --
Intermediate Term Bond Fund* 4.95 -- -- 5.28 --
Short Term Bond Fund 4.66 -- -- 5.84 --
Strategic Income Fund 7.31 6.91 6.85 7.88 --
U.S. Government Securities Fund* 3.35 2.98 -- -- 3.50
Arizona Tax Free Fund 5.00 -- 4.67 5.35 --
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California Intermediate Tax Free Fund 4.06 -- -- 4.14 --
California Tax Free Fund 4.47 -- 4.17 4.94 --
Colorado Intermediate Tax Free Fund 4.13 -- -- 4.24 --
Colorado Tax Free Fund 4.86 -- -- 4.54 --
Intermediate Tax Free Fund 3.32 -- -- 3.40 --
Minnesota Intermediate Tax Free Fund 4.02 -- -- 4.13 --
Minnesota Tax Free Fund 4.14 -- 3.94 4.56 --
Missouri Tax Free Fund* 2.68 -- -- 2.94 --
Nebraska Tax Free Fund 3.56 -- 3.55 3.95 --
Oregon Intermediate Tax Free Fund 4.27 -- -- 4.36 --
Tax Free Fund* 4.39 -- 4.04 4.91 --
- ------------------------
* Reflects information for predecessor funds Firstar Large Cap Growth
Fund is the accounting survivor of the reorganization transaction with
First American Capital Growth Fund, consummated on September 24, 2001.
Firstar Balanced Fund is the accounting survivor of the reorganization
transaction with First American Balanced Fund, consummated on September
24, 2001. Firstar Growth & Income Fund is the accounting survivor of
the reorganization transaction with First American Growth & Income
Fund, consummated on September 24, 2001. Firstar Large Cap Core Fund is
the accounting survivor of the reorganization transaction with First
American Large Cap Core Fund, consummated on September 24, 2001.
Firstar Relative Value Fund is the accounting survivor of the
reorganization transaction with First American Relative Value Fund,
consummated on September 24, 2001. Firstar Mid Cap Index Fund is the
accounting survivor of the reorganization transaction with First
American Mid Cap Index Fund, consummated on September 24, 2001. Firstar
Small Cap Index Fund is the accounting survivor of the reorganization
transaction with First American Small Cap Index Fund, consummated on
September 24, 2001. Firstar Micro Cap Fund is the accounting survivor
of the reorganization transaction with First American Micro Cap Fund,
consummated on September 24, 2001. Firstar Mid Cap Core Fund is the
accounting survivor of the reorganization transaction with First
American Mid Cap Core Fund, consummated on September 24, 2001. Firstar
Small Cap Core Fund is the accounting survivor of the reorganization
transaction with First American Small Cap Core Fund, consummated on
September 24, 2001; Firstar International Growth Fund is the accounting
survivor of the reorganization transaction with First American
International Fund, consummated on September 24, 2001. Firstar Science
& Technology Fund is the accounting survivor of the reorganization
transaction with First American Science & Technology Fund, consummated
on September 24, 2001. Firstar Bond IMMDEX Fund is the accounting
survivor of the reorganization transaction with First American Bond
IMMDEX Fund, consummated on September 24, 2001. Firstar Intermediate
Bond Fund is the accounting survivor of the reorganization transaction
with First American Intermediate Term Bond Fund, consummated on
September 24, 2001. Firstar U.S. Government Securities Fund is the
accounting survivor of the reorganization transaction with First
American U.S. Government Securities Fund, consummated on September 24,
2001. Firstar Missouri Tax Exempt Bond Fund is the accounting survivor
of the reorganization transaction with First American Missouri Tax Free
Fund, consummated on September 24, 2001. Firstar National Municipal
Bond Fund is the accounting survivor of the reorganization transaction
with First American Tax Free Fund, consummated on September 24, 2001.
TAX EQUIVALENT DISTRIBUTION RATES. The tax equivalent distribution rate
for the Tax Free Funds is computed by dividing that portion of such a Fund's
annualized current distribution rate (computed as described above) which is
tax-exempt by one minus the stated federal or combined federal/state income tax
rate, and adding the resulting figure to that portion, if any, of the annualized
current distribution rate which is not tax-exempt. Based upon the maximum
federal or combined federal/state income tax rates set forth above under "-- Tax
Exempt vs. Taxable Income," the annualized current distribution rates for the
month ended September 30, 2001, for each class of the Tax Free Funds were as set
forth below.
CLASS A CLASS C CLASS Y
Arizona Tax Free Fund 8.58% 8.01% 9.18%
California Intermediate Tax Free Fund 7.29 * 7.43
California Tax Free Fund 8.03 7.49 8.87
Colorado Intermediate Tax Free Fund 7.05 * 7.24
Colorado Tax Free Fund 8.29 8.04 7.75
Intermediate Tax Free Fund 5.41 * 5.54
Minnesota Intermediate Tax Free Fund 7.10 * 7.30
Minnesota Tax Free Fund 7.31 6.96 5.51
Missouri Tax Free Fund 4.64 -- 7.80
Nebraska Tax Free Fund 6.21 6.20 8.00
Oregon Intermediate Tax Free Fund 7.64 * 6.89
Tax Free Fund 7.15 6.58 5.10
123
TAXATION
Each Fund intends to fulfill the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), as a regulated
investment company. If so qualified, each Fund will not be liable for federal
income taxes to the extent it distributes its taxable income to its
shareholders.
If a Fund invests in U.S. Treasury inflation-protection securities, it
will be required to treat as original issue discount any increase in the
principal amount of the securities that occurs during the course of its taxable
year. If a Fund purchases such inflation-protection securities that are issued
in stripped form either as stripped bonds or coupons, it will be treated as if
it had purchased a newly issued debt instrument having original issue discount.
Generally, the original issue discount equals the difference between the "stated
redemption price at maturity" of the obligation and its "issue price" as those
terms are defined in the Code. A Fund holding an obligation with original issue
discount is required to accrue as ordinary income a portion of such original
issue discount even though it receives no cash currently as interest payment
corresponding to the amount of the original issue discount. Because each Fund is
required to distribute substantially all of its net investment income (including
accrued original issue discount) in order to be taxed as a regulated investment
company, it may be required to distribute an amount greater than the total cash
income it actually receives. Accordingly, in order to make the required
distributions, a Fund may be required to borrow or liquidate securities.
If one of the Tax Free Funds disposes of a municipal obligation that it
acquired after April 30, 1993 at a market discount, it must recognize any gain
it realizes on the disposition as ordinary income (and not as capital gain) to
the extent of the accrued market discount.
Some of the investment practices that may be employed by the Funds will
be subject to special provisions that, among other things, may defer the use of
certain losses of such Funds, affect the holding period of the securities held
by the Funds and, particularly in the case of transactions in or with respect to
foreign currencies, affect the character of the gains or losses realized. These
provisions may also require the Funds to mark-to-market some of the positions in
their respective portfolios (i.e., treat them as closed out) or to accrue
original discount, both of which may cause such Funds to recognize income
without receiving cash with which to make distributions in amounts necessary to
satisfy the distribution requirements for qualification as a regulated
investment company and for avoiding income and excise taxes. Accordingly, in
order to make the required distributions, a Fund may be required to borrow or
liquidate securities. Each Fund will monitor its transactions and may make
certain elections in order to mitigate the effect of these rules and prevent
disqualification of the Funds as regulated investments companies.
It is expected that any net gain realized from the closing out of
futures contracts, options, or forward currency contracts will be considered
gain from the sale of securities or currencies and therefore qualifying income
for purposes of the 90% of gross income from qualified sources requirement, as
discussed above.
Any loss on the sale or exchange of shares of a Fund generally will be
disallowed to the extent that a shareholder acquires or contracts to acquire
shares of the same Fund within 30 days before or after such sale or exchange.
Furthermore, if Fund shares with respect to which a long-term capital gain
distribution has been made are held for less than six months, any loss on the
sale of exchange of such shares will be treated as a long-term capital loss to
the extent of such long-term capital gain distribution. Furthermore, if a
shareholder of any of the Tax-Free Funds receives an exempt-interest dividend
from such fund and then disposes of his or her shares in such fund within six
months after acquiring them, any loss on the sale or exchange of such shares
will be disallowed to the extent of the exempt-interest dividend.
For federal tax purposes, if a shareholder exchanges shares of a Fund
for shares of any other FAIF Fund pursuant to the exchange privilege (see
"Managing Your Investment -- Exchanging Shares" in the Prospectuses), such
exchange will be considered a taxable sale of the shares being exchanged.
Furthermore, if a shareholder of Class A Class B or Class C Shares carries out
the exchange within 90 days of purchasing shares in a fund on which he or she
has incurred a sales charge, the sales charge cannot be taken into account in
determining the shareholder's gain or loss on the sale of those shares to the
extent that the sales charge that would have been applicable to the purchase of
the later-acquired shares in the other Fund is reduced because of the exchange
privilege. However, the amount of any sales charge that may not be taken into
account in determining the shareholder's gain or loss on the sale of the
first-acquired
124
shares may be taken into account in determining gain or loss on the eventual
sale or exchange of the later-acquired shares.
Pursuant to the Code, distributions of net investment income by a Fund
to a shareholder who is a foreign shareholder (as defined below) will be subject
to U.S. withholding tax (at a rate of 30% or lower treaty rate). Withholding
will not apply if a dividend paid by a Fund to a foreign shareholder is
"effectively connected" with a U.S. trade or business of such shareholder, in
which case the reporting and withholding requirements applicable to U.S.
citizens or domestic corporations will apply. Distributions of net long-term
capital gains are not subject to tax withholding but, in the case of a foreign
shareholder who is a nonresident alien individual, such distributions ordinarily
will be subject to U.S. income tax at a rate of 30% if the individual is
physically present in the U.S. for more than 182 days during the taxable year.
Each Fund will report annually to its shareholders the amount of any
withholding.
A foreign shareholder is any person who is not (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
organized in the United States or under the laws of the Untied States or a
political subdivision thereof, (iii) an estate whose income is includible in
gross income for U.S. federal income tax purposes of (iv) a trust whose
administration is subject to the primary supervision of the U.S. court and which
has one or more U.S. fiduciaries who have authority to control all substantial
decisions of the trust.
The foregoing relates only to federal income taxation and is a general
summary of the federal tax law in effect as of the date of this Statement of
Additional Information.
With respect to the Minnesota Intermediate Tax Free Fund and the
Minnesota Tax Free Fund, the 1995 Minnesota Legislature enacted a statement of
intent (codified at Minn. Stat. ss. 289A.50, subdivision 10) that interest on
obligations of Minnesota governmental units and Indian tribes be included in net
income of individuals, estates and trusts for Minnesota income tax purposes if a
court determines that Minnesota's exemption of such interest unlawfully
discriminates against interstate commerce because interest on obligations of
governmental issuers located in other states is so included. This provision
applies to taxable years that begin during or after the calendar year in which
any such court decision becomes final, irrespective of the date on which the
obligations were issued. Minnesota Intermediate Tax Free Fund and the Minnesota
Tax Free Fund are not aware of any decision in which a court has held that a
state's exemption of interest on its own bonds or those of its political
subdivisions or Indian tribes, but not of interest on the bonds of other states
or their political subdivisions or Indian tribes, unlawfully discriminates
against interstate commerce or otherwise contravenes the United States
Constitution. Nevertheless, the Fund cannot predict the likelihood that interest
on the Minnesota bonds held by the Funds would become taxable under this
Minnesota statutory provision.
125
REDUCING SALES CHARGES
CLASS A SALES CHARGE
The sales charge can be reduced on the purchase of Class A Shares
through (i) quantity discounts and accumulated purchases, or (ii) signing a
13-month letter of intent.
QUANTITY DISCOUNTS AND ACCUMULATED PURCHASES: Each Fund will combine
purchases made by an investor, the investor's spouse, and the investor's
children when it calculates the sales charge. In addition, the sales charge, if
applicable, is reduced for purchases made at one time by a trustee or fiduciary
for a single trust estate or a single fiduciary account.
For each Fund, the sales charge discount will be determined by adding
(i) the purchase price (including sales charge) of the Fund shares that are
being purchased, plus (ii) the purchase price of the Class A shares of any other
First American fund (other than a money market fund) that you are concurrently
purchasing, plus (iii) the higher of the current net asset value or the original
purchase price of Class A shares of the Fund or any other First American fund
(other than a money market fund) that your already own. In order for an investor
to receive the sales charge reduction on Class A Shares, the Fund must be
notified by the investor in writing or by his or her financial institution at
the time the purchase is made that Fund shares are already owned or that
purchases are being combined.
LETTER OF INTENT: If an investor intends to purchase, in the aggregate,
at least $50,000 of Class A shares in the Funds and other First American funds
(other than money market funds), over the next 13 months, the sales charge may
be reduced by signing a letter of intent to that effect. This letter of intent
includes a provision for a sales charge adjustment depending on the amount
actually purchased within the 13-month period and a provision for the Funds'
custodian to hold a percentage equal to the Funds' maximum sales charge rate of
the total amount intended to be purchased in escrow (in shares) until the
purchase is completed.
The amount held in escrow for all FAIF Funds will be applied to the
investor's account at the end of the 13-month period after deduction of the
sales load applicable to the dollar value of shares actually purchased. In this
event, an appropriate number of escrowed shares may be redeemed in order to
realize the difference in the sales charge.
A letter of intent will not obligate the investor to purchase shares,
but if he or she does, each purchase during the period will be at the sales
charge applicable to the total amount intended to be purchased. This letter may
be dated as of a prior date to include any purchases made within the past 90
days.
SALES OF CLASS A SHARES AND CLASS C SHARES AT NET ASSET VALUE
Purchases of a Fund's Class A Shares by the Advisor, any Sub-Advisor,
any of their affiliates, or any of their or FAIF's officers, directors,
employees, retirees, sales representatives and partners, registered
representatives of any broker-dealer authorized to sell Fund shares, and
full-time employees of FAIF's counsel, and members of their immediate families
(i.e., parent, child, spouse, sibling, step or adopted relationships,
grandparent, grandchild and UTMA accounts naming qualifying persons), may be
made at net asset value without a sales charge. A Fund's Class A Shares also may
be purchased at net asset value without a sales charge by fee-based registered
investment advisors, financial planners and registered broker-dealers who are
purchasing shares on behalf of their customers and by purchasers through
"one-stop" mutual fund networks through which the Funds are made available.
Class A Shares may be purchased at net asset value without a sales charge by
investors participating in asset allocation "wrap" accounts offered by the
Advisor or any of its affiliates, and by retirement and deferred compensation
plans and the trusts used to fund such plans (including, but not limited to,
those defined in Sections 401(k), 403(b) and 457 of the Internal Revenue Code
and "rabbi trusts"), which plans and trusts purchase through "one-stop" mutual
fund networks. In addition, purchases of Class A Shares for an investor's
medical savings account for which U.S. Bank or an affiliate serves in a
custodian capacity may be made at net asset value without a sales charge. The
Advisor may pay its affiliated Broker-Dealers, U.S. Bancorp Piper Jaffray Inc.
and U.S. Bancorp Investments, Inc., a commission of up to 2% of your purchase
price in connection with net asset value purchases of Class A shares made
pursuant to this paragraph.
Class A shares may be purchased without a sales charge by
non-retirement accounts if they total $1 million or more. Your investment
professional or financial institution may receive a commission equal to 1.00% of
the first $3
126
million, 0.75% of shares purchased in excess of $3 million up to $5 million, and
0.50% of shares purchased in excess of $5 million. Equity Index Fund, Mid Cap
Index Fund, and Small Cap Index Fund (the "Index Funds") may be used in the
calculation to reach purchases of $1 million or more, but a commission is paid
only on Class A shares of First American Funds other than the Index funds. If
such a commission is paid, you will be assessed a contingent deferred sales
charge (CDSC) of 1% if you sell your shares within 18 months.
Class A Shares may also be purchased without a sales charge by 401(k),
403(b) and 457 plans, and Profit sharing and Pension plans, which have 200 or
more eligible participants. Your representative must notify the Fund if your
retirement/deferred compensation plan is eligible for the sales load waiver.
Securities firms, financial institutions and other industry professionals that
enter into sales agreements with the Funds' distributor to perform share
distribution services may receive a commission on such sales of the Funds
(except from sales of the Index Funds) equal to 1.00% of the first $3 million,
0.75% of shares purchased in excess of $3 million up to $5 million, and 0.50% of
shares purchased in excess of $5 million.
If Class A Shares of a Fund have been redeemed, the shareholder has a
one-time right, within 180 days, to reinvest the redemption proceeds in Class A
Shares of any First American fund at the next-determined net asset value without
any sales charge. The Fund must be notified by the shareholder in writing or by
his or her financial institution of the reinvestment in order to eliminate a
sales charge. If the shareholder redeems his or her shares of a Fund, there may
be tax consequences.
Class C Shares may be purchased without a sales charge by the web-based
401(k) plan product offered by U.S. Bank.
ADDITIONAL INFORMATION ABOUT SELLING SHARES
BY TELEPHONE
A shareholder may redeem shares of a Fund, if he or she elects the
privilege on the initial shareholder application, by calling his or her
financial institution to request the redemption. Shares will be redeemed at the
net asset value next determined after the Fund receives the redemption request
from the financial institution (less the amount of any applicable contingent
deferred sales charge). Redemption requests must be received by the financial
institution by the time specified by the institution in order for shares to be
redeemed at that day's net asset value, and redemption requests must be
transmitted to and received by the Funds as of the close of regular trading on
the New York Stock Exchange (usually by 3:00 p.m. Central time) in order for
shares to be redeemed at that day's net asset value unless the financial
institution has been authorized to accept redemption requests on behalf of the
Funds. Pursuant to instructions received from the financial institution,
redemptions will be made by check or by wire transfer. It is the financial
institution's responsibility to transmit redemption requests promptly. Certain
financial institutions are authorized to act as the Funds' agent for the purpose
of accepting redemption requests, and the Funds will be deemed to have received
a redemption request upon receipt of the request by the financial institution.
Shareholders who did not purchase their shares of a Fund through a
financial institution may redeem their shares by telephoning Investor Services
at 800 677-FUND. At the shareholder's request, redemption proceeds will be paid
by check mailed to the shareholder's address of record or wire transferred to
the shareholder's account at a domestic commercial bank that is a member of the
Federal Reserve System, normally within one business day, but in no event more
than seven days after the request. Wire instructions must be previously
established on the account or provided in writing. The minimum amount for a wire
transfer is $1,000. If at any time the Funds determine it necessary to terminate
or modify this method of redemption, shareholders will be promptly notified. The
Funds may limit telephone redemption requests to $50,000 per day.
In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming shares by telephone. If this should occur,
another method of redemption should be considered. Neither the Administrators
nor any Fund will be responsible for any loss, liability, cost or expense for
acting upon wire transfer instructions or telephone instructions that they
reasonably believe to be genuine. The Administrators and the Funds will each
employ reasonable procedures to confirm that instructions communicated are
genuine. These procedures may include taping of telephone conversations. To
ensure authenticity of redemption or exchange instructions received by
telephone, the Administrators examine each shareholder request by verifying the
account number and/or tax
127
identification number at the time such request is made. The Administrators
subsequently send confirmation of both exchange sales and exchange purchases to
the shareholder for verification. If reasonable procedures are not employed, the
Administrators and the Funds may be liable for any losses due to unauthorized or
fraudulent telephone transactions.
BY MAIL
Any shareholder may redeem Fund shares by sending a written request to
the Administrators, shareholder servicing agent, or financial institution. The
written request should include the shareholder's name, the Fund name, the
account number, and the share or dollar amount requested to be redeemed, and
should be signed exactly as the shares are registered. Shareholders should call
the Fund, shareholder servicing agent or financial institution for assistance in
redeeming by mail. Unless another form of payment is requested, a check for
redemption proceeds normally is mailed within three days, but in no event more
than seven days, after receipt of a proper written redemption request.
Shareholders requesting a redemption of $50,000 or more, a redemption
of any amount to be sent to an address other than that on record with the Fund,
or a redemption payable other than to the shareholder of record, must have
signatures on written redemption requests guaranteed by:
o a trust company or commercial bank the deposits of which are
insured by the Bank Insurance Fund, which is administered by the
Federal Deposit Insurance Corporation ("FDIC");
o a member firm of the New York, American, Boston, Midwest, or
Pacific Stock Exchanges or of the National Association of
Securities Dealers;
o a savings bank or savings and loan association the deposits of
which are insured by the Savings Association;
o any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Funds do not accept signatures guaranteed by a notary public.
The Funds and the Administrators have adopted standards for accepting
signature from the above institutions. The Funds may elect in the future to
limit eligible signature guarantees to institutions that are members of a
signature guarantee program. The Funds and the Administrators reserve the right
to amend these standards at any time without notice.
REDEMPTIONS BEFORE PURCHASE INSTRUMENTS CLEAR
When shares are purchased by check or with funds transmitted through
the Automated Clearing House, the proceeds of redemptions of those shares are
not available until the Administrators are reasonably certain that the purchase
payment has cleared, which could take up to fifteen calendar days from the
purchase date.
128
RATINGS
A rating of a rating service represents that service's opinion as to
the credit quality of the rated security. However, such ratings are general and
cannot be considered absolute standards of quality or guarantees as to the
creditworthiness of an issuer. A rating is not a recommendation to purchase,
sell or hold a security, because it does not take into account market value or
suitability for a particular investor. Market values of debt securities may
change as a result of a variety of factors unrelated to credit quality,
including changes in market interest rates.
When a security has been rated by more than one service, the ratings
may not coincide, and each rating should be evaluated independently. Ratings are
based on current information furnished by the issuer or obtained by the rating
services from other sources which they consider reliable. Ratings may be
changed, suspended or withdrawn as a result of changes in or unavailability of
such information, or for other reasons. In general, the Funds are not required
to dispose of a security if its rating declines after it is purchased, although
they may consider doing so.
RATINGS OF LONG-TERM CORPORATE DEBT OBLIGATIONS AND MUNICIPAL BONDS
STANDARD & POOR'S
AAA: An obligation rated AAA has the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its financial
commitment on the obligation is extremely strong.
AA: An obligation rated AA differs from the highest rated obligations
only in small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong.
A: An obligation rated A is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than bonds
in higher rated categories. However, the obligor's capacity to meet its
financial commitment on the obligation is still strong.
BBB: An obligation rated BBB exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which
could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.
B: An obligation rated B is more vulnerable to nonpayment than
obligations rated BB, but the obligor currently has the capacity to
meet its financial commitment on the obligation. Adverse business,
financial, or economic conditions will likely impair the obligor's
capacity or willingness to meet its financial commitment on the
obligation.
CCC: An obligation rated CCC is currently vulnerable to nonpayment, and
is dependent upon favorable business, financial, and economic
conditions for the obligor to meet its financial commitment on the
obligation. In the event of adverse business, financial, or economic
conditions, the obligor is not likely to have the capacity to meet its
financial commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to
nonpayment.
C: A subordinated debt or preferred stock obligation rated C is
currently highly vulnerable to nonpayment. The C rating may be used to
cover a situation where a bankruptcy petition has been filed or similar
action taken, but payments on this obligation are being continued. A C
also will be assigned to a preferred stock issue in arrears on
dividends or sinking fund payments, but that is currently paying.
129
D: An obligation rated D is in payment default. The D rating category
is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard &
Poor's believes that such payments will be made during such grace
period. The D rating also will be used upon the filing of a bankruptcy
petition or the taking of a similar action if payments on an obligation
are jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the major rating categories.
MOODY'S
Aaa: Bonds and preferred stock which are rated Aaa are judged to be of
the best quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edge." Interest payments are
protected by a large or exceptionally stable margin and principal is
secure. While the various protective elements are likely to change,
such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds and preferred stock which are rated Aa are judged to be of
high quality by all standards. Together with the Aaa group, they
comprise what are generally known as high grade bonds. They are rated
lower than the best bonds because margins of protection may not be as
large as in Aaa securities, or fluctuation of protective elements may
be of greater amplitude, or there may be other elements present which
make the long-term risks appear somewhat greater than in Aaa
securities.
A: Bonds and preferred stock which are rated A possess many favorable
investment attributes and are to be considered as upper-medium-grade
obligations. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a
susceptibility to impairment some time in the future.
Baa: Bonds and preferred stock which are rated Baa are considered as
medium-grade obligations (i.e., they are neither highly protected nor
poorly secured). Interest payments and principal security appear
adequate for the present, but certain protective elements may be
lacking or may be characteristically unreliable over any great length
of time. Such securities lack outstanding investment characteristics,
and in fact have speculative characteristics as well.
Ba: Bonds and preferred stock which are rated Ba are judged to have
speculative elements; their future cannot be considered as well
assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both good and
bad times over the future. Uncertainty of position characterizes issues
in this class.
B: Bonds and preferred stock which are rated B generally lack
characteristics of the desirable investment. Assurance of interest and
principal payments or of maintenance of other terms of the contract
over any long period of time may be small.
Caa: Bonds and preferred stock which are rated Caa are of poor
standing. Such issues may be in default or there may be present
elements of danger with respect to principal or interest.
Ca: Bonds and preferred stock which are rated Ca represent obligations
which are speculative in a high degree. Such issues are often in
default or have other marked shortcomings.
C: Bonds and preferred stock which are rated C are the lowest rated
class of bonds, and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
130
RATINGS OF MUNICIPAL NOTES
STANDARD & POOR'S
SP-1: Strong capacity to pay principal and interest. An issue
determined to possess a very strong capacity to pay debt service is
given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term
of the notes.
SP-3: Speculative capacity to pay principal and interest.
None of the Funds will purchase SP-3 municipal notes.
MOODY'S. Generally, Moody's ratings for state and municipal short-term
obligations are designated Moody's Investment Grade ("MIG"); however, where an
issue has a demand feature which makes the issue a variable rate demand
obligation, the applicable Moody's rating is "VMIG."
MIG 1/VMIG 1: This designation denotes the superior credit quality.
Excellent protection is afforded by established cash flows, highly
reliable liquidity support, or demonstrated broad-based access to the
market for refinancing.
MIG 2/VMIG 2: This designation denotes strong credit quality. Margins
of protection are ample although not as large as in the preceding
group.
MIG 3/VMIG 3: This designation denotes acceptable credit quality.
Liquidity and cash flow protection may be narrow and market access for
refinancing is likely to be less well established.
None of the Funds will purchase MIG 2/VMIG 3 municipal notes.
RATINGS OF COMMERCIAL PAPER
STANDARD & POOR'S
Commercial paper ratings are graded into four categories, ranging from
"A" for the highest quality obligations to "D" for the lowest. None of the Funds
will purchase commercial paper rated A-3 or lower.
A-1: A short-term obligation rated "A-1" is rated in the highest
category by Standard & Poor's. The obligor's capacity to meet its financial
commitment on the obligation is strong. Within this category, certain
obligations are designated with a plus sign (+). This indicates that the
obligor's capacity to meet its financial commitment on these obligations is
extremely strong.
A-2: A short-term obligation rated "A-2" is somewhat more susceptible
to the adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
A-3: A short term obligation rated A-3 exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.
131
MOODY'S
Moody's employs the following three designations, all judged to be
investment grade, to indicate the relative repayment capacity of rated issuers.
None of the Funds will purchase Prime-3 commercial paper.
PRIME-1: Issuers rated Prime-1 (or supporting institutions) have a
superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics:
o Leading market positions in well-established industries.
o High rates of return on funds employed.
o Conservative capitalization structure with moderate reliance on
debt and ample asset protection.
o Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
o Well-established access to a range of financial markets and
assured sources of alternate liquidity.
PRIME-2: Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
PRIME-3: Issuers (or supporting institutions) rated Prime-3 have an
acceptable ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt-protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.
FINANCIAL STATEMENTS
The financial statements of FAIF included in its Annual Report to
shareholders for the fiscal year ended September 30, 2001 are incorporated
herein by reference.
132
[LOGO] FIRST AMERICAN FUNDS(TM) 2001
ANNUAL REPORT
EQUITY FUNDS
"Integrity and firmness is all I can promise; these, be the voyage
long or short, never shall forsake me."
_George Washington
FIRST AMERICAN FUNDS
WE BELIEVE INVESTMENT SUCCESS IS DEVELOPED OVER A LIFETIME. THE APPROACH MUST BE
STRATEGIC AND GOAL-ORIENTED. THE PORTFOLIO MUST HAVE DEPTH AND BREADTH. AND THE
INDIVIDUAL INVESTMENTS SHOULD DELIVER ABOVE-MARKET PERFORMANCE OVER A SUSTAINED
PERIOD OF TIME.
FIRST AMERICAN FUNDS IS A COMPLETE RESOURCE FOR YOUR INVESTMENTS. WE HAVE A WIDE
ARRAY OF OPTIONS--MORE THAN 50 MUTUAL FUNDS THAT CROSS ALL ASSET CLASSES. TO
FIND OUT HOW FIRST AMERICAN FUNDS CAN HELP YOU MEET YOUR GOALS, CONTACT YOUR
INVESTMENT PROFESSIONAL.
OUR FUND FAMILY
| HIGHER RISK AND RETURN POTENTIAL
|
> | LARGE CAP FUNDS
| [] LARGE CAP GROWTH
| [] LARGE CAP VALUE
| [] LARGE CAP CORE
| [] GROWTH & INCOME
| [] RELATIVE VALUE
| [] CAPITAL GROWTH
| [] EQUITY INCOME
| [] BALANCED
> | MID CAP FUNDS
| [] MID CAP GROWTH
| [] MID CAP VALUE
| [] MID CAP CORE
> | SMALL CAP FUNDS
| [] MICRO CAP
| [] SMALL CAP GROWTH
| [] SMALL CAP VALUE
| [] SMALL CAP CORE
> | INTERNATIONAL FUNDS
| [] EMERGING MARKETS
| [] INTERNATIONAL
> | SECTOR FUNDS
| [] HEALTH SCIENCES
| [] REAL ESTATE SECURITIES
| [] TECHNOLOGY
| [] SCIENCE & TECHNOLOGY
| INDEX FUNDS
| ASSET ALLOCATION FUNDS
| INCOME FUNDS
| TAX FREE INCOME FUNDS
| MONEY MARKET FUNDS
|
| LOWER RISK AND RETURN POTENTIAL
TABLE OF CONTENTS
Message to Shareholders 1
Report of Independent Auditors 47
LARGE CAP FUNDS
Statements of Net Assets 48
Statements of Operations 68
Statements of Changes in Net Assets 70
Financial Highlights 72
MID CAP FUNDS
Statements of Net Assets 80
Statements of Operations 88
Statements of Changes in Net Assets 89
Financial Highlights 90
SMALL CAP FUNDS
Statements of Net Assets 94
Statements of Operations 102
Statements of Changes in Net Assets 104
Financial Highlights 106
INTERNATIONAL FUNDS
Statements of Net Assets 110
Statements of Operations 116
Statements of Changes in Net Assets 117
Financial Highlights 118
SECTOR FUNDS
Statements of Net Assets 120
Statements of Operations 126
Statements of Changes in Net Assets 128
Financial Highlights 130
Notes to Financial Statements 134
Notice to Shareholders 150
Our recent merger created an opportunity for First American Funds to
put on a new face--which is exactly what we did. The new logo had to reflect our
comprehensive suite of First American Funds and our commitment to providing
unparalleled, dedicated client service.
WE CHOSE GEORGE WASHINGTON.
His rich legacy as patriot and leader is widely recognized as embodying the
sound judgment, reliability, and strategic vision that are central to our brand.
Fashioned in a style reminiscent of an 18th century engraving, the illustration
conveys the symbolic strength and vitality of Washington, which are attributes
that we value at First American Funds.
MUTUAL FUND INVESTING INVOLVES RISK; PRINCIPAL LOSS IS POSSIBLE.
- --------------------------------------------------------------------------------
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
- --------------------------------------------------------------------------------
MESSAGE TO SHAREHOLDERS November 16, 2001
DEAR SHAREHOLDERS:
Speaking for the board of directors and the staff of U.S. Bancorp Piper
Jaffray Asset Management, Inc., thank you for the ongoing opportunity you
have given us to manage your investments. This has been a momentous year
for our fund family, as it has grown by combining the funds of the First
American family with those from Firstar Funds. We believe this combination
will provide significantly greater resources and capabilities that should
prove beneficial to our shareholders.
The past year is one that will leave its mark on all Americans due to a
series of tumultuous and trying circumstances. Starting with a disputed
Presidential election at the end of 2000, and followed by a slowing U.S.
economy, a series of interest-rate cuts by the Federal Reserve, and the
unprecedented terrorist action on September 11, the investment environment
was like nothing we had ever witnessed. Like you, we will always remember
those who lost their lives in the tragic terrorist attacks and the many
citizens who sacrificed themselves in a heroic cause.
Not surprisingly, this sequence of events resulted in market volatility.
Bond markets generally benefited during this time, while equity markets
underwent a fairly dramatic and sustained correction. A market environment
such as this can be extremely challenging, and we are reminded that from
time to time unusual events can create trying times for investors. This is
when a focus on maintaining a disciplined, diversified approach is so
important in helping you achieve your long-term objectives.
This report provides you with details of investment results, fund holdings,
financial statements, and notes relating to fund operations for the fiscal
year ended September 30, 2001. Please review this information at your
convenience.
We thank you for putting your trust in the newly expanded First American
family of funds. We are committed to helping you achieve your investment
goals.
Sincerely,
/s/ Virginia L. Stringer /s/ Mark Jordahl
VIRGINIA L. STRINGER MARK JORDAHL
Chairperson of the Board Chief Investment Officer
First American Investment Funds, Inc. U.S. Bancorp Piper Jaffray Asset
Management
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 1)
A QUICKLY
EVOLVING INVESTMENT
ENVIRONMENT
So much can change in one year. In September 2000, America was just beginning to
focus on choosing a new President. The stock market was showing signs of taking
an extended breather, but few saw any significant red flags for the economy.
However, the environment quickly began to change. Stocks were confronted with
substantial volatility, but bond markets managed to hold their own.
By the end of 2000, it was clear that an economic slowdown was beginning to take
hold. Recognizing this situation, the Federal Reserve (the Fed) opened 2001 with
a surprising cut in short-term interest rates. It represented a change in policy
for the Fed, which up to that point had focused its energies on avoiding an
overheated economy and the threat of inflation. The Fed remained aggressive
about cutting rates through the winter, spring, and summer months, and its
concern about a slowdown proved to be well founded. By the second quarter of
2001, the economy was teetering on the brink of a possible recession.
STOCKS STRUGGLE THROUGHOUT THE YEAR
While consumers managed to maintain fairly normal levels of spending for much of
2001, the major problem was that capital spending by businesses slowed
significantly. This took a huge bite out of profits for a number of companies,
dragging down stock prices. Sectors such as technology and telecommunications,
which had been in a correction phase since early 2000, were hardest hit in this
environment.
In general, smaller stocks performed better than large-company issues, and
stocks with a value orientation were better performers than growth stocks.
(2 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
BONDS ON MORE SOLID GROUND
With signs of a slowing economy and the Fed cutting interest rates, the
environment proved generally favorable for bonds. Yields on short- to
intermediate-term securities in particular moved lower, helping to produce
positive results for bond investors. In fact, interest rates on the shorter end
of the yield curve dropped dramatically, while long-term rates tended to stay
relatively stable. Corporate bonds started the 12-month period rather slowly, as
Treasury securities proved more attractive. In the first six months of 2001,
corporate bonds offered better returns, but took a backseat again in the last
three months of the fiscal year. Typically, portfolios structured to benefit
from falling interest rates and focused on the middle of the yield curve enjoyed
the best performance.
The municipal bond market was in a rally mode for most of the 12-month period.
As with taxable bonds, yields on shorter- to intermediate-term tax-exempt bonds
declined the most. In fact, the bulk of the price appreciation occurred in the
closing months of 2000.
SEPTEMBER 11 CREATES A DIFFERENT MARKET
An already difficult investment environment was greatly exacerbated by the
terrible atrocities that occurred on September 11. It created an entirely new
level of uncertainty that was far different from what the markets had ever seen,
and did away with any hopes for an immediate economic recovery.
The volatile nature of the past year in the market provides further evidence of
the importance of owning a diversified portfolio. Markets can move quickly, and
unforeseen events can rapidly change the direction of the investment world. More
than ever, the First American family of funds offers you a wide selection of
investment options to help you take full advantage of the opportunities
available in today's market.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 3)
LARGE CAP GROWTH
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL
Growth stocks, the dominant performer of the markets in the late 1990s, bore the
brunt of a severe bear market that began in early 2000. The First American Large
Cap Growth Fund declined 51.31% for the fiscal year ended September 30, 2001
(Class A shares declined 51.45% on net asset value). During the 12-month period,
the fund's benchmark, the S&P 500 Composite Index, declined 26.62%.
While the domestic economy faced a significant slowdown dating back to the
closing months of 2000, the situation was even more severe for many major U.S.
corporations. They found themselves in what can be described as a "profits
recession." Corporate earnings declined dramatically, and stock prices paid a
significant price as a result. Large-cap growth stocks, which had been major
beneficiaries of an unprecedented bull market in the previous decade, were
particularly hard hit. Investors were clearly surprised by the depth of the
profit decline, and a major selloff resulted.
The fund began the fiscal year with a heavy emphasis on technology stocks. That
proved to be damaging to the portfolio in the early months, as technology
stalwarts such as Cisco Systems and Texas Instruments saw their stock prices
plunge. The fund's position in technology was reduced, and stocks the fund
continues to hold in that area tend to be companies that may be less aggressive,
but offer stable profit growth.
The fund put an increased weighting in growth stocks from the health care and
consumer areas. Health care stocks proved to be the best-performing sector in
the marketplace.
Another damaging aspect of the past year's market was a sudden change in the
fortunes of energy stocks. Early in the period, energy stocks looked
particularly attractive, as high demand and reduced supplies resulted in a boost
in oil and natural gas prices. However, as the economy lost steam, demand fell
as well as the values of many energy stocks.
The main issue affecting the fortunes of growth stocks going forward is when the
economy will begin to recover. The events on September 11 have clearly dealt a
setback to hopes for a rapid rebound. Until it becomes evident that corporate
profits can stabilize and improve, the fund will maintain a somewhat defensive
posture in its stock selection. Once it becomes evident that the economy is on
the rise, the market for large-cap growth stocks, a core holding for many
investors, is likely to improve.
- ---------------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ---------------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
--------------------------------------------------------------
1 YEAR 5 YEARS 12/18/1992 8/2/1994 8/15/1994 2/1/1999 9/24/2001
- ---------------------------------------------------------------------------------------------------------------
Class A NAV -51.45% 2.09% 5.39% -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Class A POP -54.11% 0.95% 4.72% -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
Class B NAV -51.79% 1.34% -- -- 7.42% -- --
- ---------------------------------------------------------------------------------------------------------------
Class B POP -53.93% 1.09% -- -- 7.42% -- --
- ---------------------------------------------------------------------------------------------------------------
Class C NAV -51.78% -- -- -- -- -15.51% --
- ---------------------------------------------------------------------------------------------------------------
Class C POP -52.70% -- -- -- -- -15.84% --
- ---------------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -- 2.87%
- ---------------------------------------------------------------------------------------------------------------
Class Y -51.31% 2.36% -- 8.38% -- -- --
- ---------------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(3) -45.64% 6.50% 10.01% 11.54% 11.54% -12.54% --
- ---------------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(4) -26.62% 10.22% 12.63% 13.65% 13.65% -5.33% --
- ---------------------------------------------------------------------------------------------------------------
(4 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
LARGE CAP GROWTH
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
LARGE CAP LARGE CAP LARGE CAP RUSSELL S&P 500
GROWTH FUND, GROWTH FUND, GROWTH FUND, 1000 GROWTH COMPOSITE
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4)
--------------------------------------------------------------------------
CLASS A
12/1992 10,000 9,452 10,000 10,000
9/1993 8,947 8,457 9,907 10,759
9/1994 9,286 8,777 10,485 11,155
9/1995 12,183 11,515 13,861 14,474
9/1996 14,300 13,516 16,827 17,416
9/1997 18,976 17,935 22,934 24,461
9/1998 19,092 18,045 25,481 26,672
9/1999 25,964 24,541 34,362 34,083
9/2000 32,663 30,873 42,413 38,611
9/2001 15,859 14,989 23,056 28,332
CLASS Y
8/1994 10,000 10,000 10,000
9/1994 10,236 9,863 9,756
9/1995 13,467 13,038 12,657
9/1996 15,835 15,828 15,231
9/1997 21,021 21,574 21,391
9/1998 21,246 23,969 23,325
9/1999 28,970 32,324 29,806
9/2000 36,541 39,897 33,765
9/2001 17,792 21,688 24,777
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On May 18, 1994, the Large Cap Growth Fund became the successor by merger
to the Boulevard Blue Chip Growth Fund. Prior to the merger, the First
American fund had no assets or liabilities. Performance prior to May 18,
1994, is that of the Boulevard Blue Chip Growth Fund.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500
Composite Index and the Standard & Poor's/BARRA 500 Growth Index as
benchmarks. Going forward, the fund will use the Russell 1000 Growth Index
as a comparison because its composition better matches the fund's
investment objective and strategies.
(4) An unmanaged index of large-capitalization stocks.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 5)
LARGE CAP VALUE
INVESTMENT OBJECTIVE: PRIMARY--CAPITAL APPRECIATION; SECONDARY--CURRENT INCOME
In one of the most difficult 12-month periods in recent memory for stocks of
large American companies, the First American Large Cap Value Fund declined
13.53% for the fiscal year ended September 30, 2001 (Class A shares declined
13.72% on net asset value). During the same 12-month period, the fund's
benchmark, the Russell 1000 Value Index, declined 8.91%.
The past 12 months saw investors turn more attention to value-oriented stocks.
This segment of the market struggled through much of the 1990s, at a time when
most investors preferred stocks of growth companies, especially in the
high-flying technology sector. Since the early months of 2000, investor
sentiment has shifted, favoring value issues. While technology stocks were
losing ground, investors were putting more money to work in financial services,
energy, and utilities stocks. Those sectors performed particularly well in the
closing months of 2000.
After a brief spurt by growth stocks in the opening weeks of 2001, value once
again regained leadership, and that trend generally held firm through much of
the rest of the fiscal year. A significant event that occurred regularly
throughout the year was the decision by the Federal Reserve (the Fed) to reduce
short-term interest rates. Typically, in periods where the Fed is cutting rates,
value stocks tend to perform well relative to the rest of the equity market. The
Fed's actions were an effort to keep the U.S. economy from slowing too much.
Despite the Fed's best efforts, the tragic events on September 11 may have
pushed the nation into a recession.
The declining interest-rate environment helped improve prospects for financial
services companies, and the fund was able to capitalize on positive performance.
Basic materials and industrial stocks also performed relatively well, as did a
number of the fund's health care holdings. By contrast, technology stocks
struggled, though the fund's focus on more conservative companies in this sector
tended to perform better than the broad market of technology stocks. Utilities
stocks started the year on a positive track, but struggled through most of 2001,
detracting from the fund's returns.
While the terrorist attacks on America have added a great deal of uncertainty to
the equation, there are positive signs for equities entering the new fiscal
year. What's more, it is possible that value stocks will continue to enjoy a
position of strength within the stock market. Thanks to significant stimulus
from the Fed and from added U.S. government spending and tax cuts, it seems
likely that the economy will turn a corner and begin to enjoy modest growth in
the coming months, which should improve the profit outlook for a number of
companies. Today's market appears to offer fairly attractive value, and that is
likely to benefit investors in the future.
- ----------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ----------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
----------------------------------------------
1 YEAR 5 YEARS 10 YEARS 2/4/1994 8/15/1994 2/1/1999 9/24/2001
- ----------------------------------------------------------------------------------------------------------
Class A NAV -13.72% 6.10% 10.94% -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Class A POP -18.48% 4.91% 10.32% -- -- -- --
- ----------------------------------------------------------------------------------------------------------
Class B NAV -14.42% 5.31% -- -- 9.99% -- --
- ----------------------------------------------------------------------------------------------------------
Class B POP -18.29% 5.08% -- -- 9.99% -- --
- ----------------------------------------------------------------------------------------------------------
Class C NAV -14.36% -- -- -- -- -5.02% --
- ----------------------------------------------------------------------------------------------------------
Class C POP -15.99% -- -- -- -- -5.38% --
- ----------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -- 4.24%
- ----------------------------------------------------------------------------------------------------------
Class Y -13.53% 6.38% -- 10.60% -- -- --
- ----------------------------------------------------------------------------------------------------------
Russell 1000 Value Index(3) -8.91% 11.67% 13.85% 13.42% 13.99% 0.63% --
- ----------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(4) -26.62% 10.22% 12.70% 13.24% 13.73% -5.34% --
- ----------------------------------------------------------------------------------------------------------
(6 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
LARGE CAP VALUE
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
LARGE CAP LARGE CAP LARGE CAP RUSSELL S&P 500
VALUE FUND, VALUE FUND, VALUE FUND, 1000 VALUE COMPOSITE
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4)
----------------------------------------------------------------------------
CLASS A
9/1991 10,000 9,452 10,000 10,000
9/1992 10,788 10,197 11,240 11,105
9/1993 12,495 11,810 14,090 12,549
9/1994 13,540 12,798 13,994 13,012
9/1995 16,960 16,031 17,868 16,882
9/1996 21,013 19,861 21,075 20,314
9/1997 29,171 27,571 29,992 28,531
9/1998 26,612 25,153 31,069 31,110
9/1999 32,447 30,669 36,885 39,754
9/2000 32,746 30,951 40,173 45,035
9/2001 28,252 26,703 36,592 33,047
CLASS Y
2/1994 10,000 10,000 10,000
9/1994 10,170 9,935 10,074
9/1995 12,763 12,686 13,070
9/1996 15,867 14,963 15,728
9/1997 22,076 21,294 22,089
9/1998 20,206 22,059 24,086
9/1999 24,707 26,188 30,779
9/2000 24,995 28,523 34,867
9/2001 21,614 25,980 25,585
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500
Composite Index as a benchmark. Going forward, the fund will use the
Russell 1000 Value Index as a comparison because its composition better
matches the fund's investment objectives and strategies.
(4) An unmanaged index of large-capitalization stocks.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 7)
LARGE CAP CORE
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL
The First American Large Cap Core Fund declined by 37.34% for the 12-month
period ended September 30, 2001 (Class A shares declined 37.47% on net asset
value). During the 12 months, the fund's benchmark, the S&P 500 Composite Index,
declined 26.62%.
The stock market was plagued throughout the 12-month period by the gradual
weakening of the U.S. economy. The attacks on September 11 may have been the
last straw, potentially sending the United States into a recession. Throughout
the period, the stock market moved in different and sometimes surprising
directions that made it difficult to identify the best categories of stocks. For
instance, in the closing months of 2000 and early part of 2001, there were
serious concerns about possible energy shortages. Prices of oil and natural gas
shot up, benefiting stocks in those areas. But as the year progressed, the
weaker economy dampened energy demand, and consequently, the fortunes of many of
the stocks that had previously benefited. Likewise, stocks of large
pharmaceutical companies performed particularly well in the early months of the
fiscal year, but struggled through most of 2001.
The fund is well diversified among a broad range of large-cap stocks with about
130 issues in the portfolio. The outlook is particularly optimistic for health
care and financial services stocks, which have a heavier-than-average weighting
in the portfolio. The fund is structured with the expectation that the U.S.
economy will begin to improve in the coming months, and the picture for company
profits, which has been dismal in 2001, will improve in 2002. The fund's
emphasis has been to own companies that would capitalize on this environment.
- ----------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ----------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(4)
---------------------------------------------------------
1 YEAR 5 YEARS 12/29/1992 1/9/1995 3/1/1999 11/27/2000 9/24/2001
- ----------------------------------------------------------------------------------------------------------
Class A NAV -37.47% 5.36% -- 10.11% -- -- --
- ----------------------------------------------------------------------------------------------------------
Class A POP -40.92% 4.18% -- 9.18% -- -- --
- ----------------------------------------------------------------------------------------------------------
Class B NAV -37.95% -- -- -- -9.35% -- --
- ----------------------------------------------------------------------------------------------------------
Class B POP -40.67% -- -- -- -10.24% -- --
- ----------------------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- -- 2.95%
- ----------------------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- -- 0.93%
- ----------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -31.16% --
- ----------------------------------------------------------------------------------------------------------
Class Y -37.34% 5.62% 8.42% -- -- -- --
- ----------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(3) -26.62% 10.22% 12.80% 14.63% -6.99% -20.02% --
- ----------------------------------------------------------------------------------------------------------
(8 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
LARGE CAP CORE
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
LARGE CAP LARGE CAP LARGE CAP S&P 500
CORE FUND, CORE FUND, CORE FUND, COMPOSITE
CLASS A NAV CLASS A POP CLASS Y INDEX(3)
--------------------------------------------------------------
CLASS A
1/1995 10,000 9,452 10,000
10/1995 12,347 11,666 12,603
10/1996 14,635 13,828 15,640
10/1997 17,753 16,774 20,663
10/1998 21,051 19,890 25,204
10/1999 24,823 23,453 31,671
10/2000 29,768 28,126 33,599
9/2001 19,103 18,049 24,760
CLASS Y
12/1992 10,000 10,000
10/1993 10,753 10,981
10/1994 10,813 11,406
10/1995 12,927 14,422
10/1996 15,360 17,897
10/1997 18,675 23,644
10/1998 22,203 28,840
10/1999 26,241 36,241
10/2000 31,552 38,447
9/2001 20,288 28,332
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Index is for illustrative
purposes only and is not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On September 24, 2001, the Large Cap Core Fund became the successor by
merger to the Firstar Large Cap Core Equity Fund, a series of Firstar
Funds, Inc. Prior to the merger, the First American Fund had no assets or
liabilities. Performance presented prior to September 24, 2001, represents
that of the Firstar Large Cap Core Equity Fund. Prior to January 10, 1995,
the Firstar fund offered one class of shares to investors without a
distribution or shareholder servicing fee. Performance presented prior to
January 10, 1995, does not reflect these fees.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of large-capitalization stocks.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class C and Class
S represents cumulative total return as the classes have been in operation
less than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 9)
GROWTH & INCOME
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL AND INCOME
The First American Growth & Income Fund lost 25.30% for the 12-month period
ended September 30, 2001 (Class A shares declined 25.48% on net asset value).
During the 12 months, the fund outpaced its benchmark, the S&P 500 Composite
Index, which declined 26.62%.
The biggest issue confronting the equity markets during the period was continued
slowing in U.S. economic growth, which may have actually reached recession
levels by the end of the fiscal year, particularly following the terrorist
attacks on September 11. In this environment, few companies were able to muster
reasonable profit growth, which sent stock prices tumbling. Even a series of
short-term interest rate cuts by the Federal Reserve, which began in January and
continued right through to the end of the fiscal year, was not enough to stem
the tide of a slowing U.S. economy and weak profit picture.
Among the sectors of the market that were hardest hit in the equity portfolio
were stocks of health care companies. For most of the year, they proved to be a
disappointment, generating poor returns. Only near the end of the year did they
begin to find their way back into favor. Health care stocks represented the
fund's largest equity position. The hardest-hit sector overall was technology,
and that had a negative impact on the fund as well. The fund placed a bigger
emphasis on technology stocks early in 2001, given that they already had
suffered significant losses, but the relentless economy continued to hurt this
area of business more than any other.
Better performance was generated by the fund's holdings in stocks of consumer
product companies that typically don't see their fortunes change with swings in
the economy, such as food and beverage firms and household products companies.
Selected consumer cyclical stocks also performed well.
As the new fiscal year begins, it is clear that the U.S. economy is fighting a
slump that has made for a difficult business environment. In the short term,
that will mean many companies will have to work hard to achieve their profit
expectations. However, it is expected that the economic cycle will eventually
turn positive, probably in the early part of 2002. Once that becomes apparent,
it's likely that stocks will enjoy a rebound. At some point, the fund will
likely be positioned in a more aggressive manner in an effort to take advantage
of an improving environment.
- --------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- --------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(4)
---------------------------------------------
1 YEAR 5 YEARS 10 YEARS 1/9/1995 3/1/1999 11/27/2000 9/24/2001
- --------------------------------------------------------------------------------------------------------
Class A NAV -25.48% 7.85% -- 13.06% -- -- --
- --------------------------------------------------------------------------------------------------------
Class A POP -29.58% 6.64% -- 12.11% -- -- --
- --------------------------------------------------------------------------------------------------------
Class B NAV -26.00% -- -- -- -6.36% -- --
- --------------------------------------------------------------------------------------------------------
Class B POP -29.31% -- -- -- -7.26% -- --
- --------------------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- -- 3.94%
- --------------------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- -- 1.92%
- --------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -23.50% --
- --------------------------------------------------------------------------------------------------------
Class Y -25.30% 8.11% 10.75% -- -- -- --
- --------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(3) -26.62% 10.22% 12.70% 14.56% -6.97% -19.99% --
- --------------------------------------------------------------------------------------------------------
(10 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
GROWTH & INCOME
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
GROWTH & INCOME GROWTH & INCOME GROWTH & INCOME S&P 500
FUND, FUND, FUND, COMPOSITE
CLASS A NAV CLASS A POP CLASS Y INDEX(3)
---------------------------------------------------------------
CLASS A
1/1995 10,000 9,452 10,000
10/1995 12,631 11,934 12,603
10/1996 15,992 15,109 15,640
10/1997 20,866 19,714 20,663
10/1998 24,638 23,278 25,204
10/1999 27,550 26,030 31,671
10/2000 30,991 29,280 33,599
9/2001 22,830 21,570 24,760
CLASS Y
10/1991 10,000 10,000
10/1992 10,582 10,995
10/1993 11,632 12,638
10/1994 11,847 13,128
10/1995 14,808 16,599
10/1996 18,789 20,598
10/1997 24,584 27,213
10/1998 29,094 33,193
10/1999 32,618 41,710
10/2000 36,777 44,250
9/2001 27,159 32,608
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Index is for illustrative
purposes only and is not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On September 24, 2001, the Growth & Income Fund became the successor by
merger to the Firstar Growth & Income Fund, a series of Firstar Funds, Inc.
Prior to the merger, the First American fund had no assets or liabilities.
Performance presented prior to September 24, 2001, represents that of
Firstar Growth & Income Fund. Prior to January 10, 1995, the Firstar fund
offered one class of shares to investors without a sales charge or a
distribution or shareholder servicing fee. Performance presented prior to
January 10, 1995, does not reflect these fees.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of large-capitalization stocks.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class C and Class
S represents cumulative total return as the classes have been in operation
less than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 11)
RELATIVE VALUE
INVESTMENT OBJECTIVE: MAXIMIZE AFTER-TAX TOTAL RETURN FROM CAPITAL APPRECIATION
PLUS INCOME
The First American Relative Value Fund declined by 11.97% for the 12-month
period ended September 30, 2001 (Class A shares declined 12.18% on net asset
value). During the 12-month period, the fund's benchmark, the Russell 1000 Value
Index, declined 8.91%.
There were several major trends in the economy and markets that had a
significant impact on the fund's performance over the past 12 months. For
starters, the U.S. economy went into a definite slowdown mode in late 2000, and
continued on that track throughout the first nine months of 2001. The tragedies
on September 11 may have been the catalyst to throw the U.S. economy into a
full-blown recession.
Throughout this period, the stock market continued a cycle that had begun in
2000 as investor interest shifted from a bias toward growth to one that favored
value stocks. While previously red-hot sectors like technology and
telecommunications stocks fell dramatically, sectors featuring a number of
value-oriented names, including financial services, energy, and consumer
companies that are not dependent on a strong economy to succeed, came to the
forefront.
This portfolio is structured with a limited number of stocks (close to 50 at the
end of the fiscal year). These stocks are chosen through a careful process that
seeks to identify issues offering long-term fundamental value. Trading is
limited, as the fund seeks to capture the full value of a stock's upside
potential.
The fund is diversified across most market sectors, though it currently has its
heaviest weighting in financial, energy, and technology stocks. Over the past
fiscal year, a number of stocks in these industries performed well for the fund.
Given the dramatic decline in the markets in the wake of September 11, there
appears to be solid opportunities to buy stocks at attractive prices as the new
fiscal year gets underway. The foundation may have been laid for a positive year
ahead. This fund strives to deliver consistent performance over time, and could
play an important role in a well-diversified portfolio.
- -----------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- -----------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(6)
-----------------------------------------------
1 YEAR 5 YEARS 10 YEARS 3/31/1998 8/18/1997 12/11/2000 9/24/2001
- -----------------------------------------------------------------------------------------------------------
Class A NAV -12.18% 9.55% 12.06% -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Class A POP -17.00% 8.32% 11.42% -- -- -- --
- -----------------------------------------------------------------------------------------------------------
Class B NAV -12.75% -- -- -1.36% -- -- --
- -----------------------------------------------------------------------------------------------------------
Class B POP -17.07% -- -- -2.18% -- -- --
- -----------------------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- -- 3.57%
- -----------------------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- -- 1.52%
- -----------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -13.53% --
- -----------------------------------------------------------------------------------------------------------
Class Y -11.97% -- -- -- 3.73% -- --
- -----------------------------------------------------------------------------------------------------------
Russell 1000 Value Index(3) -8.91% 11.67% 13.85% 1.29% 6.51% -7.67% --
- -----------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(4) -26.62% 10.22% 12.70% -0.34% 5.02% -20.39% --
- -----------------------------------------------------------------------------------------------------------
S&P/BARRA 500 Value Index(5) -16.89% 9.80% 12.68% 0.15% 4.85% -18.22% --
- -----------------------------------------------------------------------------------------------------------
(12 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RELATIVE VALUE
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
RELATIVE RELATIVE RELATIVE RUSSELL S&P 500 S&P/BARRA
VALUE FUND, VALUE FUND, VALUE FUND, 1000 VALUE COMPOSITE 500 VALUE
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4) INDEX(5)
--------------------------------------------------------------------------------------
CLASS A
11/1991 10,000 9,452 10,000 10,000 10,000
11/1992 11,531 10,896 12,048 11,847 11,764
11/1993 13,196 12,469 14,299 13,044 13,968
11/1994 13,066 12,346 14,118 13,181 13,944
11/1995 17,651 16,678 19,273 18,055 18,815
11/1996 22,744 21,490 24,343 23,085 23,983
11/1997 29,045 27,445 31,566 29,668 29,997
11/1998 33,886 32,018 36,329 36,683 33,971
11/1999 37,913 35,823 40,132 44,344 38,203
10/2000 37,884 35,796 42,679 46,108 42,149
9/2001 32,140 30,368 37,943 33,977 34,387
CLASS Y
8/1997 10,000 10,000 10,000 10,000
11/1997 10,393 10,764 10,667 10,586
11/1998 12,154 12,388 13,190 11,988
11/1999 13,637 13,685 15,944 13,481
10/2000 13,671 14,553 16,579 14,874
9/2001 11,627 12,938 12,217 12,135
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On September 24, 2001, the Relative Value Fund became the successor by
merger to the Firstar Relative Value Fund, a series of Firstar Funds, Inc.
Prior to the merger, the First American Fund had no assets or liabilities.
Performance presented prior to September 24, 2001, represents that of the
Firstar Relative Value Fund. The Firstar Relative Value Fund was organized
on December 11, 2000, and, prior to that, was a separate series of Firstar
Stellar Funds, Inc.
On September 24, 2001, the fund changed its investment objective to manage
its portfolio of securities on a tax-efficient basis. Performance prior to
this date does not reflect this management strategy.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 1000
companies with lower price-to-book ratios and lower forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500
Composite Index and the Standard & Poor's/BARRA 500 Value Index as
benchmarks. Going forward, the fund will use the Russell 1000 Value Index
as a comparison because its composition better matches the fund's
investment objectives and strategies.
(4) An unmanaged index of large-capitalization stocks.
(5) An unmanaged capitalization-weighted index consisting of approximately 50%
of the market capitalization of the Standard & Poor's Composite Index with
low price-to-book ratios.
(6) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class C and Class
S represents cumulative total return as the classes have been in operation
less than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 13)
CAPITAL GROWTH
INVESTMENT OBJECTIVE: MAXIMIZE LONG-TERM AFTER-TAX RETURNS
The First American Capital Growth Fund lost 43.17% for the 12-month period ended
September 30, 2001(Class A shares declined 43.28% on net asset value). During
the 12 months, the fund's benchmark, the Russell 1000 Growth Index, declined
45.64%.
Throughout the year, the U.S. economy was faced with a significant slowdown.
This severely hampered business prospects for many companies, and led to profit
declines. This also took a toll on stock prices. Hardest hit were growth
companies, which had enjoyed the fruits of a solid run-up in values through the
late 1990s and early 2000. With profit growth drying up, investors had less
enthusiasm for the growth side of the market.
Technology stocks paid the biggest price. Business demand for tech-related
products and services dried up dramatically beginning in 2000 and continuing in
2001. Stocks in that sector, which represented an important position in the
fund, declined dramatically as a result. The fund also lost ground due to a
strong commitment to health care stocks, which proved to be disappointing for
most of the year. Only in the last two months did the health care area show
signs of revival.
The fund did benefit from effective stock selection in many of the sectors in
which it invests. Holdings in the consumer staple, financial, and technology
area tended to perform better than the average stock within their respective
sectors during the period. Few significant changes were made to the portfolio
during the year. As a practice, the fund is generally positioned somewhat
comparable to the overall market for growth stocks in terms of sector
allocations. Value is added primarily through careful stock selection within
each of those sectors.
As the new fiscal year begins, it is clear that the U.S. economy is fighting a
slump that has made for a difficult business environment. In the short term,
this will continue to create a challenge for many companies trying to meet
profit expectations. As signs of an improved economy become more apparent, which
could happen by early 2002, stocks are likely to generate better performance. In
anticipation of that, the fund may be positioned in a more aggressive manner in
order to take advantage of opportunities that are likely to return to the growth
sector of the market.
- --------------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- --------------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(6)
------------------------------------------------------------
1 YEAR 5 YEARS 12/12/1994 8/18/1997 3/31/2000 12/11/2000 9/24/2001
- --------------------------------------------------------------------------------------------------------------
Class A NAV -43.28% -- -- -- -31.88% -- --
- --------------------------------------------------------------------------------------------------------------
Class A POP -46.39% -- -- -- -34.40% -- --
- --------------------------------------------------------------------------------------------------------------
Class B NAV -43.66% 4.95% 10.12% -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Class B POP -46.40% 4.62% 10.12% -- -- -- --
- --------------------------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- -- 2.58%
- --------------------------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- -- 0.60%
- --------------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -38.82% --
- --------------------------------------------------------------------------------------------------------------
Class Y -43.17% -- -- 0.29% -- -- --
- --------------------------------------------------------------------------------------------------------------
Russell 1000 Growth Index(3) -45.64% 6.50% 12.25% 1.31% -36.88% -30.89% --
- --------------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(4) -26.62% 10.22% 14.80% 5.02% -20.56% -20.39% --
- --------------------------------------------------------------------------------------------------------------
S&P/BARRA 500 Growth Index(5) -35.70% 9.94% 14.96% 4.42% -30.55% -22.79% --
- --------------------------------------------------------------------------------------------------------------
(14 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
CAPITAL GROWTH
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
CAPITAL CAPITAL CAPITAL RUSSELL S&P 500 S&P/BARRA
GROWTH FUND, GROWTH FUND, GROWTH FUND, 1000 VALUE COMPOSITE 500 GROWTH
CLASS B NAV CLASS B POP CLASS Y INDEX(3) INDEX(4) INDEX(5)
---------------------------------------------------------------------------------------
CLASS B
12/1994 10,000 10,000 10,000 10,000 10,000
11/1995 12,944 12,944 13,640 13,498 13,658
11/1996 16,483 16,483 17,228 17,258 17,528
11/1997 20,223 20,223 21,796 22,180 23,094
11/1998 24,422 24,422 28,042 27,424 30,885
11/1999 30,590 30,590 36,873 33,152 39,685
10/2000 33,189 33,189 38,250 34,470 38,845
9/2001 19,260 19,260 21,826 25,402 25,643
CLASS Y
9/1997 10,000 10,000 10,000 10,000
11/1997 10,459 10,533 10,667 10,747
11/1998 12,646 13,552 13,190 14,372
11/1999 15,884 17,820 15,944 18,468
10/2000 17,286 18,485 16,579 18,076
9/2001 10,119 10,548 12,217 11,933
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On September 24, 2001, the Capital Growth Fund became the successor by
merger to the Firstar Large Cap Growth Fund, a series of Firstar Funds,
Inc. Prior to the merger, the First American Fund had no assets or
liabilities. Performance presented prior to September 24, 2001, represents
that of the Firstar Large Cap Growth Fund. The Firstar Large Cap Growth
Fund was organized on December 11, 2000, and, prior to that, was a separate
series of Firstar Stellar Funds, Inc.
On September 24, 2001, the fund changed its investment objective to manage
its portfolio of securities on a tax-efficient basis. Performance prior to
this date does not reflect this management strategy.
(2) Performance for Class A, Class C, and Class S shares is not presented.
Performance for Class A and Class S is higher due to lower expenses.
Performance for Class C is substantially similar to Class B due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth
values. Russell 1000 companies include the 1,000 largest companies in the
Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index measures
the performance of the 3,000 largest U.S. companies based on total market
capitalization, which represents approximately 98% of the investable U.S.
equity market. Previously, the fund used the Standard & Poor's 500
Composite Index and the Standard & Poor's/BARRA 500 Growth Index as
benchmarks. Going forward, the fund will use the Russell 1000 Growth Index
as a comparison because its composition better matches the fund's
investment objective and strategies.
(4) An unmanaged index of large-capitalization stocks.
(5) An unmanaged market-capitalization-weighted index comprised of the stocks
in the Standard & Poor's 500 Composite Index with the highest valuations
and, in the advisor's view, the greatest growth opportunities.
(6) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class C and Class
S represents cumulative total return as the classes have been in operation
less than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 15)
EQUITY INCOME
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL AND INCOME
In a volatile year for stocks, the First American Equity Income Fund finished
the year with a modest decline of 3.71% for the fiscal year ended September 30,
2001 (Class A shares declined 3.89% on net asset value). By comparison, the
fund's benchmarks, the S&P 500 Composite Index and the Lehman Government/Credit
Bond Index, declined 26.62% and gained 15.32% respectively, over the 12-month
period.
Stocks that pay dividends began to draw more investor attention as market
expectations shifted from the belief that the economy would continue to grow at
a solid pace to the expectation that a recession was just around the corner. In
fact, there has been a recession in business capital spending, which began to
dramatically decline during the first months of 2001.
Because the fund was positioned to weather this change in expectations for the
economy, the portfolio held up relatively well. The fund's focus on stocks that
pay dividends helps to provide a cushion in periods when the markets move lower,
as the current yield provides a reliable return that can help offset negative
movement in stock prices.
One reason the fund performed well compared to its competitive group and the
market as a whole was that it avoided significant investments in technology
stocks, which were the hardest hit during the 12-month period.
Going forward, the fund will stick to its discipline of owning dividend-paying
companies and emphasizing yield-oriented sectors of the market. It seems likely,
particularly in the wake of the September 11 attacks, that the U.S. economy will
struggle in the first months of the new fiscal year. While there are efforts
underway to stimulate economic growth, the impact is likely to begin off of a
much lower economic base, as well as a significantly lower level of corporate
profits. The portfolio will be adjusted to favor stocks that can benefit from
positive economic growth as improvement in the economy becomes more visible.
- ----------------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ----------------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
----------------------------------------------------------
1 YEAR 5 YEARS 12/18/1992 8/2/1994 8/15/1994 2/1/1999 9/24/2001
- ----------------------------------------------------------------------------------------------------------------
Class A NAV -3.89% 10.74% 10.95% -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Class A POP -9.19% 9.49% 10.24% -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Class B NAV -4.64% 9.98% -- -- 11.64% -- --
- ----------------------------------------------------------------------------------------------------------------
Class B POP -8.35% 9.72% -- -- 11.64% -- --
- ----------------------------------------------------------------------------------------------------------------
Class C NAV -4.74% -- -- -- -- 0.75% --
- ----------------------------------------------------------------------------------------------------------------
Class C POP -6.40% -- -- -- -- 0.36% --
- ----------------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -- 4.75%
- ----------------------------------------------------------------------------------------------------------------
Class Y -3.71% 11.08% -- 12.64% -- -- --
- ----------------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(3) -26.62% 10.22% 12.63% 13.65% 13.65% -5.33% --
- ----------------------------------------------------------------------------------------------------------------
Lehman Gov't/Credit Bond Index(4) 15.32% 8.05% 7.45% 8.04% 8.04% 7.56% --
- ----------------------------------------------------------------------------------------------------------------
(16 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
EQUITY INCOME
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN LEHMAN
EQUITY EQUITY EQUITY S&P 500 GOVERNMENT/
INCOME FUND, INCOME FUND, INCOME FUND, COMPOSITE CREDIT BOND
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4)
--------------------------------------------------------------------------
CLASS A
12/1992 10,000 9,452 10,000 10,000
9/1993 10,377 9,808 10,759 10,861
9/1994 10,885 10,288 11,155 10,681
9/1995 12,851 12,146 14,474 11,885
9/1996 14,960 14,140 17,416 12,494
9/1997 19,622 18,546 24,461 13,518
9/1998 21,265 20,100 26,672 14,926
9/1999 23,337 22,057 34,083 15,020
9/2000 25,929 24,507 38,611 15,956
9/2001 24,919 23,553 28,332 18,013
CLASS Y
8/1994 10,000 10,000 10,000
9/1994 10,045 9,756 9,908
9/1995 11,877 12,657 11,025
9/1996 13,871 15,231 11,590
9/1997 18,234 21,391 12,540
9/1998 19,848 23,325 13,846
9/1999 21,853 29,806 13,933
9/2000 24,358 33,765 14,801
9/2001 23,455 24,777 16,710
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On May 18, 1994, the Equity Income Fund became the successor by merger to
the Boulevard Strategic Balance Fund. Prior to the merger, the First
American fund had no assets or liabilities. Performance prior to May 18,
1994, is that of the Boulevard Strategic Balance Fund.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of large-capitalization stocks.
(4) An unmanaged index of Treasury securities, other securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities,
including U.S. agency mortgage securities and investment-grade corporate
debt securities.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 17)
BALANCED
INVESTMENT OBJECTIVE: MAXIMIZE TOTAL RETURN (CAPITAL APPRECIATION PLUS INCOME)
Stock markets have struggled in a declining economy, while bond markets have
enjoyed better performance with interest rates moving lower. The First American
Balanced Fund posted a decline of 18.14% for the 12-month period ended September
30, 2001 (Class A shares declined 18.38% on net asset value). For the same
period, the fund's benchmarks had varying performance. The S&P 500 Composite
Index declined 26.62%, while the Lehman Aggregate Bond Index gained 12.96%.
The fund's equity component, which focused on a broad mix of large-, mid-,
and small-cap stocks, was hard hit by a slowing economy. This created a
difficult business environment for many companies, who saw their revenues
decline and profit expectations become difficult to meet. Even a series of
short-term interest-rate cuts by the Federal Reserve, which began in January and
continued right through to the end of the fiscal year, was not enough to stem
the tide of a slowing U.S. economy. The tragic terrorist attacks on September 11
clearly had a damaging effect on the economy as we closed out the fiscal year.
Throughout the period, the market moved in different and sometimes
surprising directions that made it difficult to identify the best categories of
stocks. For instance, in the closing months of 2000 and early part of 2001,
there were serious concerns about possible energy shortages. Prices of oil and
natural gas shot up, benefiting stocks in those areas. But as the year
progressed, the weaker economy dampened energy demand, and consequently, the
fortunes of many of the stocks that had previously benefited. Likewise, stocks
of large pharmaceutical companies performed particularly well in the early
months of the fiscal year, but struggled through most of 2001.
The fund took advantage of strong performance among its holdings of health
care services and supply companies. By contrast, the weak technology sector had
a detrimental impact on the portfolio as it did on the market as a whole.
In the fixed-income portfolio, interest rates on the short end of the yield
curve came down dramatically from January forward, tied to the Federal Reserve's
interest-rate cuts. Longer-bonds saw yields drop, but not in a significant way.
Early in the year, the fund put a heavy emphasis on corporate bonds, and they
performed better than Treasury debt securities into the summer. The fund's
position was shifted somewhat at that time, taking profits on some corporate
bonds and putting the proceeds to work in U.S. Treasury securities.
As the U.S. economy showed further signs of slowing in the middle of
summer, the environment changed in favor of Treasury debt securities. The
September 11 attacks clearly changed investor perceptions for the short term,
and most looked to put money to work in the highest-quality sector of the bond
market--short-term U.S. government securities.
As the new fiscal year begins, it is clear that the U.S. economy is
fighting a slump that has made for a difficult business environment. In the
short term, that will continue to create a difficult profit environment for many
companies. It also is likely to keep the bond market moving in a generally
positive direction.
Equity markets are waiting for signs of economic improvement. It seems
possible that stimulus efforts by both the Federal Reserve and the federal
government will help that process. Once a recovery becomes apparent, stocks are
likely to enjoy stronger performance. In the short term, markets will likely
remain volatile, but as signals improve, the fund may take a more aggressive
position in order to capitalize on future appreciation potential.
Although interest rates are at very low levels, continued modest inflation
should prevent them from climbing dramatically in the months ahead. In an
environment where rates are relatively steady or moving only slightly higher, it
is likely that corporate bonds will prove to be the most attractive area of the
fixed income market, and the bond portfolio will concentrate on that segment.
- ---------------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ---------------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(6)
----------------------------------------------------------
1 YEAR 5 YEARS 3/30/1992 1/9/1995 3/1/1999 11/27/2000 9/24/2001
- ---------------------------------------------------------------------------------------------------------------
Class A NAV -18.38% 5.99% -- 9.48% -- -- --
- ---------------------------------------------------------------------------------------------------------------
Class A POP -22.88% 4.80% -- 8.55% -- -- --
- ---------------------------------------------------------------------------------------------------------------
Class B NAV -19.00% -- -- -- -0.75% -- --
- ---------------------------------------------------------------------------------------------------------------
Class B POP -22.37% -- -- -- -1.66% -- --
- ---------------------------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- -- 2.15%
- ---------------------------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- -- 0.18%
- ---------------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -14.03% --
- ---------------------------------------------------------------------------------------------------------------
Class Y -18.14% 6.29% 8.33% -- -- -- --
- ---------------------------------------------------------------------------------------------------------------
S&P 500 Composite Index(3) -26.62% 10.22% 12.74% 14.56% -6.97% -20.00% --
- ---------------------------------------------------------------------------------------------------------------
Lehman Aggregate Bond Index(4) 12.96% 8.06% 7.76% 8.49% 7.76% 10.41% --
- ---------------------------------------------------------------------------------------------------------------
Lehman Gov't/Credit Bond Index(5) 13.17% 8.00% 7.26% 7.90% 7.74% 10.88% --
- ---------------------------------------------------------------------------------------------------------------
(18 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
BALANCED
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
LEHMAN
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN S&P 500 LEHMAN GOVERNMENT/
BALANCED FUND, BALANCED FUND, BALANCED FUND, COMPOSITE AGGREGATE CREDIT BOND
CLASS A NAV CLASS A POP CLASS Y INDEX(3) BOND INDEX(4) INDEX(5)
------------------------------------------------------------------------------------------
CLASS A
1/1995 10,000 9,452 10,000 10,000 10,000
10/1995 12,197 11,522 12,603 11,288 11,077
10/1996 13,707 12,949 15,640 11,948 11,721
10/1997 16,182 15,287 20,663 13,013 12,599
10/1998 17,578 16,606 25,204 14,226 13,745
10/1999 18,541 17,516 31,671 14,301 13,882
10/2000 22,152 20,926 33,599 15,344 14,775
9/2001 18,380 17,363 24,760 17,220 16,605
CLASS Y
3/1992 10,000 10,000 10,000 10,000
10/1992 10,381 10,548 10,706 10,713
10/1993 11,772 12,124 11,978 11,778
10/1994 11,665 12,593 11,538 11,550
10/1995 13,974 15,923 13,344 12,997
10/1996 15,724 19,759 14,124 13,752
10/1997 18,618 26,104 15,383 14,782
10/1998 20,264 31,841 16,818 16,127
10/1999 21,454 40,011 16,906 16,287
10/2000 25,720 42,448 18,140 17,335
9/2001 21,389 31,280 20,357 19,482
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On September 24, 2001, the First American Balanced Fund combined with
Firstar Balanced Growth Fund and Firstar Balanced Income Fund. Performance
history prior to September 24, 2001, represents that of Firstar Balanced
Growth Fund.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of large-capitalization stocks.
(4) An unmanaged index composed of the Lehman Government/Credit Bond Index, the
Lehman Mortgage Backed Securities Index, and the Lehman Asset Backed
Securities Index. The Lehman Government/Credit Bond Index is comprised of
Treasury securities, other securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities, including U.S. agency
mortgage securities and investment-grade corporate debt securities. The
Lehman Mortgage Backed Securities Index is comprised of the mortgage-backed
pass-through securities of Ginnie Mae, Fannie Mae, and Freddie Mac. The
Lehman Asset Backed Securities Index is comprised of debt securities rated
investment grade or higher that are backed by credit card, auto, and home
equity loans. Previously, the fund used the Lehman Government/Credit Bond
Index as its benchmark index. Going forward, the fund will use the Lehman
Aggregate Bond Index as a comparison because its composition better matches
the fund's investment objectives and strategies.
(5) An unmanaged index of Treasury securities, other securities issued or
guaranteed by the U.S. government or its agencies or instrumentalities,
including U.S. agency mortgage securities and investment-grade corporate
debt securities.
AMERICAN FUNDS ANNUAL REPORT 2001 19)
MID CAP GROWTH
INVESTMENT OBJECTIVE: GROWTH OF CAPITAL
Growth stocks faced significant challenges in the fiscal year ended September
30, 2001. This took a toll on the First American Mid Cap Growth Fund, which
declined 49.22% (Class A shares lost 49.38% on net asset value). By comparison,
the fund's benchmark, the Russell Midcap Growth Index, declined by 51.77%.
Beginning in the closing months of 2000, the U.S. economy, which had enjoyed
tremendous growth in previous years, suddenly began to slow significantly. While
not yet slipping into a recession, economic growth was tepid at best through
much of the fiscal year. That created a difficult environment for growth stocks,
which depend on increasing revenues and profits to rise in value. Technology
stocks, commonly a big part of any growth portfolio, were the hardest hit. As
many companies trimmed their spending on technology and telecommunications
equipment, a number of these stocks were driven down in dramatic fashion.
Given that reality, the fund shifted its focus to other types of mid-cap growth
stocks. Better opportunities were identified in areas like energy, financial
services, and health care.
The tragic attacks that occurred on September 11 appeared to leave a mark on the
U.S. economy. Hopes of avoiding a recession faded as a result of the tragedy,
and that may delay a near-term recovery for growth stocks. However, it is
possible that as the economy begins to recover and another cycle of growth gets
underway, the fund should be able to capitalize on a number of investment
opportunities.
In fact, mid-cap stocks have a solid record of performing well in the early
stages of an economic recovery. While this area of the market can be subject to
significant volatility, there are reasons to be optimistic about long-term
prospects for the portfolio. With the Federal Reserve and the U.S. government
adding fiscal stimulus to the economy, the environment is likely to improve for
mid-cap companies that are looking for capital to grow their businesses. What's
more, mid-cap growth stocks still appear to be attractively valued in the
market, which should draw more investor interest as stocks find their way back
into positive territory.
- -------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- -------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
----------------------------------
1 YEAR 5 YEARS 10 YEARS 8/7/1998 2/1/1999 9/24/2001
- -------------------------------------------------------------------------------------------------
Class A NAV -49.38% 4.36% 10.63% -- -- --
- -------------------------------------------------------------------------------------------------
Class A POP -52.17% 3.18% 10.01% -- -- --
- -------------------------------------------------------------------------------------------------
Class B NAV -49.65% -- -- -0.66% -- --
- -------------------------------------------------------------------------------------------------
Class B POP -51.11% -- -- -1.04% -- --
- -------------------------------------------------------------------------------------------------
Class C NAV -49.73% -- -- -- -3.60% --
- -------------------------------------------------------------------------------------------------
Class C POP -50.53% -- -- -- -3.97% --
- -------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- 1.81%
- -------------------------------------------------------------------------------------------------
Class Y -49.22% 4.64% 10.77% -- -- --
- -------------------------------------------------------------------------------------------------
Russell Midcap Growth Index(3) -51.77% 4.51% 9.73% 4.38% -5.80% --
- -------------------------------------------------------------------------------------------------
Russell Midcap Index(4) -22.36% 9.15% 12.74% 8.86% 2.57% --
- -------------------------------------------------------------------------------------------------
(20 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
MID CAP GROWTH
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
MID CAP MID CAP MID CAP RUSSELL RUSSELL
GROWTH FUND, GROWTH FUND, GROWTH FUND, MIDCAP GROWTH MIDCAP
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4)
----------------------------------------------------------------------------
CLASS A
9/1991 10,000 9,452 10,000 10,000
9/1992 10,462 9,891 10,923 11,454
9/1993 14,322 13,540 13,132 14,281
9/1994 13,974 13,211 13,450 14,517
9/1995 18,820 17,793 17,440 18,450
9/1996 22,177 20,967 20,289 21,410
9/1997 26,843 25,379 26,303 28,916
9/1998 23,340 22,066 23,838 27,177
9/1999 30,736 29,058 32,704 32,463
9/2000 54,231 51,272 52,449 42,729
9/2001 27,453 25,955 25,297 33,175
CLASS Y
2/1997 10,000 10,000 10,000
9/1997 12,193 12,338 12,318
9/1998 10,633 11,182 11,577
9/1999 14,032 15,341 13,829
9/2000 24,820 24,603 18,202
9/2001 12,604 11,867 14,132
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment. Stocks of
mid-capitalization companies may be slightly less volatile than those of
small-capitalization companies, but they still involve substantial risk and
may be subject to more abrupt or erratic price fluctuations than
large-capitalization companies.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On August 7, 1998, the Mid Cap Growth Fund became the successor by merger
to the Piper Emerging Growth Fund, a series of Piper Funds Inc. Prior to
the merger, the First American fund had no assets or liabilities.
Performance prior to August 7, 1998, is that of the Piper Emerging Growth
Fund.
The Mid Cap Growth Fund's 1999 and 2000 returns were higher due in part to
its strategy of investing in IPOs in a period favorable for IPO investing.
Of course, such favorable returns involve accepting the risk of volatility,
and there is no assurance that the fund's future investment in IPOs will
have the same effect on performance as it had in 1999 and 2000.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell Midcap
Index companies with higher price-to-book ratios and higher forecasted
growth values. Previously, the fund used the Russell Midcap Index as a
benchmark. Going forward, the fund will use the Russell Midcap Growth Index
as a comparison because its composition better matches the fund's
investment objective and strategies.
(4) An unmanaged index comprised of the 800 smallest securities in the Russell
1000 Index, which represent approximately 24% of the total market
capitalization of the investable U.S. equity market.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 21)
MID CAP VALUE
INVESTMENT OBJECTIVE: CAPITAL APPRECIATION
In a generally difficult market for stocks, mid-cap value issues managed to
avoid many of the problems. Still, the First American Mid Cap Value Fund
declined 5.37% for the fiscal year ended September 30, 2001 (Class A shares lost
5.41% on net asset value). Over the 12 months, the fund's broad-based benchmark,
the Russell Midcap Value Index, declined 0.04%.
A very positive trend for the fund was that value stocks significantly
outperformed growth issues. While a slow economy limited the upside potential
for stocks, investors clearly showed a preference for attractively priced
companies that could generate positive earnings. Over an 18-month span, mid-cap
value stocks have made up most of the ground that was lost during an extended
period that favored growth stocks during the late 1990s and early part of 2000.
The fund focused its portfolio on high-quality companies with a track record of
solid profitability and steady business performance. These companies are driven
by strong management teams and participate in industries with good business
fundamentals. Among the blue-chip names that contributed positively to the
fund's performance were General Dynamics, SunGard Data Systems, Kinder Morgan,
and ITT Industries. Two stocks in the portfolio that were faced with difficult
challenges but managed to bounce back strongly were Office Depot and Federated
Department Stores.
The fund lost some ground due to poor performance among its limited holdings in
the hard-hit technology sector, and significant losses in a major airline
holding, Delta Airlines, shortly after the terrorist attacks on September 11.
Those events had a damaging effect on investor psychology and expectations for
an economic turnaround. The market's expectation for the economy is that a
recovery may be delayed until some time in 2002, as the nation tries to rebound
from the impact of the tragedy on a number of business sectors. The fund is
structured with a very diversified mix of stocks across a broad range of
industries. With a focus on identifying companies that have the potential to
outperform the market as a whole, the fund will seek to generate competitive
returns in the year ahead.
- ---------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ---------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
---------------------------------------------
1 YEAR 5 YEARS 10 YEARS 2/4/1994 8/15/1994 2/1/1999 9/24/2001
- ---------------------------------------------------------------------------------------------------------
Class A NAV -5.41% 2.94% 10.24% -- -- -- --
- ---------------------------------------------------------------------------------------------------------
Class A POP -10.61% 1.78% 9.61% -- -- -- --
- ---------------------------------------------------------------------------------------------------------
Class B NAV -6.21% 2.18% -- -- 7.07% -- --
- ---------------------------------------------------------------------------------------------------------
Class B POP -10.90% 1.94% -- -- 7.07% -- --
- ---------------------------------------------------------------------------------------------------------
Class C NAV -6.17% -- -- -- -- 0.11% --
- ---------------------------------------------------------------------------------------------------------
Class C POP -8.05% -- -- -- -- -0.27% --
- ---------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -- 3.23%
- ---------------------------------------------------------------------------------------------------------
Class Y -5.37% 3.20% -- 7.83% -- -- --
- ---------------------------------------------------------------------------------------------------------
Russell Midcap Value Index(3) -0.04% 10.77% 13.84% 12.29% 12.69% 5.13% --
- ---------------------------------------------------------------------------------------------------------
Russell Midcap Index(4) -22.36% 9.15% 12.74% 11.35% 11.97% 2.57% --
- ---------------------------------------------------------------------------------------------------------
(22 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
MID CAP VALUE
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
MID CAP MID CAP MID CAP RUSSELL RUSSELL
VALUE FUND, VALUE FUND, VALUE FUND, MIDCAP VALUE MIDCAP
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4)
---------------------------------------------------------------------------
CLASS A
9/1991 10,000 9,452 10,000 10,000
9/1992 11,517 10,880 11,813 11,454
9/1993 13,688 12,931 15,030 14,281
9/1994 16,257 15,357 15,184 14,517
9/1995 18,310 17,297 18,942 18,450
9/1996 22,930 21,662 21,924 21,410
9/1997 32,086 30,311 30,748 28,916
9/1998 22,836 21,573 29,608 27,177
9/1999 24,669 23,305 32,368 32,463
9/2000 28,019 26,469 36,576 42,729
9/2001 26,504 25,038 36,563 33,175
CLASS Y
2/1994 10,000 10,000 10,000
9/1994 10,731 10,017 9,900
9/1995 12,108 12,497 12,582
9/1996 15,209 14,464 14,600
9/1997 21,331 20,286 19,719
9/1998 15,220 19,533 18,533
9/1999 16,508 21,354 22,138
9/2000 18,810 24,130 29,138
9/2001 17,800 24,122 22,623
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment. Stocks of
mid-capitalization companies may be slightly less volatile than those of
small-capitalization companies, but they still involve substantial risk and
may be subject to more abrupt or erratic price fluctuations than
large-capitalization companies.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell Midcap
companies with lower price-to-book ratios and lower forecasted growth
values. Previously, the fund used the Russell Midcap Index as a benchmark.
Going forward, the fund will use the Russell Midcap Value Index as a
comparison because its composition better matches the fund's investment
objective and strategies.
(4) An unmanaged index comprised of the 800 smallest securities in the Russell
1000 Index, which represent approximately 24% of the total market
capitalization of the investable U.S. equity market.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 23)
MID CAP CORE
INVESTMENT OBJECTIVE: CAPITAL APPRECIATION
Amid a weakening economy, mid-cap stocks faced difficult challenges in the
12-month period ended September 30, 2001. In that time, the
First American Mid Cap Core Fund declined 22.46% (Class A shares lost 22.64% on
net asset value). The fund's benchmark, the S&P Midcap 400 Index, declined
19.00% for the period.
As 2000 came to a close, significant concerns about the state of the U.S.
economy were coming to the forefront. By early January, the Federal Reserve
began a long string of short-term interest rate cuts in an effort to keep the
economy out of recession. In the early part of the fiscal year, energy stocks
performed extremely well. Health care and financial stocks also held up
reasonably well. The environment was far more difficult for stocks in the once
high-flying technology sector. With an economic slowdown at hand, a number of
businesses trimmed their technology budgets, and that left many technology
suppliers struggling to generate profit growth.
While the environment as a whole was difficult for equity investors,
mid-cap stocks generally held up better than large-cap stocks. That
was a switch from previous years, when large-cap stocks significantly
outperformed the rest of the market. Still, a number of companies found earnings
growth hard to come by in slow-growth economy.
Effective stock selection in these sectors proved to be helpful to the fund's
return. While the absolute performance of technology stocks was disappointing,
the fund managed to avoid the weakest sectors, such as Internet and
semiconductor stocks.
In light of the September 11 attacks on the United States, steps have been taken
to upgrade the portfolio, focusing on stocks that are not overly dependent on
the immediate prospects for the U.S. economy. This conservative approach should
be helpful in a period of uncertainty and expected volatility in the market.
Once the economy begins to move out of a recession, mid-cap stocks appear to be
well positioned to capture much of the potential of the markets. Historically,
mid-cap issues have performed very well in the early stages of an economic
recovery. If that pattern holds true again, the fund should be well positioned
to take advantage of the opportunities offered in the market.
- -------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- -------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(4)
-----------------------------------------------
1 YEAR 5 YEARS 10 YEARS 1/9/1995 3/1/1999 12/11/2000 9/24/2001
- -------------------------------------------------------------------------------------------------------
Class A NAV -22.64% 5.66% -- 10.72% -- -- --
- -------------------------------------------------------------------------------------------------------
Class A POP -26.89% 4.47% -- 9.79% -- -- --
- -------------------------------------------------------------------------------------------------------
Class B NAV -23.28% -- -- -- 5.98% -- --
- -------------------------------------------------------------------------------------------------------
Class B POP -25.75% -- -- -- 5.20% -- --
- -------------------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- -- 3.39%
- -------------------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- -- 1.36%
- -------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -20.87% --
- -------------------------------------------------------------------------------------------------------
Class Y -22.46% 5.91% 10.09% -- -- -- --
- -------------------------------------------------------------------------------------------------------
S&P MidCap 400 Index(3) -19.00% 13.67% 14.45% 16.46% 8.01% -15.76% --
- -------------------------------------------------------------------------------------------------------
(24 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
MID CAP CORE
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
MID CAP MID CAP MID CAP S&P
CORE FUND, CORE FUND, CORE FUND, MIDCAP 400
CLASS A NAV CLASS A POP CLASS Y INDEX(3)
-------------------------------------------------------------
CLASS A
1/1995 10,000 9,452 10,000
10/1995 12,873 12,166 12,449
10/1996 14,453 13,658 14,608
10/1997 17,658 16,688 19,381
10/1998 16,615 15,702 20,681
10/1999 16,832 15,907 25,038
10/2000 24,783 23,421 32,962
9/2001 19,826 18,736 27,636
CLASS Y
10/1991 10,000 10,000
10/1992 10,886 11,081
10/1993 12,644 13,467
10/1994 12,994 13,787
10/1995 16,346 16,711
10/1996 18,402 19,611
10/1997 22,532 26,017
10/1998 21,256 27,762
10/1999 21,588 33,612
10/2000 31,861 44,250
9/2001 25,540 37,100
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Index is for illustrative
purposes only and is not available for investment. Stocks of
mid-capitalization companies may be slightly less volatile than those of
small-capitalization companies, but they still involve substantial risk and
may be subject to more abrupt or erratic price fluctuations than
large-capitalization companies.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On September 24, 2001, the Mid Cap Core Fund became the successor by merger
to the Firstar MidCap Core Equity Fund, a series of Firstar Funds, Inc.
Prior to the merger, the First American Fund had no assets or liabilities.
Performance presented prior to September 24, 2001, represents that of the
Firstar MidCap Core Equity Fund.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged, capitalization-weighted index that represents the aggregate
market value of the common equity of 400 companies chosen by Standard &
Poor's with a median capitalization of approximately $700 million and
measures the performance of the mid-range sector of the U.S. stock market.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class C
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 25)
MICRO CAP
INVESTMENT OBJECTIVE: GROWTH OF CAPITAL
A struggling stock market had an impact on a broad range of stocks, including
those of smaller companies. In that environment, the First American Micro Cap
Fund declined 29.07% for the 12-month period ended September 30, 2001 (Class A
shares declined 29.23% on net asset value). Still, the fund fared better than
its benchmark, the Russell 2000 Growth Index, which was down 42.59% for the same
12-month period.
The general malaise that plagued the stock market, as the fiscal year began in
October 2000, was particularly evident for growth stocks. While investors had
some appetite for stocks of smaller companies, most of their interest appeared
to lie in the value sector, which is not the main emphasis of this fund. One
reason for the difficult market was that the U.S. economy began to lose steam at
the close of 2000. A recession was narrowly avoided in the first half of 2001,
but businesses had dramatically trimmed their capital spending. This took a toll
on the fortunes of many smaller growth stocks, particularly in the technology
sector.
In an effort to give the economy a boost, the Federal Reserve trimmed interest
rates eight times between January and September. This provided a bit of a lift
to the micro-cap market, but again, the fund's growth stock emphasis worked
against it. Throughout the year, a number of "mini-rallies" occurred from time
to time in the technology sector, but they were quickly overtaken by the
continuation of the general bear market. The fund began the year with a heavy
weighting in the technology sector, but eventually cut that position by more
than half.
The fund did benefit from a sizable position in energy stocks, which performed
very well in late 2000 and very early 2001. The fund's energy position was
virtually eliminated after the runup, which worked to its benefit, as energy
stocks took a turn for the worse. Stocks in the health care and financial
markets also played a bigger role in the portfolio for much of the year. Late in
the summer, it appeared that the U.S. economy was poised for a slow recovery,
and adjustments were made to the fund, adding more stocks that would benefit
from an economic upturn, including more technology issues.
The terrorist attacks on September 11 changed everything in regard to the
near-term outlook. Suddenly, the economy was dealt a severe blow, and it
appeared that any significant recovery for a number of struggling micro-cap
firms would be delayed. Nevertheless, many micro-cap stocks appear to be
attractively priced in the current market, and once the economy begins to
recover, they could be poised to show better performance.
- --------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- --------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(4)
------------------------------------------------
1 YEAR 5 YEARS 8/1/1995 3/1/1999 12/11/2000 9/24/2001
- --------------------------------------------------------------------------------------------------
Class A NAV -29.23% 21.35% 27.73% -- -- --
- --------------------------------------------------------------------------------------------------
Class A POP -33.13% 19.99% 26.57% -- -- --
- --------------------------------------------------------------------------------------------------
Class B NAV -29.79% -- -- 37.81% -- --
- --------------------------------------------------------------------------------------------------
Class B POP -32.19% -- -- 37.10% -- --
- --------------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- 3.43%
- --------------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- 1.37%
- --------------------------------------------------------------------------------------------------
Class S -- -- -- -- -15.59% --
- --------------------------------------------------------------------------------------------------
Class Y -29.07% 21.67% 28.06% -- -- --
- --------------------------------------------------------------------------------------------------
Russell 2000 Growth Index(3) -42.59% -1.75% 0.84% -7.96% -23.65% --
- --------------------------------------------------------------------------------------------------
Russell 2000 Index(3) -21.21% 4.54% 6.15% 2.06% -15.36% --
- --------------------------------------------------------------------------------------------------
(26 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
MICRO CAP
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN RUSSELL RUSSELL
MICRO CAP FUND, MICRO CAP FUND, MICRO CAP FUND, 2000 GROWTH 2000
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(3)
-----------------------------------------------------------------------
CLASS A
8/1995 10,000 9,452 10,000 10,000
10/1995 11,100 10,492 9,704 9,723
10/1996 17,137 16,197 10,997 11,338
10/1997 22,240 21,021 13,325 14,663
10/1998 17,411 16,456 11,212 12,927
10/1999 30,736 29,051 14,495 14,849
10/2000 57,608 54,450 16,838 17,434
9/2001 45,215 42,736 10,521 14,378
CLASS Y
8/1995 10,000 10,000 10,000
10/1995 11,110 9,704 9,723
10/1996 17,189 10,997 11,338
10/1997 22,366 13,325 14,663
10/1998 17,555 11,212 12,927
10/1999 31,083 14,495 14,849
10/2000 58,403 16,838 17,434
9/2001 45,943 10,521 14,378
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment. Stocks of
micro-capitalization companies involve substantial risk. These stocks
historically have experienced greater price volatility than stocks of
larger companies, and they may be expected to do so in the future.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On September 24, 2001, the Micro Cap Fund became the successor by merger to
the Firstar MicroCap Fund, a series of Firstar Funds, Inc. Prior to the
merger, the First American Fund had no assets or liabilities. Performance
presented prior to September 24, 2001, represents that of the Firstar
MicroCap Fund.
The MicroCap Fund's 1999 returns were higher due in substantial part to its
strategy of investing in IPOs in a period favorable for IPO investing. Of
course, such favorable returns involve accepting the risk of volatility,
and there is no assurance that the fund's future investment in IPOs will
have the same effect on performance as it did in 1999.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) The Russell 2000 Growth Index is an unmanaged index that measures the
performance of those companies in the Russell 2000 Index with higher
price-to-book ratios and higher forecasted growth values. The Russell 2000
Index is an unmanaged index that measures the performance of the 2,000
smallest companies in the Russell 3000 Index, which represents
approximately 8% of the total market capitalization of the Russell 3000
Index. The Russell 3000 Index measures the performance of the 3,000 largest
U.S. companies based on total market capitalization, which represents
approximately 98% of the investable U.S. equity market. Previously, the
fund used the Russell 2000 Index as a benchmark. Going forward, the fund
will use the Russell 2000 Growth Index as a comparison because its
composition better matches the fund's investment objective and strategies.
(4) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class C
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 27)
SMALL CAP GROWTH
INVESTMENT OBJECTIVE: GROWTH OF CAPITAL
Growth stocks were out of favor throughout the fiscal year ended September 30,
2001. Facing that challenge, the First American Small Cap Growth Fund declined
41.55% during the period (Class A shares declined 41.71% on net asset value).
That compares to the fund's benchmark, the Russell 2000 Growth Index, which was
down 42.59% for the same 12-month period.
The fund operated in an environment of a generally slowing U.S. economy. This
took a particular toll on growth-oriented stocks, which are dependent on the
profits of underlying companies to generate higher share value. With business
spending on the decline, particularly in the technology sector, many of the
companies in this part of the market had a difficult time meeting profit growth
expectations. As a result, stock prices tumbled.
The severe bear market for technology issues forced the fund to invest in other
types of stocks in order to generate growth. Early in the fiscal year, energy
stocks worked well, as high demand and shrinking supply boosted those companies.
However, the slowing economy took its toll here, as a sluggish business
environment reduced demand, eventually driving energy prices lower and hurting
the profitability of many companies.
A heavy weighting in financial services stocks benefited the fund. However,
technology stocks, typically an important part of a small-cap growth portfolio,
continued to struggle. While valuations of technology stocks have come down a
long way from their peaks reached in early 2000, it may still be too early to
see them recover to a significant extent. However, when appropriate, technology
issues will be added to the portfolio.
The events on September 11 have clearly made the environment more difficult and
unpredictable in the short term. There are some positive signs that should come
into play in the market at some point. For starters, both the Federal Reserve
and the U.S. government are adding significant stimulus to the economy. In
addition, world demand for U.S. products should recover in the future, adding to
the long-term growth prospects for a number of smaller companies. While
volatility is likely to continue, small-cap growth stocks should be well
positioned to benefit from an economic recovery, when that occurs.
- ----------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ----------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
----------------------------------
1 YEAR 5 YEARS 10 YEARS 7/31/1998 2/1/1999 9/24/2001
- ----------------------------------------------------------------------------------------------
Class A NAV -41.71% 9.58% 9.85% -- -- --
- ----------------------------------------------------------------------------------------------
Class A POP -44.90% 8.34% 9.85% -- -- --
- ----------------------------------------------------------------------------------------------
Class B NAV -42.14% -- -- 2.77% -- --
- ----------------------------------------------------------------------------------------------
Class B POP -44.40% -- -- 2.09% -- --
- ----------------------------------------------------------------------------------------------
Class C NAV -42.14% -- -- -- 0.16% --
- ----------------------------------------------------------------------------------------------
Class C POP -43.16% -- -- -- -0.23% --
- ----------------------------------------------------------------------------------------------
Class S -- -- -- -- -- 0.98%
- ----------------------------------------------------------------------------------------------
Class Y -41.55% 9.75% -- 3.84% -- --
- ----------------------------------------------------------------------------------------------
Russell 2000 Growth Index(3) -42.59% -1.75% 5.56% -5.47% -6.46% --
- ----------------------------------------------------------------------------------------------
Russell 2000 Index(4) -21.21% 4.54% 10.01% 0.18% 2.60% --
- ----------------------------------------------------------------------------------------------
(28 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
SMALL CAP GROWTH
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
SMALL CAP SMALL CAP SMALL CAP RUSSELL RUSSELL
GROWTH FUND, GROWTH FUND, GROWTH FUND, 2000 GROWTH 2000
CLASS A NAV CLASS A POP CLASS Y INDEX(4) INDEX(3)
-------------------------------------------------------------------------
CLASS A
9/1991 10,000 9,452 10,000 10,000
9/1992 10,616 10,031 9,978 10,894
9/1993 13,221 12,493 12,890 14,506
9/1994 13,501 12,757 13,003 14,894
9/1995 15,372 14,525 16,667 18,374
9/1996 16,201 15,309 18,768 20,787
9/1997 23,600 22,299 23,152 27,685
9/1998 19,198 18,140 17,402 22,420
9/1999 27,090 25,597 23,080 26,696
9/2000 43,906 41,486 29,926 32,940
9/2001 25,594 24,183 17,182 25,954
CLASS Y
7/1998 10,000 10,000 10,000
9/1998 8,383 8,471 8,689
9/1999 11,856 11,235 10,346
9/2000 19,275 14,568 12,766
9/2001 11,267 8,364 10,058
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment. Stocks of
small-capitalization companies involve substantial risk. These stocks
historically have experienced greater volatility than stocks of larger
companies and they may be expected to do so in the future.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On July 31, 1998, the Small Cap Growth Fund became the successor by merger
to the Piper Small Company Growth Fund, a series of Piper Funds Inc.
Performance presented prior to July 31, 1998, is that of the Piper Small
Companies Growth Fund. On September 21, 1996, shareholders approved a
change in the fund's investment objective from high total investment return
consistent with prudent investment risk to long-term capital appreciation.
In connection with this change, the fund's investment policies were
revised.
The Small Cap Growth Fund's 1999 and 2000 returns were higher due in part
to its strategy of investing in IPOs in a period favorable for IPO
investing. Of course, such favorable returns involve accepting the risk of
volatility, and there is no assurance that the fund's future investment in
IPOs will have the same effect on performance as it did in 1999 and 2000.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 2000
Index companies with higher price-to-book ratios and higher forecasted
growth values. Previously, the fund used the Russell 2000 Index as a
benchmark. Going forward, the fund will use the Russell 2000 Growth Index
as a comparison because its composition better matches the fund's
investment objective and strategies.
(4) An unmanaged index comprised of the smallest 2,000 companies in the Russell
3000 index, which represent approximately 8% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index is
composed of 3,000 large U.S. companies based on total market
capitalization, representing approximately 98% of the investable U.S.
equity market.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 29)
SMALL CAP VALUE
INVESTMENT OBJECTIVE: CAPITAL APPRECIATION
As stock markets battled a challenging environment, small-cap value stocks
withstood the onslaught with better results than most other equity sectors. In
that environment, the First American Small Cap Value Fund declined 6.25% for the
fiscal year ended September 30, 2001 (Class A shares declined 6.36% on net asset
value). The fund's benchmark, the Russell 2000 Value Index, returned 5.61%.
After lagging growth stocks through most of the 1990s and the early part of
2000, value stocks have clearly turned the tables in the 18 months leading to
the end of the current fiscal year. While a slowing economy through much of the
past year has made it difficult for stocks as a whole to generate positive
returns, small-cap value issues performed much better than the stock market as a
whole. Investors clearly appeared to prefer stocks of companies that had a solid
fundamental underpinning and tangible profits.
Using a bottom-up, research-driven approach, the fund was able to identify a
number of stocks that were positioned to do well in the challenging economic
environment. This included a large position in energy stocks, which initially
profited from price increases created by strong demand and limited supplies. As
the economy weakened, industrial demand declined, and a number of stocks gave
back some of their earlier gains. The fund's technology position was reduced,
given ongoing weakness in demand for technology products.
With the exception of the energy sector, the fund's largest holdings generally
performed quite well for most of the 12-month period. The fund emphasizes stocks
of stable and improving companies that can be purchased for an attractive price.
Later in the period, the market began to favor lower-quality companies which do
not typically play a major role in the portfolio.
Just as the fund was being positioned into companies likely to benefit from an
improved economy, the terrorist attacks occurred on September 11. In the
aftermath of that tragic event, it seems likely that a recovery in the U.S.
economy will be delayed. While the market must cope with a fair amount of
uncertainty in the short term, there are reasons for optimism about the economic
outlook. With significant stimulus put in place by the Federal Reserve and the
U.S. government, and a likely recovery of consumer demand before too long, any
possible recession should be shortlived. Once signs of economic improvement are
apparent, the portfolio will likely add a number of consumer and industrial
stocks that should benefit from the recovery.
- ----------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ----------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
-----------------------------------
1 YEAR 5 YEARS 10 YEARS 11/24/1997 2/1/1999 9/24/2001
- ----------------------------------------------------------------------------------------------
Class A NAV -6.36% 6.30% 14.17% -- -- --
- ----------------------------------------------------------------------------------------------
Class A POP -11.49% 5.11% 13.52% -- -- --
- ----------------------------------------------------------------------------------------------
Class B NAV -7.24% -- -- 0.04% -- --
- ----------------------------------------------------------------------------------------------
Class B POP -11.12% -- -- -0.52% -- --
- ----------------------------------------------------------------------------------------------
Class C NAV -7.08% -- -- -- 6.05% --
- ----------------------------------------------------------------------------------------------
Class C POP -8.78% -- -- -- 5.64% --
- ----------------------------------------------------------------------------------------------
Class S -- -- -- -- -- 4.36%
- ----------------------------------------------------------------------------------------------
Class Y -6.25% 6.54% 14.35% -- -- --
- ----------------------------------------------------------------------------------------------
Russell 2000 Value Index(3) 5.61% 9.91% 13.72% 3.55% 10.59% --
- ----------------------------------------------------------------------------------------------
Russell 2000 Index(4) -21.21% 4.54% 10.01% -0.34% 2.61% --
- ----------------------------------------------------------------------------------------------
(30 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
SMALL CAP VALUE
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
SMALL CAP SMALL CAP SMALL CAP RUSSELL RUSSELL
VALUE FUND, VALUE FUND, VALUE FUND, 2000 VALUE 2000
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4)
--------------------------------------------------------------------------
CLASS A
9/1991 10,000 9,452 10,000 10,000
9/1992 11,473 10,835 11,790 10,894
9/1993 16,252 14,776 16,103 14,506
9/1994 16,972 16,028 16,766 14,894
9/1995 23,978 22,644 19,879 18,374
9/1996 27,733 26,190 22,559 20,787
9/1997 39,320 37,132 32,180 27,685
9/1998 29,366 27,732 28,063 22,420
9/1999 32,632 30,816 29,699 26,696
9/2000 40,198 37,962 34,260 32,940
9/2001 37,641 35,547 36,182 25,954
CLASS Y
9/1991 10,000 10,000 10,000
9/1992 11,473 11,790 10,894
9/1993 15,646 16,103 14,506
9/1994 16,972 16,766 14,894
9/1995 23,869 19,879 18,374
9/1996 27,843 22,559 20,787
9/1997 39,551 32,180 27,685
9/1998 29,622 28,063 22,420
9/1999 32,987 29,699 26,696
9/2000 40,760 34,260 32,940
9/2001 38,211 36,182 25,954
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment. Stocks of
small-capitalization companies involve substantial risk. These stocks have
historically experienced greater price volatility than stocks of larger
companies, and they may be expected to do so in the future.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
Performance prior to August 1, 1994, is that of the Small Company Value
Trust Fund, a predecessor collective trust fund. On August 1, 1994,
substantially all of the assets of the Small Company Value Trust Fund were
transferred into Qualivest Small Companies Value Fund, a mutual fund
registered under the Investment Company Act of 1940. On November 21, 1997,
the First American Small Cap Value Fund became the successor by merger to
Qualivest Small Companies Value Fund. The objectives, policies, and
guidelines of the predecessor funds were, in all material respects,
identical to those of the Small Cap Value Fund. Small Company Value Trust
Fund was not registered under the Investment Company Act of 1940 and
therefore was not subject to certain investment restrictions that might
have adversely affected performance.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index that measures the performance of those Russell 2000
companies with lower price-to-book ratios and lower forecasted growth
values. Previously, the fund used the Russell 2000 Index as a benchmark.
Going forward, the fund will use the Russell 2000 Value Index as a
comparison because its composition better matches the fund's investment
objectives and strategies.
(4) An unmanaged index comprised of the smallest 2,000 companies in the Russell
3000 index, which represent approximately 8% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index is
composed of 3,000 large U.S. companies based on total market
capitalization, representing approximately 98% of the investable U.S.
equity market.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 31)
SMALL CAP CORE
INVESTMENT OBJECTIVE: CAPITAL APPRECIATION
While equity markets were negative across the board, small-cap stocks
outperformed other segments of the equity market by not falling as far. The
First American Small Cap Core Fund declined 15.37% for the 12-month period ended
September 30, 2001 (Class A shares declined 15.56% on net asset value). Over the
12-month period, the fund's benchmark, the S&P SmallCap 600 Index, declined
10.61%.
With U.S. economic growth slowing considerably over the 12-month period, many
companies had a difficult time maintaining positive earnings growth. Smaller
companies tended to weather this challenging period better than many of their
larger counterparts. While there continued to be limited opportunities to
generate solid gains in such a volatile market, the fund was able to take
advantage of opportunities in selected areas.
In the early part of the fiscal year, energy stocks, which represented a heavy
weighting in the portfolio, performed quite well as high demand and limited
supplies drove oil and natural gas prices higher. The slowing economy dampened
demand early in 2001, and the fund cut back its energy position. Technology and
health care stocks also played a large role in the portfolio for much of the
year, as did selected financial and media issues. The fund managed to find a
number of strong performing stocks in a variety of industries.
Near the end of the fiscal year, the fund was being positioned in preparation of
what appeared to be an economic recovery. The attacks on September 11 changed
the face of economic expectations. It is likely that a full recovery could be
pushed back into 2002, which might be a temporary setback for economically
sensitive stocks.
The fund continues to emphasize a portfolio that is balanced between growth and
value stocks. Key fundamental and valuation guidelines drive buy and sell
decisions for the fund. With serious efforts being made by the Federal Reserve
and the U.S. government to stimulate economic growth, it seems likely that the
economy will begin to recover in the months ahead, which should prove beneficial
for the fund.
- ----------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ----------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(6)
----------------------------------------------
1 YEAR 5 YEARS 5/6/1992 12/31/1993 3/6/1995 9/24/2001
- ----------------------------------------------------------------------------------------------
Class A NAV -15.56% 6.66% 10.66% -- -- --
- ----------------------------------------------------------------------------------------------
Class A POP -20.20% 5.46% 10.00% -- -- --
- ----------------------------------------------------------------------------------------------
Class B NAV -16.14% 5.94% -- -- 7.54% --
- ----------------------------------------------------------------------------------------------
Class B POP -19.36% 5.66% -- -- 7.54% --
- ----------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- 2.13%
- ----------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- 0.11%
- ----------------------------------------------------------------------------------------------
Class S -15.42% 6.72% -- 7.90% -- --
- ----------------------------------------------------------------------------------------------
Class Y -15.37% 6.98% 10.90% -- -- --
- ----------------------------------------------------------------------------------------------
S&P SmallCap 600 Index(3) -10.61% 7.76% 11.90% 9.80% 11.83% --
- ----------------------------------------------------------------------------------------------
Russell 2000 Index(4) -21.21% 4.54% 9.50% 7.43% 8.47% --
- ----------------------------------------------------------------------------------------------
Wilshire Next 1750 Index(5) -25.21% 5.65% 10.72% 8.60% 9.61% --
- ----------------------------------------------------------------------------------------------
(32 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
SMALL CAP CORE
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
SMALL CAP SMALL CAP SMALL CAP S&P RUSSELL WILSHIRE
CORE FUND, CORE FUND, CORE FUND, SMALLCAP 2000 NEXT 1750
CLASS A NAV CLASS A POP CLASS Y 600 INDEX(3) INDEX(4) INDEX(5)
-------------------------------------------------------------------------------------
CLASS A
5/1992 10,000 9,452 10,000 10,000 10,000
11/1992 11,255 10,638 11,275 10,887 11,069
11/1993 13,478 12,739 13,385 12,953 13,156
11/1994 14,472 13,679 12,895 12,809 13,164
11/1995 17,579 16,615 16,886 16,458 17,129
11/1996 19,048 18,004 20,584 19,176 20,229
11/1997 22,754 21,507 25,635 23,665 24,890
11/1998 19,525 18,455 24,261 22,098 23,844
11/1999 22,886 21,631 26,809 25,561 28,694
10/2000 29,671 28,044 32,235 28,319 33,033
9/2001 25,924 24,503 28,634 23,356 25,900
CLASS Y
5/1992 10,000 10,000 10,000 10,000
11/1992 11,255 11,275 10,887 11,069
11/1993 13,474 13,385 12,953 13,156
11/1994 14,492 12,895 12,809 13,164
11/1995 17,637 16,886 16,458 17,129
11/1996 19,186 20,584 19,176 20,229
11/1997 22,979 25,635 23,665 24,890
11/1998 19,784 24,261 22,098 23,844
11/1999 23,259 26,809 25,561 28,694
10/2000 30,238 32,235 28,319 33,033
9/2001 26,462 28,634 23,356 25,900
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment. Stocks of
small-capitalization companies involve substantial risk. These stocks
historically have experienced greater price volatility than stocks of
larger companies, and they may be expected to do so in the future.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On September 24, 2001, the Small Cap Core Fund became the successor by
merger to the Firstar Small Cap Core Equity Fund, a series of Firstar
Funds, Inc. Prior to the merger, the First American Fund had no assets or
liabilities. Performance presented prior to September 24, 2001, represents
that of the Firstar Small Cap Core Equity Fund. The Firstar Small Cap Core
Equity Fund was organized on November 27, 2000, and prior to that, was a
separate series of Mercantile Funds, Inc.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged, capitalization-weighted index that measures the performance
of selected U.S. stocks with small market capitalizations. Previously, the
fund used the Russell 2000 Index and the Wilshire Next 1750 Index as
benchmark indices. Going forward, the fund will use the S&P SmallCap 600
Index because its composition better matches the fund's investment
objective and strategies.
(4) An unmanaged index comprised of the smallest 2,000 companies in the Russell
3000 index, which represent approximately 8% of the total market
capitalization of the Russell 3000 Index. The Russell 3000 Index is
composed of 3,000 large U.S. companies based on total market
capitalization, representing approximately 98% of the investable U.S.
equity market.
(5) An unmanaged index intended to show the next largest 1,750 companies after
the top 750 companies of the Wilshire 5000 Stock Index.
(6) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class C
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 33)
EMERGING MARKETS
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL
In a challenging year for the volatile emerging market sector, the First
American Emerging Markets Fund registered a decline of 30.84% for the fiscal
year ended September 30, 2001 (Class A shares declined 30.94% on net asset
value). For the same period, the fund's benchmark, the MSCI Emerging Markets
Free Index, declined 33.53%. The performance during the fiscal year was in sharp
contrast to the positive return emerging markets enjoyed in the previous fiscal
year.
The period began with markets focusing more on companies able to generate
visible profits, and moving away from the technology, media, and
telecommunications sectors that had dominated performance in the late 1990s. The
fund shifted its position into more defensive areas of the market, including
financial services, consumer stocks, and health care issues. These themes
appeared to offer the best opportunity in what was becoming a slow-growth
economic environment around the world.
From a country perspective, the fund started the fiscal year with a heavy
weighting in Mexico and Brazil, believing that Latin American markets offered a
more significant opportunity for positive returns. While Mexican stocks managed
to hold their own in this challenging environment, Brazilian issues lost ground
as financial problems arose in many South American nations. The fund's holdings
in stocks such as Coca Cola Mexico and Wal-Mart Mexico were among our best
performers.
The fund also held an above average weighting in the Europe/Mideast/Africa
region, with a particular emphasis on Russian stocks. Russia was a beneficiary
earlier in the year of rising oil prices. There was more skepticism about the
Pacific region, where the fortunes of many companies are tied to the struggling
technology sector. The fund reduced its holdings in that area of the world.
After the struggles of the past year, emerging market stocks could be poised for
a recovery, assuming that economic trends improve across the globe. In the short
run, concerns stemming from the September 11 terrorist attacks in the United
States could result in investors seeking higher-quality stocks from countries
perceived to offer greater stability. But with central banks and governments
working hard to add liquidity to world markets and economies, the fund may be
able to benefit from growing interest in the unique opportunities for growth
that emerging markets offer.
- -------------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- -------------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(4)
-----------------------------------------------
1 YEAR 5 YEARS 11/9/1993 8/7/1998 2/1/2000 9/24/2001
- -------------------------------------------------------------------------------------------------------
Class A NAV -30.94% -7.83% -6.49% -- -- --
- -------------------------------------------------------------------------------------------------------
Class A POP -34.71% -8.87% -7.16% -- -- --
- -------------------------------------------------------------------------------------------------------
Class B NAV -31.54% -- -- -7.28% -- --
- -------------------------------------------------------------------------------------------------------
Class B POP -34.96% -- -- -8.18% -- --
- -------------------------------------------------------------------------------------------------------
Class C NAV -31.44% -- -- -- -27.76% --
- -------------------------------------------------------------------------------------------------------
Class C POP -32.84% -- -- -- -28.19% --
- -------------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- 2.62%
- -------------------------------------------------------------------------------------------------------
Class Y -30.84% -- -- -6.32% -- --
- -------------------------------------------------------------------------------------------------------
MSCI Emerging Markets Free Index(3) -33.53% -10.29% -5.63% 3.47% -33.57% --
- -------------------------------------------------------------------------------------------------------
(34 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
EMERGING MARKETS
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN MSCI
EMERGING EMERGING EMERGING EMERGING
MARKETS FUND, MARKETS FUND, MARKETS FUND, MARKETS FREE
CLASS A NAV CLASS A POP CLASS Y INDEX(3)
------------------------------------------------------------------
CLASS A
11/1993 10,000 9,452 10,000
9/1994 11,920 11,267 12,615
9/1995 7,300 6,900 10,380
9/1996 8,850 8,365 10,922
9/1997 11,016 10,412 11,638
9/1998 5,628 5,319 6,075
9/1999 6,791 6,419 9,508
9/2000 8,527 8,059 9,547
9/2001 5,888 5,566 6,347
CLASS Y
8/1998 10,000 10,000
9/1998 7,730 10,634
9/1999 9,354 16,645
9/2000 11,774 16,714
9/2001 8,143 11,111
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Index is for illustrative
purposes only and is not available for investment. International investing
involves risks not typically associated with domestic investing, including
risks of adverse currency fluctuations, potential political and economic
instability, different accounting standards, foreign government
regulations, currency exchange rates, limited liquidity, and volatile
prices. The risks of international investing are particularly significant
in emerging markets.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On August 7, 1998, the Emerging Markets Fund became the successor by merger
to the Piper Emerging Markets Growth Fund, a series of Piper Global Funds
Inc. Prior to the merger, the First American fund had no assets or
liabilities. Performance presented from June 21, 1996, to August 7, 1998,
is that of Piper Emerging Markets Growth Fund for which Edinburgh Fund
Managers acted as subadvisor. Performance prior to June 21, 1996, is that
of the Hercules Latin American Value Fund, a series of Hercules Funds Inc.
for which Bankers Trust company acted as subadvisor.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of securities from emerging markets that are open to
foreign investors.
(4) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 35)
INTERNATIONAL
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL
As world markets coped with a steadily weakening global economy, the First
American International Fund posted a decline of 32.09% for the 12-month period
ended September 30, 2001 (Class A shares declined 32.27% on net asset value).
During the same 12-month period, the fund's benchmark, the MSCI EAFE Index,
declined 28.28%.
The period witnessed a dramatic deterioration in global economic activity, and a
particularly pronounced backlash against the technology, media, and
telecommunications shares that had performed so well in preceding years. A
series of interest-rate cuts by the U.S. Federal Reserve along with the eventual
loosening of monetary policy in Europe and Japan were not enough to reinvigorate
the global economy. The September 11 attacks on the United States ended the
period on a somber note, virtually eliminating hopes of a rapid global economic
rebound.
During the 12-month period, the portfolio's structure became increasingly
conservative, reflecting ongoing volatility in the market. The fund benefited
from its stock selection in Australia and Hong Kong and managed to generate a
return comparable with benchmark indices in Europe. Holdings in Japan trailed
market performance as a whole. While stock selection generally worked to the
fund's benefit, weakness among our holdings in the health care area had a
negative impact. Given market results, the fund suffered from heavier weightings
in technology and industrial stocks, and its limited commitment to the
strong-performing financial services area.
Prior to the attacks, the immediate outlook for the global economy appeared
delicately balanced between a synchronized global recession and a modest
cyclical recovery led by the U.S. It looked as if an improved economic
environment might be evident before 2002, but the events on September 11 clearly
changed the climate. Still, continued interest rate cuts by central banks in the
United States, Europe, and Japan, along with increased government spending by
the United States, appeared to create a higher likelihood that an economic
rebound is in the offing in the early months of 2002.
It's valuable to note that, historically speaking, markets have generally
performed poorly during the buildup that leads to military conflict. Once the
battle begins, however, markets traditionally have turned upward. While the
events on September 11 have increased the level of uncertainty in the market, it
seems likely that stocks could react positively to an economic recovery and
improved corporate profits. The fund will continue to adhere to its bottom-up
discipline, with a focus on well-managed companies that offer long-term earnings
growth potential and are attractively priced.
- -----------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- -----------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(4)
--------------------------------------------------------
1 YEAR 5 YEARS 4/4/1994 4/24/1994 5/2/1994 3/6/1995 9/24/2001
- -----------------------------------------------------------------------------------------------------
Class A NAV -32.27% 2.89% -- -- 3.99% -- --
- -----------------------------------------------------------------------------------------------------
Class A POP -35.98% 1.73% -- -- 3.20% -- --
- -----------------------------------------------------------------------------------------------------
Class B NAV -32.77% 2.13% -- -- -- 4.63% --
- -----------------------------------------------------------------------------------------------------
Class B POP -35.77% 1.84% -- -- -- 4.63% --
- -----------------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -- -- 5.29%
- -----------------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -- -- 3.30%
- -----------------------------------------------------------------------------------------------------
Class S -32.25% 2.87% -- 4.21% -- -- --
- -----------------------------------------------------------------------------------------------------
Class Y -32.09% 3.18% 4.41% -- -- -- --
- -----------------------------------------------------------------------------------------------------
MSCI EAFE Index(3) -28.28% 0.15% 2.21% 2.21% 2.31% 2.21% --
- -----------------------------------------------------------------------------------------------------
(36 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
INTERNATIONAL
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
INTERNATIONAL INTERNATIONAL INTERNATIONAL
FUND, FUND, FUND, MSCI EAFE
CLASS A NAV CLASS A POP CLASS Y INDEX(3)
--------------------------------------------------------------
CLASS A
4/1994 10,000 9,452 10,000
11/1994 9,778 9,242 9,998
11/1995 10,641 10,058 10,788
11/1996 11,920 11,266 12,092
11/1997 12,220 11,550 12,076
11/1998 14,097 13,324 14,103
11/1999 19,260 18,204 17,127
11/2000 18,562 17,545 16,107
11/2001 13,365 12,632 11,830
CLASS Y
4/1994 10,000 10,000
11/1994 9,924 9,943
11/1995 10,807 10,729
11/1996 12,147 12,025
11/1997 12,497 12,010
11/1998 14,458 14,025
11/1999 19,817 17,032
11/2000 19,167 16,017
11/2001 13,813 11,764
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Index is for illustrative
purposes only and is not available for investment. International investing
involves risks not typically associated with domestic investing, including
risks of adverse currency fluctuations, potential political and economic
instability, different accounting standards, foreign government
regulations, currency exchange rates, limited liquidity, and volatile
prices.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
On July 1, 2001, Clay Finlay Inc. was hired as subadvisor to manage the
Fund's assets. On September 24, 2001, the First American International Fund
merged with Firstar International Growth Fund and Firstar International
Value Fund, both subadvised by Clay Finlay Inc. Performance history prior
to September 24, 2001, represents that of the Firstar International Growth
Fund.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index including approximately 1,100 companies representing
stock markets of 20 European countries, Australia, New Zealand, Japan, Hong
Kong, and Singapore.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class C
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 37)
HEALTH SCIENCES
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL
In a difficult investment environment, stocks in the health care sector
weathered the year better than the market as a whole. The First American Health
Sciences Fund declined 17.15% for the fiscal year ended September 30, 2001
(Class A shares declined 17.35% on net asset value). For the same period, the
fund's benchmark, the S&P Health Care Composite Index, declined 3.39%.
The closing months of 2000 saw health care stocks perform extremely well,
actually enjoying a positive return in comparison to the stock market as a
whole, which ended the year with a downturn. In 2001, while the stock market in
general continued to slide, health care stocks did the same, but not as
severely. The change started when the Federal Reserve first cut short-term
interest rates in early January. Investors turned away from health care stocks
in this environment, a trend that continued through March. After that, health
care issues began to work their way back into favor, and were one of the few
sectors of the market to perform well after the attacks on September 11, as
investors looked for defensive stocks that could weather a shaky environment.
The current management team began running the portfolio on July 1, 2001. A
number of changes were made to the fund beginning at that time. With large
pharmaceutical stocks having lost significant ground for much of the year, a
number of those stocks were added to the portfolio. An effort was also made to
reduce holdings in medical device and genomic-based companies, and a greater
emphasis was put on biotechnology and specialty pharmaceutical companies.
The fund offers solid potential for the long term, as the health care area looks
to offer promising growth prospects for years to come. The increasing demands of
an aging population and a regular stream of important medical breakthroughs
should create opportunities for investors. In the near term, the aura of
uncertainty hanging over the market could benefit a number of the fund's more
defensive holdings, which look attractive to many investors in this environment.
At the same time, biotechnology companies and health care services stocks seem
to be well positioned for growth in an improved market. Although short-term
trends can be unpredictable, the portfolio will continue to focus on
high-quality companies with solid fundamentals.
- ------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(4)
----------------------------------
1 YEAR 5 YEARS 1/31/1996 2/1/2000 9/24/2001
- ------------------------------------------------------------------------------------------
Class A NAV -17.35% 5.58% 4.66% -- --
- ------------------------------------------------------------------------------------------
Class A POP -21.91% 4.40% 3.62% -- --
- ------------------------------------------------------------------------------------------
Class B NAV -17.99% 4.82% 3.89% -- --
- ------------------------------------------------------------------------------------------
Class B POP -21.64% 4.50% 3.76% -- --
- ------------------------------------------------------------------------------------------
Class C NAV -17.92% -- -- 6.92% --
- ------------------------------------------------------------------------------------------
Class C POP -19.44% -- -- 6.27% --
- ------------------------------------------------------------------------------------------
Class S -- -- -- -- 8.61%
- ------------------------------------------------------------------------------------------
Class Y -17.15% 5.84% 4.91% -- --
- ------------------------------------------------------------------------------------------
S&P Health Care Composite Index(3) -3.39% 18.72% 16.66% 14.31% --
- ------------------------------------------------------------------------------------------
(38 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
HEALTH SCIENCES
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN S&P
HEALTH HEALTH HEALTH HEALTH CARE
SCIENCES FUND, SCIENCES FUND, SCIENCES FUND, COMPOSITE
CLASS A NAV CLASS A POP CLASS Y INDEX(3)
------------------------------------------------------------------
CLASS A
1/1996 10,000 9,452 10,000
9/1996 9,868 9,327 10,776
9/1997 12,197 11,528 14,753
9/1998 9,119 8,619 20,385
9/1999 9,673 9,142 20,947
9/2000 15,659 14,801 26,291
9/2001 12,943 12,234 25,397
CLASS Y
1/1996 10,000 10,000
9/1996 9,880 10,776
9/1997 12,241 14,753
9/1998 9,168 20,385
9/1999 9,772 20,947
9/2000 15,840 26,291
9/2001 13,124 25,397
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Index is for illustrative
purposes only and is not available for investment. Sector funds such as the
First American Health Sciences Fund are more vulnerable to price
fluctuation as a result of events that may affect the industry in which
they focus than are funds that invest in multiple industries. Share prices
of sector funds also will fluctuate with changing market conditions, as
will share prices of other stock funds. Sector funds should not be treated
as a core investment; rather, their role is to round out the growth portion
of a well-diversified investment portfolio.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
The Health Sciences Fund's 1999 and 2000 returns were higher due in part to
its strategy of investing in IPOs in a period favorable for IPO investing.
Of course, such favorable returns involve accepting the risk of volatility,
and there is no assurance that the fund's future investment in IPOs will
have the same effect on performance as it had in 1999 and 2000.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index comprised of health care stocks in the S&P 500 Composite
Index (an unmanaged index of large-capitalization stocks).
(4) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 39)
REAL ESTATE SECURITIES
INVESTMENT OBJECTIVE: ABOVE AVERAGE CURRENT INCOME AND LONG-TERM CAPITAL
APPRECIATION
The real estate portion of the equities market was one of the few to offer
positive returns in a difficult environment. The First American Real Estate
Securities Fund took advantage of that trend by recording a gain of 9.01% for
the fiscal year ended September 30, 2001 (Class A shares rose 8.69% on net asset
value). Over the same timeframe, the fund's benchmark, the Morgan Stanley REIT
Index, gained 11.62%.
In the last few months of 2000, Real Estate Investment Trusts (REITs), the core
of the portfolio, performed rather well, helping the fund jump to a solid start
for the year. Strong real estate markets that had been tied to the technology
boom on the East and West coasts began to soften as technology firms lost some
of their luster. That began to change the environment for REITs.
The fund emphasized larger, high-quality REIT issues going into the new year,
which appeared to be best suited to perform well in a slowing economy.
Unfortunately, the market seemed to reward smaller issues that paid higher
yields, where investors temporarily directed their focus. But in the summer of
2001, as the economy continued to soften, investors once again preferred to put
their emphasis on higher-quality REIT securities, and once again, the fund was
able to benefit from the trend.
During the year, the fund reduced its exposure or maintained limited positions
in areas of the real estate market that could be weakened by the struggling
economy. That included office and industrial REITs, as well as those associated
with shopping malls and hotels. The portfolio took a more defensive stance by
using REITS tied to businesses that are not as economically sensitive, such as
self-storage facilities and manufactured housing. Assets were also spread across
a broad geographic range of the United States, putting less emphasis on coastal
real estate opportunities. By the end of the fiscal year, cash levels were a bit
higher than normal.
Although there are many questions about the near-term direction of the REIT
market, particularly in light of the events on September 11, there are reasons
for optimism. One is that six REIT issues have been added to the Standard &
Poor's 500 Composite Index, which should build interest in the sector among a
broader range of investors. In today's uncertain environment, the fund will
focus on firms with proven management teams and strong balance sheets among a
broad range of sectors in the real estate market.
- -----------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- -----------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(4)
----------------------------------------------
1 YEAR 5 YEARS 6/30/1995 9/29/1995 2/1/2000 9/24/2001
- -----------------------------------------------------------------------------------------------
Class A NAV 8.69% 9.19% -- 10.63% -- --
- -----------------------------------------------------------------------------------------------
Class A POP 2.71% 7.96% -- 9.60% -- --
- -----------------------------------------------------------------------------------------------
Class B NAV 7.93% 8.39% -- 9.78% -- --
- -----------------------------------------------------------------------------------------------
Class B POP 2.93% 8.10% -- 9.78% -- --
- -----------------------------------------------------------------------------------------------
Class C NAV 7.93% -- -- -- 20.05% --
- -----------------------------------------------------------------------------------------------
Class C POP 5.85% -- -- -- 19.31% --
- -----------------------------------------------------------------------------------------------
Class S -- -- -- -- -- 4.87%
- -----------------------------------------------------------------------------------------------
Class Y 9.01% 9.47% 11.36% -- -- --
- -----------------------------------------------------------------------------------------------
Morgan Stanley REIT Index(3) 11.62% 9.03% 10.75% 10.48% 22.30% --
- -----------------------------------------------------------------------------------------------
(40 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
REAL ESTATE SECURITIES
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN
REAL ESTATE REAL ESTATE REAL ESTATE MORGAN
SECURITIES FUND, SECURITIES FUND, SECURITIES FUND, STANLEY
CLASS A NAV CLASS A POP CLASS Y REIT INDEX(3)
----------------------------------------------------------------------
CLASS A
9/1995 10,000 9,452 10,000
9/1996 11,817 11,171 11,827
9/1997 16,163 15,279 16,661
9/1998 14,155 13,381 14,285
9/1999 13,321 12,592 13,445
9/2000 16,875 15,952 16,302
9/2001 18,341 17,338 18,197
CLASS Y
6/1995 10,000 10,000
9/1995 10,519 10,411
9/1996 12,468 12,313
9/1997 17,091 17,346
9/1998 15,009 14,872
9/1999 14,163 13,998
9/2000 17,980 16,972
9/2001 19,601 18,945
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Index is for illustrative
purposes only and is not available for investment. Sector funds such as the
First American Real Estate Securities Fund are more vulnerable to price
fluctuation as a result of events that may affect the industry in which
they focus than are funds that invest in multiple industries. Share prices
of sector funds also will fluctuate with changing market conditions, as
will share prices of other stock funds. Sector funds should not be treated
as a core investment; rather, their role is to round out the growth portion
of a well-diversified investment portfolio.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of the most actively traded real estate investment
trusts.
(4) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 41)
TECHNOLOGY
INVESTMENT OBJECTIVE: LONG-TERM GROWTH OF CAPITAL
In what was the worst market for technology stocks in three decades, the First
American Technology Fund declined by 83.26% for the fiscal year ended September
30, 2001 (Class A shares declined 83.30% on net asset value). Over the same
timeframe, the fund's benchmark, the S&P Technology Composite Index, declined
61.63%.
The bear market in technology stocks cut across nearly all business sectors
within that market. Buyers, particularly in the business sector, pulled back
their spending from the record levels seen prior to the onset of the Year 2000
computer issue. This led to a substantial contraction in valuations of
technology stocks. While volatility is common in the technology sector, nothing
this dramatic had been experienced since the mid-1970s, when the United States
faced a severe recession.
Among the hardest hit areas were stocks in the previously flourishing
telecommunications sector. Suddenly, the market faced a glut of capacity, and
spending in that business declined significantly. Internet companies also faced
the reality of invisible profits, and their stocks were buried in the avalanche
of investor selling. The fund's emphasis on owning young, innovative companies
with exciting products proved to be particularly taxing to the fund's return, as
the market punished many of these more speculative securities. While these
stocks can suffer through difficult times like the past year, history indicates
that they can respond more quickly once the market recovers.
The fund also focused on firms and industries where earnings tended to hold up
better despite the difficult economic environment. Those included software firms
and selected communications services companies. But, in both cases, the market
did not relent, and even a number of quality companies suffered significant
damage. Capping the already difficult year were the tragic events on September
11. In the aftermath, another major stock sell-off occurred, hitting technology
stocks particularly hard.
It appears that the market may have found its low point in the closing days of
September. The new fiscal year for the fund begins with an environment of great
uncertainty about the short term. What's needed is a return of confidence for
consumers and corporations. One risk that has been eliminated is the concern
that technology stocks were too highly valued. That doesn't seem to be an issue
after the past year. Over time, the fund's focus on innovative companies should
again prove to be productive for shareholders, but a long-term perspective is
recommended.
- ---------------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ---------------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(4)
---------------------------------------------
1 YEAR 5 YEARS 4/4/1994 8/15/1994 2/1/2000 9/24/2001
- ---------------------------------------------------------------------------------------------------
Class A NAV -83.30% -7.57% 5.45% -- -- --
- ---------------------------------------------------------------------------------------------------
Class A POP -84.22% -8.61% 4.66% -- -- --
- ---------------------------------------------------------------------------------------------------
Class B NAV -83.42% -8.22% -- 5.15% -- --
- ---------------------------------------------------------------------------------------------------
Class B POP -84.07% -8.40% -- 5.15% -- --
- ---------------------------------------------------------------------------------------------------
Class C NAV -83.43% -- -- -- -67.22% --
- ---------------------------------------------------------------------------------------------------
Class C POP -83.73% -- -- -- -67.42% --
- ---------------------------------------------------------------------------------------------------
Class S -- -- -- -- -- -8.49%
- ---------------------------------------------------------------------------------------------------
Class Y -83.26% -7.30% 5.68% -- -- --
- ---------------------------------------------------------------------------------------------------
S&P Technology Composite Index(3) -61.63% 8.12% 15.82% 15.09% -50.70% --
- ---------------------------------------------------------------------------------------------------
(42 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
TECHNOLOGY
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN S&P
TECHNOLOGY TECHNOLOGY TECHNOLOGY TECHNOLOGY
FUND, FUND, FUND, COMPOSITE
CLASS A NAV CLASS A POP CLASS Y INDEX(3)
-----------------------------------------------------------------
CLASS A
4/1994 10,000 9,452 10,000
9/1994 11,190 10,577 10,708
9/1995 18,600 17,580 16,739
9/1996 22,060 20,851 20,428
9/1997 25,966 24,542 33,177
9/1998 21,632 20,446 37,563
9/1999 49,474 46,762 65,645
9/2000 89,108 84,223 78,433
9/2001 14,879 14,063 30,165
CLASS Y
4/1994 10,000 10,000
9/1994 11,190 10,708
9/1995 18,600 16,739
9/1996 22,106 20,428
9/1997 26,074 33,177
9/1998 21,794 37,563
9/1999 50,022 65,645
9/2000 90,393 78,433
9/2001 15,131 30,165
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Index is for illustrative
purposes only and is not available for investment. Sector funds such as the
First American Technology Fund are more vulnerable to price fluctuation as
a result of events that may affect the industry in which they focus than
are funds that invest in multiple industries. Share prices of sector funds
also will fluctuate with changing market conditions, as will share prices
of other stock funds. Sector funds should not be treated as a core
investment; rather, their role is to round out the growth portion of a well
diversified investment portfolio.
Total returns at net asset value ("NAV") reflect performance over the time
period indicated without including the fund's maximum sales charge and
assumes reinvestment of all distributions at net asset value.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
The Technology Fund's 1999 and 2000 returns were higher due in part to its
strategy of investing in IPOs and technology-related stocks in a period
favorable for IPO investing. Of course, such favorable returns involve
accepting the risk of volatility, and there is no assurance that the fund's
future investment in IPOs and technology stocks will have the same effect
on performance as it had in 1999 and 2000. Investments in the First
American Technology Fund are more vulnerable to price fluctuation as a
result of the narrow focus of technology investing and the fact that the
products of companies in which the fund invests may be subject to rapid
obsolescence.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index of technology stocks in the S&P 500 Composite Index (an
unmanaged index of large-capitalization stocks).
(4) The performance since inception for the index is calculated from the month
end following the inception of the class. Performance for Class S
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 43)
SCIENCE & TECHNOLOGY
INVESTMENT OBJECTIVE: LONG-TERM AFTER-TAX GROWTH OF CAPITAL
In one of the worst bear markets any sector has faced in recent history, the
First American Science & Technology Fund sustained a decline of 78.74% for the
12-month period ended September 30, 2001 (Class A shares were down 78.80% on net
asset value). Over the same time frame, the fund's benchmark, the S&P Technology
Composite Index, declined 61.63%.
After experiencing significant growth in the latter part of the 1990s,
technology-oriented stocks began to lose their appeal to investors by March of
2000. As the fiscal year began in October 2000, the virtual free-fall among
stocks in this sector was fully underway. The main culprit was a sudden
turnaround in technology spending by most companies.
A number of firms had invested significant sums upgrading their technology needs
in advance of the Year 2000 conversion. But the purse strings were tightened
after that period, a pattern that continued into 2001. This left a number of
technology firms holding huge inventories of product. Profits dried up
dramatically, and investors shied away from the sector.
Anticipating continued difficulties in this market, the fund focused a
significant portion of its assets on some of the largest companies in the
technology market. A number of stocks, such as Cisco Systems, a darling during
the heyday of technology investing, was hit as hard or harder than many
companies with a less-impressive track record.
The fund also put more emphasis on technology stocks in the health care sector.
While that helped to reduce some of the portfolio's volatility, it was not able
to stem the tide of losses suffered in the rest of the technology marketplace.
The fund's semiconductor holdings provided relatively better performance, but
again, there was little place to hide during this difficult period. The tragic
attacks on September 11 increased the magnitude of the downturn.
The silver lining to the significant market decline is that stocks appear to
have significant upside potential from this point. A number of technology stocks
were trading at very attractive levels by the end of the fiscal year, and that
should create positive opportunities in the months ahead. Demand seems to be
picking up in selected industries like wireless telecommunications, and as the
economy begins to improve, spending on other areas of technology should increase
as well, improving earnings and making these stocks attractive once again.
- ----------------------------------------------------------------------------------------------
ANNUALIZED PERFORMANCE(1)
- ----------------------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2001 SINCE INCEPTION(5)
------------------------------------------------
1 YEAR 8/9/1999 3/31/2000 12/11/2000 9/24/2001
- ----------------------------------------------------------------------------------------------
Class A NAV -78.80% -- -64.15% -- --
- ----------------------------------------------------------------------------------------------
Class A POP -79.97% -- -65.48% -- --
- ----------------------------------------------------------------------------------------------
Class B NAV -78.91% -29.98% -- -- --
- ----------------------------------------------------------------------------------------------
Class B POP -79.97% -30.97% -- -- --
- ----------------------------------------------------------------------------------------------
Class C NAV -- -- -- -- -7.11
- ----------------------------------------------------------------------------------------------
Class C POP -- -- -- -- -8.94
- ----------------------------------------------------------------------------------------------
Class S -- -- -- -73.43 --
- ----------------------------------------------------------------------------------------------
Class Y -78.74% -29.42% -- -- --
- ----------------------------------------------------------------------------------------------
S&P Technology Composite Index(3) -61.63% -31.46% -55.16% -53.08% --
- ----------------------------------------------------------------------------------------------
Nasdaq 100 Index(4) -67.28% -29.12% -58.57% -50.11% --
- ----------------------------------------------------------------------------------------------
(44 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
SCIENCE & TECHNOLOGY
VALUE OF A $10,000 INVESTMENT(1),(2) AS OF SEPTEMBER 30, 2001
[PLOT POINTS CHART]
FIRST AMERICAN FIRST AMERICAN FIRST AMERICAN S&P
SCIENCE & SCIENCE & SCIENCE & TECHNOLOGY
TECHNOLOGY FUND, TECHNOLOGY FUND, TECHNOLOGY FUND, COMPOSITE NASDAQ 100
CLASS A NAV CLASS A POP CLASS Y INDEX(3) INDEX(4)
------------------------------------------------------------------------------
CLASS A
3/2000 10,000 9,452 10,000 10,000
10/2000 8,860 8,371 7,428 7,463
9/2001 2,143 2,025 3,022 2,657
CLASS Y
8/1999 10,000 10,000 10,000
11/1999 14,560 11,200 12,378
10/2000 19,540 11,250 13,694
9/2001 4,740 4,578 4,875
(1) Past performance does not guarantee future results. The principal value of
an investment and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Performance reflects voluntary fee waivers in effect. In the absence of
such fee waivers, total returns would be reduced. Indexes are for
illustrative purposes only and are not available for investment. Sector
funds such as the First American Science & Technology Fund are more
vulnerable to price fluctuation as a result of events that may affect the
industry in which they focus than are funds that invest in multiple
industries. Share prices of sector funds also will fluctuate with changing
market conditions, as will share prices of other stock funds. Sector funds
should not be treated as a core investment; rather, their role is to round
out the growth portion of a well-diversified investment portfolio.
On September 24, 2001, the Science & Technology Fund became the successor
by merger to the Firstar Science & Technology Fund, a series of Firstar
Funds, Inc. Prior to the merger, the First American Fund had no assets or
liabilities. Performance presented prior to September 24, 2001, represents
that of the Firstar Science & Technology Fund. The Firstar Science &
Technology Fund was organized on December 11, 2000, and, prior to that, was
a separate series of Firstar Stellar Funds, Inc.
On September 24, 2001, the fund changed its investment objective to manage
its portfolio of securities on a tax-efficient basis. Performance prior to
this date does not reflect this management strategy.
The Science & Technology Fund's 1999 and 2000 returns were higher due in
part to its strategy of investing in IPOs in a period favorable for IPO
investing. Of course, such favorable returns involve accepting the risk of
volatility, and there is no assurance that the fund's future investment in
IPOs will have the same effect on performance as it had in 1999 and 2000.
Total returns at public offering price ("POP") reflect performance over the
time period indicated including maximum sales charges of 5.50% for Class A,
1% for Class C, and the maximum CDSC for Class B and Class C shares for the
relevant period. Total returns assume reinvestment of all distributions at
net asset value.
(2) Performance for Class B, Class C, and Class S shares is not presented.
Performance for Class B and Class C is lower due to higher expenses.
Performance for Class S is substantially similar to Class A due to similar
expenses.
(3) An unmanaged index comprised of technology stocks in the S&P 500 Composite
Index, which is an unmanaged index of large-capitalization stocks.
Previously, the fund used the Nasdaq 100 index as a benchmark. Going
forward, the fund will use the S&P Technology Composite Index as a
benchmark because its composition better matches the fund's investment
objective and strategies.
(4) A market-capitalization weighted index that includes 100 of the largest
financial companies, domestic and foreign, in the Nasdaq National Market.
(5) The performance since inception for the indexes is calculated from the
month end following the inception of the class. Performance for Class C
represents cumulative total return as the class has been in operation less
than one year.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 45)
(This page has been left blank intentionally.)
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors
First American Investment Funds, Inc.
We have audited the accompanying statements of net assets of the Large Cap
Growth, Large Cap Value, Large Cap Core, Growth & Income, Relative Value,
Capital Growth, Equity Income, Balanced, Mid Cap Growth, Mid Cap Value, Mid Cap
Core, Micro Cap, Small Cap Growth, Small Cap Value, Small Cap Core, Emerging
Markets, International, Health Sciences, Real Estate Securities, Technology and
Science & Technology Funds (certain funds constituting First American Investment
Funds, Inc.) (the "Funds") as of September 30, 2001, and the related statements
of operations and the statements of changes in net assets and financial
highlights for each of the periods indicated herein, except as noted below.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights of the Large Cap Growth, Large Cap Value, Equity Income, Balanced,
Mid Cap Growth, Mid Cap Value, Small Cap Growth, Small Cap Value, Emerging
Markets, International, Health Sciences, Real Estate Securities and Technology
Funds for the periods presented through September 30, 1998, were audited by
other auditors whose reports dated November 13, 1998, and September 12, 1997,
expressed unqualified opinions on those financial highlights. The statements of
operations and changes in net assets and financial highlights of the Large Cap
Core, Growth & Income, Relative Value, Capital Growth, Mid Cap Core, Micro Cap,
Small Cap Core and Science & Technology Funds for the periods presented through
October 31, 2000, were audited by other auditors whose reports dated December
29, 2000, January 21, 2000 and January 7, 2000, expressed unqualified opinions
on those financial statements and financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
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 and financial highlights. Our procedures included
confirmation of securities owned as of September 30, 2001, by correspondence
with the custodian and brokers. As to certain securities relating to uncompleted
transactions, we performed other auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights audited by us
as referred to above present fairly, in all material respects, the financial
position of each of the respective funds constituting First American Investment
Funds, Inc. at September 30, 2001, and the results of their operations, the
changes in their net assets and their financial highlights for each of the
periods indicated herein, in conformity with accounting principles generally
accepted in the United States.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
November 16, 2001
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 47)
STATEMENTS OF NET ASSETS SEPTEMBER 30, 2001
LARGE CAP GROWTH FUND
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS - 97.7%
CONSUMER DISCRETIONARY - 14.8%
AOL Time Warner* 708,990 $ 23,468
Best Buy* 124,290 5,649
Clear Channel Communications* 81,290 3,231
Cox Communications, Cl A* 342,750 14,310
Home Depot 288,977 11,088
Kohl's* 209,735 10,067
Omnicom Group 136,500 8,859
Target 123,670 3,926
Wal-Mart Stores 502,250 24,861
--------
105,459
--------
CONSUMER STAPLES - 7.0%
Anheuser-Busch 92,550 3,876
H J Heinz* 121,840 5,136
Kimberly-Clark 56,880 3,523
Kraft Foods* 216,600 7,445
Kroger* 294,100 7,247
PepsiCo 254,950 12,365
Walgreen 303,330 10,444
--------
50,036
--------
ENERGY - 1.7%
Exxon Mobil 184,980 7,288
USX - Marathon 182,430 4,869
--------
12,157
--------
FINANCIALS - 7.7%
American International Group 306,830 23,933
Capital One Financial 97,350 4,481
Charles Schwab 362,730 4,171
Citigroup 266,726 10,802
Federal Home Loan Mortgage 63,080 4,100
Morgan Stanley Dean Witter 67,810 3,143
Wells Fargo 83,810 3,725
--------
54,355
--------
HEALTH CARE - 28.1%
Amgen* 145,350 8,542
Bristol-Myers Squibb 439,640 24,426
Cardinal Health 110,680 8,185
Genentech* 323,720 14,244
Johnson & Johnson 124,790 6,913
Eli Lilly 376,210 30,360
Medtronic 426,680 18,561
Merck 463,010 30,836
Pfizer 939,370 37,669
Pharmacia 268,830 10,904
Watson Pharmaceuticals* 143,480 7,850
Zimmer Holdings 43,964 1,220
--------
199,710
--------
INDUSTRIALS - 9.0%
Automatic Data Processing 151,110 7,108
Ecolab 306,975 11,152
General Electric 833,850 31,019
Minnesota Mining & Manufacturing 75,130 7,393
Tyco International 163,210 7,426
--------
64,098
--------
LARGE CAP GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 24.4%
Analog Devices* 91,140 $2,980
Applied Materials* 38,200 1,086
Applied Micro Circuits* 140,700 983
BEA Systems* 309,820 2,971
Broadcom* 47,710 969
Brocade Communications Systems* 122,010 1,712
Check Point Software Technologies* 66,560 1,442
Ciena* 110,170 1,134
Cisco Systems* 1,637,088 19,940
Dell Computer* 335,150 6,210
EMC* 278,960 3,278
IBM 116,310 10,735
Intel 923,100 18,868
Juniper Networks* 133,790 1,298
KLA-Tencor* 32,480 1,026
Micron Technology* 224,290 4,223
Microsoft* 618,720 31,660
Nokia, ADR Cl A 406,910 6,368
Nortel Networks 583,710 3,275
Novellus Systems* 42,520 1,214
NVIDIA* 47,900 1,316
Oracle Systems* 790,440 9,944
QUALCOMM* 213,410 10,146
Siebel Systems* 214,290 2,815
Sun Microsystems* 491,320 4,063
Texas Instruments 447,070 11,168
VeriSign* 152,470 6,388
VERITAS Software* 120,260 2,218
Vitesse Semiconductor* 166,140 1,288
Xilinx* 101,560 2,390
--------
173,108
--------
TELECOMMUNICATION SERVICES - 2.9%
Verizon Communications 76,170 4,121
Nextel Communications, Cl A* 313,150 2,706
Qwest Communications International 262,310 4,381
Sprint (PCS Group)* 343,950 9,042
--------
20,250
--------
UTILITIES - 2.1%
Enron 263,960 7,188
Mirant 339,640 7,438
--------
14,626
--------
TOTAL COMMON STOCKS 693,799
--------
RELATED PARTY MONEY MARKET FUND - 3.1%
First American Prime Obligations Fund (A) 22,317,901 22,318
--------
TOTAL RELATED PARTY MONEY MARKET FUND 22,318
--------
TOTAL INVESTMENTS - 100.8%
(Cost $863,762) 716,117
--------
OTHER ASSETS AND LIABILITIES, NET - (0.8%) (B) (5,358)
--------
The accompanying notes are an integral part of the financial statements.
(48 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
LARGE CAP GROWTH FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- ----------------------------------------------------------------------------
NET ASSETS:
Portfolio capital $906,839
Accumulated net realized loss on investments (48,435)
Net unrealized depreciation of investments (147,645)
--------
TOTAL NET ASSETS - 100.0% $710,759
--------
CLASS A:
Net asset value and redemption price per
share (net assets of $85,443,548 and
9,155,837 shares of capital stock issued
and outstanding) (F) $ 9.33
Maximum sales charge of 5.50% 0.54
--------
Offering price per share (C) $ 9.87
--------
CLASS B:
Net asset value and offering price per
share (net assets of $17,975,597 and
2,005,850 shares of capital stock issued
and outstanding) (D)(F) $ 8.96
--------
CLASS C:
Net asset value per share (net assets of
$13,177,028 and 1,441,909 shares of
capital stock issued and outstanding) (D)(F) $ 9.14
Maximum sales charge of 1.00% 0.09
--------
Offering price per share (E) $ 9.23
--------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $9 and 1 share of capital stock
issued and outstanding) (F) $ 9.33
--------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets of
$594,162,913 and 62,913,602 shares
of capital stock issued and outstanding) (F) $ 9.44
--------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 178,486
Payable upon return of securities loaned $(178,486)
(C)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(D)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(E)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(F)$.0001 par value and 2 billion authorized shares.
ADR - American Depositary Receipt
CI - Class
LARGE CAP VALUE FUND
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS - 96.4%
CONSUMER DISCRETIONARY - 10.1%
AOL Time Warner* 387,100 $ 12,813
Federated Department Stores* 273,000 7,699
Ford Motor 469,791 8,151
Gannett 116,400 6,997
Gap 317,400 3,793
General Motors 203,900 8,747
Liberty Media, Cl A 578,100 7,342
Lowe's* 275,200 8,710
McDonald's 529,800 14,379
McGraw Hill 231,400 13,467
Target 261,100 8,290
Walt Disney 632,800 11,783
---------
112,171
---------
CONSUMER STAPLES - 6.7%
Albertson's 341,500 10,887
Coca-Cola 275,000 12,884
ConAgra Foods 397,900 8,933
Kimberly-Clark 307,600 19,071
Kraft Foods* 308,900 10,617
Procter & Gamble 165,200 12,025
---------
74,417
---------
ENERGY - 9.6%
Anadarko Petroleum 106,800 5,135
Exxon Mobil 970,400 38,234
Halliburton 430,400 9,705
Phillips Petroleum 239,900 12,940
Royal Dutch Petroleum, ADR 440,300 22,125
Schlumberger 262,500 11,996
Transocean Sedco Forex* 248,300 6,555
---------
106,690
---------
FINANCIALS - 25.9%
Allstate 482,800 18,033
American Express 407,800 11,851
American International Group 451,800 35,240
Bank One 350,600 11,033
Bank of America 375,300 21,917
Charles Schwab 387,400 4,455
Citigroup 917,302 37,151
Equity Office Properties 400,100 12,803
Fannie Mae 248,200 19,871
Fleet Boston Financial 642,301 23,605
Hartford Financial Services Group 178,500 10,485
JP Morgan Chase & Company 547,100 18,683
Mellon Financial 310,500 10,038
Morgan Stanley Dean Witter 312,300 14,475
Wachovia 315,600 9,784
Washington Mutual 335,000 12,891
Wells Fargo 362,500 16,113
---------
288,428
---------
HEALTH CARE - 4.9%
Bristol-Myers Squibb 488,700 27,152
Guidant* 210,100 8,089
Merck 93,700 6,240
Pharmacia 329,291 13,356
---------
54,837
---------
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 49)
STATEMENTS OF NET ASSETS September 30, 2001
LARGE CAP VALUE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
INDUSTRIALS - 9.5%
Caterpillar 124,200 $ 5,564
Delta Airlines 224,800 5,923
Emerson Electric 96,600 4,546
First Data 141,500 8,244
General Dynamics 164,900 14,564
Masco 402,800 8,233
Minnesota Mining & Manufacturing 203,900 20,064
Tyco International 285,800 13,004
Union Pacific 258,900 12,142
United Technologies 286,500 13,322
----------
105,606
----------
INFORMATION TECHNOLOGY - 9.4%
Accenture 432,200 5,511
ADC Telecommunications* 898,200 3,135
Advanced Micro Devices* 509,300 4,151
Cisco Systems* 632,200 7,700
Compaq Computers 437,500 3,636
Computer Associates International 271,200 6,981
Dell Computer* 443,000 8,209
Electronic Data Systems 201,700 11,614
Hewlett-Packard 513,700 8,271
Intel 312,900 6,396
IBM 110,056 10,158
Micron Technology* 152,700 2,875
Microsoft* 216,700 11,089
Motorola 670,500 10,460
Nortel Networks 732,400 4,109
----------
104,295
----------
MATERIALS - 5.8%
Alcoa 738,200 22,892
Dow Chemical 637,000 20,868
International Paper 383,800 13,356
Praxair 170,000 7,140
----------
64,256
----------
TELECOMMUNICATION SERVICES - 9.1%
AT&T 611,100 11,794
Bell South 467,000 19,404
SBC Communications 570,026 26,860
Verizon Communications 398,212 21,547
WorldCom* 1,468,100 22,080
----------
101,685
----------
UTILITIES - 5.4%
Duke Power 412,000 15,594
El Paso 180,200 7,487
FPL Group 155,500 8,327
Public Service Enterprises 190,100 8,089
TXU 232,600 10,774
Xcel Energy 331,600 9,335
----------
59,606
----------
TOTAL COMMON STOCKS 1,071,991
----------
LARGE CAP VALUE FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND - 4.2%
First American Prime Obligations Fund (A) 46,742,466 $ 46,742
----------
TOTAL RELATED PARTY MONEY MARKET FUND 46,742
----------
TOTAL INVESTMENTS - 100.6%
(Cost $1,206,095) 1,118,733
----------
OTHER ASSETS AND LIABILITIES, NET - (0.6%) (B) (6,230)
----------
NET ASSETS:
Portfolio capital $1,227,245
Undistributed net investment income 350
Accumulated net realized loss on investments (27,730)
Net unrealized depreciation of investments (87,362)
----------
TOTAL NET ASSETS - 100.0% $1,112,503
----------
CLASS A:
Net asset value and redemption price per
share (net assets of $94,064,434 and
5,887,747 shares of capital stock issued
and outstanding) (F) $ 15.98
Maximum sales charge of 5.50% 0.93
----------
Offering price per share (C) $ 16.91
----------
CLASS B:
Net asset value and offering price per
share (net assets of $38,107,807 and
2,425,497 shares of capital stock issued
and outstanding) (D)(F) $ 15.71
----------
CLASS C:
Net asset value per share (net assets of
$10,140,728 and 637,960 shares of
capital stock issued and outstanding) (D)(F) $ 15.90
Maximum sales charge of 1.00% 0.16
----------
Offering price per share (E) $ 16.06
----------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $16 and 1 share of capital stock
issued and outstanding) (F) $ 15.97
----------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $970,189,970 and 60,564,491 shares
of capital stock issued and outstanding) (F) $ 16.02
----------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 310,972
Payable upon return of securities loaned $(310,972)
(C)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(D)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(E) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
CI - Class
The accompanying notes are an integral part of the financial statements.
(50 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
LARGE CAP CORE FUND
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS - 91.6%
CONSUMER DISCRETIONARY - 10.9%
AOL Time Warner* 71,700 $ 2,373
Best Buy* 33,100 1,504
Carnival 99,900 2,200
Charter Communications* 213,000 2,637
Clear Channel Communications* 37,700 1,499
Dollar General 90,700 1,068
Harley-Davidson 73,100 2,961
Home Depot 114,900 4,409
Interpublic Group 63,900 1,304
Kohl's* 62,000 2,976
MGM Grand* 34,300 771
Omnicom Group 38,700 2,512
Toys "R" Us* 69,400 1,196
USA Networks* 86,100 1,548
Viacom, Cl B 75,687 2,611
Wal-Mart Stores 123,400 6,108
Walt Disney 64,500 1,201
---------
38,878
---------
CONSUMER STAPLES - 7.7%
Anheuser-Busch 77,700 3,254
Coca-Cola* 51,000 2,389
Kraft Foods* 50,000 1,718
PepsiCo 122,600 5,946
Philip Morris 66,500 3,211
Safeway* 140,100 5,565
Sysco 75,700 1,933
Walgreen 94,700 3,261
---------
27,277
---------
ENERGY - 6.6%
Apache 38,300 1,647
Baker Hughes 47,000 1,361
Burlington Resources 48,900 1,673
Ensco International 61,600 901
EOG Resources 61,400 1,776
Exxon Mobil 74,000 2,916
Phillips Petroleum 96,700 5,216
Schlumberger 68,200 3,117
Texaco 69,500 4,518
Transocean Sedco Forex 20,800 549
---------
23,674
---------
FINANCIALS - 18.4%
AFLAC 169,600 4,579
Ambac Financial Group 34,400 1,882
American Express 52,000 1,511
American International 124,945 9,746
BB&T 48,100 1,753
Charles Schwab 78,800 906
Chubb 55,300 3,949
Citigroup 143,549 5,814
Fannie Mae 57,800 4,627
Federal Home Loan Mortgage 104,000 6,760
Fifth Third Bancorp 93,450 5,745
Hartford Financial Services 51,900 3,049
JP Morgan Chase & Company 26,900 919
MBNA 190,875 5,782
MGIC Investment 50,900 3,326
Morgan Stanley Dean Witter 25,200 1,168
State Street 40,500 1,843
Wells Fargo 50,800 2,258
---------
65,617
---------
LARGE CAP CORE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
HEALTH CARE - 19.7%
Amgen* 57,300 $ 3,367
Andrx Group* 13,300 863
Baxter International 93,600 5,153
Boston Scientific* 61,800 1,267
Bristol-Myers Squibb 130,400 7,245
Cardinal Health 74,475 5,507
Eli Lilly 80,600 6,504
Forest Laboratories, Cl A* 12,600 909
Genentech* 41,300 1,817
IDEC Pharmaceuticals* 35,100 1,740
IVAX* 38,100 845
Johnson & Johnson 42,100 2,332
Medtronic 68,800 2,993
Merck 121,200 8,072
Pfizer 244,575 9,807
Pharmacia 103,000 4,178
Serono, ADR 103,600 1,966
Tenet Healthcare* 61,100 3,645
Watson Pharmaceuticals* 26,700 1,461
Zimmer Holdings* 13,040 362
--------
70,033
--------
INDUSTRIALS - 8.6%
Boeing 44,200 1,481
First Data 93,800 5,465
General Dynamics 30,900 2,729
General Electric 169,000 6,287
Illinois Tool Works 27,500 1,488
Molex, Cl A 85,537 2,079
Sabre Group Holdings* 24,000 642
Southwest Airlines 133,150 1,976
Tyco International 183,700 8,358
--------
30,505
--------
INFORMATION TECHNOLOGY - 11.4%
Adobe Systems 38,300 918
Analog Devices* 67,100 2,194
Applied Materials* 29,000 825
BEA Systems* 58,500 561
Check Point Software Technology* 48,650 1,071
Cisco Systems* 111,000 1,352
Compaq Computers 221,600 1,841
Computer Sciences* 50,700 1,682
Comverse Technology* 20,100 412
Corning 65,200 575
EMC* 25,400 298
Ericsson Telephone, ADR 266,000 928
Flextronics* 44,400 734
Intel 122,300 2,500
JDS Uniphase* 51,520 326
Juniper Networks* 28,300 275
KLA-Tencor* 43,400 1,371
Linear Technology 22,600 741
Mercury Interactive* 18,500 352
Micron Technology* 58,800 1,119
Microsoft* 169,500 8,673
Network Appliance* 96,700 658
Nokia, ADR Cl A 33,600 526
Novellus Systems* 28,000 800
Oracle Systems* 50,100 630
PeopleSoft* 29,700 536
PMC - Sierra* 33,800 347
QUALCOMM* 52,200 2,482
Siebel Systems* 30,700 399
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 51)
STATEMENTS OF NET ASSETS September 30, 2001
LARGE CAP CORE FUND (CONTINUED)
DESCRIPTION PAR (000)/SHARES VALUE (000)
- ----------------------------------------------------------------------------
Sun Microsystems* 74,300 $ 614
SunGard Data Systems* 81,400 1,902
Texas Instruments 69,400 1,734
VERITAS Software* 32,200 594
Xilinx* 23,900 562
--------
40,532
--------
MATERIALS - 1.6%
Praxair 53,700 2,255
Vulcan Materials 38,900 1,680
Weyerhaeuser 34,800 1,695
--------
5,630
--------
TELECOMMUNICATION SERVICES - 2.8%
ALLTELL 40,000 2,318
Global Crossing* 116,800 210
Nextel Communications, Cl A 70,500 609
Qwest Communications 88,900 1,485
Sprint (PCS Group)* 61,900 1,627
WorldCom* 240,472 3,624
--------
9,873
--------
UTILITIES - 4.0%
Calpine* 70,600 1,615
Constellation Energy 50,700 1,227
El Paso 99,600 4,138
Enron 123,875 3,373
Exelon 41,000 1,829
Reliant Resources* 130,600 2,110
--------
14,292
--------
TOTAL COMMON STOCKS 326,311
--------
VARIABLE RATE DEMAND NOTE - 1.7%
American Family Financial Services $ 6,000 6,000
--------
TOTAL CORPORATE OBLIGATIONS 6,000
--------
RELATED PARTY MONEY MARKET FUND - 6.6%
First American Prime Obligations Fund (A) 23,456,374 23,456
--------
TOTAL RELATED PARTY MONEY MARKET FUND 23,456
--------
TOTAL INVESTMENTS - 99.9%
(Cost $341,626) 355,767
--------
OTHER ASSETS AND LIABILITIES, NET - 0.1% (B) 532
--------
LARGE CAP CORE FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- ----------------------------------------------------------------------------
NET ASSETS:
Portfolio capital $376,798
Undistributed net investment income 636
Accumulated net realized loss on investments (35,276)
Net unrealized appreciation of investments 14,141
---------
TOTAL NET ASSETS - 100.0% $356,299
---------
CLASS A:
Net asset value and redemption price per
share (net assets of $34,330,009 and
1,404,520 shares of capital stock issued
and outstanding) (F) $ 24.44
Maximum sales charge of 5.50% 1.42
---------
Offering price per share (C) $ 25.86
---------
CLASS B:
Net asset value and offering price per share
(net assets of $2,954,372 and
123,425 shares of capital stock issued
and outstanding) (D)(F) $ 23.94
---------
CLASS C:
Net asset value per share (net assets of
$24 and 1 share of capital stock issued
and outstanding) (D)(F) $ 24.44
Maximum sales charge of 1.00% 0.25
---------
Offering price per share (E) $ 24.69
---------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $2,801,567 and 114,589 shares of
capital stock issued and outstanding) (F) $ 24.45
---------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $316,212,815 and 12,684,845 shares
of capital stock issued and outstanding) (F) $ 24.93
--------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 86,300
Payable upon return of securities loaned $ (86,300)
(C)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(D)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(E)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
CI - Class
The accompanying notes are an integral part of the financial statements.
(52 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
GROWTH & INCOME FUND
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS - 98.3%
CONSUMER DISCRETIONARY - 10.7%
AOL Time Warner* 502,100 $ 16,620
Best Buy* 41,300 1,877
Clear Channel Communications* 57,600 2,290
Comcast, Cl A* 146,900 5,269
Costco Wholesale* 144,600 5,142
Ford Motor 172,400 2,991
Home Depot 151,600 5,817
Kohl's * 14,400 691
McGraw-Hill 138,200 8,043
Target 175,200 5,563
Toys "R" Us* 186,600 3,215
Viacom, Cl B 194,111 6,697
Wal-Mart Stores 163,900 8,113
Walt Disney 157,600 2,934
---------
75,262
---------
CONSUMER STAPLES - 8.9%
Anheuser-Busch 95,800 4,012
Coca-Cola 40,300 1,888
CVS 89,100 2,958
General Mills 32,500 1,479
Kimberly-Clark 60,325 3,740
Kraft Foods* 98,900 3,399
PepsiCo 269,960 13,093
Philip Morris 122,300 5,906
Safeway* 305,325 12,128
Sysco 312,340 7,977
Walgreen 172,600 5,943
---------
62,523
---------
ENERGY - 9.2%
Anadarko Petroleum 36,800 1,769
Apache 96,700 4,158
Chevron 18,900 1,602
Exxon Mobil 650,938 25,647
Nabors Industries* 122,300 2,565
Phillips Petroleum 102,800 5,545
Schlumberger 125,500 5,735
Texaco 110,800 7,202
USX-Marathon 389,200 10,411
---------
64,634
---------
FINANCIALS - 22.9%
AFLAC 72,800 1,966
Alliance Capital Management Holding 54,300 2,482
AMB Property 183,400 4,493
Ambac 174,600 9,552
American Express 106,200 3,086
American International Group 244,950 19,106
Bank of America 67,600 3,948
Bank of New York 170,600 5,971
BB&T 48,300 1,761
Capital One Financial 33,000 1,519
Chubb 118,600 8,469
Citigroup 465,566 18,855
Fannie Mae 29,600 2,370
Federal Home Loan Mortgage 177,600 11,544
Fifth Third Bancorp 39,200 2,410
JP Morgan Chase & Company 175,500 5,993
Legg Mason 92,300 3,670
Marsh & McLennan 119,800 11,585
Mellon Financial 192,500 6,224
GROWTH & INCOME FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
Merrill Lynch 206,400 $ 8,380
MGIC Investment 81,095 5,299
Morgan Stanley Dean Witter 68,800 3,189
Northern Trust 66,050 3,466
SouthTrust 74,700 1,902
Washington Mutual 47,500 1,828
Wells Fargo 272,300 12,104
---------
161,172
---------
HEALTH CARE - 10.9%
American Home Products 152,800 8,901
Amgen* 33,600 1,975
Baxter International 132,800 7,311
Bristol-Myers Squibb 170,832 9,491
Genentech* 24,900 1,096
HCA - The Healthcare Company 149,200 6,611
Johnson & Johnson 114,600 6,349
Eli Lilly 79,900 6,448
Medtronic 42,800 1,862
Merck & Company 137,400 9,151
Pfizer 271,800 10,899
Wellpoint Health Networks* 58,200 6,353
Zimmer Holdings* 17,083 474
---------
76,921
---------
INDUSTRIALS - 9.2%
Automatic Data Processing 150,700 7,089
Avery Dennison 34,804 1,647
Boeing 27,800 931
Ecolab 257,800 9,366
General Dynamics 127,200 11,234
General Electric 376,900 14,021
Honeywell International 92,100 2,431
Tyco International 316,700 14,410
United Parcel Service, Cl B 49,950 2,596
Waste Management 58,700 1,570
---------
65,295
---------
INFORMATION TECHNOLOGY - 11.5%
Adobe Systems 34,500 827
Analog Devices* 29,300 958
Applied Materials* 119,200 3,390
Cisco Systems* 202,600 2,468
Corning 32,200 284
Dell Computer* 319,700 5,924
Electronic Data Systems 83,800 4,274
Flextronics International* 103,900 1,719
Intel 364,600 7,452
IBM 92,500 8,538
Lexmark International Group, Cl A* 83,100 3,715
Micron Technology* 139,100 2,619
Microsoft* 203,500 10,413
Millipore 63,300 3,351
Motorola 276,900 4,320
Network Appliance* 101,500 690
Nortel Networks 57,600 323
Novellus Systems* 17,800 508
Oracle Systems* 177,000 2,227
Siebel Systems* 19,100 248
Sun Microsystems* 108,150 894
SunGard Data Systems* 319,000 7,455
Texas Instruments 290,900 7,266
Xilinx* 39,600 932
---------
80,795
---------
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 53)
STATEMENTS OF NET ASSETS September 30, 2001
GROWTH & INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)/SHARES VALUE (000)
- ----------------------------------------------------------------------------
MATERIALS - 2.7%
Alcoa 105,400 $ 3,268
Pharmacia 189,100 7,205
Praxair 202,900 8,522
---------
18,995
---------
TELECOMMUNICATION SERVICES - 7.0%
ALLTELL 91,400 5,297
Bell South 83,000 3,449
Qwest Communications* 196,000 3,273
SBC Communications 228,900 10,786
Sprint 185,000 4,442
Sprint (PCS Group)* 138,400 3,638
Verizon Communications 342,500 18,532
---------
49,417
---------
UTILITIES - 5.3%
Constellation Energy 100,200 2,425
Duke Power 322,800 12,218
Dynegy 177,900 6,164
Enron 213,300 5,808
Exelon 157,000 7,002
Reliant Resources* 49,300 799
Williams 114,625 3,129
---------
37,545
---------
TOTAL COMMON STOCKS 692,559
---------
CONVERTIBLE PREFERRED STOCK - 0.5% 141,400 3,754
---------
TOTAL CONVERTIBLE PREFERRED STOCK 3,754
---------
CONVERTIBLE CORPORATE BONDS - 0.3%
Ciena
3.750%, 02/01/08 $ 1,190 707
Corning
0.000%, 11/08/15* 2,872 1,591
---------
2,298
---------
TOTAL CONVERTIBLE CORPORATE BONDS 2,298
---------
RELATED PARTY MONEY MARKET FUND - 2.0%
First American Prime Obligations Fund (A) 13,858,802 13,859
---------
TOTAL RELATED PARTY MONEY MARKET FUND 13,859
---------
TOTAL INVESTMENTS - 101.1%
(Cost $690,577) 712,470
---------
OTHER ASSETS AND LIABILITIES, NET - (1.1%) (B) (7,932)
---------
GROWTH & INCOME FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- ----------------------------------------------------------------------------
NET ASSETS:
Portfolio capital $705,708
Undistributed net investment income 187
Accumulated net realized loss on investments (23,250)
Net unrealized appreciation of investments 21,893
---------
TOTAL NET ASSETS - 100.0% $704,538
---------
CLASS A:
Net asset value and redemption price per
share (net assets of $150,322,727 and
4,823,641 shares of capital stock issued
and outstanding) (F) $ 31.16
Maximum sales charge of 5.50% 1.81
---------
Offering price per share (C) $ 32.97
---------
CLASS B:
Net asset value and offering price per
share (net assets of $11,612,659 and
376,347 shares of capital stock issued
and outstanding) (D)(F) $ 30.86
---------
CLASS C:
Net asset value per share (net assets of
$31 and 1 share of capital stock issued
and outstanding) (D)(F) $ 31.17
Maximum sales charge of 1.00% 0.31
---------
Offering price per share (E) $ 31.48
---------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $44,820,935 and 1,439,147 shares of
capital stock issued and outstanding) (F) $ 31.14
---------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $497,781,661 and 15,950,663 shares
of capital stock issued and outstanding) (F) $ 31.21
---------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 156,515
Payable upon return of securities loaned $(156,515)
(C)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(D)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(E)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(F)$.0001 par value and 2 billion authorized shares
CI - Class
The accompanying notes are an integral part of the financial statements.
(54 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RELATIVE VALUE FUND
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS - 92.1%
CONSUMER DISCRETIONARY - 2.7%
General Motors 65,000 $ 2,789
Johnson Controls 50,000 3,262
Whirlpool 100,000 5,535
---------
11,586
---------
CONSUMER STAPLES - 10.1%
Gillette 230,000 6,854
Philip Morris 350,000 16,901
Procter & Gamble 260,000 18,925
---------
42,680
---------
ENERGY - 11.4%
BP PLC 114,800 5,645
Exxon Mobil 390,764 15,396
Royal Dutch Petroleum, ADR 156,000 7,839
Texaco 300,000 19,500
---------
48,380
---------
FINANCIALS - 25.2%
American Express 225,000 6,539
AmSouth Bancorp 243,230 4,395
Bank of America 70,000 4,088
Bank of New York 300,000 10,500
Cincinnati Financial 170,000 7,075
Citigroup 430,000 17,415
First Financial Bancorp 202,125 3,135
First Tennessee National 165,000 6,105
KeyCorp 300,000 7,242
Mellon Financial 200,000 6,466
National City 115,000 3,444
North Fork Bancorp 160,000 4,758
PNC Financial Services 100,000 5,725
TCF Financial 100,000 4,606
Union Planters 250,000 10,725
Wells Fargo 100,000 4,445
---------
106,663
---------
HEALTH CARE - 8.8%
American Home Products 200,000 11,650
Bristol-Myers Squibb 115,000 6,389
GlaxoSmithKline ADR 135,000 7,576
Merck & Company 170,000 11,322
Zimmer Holdings* 11,500 319
---------
37,256
---------
INDUSTRIALS - 5.4%
General Electric 450,000 16,740
Honeywell International 240,625 6,353
---------
23,093
---------
INFORMATION TECHNOLOGY - 12.4%
Intel 800,000 16,352
IBM 300,000 27,690
Microsoft* 170,000 8,699
---------
52,741
---------
RELATIVE VALUE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
MATERIALS - 2.4%
AK Steel Holding 250,000 $ 2,113
Dow Chemical 135,000 4,423
International Paper 100,000 3,480
---------
10,016
---------
TELECOMMUNICATION SERVICES - 8.0%
AT&T* 350,000 6,755
Broadwing* 800,000 12,864
Verizon Communications 185,440 10,034
Vodafone Group, ADR 195,000 4,282
---------
33,935
---------
UTILITIES - 5.7%
Cinergy 250,000 7,718
Duke Energy 200,000 7,570
TXU 190,000 8,801
---------
24,089
---------
TOTAL COMMON STOCKS 390,439
---------
RELATED PARTY MONEY MARKET FUND - 5.8%
First American Prime Obligations Fund (A) 24,547,061 24,547
TOTAL RELATED PARTY MONEY MARKET FUND 24,547
---------
TOTAL INVESTMENTS - 97.9%
(Cost $261,524) 414,986
---------
OTHER ASSETS AND LIABILITIES, NET - 2.1% 8,882
---------
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 55)
STATEMENTS OF NET ASSETS September 30, 2001
RELATIVE VALUE FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- ----------------------------------------------------------------------------
NET ASSETS:
Portfolio capital $264,165
Undistributed net investment income 43
Accumulated net realized gain on investments 6,198
Net unrealized appreciation of investments 153,462
---------
TOTAL NET ASSETS - 100.0% $423,868
---------
CLASS A:
Net asset value and redemption price per
share (net assets of $33,287,813 and
1,381,987 shares of capital stock issued
and outstanding) (E) $ 24.09
Maximum sales charge of 5.50% 1.40
---------
Offering price per share (B) $ 25.49
---------
CLASS B:
Net asset value and offering price per
share (net assets of $12,081,297 and
503,145 shares of capital stock issued
and outstanding) (C)(E) $ 24.01
---------
CLASS C:
Net asset value per share (net assets of
$24 and 1 share of capital stock issued
and outstanding) (C)(E) $ 24.09
Maximum sales charge of 1.00% 0.24
---------
Offering price per share (D) $ 24.33
---------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets of
$34,004,063 and 1,413,130 shares of
capital stock issued and outstanding) (E) $ 24.06
---------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $344,494,811 and 14,284,925 shares
of capital stock issued and outstanding) (E) $ 24.12
---------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(C)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(D)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(E)$.0001 par value and 2 billion authorized shares.
ADR - American Depositary Receipt
CAPITAL GROWTH FUND
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS - 97.4%
CONSUMER DISCRETIONARY - 12.9%
AOL Time Warner* 205,000 $ 6,786
Best Buy* 16,500 750
Clear Channel Communications* 47,000 1,868
Comcast, Cl A* 32,100 1,151
Federated Department Stores* 5,000 10
Home Depot 77,000 2,954
Kohl's* 75,200 3,610
Target 35,000 1,111
Wal-Mart Stores* 148,000 7,326
--------
25,566
--------
CONSUMER STAPLES - 9.1%
Anheuser-Busch 50,000 2,094
H J Heinz 65,800 2,773
Kimberly-Clark 50,000 3,100
Kraft Foods* 38,500 1,323
PepsiCo 75,000 3,638
Safeway* 76,244 3,028
Walgreen 63,200 2,176
--------
18,132
--------
ENERGY - 1.6%
Ashland 2,500 96
Exxon Mobil 42,076 1,658
Global Marine* 22,800 319
Texaco* 2,500 163
USX - Marathon 33,400 887
--------
3,123
--------
FINANCIALS - 8.0%
American International Group 103,519 8,074
Capital One Financial 18,500 852
Citigroup 73,200 2,965
Federal Home Loan Mortgage 25,000 1,625
Merrill Lynch 21,900 889
Wells Fargo 35,000 1,556
--------
15,961
--------
HEALTH CARE - 29.7%
American Home Products 20,000 1,165
Amgen* 37,800 2,222
Baxter International 63,600 3,501
Bristol-Myers Squibb 126,000 7,001
Cardinal Health 93,375 6,905
Genentech* 37,700 1,659
Genzyme* 20,000 908
Guidant* 50,000 1,925
IDEC Pharmaceuticals* 16,100 798
Johnson & Johnson 32,100 1,778
Eli Lilly 60,000 4,842
Medtronic 99,530 4,330
Merck & Company 100,000 6,660
Pfizer 221,750 8,892
Pharmacia 75,400 3,058
Serono SA, ADR 54,500 1,034
Watson Pharmaceuticals* 37,400 2,046
Zimmer Holdings* 11,000 305
--------
59,029
--------
The accompanying notes are an integral part of the financial statements.
(56 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
CAPITAL GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
INDUSTRIALS - 7.7%
General Electric 235,500 $ 8,761
Illinois Tool Works 34,364 1,859
Kadant* 1,695 22
Minnesota Mining & Manufacturing 20,600 2,027
Textron 17,300 581
Tyco International 43,400 1,975
--------
15,225
--------
INFORMATION TECHNOLOGY - 24.4%
Adobe Systems 26,200 628
Analog Devices* 26,000 850
Apple Computer* 25,300 392
Applied Materials* 12,200 347
Applied Micro Circuits* 54,100 378
BEA Systems* 73,700 707
Broadcom* 13,600 276
Brocade Communications Systems* 56,300 790
CheckPoint Software Technology* 12,100 266
Cisco Systems* 287,400 3,501
Citrix Systems* 7,300 145
Corning 79,000 697
Dell Computer* 95,900 1,777
EMC* 74,400 874
Flextronics International* 46,900 776
Hewlett-Packard 40,000 644
Intel 245,560 5,019
IBM 37,000 3,415
Juniper Network* 20,400 198
KLA-Tencor* 7,200 227
Micron Technology* 60,600 1,141
Microsoft* 166,000 8,494
Millipore 18,600 985
Nokia, ADR Cl A 39,500 618
Nortel Networks 107,000 600
Novellus Systems* 10,700 306
NVIDIA* 15,800 434
Oracle Systems* 238,000 2,994
QUALCOMM* 46,600 2,215
RF Micro Devices* 68,800 1,142
Siebel Systems* 55,500 722
Sun Microsystems* 164,000 1,356
Texas Instruments 116,400 2,908
Thermo Electron* 27,700 500
VeriSign* 28,500 1,194
Vitesse Semiconductor* 45,000 349
Xilinx* 25,400 598
--------
48,463
--------
MATERIALS - 0.8%
Alcoa 50,000 1,551
--------
1,551
--------
TELECOMMUNICATION SERVICES - 1.7%
Nextel Communications, Cl A* 42,400 366
Qwest Communications International 77,100 1,288
Sprint PCS Group* 19,200 505
Verizon Communications 22,072 1,194
--------
3,353
--------
CAPITAL GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
UTILITIES - 1.5%
El Paso 26,829 $ 1,115
Enron 33,000 899
Mirant 44,200 956
--------
2,970
--------
TOTAL COMMON STOCKS 193,373
--------
SHORT-TERM INVESTMENTS - 0.3%
RNC Money Market Fund 750,000 750
--------
TOTAL SHORT-TERM INVESTMENTS 750
--------
RELATED PARTY MONEY MARKET FUND - 2.6%
First American Prime Obligations Fund (A) 5,068,031 5,068
--------
TOTAL RELATED PARTY MONEY MARKET FUND 5,068
--------
TOTAL INVESTMENTS - 100.3%
(Cost $192,428) 199,191
--------
OTHER ASSETS AND LIABILITIES, NET - 0.3% (B) (648)
--------
NET ASSETS:
Portfolio capital $206,924
Accumulated net realized loss on investments and options
written (14,938)
Net unrealized appreciation of investments 6,763
Net unrealized depreciation of options written (206)
--------
TOTAL NET ASSETS - 100.0% $198,543
--------
CLASS A:
Net asset value and redemption price per
share (net assets of $8,597,419 and
585,477 shares of capital stock issued
and outstanding) (F) $ 14.68
Maximum sales charge of 5.50% 0.85
--------
Offering price per share (C) $ 15.53
--------
CLASS B:
Net asset value and offering price per
share (net assets of $46,102,673 and
3,159,313 shares of capital stock issued
and outstanding) (D)(F) $ 14.59
--------
CLASS C:
Net asset value per share (net assets of
$15 and 1 share of capital stock issued
and outstanding) (D)(F) $ 14.68
Maximum sales charge of 1.00% 0.15
--------
Offering price per share (E) $ 14.83
--------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $11,881,420 and 808,873 shares of
capital stock issued and outstanding) (F) $ 14.69
--------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $131,961,269 and 8,932,173 shares
of capital stock issued and outstanding) (F) $ 14.77
--------
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 57)
STATEMENTS OF NET ASSETS September 30, 2001
CAPITAL GROWTH FUND (CONCLUDED)
DESCRIPTION
- ----------------------------------------------------------------------------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 54,034
Payable upon return of securities loaned $ (54,034)
(C)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(D)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(E)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
CI - Class
EQUITY INCOME FUND
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS - 96.4%
CONSUMER DISCRETIONARY - 4.9%
Ford Motor 127,616 $ 2,214
Maytag 129,700 3,195
McGraw-Hill 81,400 4,737
Omnicom Group 35,400 2,297
Sherwin Williams 35,000 778
Tribune Company 23,700 2,138
--------
15,359
--------
CONSUMER STAPLES - 9.5%
Anheuser-Busch 109,100 4,569
Avon 70,400 3,256
Colgate Palmolive 48,700 2,837
Gillette 22,500 671
H J Heinz 30,000 1,265
Kimberly-Clark 66,100 4,098
Kraft Foods* 41,160 1,415
PepsiCo 118,900 5,767
Ralston-Ralston Purina 30,000 984
Sara Lee 193,200 4,115
Sysco 30,000 766
--------
29,743
--------
ENERGY - 9.7%
BP 93,096 4,578
Chevron 38,820 3,290
Exxon Mobil 242,648 9,560
Murphy Oil 10,000 724
Phillips Petroleum 27,000 1,456
Precision Drilling* 10,000 211
Royal Dutch Petroleum, ADR 179,200 9,005
USX-Marathon 48,000 1,284
--------
30,108
--------
FINANCIALS - 27.9%
American Express 109,000 3,168
Archstone Communities 151,600 3,957
Bank of America 75,824 4,428
Bank of New York 106,500 3,728
Citigroup 182,786 7,403
Comerica 56,200 3,113
Crescent Real Estate 101,700 2,181
Duke Realty 195,172 4,624
Equity Residential Property Trust 26,600 1,553
Fannie Mae 56,600 4,531
Hartford Financial Services 10,000 587
Healthcare Realty Trust 115,700 2,950
Household International 71,397 4,025
John Hancock Financial Services 116,900 4,670
JP Morgan Chase & Company 112,100 3,828
Kimco Realty 31,600 1,534
Manufactured Home Communities 122,550 3,728
MBNA 46,000 1,393
Mellon Financial 160,200 5,179
National City 47,000 1,408
PNC Financial Services Group 22,000 1,259
Prentiss Properties Trust 48,000 1,320
Simon Property Group 137,200 3,692
St. Paul Companies 82,610 3,405
Union Planters 34,000 1,458
XL Capital Limited, Cl A 53,782 4,249
Zions Bancorporation 68,600 3,681
--------
87,052
--------
The accompanying notes are an integral part of the financial statements.
(58 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
EQUITY INCOME FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
HEALTH CARE - 11.4%
Abbott Labs 36,000 $ 1,867
American Home Products 110,900 6,460
Baxter International 137,000 7,542
Bristol-Myers Squibb 62,700 3,484
Johnson & Johnson 105,600 5,850
Merck 32,200 2,145
Pfizer 84,300 3,380
Pharmacia 26,000 1,055
Protein Design Labs* 1,597,000 1,489
Schering Plough 54,200 2,011
Zimmer Holdings* 6,270 174
--------
35,457
--------
INDUSTRIALS - 12.2%
Caterpillar 42,750 1,915
Deere 77,400 2,911
Ecolab 169,900 6,172
First Data 26,000 1,515
General Electric 119,400 4,442
Honeywell International 152,200 4,032
Knightsbridge Tanker 176,500 3,091
Minnesota Mining & Manufacturing 53,000 5,215
Parker Hannifin 73,900 2,535
United Parcel Service 76,700 3,978
United Technologies 48,700 2,264
--------
38,070
--------
INFORMATION TECHNOLOGY - 4.3%
Alcatel 16,000 186
Electronic Data Systems 85,700 4,935
Hewlett-Packard 188,300 2,995
IBM 55,730 5,144
--------
13,260
--------
MATERIALS - 2.9%
Dow Chemical 62,400 2,044
DuPont De Nemours & Co 66,000 2,476
Lyondell Chemical 135,150 1,547
Weyerhaeuser 62,800 3,059
--------
9,126
--------
TELECOMMUNICATION SERVICES - 7.8%
Nextel Communications* 4,850,000 3,019
Qwest Communications 92,400 1,532
SBC Communications 173,900 8,194
Sprint 101,300 2,432
Verizon Communications 168,680 9,127
--------
24,304
--------
UTILITIES - 5.8%
Cinergy 30,000 926
Consolidated Edison 90,000 3,665
Constellation Energy 10,900 264
Duke Energy 48,000 1,817
El Paso 10,698 445
National Fuel Gas 52,000 1,198
Reliant Energy 119,100 3,135
Xcel Energy 239,800 6,750
--------
18,200
--------
TOTAL COMMON STOCKS 300,679
--------
EQUITY INCOME FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND - 5.7%
First American Prime Obligations Fund (A) 17,605,502 $ 17,606
---------
TOTAL RELATED PARTY MONEY MARKET FUND 17,606
---------
TOTAL INVESTMENTS - 102.1%
(Cost $233,537) 318,285
---------
OTHER ASSETS AND LIABILITIES, NET - (2.1%) (B) (6,495)
---------
NET ASSETS:
Portfolio capital $227,949
Accumulated net investment loss (291)
Accumulated net realized loss on investments (616)
Net unrealized appreciation of investments 84,748
---------
TOTAL NET ASSETS - 100.0% $311,790
---------
CLASS A:
Net asset value and redemption price per
share (net assets of $24,556,888 and
2,025,021 shares of capital stock issued
and outstanding) (F) $ 12.13
Maximum sales charge of 5.50% 0.71
---------
Offering price per share (C) $ 12.84
---------
CLASS B:
Net asset value and offering price per
share (net assets of $11,515,811 and
954,459 shares of capital stock issued
and outstanding) (D)(F) $ 12.07
---------
CLASS C:
Net asset value per share (net assets of
$8,028,153 and 663,841 shares of
capital stock issued and outstanding) (D)(F)
$ 12.09
Maximum sales charge of 1.00% 0.12
---------
Offering price per share (E) $ 12.21
---------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $328,293 and 27,077 shares of
capital stock issued and outstanding) (F) $ 12.12
---------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $267,361,074 and 21,916,302 shares
of capital stock issued and outstanding) (F) $ 12.20
---------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 64,855
Payable upon return of securities loaned $ (64,855)
(C)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(D)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(E)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
CI - Class
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 59)
STATEMENTS OF NET ASSETS September 30, 2001
BALANCED FUND
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS - 53.5%
CONSUMER DISCRETIONARY - 6.7%
4Kids Entertainment* 11,700 $ 233
Abercrombie & Fitch* 16,400 288
Alliance Atlantis Communications, Cl B* 19,700 191
American Axle & Manufacturing Holdings* 4,000 51
Anchor Gaming* 2,700 112
AnnTaylor Stores* 1,400 31
AOL Time Warner* 111,760 3,699
Bally Total Fitness Holdings* 7,400 150
Barnes & Noble* 2,800 101
Best Buy* 21,180 963
BJ's Wholesale Club* 4,200 200
Borders Group* 4,700 90
Borg Warner 2,600 105
Brinker International* 3,100 73
Cablevision System - Rainbow* 3,900 79
Carnival 67,000 1,475
Catalina Marketing, Cl C* 2,300 64
CDW Computer Centers* 11,000 398
CEC Entertainment* 1,375 47
Charter Communications* 88,800 1,099
Clear Channel Communications* 19,800 787
COMCAST, Cl A* 15,400 552
Cost Plus* 4,100 75
Costco Wholesale* 14,600 519
Cox Communications, Cl A* 31,750 1,326
Dollar General 129,900 1,529
Electronics Boutique Holdings* 2,200 59
Entercom Communications* 1,900 65
Federal Signal 1,000 18
Galyan's Trading* 800 9
Gannett 7,100 427
Gap 14,335 171
Genesco* 1,900 31
Gentex* 1,400 33
Gtech Holdings* 15,400 532
Gymboree* 24,300 158
Harley-Davidson 22,900 927
Home Depot 77,590 2,977
Hot Topic* 6,600 166
Insight Communications* 11,600 213
Interpublic Group Companies 19,100 390
Jones Apparel Group* 5,100 130
Kohl's* 39,100 1,877
Lowe's 16,800 532
Macrovision* 4,700 134
McDonald's 32,300 877
McGraw-Hill 31,400 1,827
MGM Grand* 10,800 243
Michaels Stores* 1,600 58
New York Times, Cl A 2,900 113
Omnicom Group 24,730 1,605
Orient Express Hotels* 3,300 46
OshKosh B'Gosh 500 13
Radio One, Cl D* 3,200 37
Scholastic* 15,300 666
Standard Pacific 2,500 49
Steiner Leisure* 7,300 117
Target 33,500 1,064
Tommy Hilfiger* 7,900 71
Toys "R" Us* 54,400 937
BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
Ultimate Electronics* 7,500 $ 130
USA Networks* 44,600 802
ValueVision International* 19,100 246
Viacom, Cl B* 43,346 1,495
Wal-Mart Stores 97,801 4,841
Walt Disney 59,300 1,104
Westwood One* 3,300 73
--------
39,500
--------
CONSUMER STAPLES - 3.8%
Albertson's 21,400 682
Anheuser-Busch 37,900 1,587
Coca-Cola 32,500 1,523
Constellation Brands, Cl A* 2,000 83
CVS 9,400 312
Duane Reade* 2,000 60
General Mills 15,000 683
Hormel Foods 3,900 92
Kimberly-Clark 25,000 1,550
Kraft Foods* 66,430 2,283
Longs Drug Stores* 1,500 41
McCormick and Company 1,400 64
Pepsi Americas 5,500 82
PepsiCo 64,200 3,114
Performance Food Group* 2,600 74
Philip Morris 35,300 1,705
Procter & Gamble 21,900 1,594
RJ Reynolds Tobacco Holdings 1,100 63
Safeway* 72,200 2,868
Sysco* 49,954 1,276
Tyson Foods, Cl A 14,800 148
Walgreen 77,230 2,659
--------
22,543
--------
ENERGY - 3.4%
Anadarko Petroleum 10,300 495
Apache 21,900 942
Baker Hughes 15,200 440
Burlington Resources 15,000 513
Cabot Oil & Gas 2,800 56
Cal Dive International* 3,300 55
Chevron 2,000 170
Energy Partners* 8,500 59
Ensco International 18,900 276
EOG Resources 19,100 553
Equitable Resources 500 15
Exxon Mobil 131,976 5,200
Hanover Compressor* 5,000 108
Helmerich & Payne 500 13
Horizon Offshore* 1,100 7
Key Energy Group* 3,500 22
Murphy Oil 1,400 101
National-Oilwell* 46,600 676
Noble Affiliates 500 15
Ocean Energy 3,500 57
Patterson - UTI Energy* 10,400 129
Phillips Petroleum 53,300 2,875
Pioneer Natural Resources* 3,300 47
Pogo Producing 3,200 75
Precision Drilling* 7,700 163
Rowan Companies* 18,100 224
Schlumberger 55,550 2,539
Talisman Energy 3,300 112
Texaco 20,100 1,307
The accompanying notes are an integral part of the financial statements.
(60 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
Transocean Sedco Forex 56,280 $ 1,486
Ultramar Diamond Shamrock 1,600 77
USX-Marathon 39,800 1,065
Valero Energy 1,300 46
--------
19,918
--------
FINANCIALS - 10.9%
AFLAC 59,200 1,598
Alliance Capital Management Holdings 10,600 484
Allstate 29,400 1,098
AMB Property 26,175 641
Ambac Financial Group* 38,262 2,093
American Express 94,530 2,747
American Financial Group 2,075 46
American International Group 99,697 7,776
Arthur J Gallagher 25,100 850
Astoria Financial 1,200 71
Bank of America 29,900 1,746
Bank of New York 17,000 595
Banknorth Group 8,100 181
BB&T 15,700 572
Boston Properties 12,000 458
Charles Schwab 107,900 1,241
Charter One Financial 4,400 124
Chubb 28,600 2,042
Citigroup 177,180 7,176
Commerce Bancorp 4,400 299
Compass Bank Shares* 2,200 57
Dime Bancorp 1,800 71
Dime Bancorp Warrant* 6,900 2
E*Trade Group* 10,400 63
East West Bancorp 11,200 262
Eaton Vance 3,800 119
Edwards 1,600 56
Equity Office Property 25,400 813
Everest Re Group 6,900 446
Fannie Mae 47,000 3,761
Federal Home Loan Mortgage 84,500 5,472
Federated Investors 6,800 201
Fidelity National Financial 16,330 439
Fifth Third Bancorp 34,350 2,112
First American 4,900 99
First Tennessee National 3,800 141
Fleet Boston Financial 39,090 1,437
Golden West Financial 2,100 122
Greater Bay Bancorp 5,900 137
GreenPoint Financial 3,000 105
Harleysville Group 4,400 106
Hartford Financial Services Group* 26,100 1,533
Independence Community Bank 3,100 67
Instinet Group* 7,300 71
Investors Financial Services 700 40
JP Morgan Chase 51,400 1,755
Legg Mason 1,300 52
M & T Bank 3,300 244
Marsh & McLennan 11,900 1,151
Marshall & Ilsley 1,100 62
MBNA 60,742 1,840
Mellon Financial 19,200 621
Mercantile Bankshares 1,700 67
MGIC Investment 24,700 1,614
Morgan Stanley Dean Witter 39,770 1,843
National Commerce Financial 5,705 149
New York Community Bancorp 6,450 150
BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
North Fork Bancorp 4,900 $ 146
Northern Trust 6,900 362
Old Republic 32,925 863
Phoenix Companies* 9,300 134
Protective Life 4,500 131
Renaissance Re Holdings 3,600 320
SEI Investment 3,600 115
Southwest Bancorp of Texas* 2,200 65
State Street 12,600 573
TCF Financial 1,700 78
The PMI Group 1,450 90
Wells Fargo 64,100 2,849
--------
64,844
--------
HEALTH CARE - 9.5%
Advance PCS* 1,300 93
American Home Products 21,900 1,276
AmerisourceBergen* 4,380 311
Amgen* 31,160 1,831
Andrx Group* 4,200 273
Apogent Technologies* 2,600 62
Appria Healthcare* 19,900 516
Aviron* 1,700 42
Baxter International 51,400 2,830
Boston Scientific* 19,500 400
Bristol-Meyers Squibb 125,624 6,980
Cardinal Health 21,087 1,559
Celgene* 3,400 90
Cephalon* 2,100 105
DENTSPLY International 5,575 256
Edwards Lifesciences* 2,400 54
Express Scripts* 4,900 271
First Health Group* 1,800 53
Forest Laboratories, Cl A* 4,000 289
Genentech* 42,130 1,854
Genzyme* 5,500 250
Gilead Sciences* 3,100 174
Guidant* 13,100 504
HCA - The Healthcare Company 15,700 696
Health Management Association, Cl A* 6,453 134
IDEC Pharmaceuticals* 17,600 872
Intermune* 6,400 245
IVAX* 25,225 559
Johnson & Johnson 63,050 3,493
King Pharmaceuticals* 4,366 183
Eli Lilly 65,280 5,268
Lincare Holdings* 6,200 165
Medtronic 54,160 2,356
Merck 96,350 6,417
Millennium Pharmaceuticals* 6,500 115
Mylan Laboratories 5,000 163
Noven Pharmaceuticals* 600 11
Omnicare 10,400 227
Patterson Dental* 2,100 77
Pfizer 194,865 7,814
Pharmaceutical Resources* 5,100 182
Pharmacia 49,344 2,001
Priority Healthcare, Cl B* 3,100 74
Protein Design Labs* 1,200 57
Quest Diagnostics* 2,400 148
Renal Care Group* 4,100 126
Respironics* 3,400 121
Sepracor* 2,600 93
Serono SA, ADR 28,500 541
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 61)
STATEMENTS OF NET ASSETS September 30, 2001
BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
Sybron Dental Specialties* 7,166 $ 133
Techne* 2,100 62
Tenet Healthcare* 17,200 1,026
Transkaryotic Therapies* 1,600 43
Triad Hospitals* 5,500 195
Trigon Healthcare* 1,300 85
Universal Health Services* 15,800 771
Varian Medical Systems* 2,100 135
Watson Pharmaceuticals* 8,500 465
Wellpoint Health Networks* 6,100 666
Wright Medical Group* 2,200 37
Xoma* 3,800 32
Zimmer Holdings* 12,562 349
--------
56,210
--------
INDUSTRIALS - 5.1%
Administaff* 1,300 34
American Standard* 1,800 99
Apollo Group* 1,700 71
Armor Holdings* 2,700 53
Atlantic Coast Airline* 1,200 16
Automatic Data Processing 37,410 1,760
Avery Dennison 3,550 168
Bisys Group* 1,800 95
Boeing 16,600 556
C.H. Robinson Worldwide 2,200 64
ChoicePoint* 1,800 75
DiamondCluster International, Cl A* 19,100 188
DST Systems* 2,325 101
Ecolab 55,960 2,033
First Data 36,677 2,137
Frontier Airlines* 9,800 81
General Dynamics 17,500 1,546
General Electric 169,468 6,304
Global Payments 4,600 135
Granite Construction 3,600 92
GSI Lumonics* 7,600 52
Honeywell International 9,700 256
Illinois Tool Works 17,500 947
IMS Health 3,200 80
Kaydon 3,900 82
Level 3 Communications* 700 61
Ladish* 3,800 30
Manpower 2,300 61
Mercury Computer Systems* 1,300 49
Minnesota Mining & Manufacturing 28,630 2,817
Molex, Cl A 25,512 620
Pittston Brink's Group 1,800 33
Precision Castparts 1,600 36
Rayovac* 13,900 212
Sabre Group Holdings* 7,500 201
Shaw Group* 37,100 1,046
Skywest 5,900 99
Southwest Airlines 100,865 1,497
SPX* 1,000 83
Triumph Group* 1,400 33
Tyco International 109,800 4,996
United Parcel Service, Cl B 8,500 442
United Technologies 10,200 474
URS* 1,600 37
Waste Management 6,000 160
--------
30,012
--------
BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 7.5%
Accenture* 27,100 $ 346
Activision* 5,900 161
Adaptec* 4,700 37
Adobe Systems 14,400 345
ADTRAN 1,600 31
Aeroflex* 11,500 127
Affiliated Computer Services, Cl A* 3,300 269
Alliance Semiconductor* 6,200 45
Amdocs* 1,400 37
Analog Devices* 22,800 746
Anaren Microwave* 4,300 70
Applied Materials* 35,786 1,018
Arrow Electronics* 3,000 63
Ascential Software* 23,000 76
Atmel* 8,800 59
ATMI* 1,400 22
Avnet 3,300 60
Axciom* 21,400 201
BEA Systems* 45,640 438
Benchmark Electronics* 8,900 147
Black Box* 800 34
Brooks Automation* 800 21
Cadence Design Systems* 7,900 132
Check Point Software Technologies* 14,350 316
Cisco Systems* 79,410 967
Coherent* 6,600 187
Compaq Computers 106,900 888
Computer Sciences* 15,200 504
Compuware* 7,200 60
Comverse Technology* 6,100 125
Concurrent Computers* 17,000 154
Corinthian Colleges* 5,100 172
Corning 20,200 178
Cree* 4,500 67
Cypress Semiconductor* 4,400 65
Dell Computer* 88,810 1,646
Dendrite International* 5,800 46
Diebold 2,200 84
DSP Group* 3,200 64
DuPont Photomasks* 4,000 111
E.Piphany* 11,600 49
Eclipsys* 6,700 89
Elantec Semiconductor* 1,300 30
Electronic Data Systems 21,400 1,176
Electronic Arts* 4,800 219
EMC* 19,260 226
Entegris* 17,800 141
Enterasys Networks* 11,700 75
Ericsson 80,600 281
Exar* 80,700 1,396
Fisher Scientific* 5,500 140
Flextronics International* 23,700 392
Harmonic Lightwaves* 8,600 70
Harris 2,600 83
Inforte* 7,400 74
Integrated Circuit Systems* 5,300 68
Integrated Device Technology* 9,100 183
Intel 189,280 3,869
International Rectifier* 400 11
Intersil* 1,700 47
IBM 13,300 1,228
IXYS* 13,100 78
The accompanying notes are an integral part of the financial statements.
(62 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
JDS Uniphase* 15,300 $ 97
Juniper Networks* 20,360 197
Keane* 2,100 29
KLA Tencor* 12,500 395
Lexmark International Group, Cl A* 4,700 210
Linear Technology 12,680 416
Mercury Interactive* 6,800 129
Mettler-Toledo International* 3,300 139
Micrel* 2,600 52
Microchip Technology* 3,800 102
Micron Technology* 56,680 1,067
Microsoft* 150,765 7,715
Millipore 6,650 352
Motorola 42,300 660
Network Appliance* 30,100 205
Nokia, ADR Cl A 62,520 978
Nortel Networks 89,260 501
Novellus Systems* 10,200 291
Nvidia* 4,400 121
Oracle Systems* 103,560 1,303
PeopleSoft* 8,900 161
Photronics* 9,800 181
Plexus* 1,300 31
PMC - Sierra* 10,900 112
Polycom* 8,900 217
Powerware Technologies* 1,700 20
QUALCOMM* 31,510 1,498
Rational Software* 7,300 63
Retek* 3,200 40
RF Micro Devices* 3,100 51
SCI Systems* 27,300 491
Seachange International* 4,100 72
Secure Computing* 5,400 53
Semtech* 1,900 54
Siebel Systems* 27,530 358
Speechworks International* 7,600 37
Stellent* 2,800 40
Sun Microsystems* 106,990 885
SunGard Data Systems* 76,200 1,781
Symantec* 2,400 83
Synopsys* 2,200 88
Take-Two Interactive Software* 7,100 50
Tech Data* 1,600 61
Texas Instruments 71,140 1,777
THQ* 1,300 56
Three Five Systems* 2,100 33
TranSwitch* 13,300 41
TriQuint Semiconductor* 11,200 179
Ultratech Stepper* 3,500 42
VERITAS Software* 19,595 361
Virata* 8,600 86
Vitria Technology* 17,000 35
Waters* 3,500 125
Xcare.net* 1,800 22
Xilinx* 16,360 385
Zoran* 2,700 65
--------
44,637
--------
MATERIALS - 1.2%
Alcoa 25,000 775
Aracruz Celulose SA 8,100 120
Cabot 1,500 60
Dow Chemical 38,800 1,271
Ferro 4,400 102
BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------------
Georgia Gulf 3,200 $ 51
International Paper 23,400 814
Martin Marietta Materials 1,500 59
Massey Energy 4,300 63
OM Group 1,500 83
Pharmacia 18,925 721
Praxair 46,000 1,932
Sigma-Aldrich 1,000 45
Vulcan Materials 13,100 566
Weyerhaeuser 10,600 516
--------
7,178
--------
TELECOMMUNICATION SERVICES - 3.0%
Airgate PCS* 6,350 282
Alamosa Holdings* 7,050 98
ALLTEL* 20,700 1,200
Asia Global Crossing* 40,900 92
AT&T 38,300 739
Bell South 28,400 1,180
Broadwing* 15,300 246
Global Crossing* 35,700 64
Nextel Communications, Cl A* 83,700 723
Qwest Communications 81,330 1,358
SBC Communications 66,963 3,155
Sprint (PCS Group)* 81,820 2,151
Time Warner Telecommunications, Cl A* 4,740 34
Verizon Communications 59,032 3,194
Western Wireless, Cl A* 1,700 57
Williams Communications Group* 43,900 52
WorldCom - MCI Group* 1,329 20
WorldCom* 195,311 2,940
XO Communications* 56,900 23
--------
17,608
--------
UTILITIES - 2.4%
AGL Resources 1,700 34
American Water Works 3,100 122
Aquila* 8,500 185
Calpine* 90,400 2,066
Constellation Energy 31,000 750
DPL 2,400 58
Duke Power 42,100 1,593
Dynegy 22,600 783
El Paso 41,600 1,728
Energy East 3,700 74
Enron 67,300 1,833
Exelon 27,500 1,227
FPL Group 9,500 509
Hawaiian Electric Industries 1,100 43
National Fuel Gas 2,200 51
Northeast Utilities 4,500 84
NSTAR 1,700 71
Potomac Electric Power 2,800 61
Public Service Company of New Mexico 1,400 35
Reliant Resources* 161,300 2,608
SCANA 3,500 89
TECO Energy 4,600 125
UtiliCorp United 1,300 36
The Williams Companies 10,600 289
--------
14,454
--------
TOTAL COMMON STOCKS 316,904
--------
CONVERTIBLE PREFERRED STOCK - 0.0%
Enron 10,000 266
--------
TOTAL CONVERTIBLE PREFERRED STOCK 266
--------
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 63)
STATEMENTS OF NET ASSETS September 30, 2001
BALANCED FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------
CORPORATE OBLIGATIONS - 19.7%
ENERGY - 1.1%
Ashland
7.900%, 08/05/06 $ 250 $ 273
Atlantic Richfield
8.500%, 04/01/12 300 367
Consolidated Natural Gas
7.250%, 10/01/04 3,000 3,192
Dynegy
7.450%, 07/15/06 1,200 1,301
Enron
7.625%, 09/10/04 50 54
Enron
6.400%, 07/15/06 500 516
Enserch
6.250%, 01/01/03 500 512
-------
6,215
-------
FINANCIALS - 9.6%
ABN AMRO Bank
7.250%, 05/31/05 1,250 1,350
Allstate
7.200%, 12/01/09 500 531
Associates Corporation of North America
7.500%, 04/15/02 150 153
7.950%, 02/15/10 2,500 2,775
Banco Santander Chile
6.500%, 11/01/05 475 489
Bank of America
7.750%, 07/15/02 350 363
9.200%, 05/15/03 185 202
7.875%, 05/16/05 500 552
7.125%, 09/15/06 2,000 2,177
Bank of Boston
6.625%, 02/01/04 925 977
Bank of New York
7.875%, 11/15/02 150 158
Bank of Oklahoma
7.125%, 08/15/07 300 311
Bank One
6.875%, 08/01/06 550 586
Bankers Trust
8.125%, 05/15/02 1,275 1,313
7.500%, 11/15/15 200 216
Bear Stearns
6.450%, 08/01/02 250 256
CIGNA
7.400%, 01/15/03 2,825 2,941
CIT Group
5.570%, 12/08/03 950 977
Citibank Credit Card
Zero Coupon Bond, 08/15/06 1,000 881
Citicorp
9.500%, 02/01/02 100 102
Citigroup
9.500%, 03/01/02 1,000 1,026
Compass Bancshares
8.375%, 09/15/04 400 437
Credit Suisse First Boston
5.875%, 08/01/06 1,500 1,537
Donaldson Lufkin Jenrett
6.000%, 12/01/01 1,000 1,005
5.875%, 04/01/02 200 202
6.875%, 11/01/05 800 854
BALANCED FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------
Dresdner Bank - New York
7.250%, 09/15/15 $ 800 $ 846
First Bank
6.625%, 05/15/03 975 1,021
First Union National Bank
7.875%, 02/15/10 1,000 1,111
Goldman Sachs
6.250%, 02/01/03 1,900 1,954
Hartford Financial Services
6.375%, 11/01/08 205 206
Heller Financial
8.000%, 06/15/05 170 188
Household Finance
8.000%, 05/09/05 1,000 1,093
Household Netherlands
6.200%, 12/01/03 125 130
International Lease Financing
8.375%, 12/15/04 250 280
Key Bank
7.000%, 02/01/11 2,000 2,079
KeyCorp
8.000%, 07/01/04 730 791
Lehman Brothers Holdings
8.750%, 05/15/02 350 361
6.500%, 10/01/02 1,000 1,028
7.800%, 07/07/05 500 539
7.500%, 09/01/06 375 404
7.875%, 08/15/10 2,000 2,172
8.500%, 08/01/15 500 564
Merrill Lynch
8.300%, 11/01/02 225 236
6.250%, 10/15/08 200 204
7.150%, 07/30/12, Callable 7/30/02 @ 100 1,100 1,125
6.875%, 11/15/18 925 931
Morgan Stanley Dean Witter
8.875%, 10/15/01 300 301
5.625%, 01/20/04 500 516
National Bank
8.875%, 11/01/13 250 308
National Westminster Bancorp
9.375%, 11/15/03 300 335
NCNB
10.200%, 07/15/15 750 974
Paine Webber Group
7.750%, 09/01/02 200 208
7.875%, 02/15/03 500 527
8.875%, 03/15/05 500 557
Principal Financial Group Australia 144A
8.200%, 08/15/09 1,800 2,012
Salomon
7.500%, 02/01/03 409 430
6.750%, 02/15/03 575 600
7.000%, 06/15/03 277 292
Salomon Smith Barney Holdings
6.875%, 06/15/05 700 741
5.875%, 03/15/06 1,500 1,542
Standard Federal Bancorp
7.750%, 07/17/06 250 273
USF&G
7.125%, 06/01/05 350 372
Wachovia
6.605%, 10/01/25 3,500 3,691
The accompanying notes are an integral part of the financial statements.
(64 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
BALANCED FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------
Washington Mutual
7.500%, 08/15/06 $ 250 $ 275
Wells Fargo Financial
6.625%, 07/15/04 1,200 1,281
Westdeutsche
6.750%, 06/15/05 400 427
6.050%, 01/15/09 900 909
Wharf Capital International
8.875%, 11/01/04 325 359
Zurich Capital Trust 144A,
Callable 06/01/07 @ 104.19
8.376%, 06/01/37 365 358
-------
56,922
-------
GOVERNMENT AGENCY - 2.4%
FHLB
5.375%, 05/15/06 1,500 1,563
FHLMC
5.950%, 01/19/06 1,000 1,064
5.750%, 04/15/08 2,000 2,103
6.625%, 09/15/09 2,950 3,245
FNMA
5.125%, 02/13/04 1,000 1,039
6.500%, 08/15/04 500 539
7.125%, 02/15/05 250 277
6.400%, 09/27/05 500 542
7.125%, 03/15/07 2,000 2,257
5.250%, 01/15/09 500 510
6.375%, 06/15/09 1,000 1,087
6.930%, 09/17/12 250 267
-------
14,493
-------
MANUFACTURING - 2.3%
Boeing
7.250%, 06/15/25 2,250 2,205
Dow Chemical
7.600%, 01/02/02 12 12
Ford Motor
6.375%, 02/01/29 250 203
Ford Motor Credit
6.110%, 12/28/01 200 201
6.700%, 07/16/04 1,000 1,029
5.800%, 01/12/09 3,000 2,812
General Motors Acceptance
6.150%, 04/05/07 3,000 2,997
General Motors Global Bond
6.750%, 05/01/28 750 658
Georgia-Pacific
9.500%, 12/01/11 300 326
9.875%, 11/01/21 300 314
9.500%, 05/15/22 100 103
Tenneco Packaging
7.950%, 12/15//25 425 394
TRW
8.750%, 05/15/06 1,000 1,094
6.300%, 05/15/08 1,000 1,001
-------
13,349
-------
SERVICE - 2.2%
Comcast Cable
7.125%, 06/15/13 750 777
Continental Cablevision
8.875%, 09/15/05 350 395
BALANCED FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------
Continental Cablevision,
Callable 08/01/05 @ 104.75
9.500%, 08/01/13 $1,000 $1,164
Dayton Hudson
5.875%, 11/01/08 3,000 2,999
Duty Free International
7.000%, 01/15/04 1,225 1,283
Fred Meyer
7.450%, 03/01/08 500 541
May Department Store
7.900%, 10/15/07 1,000 1,107
9.875%, 06/15/21, Callable 10/09/01
@ 104.56 300 315
News America Holdings
10.125%, 10/15/12 300 331
J.C. Penney
9.750%, 06/15/21 625 572
8.250%, 08/15/22, Callable 8/15/02
@ 103.87 500 418
Time Warner
8.875%, 10/01/12 2,025 2,360
Walt Disney
5.250%, 11/10/03 1,000 1,015
-------
13,277
-------
TRANSPORTATION - 0.6%
Air 2 Us
10.127%, 10/01/20 500 519
America West Airlines
8.540%, 01/02/06 439 447
7.930%, 01/02/19 634 591
Continental Airlines
6.800%, 07/02/07 167 162
FedEx
9.650%, 06/15/12 680 743
Northwest Airlines
6.810%, 02/01/20 940 882
Stagecoach Holdings
8.625%, 11/15/09 500 487
-------
3,831
-------
UTILITIES - 1.5%
British Telecommunications
8.375%, 12/15/10 150 165
CE Generation
7.416%, 12/15/18 958 874
Commonwealth Edison
9.875%, 06/15/20 900 996
Conectiv
6.730%, 06/01/06 225 235
FPL Group Capital
7.625%, 09/15/06 150 166
France Telecom
7.750%, 03/01/11 150 158
GTE South
6.125%, 06/15/07 2,000 2,096
Metronet Communications,
Callable 6/15/03 @ 104.97, Step Coupon
9.950%, 06/15/08 300 141
ONEOK
7.750%, 08/15/06 125 137
PP&L Capital Funding
8.375%, 06/15/07 500 555
PSI Energy
7.850%, 10/15/07 750 820
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 65)
STATEMENTS OF NET ASSETS September 30, 2001
BALANCED FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------
Rochester Telephone
9.000%, 08/15/21 $ 400 $ 265
US West Communications
8.875%, 06/01/31 575 614
Utilicorp United
7.000%, 07/15/04 350 365
Worldcom
7.875%, 05/15/03 1,000 1,046
--------
8,633
--------
TOTAL CORPORATE OBLIGATIONS 116,720
--------
MORTGAGE-BACKED OBLIGATIONS - 7.1%
U.S GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES - 5.3%
FHLB
6.875%, 08/15/03 1,000 1,066
6.250%, 08/13/04 3,000 3,227
FHLMC
6.500%, 04/01/08 176 184
7.000%, 04/01/08 127 133
5.500%, 03/01/13 864 874
FHLMC GOLD POOL #G01091
7.000%, 12/01/29 3,118 3,228
FHLMC GOLD POOL #G11006
6.000%, 03/01/15 3,177 3,248
FNMA
6.000%, 03/01/16 2,800 2,857
FNMA POOL # 424411
5.500%, 03/01/06 1,918 1,966
FNMA POOL #323681
7.000%, 04/01/29 1,518 1,570
FNMA POOL #323715
6.000%, 05/01/29 3,476 3,481
FNMA POOL #535006
7.000%, 11/01/14 2,261 2,355
GNMA POOL #506639
7.000%, 04/15/29 2,274 2,355
GNMA POOL #455516X
7.500%, 09/15/27 240 251
FHLMC GOLD #00960
5.500%, 03/01/16 3,375 3,381
GNMA
6.000%, 03/01/03 104 105
GNMA POOL #447728
7.500%, 06/15/27 213 223
GNMA II
6.500%, 10/20/10 199 208
Federal Farm Credit Bank Medium Term
Note 5.750%, 09/01/05 500 528
--------
31,240
--------
CMO MORTGAGE-BACKED
OBLIGATIONS - 1.8%
FHLMC 1136, Cl H
6.000%, 09/15/21 238 246
FHLMC CMO 1606 H
6.000%, 11/15/08 3,150 3,279
FHLMC Series 1201, Cl E
7.400%, 12/15/21 156 161
FHLMC Series 85, Cl C
8.600%, 01/15/21 185 202
BALANCED FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------
FNMA 1990-105, Cl J
6.500%, 09/25/20 $ 160 $ 167
FNMA 1990-89, Cl K
6.500%, 07/25/20 32 34
FNMA 1993-210
6.500%, 04/25/23 750 791
FNMA 1996-21
6.000%, 02/25/11 333 348
FNMA 1993-50
5.500%, 10/25/22 5,000 5,035
FNMA CMO 1990-63, Cl H
9.500%, 06/25/20 173 193
FNMA GTD REMIC 1989-2, Cl D
8.800%, 01/25/19 30 32
FNMA REMIC TR 1989-37
8.000%, 07/25/19 179 196
FNMA Series 1990-30
6.500%, 03/25/20 155 162
GNMA Series 3, Class F
6.500%, 06/17/20 46 48
--------
10,894
--------
MORTGAGE BACKED VARIABLE RATE
OBLIGATIONS - 0.0%
FNMA POOL #70009
7.338%, 04/01/18 166 168
--------
TOTAL MORTGAGE-BACKED OBLIGATIONS 42,302
--------
U.S. TREASURY OBLIGATIONS - 14.4%
U.S. Treasury Bond
6.000%, 08/15/09 7,800 8,580
9.25%, 02/15/16 18,285 25,716
7.500%, 11/15/16 1,000 1,230
8.125%, 05/15/21 1,000 1,325
8.125%, 08/15/21 1,000 1,327
8.000%, 11/15/21 14,600 18,874
7.125%, 02/15/23 3,000 3,629
6.875%, 08/15/25 4,000 4,742
U.S. Treasury Note
7.250%,08/15/04 2,250 2,492
6.875%, 05/15/06 2,000 2,253
6.625%, 05/15/07 3,700 4,166
U.S. Treasury Bond Strip Prin Pmt
0%, 11/15/04 10,280 9,198
0%, 08/15/05 2,000 1,726
--------
TOTAL U.S. TREASURY OBLIGATIONS 85,258
--------
PRIVATE CMO MORTGAGE-BACKED
SECURITIES - 0.6%
FIXED RATE
General Electric Capital Mortgage
1994-17A6
7.000%, 5/25/24 2,675 2,863
Merrill Lynch Mortgage Investors
6.310%, 11/15/26 1,031 1,069
--------
TOTAL PRIVATE CMO MORTGAGE-BACKED SECURITIES 3,932
--------
ASSET-BACKED SECURITIES - 1.5%
AUTOS - 1.0%
Chase Manhattan Auto Owner Trust
6.600%, 03/15/02 47 47
Ford Credit Auto Owner
5.120%, 10/15/04 2,500 2,570
The accompanying notes are an integral part of the financial statements.
(66 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
BALANCED FUND (CONTINUED)
DESCRIPTION PAR (000)/SHARES VALUE (000)
- ---------------------------------------------------------------------
Halt 1999-A Cl A5
6.650%, 07/15/05 $ 500 $ 511
Union Acceptance 98-B-A5
6.020%, 01/09/06 3,000 3,109
--------
6,237
--------
HOME EQUITY - 0.5%
Contimortgage 1997-5 Cl A5
6.630%, 12/15/20 700 727
Contimortgage
7.120%, 08/15/28 424 442
GE Capital Mortgage Services
7.300%, 02/25/25 200 205
Green Tree Financial
7.120%, 04/15/27 196 203
Saxon Asset Securities 1998
7.325%, 01/25/12 759 774
--------
3,078
--------
TOTAL ASSET-BACKED SECURITIES 9,315
--------
CONVERTIBLE CORPORATE BONDS - 0.1%
Charter Communications
4.750%, 06/01/06 157 118
Ciena
3.750%, 02/01/08 120 71
Corning
0.000%, 11/08/15 260 144
--------
TOTAL CORPORATE CONVERTIBLE BONDS 333
--------
U.S. GOVERNMENT AGENCY BACKED
OBLIGATIONS - 1.4%
YANKEE OBLIGATIONS - 0.7%
Ford Capital BV
9.875%, 05/15/02 325 335
9.500%, 06/01/10 150 172
Norsk Hydro
9.000%, 04/15/12 400 481
Newcourt Credit
6.875%, 02/16/05 3,000 3,185
--------
4,173
--------
INTERNATIONAL/YANKEE - 0.7%
Hydro-Quebec
11.750%, 02/01/12 350 510
Hydron-Quebec, Callable 01/15/03 @ 100
9.750%, 01/15/18 500 532
Korea Electric Power
7.750%, 04/01/13 290 311
6.750%, 08/01/27 200 209
Kingdom of Sweden
11.125%, 06/01/15 150 206
Midland Bank
6.950%, 03/15/11 950 985
TransCanada Pipelines
9.125%, 04/20/06 1,000 1,146
--------
3,899
--------
TOTAL U.S. GOVERNMENT AGENCY BACKED OBLIGATIONS 8,072
--------
FOREIGN GOVERNMENT BOND - 0.0%
Israel Trust
9.250%, 11/15/01 (A) 36 37
--------
TOTAL FOREIGN GOVERNMENT BOND 37
--------
MONEY MARKET FUNDS - 0.6%
SHORT TERM MONEY MARKET FUND - 0.1%
Lindner Government Money Market Fund 850,000 850
--------
BALANCED FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND - 0.5%
First American Prime Obligations Fund (B) 2,796,996 $ 2,797
--------
TOTAL MONEY MARKET FUNDS 3,647
--------
TOTAL INVESTMENTS - 98.9%
(Cost $590,682) 586,059
--------
OTHER ASSETS AND LIABILITIES, NET - 1.1% (C) 6,542
--------
NET ASSETS:
Portfolio capital $645,487
Undistributed net investment income 418
Accumulated net realized loss on investments (48,681)
Net unrealized depreciation of investments (4,623)
--------
TOTAL NET ASSETS - 100.0% $592,601
--------
CLASS A:
Net asset value and redemption price per share
(net assets of $127,589,370 and 13,424,418 shares
of capital stock issued and outstanding) (G) $ 9.50
Maximum sales charge of 5.50% 0.55
--------
Offering price per share (D) $ 10.05
--------
CLASS B:
Net asset value and offering price per share
(net assets of $47,150,082 and 4,994,827 shares
of capital stock issued and outstanding) (E)(G) $ 9.44
--------
CLASS C:
Net asset value per share (net assets of $2,351,099
and 247,870 shares of capital stock issued and
outstanding) (E)(G) $ 9.49
Maximum sales charge of 1.00% 0.10
--------
Offering price per share (F) $ 9.59
--------
CLASS S:
Net asset value, offering price and redemption
price per share (net assets of $39,527,170 and
4,160,114 shares of capital stock issued and
outstanding) (G) $ 9.50
--------
CLASS Y:
Net asset value, offering price and redemption
price per share (net assets of $375,983,024 and
39,462,084 shares of capital stock issued and
outstanding) (G) $ 9.53
--------
*Non-income producing security
(A)Security is guaranteed by the U.S. Government.
(B)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(C)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 218,635
Payable upon return of securities loaned $(218,635)
(D)The offering price is calculated by dividing the net assets value by 1 minus
the maximum sales charge of 5.50%.
(E)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(F)The offering price is calculated by dividing the net assets value by 1 minus
the maximum sales charge of 1.00%.
(G)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
Cl - Class
CMO - Collateralized Mortgage Obligation
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 67)
STATEMENTS OF OPERATIONS in thousands
LARGE CAP LARGE CAP LARGE CAP
GROWTH FUND VALUE FUND CORE FUND
------------ ----------- -----------------------
10/1/00 10/1/00 11/1/00 11/1/99
to to to to
9/30/01 9/30/01 9/30/01 10/31/00
- ------------------------------------------------------- ------------ ----------- ---------- ---------
INVESTMENT INCOME:
Interest $ 2,139 $ 2,788 $ 1,826 $ 1,302
Dividends 4,978 22,361 2,564 1,929
Less: Foreign taxes withheld (17) (98) (2) --
Securities lending 296 291 43 --
- ------------------------------------------------------- --------- --------- --------- ---------
TOTAL INVESTMENT INCOME 7,396 25,342 4,431 3,231
======================================================= ========= ========= ========= =========
EXPENSES:
Investment advisory fees 6,989 9,205 2,899 2,836
Administrator and fund accounting fees 1,127 1,484 516 479
Transfer agent fees 368 574 160 74
Custodian fees 299 394 51 69
Directors' fees 10 13 2 7
Registration fees 10 13 46 58
Professional fees 30 40 49 44
Printing 60 79 75 37
Other 15 21 9 7
Distribution and shareholder servicing fees - Class A 346 306 105 129
Distribution and shareholder servicing fees - Class B 260 467 29 13
Shareholder servicing fees - Fund level -- -- -- --
Shareholder servicing fees - Class S -- -- 8 --
Distribution fees - Class C 164 93 -- --
- ------------------------------------------------------- --------- --------- --------- ---------
TOTAL EXPENSES 9,678 12,689 3,949 3,753
======================================================= ========= ========= ========= =========
Less: Waiver of expenses (925) (1,297) (169) (22)
- ------------------------------------------------------- --------- --------- --------- ---------
TOTAL NET EXPENSES 8,753 11,392 3,780 3,731
======================================================= ========= ========= ========= =========
Investment income (loss) - net (1,357) 13,950 651 (500)
- ------------------------------------------------------- --------- --------- --------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND OPTIONS
WRITTEN - NET:
Net realized gain (loss) on investments (48,470) (16,926) (34,753) 43,914
Net realized gain on options written -- -- -- --
Net change in unrealized appreciation or depreciation
of investments (668,727) (171,917) (145,446) 25,284
Net change in unrealized appreciation or depreciation
of options written -- -- -- --
- ------------------------------------------------------- --------- --------- --------- ---------
NET GAIN (LOSS) ON INVESTMENTS (717,197) (188,843) (180,199) 69,198
======================================================= ========= ========= ========= =========
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $(718,554) $(174,893) $(179,548) $ 68,698
======================================================= ========= ========= ========= =========
The accompanying notes are an integral part of the financial statements.
(68 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
GROWTH & RELATIVE CAPITAL EQUITY BALANCED
INCOME FUND VALUE FUND GROWTH FUND INCOME FUND FUND
- ---------------------- ---------------------- ---------------------- ----------- ----------------------
11/1/00 11/1/99 11/1/00 12/1/99 11/1/00 12/1/99 10/1/00 11/1/00 11/1/99
to to to to to to to to to
9/30/01 10/31/00 9/30/01 10/31/00 9/30/01 10/31/00 9/30/01 9/30/01 10/31/00
- --------- --------- --------- --------- --------- --------- ----------- --------- ---------
$ 2,372 $ 1,649 $ 334 $ 962 $ 440 $ 714 $ 743 $ 6,964 $ 5,922
9,307 8,945 8,900 9,391 1,663 2,261 8,005 981 738
(8) -- (83) -- (4) -- -- -- --
68 -- -- -- 24 -- 52 45 5
- --------- --------- --------- --------- --------- --------- --------- --------- ---------
11,739 10,594 9,151 10,353 2,125 2,975 8,800 7,990 6,665
========= ========= ========= ========= ========= ========= ========= ========= =========
5,763 5,295 3,332 3,692 2,261 2,271 2,085 1,874 1,735
962 855 572 651 349 413 327 382 340
361 190 211 143 212 91 137 117 74
79 113 41 123 32 76 89 46 106
1 8 9 6 9 6 3 3 8
46 53 39 28 51 31 3 68 37
31 45 52 15 53 17 9 51 45
153 105 76 43 102 41 18 68 37
10 13 12 11 8 36 15 5 6
430 461 88 112 11 1 57 133 135
108 27 122 36 600 235 109 55 13
-- -- -- 1,230 -- 758 -- -- --
117 -- 19 -- 8 -- -- 86 --
-- -- -- -- -- -- 43 -- --
- --------- --------- --------- --------- --------- --------- --------- --------- ---------
8,061 7,165 4,573 6,090 3,696 3,976 2,895 2,888 2,536
========= ========= ========= ========= ========= ========= ========= ========= =========
(221) (41) (48) (498) (304) (303) (458) (167) (144)
- --------- --------- --------- --------- --------- --------- --------- --------- ---------
7,840 7,124 4,525 5,592 3,392 3,673 2,437 2,721 2,392
========= ========= ========= ========= ========= ========= ========= ========= =========
3,899 3,470 4,626 4,761 (1,267) (698) 6,363 5,269 4,273
- --------- --------- --------- --------- --------- --------- --------- --------- ---------
(20,431) 85,495 6,186 4,418 (13,666) 8,295 34,974 (27,742) 32,738
-- -- -- -- 653 721 -- -- --
(225,024) (5,442) (87,060) (8,477) (128,509) 16,005 (48,968) (9,744) 5,378
-- -- -- -- (32) -- -- -- --
- --------- --------- --------- --------- --------- --------- --------- --------- ---------
(245,455) 80,053 (80,874) (4,059) (141,554) 25,021 (13,994) (37,486) 38,116
========= ========= ========= ========= ========= ========= ========= ========= =========
$(241,556) $ 83,523 $ (76,248) $ 702 $(142,821) $ 24,323 $ (7,631) $ (32,217) $ 42,389
========= ========= ========= ========= ========= ========= ========= ========= =========
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 69)
STATEMENTS OF CHANGES IN NET ASSETS in thousands
LARGE CAP LARGE CAP
GROWTH FUND VALUE FUND
------------------------- -------------------------
10/1/00 10/1/99 10/1/00 10/1/99
to to to to
9/30/01 9/30/00 9/30/01 9/30/00
------------ ----------- ------------ -----------
OPERATIONS:
Investment income (loss) - net $ (1,357) $ (3,407) $ 13,950 $ 15,073
Net realized gain (loss) on investments (48,470) 134,538 (16,926) 118,158
Net realized gain (loss) on options written -- -- -- --
Net change in unrealized appreciation or depreciation of investments (668,727) 136,297 (171,917) (101,122)
Net change in unrealized appreciation or depreciation of options written -- -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Net increase (decrease) in net assets resulting from operations (718,554) 267,428 (174,893) 32,109
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net (3):
Class A -- -- (1,040) (1,273)
Class B -- -- (101) (145)
Class C -- -- (19) (9)
Class S -- -- -- --
Class Y -- -- (12,725) (13,263)
Net realized gain on investments (4):
Class A (19,676) (25,025) (12,851) (20,882)
Class B (3,619) (3,205) (4,647) (7,299)
Class C (1,789) (192) (613) (187)
Class Y (105,864) (130,098) (109,515) (156,215)
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Total distributions (130,948) (158,520) (141,511) (199,273)
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 34,551 48,259 17,226 32,480
Reinvestment of distributions 18,276 23,087 13,117 20,538
Payments for redemptions (54,251) (47,999) (44,963) (71,108)
Shares issued in connection with the acquisition of the Stellar/Mercantile
Fund assets -- -- -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Increase (decrease) in net assets from Class A transactions (1,424) 23,347 (14,620) (18,090)
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Class B
Proceeds from sales 5,614 17,153 3,257 4,965
Reinvestment of distributions 3,526 3,127 4,693 7,337
Payments for redemptions (4,613) (5,162) (8,196) (16,836)
Shares issued in connection with the acquisition of the Stellar/Mercantile
Fund assets -- -- -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Increase (decrease) in net assets from Class B transactions 4,527 15,118 (246) (4,534)
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Class C
Proceeds from sales 11,240 16,991 7,663 5,590
Reinvestment of distributions 1,780 192 632 190
Payments for redemptions (3,632) (420) (2,374) (399)
Shares issued in connection with the acquisition of the Firstar Fund assets -- -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Increase in net assets from Class C transactions 9,388 16,763 5,921 5,381
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Class S(2)
Proceeds from sales -- -- -- --
Reinvestment of distributions -- -- -- --
Payments for redemptions -- -- -- --
Shares issued in connection with the acquisition of the Stellar/Mercantile
Fund assets -- -- -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Increase in net assets from Class S transactions -- -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Class Y(2)
Proceeds from sales 327,720 282,229 269,455 354,191
Reinvestment of distributions 51,487 43,249 87,684 101,147
Payments for redemptions (205,925) (168,652) (300,433) (473,352)
Shares issued in connection with the acquisition of the Stellar/Mercantile
Fund assets -- -- -- --
Shares issued in connection with the acquisition of the
Santa Monica Common Trust Fund assets -- 10,581 -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Increase (decrease) in net assets from Class Y transactions 173,282 167,407 56,706 (18,014)
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Increase (decrease) in net assets from capital share transactions 185,773 222,635 47,761 (35,257)
- ------------------------------------------------------------------------------ ---------- ---------- ---------- ----------
Total increase (decrease) in net assets (663,729) 331,543 (268,643) (202,421)
NET ASSETS AT BEGINNING OF PERIOD 1,374,488 1,042,945 1,381,146 1,583,567
============================================================================== ========== ========== ========== ==========
NET ASSETS AT END OF PERIOD $ 710,759 $1,374,488 $1,112,503 $1,381,146
============================================================================== ========== ========== ========== ==========
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ -- $ -- $ 350 $ 383
============================================================================== ========== ========== ========== ==========
[WIDE TABLE CONTINUED FROM ABOVE]
LARGE CAP
CORE FUND
--------------------------------------
11/1/00 11/1/99 11/1/98
to to to
9/30/01 10/31/00 10/31/99
---------- ---------- ----------
OPERATIONS:
Investment income (loss) - net $ 651 $ (500) $ (302)
Net realized gain (loss) on investments (34,753) 43,914 18,890
Net realized gain (loss) on options written -- -- --
Net change in unrealized appreciation or depreciation of investments (145,446) 25,284 25,991
Net change in unrealized appreciation or depreciation of options written -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Net increase (decrease) in net assets resulting from operations (179,548) 68,698 44,579
- ------------------------------------------------------------------------------ ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net (3):
Class A (1) -- (28)
Class B -- -- --
Class C -- -- --
Class S -- -- --
Class Y -- -- (237)
Net realized gain on investments (4):
Class A (5,730) (2,451) (4,421)
Class B (180) (42) --
Class C -- -- --
Class Y (37,412) (15,710) (23,343)
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Total distributions (43,323) (18,203) (28,029)
- ------------------------------------------------------------------------------ ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 4,047 11,023 13,457
Reinvestment of distributions 5,442 2,404 4,322
Payments for redemptions (8,246) (16,087) (11,168)
Shares issued in connection with the acquisition of the Stellar/Mercantile
Fund assets 7,198 -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Increase (decrease) in net assets from Class A transactions 8,441 (2,660) 6,611
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Class B
Proceeds from sales 1,354 1,376 745
Reinvestment of distributions 175 40 --
Payments for redemptions (458) (750) (24)
Shares issued in connection with the acquisition of the Stellar/Mercantile
Fund assets 1,949 -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Increase (decrease) in net assets from Class B transactions 3,020 666 721
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Class C
Proceeds from sales -- -- --
Reinvestment of distributions -- -- --
Payments for redemptions -- -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Increase in net assets from Class C transactions -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Class S(2)
Proceeds from sales 1,840 -- --
Reinvestment of distributions -- -- --
Payments for redemptions (1,949) -- --
Shares issued in connection with the acquisition of the Stellar/Mercantile
Fund assets 4,274 -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Increase in net assets from Class S transactions 4,165 -- --
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Class Y(2)
Proceeds from sales 184,099 265,505 204,039
Reinvestment of distributions 30,075 12,621 18,176
Payments for redemptions (124,828) (289,538) (127,316)
Shares issued in connection with the acquisition of the Stellar/Mercantile
Fund assets 82,317 -- --
Shares issued in connection with the acquisition of the
Santa Monica Common Trust Fund assets -- -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- -- --
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Increase (decrease) in net assets from Class Y transactions 171,663 (11,412) 94,899
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Increase (decrease) in net assets from capital share transactions 187,289 (13,406) 102,231
- ------------------------------------------------------------------------------ ---------- ---------- ----------
Total increase (decrease) in net assets (35,582) 37,089 118,781
NET ASSETS AT BEGINNING OF PERIOD 391,881 354,792 236,011
============================================================================== ========== ========== ==========
NET ASSETS AT END OF PERIOD $ 356,299 $ 391,881 $ 354,792
============================================================================== ========== ========== ==========
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ 636 $ (5) $ (4)
============================================================================== ========== ========== ==========
(1)See Note 4 in the notes to the financial statements for additional
information.
(2)On September 24, 2001, Institutional Class and Class Y of Large Cap Core
Fund, Growth and Income Fund, Relative Value Fund and Capital Growth Fund
were redesignated as Class Y and Class S, respectively.
(3)Includes distributions in excess of net investment income of $351 for the
period ended September 30, 2001 for the Equity Income Fund.
(4)Includes distributions in excess of net realized gains of $10,903, $622,
$459, $1,930, $381, and $1,019 for the period ended September 30, 2001 for
the Large Cap Value, Large Cap Core, Growth & Income, Capital Growth, Equity
Income and Balanced Funds, respectively.
The accompanying notes are an integral part of the financial statements.
(70 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
GROWTH & RELATIVE CAPITAL
INCOME FUND VALUE FUND GROWTH FUND
- -------------------------------------- -------------------------------------- --------------------------------------
11/1/00 11/1/99 11/1/98 11/1/00 12/1/99 12/1/98 11/1/00 12/1/99 12/1/98
to to to to to to to to to
9/30/01 10/31/00 10/31/99 9/30/01 10/31/00 11/30/99 9/30/01 10/31/00 11/30/99
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 3,899 $ 3,470 $ 6,818 $ 4,626 $ 4,761 $ 3,714 $ (1,267) $ (698) $ 212
(20,431) 85,495 61,424 6,186 4,418 (704) (13,666) 8,295 (1,646)
-- -- -- -- -- -- 653 721 --
(225,024) (5,442) 12,321 (87,060) (8,477) 51,592 (128,509) 16,005 54,037
-- -- -- -- -- -- (32) -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(241,556) 83,523 80,563 (76,248) 702 54,602 (142,821) 24,323 52,603
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(622) (443) (1,524) (320) (347) (307) -- -- (67)
(3) -- (1) (31) (112) (68) -- -- --
-- -- -- -- -- -- -- -- --
(205) -- -- (136) -- -- -- -- --
(3,426) (2,544) (5,308) (4,523) (4,550) (3,536) -- -- (397)
(18,329) (15,918) (13,914) (301) -- (202) (35) -- (1,524)
(381) (174) -- (110) -- (33) (2,742) -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(52,526) (44,113) (35,752) (3,303) -- (1,548) (6,486) -- (2,793)
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(75,492) (63,192) (56,499) (8,724) (5,009) (5,694) (9,263) -- (4,781)
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
14,194 11,515 26,309 2,998 3,059 8,019 10,361 1,271 --
18,343 16,227 15,257 607 338 500 33 -- --
(30,893) (43,862) (44,599) (6,427) (14,897) (10,113) (555) (51) --
39,469 -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
41,113 (16,120) (3,033) (2,822) (11,500) (1,594) 9,839 1,220 --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
5,627 2,425 1,606 1,352 4,374 7,217 5,361 17,835 17,247
382 172 1 141 111 100 2,706 -- 1,586
(2,558) (557) (36) (2,499) (3,112) (1,894) (20,732) (15,602) (10,956)
8,272 -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
11,723 2,040 1,571 (1,006) 1,373 5,423 (12,665) 2,233 7,877
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
-- -- -- -- -- -- -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
20,079 -- -- 39,284 -- -- 15,649 -- --
204 -- -- 133 -- -- -- -- --
(28,683) -- -- (1,728) -- -- (1,217) -- --
67,112 -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
58,712 -- -- 37,689 -- -- 14,432 -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
201,909 128,142 151,499 65,681 102,464 107,617 56,423 65,691 62,374
47,547 39,852 34,560 4,955 2,986 3,686 3,588 -- 1,809
(204,896) (189,546) (146,699) (121,758) (100,222) (73,910) (62,432) (28,670) (31,190)
153,883 -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
198,443 (21,552) 39,360 (51,122) 5,228 37,393 (2,421) 37,021 32,993
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
309,991 (35,632) 37,898 (17,261) (4,899) 41,222 9,185 40,474 40,870
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(7,057) (15,301) 61,962 (102,233) (9,206) 90,130 (142,899) 64,797 88,692
711,595 726,896 664,934 526,101 535,307 445,177 341,442 276,645 187,953
========== ========== ========== ========== ========== ========== ========== ========== ==========
$ 704,538 $ 711,595 $ 726,896 $ 423,868 $ 526,101 $ 535,307 $ 198,543 $ 341,442 $ 276,645
========== ========== ========== ========== ========== ========== ========== ========== ==========
$ 187 $ 1,283 $ 832 $ 43 $ 439 $ 687 $ -- $ -- $ --
========== ========== ========== ========== ========== ========== ========== ========== ==========
[WIDE TABLE CONTINUED FROM ABOVE]
EQUITY BALANCED
INCOME FUND FUND
- ------------------------ --------------------------------------
10/1/00 10/1/99 11/1/00 11/1/99 11/1/98
to to to to to
9/30/01 9/30/00 9/30/01 10/31/00 10/31/99
- ---------- ---------- ---------- ---------- ----------
$ 6,363 $ 6,507 $ 5,269 $ 4,273 $ 4,649
34,974 30,881 (27,742) 32,738 12,374
-- -- -- -- --
(48,968) (1,467) (9,744) 5,378 (3,281)
- ---------- ---------- ---------- ---------- ----------
(7,631) 35,921 (32,217) 42,389 13,742
- ---------- ---------- ---------- ---------- ----------
(499) (355) (1,041) (884) (953)
(163) (122) (63) (14) (3)
(72) (27) -- -- --
-- -- (783) -- --
(6,119) (6,079) (3,486) (3,330) (3,692)
(5,284) (1,377) (8,185) (2,820) (1,908)
(2,404) (762) (350) (42) --
(1,226) (129) -- -- --
(57,265) (23,576) (24,476) (9,415) (6,088)
- ---------- ---------- ---------- ---------- ----------
(73,032) (32,427) (38,384) (16,505) (12,644)
- ---------- ---------- ---------- ---------- ----------
12,934 7,332 4,908 4,930 6,468
4,177 1,307 9,021 3,692 2,840
(7,234) (7,386) (10,124) (13,973) (15,607)
-- -- 7,777 -- --
971 -- 77,909 -- --
- ---------- ---------- ---------- ---------- ----------
10,848 1,253 89,491 (5,351) (6,299)
- ---------- ---------- ---------- ---------- ----------
3,888 1,911 3,038 1,538 649
2,524 838 398 55 2
(2,933) (3,457) (959) (88) (14)
-- -- 1,600 -- --
777 -- 40,562 -- --
- ---------- ---------- ---------- ---------- ----------
4,256 (708) 44,639 1,505 637
- ---------- ---------- ---------- ---------- ----------
7,719 1,201 -- -- --
1,292 150 -- -- --
(1,596) (605) (1) -- --
-- -- 2,261 -- --
- ---------- ---------- ---------- ---------- ----------
7,415 746 2,260 -- --
- ---------- ---------- ---------- ---------- ----------
-- -- 18,848 -- --
-- -- 783 -- --
-- -- (20,708) -- --
-- -- 42,631 -- --
305 -- 4,589 -- --
- ---------- ---------- ---------- ---------- ----------
305 -- 46,143 -- --
- ---------- ---------- ---------- ---------- ----------
93,503 31,895 41,615 74,157 57,953
20,989 3,772 27,497 12,490 9,563
(93,006) (113,948) (49,275) (124,078) (75,558)
-- -- 14,572 -- --
-- -- -- -- --
39,223 -- 226,479 -- --
- ---------- ---------- ---------- ---------- ----------
60,709 (78,281) 260,888 (37,431) (8,042)
- ---------- ---------- ---------- ---------- ----------
83,533 (76,990) 443,421 (41,277) (13,704)
- ---------- ---------- ---------- ---------- ----------
2,870 (73,496) 372,820 (15,393) (12,606)
308,920 382,416 219,781 235,174 247,780
========== ========== ========== ========== ==========
$ 311,790 $ 308,920 $ 592,601 $ 219,781 $ 235,174
========== ========== ========== ========== ==========
$ (291) $ 139 $ 418 $ 408 $ 368
========== ========== ========== ========== ==========
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 71)
FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended
September 30, unless otherwise indicated
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
----------- ------------- ------------ ---------- -------------
LARGE CAP GROWTH FUND
Class A
2001(4) $ 21.55 $ (0.04) $ (10.11) $ -- $ (2.07)
2000 19.75 (0.09) 4.87 -- (2.98)
1999 16.25 0.02 5.39 (0.03) (1.88)
1998 17.63 0.09 (0.02) (0.09) (1.36)
1997 13.63 0.09 4.28 (0.10) (0.27)
Class B
2001(4) $ 20.93 $ (0.14) $ (9.76) $ -- $ (2.07)
2000 19.38 (0.22) 4.75 -- (2.98)
1999 16.06 0.07 5.13 -- (1.88)
1998 17.47 0.03 (0.05) (0.03) (1.36)
1997 13.57 0.01 4.18 (0.02) (0.27)
Class C
2001(4) $ 21.30 $ (0.14) $ (9.95) $ -- $ (2.07)
2000 19.67 (0.09) 4.70 -- (2.98)
1999(2) 18.56 0.01 1.11 (0.01) --
Class S
2001(3)(4) $ 9.07 $ -- $ 0.26 $ -- $ --
Class Y
2001(4) $ 21.73 $ (0.01) $ (10.21) $ -- $ (2.07)
2000 19.84 (0.04) 4.91 -- (2.98)
1999 16.30 0.02 5.46 (0.06) (1.88)
1998 17.64 0.13 0.02 (0.13) (1.36)
1997 13.66 0.12 4.26 (0.13) (0.27)
- ------- -------- ------- -------- ------- -------
LARGE CAP VALUE FUND
Class A
2001(4) $ 20.59 $ 0.16 $ (2.67) $ (0.16) $ (1.94)
2000 23.12 0.17 0.22 (0.17) (2.75)
1999 22.39 0.19 4.44 (0.20) (3.70)
1998 28.74 0.29 (2.59) (0.29) (3.76)
1997 22.59 0.33 7.90 (0.32) (1.76)
Class B
2001(4) $ 20.30 $ 0.02 $ (2.63) $ (0.04) $ (1.94)
2000 22.87 0.05 0.18 (0.05) (2.75)
1999 22.21 0.07 4.36 (0.07) (3.70)
1998 28.55 0.13 (2.58) (0.13) (3.76)
1997 22.50 0.18 7.81 (0.18) (1.76)
Class C
2001(4) $ 20.51 $ 0.02 $ (2.65) $ (0.04) $ (1.94)
2000 23.09 0.06 0.17 (0.06) (2.75)
1999(2) 22.79 0.08 0.30 (0.08) --
Class S
2001(3)(4) $ 15.32 $ -- $ 0.65 $ -- $ --
Class Y
2001(4) $ 20.64 $ 0.21 $ (2.68) $ (0.21) $ (1.94)
2000 23.17 0.23 0.21 (0.22) (2.75)
1999 22.42 0.25 4.46 (0.26) (3.70)
1998 28.75 0.35 (2.57) (0.35) (3.76)
1997 22.60 0.39 7.90 (0.38) (1.76)
- ------- -------- ------- -------- ------- -------
(1)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
(2)Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized, except total return.
(3)Class S shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(4)Per share data calculated using average shares outstanding method.
The accompanying notes are an integral part of the financial statements.
(72 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT INCOME
NET ASSET RATIO OF INVESTMENT AVERAGE (LOSS) TO AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (1) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ----------- ----------- ------------ ----------- ------------- ----------- ---------------- ---------
$ 9.33 (51.45)% $ 85,443 1.05% (0.32)% 1.14% (0.41)% 77%
21.55 25.74 208,556 1.05 (0.45) 1.14 (0.54) 47
19.75 36.00 168,153 1.05 (0.05) 1.14 (0.14) 57
16.25 0.61 140,948 1.05 0.56 1.11 0.50 38
17.63 32.69 12,017 1.05 0.57 1.14 0.48 34
$ 8.96 (51.79)% $ 17,976 1.80% (1.06)% 1.89% (1.15)% 77%
20.93 24.84 36,272 1.80 (1.20) 1.89 (1.29) 47
19.38 34.99 19,011 1.80 (0.83) 1.89 (0.92) 57
16.06 0.09 11,177 1.80 (0.20) 1.86 (0.26) 38
17.47 31.42 9,487 1.80 (0.18) 1.89 (0.27) 34
$ 9.14 (51.78)% $ 13,177 1.80% (1.04)% 1.89% (1.13)% 77%
21.30 24.89 17,538 1.80 (1.20) 1.89 (1.29) 47
19.67 6.04 962 1.80 (1.09) 1.89 (1.18) 57
$ 9.33 2.87% $ -- 0.00% 0.00% 0.00% 0.00% 77%
$ 9.44 (51.31)% $ 594,163 0.80% (0.06)% 0.89% (0.15)% 77%
21.73 26.13 1,112,122 0.80 (0.20) 0.89 (0.29) 47
19.84 36.36 854,819 0.80 0.20 0.89 0.11 57
16.30 1.07 680,143 0.80 0.82 0.86 0.76 38
17.64 32.75 681,151 0.80 0.77 0.89 0.68 34
------- ------ ---------- ---- ----- ---- ----- --
$ 15.98 (13.72)% $ 94,064 1.05% 0.88% 1.15% 0.78% 64%
20.59 0.92 138,146 1.05 (0.45) 1.13 (0.53) 68
23.12 21.93 177,251 1.05 0.82 1.15 0.72 61
22.39 (8.77) 170,529 1.05 1.21 1.13 1.13 74
28.74 38.82 50,381 1.05 1.14 1.14 1.05 57
$ 15.71 (14.42)% $ 38,108 1.80% 0.13% 1.90% 0.03% 64%
20.30 0.17 49,662 1.80 (1.20) 1.88 (1.28) 68
22.87 21.07 61,711 1.80 0.07 1.90 (0.03) 61
22.21 (9.37) 56,259 1.80 0.41 1.88 0.33 74
28.55 37.71 53,420 1.80 0.39 1.89 0.30 57
$ 15.90 (14.36)% $ 10,141 1.80% 0.12% 1.90% 0.02% 64%
20.51 0.17 6,551 1.80 (1.20) 1.88 (1.28) 68
23.09 1.65 1,398 1.80 0.00 1.90 (0.10) 61
$ 15.97 4.24% $ -- 0.00% 0.00% 0.00% 0.00% 64%
$ 16.02 (13.53)% $ 970,190 0.80% 1.13% 0.90% 1.03% 64%
20.64 1.17 1,186,787 0.80 (0.20) 0.88 (0.28) 68
23.17 22.28 1,343,207 0.80 1.07 0.90 0.97 61
22.42 (8.47) 1,253,845 0.80 1.40 0.88 1.32 74
28.75 39.13 1,095,262 0.80 1.39 0.89 1.30 57
------- ------ ---------- ---- ----- ---- ----- --
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 73)
FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended
September 30, unless otherwise indicated
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
---------- ------------- ------------ ---------- -------------
LARGE CAP CORE FUND(7)
Class A
2001(1)(2) $ 43.33 $ (0.01) $ (14.00) $ -- $ (4.88)
2000(2) 37.96 (0.15) 7.55 -- (2.03)
1999(2) 35.72 (0.12) 6.42 (0.02) (4.04)
1998(2) 35.27 (0.02) 5.66 (0.02) (5.17)
1997 30.32 (0.05) 6.30 -- (1.30)
Class B
2001(1)(2) $ 42.80 $ (0.22) $ (13.76) $ -- $ (4.88)
2000(2) 37.78 (0.47) 7.52 -- (2.03)
1999(2)(3) 36.92 (0.29) 1.15 -- --
Class C
2001(2)(4) $ 23.75 $ -- $ 0.69 $ -- $ --
Class S
2001(2)(5) $ 35.53 $ (0.01) $ (11.07) $ -- $ --
Class Y
2001(1)(2) $ 44.00 $ 0.06 $ (14.25) $ -- $ (4.88)
2000(2) 38.42 (0.04) 7.65 -- (2.03)
1999(2) 36.05 (0.02) 6.47 (0.04) (4.04)
1998(2) 35.48 0.07 5.70 (0.03) (5.17)
1997 30.43 0.04 6.31 -- (1.30)
- ------- -------- ------- -------- ------- --------
GROWTH & INCOME FUND(8)
Class A
2001(1)(2) $ 47.40 $ 0.12 $ (11.48) $ (0.12) $ (4.76)
2000(2) 46.06 0.14 5.21 (0.11) (3.90)
1999 44.41 0.29 4.92 (0.35) (3.21)
1998 39.24 0.36 6.55 (0.35) (1.39)
1997 33.07 0.37 8.92 (0.39) (2.73)
Class B
2001(1) $ 47.12 $ 0.01 $ (11.50) $ (0.01) $ (4.76)
2000(2) 46.03 (0.22) 5.21 -- (3.90)
1999(2)(3) 44.64 0.02 1.40 (0.03) --
Class C
2001(2)(4) $ 29.98 $ -- $ 1.19 $ -- $ --
Class S
2001(2)(5) $ 40.86 $ 0.10 $ (9.68) $ (0.14) $ --
Class Y
2001(1)(2) $ 47.47 $ 0.20 $ (11.49) $ (0.21) $ (4.76)
2000(2) 46.12 0.26 5.21 (0.22) (3.90)
1999 44.46 0.41 4.92 (0.46) (3.21)
1998 39.28 0.47 6.55 (0.45) (1.39)
1997 33.08 0.46 8.94 (0.47) (2.73)
- ------- -------- ------- -------- ------- --------
(1)Effective in 2001, the Fund's fiscal year end was changed from October 31 to
September 30. All ratios for the period have been annualized, except total
return.
(2)Per share data calculated using average shares outstanding method.
(3)Class B shares have been offered since March 1, 1999. All ratios for the
period have been annualized, except total return.
(4)Class C shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(5)Class S shares have been offered since November 27, 2000. All ratios for the
period have been annualized, except total return.
(6)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
(7)The financial highlights for the Large Cap Core Fund as set forth herein
include the historical financial highlights of the Firstar Large Cap Core
Equity Fund. The assets of the Firstar Fund were acquired by the First
American Large Cap Core Fund on September 24, 2001. In connection with such
acquisition, (i) Class A shares of the Firstar Large Cap Core Fund were
exchanged for Class A shares of the First American Large Cap Core Fund, (ii)
Firstar Class B shares were exchanged for Class B shares of the First
American Fund, (iii) Firstar Class Y shares were exchanged for Class S shares
of the First American Fund, and (iv) Firstar Class Institutional shares were
exchanged for Class Y shares of the First American Fund.
(8)The financial highlights for the Growth and Income Fund as set forth herein
include the historical financial highlights of the Firstar Growth and Income
Fund. The assets of the Firstar Fund were acquired by the First American
Growth and Income Fund on September 24, 2001. In connection with such
acquisition, (i) Class A shares of the Firstar Growth and Income Fund were
exchanged for Class A shares of the First American Growth and Income Fund,
(ii) Firstar Class B shares were exchanged for Class B shares of the First
American Fund, (iii) Firstar Class Y shares were exchanged for Class S shares
of the First American Fund, and (iv) Firstar Class Institutional shares were
exchanged for Class Y shares of the First American Fund.
The accompanying notes are an integral part of the financial statements.
(74 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT INCOME
NET ASSET RATIO OF INVESTMENT AVERAGE (LOSS) TO AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (6) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ---------- ------------ ------------ ----------- ------------- ----------- ----------------- ---------
$ 24.44 (35.83)% $ 34,330 1.20% (0.04)% 1.24% (0.08)% 40%
43.33 19.92 51,232 1.20 (0.35) 1.21 (0.36) 60
37.96 17.92 47,238 1.19 (0.31) 1.20 (0.32) 59
35.72 18.58 38,213 1.14 (0.05) 1.21 (0.12) 52
35.27 21.30 25,043 1.14 (0.16) 1.21 (0.23) 62
$ 23.94 (36.28)% $ 2,954 1.93% (0.79)% 1.97% (0.83)% 40%
42.80 19.06 1,483 1.95 (1.10) 1.96 (1.11) 60
37.78 2.33 722 1.96 (1.17) 1.97 (1.18) 59
$ 24.44 2.95% $ -- 0.00% 0.00% 0.00% 0.00% 40%
$ 24.45 (31.16)% $ 2,802 1.18% (0.03)% 1.22% (0.07)% 40%
$ 24.93 (35.70)% $316,213 0.94% 0.20% 0.98% 0.16% 40%
44.00 20.24 339,166 0.95 (0.10) 0.96 (0.11) 60
38.42 18.18 306,832 0.94 (0.06) 0.95 (0.07) 59
36.05 18.89 197,798 0.89 0.20 0.96 0.13 52
35.48 21.56 181,650 0.89 0.09 0.96 0.02 62
-------- ------ -------- ---- ----- ---- ----- --
$ 31.16 (26.33)% $150,323 1.19% 0.35% 1.22% 0.32% 51%
47.40 12.54 183,049 1.19 0.31 1.20 0.30 89
46.06 11.78 194,089 1.17 0.74 1.18 0.73 62
44.41 18.08 190,331 1.12 0.86 1.19 0.79 49
39.24 30.47 128,070 1.12 1.09 1.19 1.02 31
$ 30.86 (26.79)% $ 11,613 1.93% (0.43)% 1.96% (0.46)% 51%
47.12 11.69 3,718 1.94 (0.44) 1.95 (0.45) 89
46.03 3.19 1,550 1.94 0.05 1.94 0.05 62
$ 31.17 3.94% $ -- 0.00% 0.00% 0.00% 0.00% 51%
$ 31.14 (23.50)% $ 44,821 1.17% 0.31% 1.20% 0.28% 51%
$ 31.21 (26.15)% $497,781 0.93% 0.59% 0.96% 0.56% 51%
47.47 12.83 524,828 0.94 0.56 0.95 0.55 89
46.12 12.04 531,257 0.92 0.99 0.93 0.98 62
44.46 18.35 474,603 0.87 1.11 0.94 1.04 49
39.28 30.83 366,020 0.87 1.34 0.94 1.27 31
-------- ------ -------- ---- ----- ---- ----- --
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 75)
FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended
September 30, unless otherwise indicated
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
---------- ------------- ------------ ---------- -------------
RELATIVE VALUE FUND(8)
Class A
2001(1)(10) $ 28.87 $ 0.21 $ (4.55) $ (0.23) $ (0.21)
2000(2) 29.10 0.20 (0.22) (0.21) --
1999 26.26 0.10 3.01 (0.16) (0.11)
1998 23.48 0.11 3.66 (0.17) (0.82)
1997(3) 19.03 0.67 4.45 (0.28) (0.39)
Class B
2001(1)(10) $ 28.78 $ 0.04 $ (4.54) $ (0.06) $ (0.21)
2000(2) 29.09 0.20 (0.30) (0.21) --
1999 26.28 0.16 2.94 (0.18) (0.11)
1998(12) 26.01 0.14 0.24 (0.11) --
Class C
2001(4)(10) $ 23.27 $ -- $ 0.82 $ -- $ --
Class S
2001(5)(10) $ 28.11 $ 0.19 $ (3.99) $ (0.25) $ --
Class Y
2001(1)(10) $ 28.91 $ 0.27 $ (4.56) $ (0.29) $ (0.21)
2000(2) 29.12 0.26 (0.19) (0.28) --
1999 26.27 0.23 2.96 (0.23) (0.11)
1998 23.49 0.18 3.65 (0.23) (0.82)
1997(3) 22.67 0.08 0.81 (0.07) --
- ------- -------- ------- -------- ------- -------
CAPITAL GROWTH FUND(9)
Class A
2001(1)(10) $ 25.92 $ (0.09) $ (10.44) $ -- $ (0.71)
2000(2)(11) 26.95 (0.03) (1.00) -- --
Class B
2001(1)(10) $ 25.92 $ (0.21) $ (10.41) $ -- $ (0.71)
2000(2) 23.89 (0.10) 2.13 -- --
1999 19.52 (0.04) 4.88 (0.02) (0.45)
1998 17.17 0.02 3.32 (0.03) (0.96)
1997 15.17 0.19 2.97 (0.14) (1.02)
Class C
2001(4) $ 14.32 $ -- $ 0.36 $ -- $ --
Class S
2001(6) $ 24.01 $ (0.08) $ (9.24) $ -- $ --
Class Y
2001(1) $ 26.01 $ (0.05) $ (10.48) $ -- $ (0.71)
2000(2) 23.90 (0.03) 2.14 -- --
1999 19.51 0.07 4.83 (0.06) (0.45)
1998 17.18 0.06 3.30 (0.07) (0.96)
1997 16.46 0.03 0.73 (0.04) --
- ------- -------- ------- -------- ------- -------
(1)Effective in 2001, the Fund's fiscal year end was changed from October 31 to
September 30. All ratios for the period have been annualized, except total
return.
(2)Effective in 2000, the Fund's fiscal year end was changed from November 30
to October 31.
(3)Commenced operations on August 18, 1997. All ratios for the period have been
annualized, except total return.
(4)Class C shares have been offered since September 24, 2001. All ratios for
the period have been annualized, except total return.
(5)Class S shares have been offered since November 27, 2000. All ratios for the
period have been annualized, except total return.
(6)Class S shares have been offered since December 11, 2000. All ratios for the
period have been annualized, except total return.
(7)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
(8)The financial highlights for the Relative Value Fund as set forth herein
include the historical financial highlights of the Firstar Relative Value
Fund. The assets of the Firstar Fund were acquired by the First American
Relative Value Fund on September 24, 2001. In connection with such
acquisition, (i) Class A shares of the Firstar Relative Value Fund were
exchanged for Class A shares of the First American Relative Value Fund, (ii)
Firstar Class B shares were exchanged for Class B shares of the First
American Fund, (iii) Firstar Class Y shares were exchanged for Class S
shares of the First American Fund, and (iv) Firstar Class Institutional
shares were exchanged for Class Y shares of the First American Fund.
(9)The financial highlights for the Capital Growth Fund as set forth herein
include the historical financial highlights of the Firstar Large Cap Growth
Fund. The assets of the Firstar Fund were acquired by the First American
Capital Growth Fund on September 24, 2001. In connection with such
acquisition, (i) Class A shares of the Firstar Large Cap Growth Fund were
exchanged for Class A shares of the First American Capital Growth Fund, (ii)
Firstar Class B shares were exchanged for Class B shares of the First
American Fund, (iii) Firstar Class Y shares were exchanged for Class S
shares of the First American Fund, and (iv) Firstar Class Institutional
shares were exchanged for Class Y shares of the First American Fund.
(10)Per share data calculated using average shares outstanding method.
(11)Class A shares have been offered since March 31, 2000. All ratios for the
period have been annualized, except total return.
(12)Class B shares have been offered since March 31, 1998. All ratios for the
period have been annualized, except total return.
The accompanying notes are an integral part of the financial statements.
(76 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT INCOME
NET ASSET RATIO OF INVESTMENT AVERAGE (LOSS) TO AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (7) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ---------- ------------ ------------ ----------- ------------- ----------- ----------------- ----------
$ 24.09 (15.16)% $ 33,288 1.22% 0.84% 1.23% 0.83% 4%
28.87 (0.07) 42,853 1.36 0.75 1.46 0.65 7
29.10 11.89 54,825 1.30 0.52 1.46 0.36 11
26.26 16.67 50,925 1.29 0.70 1.49 0.50 26
23.48 27.69 37,748 1.01 1.40 1.21 1.20 18
$ 24.01 (15.72)% $ 12,081 1.91% 0.16% 1.92% 0.15% 4%
28.78 (0.35) 15,537 1.36 0.75 1.46 0.65 7
29.09 11.84 14,278 1.30 0.57 1.46 0.41 11
26.28 1.50 7,847 1.04 0.95 1.24 0.75 26
$ 24.09 3.57% $ -- 0.00% 0.00% 0.00% 0.00% 4%
$ 24.06 (13.53)% $ 34,004 1.20% 0.92% 1.21% 0.91% 4%
$ 24.12 (14.95)% $344,495 0.97% 1.09% 0.98% 1.08% 4%
28.91 0.25 467,711 1.11 1.00 1.21 0.90 7
29.12 12.20 466,203 1.05 0.77 1.21 0.61 11
26.27 16.95 386,405 1.04 0.95 1.24 0.75 26
23.49 3.93 312,056 1.00 1.35 1.20 1.15 18
-------- ------ -------- ---- ----- ---- ----- --
$ 14.68 (41.57)% $ 8,598 1.39% (0.55)% 1.56% (0.72)% 38%
25.92 (3.82) 1,177 1.40 (0.75) 1.49 (0.84) 35
$ 14.59 (41.97)% $ 46,103 2.07% (1.19)% 2.19% (1.31)% 38%
25.92 8.50 100,689 1.38 (0.40) 1.48 (0.50) 35
23.89 25.26 90,468 1.36 (0.08) 1.52 (0.24) 28
19.52 20.76 66,478 1.34 0.12 1.54 (0.08) 48
17.17 22.65 45,025 1.09 0.86 1.29 0.66 60
$ 14.68 2.58% $ -- 0.00% 0.00% 0.00% 0.00% 38%
$ 14.69 (38.82)% $ 11,881 1.39% (0.55)% 1.60% (0.76)% 38%
$ 14.77 (41.46)% $131,961 1.14% (0.27)% 1.26% (0.39)% 38%
26.01 8.83 239,576 1.13 (0.15) 1.23 (0.25) 35
23.90 25.61 186,177 1.11 0.17 1.27 0.01 28
19.51 20.91 121,475 1.09 0.37 1.29 0.17 48
17.18 4.59 109,087 1.06 0.68 1.26 0.48 60
-------- ------ -------- ---- ----- ---- ----- --
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 77)
FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended
September 30, unless otherwise indicated
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
---------- ------------- ------------ ---------- -------------
EQUITY INCOME FUND
Class A
2001(2) $ 16.29 $ 0.29 $ (0.74) $ (0.32) $ (3.39)
2000 15.94 0.28 1.45 (0.28) (1.10)
1999 15.70 0.36 1.15 (0.37) (0.90)
1998 15.69 0.41 0.86 (0.41) (0.85)
1997 12.65 0.40 3.40 (0.41) (0.35)
Class B
2001(2) $ 16.24 $ 0.18 $ (0.75) $ (0.21) $ (3.39)
2000 15.90 0.18 1.44 (0.18) (1.10)
1999 15.65 0.24 1.16 (0.25) (0.90)
1998 15.62 0.30 0.87 (0.29) (0.85)
1997 12.61 0.29 3.37 (0.30) (0.35)
Class C
2001(2) $ 16.28 $ 0.18 $ (0.76) $ (0.22) $ (3.39)
2000 15.93 0.19 1.44 (0.18) (1.10)
1999(1) 16.62 0.21 (0.70) (0.20) --
Class S
2001(2)(3) $ 11.57 $ 0.01 $ 0.54 $ -- $ --
Class Y
2001(2) $ 16.37 $ 0.33 $ (0.76) $ (0.35) $ (3.39)
2000 16.00 0.32 1.47 (0.32) (1.10)
1999 15.74 0.40 1.17 (0.41) (0.90)
1998 15.70 0.46 0.88 (0.45) (0.85)
1997 12.66 0.43 3.40 (0.44) (0.35)
- ------- -------- ------- ------- ------- -------
BALANCED FUND (9)
Class A
2001(2)(5) $ 13.83 $ 0.18 $ (2.24) $ (0.20) $ (2.07)
2000 12.39 0.23 2.12 (0.22) (0.69)
1999 12.30 0.20 0.49 (0.20) (0.40)
1998 12.57 0.23 0.77 (0.24) (1.03)
1997 11.54 0.24 1.73 (0.24) (0.70)
Class B
2001(2)(5) $ 13.75 $ 0.17 $ (2.29) $ (0.13) $ (2.06)
2000 12.33 0.13 2.11 (0.14) (0.68)
1999(4) 12.37 0.07 (0.04) (0.07) --
Class C
2001(2)(7) $ 9.29 $ -- $ 0.20 $ -- $ --
Class S
2001(2)(6) $ 11.27 $ 0.18 $ (1.74) $ (0.21) $ --
Class Y
2001(2)(5) $ 13.87 $ 0.16 $ (2.20) $ (0.23) $ (2.07)
2000 12.43 0.26 2.13 (0.26) (0.69)
1999 12.32 0.24 0.49 (0.23) (0.39)
1998 12.59 0.26 0.77 (0.27) (1.03)
1997 11.55 0.27 1.73 (0.27) (0.69)
- ------- -------- ------- ------- ------- -------
(1)Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized, except total return.
(2)Per share data calculated using average shares outstanding method.
(3)Class S shares have been offered since September 24, 2001. All ratios for
the period have been annualized, except total return.
(4)Class B shares have been offered since March 1, 1999.
(5)Effective in 2001, the Fund's fiscal year end was changed from October 31 to
September 30.
(6)Class S shares have been offered since November 27, 2000. All ratios for the
period have been annualized, except total return.
(7)Class C shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(8)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
(9)The financial highlights for the Balanced Fund as set forth herein include
the historical financial highlights of the Firstar Balanced Growth Fund. The
assets of the Firstar Fund were acquired by the First American Balanced Fund
on September 24, 2001. In connection with such acquisition, (i) Class A
shares of the Firstar Balanced Growth Fund were exchanged for Class A shares
of the First American Balanced Fund, (ii) Firstar Class B shares were
exchanged for Class B shares of the First American Fund, (iii) Firstar Class
Y shares were exchanged for Class S shares of the First American Fund, and
(iv) Firstar Class Institutional shares were exchanged for Class Y shares of
the First American Fund. Historical per-share amounts have been adjusted to
reflect the conversion ratios utilized for the merger of the Balanced Fund
and Firstar Balanced Growth Fund. Firstar Balanced Growth Fund is the
accounting survivor.
The accompanying notes are an integral part of the financial statements.
(78 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT INCOME
NET ASSET RATIO OF INVESTMENT AVERAGE (LOSS) TO AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME TO NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (8) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ---------- ----------- ------------ ----------- ------------ ----------- ----------------- ----------
$ 12.13 (3.89)% $ 24,557 1.00% 1.97% 1.15% 1.82% 33%
16.29 11.11 20,607 1.00 1.69 1.14 1.55 36
15.94 9.74 18,970 1.00 2.01 1.13 1.88 35
15.70 8.38 11,018 1.00 2.58 1.12 2.46 14
15.69 31.16 7,276 1.00 2.96 1.17 2.79 39
$ 12.07 (4.64)% $ 11,516 1.75% 1.20% 1.90% 1.05% 33%
16.24 10.35 10,366 1.75 0.95 1.89 0.81 36
15.90 9.10 10,971 1.75 1.34 1.88 1.21 35
15.65 7.77 8,570 1.75 1.81 1.87 1.69 14
15.62 30.06 6,619 1.75 2.19 1.92 2.02 39
$ 12.09 (4.74)% $ 8,028 1.75% 1.20% 1.90% 1.05% 33%
16.28 10.41 2,511 1.75 0.88 1.89 0.74 36
15.93 (3.02) 1,700 1.76 0.65 1.88 0.53 35
$ 12.12 4.75% $ 328 1.23% 4.08% 1.42% 3.89% 33%
$ 12.20 (3.71)% $267,361 0.75% 2.21% 0.90% 2.06% 33%
16.37 11.46 275,436 0.75 1.99 0.89 1.85 36
16.00 10.10 350,775 0.75 2.38 0.88 2.25 35
15.74 8.85 359,588 0.75 2.81 0.87 2.69 14
15.70 31.45 369,919 0.75 3.12 0.92 2.95 39
-------- ------ -------- ---- ---- ---- ---- --
$ 9.50 (17.03)% $127,590 1.22% 1.96% 1.28% 1.90% 54%
13.83 19.46 54,380 1.22 1.66 1.28 1.60 79
12.39 5.56 53,807 1.18 1.59 1.25 1.52 69
12.30 8.60 59,657 1.00 1.91 1.24 1.67 56
12.57 18.07 44,026 1.00 2.06 1.25 1.81 70
$ 9.44 (17.64)% $ 47,150 1.93% 1.22% 1.99% 1.16% 54%
13.75 18.77 2,243 1.97 0.91 2.03 0.85 79
12.33 0.25 630 1.97 0.87 2.03 0.81 69
$ 9.49 2.15% $ 2,351 0.94% 2.20% 0.94% 2.20% 54%
$ 9.50 (14.03)% $ 39,527 1.22% 1.94% 1.28% 1.88% 54%
$ 9.53 (16.84)% $375,983 0.97% 2.21% 1.04% 2.14% 54%
13.87 19.94 163,158 0.97 1.91 1.03 1.85 79
12.43 5.87 180,737 0.93 1.84 1.00 1.77 69
12.32 8.83 188,123 0.75 2.16 0.99 1.92 56
12.59 18.39 164,382 0.75 2.31 1.00 2.06 70
-------- ------ -------- ---- ---- ---- ---- --
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 79)
STATEMENTS OF NET ASSETS September 30, 2001
MID CAP GROWTH FUND
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------
COMMON STOCKS - 93.1%
CONSUMER DISCRETIONARY - 18.3%
American Eagle Outfitters* 119,050 $ 2,369
Autonation* 134,000 1,178
Barnes & Noble* 85,100 3,072
Bed Bath & Beyond* 138,550 3,528
Best Buy* 108,650 4,938
BJ's Wholesale Club* 55,600 2,647
D.R. Horton 83,650 1,745
Dardeen Restaurants 63,150 1,658
Entercom Communications* 49,650 1,688
Family Dollar Stores 157,500 4,334
Harley-Davidson 38,200 1,547
Harrahs Entertainment* 114,000 3,079
Hasbro 81,700 1,144
J.C. Penney 186,100 4,076
Johnson Controls 23,150 1,510
Krispy Kreme Doughnuts* 71,200 2,108
Mohawk Industries* 47,800 1,757
Office Depot* 176,500 2,400
Park Place Entertainment* 206,750 1,516
Radio One, Cl D* 145,100 1,674
Reebok International* 164,600 3,407
Ross Stores 91,550 2,678
Starbucks* 127,850 1,910
Toys "R" Us* 119,850 2,065
USA Networks* 117,600 2,115
Westwood One* 90,200 2,007
--------
62,150
--------
CONSUMER STAPLES - 1.1%
Constellation Brands, Cl A* 29,000 1,208
Rite Aid* 328,900 2,539
--------
3,747
--------
ENERGY - 1.8%
Nabors Industries* 105,150 2,205
Patterson-Uti Energy 131,950 1,631
Valero Energy 64,900 2,278
--------
6,114
--------
FINANCIALS - 9.2%
Ambac Financial Group 33,150 1,814
AmeriCredit* 50,900 1,610
Arthur J. Gallagher 29,800 987
Commerce Bancorp NJ 21,400 1,455
Conseco* 214,100 1,554
Dime Bancorp* 226,300 57
Eaton Vance 64,850 2,033
Host Marriott 179,700 1,267
Huntington Bancshares 96,250 1,666
Instinet Group* 189,500 1,855
Investors Financial Services 19,150 1,104
Metris Companies 62,500 1,547
North Fork Bancorp 40,200 1,196
Sovereign Bancorp 186,900 1,776
Stilwell Financial 87,100 1,698
TCF Financial 130,650 6,018
XL Capital LTD, Cl A 20,600 1,627
Zions Bancorporation 38,400 2,061
--------
31,325
--------
MID CAP GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------
HEALTHCARE - 26.3%
Andrx Group* 47,150 $ 3,061
Applera 94,850 2,314
Biomet 122,400 3,580
Caremark Rx* 95,500 1,593
Cephalon* 37,150 1,853
CYTYC* 66,600 1,786
Enzon* 14,800 755
First Health Group* 207,800 6,105
Forest Laboratories, Cl A* 30,400 2,193
Genzyme* 95,600 4,342
Gilead Sciences* 53,500 3,005
Guidant* 154,750 5,958
Health Management Associates, Cl A* 256,650 5,328
HealthSouth* 155,550 2,529
Human Genome Sciences* 52,900 1,635
IDEC Pharmaceuticals* 81,750 4,052
Invitrogen* 30,600 2,012
IVAX* 99,300 2,202
King Pharmaceuticals* 73,598 3,087
Lincare Holdings* 63,150 1,678
Manor Care* 126,700 3,560
Medimmune* 69,550 2,478
Millennium Pharmaceuticals* 101,250 1,798
Omnicare 64,200 1,431
Patterson Dental* 74,150 2,733
Protein Design Labs* 78,050 3,686
Quest Diagnostics* 33,150 2,045
St. Jude Medical* 44,150 3,022
Stryker 59,200 3,132
Teva Pharmaceutical, ADR 50,950 3,080
Watson Pharmaceuticals* 60,700 3,321
--------
89,354
--------
INDUSTRIALS - 7.7%
Allied Waste Industries* 172,750 2,203
Apollo Group* 63,950 2,688
Bisys Group* 51,700 2,741
Cendant* 221,100 2,830
Certegy* 54,475 1,414
ChoicePoint* 46,350 1,930
CSX 63,100 1,988
Equifax 104,300 2,284
Fiserv* 98,850 3,381
Precision Castparts 84,700 1,880
Skywest 51,900 868
Valassis Communication* 56,800 1,813
--------
26,020
--------
INFORMATION TECHNOLOGY - 24.0%
Advanced Fibre Communications* 72,350 1,057
Affiliated Computer Services, Cl A* 25,050 2,039
Agere Systems* 729,150 3,011
Altera* 173,650 2,844
Amdocs* 41,000 1,093
Amphenol, Cl A 31,350 1,089
Applied Micro Circuits* 295,150 2,063
Arrow Electronics* 46,000 960
Autodesk 57,800 1,853
AVX 90,350 1,470
Axcelis Technologies* 170,800 1,614
BMC Software* 119,950 1,523
Broadcom* 94,450 1,917
The accompanying notes are an integral part of the financial statements.
(80 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
MID CAP GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------------------------------------------------------------------
Cadence Design Systems* 91,300 $ 1,520
Conexant Systems* 209,650 1,740
Cree* 92,450 1,366
Earthlink* 230,100 3,504
Intersil* 84,700 2,365
KLA-Tencor* 80,100 2,530
Lam Research* 56,400 956
Lexmark International Group, Cl A* 44,950 2,010
Marvell Technology Group* 97,150 1,394
McDATA, Cl A* 173,850 1,459
Microchip Technologies* 68,150 1,826
National Semiconductor* 99,200 2,187
Novellus Systems* 86,050 2,458
Nvidia* 53,450 1,468
Openwave Systems* 164,850 2,102
PeopleSoft* 53,850 971
Peregrine Systems* 128,250 1,620
Powerwave Technologies* 221,850 2,645
Rational Software* 158,950 1,377
RF Micro Devices* 157,450 2,615
Sanmina* 144,300 1,960
SunGard Data Systems* 250,650 5,858
Synopsys* 65,800 2,639
Thermo Electron* 113,400 2,047
UTStarcom* 153,750 2,499
VeriSign* 46,100 1,932
Vignette* 430,250 1,523
Waters* 66,850 2,391
--------
81,494
--------
MATERIALS - 3.0%
Air Products & Chemicals 58,850 2,270
Martin Marietta Materials 86,250 3,373
Packaging Corporation of America* 92,000 1,421
Pactiv* 206,500 2,992
--------
10,056
--------
TELECOMMUNICATION SERVICES - 0.6%
Triton PCS Holdings* 51,850 1,970
--------
1,970
--------
UTILITIES - 1.1%
Kinder Morgan 79,600 3,917
--------
3,917
--------
TOTAL COMMON STOCKS 316,139
--------
RELATED PARTY MONEY MARKET FUND - 6.0%
First American Prime Obligations Fund (A) 20,357,135 20,357
--------
TOTAL RELATED PARTY MONEY MARKET FUND 20,357
--------
TOTAL INVESTMENTS - 99.1%
(Cost $395,914) 336,504
--------
OTHER ASSETS AND LIABILITIES, NET - 0.9% (E) 3,131
--------
MID CAP GROWTH FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- ----------------------------------------------------------------------
NET ASSETS:
Portfolio capital $527,039
Accumulated net realized loss on investments (127,994)
Net unrealized depreciation of investments (59,410)
--------
TOTAL NET ASSETS - 100.0% $339,635
--------
CLASS A:
Net asset value and redemption price per
share (net assets of $102,836,791 and
18,256,764 shares of capital stock
issued and outstanding) (F) $ 5.63
Maximum sales charge of 5.50% 0.33
--------
Offering price per share (B) $ 5.96
--------
CLASS B:
Net asset value and offering price per
share (net assets of $3,518,344 and
650,555 shares of capital stock issued
and outstanding) (C)(F) $ 5.41
--------
CLASS C:
Net asset value per share (net assets of
$6,245,581 and 1,144,880 shares of
capital stock issued and outstanding) (C)(F) $ 5.46
Maximum sales charge of 1.00% 0.07
--------
Offering price per share (D) $ 5.52
--------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $10 and 2 shares of capital stock
issued and outstanding) (F) $ 5.63
--------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $227,034,638 and 39,244,797 shares
of capital stock issued and outstanding) (F) $ 5.79
--------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(C)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(D)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(E)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 137,389
Payable upon return of securities loaned $(137,389)
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
Cl - Class
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 81)
STATEMENTS OF NET ASSETS September 30, 2001
MID CAP VALUE FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
COMMON STOCKS - 96.2%
CONSUMER DISCRETIONARY - 12.7%
Autoliv 91,000 $ 1,432
Autozone* 71,000 3,682
Charter Communications* 85,400 1,057
Delphi Automotive Systems 251,700 2,957
Federated Department Stores* 113,500 3,201
Hilton Hotels 282,800 2,220
Knight Ridder 28,700 1,603
Lear* 51,900 1,402
Mattel 216,900 3,397
New York Times, Cl A 38,500 1,503
Nike, Cl B 90,100 4,218
Office Depot* 285,500 3,883
Park Place Entertainment* 233,300 1,710
The Stanley Works 43,600 1,594
Tricon Global Restaurants* 79,100 3,102
Venator Group* 236,200 3,602
-------
40,563
-------
CONSUMER STAPLES - 8.6%
Albertson's 163,600 5,216
Archer-Daniels-Midland 245,175 3,087
Avon Products 59,000 2,729
Clorox 89,700 3,319
ConAgra Foods 111,800 2,510
Coors (Adolph) 41,000 1,845
Hershey Foods 45,000 2,942
Pepsi Bottling 65,700 3,027
Suiza Foods* 45,500 2,873
-------
27,548
-------
ENERGY - 5.6%
Apache 35,500 1,527
Equitable Resources 56,600 1,699
Kerr-McGee 56,500 2,933
National-Oilwell* 164,400 2,384
Phillips Petroleum 68,560 3,698
Smith International* 41,900 1,525
USX-Marathon 145,300 3,887
-------
17,653
-------
FINANCIALS - 23.3%
Ambac Financial Group 60,400 3,304
AmSouth Bancorp 209,400 3,784
Apartment Investment & Management 75,700 3,426
Bear Stearns 63,700 3,186
Boston Properties 88,800 3,386
City National 41,500 1,791
Comerica 67,800 3,756
Compass Bancshares 108,200 2,816
Equity Office Properties 166,600 5,331
Franklin Resources 96,400 3,342
Golden West Financial 50,600 2,940
Lincoln National 77,000 3,591
Marshall & Ilsley 67,000 3,798
MGIC Investment 36,100 2,359
National Commerce Financial 136,900 3,573
Nationwide Financial Services, Cl A 77,400 2,878
Phoenix Companies* 207,000 2,991
Progressive 26,300 3,522
Simon Property Group 126,200 3,396
MID CAP VALUE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
SouthTrust 159,500 $ 4,062
St. Paul Companies 99,000 4,081
TCF Financial 74,500 3,431
-------
74,744
-------
HEALTH CARE - 7.3%
Becton Dickinson 100,500 3,719
Boston Scientific* 133,300 2,733
Guidant* 60,100 2,314
Health Management Associates, Cl A* 124,300 2,580
Manor Care* 78,900 2,217
McKesson HBOC 88,500 3,344
Tenet Healthcare* 53,200 3,173
UnitedHealth Group 23,200 1,543
Watson Pharmaceuticals* 29,100 1,592
-------
23,215
-------
INDUSTRIALS - 12.9%
Convergys* 59,400 1,648
CSX 66,900 2,107
Deere & Company 53,600 2,016
Delta Airlines 94,300 2,485
General Dynamics 43,000 3,798
H&R Block 66,000 2,545
ITT Industries 101,000 4,525
Masco 158,100 3,232
Norfolk Southern 87,900 1,417
Northrop Grumman 33,900 3,424
Parker Hannifin 57,900 1,986
Pitney Bowes 75,900 2,899
SPX* 39,200 3,250
Swift Transportation* 92,300 1,634
Textron 35,800 1,203
York International 109,000 3,122
-------
41,291
-------
INFORMATION TECHNOLOGY - 9.0%
ADC Telecommunications* 502,900 1,755
Advanced Micro Devices* 130,200 1,061
Agere Systems* 494,700 2,043
Arrow Electronics* 60,400 1,260
Avaya* 195,300 1,933
BMC Software* 154,500 1,962
Computer Sciences* 82,800 2,746
Harris 69,900 2,224
Intuit* 115,100 4,121
Microchip Technologies* 58,600 1,570
NCR* 67,300 1,995
Novellus Systems* 32,800 937
PeopleSoft* 46,600 841
SunGard Data Systems* 109,000 2,547
Sybase* 190,300 1,770
-------
28,765
-------
MATERIALS - 5.1%
Air Products & Chemicals 57,400 2,214
Lyondell Chemical 227,400 2,604
Nucor 75,100 2,981
OM Group 32,200 1,771
Rohm & Haas 102,200 3,348
Vulcan Materials 40,000 1,728
Westvaco 71,200 1,830
-------
16,476
-------
The accompanying notes are an integral part of the financial statements.
(82 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
MID CAP VALUE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 1.2%
Centurytel 51,200 $ 1,715
United States Cellular* 48,200 2,386
--------
4,101
--------
UTILITIES - 10.5%
Cinergy 56,600 1,747
Consolidated Edison 94,600 3,852
Constellation Energy 87,600 2,120
El Paso 41,400 1,720
First Energy 90,000 3,236
FPL Group 44,100 2,362
Kinder Morgan 68,600 3,376
Mirant* 49,800 1,091
Pinnacle West 96,200 3,819
PPL 49,300 1,607
Public Service Enterprises 57,800 2,459
Reliant Resources* 91,200 1,477
Xcel Energy 170,100 4,788
--------
33,654
--------
TOTAL COMMON STOCKS 308,010
--------
RELATED PARTY MONEY MARKET FUND - 3.7%
First American Prime Obligations Fund (A) 11,821,647 11,822
--------
TOTAL RELATED PARTY MONEY MARKET FUND 11,822
--------
TOTAL INVESTMENTS - 99.9%
(Cost $333,662) 319,832
--------
OTHER ASSETS AND LIABILITIES, NET - 0.1% 350
--------
MID CAP VALUE FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------------
NET ASSETS:
Portfolio capital $ 440,756
Undistributed net investment income 194
Accumulated net realized loss on investments (106,938)
Net unrealized depreciation of investments (13,830)
---------
TOTAL NET ASSETS - 100.0% $ 320,182
---------
CLASS A:
Net asset value and redemption price per
share (net assets of $13,582,984 and
988,816 shares of capital stock issued
and outstanding)(E) $ 13.74
Maximum sales charge of 5.50% 0.80
---------
Offering price per share(B) $ 14.54
---------
CLASS B:
Net asset value and offering price per
share (net assets of $11,310,967 and
845,702 shares of capital stock issued
and outstanding)(C)(E) $ 13.37
---------
CLASS C:
Net asset value per share (net assets of
$3,311,943 and 242,902 shares of
capital stock issued and outstanding)(C)(E) $ 13.63
Maximum sales charge of 1.00% 0.14
---------
Offering price per share(D) $ 13.77
---------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $44,268 and 3,222 shares of capital
stock issued and outstanding)(E) $ 13.74
---------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $291,931,685 and 21,197,518 shares
of capital stock issued and outstanding)(E) $ 13.77
---------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(C)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(D)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(E)$.0001 par value and 2 billion authorized shares
Cl - Class
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 83)
STATEMENTS OF NET ASSETS September 30, 2001
MID CAP CORE FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
COMMON STOCKS - 91.4%
CONSUMER DISCRETIONARY - 15.6%
Abercrombie & Fitch* 178,200 $ 3,135
Barnes & Noble* 62,600 2,260
BJ's Wholesale Club* 90,830 4,324
Borders Group* 50,200 961
Brinker International* 68,900 1,627
Catalina Marketing, Cl C* 50,900 1,425
CDW Computer Centers* 241,630 8,742
Charter Communications* 474,660 5,876
Corinthian Colleges* 82,685 2,787
Dollar General 462,150 5,411
Entercom Communications* 40,300 1,370
Federal Signal 22,000 388
Gentex* 31,300 748
Gtech Holdings* 82,100 2,836
Insight Communications* 81,400 1,498
Jones Apparel Group* 119,400 3,044
Macrovision* 102,500 2,912
New York Times, Cl A 62,700 2,447
Scholastic* 217,535 9,463
Toys "R" Us* 383,900 6,615
USA Networks* 401,000 7,210
Westwood One* 73,900 1,644
-------
76,723
-------
CONSUMER STAPLES - 2.2%
Hormel Foods 92,500 2,185
Longs Drug Stores 32,300 879
McCormick & Company 30,975 1,419
Pepsi Americas 118,500 1,772
RJ Reynolds Tobacco Holdings 23,300 1,331
Tyson Foods, Cl A 321,775 3,224
------
10,810
------
ENERGY - 3.6%
Cal Dive International* 73,100 1,218
Equitable Resources 8,700 261
Hanover Compressor* 111,200 2,406
Helmerich & Payne 6,200 162
Murphy Oil 31,300 2,265
National - Oilwell* 105,200 1,525
Noble Affiliates 27,200 843
Ocean Energy 109,550 1,786
Pioneer Natural Resources* 72,200 1,027
Precision Drilling* 53,600 1,132
Talisman Energy 70,700 2,405
Ultramar Diamond Shamrock 35,200 1,688
Valero Energy 30,825 1,082
------
17,800
------
FINANCIALS - 19.7%
A.G. Edwards 35,500 1,246
Ambac Financial Group 204,227 11,173
American Financial Group 16,900 375
Arthur J. Gallagher 325,600 11,022
Astoria Financial 27,800 1,647
Banknorth Group 182,650 4,077
Charter One Financial 95,300 2,689
City National 20,500 885
Commercial Federal 13,400 325
Compass Bancshares 46,500 1,210
Dime Bancorp 40,900 1,608
MID CAP CORE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
Dime Bancorp Warrant* 131,900 $ 33
E*Trade Group* 233,425 1,412
Eaton Vance 84,000 2,633
Everest Re Group 152,145 9,844
Fidelity National Financial 49,500 1,331
First Tennessee National* 85,350 3,158
Golden West Financial 44,300 2,574
GreenPoint Financial 64,400 2,260
Investors Financial Services 18,400 1,061
Legg Mason 26,500 1,054
M & T Bank 61,400 4,544
Marshall & Ilsley 25,400 1,440
Mercantile Bankshares 39,700 1,576
MGIC Investment 12,200 797
National Commerce Financial 127,995 3,341
North Fork Bancorp 108,175 3,217
Old Republic 353,065 9,254
Phoenix Companies* 209,950 3,034
Protective Life 97,120 2,817
SEI Investments 65,000 2,080
TCF Financial 35,700 1,644
The PMI Group 32,650 2,037
-------
97,398
-------
HEALTH CARE - 16.7%
Edwards Lifesciences* 51,400 1,151
First Health Group* 54,025 1,587
AmerisourceBergen* 30,100 2,136
Apogent Technologies* 56,725 1,356
Appria Healthcare Group* 163,750 4,241
Celgene* 76,900 2,033
Express Scripts* 108,710 6,014
Genzyme* 124,500 5,655
Gilead Sciences* 69,600 3,909
Health Management Associates, Cl A* 147,209 3,056
IDEC Pharmaceuticals* 134,900 6,687
IVAX* 281,750 6,246
King Pharmaceuticals* 97,349 4,084
Lincare Holdings* 138,120 3,670
Millennium Pharmaceuticals* 145,800 2,589
Mylan Laboratories 99,000 3,229
Omnicare 138,900 3,032
Patterson Dental* 44,200 1,629
Protein Design Labs* 22,900 1,082
Quest Diagnostics* 62,000 3,825
Renal Care Group* 70,050 2,156
Sepracor* 59,200 2,125
Trigon Healthcare* 26,600 1,742
Universal Health Services* 191,500 9,345
-------
82,579
-------
INDUSTRIALS - 5.0%
American Standard* 44,600 2,453
Apollo Group* 38,125 1,602
Bisys Group* 37,550 1,991
C.H. Robinson Worldwide* 52,950 1,533
ChoicePoint* 38,700 1,612
DST Systems* 52,350 2,264
IMS Health 70,900 1,776
Level-3 Communications* 16,100 1,408
Manpower 48,800 1,285
Pittston Brink's Group* 38,500 697
Precision Castparts 34,000 755
The accompanying notes are an integral part of the financial statements.
(84 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
MID CAP CORE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
Rayovac* 100,200 $ 1,528
Shaw Group* 19,550 552
Skywest 96,300 1,610
SPX* 25,800 2,139
Valassis Communication* 41,500 1,324
--------
24,529
--------
INFORMATION TECHNOLOGY - 17.3%
Activision* 103,300 2,812
Adtran* 36,700 701
Affiliated Computer Services, Cl A* 50,740 4,131
Amdocs* 34,300 914
Arrow Electronics* 63,900 1,333
Ascential Software* 302,700 999
Atmel* 195,500 1,306
Avnet 69,325 1,261
Axciom* 474,600 4,461
Cadence Design System* 168,600 2,807
Compuware* 159,500 1,329
Cree* 61,700 912
Cypress Semiconductor* 96,725 1,437
Diebold 46,600 1,776
Electronic Arts* 109,600 5,005
Enterasys Networks* 95,600 617
Exar* 195,675 3,385
Harmonic Lightwaves* 113,900 923
Harris 50,900 1,620
Integrated Circuit Systems* 84,900 1,085
Integrated Device Technology* 87,550 1,762
International Rectifier* 10,000 272
Intersil* 39,700 1,108
Keane* 48,750 665
Mercury Interactive* 25,200 480
Micrel* 59,100 1,179
Microchip Technology* 82,800 2,219
Nvidia* 101,200 2,780
Plexus* 26,200 618
Polycom* 205,650 5,012
Powerwave Technologies* 36,200 432
Rational Software* 160,400 1,389
Retek* 73,600 929
RF Micro Devices* 69,600 1,155
SCI Systems* 301,900 5,434
Semtech* 42,575 1,208
SunGard Data Systems* 420,650 9,831
Symantec* 56,400 1,955
Synopsys* 49,600 1,989
Tech Data* 36,700 1,391
TriQuint Semiconductor* 119,120 1,905
Waters* 79,000 2,826
--------
85,353
--------
MATERIALS - 1.1%
Cabot 36,690 1,464
Martin Marietta Materials 31,175 1,219
Sigma-Aldrich 29,475 1,332
Vulcan Materials 29,200 1,261
--------
5,276
--------
MID CAP CORE FUND (CONTINUED)
DESCRIPTION PAR (000)/SHARES VALUE (000)
- -------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 1.4%
Alamosa Holdings* 68,400 $ 947
Broadwing* 170,500 2,742
Time Warner Telecommunications, Cl A* 109,100 791
Western Wireless, Cl A* 36,210 1,223
Williams Communications Group* 801,475 946
--------
6,649
--------
UTILITIES - 8.8%
AGL Resources 38,375 766
American Water Works 65,700 2,595
Calpine* 273,100 6,229
Constellation Energy Group 104,720 2,534
DPL 48,100 1,170
Dynegy 255,550 8,855
Energy East 75,400 1,516
Hawaiian Electric Industries 20,625 804
National Fuel Gas 48,600 1,119
Northeast Utilities 91,200 1,708
NSTAR 33,700 1,412
Potomac Electric Power 58,535 1,285
Public Service Company of New Mexico 25,900 653
Reliant Resources* 453,515 7,341
Scana 70,000 1,777
Teco Energy 95,800 2,596
UtiliCorp United 29,350 822
--------
43,182
--------
TOTAL COMMON STOCKS 450,299
--------
U.S. TREASURY OBLIGATIONS - 0.3%
U.S. Treasury Bill
Zero Coupon, 11/08/01 $ 1,500 1,495
--------
TOTAL U.S. TREASURY OBLIGATIONS 1,495
--------
INVESTMENT COMPANIES - 4.5%
Midcap SPDR TR Unit Ser 1 277,000 21,925
--------
TOTAL INVESTMENT COMPANIES 21,925
--------
RELATED PARTY MONEY MARKET FUND - 4.1%
First American Prime Obligations Fund (A) 20,011,926 20,012
--------
TOTAL RELATED PARTY MONEY MARKET FUND 20,012
--------
TOTAL INVESTMENTS - 100.3%
(Cost $519,095) 493,731
--------
OTHER ASSETS AND LIABILITIES, NET - (0.3%) (E) (1,247)
--------
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 85)
STATEMENTS OF NET ASSETS September 30, 2001
MID CAP CORE FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------------
NET ASSETS:
Portfolio capital $534,322
Accumulated net investment loss (5)
Accumulated net realized loss on investments (16,469)
Net unrealized depreciation of investments (25,364)
--------
TOTAL NET ASSETS - 100.0% $492,484
--------
CLASS A:
Net asset value and redemption price per
share (net assets of $82,042,954 and
2,895,811 shares of capital stock issued
and outstanding)(F) $ 28.33
Maximum sales charge of 5.50% 1.65
--------
Offering price per share(B) $ 29.98
--------
CLASS B:
Net asset value and offering price per
share (net assets of $2,607,874 and
94,534 shares of capital stock issued
and outstanding)(C)(F) $ 27.59
--------
CLASS C:
Net asset value per share (net assets of
$28 and 1 share of capital stock issued
and outstanding)(C)(F) $ 28.33
Maximum sales charge of 1.00% 0.29
--------
Offering price per share(D) $ 28.62
--------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $1,483,880 and 52,458 shares of
capital stock issued and outstanding)(F) $ 28.29
--------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $406,349,006 and 13,958,718 shares
of capital stock issued and outstanding)(F) $ 29.11
--------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(C)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(D)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(E)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 133,920
Payable upon return of securities loaned $(133,920)
(F)$.0001 par value and 2 billion authorized shares
Cl - Class
The accompanying notes are an integral part of the financial statements.
(86 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
(This page has been left blank intentionally.)
STATEMENTS OF OPERATIONS in thousands
MID CAP MID CAP MID CAP
GROWTH FUND VALUE FUND CORE FUND
----------- ----------- ----------------------
10/1/00 10/1/00 11/1/00 11/1/99
to to to to
9/30/01 9/30/01 9/30/01 10/31/00
----------- ----------- --------- ---------
INVESTMENT INCOME:
Interest $ 1,822 $ 1,002 $ 2,296 $ 1,795
Dividends 1,435 5,038 2,767 2,246
Less: Foreign taxes withheld (4) -- (2) --
Securities lending 228 106 59 64
- ------------------------------------------------------- --------- --------- --------- ---------
TOTAL INVESTMENT INCOME 3,481 6,146 5,120 4,105
======================================================= ========= ========= ========= =========
EXPENSES:
Investment advisory fees 3,313 2,362 3,813 3,763
Administrator and fund accounting fees 534 380 655 616
Transfer agent fees and expenses 403 158 209 188
Custodian fees 142 101 59 100
Directors' fees 5 4 1 7
Registration fees 5 3 48 31
Professional fees 14 10 49 43
Printing 28 20 107 84
Distribution and shareholder servicing fees - Class A 428 37 229 257
Distribution and shareholder servicing fees - Class B 46 127 16 4
Shareholder servicing fees - Class S -- -- 1 --
Distribution fees - Class C 77 24 -- --
Other 5 6 4 15
- ------------------------------------------------------- --------- --------- --------- ---------
TOTAL EXPENSES 5,000 3,232 5,191 5,108
======================================================= ========= ========= ========= =========
Less: Waiver of expenses (188) (8) (116) (81)
- ------------------------------------------------------- --------- --------- --------- ---------
TOTAL NET EXPENSES 4,812 3,224 5,075 5,027
======================================================= ========= ========= ========= =========
Investment income (loss) - net (1,331) 2,922 45 (922)
- ------------------------------------------------------- --------- --------- --------- ---------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS - NET:
Net realized gain (loss) on investments (126,340) 28,350 (9,530) 217,428
Net change in unrealized appreciation or depreciation
of investments (185,161) (51,162) (110,074) (27,891)
- ------------------------------------------------------- --------- --------- --------- ---------
NET GAIN (LOSS) ON INVESTMENTS (311,501) (22,812) (119,604) 189,537
======================================================= ========= ========= ========= =========
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $(312,832) $ (19,890) $(119,559) $ 188,615
======================================================= ========= ========= ========= =========
The accompanying notes are an integral part of the financial statements.
(88 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
STATEMENTS OF CHANGES IN NET ASSETS in thousands
MID CAP MID CAP
GROWTH FUND VALUE FUND
---------------------- ----------------------
10/1/00 10/1/99 10/1/00 10/1/99
to to to to
9/30/01 9/30/00 9/30/01 9/30/00
--------- --------- --------- ---------
OPERATIONS:
Investment income (loss) - net $ (1,331) $ (3,191) $ 2,922 $ 2,157
Net realized gain (loss) on investments (126,340) 240,252 28,350 (37,771)
Net change in unrealized appreciation or depreciation of investments (185,161) 49,305 (51,162) 72,261
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Net increase (decrease) in net assets resulting from operations (312,832) 286,366 (19,890) 36,647
- ---------------------------------------------------------------------- --------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A -- -- (95) (87)
Class B -- -- (21) (18)
Class C -- -- (4) (1)
Class Y -- -- (2,673) (2,180)
Net realized gain on investments(3):
Class A (93,172) (33,787) -- --
Class B (1,853) (89) -- --
Class C (2,270) (101) -- --
Class Y (126,486) (43,422) -- --
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Total distributions (223,781) (77,399) (2,793) (2,286)
- ---------------------------------------------------------------------- --------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 61,110 82,148 4,892 6,834
Reinvestment of distributions 92,311 33,367 93 84
Payments for redemptions (107,971) (103,709) (4,121) (14,884)
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Increase (decrease) in net assets from Class A transactions 45,450 11,806 864 (7,966)
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Class B
Proceeds from sales 3,176 4,213 1,758 662
Reinvestment of distributions 1,820 89 19 19
Payments for redemptions (1,406) (322) (2,202) (8,563)
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Increase (decrease) in net assets from Class B transactions 3,598 3,980 (425) (7,882)
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Class C
Proceeds from sales 8,014 5,018 2,695 1,162
Reinvestment of distributions 2,263 102 4 1
Payments for redemptions (2,679) (166) (495) (30)
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Increase in net assets from Class C transactions 7,598 4,954 2,204 1,133
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Class S(2)
Proceeds from sales -- -- 43 --
Payments for redemptions -- -- -- --
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Increase in net assets from Class S transactions -- -- 43 --
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Class Y(2)
Proceeds from sales 191,317 147,646 102,985 72,157
Reinvestment of distributions 96,331 32,160 1,102 1,109
Payments for redemptions (104,958) (150,018) (66,529) (134,167)
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Increase (decrease) in net assets from Class Y transactions 182,690 29,788 37,558 (60,901)
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Increase (decrease) in net assets from capital share transactions 239,328 50,528 40,244 (75,616)
- ---------------------------------------------------------------------- --------- --------- --------- ---------
Total increase (decrease) in net assets (297,285) 259,495 17,561 (41,255)
NET ASSETS AT BEGINNING OF PERIOD 636,920 377,425 302,621 343,876
====================================================================== ========= ========= ========= =========
NET ASSETS AT END OF PERIOD $ 339,635 $ 636,920 $ 320,182 $ 302,621
====================================================================== ========= ========= ========= =========
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ -- $ -- $ 194 $ 65
====================================================================== ========= ========= ========= =========
[WIDE TABLE CONTINUED FROM ABOVE]
MID CAP
CORE FUND
-----------------------------------
11/1/00 11/1/99 11/1/98
to to to
9/30/01 10/31/00 10/31/99
--------- --------- ---------
OPERATIONS:
Investment income (loss) - net $ 45 $ (922) $ (103)
Net realized gain (loss) on investments (9,530) 217,428 38,420
Net change in unrealized appreciation or depreciation of investments (110,074) (27,891) (27,055)
- ---------------------------------------------------------------------- --------- --------- ---------
Net increase (decrease) in net assets resulting from operations (119,559) 188,615 11,262
- ---------------------------------------------------------------------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A -- -- --
Class B -- -- --
Class C -- -- --
Class Y -- -- --
Net realized gain on investments(3):
Class A (35,265) (1,850) (1,086)
Class B (251) (3) --
Class C -- -- --
Class Y (138,433) (6,917) (3,772)
- ---------------------------------------------------------------------- --------- --------- ---------
Total distributions (173,949) (8,770) (4,858)
- ---------------------------------------------------------------------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 5,868 4,908 10,459
Reinvestment of distributions 34,561 1,829 1,072
Payments for redemptions (10,599) (31,499) (53,329)
- ---------------------------------------------------------------------- --------- --------- ---------
Increase (decrease) in net assets from Class A transactions 29,830 (24,762) (41,798)
- ---------------------------------------------------------------------- --------- --------- ---------
Class B
Proceeds from sales 2,876 466 176
Reinvestment of distributions 186 3 --
Payments for redemptions (323) (33) (51)
- ---------------------------------------------------------------------- --------- --------- ---------
Increase (decrease) in net assets from Class B transactions 2,739 436 125
- ---------------------------------------------------------------------- --------- --------- ---------
Class C
Proceeds from sales -- -- --
Reinvestment of distributions -- -- --
Payments for redemptions -- -- --
- ---------------------------------------------------------------------- --------- --------- ---------
Increase in net assets from Class C transactions -- -- --
- ---------------------------------------------------------------------- --------- --------- ---------
Class S(2)
Proceeds from sales 2,025 -- --
Payments for redemptions (344) -- --
- ---------------------------------------------------------------------- --------- --------- ---------
Increase in net assets from Class S transactions 1,681 -- --
- ---------------------------------------------------------------------- --------- --------- ---------
Class Y(2)
Proceeds from sales 399,904 145,630 245,028
Reinvestment of distributions 122,644 6,230 3,350
Payments for redemptions (315,411) (218,605) (358,282)
- ---------------------------------------------------------------------- --------- --------- ---------
Increase (decrease) in net assets from Class Y transactions 207,137 (66,745) (109,904)
- ---------------------------------------------------------------------- --------- --------- ---------
Increase (decrease) in net assets from capital share transactions 241,387 (91,071) (151,577)
- ---------------------------------------------------------------------- --------- --------- ---------
Total increase (decrease) in net assets (52,121) 88,774 (145,173)
NET ASSETS AT BEGINNING OF PERIOD 544,605 455,831 601,004
====================================================================== ========= ========= =========
NET ASSETS AT END OF PERIOD $ 492,484 $ 544,605 $ 455,831
====================================================================== ========= ========= =========
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ (5) $ (5) $ (775)
====================================================================== ========= ========= =========
(1)See Note 4 in Notes to Financial Statements for additional information.
(2)On September 24, 2001, Class Y and Institutional Class of Mid Cap Core Fund
were redesignated as Class S and Class Y, respectively.
(3)Includes distributions in excess of net realized gains of $1,793 and $4,952
for the period ended September 30, 2001 for Mid Cap Growth Fund and Mid Cap
Core Fund, respectively.
The accompanying notes are an integral part of the financial statements.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 89)
FINANCIAL HIGHLIGHTS For a share outstanding, throughout the periods ended
September 30, unless otherwise indicated
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
---------- ------------- ------------ ---------- -------------
MID CAP GROWTH FUND(2)
Class A
2001(3) $ 18.88 $ (0.04) $ (6.36) $ -- $ (6.85)
2000 12.87 (0.12) 8.80 -- (2.67)
1999 11.80 (0.07) 3.40 -- (2.26)
1998 15.25 (0.09) (1.80) -- (1.56)
1997 13.86 (0.08) 2.72 -- (1.25)
Class B
2001(3) $ 18.51 $ (0.10) $ (6.15) $ -- $ (6.85)
2000 12.75 (0.16) 8.59 -- (2.67)
1999 11.78 (0.10) 3.33 -- (2.26)
1998(4) 13.86 (0.01) (2.07) -- --
Class C
2001(3) $ 18.61 $ (0.09) $ (6.21) $ -- $ (6.85)
2000 12.80 (0.14) 8.62 -- (2.67)
1999(6) 12.43 (0.06) 0.43 -- --
Class S
2001(3)(7) $ 5.53 $ -- $ 0.10 $ -- $ --
Class Y
2001(3) $ 19.14 $ (0.02) $ (6.48) $ -- $ (6.85)
2000 12.99 (0.08) 8.90 -- (2.67)
1999 11.87 (0.03) 3.41 -- (2.26)
1998 15.29 (0.04) (1.82) -- (1.56)
1997(5) 12.54 (0.01) 2.76 -- --
- ------- -------- ------- ------- ------- -------
MID CAP VALUE FUND
Class A
2001(3) $ 14.62 $ 0.10 $ (0.88) $ (0.10) $ --
2000 12.95 0.08 1.67 (0.08) --
1999 15.04 0.10 1.26 (0.10) (3.35)
1998 24.19 0.07 (6.41) (0.07) (2.74)
1997 20.41 0.11 6.98 (0.11) (3.20)
Class B
2001(3) $ 14.28 $ (0.01) $ (0.88) $ (0.02) $ --
2000 12.67 0.02 1.61 (0.02) --
1999 14.80 0.04 1.22 (0.04) (3.35)
1998 23.96 (0.01) (6.41) -- (2.74)
1997 20.31 0.02 6.85 (0.02) (3.20)
Class C
2001(3) $ 14.55 $ (0.01) $ (0.89) $ (0.02) $ --
2000 12.92 0.02 1.63 (0.02) --
1999(6) 13.69 0.06 (0.78) (0.05) --
Class S
2001(3)(7) $ 13.31 $ 0.01 $ 0.42 $ -- $ --
Class Y
2001(3) $ 14.68 $ 0.14 $ (0.92) $ (0.13) $ --
2000 12.99 0.11 1.69 (0.11) --
1999 15.05 0.12 1.30 (0.13) (3.35)
1998 24.21 0.14 (6.43) (0.13) (2.74)
1997 20.43 0.16 6.98 (0.16) (3.20)
- ------- -------- ------- ------- ------- -------
(1)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
(2)The financial highlights for the Mid Cap Growth Fund as set forth herein
include the historical financial highlights of the Piper Emerging Growth Fund
Class A shares and Class Y shares. The assets of the Piper Emerging Growth
Fund were acquired by Mid Cap Growth Fund on August 7, 1998. In connection
with such acquisition, (i) Class A shares of the Piper Emerging Growth Fund
were exchanged for Class A shares of the Mid Cap Growth Fund, (ii) Class Y
shares of the Piper Emerging Growth Fund were exchanged for Class Y shares of
the Mid Cap Growth Fund. On August 7, 1998, the Fund's advisor changed from
Piper Capital Management, Inc. to U.S. Bank National Association.
(3)Per share data calculated using average shares outstanding method.
(4)Class B shares have been offered since August 7, 1998. All ratios for the
period have been annualized, except total return.
(5)Class Y shares have been offered since February 18, 1997. All ratios for the
period have been annualized, except total return.
(6)Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized, exept total return.
(7)Class S shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
The accompanying notes are an integral part of the financial statements.
(90 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT INCOME
NET ASSET RATIO OF INVESTMENT AVERAGE (LOSS) TO AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN(1) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ---------- ----------- ------------ ----------- ------------- ----------- ---------------- ---------
$ 5.63 (49.38)% $102,837 1.15% (0.40)% 1.19% (0.44)% 264%
18.88 76.44 264,570 1.15 (0.70) 1.17 (0.72) 217
12.87 31.69 165,072 1.14 (0.48) 1.19 (0.53) 94
11.80 (13.05) 188,763 1.18 (0.60) 1.34 (0.76) 39
15.25 21.04 274,799 1.23 (0.55) 1.39 (0.71) 51
$ 5.41 (49.65)% $ 3,518 1.90% (1.17)% 1.94% (1.21)% 264%
18.51 75.14 4,812 1.90 (1.45) 1.92 (1.47) 217
12.75 30.66 360 1.89 (1.26) 1.98 (1.35) 94
11.78 (15.01) 17 1.87 (1.12) 1.87 (1.12) 39
$ 5.46 (49.73)% $ 6,246 1.91% (1.17)% 1.95% (1.21)% 264%
18.61 75.10 5,971 1.90 (1.45) 1.92 (1.47) 217
12.80 3.06 466 1.89 1.27 1.98 1.18 94
$ 5.63 1.81% $ -- 0.00% 0.00% 0.00% 0.00% 264%
$ 5.79 (49.22)% $227,035 0.90% (0.17)% 0.94% (0.21)% 264%
19.14 76.88 361,567 0.90 (0.46) 0.92 (0.48) 217
12.99 31.97 211,527 0.89 (0.25) 0.96 (0.32) 94
11.87 (12.79) 73,356 0.87 (0.27) 0.87 (0.27) 39
15.29 21.93 59,393 0.87 (0.16) 0.87 (0.16) 51
------- ------ -------- ---- ----- ---- ----- ---
$ 13.74 (5.41)% $ 13,583 1.15% 0.67% 1.15% 0.67% 104%
14.62 13.58 13,568 1.15 0.53 1.19 0.49 141
12.95 8.03 20,148 1.15 0.63 1.18 0.60 121
15.04 (28.83) 29,261 1.14 0.43 1.14 0.43 135
24.19 39.93 35,207 1.14 0.58 1.15 0.57 82
$ 13.37 (6.21)% $ 11,311 1.90% (0.08)% 1.90% (0.08)% 104%
14.28 12.85 12,495 1.90 (0.22) 1.94 (0.26) 141
12.67 7.38 19,072 1.90 (0.13) 1.93 (0.16) 121
14.80 (29.40) 31,276 1.89 (0.31) 1.89 (0.31) 135
23.96 38.81 36,649 1.90 (0.18) 1.90 (0.18) 82
$ 13.63 (6.17)% $ 3,312 1.90% (0.04)% 1.90% (0.04)% 104%
14.55 12.81 1,430 1.90 (0.15) 1.93 (0.18) 141
12.92 (5.25) 164 1.90 0.29 1.93 0.26 121
$ 13.74 3.23% $ 44 0.85% 5.19% 0.85% 5.19% 104%
$ 13.77 (5.37)% $291,932 0.90% 0.92% 0.90% 0.92% 104%
14.68 13.94 275,128 0.90 0.79 0.94 0.75 141
12.99 8.47 304,492 0.90 0.89 0.93 0.86 121
15.05 (28.65) 418,041 0.89 0.69 0.89 0.69 135
24.21 40.25 509,308 0.89 0.82 0.90 0.81 82
------- ------ -------- ---- ----- ---- ----- ---
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 91)
FINANCIAL HIGHLIGHTS For a share outstanding, throughout the periods ended
September 30, unless otherwise indicated
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
---------- ------------- ----------- --------- -------------
MID CAP CORE FUND(2)
Class A
2001(6)(7) $ 54.63 $ (0.06) $ (8.40) $ -- $ (17.84)
2000(6) 37.80 (0.18) 17.80 -- (0.79)
1999(6) 37.59 (0.08) 0.60 -- (0.31)
1998(6) 44.36 (0.24) (2.07) -- (4.46)
1997 41.38 (0.20) 8.44 -- (5.26)
Class B
2001(6)(7) $ 53.97 $ (0.29) $ (8.25) $ -- $ (17.84)
2000(6) 37.63 (0.53) 17.66 -- (0.79)
1999(5)(6) 37.57 (0.23) 0.29 -- --
Class C
2001(3)(6) $ 27.40 $ 0.00 $ 0.93 $ -- $ --
Class S
2001(4)(6) $ 35.75 $ (0.06) $ (7.40) $ -- $ --
Class Y
2001(6)(7) $ 55.52 $ 0.02 $ (8.59) $ -- $ (17.84)
2000(6) 38.32 (0.05) 18.04 -- (0.79)
1999(6) 38.01 0.02 0.60 -- (0.31)
1998(6) 44.70 (0.14) (2.09) -- (4.46)
1997 41.58 (0.11) 8.49 -- (5.26)
- ------- -------- ------- ------- ---- --------
(1)Total return does not include sales charges. Total return would have been
lower had certain expenses not been waived.
(2)The financial highlights for the Mid Cap Core Fund as set forth herein
include the historical financial highlights of the Firstar Mid Cap Core
Equity Fund. The assets of the Firstar Fund were acquired by the First
American Mid Cap Core Fund on September 24, 2001. In connection with such
acquisition, (i) Class A shares of the Firstar Mid Cap Core Equity Fund were
exchanged for Class A shares of the First American Mid Cap Core Fund, (ii)
Firstar Class B shares were exchanged for Class B shares of the First
American Fund, (iii) Firstar Class Y shares were exchanged for Class S shares
of the First American Fund, and (iv) Firstar Class Institutional shares were
exchanged for Class Y shares of the First American Fund.
(3)Class C shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(4)Class S shares have been offered since December 11, 2000. All ratios for the
period have been annualized, except total return.
(5)Class B shares have been offered since March 1, 1999. All ratios for the
period have been annualized, except total return.
(6)Per share data calculated using average shares outstanding method.
(7)Effective in 2001, the Fund's fiscal year end was changed from October 31 to
September 30. All ratios for the period have been annualized, except total
return.
The accompanying notes are an integral part of the financial statements.
(92 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT INCOME
NET ASSET RATIO OF INVESTMENT AVERAGE (LOSS) TO AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (1) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ---------- ----------- ------------ ----------- ------------- ----------- ----------------- ---------
$ 28.33 (20.00)% $ 82,043 1.20% (0.19)% 1.22% (0.21)% 204%
54.63 47.23 108,326 1.20 (0.38) 1.22 (0.40) 205
37.80 1.31 95,758 1.19 (0.21) 1.21 (0.23) 140
37.59 (5.91) 136,146 1.13 (0.57) 1.20 (0.64) 77
44.36 22.18 147,396 1.12 (0.50) 1.20 (0.58) 97
$ 27.59 (20.60)% $ 2,606 1.94% (0.95)% 1.97% (0.98)% 204%
53.97 46.13 666 1.95 (1.13) 1.97 (1.15) 205
37.63 0.16 126 1.95 (0.89) 1.97 (0.91) 140
$ 28.33 3.39% $ -- 0.00% 0.00% 0.00% 0.00% 204%
$ 28.29 (20.87)% $ 1,484 1.19% (0.24)% 1.23% (0.28)% 204%
$ 29.11 (19.84)% $406,349 0.95% 0.06% 0.97% 0.04% 204%
55.52 47.56 435,613 0.95 (0.13) 0.97 (0.15) 205
38.32 1.56 359,947 0.94 0.04 0.96 0.02 140
38.01 (5.66) 464,858 0.88 (0.32) 0.95 (0.39) 77
44.70 22.44 569,028 0.87 (0.25) 0.95 (0.33) 97
-------- ------ -------- ---- ----- ---- ----- ---
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 93)
STATEMENTS OF NET ASSETS September 30, 2001
MICRO CAP FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
COMMON STOCKS - 94.5%
CONSUMER DISCRETIONARY - 23.9%
4Kids Entertainment* 140,100 $ 2,788
ACT Teleconferencing* 25,400 211
Alliance Atlantis Communication, Cl B* 341,400 3,312
Briazz* 215,500 259
Career Education* 71,500 3,933
Championship Auto Racing* 204,000 2,836
Champps Entertainment* 212,000 1,495
Cheap Tickets* 74,500 1,221
Christopher & Banks* 110,700 3,333
Corinthian Colleges* 245,600 8,279
Cost Plus* 67,000 1,230
Electronics Boutique & Holdings* 59,100 1,593
Gaiam* 168,300 2,649
Galyan's Trading* 72,700 776
Goody's Family Clothing* 92,700 283
Gymboree* 380,600 2,474
JAKKS Pacific* 261,400 3,529
Landry's Restaurants 142,800 2,113
Midway Games* 265,400 3,214
O'Charley's* 106,900 1,833
OshKosh B'Gosh 129,075 3,356
Prime Hospitality* 125,800 1,107
ProsoftTraining.com* 142,700 91
Recoton* 213,700 2,639
Regent Communication* 206,100 1,241
Saga Communications* 116,050 2,009
School Specialty* 10,600 324
Steiner Leisure* 41,800 669
Steven Madden* 119,900 1,217
Too* 85,000 1,784
Ultimate Electronics* 206,500 3,583
University of Phoenix Online* 240,450 7,444
ValueVision International* 232,800 3,003
-------
75,828
-------
CONSUMER STAPLES - 0.5%
Monterey Pasta* 88,200 560
Natures Sunshine Product 87,900 1,006
-------
1,566
-------
ENERGY - 2.8%
Headwaters* 343,700 3,781
Horizon Offshore* 77,600 473
Ishares DJ US Energy* 105,400 4,629
-------
8,883
-------
FINANCIALS - 9.5%
Alexandria Real Estate Equities 24,600 970
American Financial Holdings 78,700 1,932
American Home Mortgage Holdings 52,200 911
Bedford Property Investors 44,900 909
CBL & Associates Properties 29,500 804
Dime Community Bancshares 104,550 2,647
East West Bancorp 108,300 2,533
EastGroup Properties 40,900 896
Efunds* 21,700 361
Euronet Services* 369,700 4,085
First Financial Holdings 33,400 767
Flagstar Bancorp 35,500 820
Hilb, Rogal & Hamilton* 21,100 962
LandAmerica Financial Group 84,700 2,816
MICRO CAP FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
Local Financial* 10,500 $ 140
Macatawa Bank 121,400 2,027
Nextcard* 341,000 2,172
Parkway Properties 27,450 892
Philadelphia Consolidated Holding* 51,100 1,775
Staten Island Bancorp 72,000 1,775
-------
30,194
-------
HEALTH CARE - 14.3%
1-800 Contacts* 70,025 861
Amsurg, Cl A* 88,900 2,449
Array Biopharma* 543,400 4,901
Bone Care International* 150,000 2,919
Carriage Services* 355,700 2,348
CIMA Labs* 64,300 3,906
Cyberonics* 165,200 2,604
D & K Healthcare Resources 28,100 1,346
Davita* 176,000 3,582
First Horizon Pharmaceutical* 126,150 3,284
Haemonetics* 47,800 1,654
Icon ADR* 51,300 1,703
Medcath* 196,200 3,169
Meridian Medical* 8,400 158
MGI Pharma* 69,500 929
Osteotech* 442,700 1,563
Packard Bioscience* 303,100 2,398
Select Medical* 276,800 4,360
United Surgical Partners* 57,750 1,184
-------
45,318
-------
INDUSTRIALS - 8.8%
Allied Research* 77,700 1,205
Applied Signal Technology 29,400 260
Arkansas Best* 155,200 3,214
Armor Holdings* 21,100 418
Astropower* 21,100 728
Covenant Transport* 135,800 1,277
DiamondCluster, Cl A* 63,500 623
DRS Technologies* 103,700 3,604
EDO 21,100 607
Exult* 343,700 4,018
Frontier Airlines* 54,650 453
Keith Companies* 165,500 1,513
Landstar* 41,900 2,682
Mesa Air Group* 301,700 984
OshKosh Truck 42,400 1,536
RailAmerica* 250,582 3,132
RMH Teleservices* 135,100 1,452
-------
27,706
-------
INFORMATION TECHNOLOGY - 30.8%
Actel* 175,200 3,112
Advanced Power Technology* 117,800 1,190
Aeroflex* 390,650 4,297
Applied Films* 17,100 286
APW Limited* 346,800 1,450
AmerisSoft* 212,600 149
AXT* 259,600 2,752
Braun Consulting* 196,100 706
Celeritek* 138,300 1,636
Concurrent Computers* 794,200 7,211
Duraswitch Industries* 118,200 1,187
Forrester Research* 68,100 1,131
The accompanying notes are an integral part of the financial statements.
(94 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
MICRO CAP FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
Genesis Microchip* 102,300 $ 2,879
Genroco* 415,178 17
Genroco Warrants* 103,794 --
Inforte* 55,700 558
Integrated Silicon Solution* 274,500 2,358
Interplay Entertainment* 295,000 124
IXYS* 254,750 1,516
Lantronix* 706,500 4,310
Mechanical Dynamics* 69,400 587
Moldflow* 126,800 1,074
Monolithic System Technology* 84,100 734
Nuance Communications* 281,700 1,831
Oak Technology* 365,800 2,853
Optimal Robotics* 105,900 2,595
OTG Software* 50,900 283
Overland Data* 398,000 2,742
Pericom Semiconductor* 140,050 1,947
Photronics* 94,500 1,744
Pixelworks* 212,700 2,680
Planar Systems* 76,100 1,530
Qualstar* 345,000 1,977
Read-Rite* 600,200 1,771
Sage* 206,200 3,145
Seachange International* 129,925 2,270
Secure Computing* 125,100 1,218
Silicon Image* 356,000 744
Speechworks International* 349,500 1,723
Take-Two Interactive Software* 773,200 5,467
Talx 151,690 3,231
Tanning Technology* 173,900 591
THQ* 28,500 1,230
Three Five Systems* 130,700 2,083
Tridium, Cl B* 2,785,000 1,269
Tridium Warrant* 205,000 54
TTM Technologies* 80,500 497
ViaSat* 378,900 6,760
VideoPropulsion* 809,856 49
Websense* 132,500 1,444
Zamba* 455,000 196
Zomax* 209,400 1,137
Zoran* 124,600 3,018
--------
97,343
--------
MATERIALS - 1.8%
Ivex Packaging* 326,900 5,574
--------
5,574
--------
TELECOMMUNICATION SERVICES - 2.1%
Airgate PCS* 84,600 3,758
Lexent* 71,600 519
Ubiquitel* 303,700 2,451
--------
6,728
--------
TOTAL COMMON STOCKS 299,140
--------
RELATED PARTY MONEY MARKET FUND - 5.0%
First American Prime Obligations Fund (A) 15,814,002 15,814
--------
TOTAL RELATED PARTY MONEY MARKET FUND 15,814
--------
TOTAL INVESTMENTS - 99.5%
(Cost $335,583) 314,947
--------
OTHER ASSETS AND LIABILITIES, NET - 0.5% (E) 1,582
--------
MICRO CAP FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------------
NET ASSETS
Portfolio capital $344,919
Accumulated net investment loss (3)
Accumulated net realized loss on investments and
options written (7,751)
Net unrealized depreciation of investments (20,636)
--------
TOTAL NET ASSETS - 100.0% $316,529
--------
CLASS A:
Net asset value and redemption price per
share (net assets of $45,233,153 and
2,678,010 shares of capital stock issued
and outstanding)(F) $ 16.89
Maximum sales charge of 5.50% 0.98
--------
Offering price per share (B) $ 17.87
--------
CLASS B:
Net asset value and offering price per
share (net assets of $3,164,937 and
192,521 shares of capital stock issued
and outstanding)(C)(F) $ 16.44
--------
CLASS C:
Net asset value per share (net assets of
$549 and 32 shares of capital stock
issued and outstanding) (C)(F) $ 16.90
Maximum sales charge of 1.00% 0.17
--------
Offering price per share (D) $ 17.07
--------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $2,014,459 and 119,270 shares of
capital stock issued and outstanding)(F) $ 16.89
--------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $266,115,427 and 15,310,783 shares
of capital stock issued and outstanding)(F) $ 17.38
--------
*Non-income producing security
(A)This money market fund is advised by U.S.Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(C)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(D)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(E)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 26,136
Payable upon return of securities loaned $ (26,136)
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
Cl - Class
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 95)
STATEMENTS OF NET ASSETS September 30, 2001
SMALL CAP GROWTH FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
COMMON STOCKS - 90.4%
CONSUMER DISCRETIONARY - 18.7%
4Kids Entertainment* 58,450 $ 1,163
Action Performance* 99,350 1,809
Anchor Gaming* 25,500 1,058
Borders Group* 198,900 3,809
Buca* 249,950 2,804
Career Education* 51,050 2,808
Cheesecake Factory* 48,600 1,164
Chico's FAS* 106,450 2,507
Christopher & Banks* 65,900 1,984
Corinthian Colleges* 83,100 2,801
Direct Focus* 106,400 2,117
Electronics Boutique Holdings* 80,350 2,165
Freds, Cl A 173,750 4,552
Genesco* 150,350 2,443
Group 1 Automotive* 70,800 1,880
Harman International 69,500 2,328
Hot Topic* 91,400 2,294
Insight Communications* 146,200 2,690
Michaels Stores* 67,800 2,477
Panera Bread, Cl A* 112,700 3,943
Radio One, Cl D* 110,550 1,276
Reebok* 158,600 3,283
Ruby Tuesday 78,350 1,230
Six Flags* 242,950 2,971
Sonic Automotive* 85,850 1,168
Sonic* 96,050 2,912
Spanish Broadcasting* 177,350 1,257
Steiner Leisure* 84,000 1,344
Tommy Hilfiger* 50,900 456
Too* 87,500 1,837
United Rentals* 126,500 2,194
ValueVision International* 104,500 1,348
-------
70,072
-------
CONSUMER STAPLES - 0.7%
Duane Reade* 85,950 2,579
-------
2,579
-------
ENERGY - 3.0%
Frontier Oil 123,700 2,121
Headwaters* 174,600 1,921
Key Energy Services* 247,300 1,573
Spinnaker Exploration* 247,300 1,574
Universal Compression Holdings* 88,900 2,000
WH Energy Services* 144,400 2,030
-------
11,219
-------
FINANCIALS - 8.9%
Affiliated Managers Group* 45,200 2,568
Alliance Data Systems* 144,950 2,355
Americredit* 50,200 1,587
Banknorth Group 121,000 2,701
Commerce Bancorp 39,350 2,676
Corrections Corporation of America* 158,800 2,090
Doral Financial 93,750 3,638
East West Bancorp 136,700 3,197
Eaton Vance 45,400 1,423
Efunds* 218,300 3,635
Espeed, Cl A* 216,400 649
Metris 48,350 1,197
New York Community Bancorp 93,700 2,175
SMALL CAP GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
Southwest Bancorp of Texas* 42,200 $ 1,255
Webster Financial 70,200 2,314
-------
33,460
-------
HEALTH CARE - 25.6%
Advance PCS* 21,800 1,565
AmerisourceBergen* 108,410 7,692
Apogent Technologies* 122,150 2,919
Apria Healthcare* 161,400 4,180
Caremark Rx* 523,600 8,734
Covance* 102,850 1,842
Curagen* 81,200 1,567
Davita* 217,150 4,419
Enzon* 24,250 1,237
Lifecore Biomedical* 51,800 657
Lifepoint Hospitals* 29,300 1,282
Luminex 145,600 2,924
Maximus* 59,100 2,348
Medcath* 19,200 310
Myriad Genetics* 77,950 2,388
Noven Pharmaceuticals* 152,350 2,758
Ocular Sciences* 83,450 1,690
Orasure Technologies* 90,550 928
Pediatrix Medical Group* 70,550 2,878
Pharmaceutical Resources* 69,750 2,494
Priority Healthcare, Cl B* 172,950 4,151
Rehabacare Group* 58,100 2,528
Renal Care* 108,850 3,349
Respironics* 126,500 4,498
Sangstat Medical* 112,850 2,078
Select Medical* 214,100 3,372
Service Corporation International* 399,350 2,404
STERIS* 69,500 1,366
Surmodics* 45,150 1,804
Syncor International* 39,400 1,254
Tanox* 243,700 3,589
Techne* 9,700 286
Thoratec Labs* 97,750 1,617
Triad Hospitals* 87,650 3,103
Urologix* 158,100 2,150
XOMA Limited* 412,900 3,481
-------
95,842
-------
INDUSTRIALS - 12.5%
Armor Holdings* 118,000 2,336
Atlantic Coast Airline Holdings* 118,200 1,572
BE Aerospace* 173,150 1,316
Corporate Executive Board* 73,550 1,918
DAL-Tile International* 242,000 3,724
DiamondCluster, Cl A* 97,750 960
Education Management* 65,600 1,992
Elcor 177,850 3,829
Insituform Technology, Cl A* 98,500 1,680
Ionics* 59,400 1,313
Joy Global* 120,300 1,787
Keith Companies* 209,850 1,918
Oshkosh Truck 56,900 2,061
Pemstar* 273,650 3,147
Stericycle* 63,250 2,636
Surebeam* 256,900 2,132
Swift Transportation* 151,950 2,690
Sylvan Learning System* 88,850 2,035
The Profit Recovery Group* 194,850 1,906
The accompanying notes are an integral part of the financial statements.
(96 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
SMALL CAP GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
Valence Technology* 498,200 $ 1,764
Waste Connections* 89,500 2,417
Yellow* 89,050 1,811
--------
46,944
--------
INFORMATION TECHNOLOGY - 17.4%
Actuate Software* 365,100 1,530
Anaren Microwave* 156,250 2,555
Axciom* 220,700 2,075
Centillium Communications* 404,450 2,451
DSP Group* 95,700 1,909
Integrated Circuit Systems* 193,050 2,467
Intercept Group* 60,950 2,039
Intermagnetics General 91,351 2,125
Kopin* 226,400 2,361
Lantronix* 315,700 1,926
Measurement Specialties* 82,450 815
Microsemi* 114,700 2,988
Microtune* 195,650 2,230
MKS Instruments* 88,000 1,562
Multilink Technologies* 188,200 973
Mykrolis* 217,150 1,948
02Micro International* 218,450 2,873
Perot Systems, Cl A* 197,850 3,195
Plato Learning* 92,450 2,232
Power Integrations* 161,550 2,943
Powerwave Technologies* 188,700 2,249
Renaissance Learning* 50,200 1,652
S1 Corporation* 301,400 2,550
Stellent* 230,300 3,316
Titan* 126,150 2,473
TriQuint Semiconductor* 152,950 2,446
TriZetto* 242,450 2,134
Varian Semiconductor Equipment* 64,950 1,679
Virata* 333,900 3,332
--------
65,028
--------
MATERIALS - 2.0%
Ball 35,900 2,150
Cambrex 50,700 1,700
OM Group 36,725 2,020
Stillwater Mining* 75,850 1,526
--------
7,396
--------
TELECOMMUNICATIONS - 1.6%
Airgate PCS* 63,300 2,812
Alamosa Holdings* 144,900 2,007
Lexent* 147,750 1,071
--------
5,890
--------
TOTAL COMMON STOCKS 338,430
--------
RELATED PARTY MONEY MARKET FUND - 2.1%
First American Prime Obligations Fund (A) 7,696,185 7,696
--------
TOTAL RELATED PARTY MONEY MARKET FUND 7,696
--------
TOTAL INVESTMENTS - 92.5%
(Cost $399,781) 346,126
--------
OTHER ASSETS AND LIABILITIES, NET - 7.5% (E) 28,091
--------
SMALL CAP GROWTH FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------------
NET ASSETS
Portfolio capital $500,913
Accumulated net realized loss on investments (73,041)
Net unrealized depreciation of investments (53,655)
--------
TOTAL NET ASSETS - 100.0% $374,217
--------
CLASS A:
Net asset value and redemption price per
share (net assets of $31,913,370 and
2,829,384 shares of capital stock issued
and outstanding)(F) $ 11.28
Maximum sales charge of 5.50% 0.66
--------
Offering price per share (B) $ 11.94
--------
CLASS B:
Net asset value and offering price per
share (net assets of $5,008,934 and
479,813 shares of capital stock issued
and outstanding)(C)(F) $ 10.44
--------
CLASS C:
Net asset value per share (net assets of
$6,377,964 and 578,706 shares of
capital stock issued and outstanding)(C)(F) $ 11.02
Maximum sales charge of 1.00% 0.11
--------
Offering price per share(D) $ 11.13
--------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $11 and 1 share of capital stock
issued and outstanding)(F) $ 11.28
--------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $330,917,100 and 28,775,417 shares
of capital stock issued and outstanding)(F) $ 11.50
--------
*Non-Income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(C)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(D)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(E)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Receivable for securities sold $ 29,511
Collateral received for securities loaned, at value $ 75,006
Payable upon return of securities loaned $(75,006)
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
Cl - Class
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 97)
STATEMENTS OF NET ASSETS September 30, 2001
SMALL CAP VALUE FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
COMMON STOCKS - 89.8%
CONSUMER DISCRETIONARY - 15.6%
Applebee's International 29,900 $ 882
Ashworth* 452,100 2,595
Buca* 168,700 1,893
D.R. Horton 373,564 7,793
Dura Automotive Systems* 597,150 4,299
Lodgenet Entertainment* 452,200 4,970
Matthews International, CI A 131,400 2,899
O'Charley's* 210,500 3,610
Pomeroy Computer Resources* 173,800 2,094
Regis 473,350 9,921
School Specialty* 227,500 6,952
Sport-Haley* 231,000 584
Stanley Furniture* 283,200 6,831
Steiner Leisure* 310,000 4,960
Timberland* 130,400 3,534
Topps* 806,150 7,739
Tower Automotive* 534,300 3,831
-------
75,389
-------
CONSUMER STAPLES - 1.3%
Suiza Foods* 99,100 6,257
-------
6,257
-------
ENERGY - 9.0%
Core Laboratories N.V.* 386,500 4,970
Evergreen Resources* 163,600 5,554
Forest Oil* 305,500 7,576
Houston Exploration* 133,900 3,321
Newfield Exploration* 278,800 8,141
Newpark Resources* 536,400 3,621
Pride International* 151,900 1,580
Stone Energy* 178,811 5,758
Veritas DGC* 289,350 3,226
-------
43,747
-------
FINANCIALS - 29.5%
American Capital Strategies 125,400 3,435
American Financial Group 180,500 4,007
Astoria Financial 126,600 7,502
Berkley (W.R.) 103,900 4,987
Cadiz* 583,200 4,998
Chelsea Property Group, REIT 126,000 5,727
City National 82,100 3,543
Community First Bankshares 340,100 8,169
Cullen/Frost Bankers 217,500 5,862
Dime Bancorp* 264,900 66
E*Trade Group* 278,900 1,687
First Republic Bank* 318,550 7,311
Greater Bay Bancorp 75,100 1,748
Highwoods Properties, REIT 200,700 4,967
Horace Mann Educators 173,600 3,064
Lexington Corporate Properties, REIT 187,886 2,753
Markel* 18,500 3,608
Medallion Financial 88,100 727
Metris 101,750 2,518
Mutual Risk Management 208,600 1,585
National Commerce Bancorporation 398,700 10,406
Philadelphia Consolidated Holding* 167,300 5,812
Phoenix Companies* 184,700 2,669
Protective Life 292,000 8,468
Radian Group 458,668 17,659
SMALL CAP VALUE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
Roslyn Bancorp 419,850 $ 7,771
Sterling Bancshares 223,200 2,951
TCF Financial 186,400 8,586
Trenwick Group 86,400 702
--------
143,288
--------
HEALTH CARE - 7.2%
ATS Medical* 607,450 2,430
Cooper 109,200 5,121
Hooper Holmes 267,600 1,670
Lifecore Biomedical* 147,500 1,872
Mentor 186,200 4,711
Osteotech* 206,400 729
PolyMedica* 160,700 2,454
Renal Care* 369,600 11,373
Res-Care* 320,000 2,880
Respironics* 46,200 1,643
--------
34,883
--------
INDUSTRIALS - 17.8%
Alliant Techsystems* 85,350 7,306
Astec Industries* 379,300 4,935
C&D Technologies 116,200 2,138
Catalytica* 95,665 733
Dollar Thrifty Automotive* 313,300 3,117
L.B. Foster, CI A* 254,000 1,029
ITT Educational Services* 54,600 1,747
Landstar* 38,700 2,477
Learning Tree* 254,850 5,173
MagneTek* 542,487 4,980
Moog, Cl A* 302,400 6,825
NCO Group* 708,000 9,685
On Assignment* 255,250 4,104
Park Ohio Holdings* 270,317 824
Pentair 137,200 4,222
Rayovac* 582,050 8,876
Simpson Manufacturing* 37,350 1,980
SPX* 76,700 6,358
Teletech Holdings* 370,600 2,894
Tredegar Industries 110,600 1,880
Valassis Communications* 160,500 5,122
--------
86,405
--------
INFORMATION TECHNOLOGY - 6.7%
Actel* 230,600 4,095
APW Limited* 261,100 1,091
Braun Consulting* 215,500 776
Carreker* 135,700 1,030
DMC Stratex Networks* 220,300 1,137
Evolving Systems* 381,500 389
FSI International* 224,200 2,233
Innovex* 414,300 576
JDA Software* 263,900 3,468
Mykrolis* 198,100 1,777
Proquest* 263,900 8,682
Radisys* 202,400 2,429
Rainbow Technologies* 287,100 1,005
REMEC* 127,750 1,013
SONICblue* 156,900 171
Verity* 278,000 2,808
Zamba* 66,100 28
--------
32,708
--------
The accompanying notes are an integral part of the financial statements.
(98 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
SMALL CAP VALUE FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
UTILITIES - 2.7%
NSTAR 175,000 $ 7,333
Unisource Energy Holding 397,900 5,571
--------
12,904
--------
TOTAL COMMON STOCKS 435,579
--------
RELATED PARTY MONEY MARKET FUND - 10.3%
First American Prime Obligations Fund(A) 50,020,295 50,020
--------
TOTAL RELATED PARTY MONEY MARKET FUND 50,020
--------
TOTAL INVESTMENTS - 100.1%
(Cost $480,014) 485,599
--------
OTHER ASSETS AND LIABILITIES, NET - (0.1%)(E) (271)
--------
NET ASSETS
Portfolio capital $412,297
Accumulated net realized gain on investments 67,446
Net unrealized appreciation of investments 5,585
--------
TOTAL NET ASSETS - 100.0% $485,328
--------
CLASS A:
Net asset value and redemption price per share (net assets
of $34,291,712 and 2,559,602 shares of capital stock
issued and outstanding)(F) $ 13.40
Maximum sales charge of 5.50% 0.78
--------
Offering price per share(B) $ 14.18
--------
CLASS B:
Net asset value and offering price per share (net assets
of $12,391,788 and 952,846 shares of capital stock
issued and outstanding)(C)(F) $ 13.01
--------
CLASS C:
Net asset value per share (net assets of $4,547,448
and 346,465 shares of capital stock issued and
outstanding)(C)(F) $ 13.13
Maximum sales charge of 1.00% 0.13
--------
Offering price per share(D) $ 13.26
--------
CLASS S:
Net asset value, offering price and redemption price
per share (net assets of $13 and 1 share of capital
stock issued and outstanding)(F) $ 13.40
--------
CLASS Y:
Net asset value, offering price and redemption price per
share (net assets of $434,096,950 and 32,192,203 shares
of capital stock issued and outstanding)(F) $ 13.48
--------
*Non-income producing security
(A)This money market fund is advised by U.S.Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(C)Class B and Class C have a contingent deferred sales charge. For a
description of a possible redemption charge, see the notes to the financial
statements.
(D)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(E)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 18,790
Payable upon return of securities loaned $(18,790)
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
Cl - Class
REIT - Real Estate Investment Trust
SMALL CAP CORE FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
COMMON STOCKS - 94.6%
CONSUMER DISCRETIONARY - 20.3%
4Kids Entertainment 86,900 $ 1,729
Abercrombie & Fitch* 195,400 3,437
Alliance Atlantis Communication, Cl B 402,100 3,900
American Axle & Manufacturing Holdings 103,100 1,315
Anchor Gaming* 53,000 2,200
AnnTaylor Stores 28,800 631
Bally Total Fitness Holdings 134,300 2,728
Borg Warner 52,300 2,108
Cablevision Systems 78,700 1,594
CEC Entertainment 28,800 982
Corinthian Colleges* 28,800 971
Cost Plus 85,400 1,568
Electronics Boutique Holdings 41,900 1,129
Galyan's Trading 19,400 207
Genesco* 38,400 624
Gtech Holdings 231,000 7,979
Gymboree* 498,400 3,240
Hot Topic* 135,400 3,399
Insight Communications 162,125 2,983
Michaels Stores 34,300 1,253
Orient Express Hotels 196,800 2,757
OshKosh B'Gosh 14,400 374
Radio One, Cl D* 60,450 698
Scholastic* 122,700 5,337
Standard Pacific 49,100 958
Steiner Leisure* 69,735 1,116
Tommy Hilfiger* 160,900 1,440
Ultimate Electronics* 150,500 2,611
ValueVision International* 350,200 4,518
-------
63,786
-------
CONSUMER STAPLES - 1.4%
Constellation Brands, Cl A* 36,734 1,530
Duane Reade* 41,400 1,242
Performance Food Group* 54,308 1,549
-------
4,321
-------
ENERGY - 5.1%
Cabot Oil & Gas 78,200 1,560
Energy Partners* 171,925 1,200
Horizon Offshore* 8,400 51
Key Energy Group* 26,000 165
National - Oilwell* 349,100 5,062
Patterson - UTI Energy* 236,500 2,923
Pogo Producing 57,800 1,358
Precision Drilling* 101,300 2,139
Rowan Companies 133,700 1,655
-------
16,113
-------
FINANCIALS - 14.7%
Arthur. J. Gallagher 138,220 4,679
Commerce Bancorp 83,000 5,644
East West Bancorp 206,400 4,828
Federated Investors 68,700 2,034
Fidelity National Financial 311,000 8,363
First American Financial 87,600 1,774
Greater Bay Bancorp 120,600 2,806
Harleysville Group 95,100 2,281
Independence Community Bank 58,500 1,271
Instinet Group* 153,300 1,501
New York Community Bancorp 135,450 3,144
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 99)
STATEMENTS OF NET ASSETS September 30, 2001
SMALL CAP CORE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------
RenaissanceRe Holdings 75,800 $ 6,739
Southwest Bancorp of Texas* 40,200 1,196
-------
46,260
-------
HEALTH CARE - 16.0%
Advance PCS* 24,300 1,744
AmerisourceBergen* 63,106 4,477
Aviron* 35,100 874
Cephalon* 43,150 2,152
DENTSPLY International 113,425 5,211
Henry Schein* 13,900 537
Intermune* 117,900 4,510
Medicis , Cl A* 10,100 505
Noven Pharmaceuticals* 10,900 197
Omnicare 107,065 2,337
Pharmaceutical Resources 103,400 3,697
Priority Healthcare, Cl B* 63,600 1,526
Renal Care* 19,100 588
Respironics* 69,800 2,482
Sybron Dental Specialties* 163,300 3,037
Techne* 44,100 1,298
Transkaryotic Therapies* 33,900 920
Triad Hospitals* 111,600 3,951
Universal Health Services* 133,500 6,515
Varian Medical Systems* 36,900 2,367
Wright Medical Group* 44,800 759
XOMA Limited* 78,000 658
-------
50,342
-------
INDUSTRIALS - 9.3%
Administaff* 26,500 689
Armor Holdings* 52,200 1,034
Atlantic Coast Airline Holdings* 24,500 326
DiamondCluster International, Cl A 392,700 3,868
Frontier Airlines* 199,700 1,654
Global Payments 88,300 2,596
Granite Construction 54,300 1,392
GSI Lumonics* 103,855 707
Kaydon 79,900 1,672
Ladish* 77,300 615
Mercury Computer Systems* 27,300 1,025
Rayovac* 187,900 2,865
Shaw Group* 256,800 7,235
Skywest 34,800 582
Triumph Group* 31,100 725
URS 31,900 734
Valassis Communication 53,700 1,714
-------
29,433
-------
INFORMATION TECHNOLOGY - 21.2%
Activision* 27,900 759
Adaptec* 135,300 1,063
Aeroflex 172,400 1,896
Affiliated Computer Services, Cl A* 21,830 1,777
Alliance Semiconductor* 126,000 905
Anaren Microwave 87,100 1,424
Ascential Software* 197,100 650
ATMI* 28,500 440
Benchmark Electronics* 152,900 2,525
Black Box* 14,500 610
Brooks Automation* 14,600 388
Coherent* 147,600 4,192
Concurrent Computers* 350,200 3,180
SMALL CAP CORE FUND (CONTINUED)
DESCRIPTION PAR (000)/SHARES VALUE (000)
- -------------------------------------------------------------------------
Cree* 39,050 $ 577
Dendrite International* 118,600 942
DSP Group* 66,000 1,317
DuPont Photomasks* 98,700 2,742
E.Piphany* 237,700 1,010
Eclipsys* 49,400 657
Elantec Semiconductor* 24,800 569
Entegris* 219,600 1,735
Exar* 416,200 7,200
Fisher Scientific International* 109,300 2,776
Harmonic Lightwaves* 71,700 581
Inforte* 156,800 1,571
Integrated Circuit Systems* 27,200 348
Integrated Device Technologies* 98,700 1,986
IXYS* 244,200 1,453
Mettler - Toledo International* 66,452 2,800
Photronics* 197,960 3,652
Seachange International* 83,900 1,466
Secure Computing* 105,800 1,030
Speechworks International* 157,000 774
Stellent* 54,500 785
Take-Two Interactive Software* 260,100 1,839
THQ* 25,000 1,079
Three Five Systems* 42,800 682
Transwitch* 224,500 687
TriQuint Semiconductor* 122,300 1,956
Ultratech Stepper* 54,400 651
Virata* 175,300 1,749
Vitria Technology* 313,300 642
Xcare.net* 36,400 453
Zoran* 51,600 1,250
-------
66,768
-------
MATERIALS - 2.6%
Aracruz Celulose SA ADR 166,900 2,478
Ferro 86,800 2,012
Georgia Gulf 65,500 1,053
Massey Energy Company 83,100 1,217
OM Group 25,600 1,408
-------
8,168
-------
TELECOMMUNICATION SERVICES - 2.8%
Airgate PCS* 131,475 5,840
Alamosa Holdings* 85,700 1,187
Asia Global Crossing* 831,700 1,871
-------
8,898
-------
UTILITIES - 1.2%
Aquila* 173,400 3,780
-------
3,780
-------
TOTAL COMMON STOCKS 297,869
--------
CONVERTIBLE CORPORATE BONDS - 0.8%
Charter Communications
4.750%, 06/01/06 $ 3,213 2,424
--------
TOTAL CONVERTIBLE CORPORATE BONDS 2,424
--------
RELATED PARTY MONEY MARKET FUND - 5.4%
First American Prime Obligations Fund (A17,003,043 17,003
--------
TOTAL RELATED PARTY MONEY MARKET FUND 17,003
--------
TOTAL INVESTMENTS - 100.8%
(Cost $333,713) 317,296
--------
OTHER ASSETS & LIABILITIES, NET - (0.8%) (E) (2,543)
--------
The accompanying notes are an integral part of the financial statements.
(100 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
SMALL CAP CORE FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- -------------------------------------------------------------------------
NET ASSETS
Portfolio capital $309,114
Accumulated net investment loss (3)
Accumulated net realized gain on investments 22,059
Net unrealized depreciation of investments (16,417)
--------
TOTAL NET ASSETS - 100.0% $314,753
--------
CLASS A:
Net asset value and redemption price per
share (net assets of $17,351,342 and
1,449,925 shares of capital stock issued
and outstanding)(F) $ 11.97
Maximum sales charge of 5.50% 0.70
--------
Offering price per share(B) $ 12.67
--------
CLASS B:
Net asset value and offering price per
share (net assets of $1,978,651 and
175,452 shares of capital stock issued
and outstanding)(C)(F) $ 11.28
--------
CLASS C:
Net asset value per share (net assets of
$12 and 1 share of capital stock issued
and outstanding)(C)(F) $ 11.97
Maximum sales charge of 1.00% 0.12
--------
Offering price per share (D) $ 12.09
--------
CLASS S:
Net asset value, offering price and
redemption price per share (net assets
of $3,721,357 and 311,721 shares of
capital stock issued and outstanding)(F) $ 11.94
--------
CLASS Y:
Net asset value, offering price and
redemption price per share (net assets
of $291,701,705 and 23,789,500 shares of
capital stock issued and outstanding)(F) $ 12.26
--------
*Non-income producing security
(A)This money market fund is advised by U.S.Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.50%.
(C)Class B and C have a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(D)The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
(E)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 50,157
Payable upon return of securities loaned $(50,157)
(F)$.0001 par value and 2 billion authorized shares.
ADR - American Depositary Receipt
Cl - Class
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 101)
STATEMENTS OF OPERATIONS in thousands
MICRO CAP SMALL CAP
FUND GROWTH FUND
---------------------- -----------
11/1/00 11/1/99 10/1/00
to to to
9/30/01 10/31/00 9/30/01
--------- -------- -----------
INVESTMENT INCOME:
Interest $ 1,161 $ 1,398 $ 1,939
Dividends 1,844 800 695
Securities lending 344 -- 277
- ---------------------------------------------------------------------- --------- --------- ---------
TOTAL INVESTMENT INCOME 3,349 2,198 2,911
====================================================================== ========= ========= =========
EXPENSES:
Investment advisory fees 4,794 5,061 3,299
Administrator and fund accounting fees 447 427 532
Transfer agent fees and expenses 88 61 190
Custodian fees 53 81 142
Directors' fees 2 9 5
Registration fees 73 40 5
Professional fees 46 45 14
Printing 44 15 28
Distribution and shareholder servicing fees - Class A 98 103 112
Distribution and shareholder servicing fees - Class B 25 12 68
Shareholder servicing fees - Class S 2 -- --
Distribution fees - Class C -- -- 77
Other 8 13 7
- ---------------------------------------------------------------------- --------- --------- ---------
TOTAL EXPENSES 5,680 5,867 4,479
====================================================================== ========= ========= =========
Less: Waiver of expenses (173) -- --
- ---------------------------------------------------------------------- --------- --------- ---------
TOTAL NET EXPENSES 5,507 5,867 4,479
====================================================================== ========= ========= =========
Investment loss - net (2,158) (3,669) (1,568)
- ---------------------------------------------------------------------- --------- --------- ---------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS,
OPTIONS WRITTEN AND FUTURES - NET:
Net realized gain (loss) on investments (7,340) 136,862 (68,972)
Net realized gain on futures 307 -- --
Net realized loss on options written (619) -- --
Net change in unrealized appreciation or depreciation of investments (78,259) 23,319 (172,542)
- ---------------------------------------------------------------------- --------- --------- ---------
NET GAIN (LOSS) ON INVESTMENTS (85,911) 160,181 (241,514)
====================================================================== ========= ========= =========
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (88,069) $ 156,512 $(243,082)
====================================================================== ========= ========= =========
The accompanying notes are an integral part of the financial statements.
(102 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
SMALL CAP SMALL CAP
VALUE FUND CORE FUND
- ----------- ----------------------
10/1/00 11/1/00 12/1/99
to to to
9/30/01 9/30/01 10/31/00
- ----------- --------- ---------
$ 2,928 $ 1,418 $ 667
3,454 1,347 738
149 183 336
--------- --------- ---------
6,531 2,948 1,741
========= ========= =========
3,595 2,336 1,033
581 421 664
235 94 45
154 50 69
5 -- 3
5 21 14
15 41 18
31 45 22
94 45 27
136 17 11
-- 10 --
29 -- --
8 9 12
--------- --------- ---------
4,888 3,089 1,918
========= ========= =========
(12) (101) (523)
--------- --------- ---------
4,876 2,988 1,395
========= ========= =========
1,655 (40) 346
--------- --------- ---------
74,818 22,966 31,087
-- 207 --
-- -- --
--------- --------- ---------
(111,001) (58,688) 5,810
--------- --------- ---------
(36,183) (35,515) 36,897
========= ========= =========
$ (34,528) $ (35,555) $ 37,243
========= ========= =========
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 103)
STATEMENTS OF CHANGES IN NET ASSETS in thousands
MICRO CAP
FUND
-----------------------------------
11/1/00 11/1/99 11/1/98
to to to
9/30/01 10/31/00 10/31/99
--------- --------- ---------
OPERATIONS:
Investment income (loss) - net $ (2,158) $ (3,669) $ (1,572)
Net realized gain (loss) on investments (7,340) 136,862 47,964
Net realized gain on futures 307 -- --
Net realized gain (loss) on options written (619) -- --
Net change in unrealized appreciation or depreciation of investments (78,259) 23,319 29,718
- -------------------------------------------------------------------------------------- --------- --------- ---------
Net increase (decrease) in net assets resulting from operations (88,069) 156,512 76,110
- -------------------------------------------------------------------------------------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net (3):
Class A -- -- --
Class B -- -- --
Class C -- -- --
Class S -- -- --
Class Y -- -- --
Net realized gain on investments (4):
Class A (11,961) (6,166) (44)
Class B (628) (62) --
Class C -- -- --
Class S -- -- --
Class Y (92,209) (42,827) (233)
Tax return of capital:
Class A -- -- --
Class B -- -- --
Class C -- -- --
Class Y -- -- --
- -------------------------------------------------------------------------------------- --------- --------- ---------
Total distributions (104,798) (49,055) (277)
- -------------------------------------------------------------------------------------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS (1):
Class A
Proceeds from sales 37,275 29,841 8,724
Reinvestment of distributions 11,494 5,924 42
Payments for redemptions (22,539) (29,091) (9,284)
Shares issued in connection with the acquisition of Stellar/Mercantile Fund assets -- -- --
Shares issued in connection with the acquisition of the Micro Cap Value Fund
and Regional Equity Fund -- -- --
- -------------------------------------------------------------------------------------- --------- --------- ---------
Increase (decrease) in net assets from Class A transactions 26,230 6,674 (518)
- -------------------------------------------------------------------------------------- --------- --------- ---------
Class B
Proceeds from sales 2,299 1,974 119
Reinvestment of distributions 595 61 --
Payments for redemptions (357) (240) --
Shares issued in connection with the acquisition of Stellar/Mercantile Fund assets -- -- --
Shares issued in connection with the acquisition of the Micro Cap Value Fund
and Regional Equity Fund -- -- --
- -------------------------------------------------------------------------------------- --------- --------- ---------
Increase (decrease) in net assets from Class B transactions 2,537 1,795 119
- -------------------------------------------------------------------------------------- --------- --------- ---------
Class C
Proceeds from sales 1 -- --
Reinvestment of distributions -- -- --
Payments for redemptions -- -- --
- -------------------------------------------------------------------------------------- --------- --------- ---------
Increase in net assets from Class C transactions 1 -- --
- -------------------------------------------------------------------------------------- --------- --------- ---------
Class S (2)
Proceeds from sales 2,652 -- --
Reinvestment of distributions -- -- --
Payments for redemptions (145) -- --
- -------------------------------------------------------------------------------------- --------- --------- ---------
Increase (decrease) in net assets from Class S transactions 2,507 -- --
- -------------------------------------------------------------------------------------- --------- --------- ---------
Class Y (2)
Proceeds from sales 68,057 115,738 44,207
Reinvestment of distributions 84,908 40,308 222
Payments for redemptions (42,992) (76,850) (31,952)
Shares issued in connection with the acquisition of Stellar/Mercantile Fund assets -- -- --
Shares issued in connection with the acquisition of the Micro Cap Value Fund
and Regional Equity Fund -- -- --
- -------------------------------------------------------------------------------------- --------- --------- ---------
Increase (decrease) in net assets from Class Y transactions 109,973 79,196 12,477
- -------------------------------------------------------------------------------------- --------- --------- ---------
Increase (decrease) in net assets from capital share transactions 141,245 87,665 12,078
- -------------------------------------------------------------------------------------- --------- --------- ---------
Total increase (decrease) in net assets (51,619) 195,122 87,911
NET ASSETS AT BEGINNING OF PERIOD 368,148 173,026 85,115
====================================================================================== ========= ========= =========
NET ASSETS AT END OF PERIOD $ 316,529 $ 368,148 $ 173,026
====================================================================================== ========= ========= =========
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ (3) $ (5) $ --
====================================================================================== ========= ========= =========
[WIDE TABLE CONTINUED FROM ABOVE]
SMALL CAP
GROWTH FUND
----------------------
10/1/00 10/1/99
to to
9/30/01 9/30/00
--------- ---------
OPERATIONS:
Investment income (loss) - net $ (1,568) $ (1,641)
Net realized gain (loss) on investments (68,972) 100,117
Net realized gain (loss) on foreign currency -- --
Net realized gain (loss) on options written -- --
Net change in unrealized appreciation or depreciation of investments (172,542) 81,954
- -------------------------------------------------------------------------------------- --------- ---------
Net increase (decrease) in net assets resulting from operations (243,082) 180,430
- -------------------------------------------------------------------------------------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net (3):
Class A -- --
Class B -- --
Class C -- --
Class S -- --
Class Y -- --
Net realized gain on investments (4):
Class A (10,305) (3,977)
Class B (1,633) (304)
Class C (1,503) (54)
Class S -- --
Class Y (81,507) (31,018)
Tax return of capital:
Class A (271) --
Class B (43) --
Class C (40) --
Class Y (2,148) --
- -------------------------------------------------------------------------------------- --------- ---------
Total distributions (97,450) (35,353)
- -------------------------------------------------------------------------------------- --------- ---------
CAPITAL SHARE TRANSACTIONS (1):
Class A
Proceeds from sales 47,615 65,853
Reinvestment of distributions 10,189 3,812
Payments for redemptions (49,298) (60,250)
Shares issued in connection with the acquisition of Stellar/Mercantile Fund assets -- --
Shares issued in connection with the acquisition of the Micro Cap Value Fund
and Regional Equity Fund -- --
- -------------------------------------------------------------------------------------- --------- ---------
Increase (decrease) in net assets from Class A transactions 8,506 9,415
- -------------------------------------------------------------------------------------- --------- ---------
Class B
Proceeds from sales 1,463 6,013
Reinvestment of distributions 1,656 303
Payments for redemptions (1,233) (1,048)
Shares issued in connection with the acquisition of Stellar/Mercantile Fund assets -- --
Shares issued in connection with the acquisition of the Micro Cap Value Fund
and Regional Equity Fund -- --
- -------------------------------------------------------------------------------------- --------- ---------
Increase (decrease) in net assets from Class B transactions 1,886 5,268
- -------------------------------------------------------------------------------------- --------- ---------
Class C
Proceeds from sales 4,139 7,592
Reinvestment of distributions 1,542 53
Payments for redemptions (1,831) (131)
- -------------------------------------------------------------------------------------- --------- ---------
Increase in net assets from Class C transactions 3,850 7,514
- -------------------------------------------------------------------------------------- --------- ---------
Class S (2)
Proceeds from sales -- --
Reinvestment of distributions -- --
Payments for redemptions -- --
- -------------------------------------------------------------------------------------- --------- ---------
Increase (decrease) in net assets from Class S transactions -- --
- -------------------------------------------------------------------------------------- --------- ---------
Class Y (2)
Proceeds from sales 210,902 199,248
Reinvestment of distributions 53,055 13,358
Payments for redemptions (116,218) (110,520)
Shares issued in connection with the acquisition of Stellar/Mercantile Fund assets -- --
Shares issued in connection with the acquisition of the Micro Cap Value Fund
and Regional Equity Fund -- --
- -------------------------------------------------------------------------------------- --------- ---------
Increase (decrease) in net assets from Class Y transactions 147,739 102,086
- -------------------------------------------------------------------------------------- --------- ---------
Increase (decrease) in net assets from capital share transactions 161,981 124,283
- -------------------------------------------------------------------------------------- --------- ---------
Total increase (decrease) in net assets (178,551) 269,360
NET ASSETS AT BEGINNING OF PERIOD 552,768 283,408
====================================================================================== ========= =========
NET ASSETS AT END OF PERIOD $ 374,217 $ 552,768
====================================================================================== ========= =========
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ -- $ --
====================================================================================== ========= =========
(1)See note 4 in Notes to Financial Statements for additional information.
(2)On September 24, 2001, Class Y and Institutional classes of Micro Cap and
Small Cap Core Funds were redesignated as Class S and Class Y, respectively.
(3)Includes distributions in excess of net investment income of $297 and $64 for
the period ended September 30, 2001 for Small Cap Value and Small Cap Core
Funds, respectively.
(4)Includes distributions in excess of net realized gains of $989 and $2,502 for
the period ended September 30, 2001 for Micro Cap and Small Cap Growth Funds,
respectively.
The accompanying notes are an integral part of the financial statements.
(104 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
SMALL CAP SMALL CAP
VALUE FUND CORE FUND
---------------------- -----------------------------------
10/1/00 10/1/99 11/1/00 12/1/99 12/1/98
to to to to to
9/30/01 9/30/00 9/30/01 10/31/00 11/30/99
--------- --------- --------- --------- ---------
$ 1,655 $ 286 $ (40) $ 346 $ (401)
74,818 68,049 22,966 31,087 2,841
-- -- 207 -- --
-- -- -- -- --
(111,001) 23,381 (58,688) 5,810 19,705
--------- --------- --------- --------- ---------
(34,528) 91,716 (35,555) 37,243 22,145
--------- --------- --------- --------- ---------
(109) -- -- (4) (50)
(1) -- -- -- (6)
(1) -- -- -- --
-- -- -- (2) (108)
(2,125) -- (64) (270) (546)
(5,677) (53) (1,982) (170) --
(2,179) (5) (295) (21) --
(181) -- -- -- --
-- -- (947) (49) --
(66,578) (1,495) (27,758) (2,115) --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
--------- --------- --------- --------- ---------
(76,851) (1,553) (31,046) (2,631) (710)
--------- --------- --------- --------- ---------
11,354 12,390 14,407 408 748
5,639 52 1,889 166 48
(10,252) (15,074) (14,993) (2,170) (5,010)
-- -- 10,478 -- --
-- 21,098 -- -- --
--------- --------- --------- --------- ---------
6,741 18,466 11,781 (1,596) (4,214)
--------- --------- --------- --------- ---------
1,999 848 1,125 150 75
2,146 5 282 20 6
(2,275) (3,656) (562) (206) (442)
-- -- 389 -- --
-- 13,248 -- -- --
--------- --------- --------- --------- ---------
1,870 10,445 1,234 (36) (361)
--------- --------- --------- --------- ---------
4,274 991 -- -- --
179 1 -- -- --
(311) (113) -- -- --
--------- --------- --------- --------- ---------
4,142 879 -- -- --
--------- --------- --------- --------- ---------
-- -- 1,896 4,408 2,214
-- -- 866 51 108
-- -- (2,003) (3,229) (26,973)
--------- --------- --------- --------- ---------
-- -- 759 1,230 (24,651)
--------- --------- --------- --------- ---------
177,439 89,113 117,240 16,703 24,124
54,016 1,298 22,377 1,996 459
(130,010) (170,625) (109,605) (27,051) (60,237)
-- -- 187,640 -- --
-- 110,330 -- -- --
--------- --------- --------- --------- ---------
101,445 30,116 217,652 (8,352) (35,654)
--------- --------- --------- --------- ---------
114,198 59,906 231,426 (8,754) (64,880)
--------- --------- --------- --------- ---------
2,819 150,069 164,825 25,858 (43,445)
482,509 332,440 149,928 124,070 167,515
========= ========= ========= ========= =========
$ 485,328 $ 482,509 $ 314,753 $ 149,928 $ 124,070
========= ========= ========= ========= =========
$ -- $ 285 $ (3) $ 48 $ --
========= ========= ========= ========= =========
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 105)
FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended
September 30, unless otherwise indicated
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS FROM
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS CAPITAL
---------- ------------- ------------ ---------- ------------- -------------
MICRO CAP FUND(2)
Class A
2001(3)(7) $ 31.26 $ (0.17) $ (5.20) $ -- $ (9.00) --
2000(7) 21.80 (0.40) 15.99 -- (6.13) --
1999 12.38 (0.26) 9.71 -- (0.03) --
1998(7) 17.47 (0.25) (3.17) -- (1.67) --
1997 16.16 (0.18) 4.24 -- (2.75) --
Class B
2001(3)(7) $ 30.84 $ (0.31) $ (5.09) $ -- $ (9.00) --
2000(7) 21.69 (0.61) 15.89 -- (6.13) --
1999(6)(7) 13.74 (0.30) 8.25 -- -- --
Class C
2001(5)(7) $ 16.34 $ -- $ 0.56 $ -- $ -- --
Class S
2001(4)(7) $ 20.01 $ (0.19) $ (2.93) $ -- $ -- --
Class Y
2001(3)(7) $ 31.83 $ (0.12) $ (5.33) $ -- $ (9.00) --
2000 22.06 (0.31) 16.21 -- (6.13) --
1999 12.49 (0.19) 9.79 -- (0.03) --
1998 17.57 (0.22) (3.19) -- (1.67) --
1997 16.20 (0.15) 4.27 -- (2.75) --
- ------- -------- ------- ------- ------- ------- --
SMALL CAP GROWTH FUND
Class A(8)
2001(7) $ 24.47 $ (0.08) $ (8.55) $ -- $ (4.46) $ (0.10)
2000 16.77 (0.12) 9.89 -- (2.07) --
1999 11.90 (0.06) 4.95 -- (0.02) --
1998 17.41 (0.09) (2.67) -- (2.64) (0.11)
1997 17.11 (0.16) 5.66 (0.04) (5.16) --
Class B
2001(7) $ 23.17 $ (0.19) $ (7.98) $ -- $ (4.47) $ (0.09)
2000 16.07 (0.23) 9.40 -- (2.07) --
1999 11.50 (0.14) 4.73 -- (0.02) --
1998(9) 13.74 (0.02) (2.22) -- -- --
Class C
2001(7) $ 24.17 $ (0.20) $ (8.39) $ -- $ (4.49) $ (0.07)
2000 16.68 (0.13) 9.69 -- (2.07) --
1999(10) 15.48 (0.08) 1.28 -- -- --
Class S
2001(7)(11) $ 11.17 $ -- $ 0.11 $ -- $ -- $ --
Class Y
2001(7) $ 24.79 $ (0.04) $ (8.69) $ -- $ (4.49) $ (0.07)
2000 16.92 (0.06) 10.00 -- (2.07) --
1999 11.98 (0.02) 4.98 -- (0.02) --
1998(9) 14.29 -- (2.31) -- -- --
- ------- -------- ------- ------- ------- ------- -------
(1)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
(2)The financial highlights for the Micro Cap Fund as set forth herein include
the historical financial highlights of the Firstar Micro Cap Fund. The
assets of the Firstar Fund were acquired by the First American Micro Cap
Fund on September 24, 2001. In connection with such acquisition, (i) Class A
shares of the Firstar Micro Cap Fund were exchanged for Class A shares of
the First American Micro Cap Fund, (ii) Firstar Class B shares were
exchanged for Class B shares of the First American Fund, (iii) Firstar Class
Y shares were exchanged for Class S shares of the First American Fund, and
(iv) Firstar Class Institutional shares were exchanged for Class Y shares of
the First American Fund.
(3)Effective in 2001, the Fund's fiscal year end was changed from October 31 to
September 30. All ratios for the period have been annualized, except total
return.
(4)Class S shares have been offered since December 11, 2000. All ratios for the
period have been annualized, except total return.
(5)Class C shares have been offered since September 24, 2001. All ratios for
the period have been annualized, except total return.
(6)Class B shares have been offered since March 1, 1999. All ratios for the
period have been annualized, except total return.
(7)Per share data calculated using average shares outstanding method.
(8)Historical per-share amounts have been adjusted to reflect the conversion
ratios utilized for the reorganization of the FAIF Small Cap Growth Fund and
the Piper Small Company Growth Fund, that occurred on July 31, 1998. Piper
Small Company Growth Fund is the financial reporting survivor. Therefore,
the financial highlights for the Small Cap Growth Fund represent the
financial highlights information of the former Piper Small Company Growth
Fund. On July 31, 1998, the fund's advisor changed from Piper Capital
Management, Inc. to U.S. Bank National Association.
(9)Class Y and Class B share have been offered since July 31, 1998. There is no
historical information for these classes of Piper Small Company Growth Fund
prior to the reorganization on July 31, 1998. All ratios for the period have
been annualized, except total return.
(10)Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized, except total return.
(11)Class S shares have been offered since September 24, 2001. All ratios for
the period have been annualized, except total return.
The accompanying notes are an integral part of the financial statements.
(106 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT INCOME
NET ASSET RATIO OF INVESTMENT AVERAGE (LOSS) TO AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (1) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- --------- ----------- ------------ ----------- ------------- ------------ ----------------- ----------
$ 16.89 (21.51)% $ 45,233 1.93% (0.91)% 1.99% (0.97)% 125%
31.26 87.43 43,031 1.96 (1.31) 1.96 (1.31) 179
21.80 76.54 21,988 2.01 (1.43) 2.02 (1.44) 200
12.38 (21.71) 12,419 1.99 (1.63) 2.06 (1.70) 136
17.47 29.78 16,793 1.95 (1.45) 2.03 (1.53) 158
$ 16.44 (22.07)% $ 3,165 2.68% (1.68)% 2.74% (1.74)% 125%
30.84 86.13 2,136 2.71 (2.06) 2.71 (2.06) 179
21.69 57.86 140 2.78 (2.36) 2.78 (2.36) 200
$ 16.90 3.43% $ 1 1.63% (0.41)% 1.76% (0.54)% 125%
$ 16.89 (15.59)% $ 2,014 1.94% (1.06)% 2.00% (1.12)% 125%
$ 17.38 (21.35)% $266,115 1.68% (0.64)% 1.74% (0.70)% 125%
31.83 87.90 322,981 1.71 (1.06) 1.71 (1.06) 179
22.06 77.06 150,898 1.76 (1.18) 1.77 (1.19) 200
12.49 (21.51) 72,696 1.74 (1.38) 1.81 (1.45) 136
17.57 30.12 103,840 1.70 (1.20) 1.78 (1.28) 158
-------- ------ -------- ---- ----- ---- ----- ---
$ 11.28 (41.71)% $ 31,913 1.15% (0.51)% 1.15% (0.51)% 265%
24.47 62.07 57,148 1.14 (0.57) 1.14 (0.57) 230
16.77 41.11 32,203 1.14 (0.39) 1.15 (0.40) 110
11.90 (18.66) 28,252 1.29 (0.61) 1.43 (0.75) 92
17.41 45.66 35,647 1.34 (0.75) 1.98 (1.39) 109
$ 10.44 (42.14)% $ 5,009 1.90% (1.27)% 1.90% (1.27)% 265%
23.17 60.95 8,440 1.89 (1.30) 1.89 (1.30) 230
16.07 39.92 2,217 1.90 (1.16) 1.91 (1.17) 110
11.50 (16.30) 1,104 1.90 (1.20) 1.90 (1.20) 92
$ 11.02 (42.14)% $ 6,378 1.90% (1.28)% 1.90% (1.28)% 265%
24.17 61.06 8,205 1.89 (1.28) 1.89 (1.28) 230
16.68 7.75 309 1.90 (1.18) 1.91 (1.19) 110
$ 11.28 0.98% $ -- 0.00% 0.00% 0.00% 0.00% 265%
$ 11.50 (41.55)% $330,917 0.90% (0.28)% 0.90% (0.28)% 265%
24.79 62.58 478,975 0.89 (0.30) 0.89 (0.30) 230
16.92 41.42 248,679 0.90 (0.16) 0.91 (0.17) 110
11.98 (16.17) 113,874 0.90 (0.20) 0.90 (0.20) 92
-------- ------ -------- ---- ----- ---- ----- ---
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 107)
FINANCIAL HIGHLIGHTs For a share outstanding, throughout the periods ended
September 30, unless otherwise indicated
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
---------- ------------- ------------ ---------- -------------
SMALL CAP VALUE FUND(B)
Class A
2001(8) $ 17.09 $ 0.02 $ (0.97) $ (0.05) $ (2.69)
2000 13.94 (0.01) 3.23 -- (0.07)
1999 13.58 0.01 1.47 (0.01) (1.11)
1998(1) 18.20 0.04 (3.38) (0.01) (1.27)
1997(2) 17.86 (0.03) 0.37 -- --
1997(9) 13.95 0.01 5.43 (0.01) (1.52)
Class B
2001(8) $ 16.76 $ (0.09) $ (0.97) $ -- $ (2.69)
2000 13.77 (0.09) 3.15 -- (0.07)
1999 13.53 0.02 1.33 -- (1.11)
1998(1) 18.23 0.01 (3.43) (0.01) (1.27)
1997(3)(4) 18.22 -- 0.01 -- --
Class C
2001(8) $ 16.88 $ (0.10) $ (0.95) $ (0.01) $ (2.69)
2000 13.87 (0.06) 3.14 (0.07)
1999(5) 13.48 0.01 0.38 -- --
Class S
2001(6)(8) $ 12.84 $ -- $ 0.56 $ -- $ --
Class Y
2001(8) $ 17.19 $ 0.06 $ (1.00) $ (0.08) $ (2.69)
2000 13.98 0.02 3.26 -- (0.07)
1999 13.60 0.01 1.50 (0.02) (1.11)
1998(1) 18.23 0.06 (3.38) (0.04) (1.27)
1997(2) 17.87 (0.01) 0.37 -- --
1997(11) 13.96 0.04 5.43 (0.04) (1.52)
- ------- -------- ------- ------- ------- -------
SMALL CAP CORE FUND(C)
Class A
2001(8)(9) $ 17.60 $ (0.03) $ (1.89) $ -- $ (3.71)
2000(8)(10) 13.84 (0.10) 4.13 (0.01) (0.26)
1999(8) 11.86 (0.07) 2.10 -- (0.05)
1998 15.03 (0.06) (1.89) -- (1.22)
1997 13.40 (0.05) 2.50 -- (0.82)
Class B
2001(8)(9) $ 16.90 $ (0.12) $ (1.79) $ -- $ (3.71)
2000(8)(10) 13.38 (0.13) 3.92 -- (0.27)
1999(8) 11.53 (0.16) 2.06 -- (0.05)
1998 14.74 (0.14) (1.85) -- (1.22)
1997 13.24 (0.13) 2.45 -- (0.82)
Class C
2001(7)(8) $ 11.72 $ -- $ 0.25 $ -- $ --
Class S
2001(8)(9) $ 17.55 $ (0.01) $ (1.89) $ -- $ (3.71)
2000(8)(10) 13.80 (0.01) 4.03 (0.01) (0.26)
1999(8) 11.82 (0.07) 2.10 -- (0.05)
1998 14.98 (0.07) (1.87) -- (1.22)
1997 13.36 (0.04) 2.48 -- (0.82)
Class Y
2001(8)(9) $ 17.92 $ 0.00 $ (1.95) $ -- $ (3.71)
2000(8)(10) 14.07 0.05 4.10 (0.03) (0.27)
1999(8) 12.02 (0.03) 2.13 -- (0.05)
1998 15.17 (0.02) (1.91) -- (1.22)
1997 13.49 0.01 2.50 (0.01) (0.82)
- ------- -------- ------- ------- ------- -------
(A)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
(B)The financial highlights for Small Cap Value Fund as set forth herein include
the historical financial highlights of the Qualivest Small Companies Fund
Class A and Class Y shares. The assets of the Qualivest Small Companies Fund
were acquired by Small Cap Value Fund on November 21, 1997. In connection
with such acquisition, (i) Class A and Class C shares of the Qualivest Small
Companies Fund were exchanged for Class A shares of Small Cap Value Fund; and
(ii) Qualivest Class Y shares were exchanged for Class Y shares of Small Cap
Value Fund.
(C)The financial highlights for the Small Cap Core Fund as set forth herein
include the historical financial highlights of the Firstar Small Cap Core
Equity Fund. The assets of the Firstar Fund were acquired by the First
American Small Cap Core Fund on September 24, 2001. In connection with such
acquisition, (i) Class A shares of the Firstar Small Cap Core Fund were
exchanged for Class A shares of the First American Small Cap Core Fund, (ii)
Firstar Class B shares were exchanged for Class B shares of the First
American Fund, (iii) Firstar Class Y shares were exchanged for Class S shares
of the First American Fund, and (iv) Firstar Class Institutional shares were
exchanged for Class Y shares of the First American Fund.
The accompanying notes are an integral part of the financial statements.
(108 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT INCOME
NET ASSET RATIO OF INVESTMENT AVERAGE (LOSS) TO AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (A) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ---------- ----------- ------------ ----------- ------------- ----------- ----------------- ---------
$ 13.40 (6.36)% $ 34,292 1.15% 0.11% 1.15% 0.11% 53%
17.09 23.19 35,858 1.14 (0.13) 1.16 (0.15) 73
13.94 11.12 11,567 1.14 (0.17) 1.14 (0.17) 44
13.58 (19.48) 13,551 1.13 0.15 1.13 0.15 21
18.20 1.90 19,194 1.37 (0.38) 1.37 (0.38) 3
17.86 41.71 22,429 1.31 0.01 1.31 0.01 29
$ 13.01 (7.24)% $ 12,392 1.90% (0.64)% 1.90% (0.64)% 53%
16.76 22.31 13,646 1.88 (0.89) 1.90 (0.91) 73
13.77 10.16 1,005 1.89 (0.93) 1.89 (0.93) 44
13.53 (19.91) 618 1.88 (0.53) 1.88 (0.53) 21
18.23 0.05 1 1.90 (1.53) 1.90 1.53 3
$ 13.13 (7.08)% $ 4,547 1.90% (0.65)% 1.90% (0.65)% 53%
16.88 22.29 1,099 1.88 (0.84) 1.91 (0.87) 73
13.87 2.89 116 1.89 (1.04) 1.89 (1.04) 44
$ 13.40 4.36% $ -- 0.00% 0.00% 0.00% 0.00% 53%
$ 13.48 (6.25)% $434,097 0.90% 0.37% 0.90% 0.37% 53%
17.19 23.56 431,906 0.89 0.11 0.91 0.09 73
13.98 11.36 319,752 0.89 0.08 0.89 0.08 44
13.60 (19.31) 367,035 0.88 0.40 0.88 0.40 21
18.23 2.01 461,046 1.06 (0.06) 1.06 (0.06) 3
17.87 41.96 449,988 1.06 0.25 1.06 0.25 29
-------- ------ -------- ---- ----- ---- ----- --
$ 11.97 (12.63)% $ 17,351 1.19% (0.24)% 1.22% (0.27)% 204%
17.60 29.65 9,538 1.28 (0.01) 1.39 (0.12) 91
13.84 17.21 8,885 1.26 (0.57) 1.36 (0.67) 72
11.86 (14.19) 11,601 1.25 (0.45) 1.35 (0.55) 70
15.03 19.45 14,213 1.25 (0.29) 1.35 (0.39) 80
$ 11.28 (13.21)% $ 1,979 1.93% (0.99)% 1.97% (1.03)% 204%
16.90 28.81 1,331 1.98 (0.71) 2.09 (0.82) 91
13.38 16.57 1,094 1.96 (1.27) 2.06 (1.37) 72
11.53 (14.79) 1,286 1.95 (1.15) 2.05 (1.25) 70
14.74 18.62 1,503 1.95 (0.99) 2.05 (1.09) 80
$ 11.97 2.13% $ -- 0.00% 0.00% 0.00% 0.00% 204%
$ 11.94 (12.52)% $ 3,721 1.07% (0.05)% 1.14% (0.12)% 204%
17.55 29.67 4,442 1.28 (0.01) 1.39 (0.12) 91
13.80 17.27 2,448 1.26 (0.59) 1.36 (0.69) 72
11.82 (14.17) 25,037 1.25 (0.45) 1.35 (0.55) 70
14.98 19.41 34,395 1.25 (0.29) 1.35 (0.39) 80
$ 12.26 (12.49)% $291,706 0.93% 0.01% 0.96% (0.02)% 204%
17.92 30.01 134,617 0.98 0.29 1.39 (0.12) 91
14.07 17.57 111,643 0.96 (0.26) 1.36 (0.66) 72
12.02 (13.90) 129,591 0.95 (0.16) 1.35 (0.56) 70
15.17 19.77 211,643 0.95 0.01 1.35 (0.39) 80
-------- ------ -------- ---- ----- ---- ----- ---
(1)Effective in 1998, the Fund's fiscal year end was changed from November 30
to September 30. All ratios for the period have been annualized, except
total return.
(2)Effective in 1997, the Fund's fiscal year end was changed from July 31 to
November 30. All ratios for the period have been annualized, except total
return.
(3)Class B shares have been offered since November 24, 1997. All ratios for the
period have been annualized, except total return.
(4)For the period November 24, 1997 to November 30, 1997. All ratios for the
period have been annualized, except total return.
(5)Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized, except total return.
(6)Class S shares have been offered since September 24, 2001. All ratios for
the period have been annualized, except total return.
(7)Class C shares have been offered since September 24, 2001. All ratios for
the period have been annualized, except total return.
(8)Per share data calculated using average shares outstanding method.
(9)Effective in 2001, the Fund's fiscal year end was changed from October 31
to September 30. All ratios for the period have been annualized, except
total return.
(10)Effective in 2000, the Fund's fiscal year end was changed from November 30
to October 31. All ratios for the period have been annualized, except total
return.
(11)For the period ended July 31.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 109)
STATEMENTS OF NET ASSETS September 30, 2001
EMERGING MARKETS FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
FOREIGN COMMON STOCKS - 92.7%
CHINA - 15.7%
Beijing Enterprises Hldgs 170,000 $169
Beilinh Dating Power Gen-H 2,156,000 774
China Merchants Holdings International 448,000 264
China Resources Beijing Land 580,000 138
China Resources Enterprises 464,000 405
China Southern Airlines, Cl H* 1,218,000 250
Cnoc Ltd 1,366,500 1,349
Denway Motors* 3,070,800 817
Greencool Technology 500,000 167
Huaneng Power Intl Inc-H 1,864,000 1,052
PetroChina 4,773,000 906
Travelsky Technology Ltd 329,000 221
Tsingtao Brewery 500,000 133
Yanzou Coal Mining 745,000 224
------
6,869
------
CROATIA - 0.5%
Pliva Dd Gdr 144A 24,600 223
------
HUNGARY - 5.8%
EGIS 4,365 180
Richter Gedeon 33,100 1,843
OTP Bank 11,000 531
------
2,554
------
INDIA - 1.5%
Doctor Reddy's Lab 9,200 205
Ranbaxy Laboratories Ltd 33,500 455
------
660
------
INDONESIA - 0.7%
Astra Intl Idr1000 524,500 104
Hm Sampoerna TBK PT 350,000 115
Pt Gudang Garam Tbk 109,000 112
------
331
------
ISRAEL - 2.4%
Teva Pharmaceutical Industries ADR 17,400 1,052
------
KOREA - 11.6%
Hite Brewery 4,980 177
Humax Co Ltd 10,000 145
Hyundai Development 50,000 196
Hyundai Motor 49,600 636
Kia Motors Corporation 28,000 152
Kookmin Bank 18,300 225
Kookmin Credit Card Co Ltd 18,450 462
Pacific Corporation 9,280 680
Pohang Iron & Steel 12,000 740
Samsung Corporation 26,400 117
Samsung Electronics 3,100 331
Samsung Securities 22,600 491
Samung Fire & Marine Insurance 5,100 140
SK Telecom 2,400 381
Ssangyong Oil Refining 6,270 195
------
5,068
------
MEXICO - 28.0%
America Movil-Series L* 26,800 397
Aracruz Celulose, ADR 61,100 907
Cemex S.A. 453,000 1,800
Coca Cola Femsa ADR 63,200 1,248
Fomento Economico Mexico, ADR 42,700 1,216
EMERGING MARKETS FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Grupo Carso 104,400 $ 235
Grupo Financiero Bbva Banc, Cl O 1,881,400 1,325
Grupo Modelo, Cl C 109,000 253
Grupo Posadas, Cl A* 1,061,000 948
Telefonos de Mexico ADR 61,500 1,986
Walmart de Mexico* 930,000 1,955
-------
12,270
--------
PANAMA - 1.6%
Panamerican Beverages 41,500 699
--------
POLAND - 0.8%
Ceska Sporitelna A.S. 47,200 334
--------
RUSSIA - 5.6%
Lukoil Holding Spnsr Adr 12,900 484
Mobile Telesystems* 24,700 606
Surgutneftegaz-Sp Adr 57,000 638
Vimpel Communications 14,000 230
Yukos-Adr 10,000 481
--------
2,439
--------
SOUTH AFRICA - 12.1%
Anglo American 142,000 1,693
Firstrand Limited 380,000 314
Sasol Ltd 152,400 1,245
South African Breweries 39,900 245
Standard Bank Investment 526,200 1,805
--------
5,302
--------
TAIWAN - 3.6%
Asustek Computer Inc 109,000 327
Fubon Insurance 598,000 461
Taiwan Semiconductor 393,315 532
Taiwan Semiconductor Manufacturing* 27,000 254
--------
1,574
--------
THAILAND - 2.8%
Advanced Info Service 55,000 589
Bangkok Bank (A)* 349,300 318
Land & House Public Co Ltd 159,000 125
Siam Cement 17,200 184
--------
1,216
--------
TOTAL FOREIGN COMMON STOCKS
40,591
--------
FOREIGN PREFERRED STOCKS - 3.5%
BRAZIL - 3.5%
Ambev 3,490,000 559
Banco Itau 15,510,000 987
--------
1,546
--------
TOTAL FOREIGN PREFERRED STOCKS
1,546
--------
RELATED PARTY MONEY MARKET FUND - 2.9%
First American Prime Obligations Fund (B) 1,278,788 1,279
--------
TOTAL RELATED PARTY MONEY MARKET FUND
1,279
--------
TOTAL INVESTMENTS - 99.1%
(Cost $49,558) 43,416
--------
OTHER ASSETS AND LIABILITIES, NET - 0.9%
373
--------
The accompanying notes are an integral part of the financial statements.
(110 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
EMERGING MARKETS FUND (CONTINUED)
DESCRIPTION VALUE (000)
- -----------------------------------------------------------------
NET ASSETS:
Portfolio capital $ 57,801
Accumulated net investment loss (157)
Accumulated net realized loss on
investments (7,721)
Net unrealized depreciation of
investments (6,142)
Net unrealized appreciation of foreign
currency and translation of other assets
and liabilities in foreign currency 8
--------
TOTAL NET ASSETS - 100.0% $ 43,789
--------
CLASS A:
Net asset value and redemption price per share
(net assets of $3,243,862 and 552,985 shares of
capital stock issued and outstanding)(F) $ 5.87
Maximum sales charge of 5.50% 0.34
--------
Offering price per share(C) $ 6.21
--------
CLASS B:
Net asset value and offering price per share
(net assets of $173,389 and 30,258 shares of
capital stock issued and outstanding)(D)(F) $ 5.73
--------
CLASS C:
Net asset value per share (net assets of
$89,530 and 15,436 shares of capital
stock issued and outstanding)(D)(F) $ 5.80
Maximum sales charge of 1.00% 0.06
--------
Offering price per share(E) $ 5.86
--------
CLASS S:
Net asset value, offering price and redemption
price per share (net assets of $10 and 2 shares
of capital stock issued and outstanding)(F) $ 5.87
--------
CLASS Y:
Net asset value, offering price and redemption
price per share (net assets of $40,281,933 and
6,803,758 shares of capital stock issued and
outstanding)(F) $ 5.92
--------
*Non-income producing
(A)Security sold within the terms of a private placement memorandum, exempt from
registration under Section 144A of the Securities Act of 1933 , as amended,
and may be sold only to dealers in that program or other "qualified
institutional investors." These securities have been determined to be liquid
under guidelines established by the Board of Directors.
(B)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also notes
to the finacial statements.
(C)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 5.50%.
(D)Class B and C have a contingent deferred sales charge. For a possible
redemption charge, see the notes to the financial statements.
(E)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 1.00%.
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
Cl - Class
EMERGING MARKETS FUND (CONCLUDED)
DESCRIPTION
- ---------------------------------------------------------------------
At September 30, 2001, sector diversification of the Fund was as follows:
% of
Net Assets Value (000)
------------ ------------
FOREIGN COMMON STOCK
Beverages & Tobacco 9.59% $ 4,198
Health/Personal Care 10.08 4,415
Energy Sources 9.77 4,277
Banking 7.34 3,212
Telecommunications 9.57 4,189
Multi-Industry 6.32 2,766
Financial Services 5.92 2,592
Bldg Mat/Components 4.54 1,984
Merchandising 4.46 1,955
Utilities - Elec/Gas 4.17 1,826
Automobiles 3.90 1,709
Chemicals 3.35 1,468
Elec Component/Instr 3.30 1,446
Leisure & Tourism 2.16 948
Forest Product/Paper 2.07 907
Metals - Steel 1.69 740
Insurance 1.37 601
Real Estate 0.60 263
Transport - Airlines 0.57 250
Business/Public Srvc 0.50 221
Construction/Housing 0.45 196
Machinery/Engineer 0.38 166
Elec/Electronics 0.33 145
Wholesale/Int'l Trd 0.27 117
------ -------
TOTAL FOREIGN COMMON STOCKS 92.7 40,591
TOTAL FOREIGN PREFERRED STOCKS 3.5 1,546
TOTAL RELATED PARTY MONEY MARKET FUND 2.9 1,279
------ -------
TOTAL INVESTMENTS 99.1 43,416
OTHER ASSETS AND LIABILITIES, NET 0.9 373
------ -------
NET ASSETS 100.0% $43,789
====== =======
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 111)
STATEMENTS OF NET ASSETS September 30, 2001
INTERNATIONAL FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
FOREIGN COMMON STOCKS - 92.6%
AUSTRALIA - 3.1%
Aristocrat Leiure 1,050,000 $3,275
BRL Hardy Limited 11,007 55
BRL Hardy Limited - Rights 1,101 --
Macquarie Bank 361,200 6,417
Southcorp 1,559,855 5,812
Woodside Petroleum 1,156,400 7,881
-------
23,440
-------
DENMARK - 1.5%
Carlsberg, Cl A 562 22
Carlsberg, Cl B 189,380 8,071
Vestas Wind System 123,820 3,685
-------
11,778
-------
FINLAND - 0.0%
Instrumentarium 1 --
-------
FRANCE - 16.3%
Atos Origin 78,980 5,539
Aventis 171,090 12,980
BNP Paribas 120,750 9,876
Castorama Dubois Investisse 155,120 7,204
Compagnie de Saint-Gobain 73,600 10,122
Orange SA 1,666,655 12,143
Sanofi-Synthelabo SA 236,357 15,391
STMicroelectronics NV 286,500 6,153
Total Fina Elf SA, Cl B 111,419 14,967
Vinci 242,300 14,233
Vivendi Environment* 249,990 9,681
Vivendi Universal 132,200 6,122
-------
124,411
--------
GERMANY - 7.5%
Allianz, Registered 53,690 12,176
Deutsche Post AG 715,000 10,354
Deutsche Telekom AG 581,000 9,043
Fresenius Medical Care 179,895 13,762
MLP AG 163,015 9,724
Schering AG 42,700 2,119
--------
57,178
--------
HONG KONG - 3.8%
China Mobile Hong Kong* 912,500 2,884
China Resources 6,240,000 5,440
Hang Seng Bank 692,800 7,173
Hutchison Whampoa 1,056,500 7,789
Wharf Holdings 3,538,000 5,829
--------
29,115
--------
IRELAND - 3.9%
Bank of Ireland 239,300 1,896
CRH 534,960 7,941
Elan ADR* 176,400 8,546
Irish Life & Permanent 1,159,300 11,403
--------
29,786
--------
ITALY - 2.5%
Assicurazioni Generali 221,725 5,957
Autogrill 575,800 3,954
Ente Nazionale Idrocarburi 726,200 9,015
Gucci Group 6,500 531
--------
19,457
--------
INTERNATIONAL FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------
JAPAN - 20.8%
Asahi Bank 2,481,000 $ 2,770
Avex 133,800 4,942
Brother Industries 1,866,000 5,247
Canon 289,000 7,933
Daiichi Pharmaceutical 255,000 5,351
Daiwa Securities Group 759,000 5,263
Fanuc 104,100 3,906
Fast Retailing 85,100 9,565
Fuji Heavy 671,000 3,087
Fuji Photo Film 107,000 3,682
Fuji Television Network 783 3,904
Furukawa Electric 673,000 3,661
Hitachi 613,000 4,080
Honda Motor 182,100 5,916
Japan Radio 1,193,000 3,906
Kanebo* 2,169,000 3,951
Kanematsu* 2,187,000 3,929
Keyence 25,300 3,398
Kose 37,560 1,261
Meitec 118,100 3,073
Mizuho Holdings 1,154 4,456
NGK Insulators 712,000 5,457
Nintendo 36,800 5,308
Nippon Foundry 564 3,172
Nippon Mitsubishi Oil 925 4
Nippon Telegraph & Telephone 994 4,639
Nissan Motor 1,342,000 5,599
NTT Mobile Communications 492 6,649
Olympus Optical 274,000 3,853
Promise 86,100 5,782
Rohm 48,100 4,684
Sony 126,600 4,665
Sumitomo Bank 602,000 4,316
Takeda Chemical Industries 103,800 4,792
Tohoku Pioneer 47,300 1,112
Tokyo Broadcasting System 12,000 211
Toys R Us-Japan 44,100 1,096
Yamada Denki 71,100 4,619
--------
159,239
--------
MALAYSIA - 0.0%
Silverstone* 3,325 --
--------
MEXICO - 0.6%
Telefonos de Mexico ADR 137,000 4,424
--------
NETHERLANDS - 1.5%
ASML Holding* 286,700 3,191
Elsevier 752,410 8,778
--------
11,969
--------
SINGAPORE - 1.4%
Capitaland* 3,721,000 2,802
Datacraft Asia Limited 908,840 2,981
Singapore Telecom 4,681,000 4,797
--------
10,580
--------
SPAIN - 3.4%
Banco Santander Central Hispano 1,418,340 10,876
NH Hoteles 733,460 6,446
Telefonica 768,510 8,497
--------
25,819
--------
The accompanying notes are an integral part of the financial statements.
(112 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
INTERNATIONAL FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------
SWEDEN - 1.2%
Skandinaviska Enskilda 1,314,610 $ 9,181
----------
9,181
----------
SWITZERLAND - 5.6%
Jomed 111,330 2,142
Nestle, Registered 76,550 16,338
Novartis, Registered 280,300 10,976
UBS, Registered 294,513 13,774
----------
43,230
----------
TAIWAN - 0.5%
Taiwan Semiconductor 378,460 3,592
----------
UNITED KINGDOM - 19.0%
BP Amoco 1,923,600 15,889
Celltech* 645,645 6,576
CGNU 836,800 10,325
Compass Group 1,714,200 11,954
Dixons Group 2,679,461 7,256
Electrocomponents 1,522,600 9,153
Galen Holdings 453,900 4,245
Glaxosmithkline* 33,781 953
Lloyds TSB Group 927,000 8,856
Misys 937,150 2,803
Next 655,600 8,624
Reckit Benckiser 994,030 14,288
Scottish and Southern Energy 1,527,400 14,547
Tesco 2,898,490 10,906
Trinity Mirror 1 --
Vodafone AirTouch 8,513,250 18,768
----------
145,143
----------
TOTAL FOREIGN COMMON STOCKS 708,342
----------
RELATED PARTY MONEY MARKET FUND - 1.2%
First American Prime Obligations Fund(A) 9,123,771 9,124
----------
TOTAL RELATED PARTY MONEY MARKET FUND 9,124
----------
TOTAL INVESTMENTS - 93.8%
(Cost $847,962) 717,466
----------
OTHER ASSETS AND LIABILITIES, NET - 6.2%(E) 47,451
----------
INTERNATIONAL FUND (CONTINUED)
DESCRIPTION VALUE (000)
- -----------------------------------------------------------------------
NET ASSETS:
Portfolio capital $1,074,444
Accumulated net investment loss (8,325)
Accumulated net realized loss on
investments (170,860)
Net unrealized depreciation of
investments (130,496)
Net unrealized appreciaiton of forward
foreign currency contracts, foreign
currency and translation of other assets
and liabilities in foreign currency 154
----------
TOTAL NET ASSETS - 100.0% $ 764,917
----------
CLASS A:
Net asset value and redemption price per share
(net assets of $64,906,904 and 7,242,301 shares
of capital stock issued and outstanding)(F) $ 8.96
Maximum sales charge of 5.50% 0.52
----------
Offering price per share(B) $ 9.48
----------
CLASS B:
Net asset value and offering price per share
(net assets of $10,857,648 and 1,285,176 shares
of capital stock issued and outstanding)(C)(F) $ 8.45
----------
CLASS C:
Net asset value per share (net assets of $17,805,855
and 2,036,043 shares of capital stock issued and
outstanding)(C)(F) $ 8.75
Maximum sales charge of 1.00% 0.09
----------
Offering price per share(D) $ 8.84
----------
CLASS S:
Net asset value, offering price and redemption price
per share (net assets of $9,461,078 and 1,055,586
shares of capital stock issued and outstanding)(F) $ 8.96
----------
CLASS Y:
Net asset value, offering price and redemption price
per share (net assets of $661,885,927 and 73,300,055
shares of capital stock issued and outstanding)(F) $ 9.03
----------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc., who also serves as advisor for this fund. See also the
notes to the financial statements.
(B)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 5.50%.
(C)Class B and C have a contingent deferred sales charge. For a possible
redemption charge, see the notes to the financial statements.
(D)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 1.00%.
(E)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Cash denominated in foreign currency $35,293
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
Cl - Class
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 113)
STATEMENTS OF NET ASSETS September 30, 2001
INTERNATIONAL FUND (CONCLUDED)
DESCRIPTION
- -------------------------------------------------------------
At September 30, 2001, sector diversification of the Fund was as follows:
% of
Net Assets Value (000)
------------ ------------
FOREIGN COMMON STOCK
Banks 10.39% $ 79,463
Pharmaceuticals & Biotechnology 9.41 71,969
Telecommunication Services 9.38 71,859
Capital Goods 8.11 61,999
Insurance 6.48 49,581
Energy 6.24 47,754
Technology Hardware & Equipment 5.78 44,199
Retailing 5.02 38,364
Food Beverage & Tobacco 3.96 30,298
Hotels Restaurants & Leisure 3.35 25,629
Utilities 3.17 24,227
Media 3.13 23,956
Diversified Financials 2.92 22,359
Health Care Equipment & Services 2.58 19,756
Household & Personal Product 2.55 19,500
Consumer Durables & Apparel 2.54 19,412
Automobiles & Components 1.91 14,601
Software & Services 1.49 11,414
Food & Drug Retailing 1.43 10,906
Transportation 1.35 10,353
Materials 1.04 7,941
Real Estate 0.37 2,802
Commercial Services & Supplies 0.00 --
------ --------
TOTAL FOREIGN COMMON STOCKS 92.6 708,342
TOTAL RELATED PARTY MONEY MARKET FUND 1.2 9,124
------ --------
TOTAL INVESTMENTS 93.8 717,466
OTHER ASSETS AND LIABILITIES, NET 6.2 47,451
------ --------
NET ASSETS 100.0% $764,917
====== ========
The accompanying notes are an integral part of the financial statements.
(114 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
(This page has been left blank intentionally.)
STATEMENTS OF OPERATIONS in thousands
EMERGING INTERNATIONAL
MARKETS FUND FUND
----------- ------------------------
10/1/00 11/1/00 12/1/99
to to to
9/30/01 9/30/01 10/31/00
----------- --------- ----------
INVESTMENT INCOME:
Interest $ 169 $ 468 $ 187
Dividends 1,239 2,703 1,397
Less: Foreign taxes withheld (135) -- (5)
Securities lending -- -- 47
- ---------------------------------------------------------------------- --------- --------- ----------
TOTAL INVESTMENT INCOME 1,273 3,171 1,626
====================================================================== ========= ========= ==========
EXPENSES:
Investment advisory fees 692 1,688 1,228
Administrator and fund accounting fees 62 305 603
Transfer agent fees and expenses 103 71 39
Custodian fees 59 122 214
Directors' fees 1 6 2
Registration fees -- 38 12
Professional fees 2 65 17
Printing 3 28 21
Other 1 6 8
Shareholder servicing fees - Class A 9 11 11
Shareholder servicing fees - Class B 2 10 7
Shareholder servicing fees - Class Y -- 31 --
Distribution fees - Class C 2 -- --
- ---------------------------------------------------------------------- --------- --------- ----------
TOTAL EXPENSES 936 2,381 2,162
====================================================================== ========= ========= ==========
Less: Waiver of expenses (120) (205) (529)
- ---------------------------------------------------------------------- --------- --------- ----------
TOTAL NET EXPENSES 816 2,176 1,633
====================================================================== ========= ========= ==========
Investment income (loss) - net 457 995 (7)
- ---------------------------------------------------------------------- --------- --------- ----------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS - NET:
Net realized gain (loss) on investments (6,981) (22,013) 13,800
Net realized gain (loss) on forward foreign currency contracts and
foreign currency transactions (286) 31 (267)
Net change in unrealized appreciation or depreciation of investments (13,117) 14,847 (22,320)
Net change in unrealized appreciation or depreciation of
foreign currency, and translation of other assets and
liabilities denominated in foreign currency 1 183 (9)
- ---------------------------------------------------------------------- --------- --------- ----------
NET LOSS ON INVESTMENTS (20,383) (6,952) (8,796)
====================================================================== ========= ========= ==========
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (19,926) $ (5,957) $ (8,803)
====================================================================== ========= ========= ==========
The accompanying notes are an integral part of the financial statements.
(116 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
STATEMENTS OF CHANGES IN NET ASSETS in thousands
EMERGING
MARKETS FUND
------------------------
10/1/00 10/1/99
to to
9/30/01 9/30/00
----------- ----------
OPERATIONS:
Investment income (loss) - net $ 457 $ (280)
Net realized gain (loss) on investments (6,981) 11,580
Net realized gain (loss) on foreign currency transactions (286) (291)
Net change in unrealized appreciation or depreciation of investments (13,117) 145
Net change in unrealized appreciation or depreciation of foreign currency transactions 1 (9)
- ------------------------------------------------------------------------------------------ ---------- ------------
Net increase (decrease) in net assets resulting from operations (19,926) 11,145
- ------------------------------------------------------------------------------------------ ---------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A -- --
Class B -- --
Class S -- --
Class Y -- --
Net realized gain on investments:
Class A -- --
Class B -- --
Class S -- --
Class Y -- --
- ------------------------------------------------------------------------------------------ ---------- -----------
Total distributions -- --
- ------------------------------------------------------------------------------------------ ---------- -----------
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 6,895 601
Reinvestment of distributions -- --
Payments for redemptions (6,765) (1,935)
Shares issued in connection with the acquisition of the Stellar/Mercantile Fund assets -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- --
- ------------------------------------------------------------------------------------------ ---------- -----------
Increase (decrease) in net assets from Class A transactions 130 (1,334)
- ------------------------------------------------------------------------------------------ ---------- -----------
Class B
Proceeds from sales 171 112
Reinvestment of distributions -- --
Payments for redemptions (38) (5)
Shares issued in connection with the acquisition of the Stellar/Mercantile Fund assets -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- --
- ------------------------------------------------------------------------------------------ ---------- -----------
Increase (decrease) in net assets from Class B transactions 133 107
- ------------------------------------------------------------------------------------------ ---------- -----------
Class C
Proceeds from sales 407 5
Reinvestment of distributions -- --
Payments for redemptions (284) --
- ------------------------------------------------------------------------------------------ ---------- -----------
Increase in net assets from Class C transactions 123 5
- ------------------------------------------------------------------------------------------ ---------- -----------
Class S (2)
Proceeds from sales -- --
Reinvestment of distributions -- --
Payments for redemptions -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- --
- ------------------------------------------------------------------------------------------ ---------- -----------
Increase in net assets from Class S transactions -- --
- ------------------------------------------------------------------------------------------ ---------- -----------
Class Y (2)
Proceeds from sales 19,980 15,887
Reinvestment of distributions -- --
Payments for redemptions (16,853) (10,427)
Shares issued in connection with the acquisition of the Stellar/Mercantile Fund assets -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- --
- ------------------------------------------------------------------------------------------ ---------- -----------
Increase in net assets from Class Y transactions 3,127 5,460
- ------------------------------------------------------------------------------------------ ---------- -----------
Increase in net assets from capital share transactions 3,513 4,238
- ------------------------------------------------------------------------------------------ ---------- -----------
Total increase (decrease) in net assets (16,413) 15,383
NET ASSETS AT BEGINNING OF PERIOD 60,202 44,819
========================================================================================== ========== ===========
NET ASSETS AT END OF PERIOD $ 43,789 $ 60,202
========================================================================================== ========== ===========
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ (157) $ (297)
========================================================================================== ========== ===========
[WIDE TABLE CONTINUED FROM ABOVE]
INTERNATIONAL
FUND
---------------------------
11/1/00 12/1/99
to to
9/30/01 10/31/00
------------- -----------
OPERATIONS:
Investment income (loss) - net $ 995 $ (7)
Net realized gain (loss) on investments (22,013) 13,800
Net realized gain (loss) on foreign currency transactions 31 (267)
Net change in unrealized appreciation or depreciation of investments 14,847 (22,320)
Net change in unrealized appreciation or depreciation of foreign currency transactions 183 (9)
- ------------------------------------------------------------------------------------------ ---------- ------------
Net increase (decrease) in net assets resulting from operations (5,957) (8,803)
- ------------------------------------------------------------------------------------------ ---------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (27) (26)
Class B (4) (4)
Class S (120) (77)
Class Y (1,078) (771)
Net realized gain on investments:
Class A (348) (354)
Class B (77) (72)
Class S (1,564) (1,003)
Class Y (11,770) (8,213)
- ------------------------------------------------------------------------------------------ ------------ ------------
Total distributions (14,988) (10,520)
- ------------------------------------------------------------------------------------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 24,557 474
Reinvestment of distributions 342 346
Payments for redemptions (23,661) (671)
Shares issued in connection with the acquisition of the Stellar/Mercantile Fund assets 28 --
Shares issued in connection with the acquisition of the Firstar Fund assets 56,551 --
- ------------------------------------------------------------------------------------------ ------------ ------------
Increase (decrease) in net assets from Class A transactions 57,817 149
- ------------------------------------------------------------------------------------------ ------------ ------------
Class B
Proceeds from sales 413 128
Reinvestment of distributions 71 68
Payments for redemptions (273) (144)
Shares issued in connection with the acquisition of the Stellar/Mercantile Fund assets 112 --
Shares issued in connection with the acquisition of the Firstar Fund assets 9,404 --
- ------------------------------------------------------------------------------------------ ------------ ------------
Increase (decrease) in net assets from Class B transactions 9,727 52
- ------------------------------------------------------------------------------------------ ------------ ------------
Class C
Proceeds from sales 94 --
Reinvestment of distributions -- --
Payments for redemptions (84) --
- ------------------------------------------------------------------------------------------ ------------ ------------
Increase in net assets from Class C transactions 10 --
- ------------------------------------------------------------------------------------------ ------------ ------------
Class S (2)
Proceeds from sales 5,638 16,446
Reinvestment of distributions 1,627 1,080
Payments for redemptions (8,436) (101,109)
Shares issued in connection with the acquisition of the Firstar Fund assets 457,512 --
- ------------------------------------------------------------------------------------------ ------------ ------------
Increase in net assets from Class S transactions 456,341 7,417
- ------------------------------------------------------------------------------------------ ------------ ------------
Class Y (2)
Proceeds from sales 130,404 56,458
Reinvestment of distributions 7,542 5,492
Payments for redemptions (105,059) (16,025)
Shares issued in connection with the acquisition of the Stellar/Mercantile Fund assets 37,760 --
Shares issued in connection with the acquisition of the Firstar Fund assets 48,295 --
- ------------------------------------------------------------------------------------------ ------------ ------------
Increase in net assets from Class Y transactions 118,942 45,925
- ------------------------------------------------------------------------------------------ ------------ ------------
Increase in net assets from capital share transactions 642,837 53,543
- ------------------------------------------------------------------------------------------ ------------ ------------
Total increase (decrease) in net assets 621,892 34,220
NET ASSETS AT BEGINNING OF PERIOD 143,025 108,805
========================================================================================== ============ ============
NET ASSETS AT END OF PERIOD $ 764,917 $ 143,025
========================================================================================== ============ ============
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ (8,325) $ 5
========================================================================================== ============ ============
[WIDE TABLE CONTINUED FROM ABOVE]
INTERNATIONNAL
FUND
--------------
12/1/98
to
11/30/99
-----------
OPERATIONS:
Investment income (loss) - net $ 179
Net realized gain (loss) on investments 10,365
Net realized gain (loss) on foreign currency transactions 36
Net change in unrealized appreciation or depreciation of investments 15,949
Net change in unrealized appreciation or depreciation of foreign currency transactions (19)
- ------------------------------------------------------------------------------------------ --------
Net increase (decrease) in net assets resulting from operations 26,510
- ------------------------------------------------------------------------------------------ --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (11)
Class B --
Class S (29)
Class Y (320)
Net realized gain on investments:
Class A (178)
Class B (36)
Class S (458)
Class Y (3,385)
- ------------------------------------------------------------------------------------------ --------
Total distributions (4,417)
- ------------------------------------------------------------------------------------------ --------
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 373
Reinvestment of distributions 180
Payments for redemptions (637)
Shares issued in connection with the acquisition of the Stellar/Mercantile Fund assets --
Shares issued in connection with the acquisition of the Firstar Fund assets --
- ------------------------------------------------------------------------------------------ --------
Increase (decrease) in net assets from Class A transactions (84)
- ------------------------------------------------------------------------------------------ --------
Class B
Proceeds from sales 97
Reinvestment of distributions 34
Payments for redemptions (147)
Shares issued in connection with the acquisition of the Stellar/Mercantile Fund assets --
Shares issued in connection with the acquisition of the Firstar Fund assets --
- ------------------------------------------------------------------------------------------ --------
Increase (decrease) in net assets from Class B transactions (16)
- ------------------------------------------------------------------------------------------ --------
Class C
Proceeds from sales --
Reinvestment of distributions --
Payments for redemptions --
- ------------------------------------------------------------------------------------------ --------
Increase in net assets from Class C transactions --
- ------------------------------------------------------------------------------------------ --------
Class S (2)
Proceeds from sales 2,901
Reinvestment of distributions 487
Payments for redemptions (2,626)
Shares issued in connection with the acquisition of the Firstar Fund assets --
- ------------------------------------------------------------------------------------------ --------
Increase in net assets from Class S transactions 762
- ------------------------------------------------------------------------------------------ --------
Class Y (2)
Proceeds from sales 19,316
Reinvestment of distributions 1,910
Payments for redemptions (7,659)
Shares issued in connection with the acquisition of the Stellar/Mercantile Fund assets --
Shares issued in connection with the acquisition of the Firstar Fund assets --
- ------------------------------------------------------------------------------------------ --------
Increase in net assets from Class Y transactions 13,567
- ------------------------------------------------------------------------------------------ --------
Increase in net assets from capital share transactions 14,229
- ------------------------------------------------------------------------------------------ --------
Total increase (decrease) in net assets 36,322
NET ASSETS AT BEGINNING OF PERIOD 72,483
========================================================================================== ========
NET ASSETS AT END OF PERIOD $108,805
========================================================================================== ========
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ 608
========================================================================================== ========
(1)See note 4 in the notes to the financial statements for additional
information.
(2)On September 24, 2001, Class Y and Institutional Class of International Fund
were redesignated as Class S and Class Y, respectively.
The accompanying notes are an integral part of the financial statements.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 117)
FINANCIAL HIGHLIGHTS For a share outstanding, throughout the periods ended
September 30, unless otherwise indicated
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
----------- --------------- ------------- ------------ --------------
EMERGING MARKETS FUND
Class A(1)
2001(2) $ 8.50 $ 0.02 $ (2.65) $ -- $ --
2000(2) 6.77 (0.06) 1.79 -- --
1999(2) 5.61 (0.04) 1.20 -- --
1998 10.96 (0.15) (5.18) (0.02) --
1997 8.85 0.02 2.10 (0.01) --
Class B
2001(2) $ 8.37 $ (0.03) $ (2.61) $ -- $ --
2000(2) 6.72 (0.11) 1.76 -- --
1999(2) 5.60 (0.08) 1.20 -- --
1998(3) 7.27 -- (1.67) -- --
Class C
2001(2) $ 8.46 $ -- $ (2.66) $ -- $ --
2000(2)(4) 9.96 (0.06) (1.44) -- --
Class S
2001(2)(5) $ 5.72 $ -- $ 0.15 $ -- $ --
Class Y
2001(2) $ 8.55 $ 0.06 $ (2.69) $ -- $ --
2000(2) 6.80 (0.04) 1.79 -- --
1999(2) 5.62 (0.02) 1.20 -- --
1998(3) 7.27 0.01 (1.66) -- --
- ------- ------- ------- ------- ------- -------
INTERNATIONAL FUND(10)
Class A
2001(2)(6) $ 13.96 $ 0.10 $ (3.63) $ (0.10) $ (1.37)
2000(2)(8) 15.94 (0.03) (0.42) (0.10) (1.43)
1999 12.42 -- 4.26 (0.04) (0.70)
1998 11.22 0.01 1.66 (0.07) (0.40)
1997 11.28 (0.02) 0.30 (0.05) (0.29)
Class B
2001(2)(6) $ 13.28 $ 0.01 $ (3.43) $ (0.07) $ (1.34)
2000(2)(8) 15.27 (0.10) (0.42) (0.07) (1.40)
1999 11.97 (0.09) 4.09 (0.01) (0.69)
1998 10.87 (0.08) 1.60 (0.02) (0.40)
1997 10.99 (0.08) 0.28 (0.03) (0.29)
Class C
2001(2)(7) $ 8.31 $ 0.01 $ 0.43 $ -- $ --
Class S
2001(2)(6) $ 13.97 $ (0.04) $ (3.50) $ (0.10) $ (1.37)
2000(2)(8) 15.95 (0.03) (0.42) (0.10) (1.43)
1999 12.43 (0.01) 4.27 (0.04) (0.70)
1998 11.23 -- 1.67 (0.07) (0.40)
1997 11.29 (0.03) 0.31 (0.05) (0.29)
Class Y
2001(2)(6) $ 14.03 $ 0.07 $ (3.61) $ (0.11) $ (1.35)
2000(2)(8) 15.97 0.01 (0.42) (0.12) (1.41)
1999 12.42 0.06 4.25 (0.06) (0.70)
1998 11.21 0.04 1.67 (0.10) (0.40)
1997 11.24 0.01 0.31 (0.06) (0.29)
- ------- ------- ------- ------- ------- -------
(1)The financial highlights for Emerging Markets Fund as set forth herein
include the historical financial highlights of the Piper Emerging Markets
Growth Fund Class A shares. The assets of the Piper Emerging Markets Growth
Fund were acquired by Emerging Markets Fund on August 7, 1998. In connection
with such acquisition, Class A shares of the Piper Emerging Markets Growth
Fund were exchanged for Class A shares of the Emerging Markets Fund. On
August 7, 1998, the fund's advisor changed from Piper Capital Management
Incorporated to U.S. Bank National Association.
(2)Per share data calculated using average shares outstanding method.
(3)Class Y and Class B shares have been offered since August 10, 1998. All
ratios for the period have been annualized, except total return.
(4)Commenced operations February 1, 2000. All ratios for the period have been
annualized, except total return.
(5)Class S shares have been offered since September 24, 2001. All ratios for
the period have been annualized, except total return.
(6)Effective in 2001, the Fund's fiscal year end was changed from October 31 to
September 30. All ratios for the period have been annualized, except total
return.
(7)Class C shares have been offered since September 24, 2001. All ratios for
the period have been annualized. All ratios for the period have been
annualized, except total return.
(8)Effective in 2000, the Fund's fiscal year end was changed from November 30
to October 31. All ratios for the period have been annualized, except total
return.
(9)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
(10)The financial highlights for the International Fund as set forth herein
include the historical financial highlights of the Firstar International
Growth Fund. The assets of the Firstar Fund were acquired by the First
American International Fund on September 24, 2001. In connection with such
acquisition, (i) class A shares of the Firstar International Growth Fund
were exchanged for class A shares of the First American International Fund,
(ii) Firstar Class B shares were exchanged for Class B shares of the First
American Fund, (iii) Firstar Class Y shares were exchanged for Class S
shares of the First American Fund, and (iv) Firstar Class Institutional
shares were exchanged for Class Y shares of the First American Fund.
Historical per share amounts have been adjusted to reflect the conversion
ratios utilized for the merger of the International Fund and Firstar
Internal Growth Fund. Firstar International Growth Fund is the accounting
survivor.
The accompanying notes are an integral part of the financial statements.
(118 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RATIO OF RATIO OF
RATIO OF NET EXPENSES TO NET INCOME
NET ASSET RATIO OF INVESTMENT AVERAGE TO AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (9) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
----------- -------------- -------------- ------------- --------------- ------------- ------------ ----------
$ 5.87 (30.94)% $ 3,244 1.70% 0.26% 1.92% 0.04% 132%
8.50 25.55 4,338 1.70 (0.70) 1.89 (0.89) 149
6.77 20.68 4,551 1.70 (0.54) 2.02 (0.86) 138
5.61 (48.91) 5,384 1.96 (1.09) 3.43 (2.56) 48
10.96 23.91 16,998 2.00 0.17 3.34 (1.17) 105
$ 5.73 (31.54)% $ 173 2.45% (0.37)% 2.64% (0.56)% 132%
8.37 24.55 107 2.45 (1.21) 2.66 (1.42) 149
6.72 20.00 13 2.45 (1.19) 2.72 (1.46) 138
5.60 (22.97) 1 2.46 (0.43) 4.30 (2.27) 48
$ 5.80 (31.44)% $ 90 2.45% 0.02% 2.70% (0.23)% 132%
8.46 (15.06) 4 2.45 (0.99) 2.64 (1.18) 149
$ 5.87 2.62% $ -- 0.00% 0.00% 0.00% 0.00% 132%
$ 5.92 (30.84)% $ 40,282 1.45% 0.88% 1.67% 0.66% 132%
8.55 25.74 55,753 1.45 (0.42) 1.64 (0.61) 149
6.80 21.00 40,255 1.45 (0.35) 1.73 (0.63) 138
5.62 (22.70) 7,444 1.46 0.83 3.30 (1.01) 48
------- ------ -------- ---- ----- ---- ----- ---
$ 8.96 (28.00)% $ 64,907 1.49% 1.02% 1.59% 0.92% 72%
13.96 (3.59) 3,591 1.58 (0.26) 1.76 (0.44) 90
15.94 36.62 3,939 1.56 (0.01) 1.75 (0.20) 94
12.42 15.33 3,154 1.58 0.02 1.75 (0.15) 89
11.22 2.58 2,854 1.59 (0.20) 1.75 (0.36) 75
$ 8.45 (28.57)% $ 10,857 2.17% 0.06% 2.27% (0.04)% 72%
13.28 (4.22) 732 2.28 (0.96) 2.46 (1.14) 90
15.27 35.65 781 2.26 (0.71) 2.45 (0.90) 94
11.97 14.48 624 2.28 (0.70) 2.45 (0.87) 89
10.87 1.82 562 2.29 (0.91) 2.45 (1.07) 75
$ 8.75 5.29% $ 17,806 1.48% 4.15% 1.48% 4.15% 72%
$ 8.96 (28.03)% $ 9,461 1.46% (0.33)% 1.61% (0.48)% 72%
13.97 (3.59) 16,373 1.58 (0.26) 1.76 (0.44) 90
15.95 36.61 11,307 1.56 0.00 1.75 (0.19) 94
12.43 15.37 8,058 1.58 0.01 1.75 (0.16) 89
11.23 2.59 6,798 1.59 (0.21) 1.75 (0.37) 75
$ 9.03 (27.93)% $661,886 1.23% 0.67% 1.36% 0.54% 72%
14.03 (3.27) 122,329 1.28 0.04 1.76 (0.44) 90
15.97 36.98 92,778 1.26 0.28 1.75 (0.21) 94
12.42 15.73 60,647 1.28 0.34 1.75 (0.13) 89
11.21 2.91 55,038 1.29 0.09 1.75 (0.37) 75
------- ------ -------- ---- ----- ---- ----- ---
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 119)
STATEMENTS OF NET ASSETS September 30, 2001
HEALTH SCIENCES FUND
DESCRIPTION SHARES VALUE (000)
- -----------------------------------------------------------------------------
COMMON STOCKS - 96.5%
COMMERCIAL SERVICES & SUPPLIES - 2.0%
IMS Health 18,900 $473
Stericycle* 3,900 163
------
636
------
HEALTH CARE EQUIPMENT & SERVICES - 25.2%
AdvancePCS* 4,600 330
AmerisourceBergen* 9,472 672
Applera 9,000 220
Apria Healthcare* 18,130 470
Baxter International 3,000 165
Biomet 9,100 266
Cardinal Health 8,375 619
Caremark Rx* 29,400 490
Cooper 6,400 300
Cyberonics* 10,000 158
Express Scripts, Cl A* 6,400 354
HCA-Healthcare 3,300 146
Kensey Nash* 8,760 168
Laboratory Corporation of America
Holdings* 4,400 356
McKesson HBOC 5,700 215
Medtronic 16,100 700
Noven Pharmaceuticals* 5,200 94
Omnicare 5,600 122
Quest Diagnostic* 9,300 574
Regeneration Technologies* 16,000 186
Select Medical* 6,700 106
Specialty Laboratories* 9,400 259
Stryker 4,300 227
Triad Hospitals* 4,900 173
Universal Health Services* 4,300 210
Varian Medical System* 3,000 192
Wellpoint Health Networks* 2,250 246
Zimmer Holdings* 6,170 171
------
8,189
------
PHARMACEUTICALS & BIOTECHNOLOGY - 67.4%
Abbott Laboratories 17,900 928
Allergan 4,300 285
American Home Products 26,000 1,515
Amgen* 14,660 862
Andrx* 5,220 339
Array Biopharma* 33,000 298
Bone Care International* 18,440 359
Bristol-Myers Squibb 28,800 1,600
Celgene* 22,400 592
Cephalon* 8,400 419
Charles River Laboratories International* 11,500 407
Enzon* 2,600 133
Forest Laboratories* 4,500 325
Genentech* 19,880 875
Genzyme* 3,700 168
IDEC Pharmaceuticals* 17,300 858
Imclone System* 3,300 187
Immunex* 10,500 196
Invitrogen* 4,100 270
Ivax* 16,310 362
King Pharmaceuticals* 8,266 347
Eli Lilly 20,500 1,654
Merck 24,500 1,632
HEALTH SCIENCES FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -----------------------------------------------------------------------------
MGI Pharma* 12,300 $ 164
Novartis AG, ADR 8,500 331
NPS Pharmaceuticals* 4,300 134
Pfizer 73,500 2,947
Pharmaceutical Resources* 6,800 243
Pharmacia 46,967 1,905
Praecis Pharmaceuticals* 25,600 95
Protein Design Labs* 6,440 304
Techne* 14,070 414
Teva Pharmaceutical Industries, ADR 4,900 296
Watson Pharmaceuticals* 2,800 153
XOMA Limited* 36,700 309
-------
21,906
--------
SOFTWARE & SERVICES - 1.9%
Allscripts Healthcare Solutions* 37,330 157
Eclipsys* 13,600 181
TriZetto* 31,820 280
--------
618
--------
TOTAL COMMON STOCKS
31,349
--------
RELATED PARTY MONEY MARKET FUND - 1.7%
First American Prime Obligations Fund(A) 557,656 558
--------
TOTAL RELATED PARTY MONEY MARKET FUND
558
--------
TOTAL INVESTMENTS - 98.2%
(Cost $30,960) 31,907
--------
OTHER ASSETS AND LIABILITIES, NET - 1.8%(E) 573
--------
The accompanying notes are an integral part of the financial statements.
(120 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
HEALTH SCIENCES FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- ---------------------------------------------------------------
NET ASSETS:
Portfolio capital $31,694
Accumulated net realized loss on
investments (161)
Net unrealized appreciation of
investments 947
-------
TOTAL NET ASSETS - 100.0% $32,480
-------
CLASS A:
Net asset value and redemption price per share
(net assets of $6,513,580 and 661,782 shares
of capital stock issued and outstanding)(F) $ 9.84
Maximum sales charge of 5.50% 0.57
-------
Offering price per share(B) $ 10.41
-------
CLASS B:
Net asset value and offering price per share
(net assets of $3,496,574 and 371,931 shares
of capital stock issued and outstanding)(C)(F) $ 9.40
-------
CLASS C:
Net asset value per share (net assets of
$5,328,752 and 547,847 shares of
capital stock issued and outstanding)(C)(F) $ 9.73
Maximum sales charge of 1.00% 0.10
-------
Offering price per share(D) $ 9.83
-------
CLASS S:
Net asset value, offering price and redemption
price per share (net assets of $10 and 1 share
of capital stock issued and outstanding)(F) $ 9.84
-------
CLASS Y:
Net asset value, offering price and redemption
price per share (net assets of $17,140,889 and
1,725,852 shares of capital stock issued and
outstanding)(F) $ 9.93
-------
*Non-income producing security
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc. who also serves as advisor for this fund. See also the
notes to the Financial statements.
(B)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 5.50%.
(C)Class B and C have a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(D)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 1.00%.
(E)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 5,030
Payable upon return of securities loaned $ (5,030)
(F)$.0001 par value and 2 billion authorized shares.
ADR - American Depositary Receipt
Cl - Class
REAL ESTATE SECURITIES FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------
COMMON STOCKS - 96.0%
CONSUMER DISCRETIONARY - 0.3%
Marriott International, Cl A 10,000 $ 334
-------
REAL ESTATE INVESTMENT TRUSTS - 95.7%
DIVERSIFIED - 5.3%
Duke Realty Invesments 105,700 2,504
Rouse 91,400 2,209
Washington Real Estate Investment 27,700 657
-------
5,370
-------
FINANCIAL SERVICES - 2.4%
Anthracite Mortgage Capital 235,200 2,446
-------
HEALTH CARE - 0.8%
Healthcare Realty Trust 30,000 765
-------
HOTELS - 3.7%
Hospitality Properties Trust 105,700 2,545
Meristar Hospitality 110,900 1,170
-------
3,715
-------
OFFICE/INDUSTRIAL - 40.3%
Amb Property 66,200 1,622
Arden Realty 77,200 1,974
Beacon Capital Partnership* (A) 33,750 384
Boston Properties 84,100 3,207
Brandywine Realty Trust 30,600 653
Brookfield Properties 137,200 2,504
CarrAmerica Realty Trust 101,500 3,041
Centerpoint Properties 16,500 788
Corporate Office Properties Trust 31,600 344
Cousins Properties 37,900 938
Eastgroup Properties 23,000 504
Equity Office Properties Trust 319,623 10,228
Kilroy Realty 37,400 933
Liberty Property Trust 55,850 1,602
Mission West Properties 124,700 1,496
Prentiss Properties Trust 38,900 1,070
Prologis Trust 139,300 2,939
PS Business Parks 37,300 1,033
Reckson Associates Realty 91,500 2,210
SL Green Realty 70,800 2,232
Trizec Hahn 57,500 1,035
-------
40,737
-------
RESIDENTIAL - 22.0%
Apartment Investment & Management 100,100 4,531
Archstone Community Trust 97,100 2,534
Avalonbay Communities 41,412 1,977
Bre Properties, Cl A 68,000 2,037
Camden Property Trust 39,400 1,462
Equity Residential Properties Trust 85,900 5,017
Essex Property Trust 49,000 2,406
Charles E. Smith Residential Realty 11,500 592
Summit Properties 20,200 530
United Dominion Realty Trust 79,600 1,137
-------
22,223
-------
MALL/RETAIL - 17.2%
Chelsea Property Group 32,700 1,486
General Growth Properties 41,200 1,433
Kimco Realty 69,770 3,387
Mid-Atlantic Realty Trust 33,600 470
New Plan Excel Realty Trust 63,400 1,084
Pan Pacific Retail Properties 44,700 1,178
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 121)
STATEMENTS OF NET ASSETS September 30, 2001
REAL ESTATE SECURITIES FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------
Simon Property Group 145,140 $ 3,906
Wornado Realty Trust 93,500 3,712
Weingarten Realty Investors 15,000 729
--------
17,385
--------
SELF STORAGE - 3.2%
Public Storage 98,000 3,273
--------
SPECIALTY REAL ESTATE - 0.8%
Capital Automotive 21,000 370
Fortress Investment (A) 35,000 433
--------
803
--------
TOTAL REAL ESTATE INVESTMENT TRUSTS 96,717
--------
TOTAL COMMON STOCKS 97,051
--------
PREFERRED STOCKS - 0.2%
Cypress* 602 1
Wyndham International* (B) 1,659 163
--------
TOTAL PREFERRED STOCKS 164
--------
RELATED PARTY MONEY MARKET FUND - 4.0%
First American Prime Obligations Fund (C) 4,016,796 4,017
TOTAL RELATED PARTY MONEY MARKET FUND 4,017
--------
TOTAL INVESTMENTS - 100.2%
(Cost $92,908) 101,232
--------
OTHER ASSETS AND LIABILITIES, NET - (0.2%) (G) (163)
--------
REAL ESTATE SECURITIES FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------
NET ASSETS:
Portfolio capital $ 96,862
Undistributed net investment income 751
Accumulated net realized loss on
investments (4,868)
Net unrealized appreciation of
investments 8,324
--------
TOTAL NET ASSETS - 100.0% $101,069
--------
CLASS A:
Net asset value and redemption price per share
(net assets of $2,421,259 and 184,515 shares
of capital stock issued and outstanding)(H) $ 13.12
Maximum sales charge of 5.50% 0.76
--------
Offering price per share(D) $ 13.88
--------
CLASS B:
Net asset value and offering price per share
(net assets of $1,723,778 and 132,408 shares
of capital stock issued and outstanding)(E)(H) $ 13.02
--------
CLASS C:
Net asset value per share (net assets of
$340,898 and 26,058 shares of capital stock
issued and outstanding)(E)(H) $ 13.08
Maximum sales charge of 1.00% 0.13
--------
Offering price per share(F) $ 13.21
--------
CLASS S:
Net asset value, offering price and redemption
price per share (net assets of $320,169 and
24,401 shares of capital stock issued and
outstanding)(H) $ 13.12
--------
CLASS Y:
Net asset value, offering price and redemption
price per share (net assets of $96,262,502 and
7,319,112 shares of capital stock issued and
outstanding)(H) $ 13.15
--------
*Non-income producing security
(A)Security sold within the terms of a private placement memorandum, exempt from
registration under Section 144A of the Securities Act of 1933, as amended,
and may be sold only to dealers in that programs or other "qualified
institutional investors". These securities have been determined to be liquid
under guidelines established by the Board of Directors.
(B)Private placement securities considered illiquid investments under guidelines
established by the Board of Directors.
(C)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc. who also serves as advisor for this fund. See also the
notes to the financial statements.
(D)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 5.50%.
(E)Class B and C have a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(F)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 1.00%.
(G)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 11,072
Payable upon return of securities loaned $ (11,072)
(H)$.0001 par value and 2 billion authorized shares
Cl - Class
The accompanying notes are an integral part of the financial statements.
(122 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
TECHNOLOGY FUND
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------
COMMON STOCKS - 98.2%
CONSUMER DURABLES & APPAREL - 1.9%
Sony, ADR 64,000 $2,125
-------
MEDIA - 5.0%
AOL Time Warner* 173,000 5,726
-------
RETAILING - 1.3%
eBay* 32,650 1,494
-------
SOFTWARE & SERVICES - 27.8%
Actuate Software* 93,400 391
Ariba* 46,150 86
Check Point Software Technologies* 97,900 2,156
Earthlink* 36,200 551
Electronic Data Systems 54,200 3,121
Internap Network Services* 466,500 467
Liberate Technologies* 183,850 1,831
Mercury Interactive* 46,500 885
Micromuse* 41,700 237
Microsoft* 126,950 6,496
Netiq* 23,450 534
Openwave System* 99,450 1,268
Oracle* 217,250 2,733
Precise Software Solutions* 89,900 993
SAP AG 24,450 634
Siebel Systems* 112,400 1,462
Stellent* 79,700 1,148
Synopsys* 20,550 824
Tricord Systems* 317,600 172
UAXS Global Holdings* 173,400 128
VERITAS Software* 127,100 2,344
Vignette* 357,050 1,264
Vitria Technology* 377,500 774
Yahoo* 123,500 1,088
-------
31,587
-------
TECHNOLOGY HARDWARE & EQUIPMENT - 54.0%
Advanced Fibre Communications* 50,200 733
Agere Systems* 506,900 2,094
Alpha Industries* 50,250 973
Applied Micro Circuits* 146,250 1,022
Broadcom* 61,050 1,239
Brocade Communications Systems* 205,150 2,878
Celestica* 46,200 1,261
Centillium Communications* 76,100 461
Ciena* 86,200 887
Cisco Systems* 380,750 4,638
Dell Computer* 81,300 1,507
Emcore* 58,450 500
Ericsson, ADR 557,900 1,947
Exfo Electro-Optical Engineering* 77,750 700
Genesis Microchip* 31,500 886
Integrated Circuit System* 40,000 511
Intel 50,900 1,040
Intergraph* 67,720 606
Juniper Networks* 45,900 445
Lantronix* 132,500 808
Linear Technology 19,050 625
McDATA* 107,600 903
Micron Technology* 71,450 1,345
Motorola 312,850 4,880
Multilink Technology* 179,450 928
Mykrolis* 123,000 1,103
National Semiconductor* 37,700 831
TECHNOLOGY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------
Nokia, ADR, Cl A 137,700 $2,155
Nortel Networks 801,550 4,497
O2Micro International* 94,300 1,240
Palm* 213,727 312
PMC-Sierra* 61,500 632
Powerwave Technologies* 83,200 992
QUALCOMM* 97,900 4,654
Research In Motion* 59,950 964
RF Micro Devices* 81,000 1,345
Sanmina* 95,000 1,290
Sonus Networks* 88,000 264
StorageNetworks* 179,800 712
Taiwan Semiconductor Manufacturing
SP, ADR* 323,260 3,068
Tellium* 89,150 440
United Microelectronics, ADR 273,298 1,454
UTStarcom* 101,900 1,656
-------
61,426
-------
TELECOMMUNICATION SERVICES - 8.2%
Airgate PCS* 12,950 575
Allegiance Telecommunications* 185,350 558
American Tower* 75,750 1,052
Global Crossing* 326,550 588
Qwest Communications International 135,000 2,255
Sprint* 92,700 2,437
Time Warner Telecommunications, Cl A* 102,150 741
Triton PCS Holdings* 22,250 846
WorldCom - MCI Group* 685 10
WorldCom - Worldcom Group* 17,142 258
-------
9,320
-------
TOTAL COMMON STOCKS
111,676
--------
RELATED PARTY MONEY MARKET FUND - 0.7%
First American Prime Obligations Fund (A) 746,146 746
--------
TOTAL RELATED PARTY MONEY MARKET FUND
746
--------
TOTAL INVESTMENTS - 98.9%
(Cost $263,486) 112,424
--------
OTHER ASSETS AND LIABILITIES, NET - 1.1% (E)
1,297
--------
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 123)
STATEMENTS OF NET ASSETS September 30, 2001
TECHNOLOGY FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- -------------------------------------------------------------
NET ASSETS:
Portfolio capital $581,972
Accumulated net realized loss on
investments (317,189)
Net unrealized depreciation of
investments (151,062)
--------
TOTAL NET ASSETS - 100.0% $113,721
--------
CLASS A:
Net asset value and redemption price per share
(net assets of $29,083,997 and 4,572,482 shares
of capital stock issued and outstanding)(F) $ 6.36
Maximum sales charge of 5.50% 0.37
--------
Offering price per share(B) $ 6.73
--------
CLASS B:
Net asset value and offering price per share
(net assets of $15,973,878 and 2,770,538 shares
of capital stock issued and outstanding)(C)(F) $ 5.77
--------
CLASS C:
Net asset value per share (net assets of
$9,009,603 and 1,434,645 shares of
capital stock issued and outstanding)(C)(F) $ 6.28
Maximum sales charge of 1.00% 0.06
--------
Offering price per share(D) $ 6.34
--------
CLASS S:
Net asset value, offering price and redemption
price per share (net assets of $6 and 1 share
of capital stock issued and outstanding)(F) $ 6.36
--------
CLASS Y:
Net asset value, offering price and redemption
price per share (net assets of $59,653,581 and
9,128,705 shares of capital stock issued and
outstanding)(F) $ 6.53
--------
*Non-income producing security
(A)This money market fund is advised by U.S.Bancorp Piper Jaffray Management,
Inc. who also serves as advisor for this fund. See the notes to the financial
statements.
(B)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 5.50%.
(C)Class B and C have a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(D)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 1.00%.
(E)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 51,214
Payable upon return of securities loaned $ (51,214)
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
Cl - Class
SCIENCE & TECHNOLOGY FUND
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
COMMON STOCKS - 94.0%
HEALTH CARE EQUIPMENT & SERVICES - 1.1%
Medtronic 9,000 $ 392
------
PHARMACEUTICALS & BIOTECHNOLOGY - 14.9%
Abgenix* 6,200 141
Amgen* 11,900 699
Andrx* 2,900 188
Bristol-Myers Squibb 6,200 345
Eli Lilly 5,800 468
Genetech* 10,400 458
Genzyme* 6,800 309
IDEC Pharmaceuticals* 7,900 392
Ivax* 10,600 235
King Pharmaceuticals* 4,600 193
MedImmune* 7,000 249
Merck 3,900 260
Millennium Pharmaceuticals* 10,000 178
Pfizer 9,800 393
Pharmacia 10,900 442
Praecis Pharmaceuticals* 24,200 90
Protein Design Labs* 2,800 132
------
5,172
------
CAPITAL GOODS - 1.8%
General Dynamics 7,000 618
------
SOFTWARE & SERVICES - 23.7%
Adobe Systems 17,700 424
BEA Systems* 64,000 614
Check Point Software Technologies* 35,000 771
Citrix Systems* 30,500 604
Computer Sciences* 22,200 736
Mercury Interactive* 18,200 347
Microsoft* 17,500 895
Nuance Communications* 56,500 367
NVIDIA* 32,200 885
Openwave System* 25,157 321
PeopleSoft* 15,400 278
Rational Software* 57,300 496
Siebel Systems* 48,000 625
VeriSign* 4,900 205
VERITAS Software* 36,300 669
------
8,237
------
The accompanying notes are an integral part of the financial statements.
(124 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
SCIENCE & TECHNOLOGY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------------
TECHNOLOGY HARDWARE & EQUIPMENT - 49.4%
Alpha Industries* 38,300 $ 742
Analog Devices* 26,800 876
Applied Micro Circuits* 61,000 426
AXT* 65,000 689
Broadcom* 12,500 254
Brocade Communications Systems* 36,900 518
Cisco Systems* 95,600 1,164
Comverse Technology* 8,700 178
Corning 26,400 233
Cree* 9,900 146
Cypress Semi-Conductor* 11,300 168
Dell Computer* 40,200 745
EMC* 30,100 354
EMCORE* 73,300 627
Emulex* 24,000 228
Integrated Device Technologies* 15,600 314
Intel 49,300 1,008
IBM 8,200 757
JDS Uniphase* 42,800 271
Juniper Networks* 28,800 279
KLA-Tencor* 12,000 379
Micron Technology* 41,700 785
Network Appliance* 41,000 279
Nokia, ADR, Cl A 18,000 282
Nortel Networks 40,700 228
Novellus Systems* 20,900 597
ONI Systems* 31,500 127
Qlogic* 10,900 207
QUALCOMM* 16,200 770
RF Micro Devices* 50,100 832
Scientific - Atlanta 12,300 216
Sonus Networks* 27,700 83
Sun Microsystems* 75,497 624
Texas Instruments 46,000 1,149
Vitesse Semiconductor* 37,700 292
Xilinx* 13,100 308
--------
17,135
--------
TELECOMMUNICATION SERVICES - 3.1%
Broadwing* 12,400 199
Sprint* 15,500 408
WorldCom* 31,200 469
--------
1,076
--------
TOTAL COMMON STOCKS 32,630
--------
SCIENCE & TECHNOLOGY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND - 8.3%
First American Prime Obligations Fund(A) 2,881,835 $ 2,882
--------
TOTAL RELATED PARTY MONEY MARKET FUND 2,882
--------
TOTAL INVESTMENTS - 102.3%
(Cost $62,188) 35,512
--------
OTHER ASSETS AND LIABILITIES, NET - (2.3%)(E) (810)
--------
NET ASSETS:
Portfolio capital $117,825
Accumulated net realized loss on
investments and options written (55,995)
Net unrealized depreciation of
investments (26,677)
Net unrealized depreciation of options
written (451)
--------
TOTAL NET ASSETS - 100.0%
$ 34,702
--------
CLASS A:
Net asset value and redemption price per share
(net assets of $987,958 and 210,077 shares of
capital stock issued and outstanding)(F) $ 4.70
Maximum sales charge of 5.50% 0.27
--------
Offering price per share(B) $ 4.97
--------
CLASS B:
Net asset value and offering price per share
(net assets of $3,562,681 and 765,303 shares of
capital stock issued and outstanding)(C)(F) $ 4.66
--------
CLASS C:
Net asset value per share (net assets of $9 and 2
shares of capital stock issued and outstanding)(C)(F) $ 4.70
Maximum sales charge of 1.00% 0.05
--------
Offering price per share (D) $ 4.75
--------
CLASS S:
Net asset value, offering price and redemption price
per share (net assets of $1,858,248 and 395,201 shares
of capital stock issued and outstanding)(F) $ 4.70
--------
CLASS Y:
Net asset value, offering price and redemption price per
share (net assets of $28,292,777 and 5,966,475 shares of
capital stock issued and outstanding)(F) $ 4.74
--------
*Non-income producing securities
(A)This money market fund is advised by U.S. Bancorp Piper Jaffray Asset
Management, Inc. who also serves as advisors for this fund. See also the
notes to the financial statements.
(B)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 5.50%.
(C)Class B and C have a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(D)The offering is calculated by dividing the net asset value by 1 minus the
maximum sales charge of 1.00%.
(E)Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Collateral received for securities loaned, at value $ 12,195
Payable upon return of securities loaned $ (12,195)
(F)$.0001 par value and 2 billion authorized shares
ADR - American Depositary Receipt
Cl - Class
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 125)
STATEMENTS OF OPERATIONS in thousands
HEALTH REAL ESTATE
SCIENCES FUND SECURITIES FUND
------------- ---------------
10/1/00 10/1/00
to to
9/30/01 9/30/01
------- -------
INVESTMENT INCOME:
Interest $ 101 $ 112
Dividends 179 4,536
Securities lending 8 11
- ------------------------------------------------------- ----------- -------------
TOTAL INVESTMENT INCOME 288 4,659
======================================================= =========== =============
EXPENSES:
Investment advisory fees 233 449
Administrator and fund accounting fees 2 72
Transfer agent fees and expenses 104 96
Custodian fees 10 19
Directors' fees -- 1
Registration fees -- 1
Professional fees 1 2
Printing 2 4
Other 41 2
Shareholder servicing fees - Fund level -- --
Shareholder servicing fees - Class S -- --
Distribution and shareholder servicing fees - Class A 16 6
Distribution and shareholder servicing fees - Class B 39 18
Distribution fees - Class C 49 3
- ------------------------------------------------------- ----------- -------------
TOTAL EXPENSES 493 673
======================================================= =========== =============
Less: Waiver of expenses (89) (137)
- ------------------------------------------------------- ----------- -------------
TOTAL NET EXPENSES 404 536
======================================================= =========== =============
Investment income (loss) - net (116) 4,123
- ------------------------------------------------------- ----------- -------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND OPTIONS WRITTEN - NET:
Net realized gain (loss) on investments 399 4,720
Net realized gain (loss) on options written -- --
Net change in unrealized appreciation or depreciation
of investments (6,754) (1,546)
Net changes in unrealized appreciation or depreciation
of options written -- --
- ------------------------------------------------------- ----------- -------------
NET GAIN (LOSS) ON INVESTMENTS (6,355) 3,174
======================================================= =========== =============
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ (6,471) $ 7,297
======================================================= =========== =============
[WIDE TABLE CONTINUED FROM ABOVE]
TECHNOLOGY SCIENCE &
FUND TECHNOLOGY FUND
------------ -----------------------
10/1/00 11/1/00 12/1/99
to to to
9/30/01 9/30/01 10/31/00
----------- ----------- ---------
INVESTMENT INCOME:
Interest $ 532 $ 242 $ 393
Dividends 73 65 73
Securities lending 300 12 --
- ------------------------------------------------------- ------------ ------------ ---------
TOTAL INVESTMENT INCOME 905 319 466
======================================================= ============ ============ =========
EXPENSES:
Investment advisory fees 2,215 745 900
Administrator and fund accounting fees 357 130 171
Transfer agent fees and expenses 333 69 27
Custodian fees 95 20 25
Directors' fees 3 9 6
Registration fees -- 57 57
Professional fees 9 54 13
Printing 19 45 16
Other 6 4 2
Shareholder servicing fees - Fund level -- -- 250
Shareholder servicing fees - Class S 103 1 --
Distribution and shareholder servicing fees - Class A 181 3 1
Distribution and shareholder servicing fees - Class B 333 70 69
Distribution fees - Class C 195 -- --
- ------------------------------------------------------- ------------ ------------ ---------
TOTAL EXPENSES 3,849 1,207 1,537
======================================================= ============ ============ =========
Less: Waiver of expenses (189) (170) (97)
- ------------------------------------------------------- ------------ ------------ ---------
TOTAL NET EXPENSES 3,660 1,037 1,440
======================================================= ============ ============ =========
Investment income (loss) - net (2,755) (718) (974)
- ------------------------------------------------------- ------------ ------------ ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND OPTIONS WRITTEN - NET:
Net realized gain (loss) on investments (315,453) (51,893) (2,367)
Net realized gain (loss) on options written -- (2,253) 932
Net change in unrealized appreciation or depreciation
of investments (271,929) (51,406) 14,820
Net changes in unrealized appreciation or depreciation
of options written -- (253) --
- ------------------------------------------------------- ------------ ------------ ---------
NET GAIN (LOSS) ON INVESTMENTS (587,382) (105,800) 13,385
======================================================= ============ ============ =========
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ (590,137) $ (106,523) $ 12,411
======================================================= ============ ============ =========
The accompanying notes are an integral part of the financial statements.
(126 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
(This page has been left blank intentionally.)
STATEMENTS OF CHANGES IN NET ASSETS in thousands
HEALTH
SCIENCES FUND
-------------------------
10/1/00 10/1/99
to to
9/30/01 9/30/00
---------- ---------
OPERATIONS:
Investment income (loss) - net $ (116) $ (38)
Net realized gain (loss) on investments 399 3,404
Net realized gain (loss) on options written -- --
Net change in unrealized appreciation or depreciation of investments (6,754) 6,835
Net change in unrealized appreciation or depreciation of options written -- --
- ------------------------------------------------------------------------------- -------- -----------
Net increase (decrease) in net assets resulting from operations (6,471) 10,201
- ------------------------------------------------------------------------------- -------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A -- --
Class B -- --
Class C -- --
Class Y (1) (2)
Net realized gain on investments(3):
Class A (702) --
Class B (475) --
Class C (459) --
Class Y (2,040) --
Tax return of capital:
Class A -- --
Class B -- --
Class Y -- --
- ------------------------------------------------------------------------------- --------- -------------
Total distributions (3,677) (2)
- ------------------------------------------------------------------------------- --------- --------------
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 3,275 4,777
Reinvestment of distributions 685 --
Payments for redemptions (2,142) (1,336)
- ------------------------------------------------------------------------------- --------- -------------
Increase (decrease) in net assets from Class A transactions 1,818 (3,441)
- ------------------------------------------------------------------------------- --------- -------------
Class B
Proceeds from sales 1,409 2,706
Reinvestment of distributions 469 --
Payments for redemptions (1,319) (686)
Shares issued in connection with the acquisition of the Firstar Fund assets -- --
- ------------------------------------------------------------------------------- --------- -------------
Increase (decrease) in net assets from Class B transactions 559 2,020
- ------------------------------------------------------------------------------- --------- -------------
Class C
Proceeds from sales 2,495 3,975
Reinvestment of distributions 458 --
Payments for redemptions (546) (60)
- ------------------------------------------------------------------------------- --------- -------------
Increase in net assets from Class C transactions 2,407 3,915
- ------------------------------------------------------------------------------- --------- -------------
Class S (2)
Proceeds from sales -- --
Payments for redemptions -- --
Shares issued in connection with the acquisition of the Firstar Fund assets -- --
- ------------------------------------------------------------------------------- --------- -------------
Increase in net assets from Class S transactions -- --
- ------------------------------------------------------------------------------- --------- -------------
Class Y (2)
Proceeds from sales 4,869 3,248
Reinvestment of distributions 902 --
Payments for redemptions (2,315) (3,039)
Shares issued in connection with the acquisition of the Firstar Fund assets -- --
- ------------------------------------------------------------------------------- --------- -------------
Increase (decrease) in net assets from Class Y transactions 3,456 209
- ------------------------------------------------------------------------------- --------- -------------
Increase (decrease) in net assets from capital share transactions 8,240 (9,585)
- ------------------------------------------------------------------------------- --------- -------------
Total increase (decrease) in net assets (1,908) (19,784)
- ------------------------------------------------------------------------------- --------- -------------
NET ASSETS AT BEGINNING OF PERIOD 34,388 14,604
=============================================================================== ========= =============
NET ASSETS AT END OF PERIOD $32,480 $ 34,388
=============================================================================== ========= =============
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ -- $ --
=============================================================================== ========= =============
[WIDE TABLE CONTINUED FROM ABOVE]
REAL ESTATE
SECURITIES FUND
---------------------------
10/1/00 10/1/99
to to
9/30/01 9/30/00
------------ -----------
OPERATIONS:
Investment income (loss) - net $ 4,123 $ 3,630
Net realized gain (loss) on investments 4,720 (5,831)
Net realized gain (loss) on options written -- --
Net change in unrealized appreciation or depreciation of investments (1,546) 15,034
Net change in unrealized appreciation or depreciation of options written -- --
- ------------------------------------------------------------------------------- --------- -----------
Net increase (decrease) in net assets resulting from operations 7,297 12,833
- ------------------------------------------------------------------------------- --------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (109) (102)
Class B (76) (106)
Class C (13) (1)
Class Y (3,085) (3,583)
Net realized gain on investments(3):
Class A -- --
Class B -- --
Class C -- --
Class Y -- --
Tax return of capital:
Class A (5) (4)
Class B (4) (5)
Class Y (149) (138)
- ------------------------------------------------------------------------------- --------- ------------
Total distributions (3,441) (3,939)
- ------------------------------------------------------------------------------- --------- ------------
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 1,350 772
Reinvestment of distributions 102 91
Payments for redemptions (1,119) (601)
- ------------------------------------------------------------------------------- --------- ------------
Increase (decrease) in net assets from Class A transactions 333 262
- ------------------------------------------------------------------------------- --------- ------------
Class B
Proceeds from sales 376 315
Reinvestment of distributions 73 92
Payments for redemptions (663) (995)
Shares issued in connection with the acquisition of the Firstar Fund assets 2 --
- ------------------------------------------------------------------------------- --------- ------------
Increase (decrease) in net assets from Class B transactions (212) (588)
- ------------------------------------------------------------------------------- --------- ------------
Class C
Proceeds from sales 256 167
Reinvestment of distributions 13 1
Payments for redemptions (101) (7)
- ------------------------------------------------------------------------------- --------- -------------
Increase in net assets from Class C transactions 168 161
- ------------------------------------------------------------------------------- --------- ------------
Class S (2)
Proceeds from sales 242 --
Payments for redemptions -- --
Shares issued in connection with the acquisition of the Firstar Fund assets 67 --
- ------------------------------------------------------------------------------- --------- ------------
Increase in net assets from Class S transactions 309 --
- ------------------------------------------------------------------------------- --------- ------------
Class Y (2)
Proceeds from sales 12,135 14,679
Reinvestment of distributions 255 337
Payments for redemptions (8,203) (18,216)
Shares issued in connection with the acquisition of the Firstar Fund assets 32,008 --
- ------------------------------------------------------------------------------- --------- ------------
Increase (decrease) in net assets from Class Y transactions 36,195 (3,200)
- ------------------------------------------------------------------------------- --------- ------------
Increase (decrease) in net assets from capital share transactions 36,793 (3,365)
- ------------------------------------------------------------------------------- --------- ------------
Total increase (decrease) in net assets 40,649 5,529
- ------------------------------------------------------------------------------- --------- ------------
NET ASSETS AT BEGINNING OF PERIOD 60,420 54,891
=============================================================================== ========= ============
NET ASSETS AT END OF PERIOD $101,069 $ 60,420
=============================================================================== ========= ============
ACCUMULATED NET INVESTMENT INCOME (LOSS) $ 751 $ (69)
=============================================================================== ========= ============
(1)See Note 4 in the notes to the financial statements for additional
information.
(2)On September 24, 2001, Class Y and Institutional class of Science &
Technology Fund were redesignated as Class S and Class Y, respectively.
(3)Includes distributions in excess of net realized gains of $97 and $1,745 for
the period ended September 30, 2001 for the Health Sciences and Technology
Funds, respectively.
The accompanying notes are an integral part of the financial statements.
(128 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
TECHNOLOGY SCIENCE &
FUND TECHNOLOGY FUND
------------------------- -------------------------------------
10/1/00 10/1/99 11/1/00 12/1/99 8/9/99
to to to to to
9/30/01 9/30/00 9/30/01 10/31/00 11/30/99
----------- ----------- ------------ ----------- ---------
$ (2,755) $ (5,255) $ (718) $ (974) $ (71)
(315,453) 131,445 (51,893) (2,367) (414)
-- -- (2,253) 932
(271,929) 43,672 (51,406) 14,820 9,711
-- -- (253) -- --
---------- ----------- ---------- ---------- ---------
(590,137) 169,862 (106,523) 12,411 9,226
---------- ----------- ---------- ---------- ---------
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
(24,639) (7,867) -- -- --
(16,716) (7,758) -- -- --
(5,503) -- -- -- --
(67,890) (70,350) -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
---------- ----------- ---------- ---------- ---------
(114,748) (85,975) -- -- --
---------- ----------- ---------- ---------- ---------
51,555 226,127 2,947 2,073 --
23,719 7,203 -- -- --
(42,766) (96,618) (1,777) (27) --
---------- ----------- ---------- ---------- ---------
32,508 136,712 1,170 2,046 --
---------- ----------- ---------- ---------- ---------
11,252 82,706 2,098 12,986 1,197
16,266 7,621 -- --
(9,839) (17,275) (1,168) (1,054) --
-- -- -- -- --
---------- ----------- ---------- ---------- ---------
17,679 73,052 930 11,932 1,197
---------- ----------- ---------- ---------- ---------
16,755 39,844 -- -- --
5,470 -- -- -- --
(5,921) (1,945) -- -- --
---------- ----------- ---------- ---------- ---------
16,304 37,899 -- -- --
---------- ----------- ---------- ---------- ---------
-- -- 3,256 -- --
-- -- (104) -- --
-- -- -- -- --
---------- ----------- ---------- ---------- ---------
-- -- 3,152 -- --
---------- ----------- ---------- ---------- ---------
88,628 242,912 50,119 86,735 32,590
35,693 19,875 -- -- --
(95,285) (128,235) (51,322) (18,229) (734)
-- -- -- -- --
---------- ----------- ---------- ---------- ---------
29,036 134,552 (1,203) 68,506 31,858
---------- ----------- ---------- ---------- ---------
95,527 382,215 4,049 82,484 33,055
---------- ----------- ---------- ---------- ---------
(609,358) 466,102 (102,474) 94,895 42,281
---------- ----------- ---------- ---------- ---------
723,079 256,977 137,176 42,281 --
========== =========== ========== ========== =========
$ 113,721 $ 723,079 $ 34,702 $ 137,176 $42,281
========== =========== ========== ========== =========
$ -- $ -- $ -- $ -- $ --
========== =========== ========== ========== =========
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 129)
FINANCIAL HIGHLIGHTS For a share outstanding, throughout the periods ended
September 30, unless otherwise indicated
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS FROM
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS CAPITAL
----------- --------------- ------------- ------------ --------------- --------------
HEALTH SCIENCES FUND
Class A
2001(4) $ 13.34 $ (0.03) $ (2.10) $ -- $ (1.37) $ --
2000 8.24 (0.02) 5.12 -- -- --
1999 7.82 0.01 0.46 (0.01) (0.04) --
1998 12.05 0.01 (2.78) -- (1.46) --
1997 9.86 (0.01) 2.30 -- (0.10) --
Class B
2001(4) $ 12.89 $ (0.11) $ (2.01) $ -- $ (1.37) $ --
2000 8.02 (0.08) 4.95 -- -- --
1999 7.65 0.01 0.40 -- (0.04) --
1998 11.90 (0.02) (2.77) -- (1.46) --
1997 9.81 (0.01) 2.20 -- (0.10) --
Class C
2001(4) $ 13.29 $ (0.11) $ (2.08) $ -- $ (1.37) $ --
2000(2) 9.76 (0.03) 3.56 -- -- --
Class S
2001(3)(4) $ 9.06 $ -- $ 0.78 $ -- $ -- $ --
Class Y
2001(4) $ 13.42 $ -- $ (2.12) $ -- $ (1.37) $ --
2000 8.28 -- 5.14 -- -- --
1999 7.84 0.04 0.48 (0.04) (0.04) --
1998 12.08 0.03 (2.78) (0.03) (1.46) --
1997 9.87 (0.01) 2.33 (0.01) (0.10) --
- ------- -------- ------- ------- ------- ------- -------
REAL ESTATE SECURITIES FUND
Class A
2001(4) $ 12.71 $ 0.76 $ 0.32 $ (0.64) $ -- $ (0.03)
2000 10.78 0.74 2.00 (0.79) -- (0.02)
1999 12.17 0.65 (1.36) (0.67) -- (0.01)
1998 14.97 0.63 (2.40) (0.70) (0.33) --
1997 11.52 0.72 3.42 (0.65) (0.03) (0.01)
Class B
2001(4) $ 12.61 $ 0.65 $ 0.33 $ (0.54) $ -- $ (0.03)
2000 10.69 0.64 2.00 (0.69) -- (0.03)
1999 12.08 0.55 (1.34) (0.57) -- (0.03)
1998 14.86 0.52 (2.37) (0.60) (0.33) --
1997 11.46 0.63 3.38 (0.57) (0.03) (0.01)
Class C
2001(4) $ 12.68 $ 0.68 $ 0.30 $ (0.59) $ -- $ --
2000(2) 10.61 0.50 2.14 (0.57) -- --
Class S
2001(3)(4) $ 12.52 $ 0.11 $ 0.49 $ -- $ -- $ --
Class Y
2001(4) $ 12.73 $ 0.84 $ 0.28 $ (0.68) $ -- $ (0.02)
2000 10.80 0.77 2.00 (0.81) -- (0.03)
1999 12.19 0.68 (1.35) (0.69) -- (0.03)
1998 14.99 0.67 (2.40) (0.74) (0.33) --
1997 11.53 0.74 3.43 (0.67) (0.03) (0.01)
- ------- -------- ------- ------- ------- ------- -------
(1)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
(2)Commenced operations on February 1, 2000. All ratios for the period have been
annualized, except total return.
(3)Class S shares have been offered since September 24, 2001. All ratios for the
period have been annualized, except total return.
(4)Per share data calculated using average shares outstanding method.
The accompanying notes are an integral part of the financial statements.
(130 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES TO INCOME (LOSS)
NET ASSET RATIO OF INVESTMENT AVERAGE TO AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (1) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
----------- -------------- -------------- ------------- --------------- ------------- -------------- ----------
$ 9.84 (17.35)% $ 6,514 1.15% (0.28)% 1.42% (0.55)% 103%
13.34 61.89 6,645 1.17 (0.27) 1.46 (0.56) 104
8.24 6.08 1,383 1.16 0.11 1.30 (0.03) 53
7.82 (25.24) 2,017 1.15 0.04 1.20 (0.01) 45
12.05 23.60 849 1.15 (0.20) 1.29 (0.34) 54
$ 9.40 (17.99)% $ 3,496 1.90% (1.04)% 2.17% (1.31)% 103%
12.89 60.72 4,221 1.92 (1.02) 2.21 (1.31) 104
8.02 5.37 1,029 1.92 (0.64) 2.05 (0.77) 53
7.65 (25.80) 645 1.90 (0.73) 1.95 (0.78) 45
11.90 22.69 516 1.90 (0.94) 2.04 (1.08) 54
$ 9.73 (17.92)% $ 5,329 1.90% (1.04)% 2.17% (1.31)% 103%
13.29 36.17 4,347 1.92 (1.02) 2.21 (1.31) 104
$ 9.84 8.61% $ -- 0.00% 0.00% 0.00% 0.00% 103%
$ 9.93 (17.15)% $17,141 0.90% (0.04)% 1.17% (0.31)% 103%
13.42 62.10 19,175 0.92 (0.02) 1.21 (0.31) 104
8.28 6.59 12,192 0.90 0.38 1.05 0.23 53
7.84 (25.10) 21,977 0.90 0.27 0.95 0.22 45
12.08 23.89 41,243 0.90 0.06 1.04 (0.08) 54
------- ------ ----------- ---- ----- ---- ----- ---
$ 13.12 8.69% $ 2,421 1.04% 5.89% 1.25% 5.68% 85%
12.71 26.68 2,035 1.05 6.59 1.24 6.40 45
10.78 (5.89) 1,518 1.05 5.52 1.18 5.39 21
12.17 (12.42) 2,027 1.05 4.71 1.18 4.58 36
14.97 36.77 2,105 1.05 4.46 1.30 4.21 14
$ 13.02 7.93% $ 1,724 1.79% 5.13% 2.00% 4.92% 85%
12.61 25.81 1,874 1.80 5.79 1.99 5.60 45
10.69 (6.68) 2,192 1.80 4.75 1.93 4.62 21
12.08 (13.04) 3,026 1.80 3.98 1.93 3.85 36
14.86 35.77 3,318 1.80 3.61 2.00 3.41 14
$ 13.08 7.93% $ 341 1.79% 5.27% 2.00% 5.06% 85%
12.68 25.56 164 1.80 5.79 1.99 5.60 45
$ 13.12 4.87% $ 320 0.56% 43.93% 1.01% 43.48% 85%
$ 13.15 9.01% $96,263 0.80% 6.50% 1.01% 6.29% 85%
12.73 26.95 56,347 0.80 6.79 0.99 6.60 45
10.80 (5.64) 51,181 0.80 5.78 0.93 5.65 21
12.19 (12.18) 58,275 0.80 5.06 0.93 4.93 36
14.99 37.07 40,501 0.80 4.57 1.05 4.32 14
------- ------ ----------- ---- ----- ---- ----- ---
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 131)
FINANCIAL HIGHLIGHTS For a share outstanding, throughout the periods ended
September 30, unless otherwise indicated
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
----------- --------------- ------------- ------------ --------------
TECHNOLOGY FUND
Class A
2001(7) $ 47.68 $ (0.15) $ (33.55) $ -- $ (7.62)
2000 34.22 (0.35) 24.87 -- (11.06)
1999 15.60 (0.18) 19.55 -- (0.75)
1998 20.20 (0.13) (3.26) -- (1.21)
1997 19.25 (0.11) 3.12 -- (2.06)
Class B
2001(7) $ 44.40 $ (0.26) $ (30.75) $ -- $ (7.62)
2000 32.59 (0.35) 23.22 -- (11.06)
1999 14.99 (0.34) 18.69 -- (0.75)
1998 19.58 (0.24) (3.14) -- (1.21)
1997 18.85 (0.20) 2.99 -- (2.06)
Class C
2001(7) $ 47.49 $ (0.26) $ (33.33) $ -- $ (7.62)
2000(1) 50.30 (0.35) (2.46) -- --
Class S
2001(2)(7) $ 6.95 $ -- $ (0.59) $ -- $ --
Class Y
2001(7) $ 48.60 $ (0.11) $ (34.34) $ -- $ (7.62)
2000 34.64 (0.34) 25.36 -- (11.06)
1999 15.73 (0.13) 19.79 -- (0.75)
1998 20.29 (0.08) (3.27) -- (1.21)
1997 19.29 (0.06) 3.12 -- (2.06)
- ------- -------- ------- -------- ---- --------
SCIENCE & TECHNOLOGY FUND(9)
Class A
2001(3)(7) $ 19.43 $ (0.10) $ (14.63) $ -- $ --
2000(5)(6) 21.93 (0.07) (2.43) -- --
Class B
2001(3)(7) $ 19.36 $ (0.18) $ (14.52) $ -- $ --
2000(6)(7) 14.52 (0.27) 5.11 -- --
1999(5) 10.00 -- 4.52 -- --
Class C
2001(2)(7) $ 5.06 $ -- $ (0.36) $ -- $ --
Class S
2001(4)(7) $ 17.69 $ (0.07) $ (12.92) $ -- $ --
Class Y
2001(3)(7) $ 19.54 $ (0.09) $ (14.71) $ -- $ --
2000(6) 14.56 (0.13) 5.11 -- --
1999(5) 10.00 -- 4.56 -- --
- ------- -------- ------- -------- ---- --------
(1)Commenced operations on February 1, 2000. All ratios for the period have been
annualized, except total return.
(2)Class C and Class S shares have been offered since September 24, 2001. All
ratios for the period have been annualized, except total return.
(3)Effective in 2001, the Fund's fiscal year end was changed from October 31 to
September 30 . All ratios for the period have been annualized, except total
return.
(4)Class S shares have been offered since December 11, 2000. All ratios for the
period have been annualized, except total return.
(5)Commenced operations on August 9, 1999. All ratios for the period have been
annualized, except total return.
(6)Effective in 2000, the Fund's fiscal year end was changed from November 30 to
October 31. All ratios for the period have been annualized, except total
return.
(7)Per share data calculated using average shares outstanding method.
(8)Total return does not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
(9)The financial highlights for the Science & Technology Fund as set forth
herein include the historical financial highlights of the Firstar Science &
Technology Fund. The assets of the Firstar Fund were acquired by the First
American Science & Technology Fund on September 24, 2001. In connection with
such acquisition, (i) Class A shares of the Firstar Science & Technology
Fund were exchanged for Class A shares of the First American Science &
Technology Fund, (ii) Firstar Class B shares were exchanged for Class B
shares of the First American Fund, (iii) Firstar Class Y shares were
exchanged for Class S shares of the First American Fund, and (iv) Firstar
Class Institutional shares were exchanged for Class Y shares of the First
American Fund.
The accompanying notes are an integral part of the financial statements.
(132 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES TO INCOME (LOSS)
NET ASSET RATIO OF INVESTMENT AVERAGE TO AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (8) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
----------- -------------- -------------- ------------- --------------- ------------- -------------- ----------
$ 6.36 (83.30)% $ 29,084 1.15% (0.88)% 1.22% (0.95)% 269%
47.68 80.11 155,533 1.15 (0.93) 1.15 (0.93) 195
34.22 128.71 21,491 1.15 (0.80) 1.16 (0.81) 184
15.60 (16.69) 7,703 1.15 (0.60) 1.15 (0.60) 124
20.20 17.71 5,564 1.15 (0.59) 1.17 (0.61) 150
$ 5.77 (83.42)% $ 15,974 1.90% (1.63)% 1.97% (1.70)% 269%
44.40 78.77 97,003 1.90 (1.68) 1.90 (1.68) 195
32.59 127.09 20,866 1.90 (1.56) 1.91 (1.57) 184
14.99 (17.21) 7,499 1.90 (1.38) 1.90 (1.38) 124
19.58 16.82 8,463 1.90 (1.41) 1.92 (1.43) 150
$ 6.28 (83.43)% $ 9,010 1.90% (1.63)% 1.98% (1.71)% 269%
47.49 (5.59) 33,605 1.90 (1.67) 1.88 (1.65) 195
$ 6.36 (8.49)% $ -- 0.00% 0.00% 0.00% 0.00% 269%
$ 6.53 (83.26)% $ 59,653 0.90% (0.62)% 0.96% (0.67)% 269%
48.60 80.71 436,938 0.90 (0.67) 0.90 (0.67) 195
34.64 129.52 214,620 0.90 (0.53) 0.91 (0.54) 184
15.73 (16.41) 100,985 0.90 (0.38) 0.90 (0.38) 124
20.29 17.95 148,659 0.90 (0.41) 0.92 (0.43) 150
- ---- ------- ------ ----------- ---- ----- ---- ----- ---
$ 4.70 (75.81)% $ 988 1.59% (1.15)% 1.84% (1.40)% 146%
19.43 (11.40) 1,944 1.64 (1.47) 1.73 (1.56) 85
$ 4.66 (75.93)% $ 3,563 2.32% (1.87)% 2.56% (2.11)% 146%
19.36 33.33 13,465 2.09 (1.63) 2.19 (1.73) 85
14.52 45.20 1,345 1.94 (1.19) 2.09 (1.34) 16
$ 4.70 (7.11)% $ -- 0.00% 0.00% 0.00% 0.00% 146%
$ 4.70 (73.43)% $ 1,858 1.56% (1.19)% 1.90% (1.53)% 146%
$ 4.74 (75.74)% $ 28,293 1.34% (0.90)% 1.58% (1.14)% 146%
19.54 34.20 121,767 1.36 (0.90) 1.46 (1.00) 85
14.56 45.60 40,936 1.69 (0.94) 1.84 (1.09) 16
- ---- ------- ------ ----------- ---- ----- ---- ----- ---
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 133)
NOTES TO FINANCIAL STATEMENTS September 30, 2001
1 > ORGANIZATION
The Large Cap Growth Fund, Large Cap Value Fund, Large Cap Core Fund,
Growth & Income Fund, Relative Value Fund, Capital Growth Fund, Equity
Income Fund, Balanced Fund, Mid Cap Growth Fund, Mid Cap Value Fund, Mid
Cap Core Fund, Micro Cap Fund, Small Cap Growth Fund, Small Cap Value Fund,
Small Cap Core Fund, Emerging Markets Fund, International Fund, Health
Sciences Fund, Real Estate Securities Fund, Technology Fund, and Science &
Technology Fund (each "Fund" and collectively, the "Funds") are mutual
funds offered by First American Investment Funds, Inc. (FAIF), which is a
member of the First American Family of Funds. FAIF is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company. FAIF's articles of incorporation permit the Board of
Directors to create additional funds in the future.
FAIF offers Class A, Class B, Class C, Class S, and Class Y shares. Class A
shares are sold with a front-end sales charge. Class B shares may be
subject to a contingent deferred sales charge for six years and
automatically convert to Class A shares after eight years. Class C shares
are sold with a front-end sales charge and may be subject to a contingent
deferred sales charge for 18 months. Class S shares have no sales charge
and are offered only through banks and other financial institutions. Class
Y shares have no sales charge and are offered only to qualifying
institutional investors.
The Funds' prospectuses provide descriptions of each Fund's investment
objectives, policies and strategies. All 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 may differ
among classes.
2 > SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Funds are as follows:
SECURITY VALUATION - Security valuations for FAIF fund investments are
furnished by independent pricing services that have been approved by the
Board of Directors. Investments in equity securities that are traded on a
national securities exchange (or reported on the NASDAQ national market
system) are stated at the last quoted sales price if readily available for
such securities on each business day. Other equity securities traded in the
over-the-counter market and listed equity securities for which no sale was
reported on that date are stated at the last quoted bid price. Debt
obligations exceeding sixty days to maturity are valued by an independent
pricing service. The pricing service may employ methodologies that utilize
actual market transactions, broker-dealer supplied valuations, or other
formula driven valuation techniques. These techniques generally consider
such factors as yields or prices of bonds of comparable quality, type of
issue, coupon, maturity, ratings and general market conditions. Securities
for which prices are not available from an independent pricing service but
where an active market exists are valued using market quotations obtained
from one or more dealers that make markets in the securities or from a
widely-used quotation system. When market quotations are not readily
available, securities are valued at fair value as determined in good faith
by procedures established and approved by the Board of Directors. Debt
obligations with sixty days or less remaining until maturity may be valued
at their amortized cost. Foreign securities are valued at the closing
prices on the principal exchange on which they trade. The prices for
foreign securities are reported in local currency and converted to U.S.
dollars using currency exchange rates. Exchange rates are provided daily by
recognized independent pricing agents.
SECURITY TRANSACTIONS AND INVESTMENT INCOME - The Funds record security
transactions on the trade date of the security purchase or sale. Dividend
income is recorded on the ex-dividend date. Interest income, including
amortization of bond premium and discount, is recorded on the accrual
basis. Security gains and losses are determined on the basis of identified
cost, which is the same basis used for federal income tax purposes.
DISTRIBUTIONS TO SHAREHOLDERS - Balanced Fund, Capital Growth Fund, Equity
Income Fund, Growth & Income Fund, Large Cap Core Fund, Large Cap Growth
Fund, Large Cap Value Fund, Mid Cap Core Fund, Mid Cap Growth Fund, Mid Cap
Value Fund and Relative Value Fund declare and pay income dividends
monthly. Micro Cap Fund, Small Cap Growth Fund, Small Cap Core Fund, Small
Cap Value Fund, Health Sciences Fund, Real Estate Securities Fund and
Technology Fund declare and pay income dividends quarterly. Emerging
Markets Fund, International Fund and Science & Technology Fund declare and
pay income dividends annually.
Due to the nature of the dividends received by the Real Estate Securities
Fund on its securities holdings, a portion of the quarterly distributions
of the Real Estate Securities Fund may be a return of capital. Any net
realized capital
(134 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
gains on sales of a fund's securities are distributed to shareholders at
least annually.
FEDERAL TAXES - It is each Fund's intention to continue to qualify as a
regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required.
The character of distributions made during the year from net investment
income or net realized gains may differ from its ultimate characterization
for Federal income tax purposes. In addition, due to the timing of dividend
distributions, the fiscal year in which the amounts are distributed may
differ from the year that the income or realized gains (losses) were
recorded by the Fund.
Net investment income and net realized gains (losses) may differ for
financial statement and tax purposes because of temporary or permanent
book/tax differences. These differences are primarily due to post-October
losses, losses deferred due to wash sales, foreign currency gains and
losses and the "mark-to-market" of certain Passive Foreign Investment
Companies (PFICs) for tax purposes. To the extent these differences are
permanent, adjustments are made to the appropriate equity accounts in the
period that the difference arises.
On the statements of net assets the following adjustments were made for
permanent tax adjustments (000):
ACCUMULATED UNDISTRIBUTED
NET REALIZED NET INVESTMENT
GAIN (LOSS) INCOME PAID IN CAPITAL
-------------- --------------- ----------------
Large Cap Growth Fund $ 36 $ 1,357 $ (1,393)
Large Cap Value Fund 98 (98) --
Large Cap Core Fund (3) (9) 12
Growth & Income Fund (2,361) (739) 3,100
Relative Value Fund 12 (12) --
Capital Growth Fund 4 1,267 (1,271)
Equity Income Fund 5 60 (65)
Balanced Fund (622) 114 508
Mid Cap Growth Fund 138 1,331 (1,469)
Mid Cap Core Fund 68 (45) (23)
Micro Cap Fund 890 2,159 (3,049)
Small Cap Growth Fund 52 1,568 (1,620)
Small Cap Value Fund (531) 297 234
Small Cap Core Fund 141 53 (194)
Emerging Markets Fund 286 (317) 31
International Fund (25,014) (8,096) 33,110
Health Sciences Fund (64) 118 (54)
Real Estate Securities Fund 1,651 138 (1,789)
Technology Fund 8 2,755 (2,763)
Science & Technology Fund -- 718 (718)
- ---------------------------------- ---------- --------- --------
At September 30, 2001, the following funds have capital loss carryovers:
AMOUNT (000) EXPIRATION DATE
-------------- ----------------
Large Cap Growth Fund $ 5,390 2009
Large Cap Value Fund 5,508 2009
Large Cap Core Fund 31,064 2009
Growth & Income Fund 20,675 2009
Capital Growth Fund 12,783 2009
Balanced Fund 15,132 2008-2009
Mid Cap Growth Fund 8,410 2009
Mid Cap Value Fund 106,045 2008
Mid Cap Core Fund 13,265 2009
Micro Cap Fund 7,489 2009
Emerging Markets Fund 242 2007
International Fund 51,154 2007-2009
Real Estate Securities Fund 4,664 2008
Technology Fund 12,002 2009
Science & Technology Fund 51,353 2007-2009
- ---------------------------------- -------- ---------
In accordance with Section 382 of the Internal Revenue Code, utilization of
the capital loss carryovers was limited for Balanced, International and
Real Estate Securities Funds in the amount (000) of $11,268, $8,582, and
$1,604, respectively. The amount for the Real Estate Securities Fund is
subject to change because its tax year end is December 31.
Certain funds incurred a loss for tax purposes for November 1, 2000, to
September 30, 2001. As permitted by tax regulations, the Fund intends to
elect to defer and treat these losses as arising in the fiscal year ended
September 30, 2002. The following funds had deferred losses:
AMOUNT (000)
------------
Large Cap Growth Fund $38,004
Balanced Fund 24,605
Mid Cap Growth Fund 108,446
Small Cap Growth Fund 71,061
Emerging Markets Fund 7,401
International Fund 125,526
Technology Fund 285,984
----------------------- -------
FUTURES TRANSACTIONS - In order to gain exposure to or protect against
changes in the market, certain Funds may enter into S&P Stock Index futures
contracts and other stock futures contracts.
Upon entering into a futures contract, the Fund is required to deposit cash
or pledge U.S. government securities in an amount equal to five percent of
the purchase price indicated in the futures contract (initial margin).
Subsequent payments, which are dependent on the daily fluctuations in the
value of the underlying security or securities, are made or received by the
Fund each day (daily variation margin) and are recorded as unrealized gains
or losses until the contract is closed. When the contract is closed, the
Fund
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 135)
NOTES TO FINANCIAL STATEMENTS September 30, 2001
records a realized gain or loss equal to the difference between the
proceeds from (or cost of) the closing transaction and the Fund's basis in
the contract.
FOREIGN CURRENCY TRANSLATION - The books and records of the Emerging
Markets Fund and International Fund are maintained in U.S. dollars on the
following basis:
o market value of investment securities, assets and liabilities at the
current rate of exchange; and
o purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Emerging Markets Fund and International Fund do not isolate the portion
of gains and losses on investments in equity securities that is due to
changes in the foreign exchange rates from that which is due to changes in
market prices of equity securities.
The Emerging Markets Fund and International Fund report certain foreign
currency-related transactions as components of realized gains for financial
reporting purposes, whereas such components are treated as ordinary income
for federal income tax purposes.
FORWARD FOREIGN CURRENCY CONTRACTS - The Emerging Markets Fund and
International Fund may enter into forward foreign currency contracts as
hedges against either specific transactions or fund positions. The
aggregate principal amount of the contracts are not recorded because the
Emerging Markets Fund and International Fund intend to settle the contracts
prior to delivery. All commitments are "marked-to-market" daily at the
applicable foreign exchange rate, and any resulting unrealized gains or
losses are recorded currently. The Emerging Markets Fund and International
Fund realize gains or losses at the time the forward contracts are
extinguished. Unrealized gains or losses on outstanding positions in
forward foreign currency contracts held at the close of the period are
recognized as ordinary income or loss for federal income tax purposes.
The use of forward foreign currency contracts does not eliminate
fluctuations in the underlying prices of the securities, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts limit the risk of loss due to a decline
in the value of the hedged currency, they also limit a potential gain that
might result should the value of the currency increase. These contracts
involve market risk in excess of the amount reflected in the Funds'
statement of assets and liabilities. The face or contract amount in U.S.
dollars reflects the total exposure the portfolio has in that particular
currency contract. In addition, there could be exposure to risks (limited
to the amount of unrealized gains) if the counterparties to the contracts
are unable to meet the terms of their contracts. There were no outstanding
forward foreign currency contracts at September 30, 2001.
EXPENSES - Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses are allocated to
the Funds on the basis of relative net assets. Class specific expenses,
such as the 12b-1 fees, are borne by that Class. Income, other expenses and
realized and unrealized gains and losses of a Fund are allocated to the
respective Class on the basis of the relative net assets each day.
OPTIONS TRANSACTIONS - When a call or put option is written, an amount
equal to the premium received is recorded as a liability. The liability is
marked-to-market daily to reflect the current market value of the option
written. When a written option expires, a gain is realized in the amount of
the premium originally received. If a closing purchase contract is entered
into, a gain or loss is realized in the amount of the original premium less
the cost of the closing transaction. If a written call is exercised, a gain
or loss is realized from the sale of the underlying security, and the
proceeds from such sale are increased by the premium originally received.
If a written put option is exercised, the amount of the premium originally
received reduces the cost of the security which is purchased upon exercise
of the option.
Purchased options are recorded as investments and marked-to-market daily to
reflect the current market value of the option contract. If a purchased
option expires, a loss is realized in the amount of the cost of the option.
If a closing transaction is entered into, a gain or loss is realized, to
the extent that the proceeds from the sale are greater or less than the
cost of the option. If a put option is exercised, a gain or loss is
realized from the sale of the underlying security by adjusting the proceeds
from such sale by the amount of the premium originally paid. If a call
option is exercised, the cost of the security purchased upon exercise is
increased by the premium originally paid.
SECURITIES LENDING - Each Fund may lend up to one-third of the value of its
total assets to broker-dealers, banks or other institutional borrowers of
securities in order to earn additional income. Each Fund's policy is to
maintain collateral in the form of cash, U.S. Government securities or
other high grade debt obligations equal to at least
(136 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
100% of the value of securities loaned. The collateral is then
"marked-to-market" daily until the securities are returned.
USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS - The preparation
of financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and
assumptions that affect the reported amount of net assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported results of operations during the
reporting period. Actual results could differ from those estimates.
3 > FEES AND EXPENSES
ADVISOR FEES - Prior to May 2, 2001, First American Asset Management
("FAAM"), a division of U.S. Bank National Association ("U.S. Bank"),
served as investment advisor to the Large Cap Growth Fund, Large Cap Value
Fund, Equity Income Fund, Mid Cap Growth Fund, Mid Cap Value Fund, Small
Cap Growth Fund, Small Cap Value Fund, Emerging Markets Fund, Health
Sciences Fund, Real Estate Securities Fund and Technology Fund. Firstar
Investment Research & Management Company LLC ("FIRMCO") served as
investment advisor to Large Cap Core Fund, Growth & Income Fund, Relative
Value Fund, Capital Growth Fund, Balanced Fund, Mid Cap Core Fund, Micro
Cap Fund, Small Cap Core Fund, International Fund and Science & Technology
Fund. On May 2, 2001, FAAM and FIRMCO combined advisory operations to form
U.S. Bancorp Piper Jaffray Asset Management, Inc. (the "Advisor"), a
subsidiary of U.S. Bank. The investment advisory fees paid by each fund did
not change as a result of the combination. Pursuant to an investment
advisory agreement (the "Agreement"), the Advisor manages each Fund's
assets and furnishes related office facilities, equipment, research and
personnel. The Agreement requires each fund to pay the Advisor a monthly
fee based upon average daily net assets. The annual fee for each fund is as
follows:
-----------------------------------------
Large Cap Growth Fund 0.65%
Large Cap Value Fund 0.65%
Large Cap Core fund 0.65%
Growth & Income Fund 0.65%
Relative Value Fund 0.65%
Capital Growth Fund 0.65%
Equity Income Fund 0.65%
Balanced Fund 0.65%
Mid Cap Growth Fund 0.70%
Mid Cap Value Fund 0.70%
Mid Cap Core Fund 0.70%
Micro Cap Fund 1.40%
Small Cap Growth Fund 0.70%
Small Cap Value Fund 0.70%
Small Cap Core Fund 0.70%
Emerging Markets Fund 1.15%
International Fund 1.10%
Health Sciences Fund 0.70%
Real Estate Securities Fund 0.70%
Technology Fund 0.70%
Science & Technology Fund 0.70%
-----------------------------------------
The Advisor voluntarily waived fees during the current fiscal year so that
the total fund operating expenses did not exceed expense limitations
described in the Funds' prospectuses.
The Funds may invest in First American Funds, Inc. (FAF), subject to
certain limitations. The terms of such transactions are identical to those
of non-related entities except that, to avoid duplicative investment
advisory fees, the Advisor reimburses each FAIF fund an amount equal to the
investment advisory fee earned by FAF related to such investments.
SUB-ADVISOR FEES - Marvin & Palmer Associates, Inc. serves as Sub-Advisor
to the Emerging Markets Fund pursuant to a Sub-Advisory Agreement with the
Advisor. For Emerging Markets Fund, Marvin & Palmer is paid a monthly fee
by the Advisor calculated on an annual basis equal to 0.85% of the first
$100 million of average daily net assets, 0.60% of average daily net assets
in excess of $100 million up to $300 million, 0.55% of average daily net
assets in excess of $300 million up to $500 million, and 0.50% of average
daily net assets in excess of $500 million.
Clay Finlay, Inc. serves as Sub-Adviser to the International Fund, and
receives a fee, payable by the Advisor. The fee is computed daily and paid
monthly at the following annual rates (as a percentage of the Fund's
average daily net assets): 0.75% of the first $50 million of the Fund's
average daily net assets; plus 0.50% of the next $50 million of average
daily net assets; plus 0.25% of average net assets in excess of $100
million.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 137)
NOTES TO FINANCIAL STATEMENTS September 30, 2001
ADMINISTRATION FEES - U.S. Bank is the administrator providing
administrative services including certain accounting, legal, and
shareholder services to the First American Family of Funds. Under the
arrangement, the Funds are charged an annual rate of 0.12% of each FAIF
Fund's average daily net assets, with a minimum annual fee of $50,000. To
the extent that aggregate net assets of the First American Family of Funds
exceed $8 billion, the annual rate for each FAIF Fund is reduced to 0.105%
of its respective share of excess net assets. Fees are computed daily and
paid monthly.
Administration fees paid to U.S. Bank as administrator for the year ended
September 30, 2001 were as follows (000):
-------------------------------------
Large Cap Growth Fund $471
Large Cap Value Fund 621
Equity Income Fund 142
Mid Cap Growth Fund 222
Mid Cap Value Fund 161
Small Cap Growth Fund 222
Small Cap Value Fund 246
Emerging Markets Fund 26
Health Sciences Fund 16
Real Estate Securities Fund 31
Technologies Fund 144
-------------------------------------
Firstar Mutual Fund Services, LLC ("FMFS"), an affiliate of U.S. Bancorp,
served as the administrator of the Firstar Funds. As administrator FMFS
earned a fee at an annual rate of 0.125% on the first $2 billion of average
daily net assets and 0.10% on assets in excess of $2 billion. For the
period of November 1, 2000 to September 30, 2001, FMFS earned fees, which
were computed daily and paid monthly, from the following funds (000):
-----------------------------------
Large Cap Core Fund $389
Growth & Income Fund 795
Relative Value Fund 460
Capital Growth Fund 252
Balanced Fund 258
Mid Cap Core Fund 525
Micro Cap Fund 330
Small Cap Core Fund 331
International Fund 173
Science & Technology Fund 75
-----------------------------------
SUB-ADMINISTRATION FEES - Both SEI Investments Mutual Fund Services
("SIMFS") and FMFS provided sub-administration services for the Funds for
the year ended September 30, 2001. For these services U.S. Bank compensates
SIMFS and FMFS monthly at a rate equal to 0.05% of aggregate average daily
net assets of the FAIF. In addition, SIMFS also received 0.015% on assets
up to $34.5 billion, 0.0075% on the next $25.5 billion and 0.005% on the
assets over $80 billion for the First American Family of Funds. There is a
minimum fee of $50,000 per fund (the oldest 38 funds excluded). U.S. Bank
paid SIMFS $9,211,172 and FMFS $1,182,706 in aggregate from October 1, 2000
through September 30, 2001. For the funds included in this annual report
the amounts paid to SIMFS and FMFS for their respective periods were as
follows (000):
SIMFS FMFS
-----------------------------------------------
Large Cap Growth Fund $585 $31
Large Cap Value Fund 796 14
Equity Income Fund 171 11
Balanced Fund 174 --
Mid Cap Growth Fund 283 10
Mid Cap Value Fund 198 9
Small Cap Growth Fund 273 18
Small Cap Value Fund 300 14
Emerging Markets Fund 33 1
Health Sciences Fund 19 1
Real Estate Securities Fund 37 2
Technology Fund 198 2
-----------------------------------------------
CUSTODIAN FEES - Through a separate contractual agreement, U.S. Bank served
as the Fund's custodian for the Large Cap Growth Fund, Large Cap Value
Fund, Equity Income Fund, Mid Cap Growth Fund, Mid Cap Value Fund, Small
Cap Growth Fund, Small Cap Value Fund, Emerging Markets Fund, Health
Sciences Fund, Real Estate Securities Fund and Technology Fund. The fee for
each Fund, with the exception of Emerging Markets, is equal to an annual
rate of 0.03% of average daily net assets. The fee for the Emerging Markets
Fund was 0.10% of the average daily net assets, which is computed daily and
paid monthly. Firstar Bank N.A., an affiliate of U.S. Bancorp, served as
custodian for the Large Cap Core Fund, Growth & Income Fund, Relative Value
Fund, Capital Growth Fund, Balanced Fund, Mid Cap Core Fund, Micro Cap
Fund, Small Cap Core Fund, International Fund and Science & Technology
Fund. Under the arrangement, the Funds were charged an annual fee of 0.02%
on the first $2 billion of Firstar Funds assets, plus 0.015% on the next $2
billion, plus 0.01% on the next $1 billion and 0.005% on assets in excess
of $5 billion.
DISTRIBUTION AND SHAREHOLDER SERVICING FEES - SEI Investments Distribution
Co. ("SIDCO") served as distributor of the Funds. Under the respective
distribution plan, each of the Funds pay SIDCO a monthly distribution fee
equal to an annual rate of 0.25% of each Fund's average daily net assets of
the Class A shares, 1.00% of the Class B shares, 1.00% of the Class C
shares and 0.25% of the Class S shares, which may be used by SIDCO to
provide compensation for sales support and distribution activities. No
distribution and shareholder servicing fees are paid
(138 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
by Class Y shares. Under the agreement, SIDCO paid the following amounts to
affiliates of U.S. Bank for the period ended September 30, 2001 (000):
U.S. BANCORP
U.S. BANK PIPER JAFFRAY U.S. BANK TRUST
---------------------------------------------------------------------------
Large Cap Growth Fund $ 70 $288 $ 1
Large Cap Value Fund 107 245 3
Equity Income Fund 31 42 --
Mid Cap Growth Fund 19 358 5
Mid Cap Value Fund 30 27 --
Small Cap Growth Fund 26 95 --
Small Cap Value Fund 51 36 --
Emerging Markets Fund -- 9 --
Health Sciences Fund 8 21 --
Real Estate Securities Fund 3 5 --
Technology Fund 44 115 --
---------------------------------------------------------------------------
Quasar Distributors, LLC ("Quasar"), an affiliate of U.S. Bancorp, served
as distributor for the Large Cap Core Fund and Growth & Income Fund,
Relative Value Fund, Capital Growth Fund, Balanced Fund, Mid Cap Core Fund,
Micro Cap Fund, Small Cap Core Fund, International Fund and Science &
Technology Fund. Under the respective distribution agreement the Funds paid
Quasar a monthly distribution fee equal to a rate of 0.25% of each Fund's
average daily net assets of the Class A shares, 1.00% of the Class B
shares, 1.00% of the Class C shares, and 0.25% of the Class S shares.
As of October 1, 2001, Quasar was named as the distributor of the FAIF
Funds.
TRANSFER AGENT FEES - As the servicing agent, U.S. Bank was paid $8,602,245
in aggregate for the year ended September 30, 2001 for the First American
Family of Funds. For the year ended September 30, 2001, transfer agent fees
paid to U.S. Bank for the funds included in this annual report were as
follows (000):
-------------------------------------
Large Cap Growth Fund $231
Large Cap Value Fund 211
Equity Income Fund 29
Mid Cap Growth Fund 224
Mid Cap Value Fund 37
Small Cap Growth Fund 92
Small Cap Value Fund 54
Emerging Markets Fund 21
Health Sciences Fund 22
Real Estate Securities Fund 6
Technology Fund 220
-------------------------------------
FMFS served as the transfer agent to the Large Cap Core Fund, Growth &
Income Fund, Relative Value Fund, Capital Growth Fund, Balanced Fund, Mid
Cap Core Fund, Micro Cap Fund, Small Cap Core Fund, International Fund, and
Science & Technology Fund. For the period November 1, 2001 to September 30,
2001, the transfer agent fees paid to FMFS were (000):
-----------------------------------
Large Cap Core Fund $148
Growth & Income Fund 339
Relative Value Fund 188
Capital Growth Fund 180
Balanced Fund 108
Mid Cap Core Fund 188
Micro Cap Fund 80
Small Cap Core Fund 90
International Fund 64
Science & Technology Fund 54
-----------------------------------
OTHER FEES - In addition to the investment advisory and management fees,
custodian fees, distribution fees, administrator and transfer agent fees,
each Fund is responsible for paying most other operating expenses including
organization costs, fees and expenses of outside directors, registration
fees, printing shareholder reports, legal, auditing, insurance and other
miscellaneous expenses.
For the year ended September 30, 2001, legal fees and expenses were paid to
a law firm of which the Assistant Secretaries of the Funds are partners.
SALES CHARGES - A Contingent Deferred Sales Charge ("CDSC") is imposed on
redemptions made in the Class B shares. The CDSC varies depending on the
number of years from time of payment for the purchase of Class B shares
until the redemption of such shares.
CDSC
AS A PERCENTAGE OF DOLLAR
YEAR SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
--------------------------------------------------
First 5.00%
Second 5.00%
Third 4.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh --
Eighth --
--------------------------------------------------
Class B shares will automatically convert to Class A shares eight years
after the first day of the month shares are purchased.
A CDSC of 1.00% is imposed on redemptions made in Class C shares for the
first eighteen months.
The CDSC for Class B shares and Class C shares is imposed on the value of
the purchased shares, or the value at the time of redemption, whichever is
less.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 139)
NOTES TO FINANCIAL STATEMENTS September 30, 2001
4 > CAPITAL SHARE TRANSACTIONS
Capital share transactions for the Funds were as follows (000):
LARGE CAP LARGE CAP
GROWTH FUND VALUE FUND
--------------------- ---------------------
10/1/00 10/1/99 10/1/00 10/1/99
to to to to
9/30/01 9/30/00 9/30/01 9/30/00
--------- --------- --------- ---------
Class A:
Shares issued 2,597 2,279 948 1,536
Shares issued in lieu of cash distributions 1,077 1,181 697 927
Shares redeemed (4,194) (2,296) (2,467) (3,419)
Shares issued in connection with the acquisition of
Stellar/Mercantile assets -- -- -- --
- ----------------------------------------------------- ------ ------ ------ ------
TOTAL CLASS A TRANSACTIONS (520) 1,164 (822) (956)
===================================================== ====== ====== ====== ======
Class B:
Shares issued 423 836 195 240
Shares issued in lieu of cash distributions 215 164 252 335
Shares redeemed (365) (248) (469) (827)
Shares issued in connection with the acquisition of
Stellar/Mercantile assets -- -- -- --
- ----------------------------------------------------- ------ ------ ------ ------
TOTAL CLASS B TRANSACTIONS 273 752 (22) (252)
===================================================== ====== ====== ====== ======
Class C:
Shares issued 793 785 414 268
Shares issued in lieu of cash distributions 106 10 34 9
Shares redeemed (281) (20) (129) (19)
- ----------------------------------------------------- ------ ------ ------ ------
TOTAL CLASS C TRANSACTIONS 618 775 319 258
===================================================== ====== ====== ====== ======
Class S:
Shares issued -- -- -- --
Shares issued in lieu of cash distributions -- -- -- --
Shares redeemed -- -- -- --
Shares issued in connection with the acquisition of
Stellar/Mercantile assets -- -- -- --
- ----------------------------------------------------- ------ ------ ------ ------
TOTAL CLASS S TRANSACTIONS -- -- --
===================================================== ====== ====== ====== ======
Class Y:
Shares issued 24,802 13,361 14,771 17,619
Shares issued in lieu of cash distributions 3,006 2,201 4,642 4,556
Shares redeemed (16,084) (7,928) (16,348) (22,648)
Shares issued in connection with the acquisition of
Santa Monica Trust Fund -- 471 -- --
Shares issued in connection with the acquisition of
Stellar/Mercantile assets -- -- -- --
- ----------------------------------------------------- ------- ------ ------- -------
TOTAL CLASS Y TRANSACTIONS 11,724 8,105 3,065 (473)
===================================================== ======= ====== ======= =======
NET INCREASE (DECREASE) IN CAPITAL SHARES 12,095 10,796 2,540 (1,423)
===================================================== ======= ====== ======= =======
[WIDE TABLE CONTINUED FROM ABOVE]
LARGE CAP
CORE FUND
--------------------------------
11/1/00 11/1/99 11/1/98
to to to
9/30/01 10/31/00 10/31/99
--------- -------- ---------
Class A:
Shares issued 127 155 378
Shares issued in lieu of cash distributions 153 45 23
Shares redeemed (260) (279) (329)
Shares issued in connection with the acquisition of
Stellar/Mercantile assets 203 -- --
- ----------------------------------------------------- ---- ---- ----
TOTAL CLASS A TRANSACTIONS 223 (79) 72
===================================================== ==== ==== ====
Class B:
Shares issued 43 85 51
Shares issued in lieu of cash distributions 5 1 --
Shares redeemed (15) (17) (1)
Shares issued in connection with the acquisition of
Stellar/Mercantile assets 56 -- --
- ----------------------------------------------------- ---- ---- ----
TOTAL CLASS B TRANSACTIONS 89 69 50
===================================================== ==== ==== ====
Class C:
Shares issued -- -- --
Shares issued in lieu of cash distributions -- -- --
Shares redeemed -- -- --
- ----------------------------------------------------- ---- ---- ----
TOTAL CLASS C TRANSACTIONS -- -- --
===================================================== ==== ==== ====
Class S:
Shares issued 57 -- --
Shares issued in lieu of cash distributions -- -- --
Shares redeemed (63) -- --
Shares issued in connection with the acquisition of
Stellar/Mercantile assets 120 -- --
- ----------------------------------------------------- ---- ---- ----
TOTAL CLASS S TRANSACTIONS 114 -- --
===================================================== ==== ==== ====
Class Y:
Shares issued 5,657 4,085 3,463
Shares issued in lieu of cash distributions 831 190 92
Shares redeemed (3,788) (3,746) (3,440)
Shares issued in connection with the acquisition of
Santa Monica Trust Fund -- -- --
Shares issued in connection with the acquisition of
Stellar/Mercantile assets 2,276 -- --
- ----------------------------------------------------- ------ ------ ------
TOTAL CLASS Y TRANSACTIONS 4,976 529 115
===================================================== ====== ====== ======
NET INCREASE (DECREASE) IN CAPITAL SHARES 5,402 519 237
===================================================== ====== ====== ======
(140 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
GROWTH &
INCOME FUND
-------------------------------
11/1/00 11/1/99 11/1/98
to to to
9/30/01 10/31/00 10/31/99
---------- -------- --------
Class A:
Shares issued 369 251 570
Shares issued in lieu of cash distributions 453 378 332
Shares redeemed (830) (981) (973)
Shares issued in connection with the acquisition of Stellar/Mercantile assets 970 -- --
- -------------------------------------------------------------------------------- ---- ---- ----
TOTAL CLASS A TRANSACTIONS 962 (352) (71)
================================================================================ ==== ==== ====
Class B:
Shares issued 153 54 35
Shares issued in lieu of cash distributions 9 4 --
Shares redeemed (70) (13) (1)
Shares issued in connection with the acquisition of Stellar/Mercantile assets 205 -- --
- -------------------------------------------------------------------------------- ---- ---- ----
TOTAL CLASS B TRANSACTIONS 297 45 34
================================================================================ ==== ==== ====
Class S:
Shares issued 544 -- --
Shares issued in lieu of cash distributions 6 -- --
Shares redeemed (765) -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets 1,654 -- --
- -------------------------------------------------------------------------------- ----- ---- ----
TOTAL CLASS S TRANSACTIONS 1,439 -- --
================================================================================ ===== ==== ====
Class Y:
Shares issued 5,233 2,839 3,290
Shares issued in lieu of cash distributions 1,175 926 750
Shares redeemed (5,299) (4,228) (3,196)
Shares issued in connection with the acquisition of Stellar/Mercantile assets 3,786 -- --
- -------------------------------------------------------------------------------- ------ ------ ------
TOTAL CLASS Y TRANSACTIONS 4,895 (463) 844
================================================================================ ====== ====== ======
NET INCREASE (DECREASE) IN CAPITAL SHARES 7,593 (770) 807
================================================================================ ====== ====== ======
[WIDE TABLE CONTINUED FROM ABOVE]
RELATIVE
VALUE FUND
-------------------------------
11/1/00 12/1/99 12/1/98
to to to
9/30/01 10/31/00 11/30/99
--------- -------- --------
Class A:
Shares issued 110 109 300
Shares issued in lieu of cash distributions 23 12 18
Shares redeemed (235) (520) (373)
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- -- --
- -------------------------------------------------------------------------------- ---- ---- ----
TOTAL CLASS A TRANSACTIONS (102) (399) (55)
================================================================================ ==== ==== ====
Class B:
Shares issued 50 155 255
Shares issued in lieu of cash distributions 5 4 4
Shares redeemed (92) (110) (67)
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- -- --
- -------------------------------------------------------------------------------- ---- ---- ----
TOTAL CLASS B TRANSACTIONS (37) 49 192
================================================================================ ==== ==== ====
Class S:
Shares issued 1,472 -- --
Shares issued in lieu of cash distributions 5 -- --
Shares redeemed (64) -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- -- --
- -------------------------------------------------------------------------------- ----- ---- ----
TOTAL CLASS S TRANSACTIONS 1,413 -- --
================================================================================ ===== ==== ====
Class Y:
Shares issued 2,404 3,570 3,776
Shares issued in lieu of cash distributions 185 104 133
Shares redeemed (4,482) (3,504) (2,610)
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- -- --
- -------------------------------------------------------------------------------- ------ ------ ------
TOTAL CLASS Y TRANSACTIONS (1,893) 170 1,299
================================================================================ ====== ====== ======
NET INCREASE (DECREASE) IN CAPITAL SHARES (619) (180) 1,436
================================================================================ ====== ====== ======
[WIDE TABLE CONTINUED FROM ABOVE]
CAPITAL
GROWTH FUND
---------------------------------
11/1/00 12/1/99 12/1/98
to to to
9/30/01 10/31/00 11/30/99
--------- -------- --------
Class A:
Shares issued 570 47 --
Shares issued in lieu of cash distributions 2 -- --
Shares redeemed (32) (2) --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- -- --
- -------------------------------------------------------------------------------- --- -- --
TOTAL CLASS A TRANSACTIONS 540 45 --
================================================================================ === == ==
Class B:
Shares issued 268 685 811
Shares issued in lieu of cash distributions 118 -- 80
Shares redeemed (1,111) (588) (509)
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- -- --
- -------------------------------------------------------------------------------- ------ ---- ----
TOTAL CLASS B TRANSACTIONS (725) 97 382
================================================================================ ====== ==== ====
Class S:
Shares issued 878 -- --
Shares issued in lieu of cash distributions -- -- --
Shares redeemed (69) -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- -- --
- -------------------------------------------------------------------------------- ------ ---- ----
TOTAL CLASS S TRANSACTIONS 809 -- --
================================================================================ ====== ==== ====
Class Y:
Shares issued 2,883 2,513 2,900
Shares issued in lieu of cash distributions 156 -- 91
Shares redeemed (3,316) (1,095) (1,425)
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- -- --
- -------------------------------------------------------------------------------- ------ ------ ------
TOTAL CLASS Y TRANSACTIONS (277) 1,418 1,566
================================================================================ ====== ====== ======
NET INCREASE (DECREASE) IN CAPITAL SHARES 347 1,560 1,948
================================================================================ ====== ====== ======
[WIDE TABLE CONTINUED FROM ABOVE]
EQUITY
INCOME FUND
---------------------
10/1/00 10/1/99
to to
9/30/01 9/30/00
--------- --------
Class A:
Shares issued 863 471
Shares issued in lieu of cash distributions 308 81
Shares redeemed (497) (477)
Shares issued in connection with the acquisition of Firstar assets 86 --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ---- ----
TOTAL CLASS A TRANSACTIONS 760 75
================================================================================ ==== ====
Class B:
Shares issued 265 123
Shares issued in lieu of cash distributions 188 52
Shares redeemed (206) (227)
Shares issued in connection with the acquisition of Firstar assets 69 --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ---- ----
TOTAL CLASS B TRANSACTIONS 316 (52)
================================================================================ ==== ====
Class C:
Shares issued 522 77
Shares issued in lieu of cash distributions 99 9
Shares redeemed (111) (39)
Shares issued in connection with the acquisition of Firstar assets -- --
- -------------------------------------------------------------------------------- ---- ----
TOTAL CLASS C TRANSACTIONS 510 47
================================================================================ ==== ====
Class S:
Shares issued -- --
Shares issued in lieu of cash distributions -- --
Shares redeemed -- --
Shares issued in connection with the acquisition of Firstar assets 27 --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ---- ----
TOTAL CLASS S TRANSACTIONS 27 --
================================================================================ ==== ====
Class Y:
Shares issued 6,753 2,047
Shares issued in lieu of cash distributions 1,549 233
Shares redeemed (6,668) (7,378)
Shares issued in connection with the acquisition of Firstar assets 3,459 --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ------ ------
TOTAL CLASS Y TRANSACTIONS 5,093 (5,098)
================================================================================ ====== ======
NET INCREASE (DECREASE) IN CAPITAL SHARES 6,679 (5,028)
================================================================================ ====== ======
[WIDE TABLE CONTINUED FROM ABOVE]
BALANCED
FUND
------------------------------
11/1/00 11/1/99 11/1/98
to to to
9/30/01 10/31/00 10/31/99
-------- -------- --------
Class A:
Shares issued 204 149 210
Shares issued in lieu of cash distributions 334 119 92
Shares redeemed (457) (437) (513)
Shares issued in connection with the acquisition of Firstar assets 11,449 -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets 274 -- --
- -------------------------------------------------------------------------------- ------ ---- ----
TOTAL CLASS A TRANSACTIONS 11,804 (169) (211)
================================================================================ ====== ==== ====
Class B:
Shares issued 121 47 21
Shares issued in lieu of cash distributions 15 2 --
Shares redeemed (67) (3) --
Shares issued in connection with the acquisition of Firstar assets 4,800 -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets 59 -- --
- -------------------------------------------------------------------------------- ------ ---- ----
TOTAL CLASS B TRANSACTIONS 4,928 46 21
================================================================================ ====== ==== ====
Class C:
Shares issued 0 -- --
Shares issued in lieu of cash distributions -- -- --
Shares redeemed -- -- --
Shares issued in connection with the acquisition of Firstar assets 248 -- --
- -------------------------------------------------------------------------------- ------ ---- ----
TOTAL CLASS C TRANSACTIONS 248 -- --
================================================================================ ====== ==== ====
Class S:
Shares issued 744 -- --
Shares issued in lieu of cash distributions 31 -- --
Shares redeemed (960) -- --
Shares issued in connection with the acquisition of Firstar assets 2,782 -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets 1,563 -- --
- -------------------------------------------------------------------------------- ------ ---- ----
TOTAL CLASS S TRANSACTIONS 4,160 -- --
================================================================================ ====== ==== ====
Class Y:
Shares issued 1,659 2,282 1,893
Shares issued in lieu of cash distributions 1,018 401 310
Shares redeemed (2,394) (3,831) (2,501)
Shares issued in connection with the acquisition of Firstar assets 33,791 -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets 533 -- --
- -------------------------------------------------------------------------------- ------ ------ ------
TOTAL CLASS Y TRANSACTIONS 34,607 (1,148) (298)
================================================================================ ====== ====== ======
NET INCREASE (DECREASE) IN CAPITAL SHARES 55,747 (1,271) (488)
================================================================================ ====== ====== ======
[WIDE TABLE CONTINUED FROM ABOVE]
MID CAP
GROWTH FUND
-------------------------
10/1/00 10/1/99
to to
9/30/01 9/30/00
------------ ---------
Class A:
Shares issued 7,041 4,773
Shares issued in lieu of cash distributions 9,400 2,541
Shares redeemed (12,201) (6,122)
Shares issued in connection with the acquisition of Firstar assets -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ------- ------
TOTAL CLASS A TRANSACTIONS 4,240 1,192
================================================================================ ======= ======
Class B:
Shares issued 375 243
Shares issued in lieu of cash distributions 192 7
Shares redeemed (176) (18)
Shares issued in connection with the acquisition of Firstar assets -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ------- ------
TOTAL CLASS B TRANSACTIONS 391 232
================================================================================ ======= ======
Class C:
Shares issued 881 286
Shares issued in lieu of cash distributions 237 8
Shares redeemed (294) (9)
Shares issued in connection with the acquisition of Firstar assets -- --
- -------------------------------------------------------------------------------- ------- ------
TOTAL CLASS C TRANSACTIONS 824 285
================================================================================ ======= ======
Class S:
Shares issued -- --
Shares issued in lieu of cash distributions -- --
Shares redeemed -- --
Shares issued in connection with the acquisition of Firstar assets -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ------- ------
TOTAL CLASS S TRANSACTIONS -- --
================================================================================ ======= ======
Class Y:
Shares issued 22,670 8,812
Shares issued in lieu of cash distributions 9,585 2,422
Shares redeemed (11,904) (8,620)
Shares issued in connection with the acquisition of Firstar assets -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ------- ------
TOTAL CLASS Y TRANSACTIONS 20,351 2,614
================================================================================ ======= ======
NET INCREASE (DECREASE) IN CAPITAL SHARES 25,806 4,323
================================================================================ ======= ======
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 141)
NOTES TO FINANCIAL STATEMENTS September 30, 2001
MID CAP MID CAP
VALUE FUND CORE FUND
--------------------- -------------------------------
10/1/00 10/1/99 11/1/00 11/1/99 11/1/98
to to to to to
9/30/01 9/30/00 9/30/01 10/31/00 10/31/99
--------- --------- --------- -------- ---------
Class A:
Shares issued 332 524 173 106 266
Shares issued in lieu of cash distributions 7 6 1,052 43 26
Shares redeemed (278) (1,157) (312) (700) (1,380)
- ---------------------------------------------- ---- ------ ----- ---- ------
TOTAL CLASS A TRANSACTIONS 61 (627) 913 (551) (1,088)
============================================== ==== ====== ===== ==== ======
Class B:
Shares issued 122 51 86 10 4
Shares issued in lieu of cash distributions 1 2 6 -- --
Shares redeemed (152) (683) (10) (1) (1)
- ---------------------------------------------- ---- ------ ----- ----- -------
TOTAL CLASS B TRANSACTIONS (29) (630) 82 9 3
============================================== ==== ====== ===== ==== ======
Class C:
Shares issued 178 88 -- -- --
Shares redeemed (33) (3) -- -- --
- ---------------------------------------------- ---- ------- ----- ---- ------
TOTAL CLASS C TRANSACTIONS 145 85 -- -- --
============================================== ==== ====== ===== ==== ======
Class S:
Shares issued 3 -- 63 -- --
Shares redeemed -- -- (11) -- --
- ---------------------------------------------- ---- ------ ----- ---- ------
TOTAL CLASS S TRANSACTIONS 3 -- 52 -- --
============================================== ==== ====== ===== ==== ======
Class Y:
Shares issued 6,832 5,589 11,303 2,923 6,379
Shares issued in lieu of cash distributions 78 85 3,638 146 80
Shares redeemed (4,453) (10,370) (8,827) (4,617) (9,295)
- ---------------------------------------------- ------ ------- ------ ------ ------
TOTAL CLASS Y TRANSACTIONS 2,457 (4,696) 6,114 (1,548) (2,836)
============================================== ====== ======= ====== ====== ======
NET INCREASE (DECREASE) IN CAPITAL SHARES 2,637 (5,868) 7,161 (2,090) (3,921)
============================================== ====== ======= ====== ====== ======
[WIDE TABLE CONTINUED FROM ABOVE]
MICRO
CAP FUND
--------------------------------
11/1/00 11/1/99 11/1/98
to to to
9/30/01 10/31/00 10/31/99
--------- -------- ---------
Class A:
Shares issued 1,815 1,005 596
Shares issued in lieu of cash distributions 578 296 3
Shares redeemed (1,092) (934) (594)
- ---------------------------------------------- ------ ----- ----
TOTAL CLASS A TRANSACTIONS 1,301 367 5
============================================== ====== ===== ====
Class B:
Shares issued 111 68 6
Shares issued in lieu of cash distributions 31 3 --
Shares redeemed (19) (8) --
- ---------------------------------------------- ------ ------ ----
TOTAL CLASS B TRANSACTIONS 123 63 6
============================================== ====== ===== ====
Class C:
Shares issued -- -- --
Shares redeemed -- -- --
- ---------------------------------------------- ------ ----- ----
TOTAL CLASS C TRANSACTIONS -- -- --
============================================== ====== ===== ====
Class S:
Shares issued 126 -- --
Shares redeemed (7) -- --
- ---------------------------------------------- ------- ----- ----
TOTAL CLASS S TRANSACTIONS 119 -- --
============================================== ====== ===== ====
Class Y:
Shares issued 3,092 3,925 2,966
Shares issued in lieu of cash distributions 4,158 1,987 16
Shares redeemed (2,085) (2,605) (1,964)
- ---------------------------------------------- ------ ------ ------
TOTAL CLASS Y TRANSACTIONS 5,165 3,307 1,018
============================================== ====== ====== ======
NET INCREASE (DECREASE) IN CAPITAL SHARES 6,708 3,737 1,029
============================================== ====== ====== ======
[WIDE TABLE CONTINUED FROM ABOVE]
SMALL CAP SMALL CAP
GROWTH FUND VALUE FUND
--------------------- ----------------------
10/1/00 10/1/99 10/1/00 10/1/99
to to to to
9/30/01 9/30/00 9/30/01 9/30/00
--------- --------- --------- ----------
Class A:
Shares issued 3,029 2,743 769 812
Shares issued in lieu of cash distributions 592 204 398 4
Shares redeemed (3,127) (2,531) (706) (994)
Shares issued in connection with merger of
Regional Equity Fund and Micro Cap Value Fund -- -- -- 1,446
Shares issued in connection with the acquisition of
Stellar/Mercantile assets -- -- -- --
- ----------------------------------------------------- ------ ------ ---- -----
TOTAL CLASS A TRANSACTIONS 494 416 461 1,268
===================================================== ====== ====== ==== =====
Class B:
Shares issued 103 256 142 55
Shares issued in lieu of cash distributions 103 17 155 --
Shares redeemed (91) (47) (158) (236)
Shares issued in connection with merger of
Regional Equity Fund and Micro Cap Value Fund -- -- -- 922
Shares issued in connection with the acquisition of
Stellar/Mercantile assets -- -- -- --
- ----------------------------------------------------- ------ ------ ---- -----
TOTAL CLASS B TRANSACTIONS 115 226 139 741
===================================================== ====== ====== ==== =====
Class C:
Shares issued 285 323 290 64
Shares issued in lieu of cash distributions 91 3 13 --
Shares redeemed (137) (6) (22) (7)
- ----------------------------------------------------- ------ ------- ---- ------
TOTAL CLASS C TRANSACTIONS 239 320 281 57
===================================================== ====== ====== ==== =====
Class S:
Shares issued -- -- -- --
Shares issued in lieu of cash distributions -- -- -- --
Shares redeemed -- -- -- --
- ----------------------------------------------------- ------ ------ ---- -----
TOTAL CLASS S TRANSACTIONS -- -- -- --
===================================================== ====== ====== ==== =====
Class Y:
Shares issued 13,909 8,310 12,165 5,884
Shares issued in lieu of cash distributions 3,028 708 3,792 94
Shares redeemed (7,480) (4,399) (8,889) (11,099)
Shares issued in connection with merger of
Regional Equity Fund and Micro Cap Value Fund -- -- -- 7,381
Shares issued in connection with the acquisition of
Stellar/Mercantile assets -- -- -- --
- ----------------------------------------------------- ------ ------ ------ -------
TOTAL CLASS Y TRANSACTIONS 9,457 4,619 7,068 2,260
===================================================== ====== ====== ====== =======
NET INCREASE (DECREASE) IN CAPITAL SHARES 10,305 5,581 7,949 4,326
===================================================== ====== ====== ====== =======
[WIDE TABLE CONTINUED FROM ABOVE]
SMALL CAP
CORE FUND
--------------------------------
11/1/00 12/1/99 12/1/98
to to to
9/30/01 10/31/00 11/30/99
--------- -------- ---------
Class A:
Shares issued 1,069 22 61
Shares issued in lieu of cash distributions 145 12 4
Shares redeemed (1,107) (134) (401)
Shares issued in connection with merger of
Regional Equity Fund and Micro Cap Value Fund -- -- --
Shares issued in connection with the acquisition of
Stellar/Mercantile assets 801 -- --
- ----------------------------------------------------- ------ ---- ----
TOTAL CLASS A TRANSACTIONS 908 (100) (336)
===================================================== ====== ==== ====
Class B:
Shares issued 86 8 6
Shares issued in lieu of cash distributions 23 2 --
Shares redeemed (43) (13) (36)
Shares issued in connection with merger of
Regional Equity Fund and Micro Cap Value Fund -- -- --
Shares issued in connection with the acquisition of
Stellar/Mercantile assets 31 -- --
- ----------------------------------------------------- ------ ---- ----
TOTAL CLASS B TRANSACTIONS 97 (3) (30)
===================================================== ====== ===== ====
Class C:
Shares issued -- -- --
Shares issued in lieu of cash distributions -- -- --
Shares redeemed -- -- --
- ----------------------------------------------------- ------ ---- ----
TOTAL CLASS C TRANSACTIONS -- -- --
===================================================== ====== ==== ====
Class S:
Shares issued 140 267 178
Shares issued in lieu of cash distributions 67 4 9
Shares redeemed (148) (195) (2,128)
- ----------------------------------------------------- ------ ---- ------
TOTAL CLASS S TRANSACTIONS 59 76 (1,941)
===================================================== ====== ==== ======
Class Y:
Shares issued 8,351 1,004 1,863
Shares issued in lieu of cash distributions 1,679 137 40
Shares redeemed (7,782) (1,563) (4,752)
Shares issued in connection with merger of
Regional Equity Fund and Micro Cap Value Fund -- -- --
Shares issued in connection with the acquisition of
Stellar/Mercantile assets 14,027 -- --
- ----------------------------------------------------- ------ ------ ------
TOTAL CLASS Y TRANSACTIONS 16,275 (422) (2,849)
===================================================== ====== ====== ======
NET INCREASE (DECREASE) IN CAPITAL SHARES 17,339 (449) (5,156)
===================================================== ====== ====== ======
(142 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
EMERGING
MARKETS FUND
---------------------
10/1/00 10/1/99
to to
9/30/01 9/30/00
--------- ---------
Class A:
Shares issued 1,068 62
Shares issued in lieu of cash distributions -- --
Shares redeemed (1,025) (224)
Shares issued in connection with the acquisition of Firstar assets -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ------ ----
TOTAL CLASS A TRANSACTIONS 43 (162)
================================================================================ ====== ====
Class B:
Shares issued 23 12
Shares issued in lieu of cash distributions -- --
Shares redeemed (6) (1)
Shares issued in connection with the acquisition of Firstar assets -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ------ ----
TOTAL CLASS B TRANSACTIONS 17 11
================================================================================ ====== ====
Class C:
Shares issued 55 1
Shares issued in lieu of cash distributions -- --
Shares redeemed (40) --
Shares issued in connection with the acquisition of Firstar assets -- --
- -------------------------------------------------------------------------------- ------ ----
TOTAL CLASS C TRANSACTIONS 15 1
================================================================================ ====== ====
Class S:
Shares issued -- --
Shares issued in lieu of cash distributions -- --
Shares redeemed -- --
Shares issued in connection with the acquisition of Firstar assets -- --
- -------------------------------------------------------------------------------- ------ ----
TOTAL CLASS S TRANSACTIONS -- --
================================================================================ ====== ====
Class Y:
Shares issued 2,753 1,674
Shares issued in lieu of cash distributions -- --
Shares redeemed (2,466) (1,077)
Shares issued in connection with the acquisition of Firstar assets -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ------ ------
TOTAL CLASS Y TRANSACTIONS 287 597
================================================================================ ====== ======
NET INCREASE (DECREASE) IN CAPITAL SHARES 362 447
================================================================================ ====== ======
[WIDE TABLE CONTINUED FROM ABOVE]
INTERNATIONAL
FUND
------------------------------
11/1/00 12/1/99 12/1/98
to to to
9/30/01 10/31/00 11/30/99
--------- -------- --------
Class A:
Shares issued 2,252 27 27
Shares issued in lieu of cash distributions 26 21 15
Shares redeemed (2,100) (38) (48)
Shares issued in connection with the acquisition of Firstar assets 6,822 -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets 2 -- --
- -------------------------------------------------------------------------------- ------ --- ---
TOTAL CLASS A TRANSACTIONS 7,002 10 (6)
================================================================================ ====== === ====
Class B:
Shares issued 41 8 7
Shares issued in lieu of cash distributions 6 4 3
Shares redeemed (25) (8) (11)
Shares issued in connection with the acquisition of Firstar assets 1,203 -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets 9 -- --
- -------------------------------------------------------------------------------- ------ --- ---
TOTAL CLASS B TRANSACTIONS 1,234 4 (1)
================================================================================ ====== === ====
Class C:
Shares issued 11 -- --
Shares issued in lieu of cash distributions -- -- --
Shares redeemed (10) -- --
Shares issued in connection with the acquisition of Firstar assets 2,035 -- --
- -------------------------------------------------------------------------------- ------ --- ---
TOTAL CLASS C TRANSACTIONS 2,036 -- --
================================================================================ ====== === ===
Class S:
Shares issued 513 975 208
Shares issued in lieu of cash distributions 125 66 40
Shares redeemed (688) 606 (191)
Shares issued in connection with the acquisition of Firstar assets 6 -- --
- -------------------------------------------------------------------------------- ------ --- ----
TOTAL CLASS S TRANSACTIONS (44) 435 57
================================================================================ ====== === ====
Class Y:
Shares issued 12,188 3,294 1,262
Shares issued in lieu of cash distributions 570 332 153
Shares redeemed (9,040) (926) (555)
Shares issued in connection with the acquisition of Firstar assets 58,594 -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets 2,901 -- --
- -------------------------------------------------------------------------------- ------ ----- -----
TOTAL CLASS Y TRANSACTIONS 65,213 2,700 860
================================================================================ ====== ===== =====
NET INCREASE (DECREASE) IN CAPITAL SHARES 75,441 3,149 910
================================================================================ ====== ===== =====
[WIDE TABLE CONTINUED FROM ABOVE]
HEALTH
SCIENCES
FUND
------------------
10/1/00 10/1/99
to to
9/30/01 9/30/00
-------- -------
Class A:
Shares issued 309 454
Shares issued in lieu of cash distributions 61 --
Shares redeemed (206) (124)
Shares issued in connection with the acquisition of Firstar assets -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ---- ----
TOTAL CLASS A TRANSACTIONS 164 330
================================================================================ ==== ====
Class B:
Shares issued 134 263
Shares issued in lieu of cash distributions 43 --
Shares redeemed (133) (64)
Shares issued in connection with the acquisition of Firstar assets -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ---- ----
TOTAL CLASS B TRANSACTIONS 44 199
================================================================================ ==== ====
Class C:
Shares issued 233 333
Shares issued in lieu of cash distributions 41 --
Shares redeemed (53) (6)
Shares issued in connection with the acquisition of Firstar assets -- --
- -------------------------------------------------------------------------------- ---- ----
TOTAL CLASS C TRANSACTIONS 221 327
================================================================================ ==== ====
Class S:
Shares issued -- --
Shares issued in lieu of cash distributions -- --
Shares redeemed -- --
Shares issued in connection with the acquisition of Firstar assets -- --
- -------------------------------------------------------------------------------- ---- ----
TOTAL CLASS S TRANSACTIONS -- --
================================================================================ ==== ====
Class Y:
Shares issued 434 276
Shares issued in lieu of cash distributions 79 --
Shares redeemed (216) (320)
Shares issued in connection with the acquisition of Firstar assets -- --
Shares issued in connection with the acquisition of Stellar/Mercantile assets -- --
- -------------------------------------------------------------------------------- ---- ----
TOTAL CLASS Y TRANSACTIONS 297 (44)
================================================================================ ==== ====
NET INCREASE (DECREASE) IN CAPITAL SHARES 726 812
================================================================================ ==== ====
[WIDE TABLE CONTINUED FROM ABOVE]
REAL ESTATE TECHNOLOGY
SECURITIES FUND FUND
-------------------- --------------------
10/1/00 10/1/99 10/1/00 10/1/99
to to to to
9/30/01 9/30/00 9/30/01 9/30/00
-------- -------- -------- --------
Class A:
Shares issued 103 66 2,869 4,406
Shares issued in lieu of cash distributions 8 8 784 190
Shares redeemed (87) (55) (2,343) (1,962)
- --------------------------------------------------------------------- --- --- ------ ------
TOTAL CLASS A TRANSACTIONS 24 19 1,310 2,634
===================================================================== === === ====== ======
Class B:
Shares issued 30 29 673 1,687
Shares issued in lieu of cash distributions 6 8 589 215
Shares redeemed (52) (93) (676) (357)
- --------------------------------------------------------------------- --- --- ------ ------
TOTAL CLASS B TRANSACTIONS (16) (56) 586 1,545
===================================================================== === === ====== ======
Class C:
Shares issued 22 14 904 745
Shares issued in lieu of cash distributions 1 -- 182 --
Shares redeemed (10) (1) (359) (37)
- --------------------------------------------------------------------- --- ---- ------ ------
TOTAL CLASS C TRANSACTIONS 13 13 727 708
===================================================================== === === ====== ======
Class S:
Shares issued 19 -- -- --
Shares issued in lieu of cash distributions -- -- -- --
Shares redeemed -- -- -- --
Shares issued in connection with the acquisition of Firstar assets 6 -- -- --
- --------------------------------------------------------------------- --- --- ------ ------
TOTAL CLASS S TRANSACTIONS 25 -- -- --
===================================================================== === === ====== ======
Class Y:
Shares issued 953 1,338 5,223 4,778
Shares issued in lieu of cash distributions 20 31 1,152 517
Shares redeemed (651) (1,685) (6,237) (2,501)
Shares issued in connection with the acquisition of Firstar assets 2,572 -- -- --
- --------------------------------------------------------------------- ----- ------ ------ ------
TOTAL CLASS Y TRANSACTIONS 2,894 (316) 138 2,794
===================================================================== ===== ====== ====== ======
NET INCREASE (DECREASE) IN CAPITAL SHARES 2,940 (340) 2,761 7,681
===================================================================== ===== ====== ====== ======
[WIDE TABLE CONTINUED FROM ABOVE]
SCIENCE &
TECHNOLOGY FUND
------------------------------
11/1/00 12/1/99 8/9/99
to to to
9/30/01 10/31/00 11/30/99
--------- -------- --------
Class A:
Shares issued 306 101 --
Shares issued in lieu of cash distributions -- -- --
Shares redeemed (196) (1) --
- --------------------------------------------------------------------- ---- ---- --
TOTAL CLASS A TRANSACTIONS 110 100 --
===================================================================== ==== === ==
Class B:
Shares issued 184 656 93
Shares issued in lieu of cash distributions -- -- --
Shares redeemed (114) (53) --
- --------------------------------------------------------------------- ---- --- --
TOTAL CLASS B TRANSACTIONS 70 603 93
===================================================================== ==== === ==
Class C:
Shares issued -- -- --
Shares issued in lieu of cash distributions -- -- --
Shares redeemed -- -- --
- --------------------------------------------------------------------- ---- --- --
TOTAL CLASS C TRANSACTIONS -- -- --
===================================================================== ==== === ==
Class S:
Shares issued 409 -- --
Shares issued in lieu of cash distributions -- -- --
Shares redeemed (14) -- --
Shares issued in connection with the acquisition of Firstar assets -- -- --
- --------------------------------------------------------------------- ---- --- --
TOTAL CLASS S TRANSACTIONS 395 -- --
===================================================================== ==== === ==
Class Y:
Shares issued 4,228 4,314 2,872
Shares issued in lieu of cash distributions -- -- --
Shares redeemed (4,492) (895) (61)
Shares issued in connection with the acquisition of Firstar assets -- -- --
- --------------------------------------------------------------------- ------ ----- -----
TOTAL CLASS Y TRANSACTIONS (264) 3,419 2,811
===================================================================== ====== ===== =====
NET INCREASE (DECREASE) IN CAPITAL SHARES 311 4,122 2,904
===================================================================== ====== ===== =====
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 143)
NOTES TO FINANCIAL STATEMENTS September 30, 2001
5 > INVESTMENT SECURITY TRANSACTIONS
During the year ended September 30, 2001, purchases of securities and
proceeds from sales of securities, other than temporary investments in
short-term securities, were as follows (000):
PURCHASES SALES
--------------------------------------------------------
Large Cap Growth Fund $806,132 $745,490
Large Cap Value Fund 812,795 898,326
Large Cap Core Fund 214,426 152,912
Growth & Income Fund 417,025 407,818
Relative Value Fund 18,705 73,358
Capital Growth Fund 107,956 96,958
Equity Income Fund 96,307 124,373
Balanced Fund 156,946 151,701
Mid Cap Growth Fund 1,203,551 1,183,744
Mid Cap Value Fund 382,379 332,056
Mid Cap Core Fund 912,608 810,512
Micro Cap Fund 444,524 405,995
Small Cap Growth Fund 1,221,420 1,158,222
Small Cap Value Fund 249,829 243,499
Small Cap Core Fund 654,701 638,526
Emerging Markets Fund 73,226 67,529
International Fund 802,390 151,085
Health Sciences Fund 37,529 32,720
Real Estate Securities Fund 60,094 54,608
Technology Fund 847,016 839,325
Science & Technology Fund 110,161 107,351
--------------------------------------------------------
The aggregate gross unrealized appreciation and depreciation of securities
held by the Funds and the total cost of securities for federal tax purposes
at September 30, 2001, is as follows (000):
AGGREGATE AGGREGATE FEDERAL
GROSS GROSS INCOME
APPRECIATION DEPRECIATION NET TAX COST
- ---------------------------------------------------------------------------------------------
Large Cap Growth Fund $ 66,081 $(218,767) $(152,686) 868,803
Large Cap Value Fund 68,528 (178,111) (109,583) 1,228,316
Large Cap Core Fund 79,557 (69,628) 9,929 345,838
Growth & Income Fund 115,611 (96,100) 19,511 692,959
Relative Value Fund 161,468 (8,006) 153,462 261,524
Capital Growth Fund 48,549 (43,943) 4,606 194,585
Equity Income Fund 90,259 (7,375) 82,884 235,401
Balanced Fund 50,130 (63,698) (13,568) 599,627
Mid Cap Growth Fund 14,469 (85,017) (70,548) 407,052
Mid Cap Value Fund 25,666 (40,390) (14,724) 334,556
Mid Cap Core Fund 48,855 (77,423) (28,568) 522,299
Micro Cap Fund 42,924 (63,824) (20,900) 335,847
Small Cap Growth Fund 20,031 (75,666) (55,635) 401,761
Small Cap Value Fund 91,863 (86,572) 5,291 480,308
Small Cap Core Fund 30,743 (48,705) (17,962) 335,258
Emerging Markets Fund 1,052 (7,271) (6,219) 49,635
International Fund 11,484 (144,448) (132,964) 850,430
Health Sciences Fund 3,246 (2,345) 901 31,006
Real Estate Securities Fund 10,283 (2,163) 8,120 93,112
Technology Fund 1,141 (171,402) (170,264) 282,688
Science & Technology Fund 1,113 (32,781) (31,668) 67,180
- ------------------------------- -------- --------- --------- ---------
6 > SECURITIES LENDING TRANSACTIONS
In order to generate additional income, the Funds may lend portfolio
securities representing up to one-third of the value of total assets (which
includes collateral received for securities on loan) to broker dealers,
banks, or other institutional borrowers of securities. As with other
extensions of credit, there may be risks of delay in recovery of the
securities or even loss of rights in the collateral should the borrower of
the security fail financially. The market value of the securities on loan
at September 30, 2001, the collateral purchased with cash received and held
at September 30, 2001, with respect to such loans, and income generated
during the year ended September 30, 2001, from the program were as follows
(000):
MARKET VALUE OF INCOME RECEIVED
LOANED SECURITIES FROM SECURITIES LENDING
---------------------------------------------------------------------------
Large Cap Growth Fund $175,426 $296
Large Cap Value Fund 309,208 291
Large Cap Core Fund 81,397 43
Growth & Income Fund 156,066 68
Capital Growth Fund 53,020 24
Equity Income Fund 63,825 52
Balanced Fund 215,184 45
Mid Cap Growth Fund 134,224 228
Mid Cap Value Fund 159 106
Mid Cap Core Fund 132,271 59
Micro Cap Fund 24,717 344
Small Cap Growth Fund 74,584 277
Small Cap Value Fund 18,388 149
Small Cap Core Fund 49,515 183
Health Sciences Fund 4,845 8
Real Estate Securities Fund 10,730 11
Technology Fund 48,685 300
Science & Technology Fund 11,742 12
---------------------------------------------------------------------------
MARKET VALUE OF COLLATERAL PURCHASED WITH CASH RECEIVED
-------------------------------------------------------
OTHER FIXED
REPURCHASE MONEY MARKET INCOME
AGREEMENTS INSTRUMENTS SECURITIES TOTAL
--------------------------------------------------------------------------------
Large Cap Growth $73,503 $17,879 $87,104 $178,486
Large Cap Value 128,062 31,151 151,759 310,972
Large Cap Core 35,539 8,645 42,116 86,300
Growth & Income 64,455 15,678 76,382 156,515
Capital Growth 22,252 5,413 26,369 54,034
Equity Income 26,708 6,497 31,650 64,855
Balanced 90,037 21,901 106,697 218,635
Mid Cap Growth 56,579 13,762 67,048 137,389
Mid Cap Value 66 16 79 161
Mid Cap Core 55,150 13,415 65,355 133,920
Micro Cap 10,763 2,618 12,755 26,136
Small Cap Growth 30,889 7,513 36,604 75,006
Small Cap Value 7,738 1,882 9,170 18,790
Small Cap Core 20,655 5,024 24,477 50,157
Health Sciences 2,072 504 2,454 5,030
Real Estate Securities 4,560 1,109 5,403 11,072
Technology 21,091 5,130 24,993 51,214
Science & Technology 5,022 1,222 5,951 12,195
--------------------------------------------------------------------------------
(144 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
U.S. Bank acts as the securities lending agent in transactions involving
the lending of portfolio securities on behalf of the funds. For these
services, U.S. Bank and Firstar received $2,805,419 and $16,775,
respectively, in aggregate securities lending fees for the year ended
September 30, 2001 for the First American Family of Funds. Fees generated
from the funds included in this annual report for securities lending were
as follows (000):
--------------------------------
Large Cap Growth $185
Large Cap Value 194
Large Cap Core 29
Growth & Income 46
Capital Growth 16
Equity Income 35
Balanced 30
Mid Cap Growth 152
Mid Cap Value 70
Mid Cap Core 39
Micro Cap 230
Small Cap Growth 184
Small Cap Value 99
Small Cap Core 122
Health Sciences 6
Real Estate Securities 8
Technology 200
Science & Technology 8
--------------------------------
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 145)
NOTES TO FINANCIAL STATEMENTS September 30, 2001
7 > FUND MERGERS
On August 31, 2001 the Board of Directors and shareholders of the FAIF
approved the agreement and plan of reorganization providing for the
acquisition of Firstar Funds, Inc. On September 24, 2001 certain portfolios
of FAIF, including newly formed shell portfolios (which were organized
solely to acquire the assets and continue business of certain portfolios of
the Firstar Funds) merged with certain portfolios of the Firstar Funds. The
following table illustrates the specifics of the mergers (000):
ACQUIRED
FUND'S NET
ACQUIRED FUND ACQUIRING FUND ASSETS
- ------------------------------ ---------------------------------- -----------
Firstar Large Cap Core(1) First American Large Cap Core(2) $ 335,610
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar Growth & Income(1) First American Growth & Income(2) 662,988
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar Relative Value(1) First American Relative Value(2) 395,702
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar Large Cap Growth(1) First American Large Cap Growth(2) 185,259
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar Equity Income First American Equity Income(1) 41,276(3)
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar Balanced Growth(1) First American Balanced Growth 227,242
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar Balanced Income 126,447(4)
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar Mid Cap Core Equity(1) First American Mid Cap Core(2) 468,645
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar Micro Cap(1) First American Micro Cap (2) 289,894
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
- --------------------------------------------------------------------------------
[WIDE TABLE CONTINUED FROM ABOVE]
SHARES ISSUED TO
SHAREHOLDERS OF ACQUIRING FUND COMBINED TAX STATUS
ACQUIRED FUND ACQUIRED FUND NET ASSETS NET ASSETS OF TRANSFER
- --------------------------------------------------------------------------------------------
Firstar Large Cap Core(1) $ -- $ 335,610 Non-taxable
Class A 1,406
Class B 123
Class Y 121
Institutional Class 12,631
Firstar Growth & Income(1) -- 662,988 Non-taxable
Class A 4,878
Class B 374
Class Y 1,447
Institutional Class 16,110
Firstar Relative Value(1) -- 395,702 Non-taxable
Class A 1,384
Class B 504
Class Y 1,134
Institutional Class 14,561
Firstar Large Cap Growth(1) -- 185,259 Non-taxable
Class A 586
Class B 3,175
Class Y 657
Institutional Class 9,030
Firstar Equity Income 245,057 286,333 Non-taxable
Class A 86
Class B 69
Class Y 27
Institutional Class 3,459
Firstar Balanced Growth(1) 225,353(4) 579,042 Non-taxable
Class A 4,968
Class B 560
Class Y 3,880
Institutional Class 15,433
Firstar Balanced Income
Class A 4,483
Class B 891
Class Y 502
Institutional Class 7,951
Firstar Mid Cap Core Equity(1) -- 468,645 Non-taxable
Class A 2,906
Class B 91
Class Y 39
Institutional Class 14,087
Firstar Micro Cap(1) -- 289,894 Non-taxable
Class A 2,581
Class B 194
Class Y 119
Institutional Class 15,293
- --------------------------------------------------------------------------------------------
(146 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
ACQUIRED
FUND'S NET
ACQUIRED FUND ACQUIRING FUND ASSETS
- --------------------------------------------------------------------------------------------
Firstar Small Cap Core Equity(1) First American Small Cap Core(2) 296,588
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar International Growth(1) First American International 136,396
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar International Value 35,240 (5)
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar REIT First American Real Estate Securities(1) 32,077 (6)
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
Firstar Science & Technology(1) First American Science & Technology(2) 35,449
Class A Class A
Class B Class B
Class Y Class S
Institutional Class Class Y
- --------------------------------------------------------------------------------------------
[WIDE TABLE CONTINUED FROM ABOVE]
SHARES ISSUED TO
SHAREHOLDERS OF ACQUIRING FUND COMBINED TAX STATUS
ACQUIRED FUND ACQUIRED FUND NET ASSETS NET ASSETS OF TRANSFER
- ----------------------------------- ------------------ ---------------- ------------ ------------
Firstar Small Cap Core Equity(1) -- 296,588 Non-taxable
Class A 1,452
Class B 174
Class Y 305
Institutional Class 23,845
Firstar International Growth(1) 536,522(5) 708,158 Non-taxable
Class A 239
Class B 86
Class Y 1,128
Institutional Class 14,898
Firstar International Value
Class A 368
Class B 39
Class Y 6
Institutional Class 3,813
Firstar REIT 63,394 95,471 Non-taxable
Class A --
Class B --
Class Y 6
Institutional Class 2,572
Firstar Science & Technology(1) -- 35,449 Non-taxable
Class A 210
Class B 763
Class Y 300
Institutional Class 6,147
- ------------------------------------------------------------------------------------------------
(1)Accounting Survivor
(2)Shell Portfolio
(3)Includes accumulated realized loss of ($239) and unrealized appreciation of
$8,261.
(4)Includes accumulated realized loss of ($19,184) and unrealized depreciation
of ($37,098).
(5)Includes accumulated realized loss of ($124,169) and unrealized depreciation
of ($150,432).
(6)Includes accumulated realized loss of ($2,258) and unrealized appreciation
of $1,791.
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 147)
NOTES TO FINANCIAL STATEMENTS September 30, 2001
On November 27, 2000, certain portfolios of the Firstar Funds, including newly
formed shell portfolios (which were organized solely to acquire the assets and
continue the business of certain portfolios of Mercantile Funds and Firstar
Stellar Funds) merged with certain portfolios of Mercantile Funds and Stellar
Funds. On December 11, 2000, certain other portfolios of Mercantile Funds and
Firstar Stellar Funds merged into shell portfolios of Firstar Funds. The
following table illustrates the specifics of the mergers (000):
ACQUIRED
FUND'S NET
ACQUIRED FUND ACQUIRING FUND ASSETS
- -----------------------------------------------------------------------------------------
Mercantile Growth Equity Firstar Large Cap Core Equity(1) $95,738(5)
Class A Class A
Class B Class B
Institutional Class Class Y
Trust Class Institutional Class
Mercantile Growth & Income Equity Firstar Growth & Income(1) 268,736(4)
Class A Class A
Class B Class B
Institutional Class Class Y
Trust Class Institutional Class
Firstar Stellar Relative Value(1) Firstar Relative Value(2) 503,157
Class A Class A
Class B Class B
Class Y Institutional Class
Firstar Stellar Growth Equity(1) Firstar Large Cap Growth(2) 320,713
Class A Class A
Class B Class B
Class Y Institutional Class
Mercantile Equity Income(1) Firstar Equity Income(2) 51,717
Class A Class A
Class B Class B
Institutional Class Class Y
Trust Class Institutional Class
Mercantile Balanced Firstar Balanced Growth(1) 66,580(3)
Class A Class A
Class B Class B
Institutional Class Class Y
Trust Class Institutional Class
Mercantile Small Cap Equity(1) Firstar Emerging Growth 137,018
Class A Class A
Class B Class B
Trust Class Institutional Class
Mercantile International Equity(1) Firstar Core International Equity 131,976
Class A Class A
Class B Class B
Trust Class Institutional Class
Firstar Stellar REIT(1) Firstar REIT (2) 36,907
Class Y Institutional Class
Firstar Stellar Science & Technology(1) Firstar Science & Technology(2) 121,342
Class A Class A
Class B Class B
Class Y Institutional Class
- -------------------------------------------------------------------------------------------
[WIDE TABLE CONTINUED FROM ABOVE]
SHARES ISSUED TO
SHAREHOLDERS OF ACQUIRING FUND COMBINED TAX STATUS
ACQUIRED FUND ACQUIRED FUND NET ASSETS NET ASSETS OF TRANSFER
- -------------------------------------------------------------------------------------------------------
Mercantile Growth Equity $356,198 $451,936 Non-taxable
Class A 203
Class B 56
Institutional Class 120
Trust Class 2,276
Mercantile Growth & Income Equity 673,486 942,222 Non-taxable
Class A 970
Class B 205
Institutional Class 1,654
Trust Class 3,786
Firstar Stellar Relative Value(1) -- 503,157 Non-taxable
Class A 1,458
Class B 537
Class Y 16,100
Firstar Stellar Growth Equity(1) -- 320,713 Non-taxable
Class A 57
Class B 3,972
Class Y 9,383
Mercantile Equity Income(1) -- 51,717 Non-taxable
Class A 134
Class B 98
Institutional Class 12
Trust Class 7,693
Mercantile Balanced 212,028 278,608 Non-taxable
Class A 274
Class B 59
Institutional Class 533
Trust Class 1,563
Mercantile Small Cap Equity(1) 198,507(6) 335,525 Non-taxable
Class A 801
Class B 31
Trust Class 14,027
Mercantile International Equity(1) 37,900 169,876 Non-taxable
Class A 2
Class B 9
Trust Class 2,901
Firstar Stellar REIT(1) -- 36,907 Non-taxable
Class Y 4,085
Firstar Stellar Science & Technology(1) -- 121,342 Non-taxable
Class A 106
Class B 704
Class Y 6,251
- -------------------------------------------------------------------------------------------------------
(1)Accounting Survivor
(2)Shell Portfolio
(3)Includes accumulated realized loss of ($114) and unrealized depreciation of
($283).
(4)Includes unrealized appreciation of $50,298.
(5)Includes unrealized appreciation of $40,483.
(6)Includes unrealized appreciation of $18,818.
(148 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
8 > OPTIONS WRITTEN
The following options written were outstanding as of September 30, 2001:
PUT OPTIONS WRITTEN
EXPIRATION EXERCISE NUMBER OF MARKET VALUE
ISSUER DATE PRICE CONTRACTS (000)
- ----------------------------------- ------------ ---------- ----------- -------------
CAPITAL GROWTH FUND:
CheckPoint Software Technology Oct-01 50 28 $ 81
Juniper Networks Oct-01 20 100 100
Texaco Oct-01 70 75 37
------
Total put options outstanding
(premiums received, $71) $ 218
------
SCIENCE & TECHNOLOGY FUND:
Siebel Systems, Inc. Nov-01 30 95 $ 159
Somanetics Corporation Nov-01 460 100 909
------
Total put options outstanding
(premiums received, $616) $1,068
------
CALL OPTIONS WRITTEN
EXPIRATION EXERCISE NUMBER OF MARKET VALUE
ISSUER DATE PRICE CONTRACTS (000)
- ------------------------ ----------- --------- ----------- -------------
CAPITAL GROWTH FUND:
Cardinal Health Dec-01 75 150 $ 66
Cardinal Health Dec-01 80 100 23
Kohl's Jan-02 60 250 40
Wal-Mart Stores Dec-01 55 300 35
----
Total call options outstanding (premiums received, $104) $164
----
Transactions in options written for the period ended September 30, 2001,
were as follows:
PUT OPTIONS WRITTEN
NUMBER OF PREMIUM
CONTRACTS AMOUNT (000)
----------- -------------
CAPITAL GROWTH FUND:
Balance at September 30, 2000 245 $ 78
Opened 2,075 686
Expired (980) (237)
Exercised (412) (204)
Closed (725) (252)
----- ------
Balance at September 30, 2001 203 $ 71
----- ------
SCIENCE & TECHNOLOGY FUND:
Balance at September 30, 2000 127 $ 215
Opened 1,525 1,560
Expired (50) (18)
Exercised (442) (366)
Closed (965) (775)
----- ------
Balance at September 30, 2001 195 $ 616
----- ------
CALL OPTIONS WRITTEN
CAPITAL GROWTH FUND:
Balance at September 30, 2000 700 $ 159
Opened 3,450 605
Expired (2,200) (405)
Closed (1,150) (255)
------ ------
Balance at September 30, 2001 800 $ 104
------ ------
SCIENCE & TECHNOLOGY FUND:
Balance at September 30, 2000 103 $ 38
Opened 1,010 391
Closed (1,115) (429)
------ ------
Balance at September 30, 2001 -- $ --
------ ------
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 149)
NOTICE TO SHAREHOLDERS September 30, 2001 (unaudited)
THE INFORMATION SET FORTH BELOW IS FOR EACH FUND'S FISCAL YEAR AS REQUIRED BY
FEDERAL LAWS. SHAREHOLDERS, HOWEVER, MUST REPORT DISTRIBUTIONS ON A CALENDAR
YEAR BASIS FOR INCOME TAX PURPOSES, WHICH MAY INCLUDE DISTRIBUTIONS FOR
PORTIONS OF TWO FISCAL YEARS OF A FUND. ACCORDINGLY, THE INFORMATION NEEDED BY
SHAREHOLDERS FOR INCOME TAX PURPOSES WILL BE SENT TO THEM IN EARLY 2002.
PLEASE CONSULT YOUR TAX ADVISOR FOR PROPER TREATMENT OF THIS INFORMATION.
Dear First American Shareholders:
For the fiscal year ended September 30, 2001, each Fund has designated long
term capital gains and qualifying dividends with regard to distributions paid
during the year as follows:
(A) (B) (C) (D)
LONG TERM ORDINARY
CAPITAL GAINS INCOME TOTAL
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS QUALIFYING
(TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS(1)
---------------------------------------------------------------------------------------------------
Large Cap Growth Fund 100% 0% 100% 0%
Large Cap Value Fund 90 10 100 100
Large Cap Core Fund 93 7 100 62
Growth & Income Fund 94 6 100 100
Relative Value Fund 43 57 100 100
Capital Growth Fund 100 0 100 0
Equity Income Fund 88 12 100 88
Balanced Fund 73 27 100 19
Mid Cap Growth Fund 50 50 100 0
Mid Cap Value Fund 0 100 100 100
Mid Cap Core Fund 44 56 100 2
Micro Cap Fund 15 85 100 1
Small Cap Growth Fund 40 60 100 9
Small Cap Value Fund 50 50 100 10
Small Cap Core Fund 46 54 100 6
International Fund 83 17 100 0
Health Sciences Fund 65 35 100 25
Real Estate Securities Fund 0 100 100 0
Technology Fund 74 26 100 0
- -----------------------------------------------------------------------------------------------------
*Items (A) and (B) are based on a percentage of the fund's total
distributions.
**Item (D) is based on a percentage of ordinary income distributions of the
fund.
(1)Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction.
(2)Real Estate Securities Fund is not shown due To the fact that the tax year
end is December 31st.
SHAREHOLDER MEETINGS
At a special meeting of shareholders of the First American Funds on August 31,
2001, the shareholders of each of the Funds voted to approve the following
proposals:
Proposal No. 1 -- Election of Robert J. Dayton, Andrew S. Duff, Roger A.
Gibson, Andrew M. Hunter III, Leonard W. Kedrowski, John M. Murphy, Jr.,
Richard K. Riederer, Joseph D. Strauss, Virginia L. Stringer and James M.
Wade as Directors.
At the meeting, shareholders approved Proposal No. 1 as follows:
SHARES VOTED FOR SHARES WITHHELD
--------------------------------------------------------------
Robert J. Dayton 558,356,535 8,806,518
Andrew S. Duff 564,054,926 3,108,127
Roger A. Gibson 564,135,567 3,027,486
Andrew M. Hunter III 564,182,351 2,080,702
Leonard W. Kedrowski 564,142,080 3,020,973
John M. Murphy, Jr. 563,979,300 3,183,753
Richard K. Riederer 564,286,876 2,876,177
Joseph D. Strauss 564,169,341 2,993,712
Virginia L. Stringer 553,921,602 3,241,451
James M. Wade 564,289,279 2,873,774
--------------------------------------------------------------
(150 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
Proposal No. 2 -- Ratification of the selection of Ernst & Young LLP as
independent public accountants for the Company.
At the meeting, shareholders approved Proposal No. 2 as follows:
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------
563,155,535 986,817 3,020,716
- --------------------------------------------------------------------------------
Proposal No. 4 -- Approval of a new sub-advisory agreement with Clay Finlay,
Inc.
At the meeting, shareholders approved Proposal No. 3 as follows:
FOR AGAINST ABSTAIN
- --------------------------------------------------------------------------------
International 46,431,207 259,165 322,987
- --------------------------------------------------------------------------------
Proposal No. 5 -- To approve the modification or elimination of certain
fundamental investment restrictions of the funds.
At the meeting, shareholders approved Proposal No. 5 as follows:
5A -- Modify investment restriction regarding concentration in a particular
industry.
FOR AGAINST ABSTAIN BROKER NON-VOTE
------------ --------- --------- ---------------
Large Cap Growth 46,221,675 517,478 373,173 9,010,338
Large Cap Value 47,936,936 578,116 287,564 6,040,688
Balanced 11,748,062 278,346 362,084 2,494,517
Equity Income 12,771,923 178,811 132,535 1,457,459
Mid Cap Growth 26,069,771 606,685 344,685 4,420,016
Mid Cap Value 17,613,986 106,813 74,105 1,233,246
Small Cap Growth 22,417,869 195,958 109,685 2,491,112
Small Cap Value 24,593,327 903,789 101,364 1,794,375
Health Sciences 1,426,095 19,729 31,819 363,495
Real Estate Securities 3,483,034 7,349 14,963 234,129
Technology 6,943,955 208,472 99,963 2,529,603
International 39,319,909 410,002 357,535 6,925,913
Emerging Markets 6,803,835 13,736 27,198 383,384
- ----------------------- ------------ --------- --------- ---------------
5B -- Modify investment restriction regarding borrowing.
FOR AGAINST ABSTAIN BROKER NON-VOTE
------------ --------- --------- ---------------
Large Cap Growth 46,040,766 643,685 427,875 9,010,338
Large Cap Value 47,730,049 666,836 406,731 6,040,688
Balanced 11,759,460 284,621 344,311 2,434,517
Equity Income 12,753,377 206,354 123,538 1,457,459
Mid Cap Growth 25,930,988 895,574 394,162 4,420,016
Mid Cap Value 17,614,050 102,027 78,826 1,233,246
Small Cap Growth 22,376,239 210,135 137,138 2,491,112
Small Cap Value 24,446,988 409,398 142,093 1,794,376
Health Sciences 1,420,172 26,531 30,940 363,495
Real Estate Securities 3,470,009 20,294 15,044 234,128
Technology 6,914,119 222,198 118,073 2,529,603
International 39,202,368 568,723 316,355 6,925,913
Emerging Markets 6,798,784 18,271 27,714 363,384
- ----------------------- ------------ --------- --------- ---------------
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 151)
NOTICE TO SHAREHOLDERS September 30, 2001 (unaudited)
5C -- Modify investment restriction regarding issuance of senior securities.
FOR AGAINST ABSTAIN BROKER NON-VOTE
------------ --------- --------- ---------------
Large Cap Growth 46,053,602 595,392 463,331 9,010,336
Large Cap Value 47,749,534 620,567 433,515 6,040,688
Balanced 11,762,528 234,880 390,984 2,494,517
Equity Income 12,762,693 177,880 142,716 1,457,459
Mid Cap Growth 26,003,088 648,790 368,846 4,420,016
Mid CapValue 17,612,193 108,022 74,689 1,233,246
Small Cap Growth 22,374,947 226,459 122,106 2,491,112
Small Cap Value 24,604,399 251,064 143,017 1,794,375
Health Sciences 1,418,141 26,800 32,702 363,495
Real Estate Securities 3,450,450 36,394 18,503 234,128
Technology 6,901,620 241,930 108,840 2,529,603
International 39,246,359 417,348 423,739 6,925,913
Emerging Markets 6,792,425 24,944 27,400 363,384
- ----------------------- ------------ --------- --------- ---------------
5D -- Eliminate the investment restriction regarding margin purchases and short
sales.
FOR AGAINST ABSTAIN BROKER NON-VOTE
------------ --------- --------- ---------------
Large Cap Growth 45,428,884 1,234,971 448,471 9,010,336
Large Cap Value 47,501,171 878,887 423,558 6,040,686
Balanced 11,702,450 314,461 371,481 2,494,517
Equity Income 12,586,876 267,740 128,653 1,457,459
Mid Cap Growth 25,812,283 837,730 370,711 4,420,016
Mid Cap Value 17,574,220 137,673 83,011 1,233,245
Small Cap Growth 22,204,509 350,416 168,587 2,491,112
Small Cap Value 24,981,505 459,077 157,898 1,794,375
Health Sciences 1,413,310 34,388 29,945 363,485
Real Estate Securities 3,374,690 106,203 24,454 234,128
Technology 6,813,037 312,093 127,260 2,529,603
International 38,929,610 890,608 327,228 6,925,913
Emerging Markets 6,780,132 34,105 30,532 363,384
- ----------------------- ------------ --------- --------- ---------------
5E -- Modify investment restriction regarding investments in commodities.
FOR AGAINST ABSTAIN BROKER NON-VOTE
------------ --------- --------- ---------------
Large Cap Growth 46,080,801 668,677 382,848 9,010,336
Large Cap Value 47,745,580 624,791 433,245 6,040,688
Balanced 11,775,329 255,136 357,927 2,494,517
Equity Income 12,728,029 224,596 130,644 1,457,459
Mid Cap Growth 25,993,248 677,643 349,833 4,420,016
Mid Cap Value 17,505,625 116,876 71,403 1,233,246
Small Cap Growth 22,339,942 270,770 112,800 2,491,112
Small Cap Value 24,614,709 253,549 130,222 1,794,375
Health Sciences 1,414,287 28,712 34,643 363,496
Real Estate Securities 3,439,447 48,689 19,211 234,128
Technology 8,838,585 308,784 105,021 2,529,603
International 39,259,532 501,823 316,091 6,925,913
Emerging Markets 6,786,757 31,532 26,480 363,384
- ----------------------- ------------ --------- --------- ---------------
5F -- Modify investment restriction regarding investments in real estate.
FOR AGAINST ABSTAIN BROKER NON-VOTE
------------ --------- --------- ---------------
Large Cap Growth 46,174,078 549,339 388,915 9,010,336
Large Cap Value 47,875,943 516,822 410,851 6,040,688
Balanced 11,760,826 264,722 362,844 2,494,517
Equity Income 12,735,266 227,057 120,945 1,457,459
Mid Cap Growth 25,976,469 687,796 356,458 4,420,016
Mid Cap Value 17,633,609 91,367 69,928 1,233,246
Small Cap Growth 22,395,608 200,539 127,365 2,491,112
Small Cap Value 24,637,467 234,455 126,558 1,794,375
Health Sciences 1,420,043 23,671 33,929 363,495
Real Estate Securities 3,449,313 39,766 16,268 234,128
Technology 6,937,985 213,885 100,520 2,529,603
International 39,358,936 372,058 356,452 6,925,913
Emerging Markets 6,792,804 24,622 27,343 363,384
- ----------------------- ------------ --------- --------- ---------------
(152 FIRST AMERICAN FUNDS ANNUAL REPORT 2001
5G -- Modify the investment restriction regarding underwriting securities.
FOR AGAINST ABSTAIN BROKER NON-VOTE
------------ --------- --------- ---------------
Large Cap Growth 46,044,126 589,737 478,463 9,010,336
Large Cap Value 47,885,453 493,758 424,405 6,040,688
Balanced 11,760,737 260,634 367,021 2,494,517
Equity Income 12,729,028 218,030 136,211 1,457,459
Mid Cap Growth 26,006,380 637,830 376,514 4,420,016
Mid Cap Value 17,599,896 118,052 76,956 1,233,246
Small Cap Growth 22,356,064 226,274 141,174 2,481,112
Small Cap Value 24,640,151 224,005 134,323 1,794,375
Health Sciences 1,423,370 19,774 34,498 363,496
Real Estate Securities 3,446,343 42,085 16,918 234,128
Technology 6,921,671 217,021 113,698 2,529,603
International 39,342,047 421,131 324,288 6,925,913
Emerging Markets 6,793,048 23,504 28,217 363,384
- ----------------------- ------------ --------- --------- ---------------
5H -- Modify investment restriction regarding lending.
FOR AGAINST ABSTAIN BROKER NON-VOTE
------------ --------- --------- ---------------
Large Cap Growth 45,980,861 675,547 455,918 9,010,336
Large Cap Value 47,778,668 604,596 420,252 6,040,688
Balanced 11,729,635 304,763 354,004 2,494,517
Equity Income 12,734,736 234,487 114,046 1,457,459
Mid Cap Growth 25,954,437 687,132 379,155 4,420,016
Mid Cap Value 17,589,123 128,653 77,127 1,299,246
Small Cap Growth 22,328,818 249,960 144,734 2,491,112
Small Cap Value 24,616,889 245,852 135,739 1,794,375
Health Sciences 1,418,126 28,855 30,661 363,496
Real Estate Securities 3,448,349 41,854 15,044 234,128
Technology 6,899,652 228,500 124,238 2,529,603
International 39,306,612 477,150 303,684 6,925,913
Emerging Markets 6,789,468 27,139 28,182 363,384
- ----------------------- ------------ --------- --------- ---------------
FIRST AMERICAN FUNDS ANNUAL REPORT 2001 153)
(This page has been left blank intentionally.)
BOARD OF DIRECTORS First American Investment Funds, Inc.
MR. ROBERT DAYTON
Director of First American Investment Funds, Inc.
Retired; former Chief Executive Officer of Okabena Company
MR. ANDREW DUFF
Director of First American Investment Funds, Inc.
President and Chief Executive Officer of U.S. Bancorp Piper Jaffray
MR. ROGER GIBSON
Director of First American Investment Funds, Inc.
Vice President of North America-Mountain Region for United Airlines
MR. ANDREW HUNTER III
Director of First American Investment Funds, Inc.
Chairman of Hunter, Keith Industries, Inc.
MR. LEONARD KEDROWSKI
Director of First American Investment Funds, Inc.
Owner and President of Executive Management Consulting, Inc.
MR. JOHN MURPHY JR.
Director of First American Investment Funds, Inc.
Executive Vice President of U.S. Bancorp
MR. RICHARD RIEDERER
Director of First American Investment Funds, Inc.
Retired; former President and Chief Executive Officer of Weirton Steel
MR. JOSEPH STRAUSS
Director of First American Investment Funds, Inc.
Former Chairman of First American Investment Funds, Inc.
Owner and President of Strauss Management Company
MS. VIRGINIA STRINGER
Chairperson of First American Investment Funds, Inc.
Owner and President of Strategic Management Resources, Inc.
MR. JAMES WADE
Director of First American Investment Funds, Inc.
Owner and President of Jim Wade Homes
[LOGO] FIRST AMERICAN FUNDS(TM)
DIRECT FUND CORRESPONDENCE TO:
FIRST AMERICAN FUNDS
P.O. Box 1330
Minneapolis, MN 55440-1330
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the corporation and are not intended
to be a forecast of future events, a guarantee of future results, nor investment
advice. Further, there is no assurance that certain securities will remain in or
out of each fund's portfolio.
For a prospectus or fund profile containing more information on First American
Funds, including investment policies, fees, and expenses, please contact your
investment professional, call First American Funds Investor Services at
800.677.FUND, or visit us on the web at firstamericanfunds.com. Please read the
prospectus or profile carefully before you invest or send money.
INVESTMENT ADVISOR AND ADMINISTRATOR
U.S. BANCORP PIPER JAFFRAY ASSET MANAGEMENT, INC.,
A SUBSIDIARY OF U.S. BANK NATIONAL ASSOCIATION
601 Second Avenue South
Minneapolis, Minnesota 55402
CUSTODIAN
U.S. BANK NATIONAL ASSOCIATION
180 East Fifth Street
St. Paul, Minnesota 55101
DISTRIBUTOR
QUASAR DISTRIBUTORS, LLC
615 East Michigan Street, 2nd floor
Milwaukee, WI 53202
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
1400 Pillsbury Center
200 South Sixth Street
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY LLP
50 South Sixth Street
Minneapolis, Minnesota 55402
- --------------------------------------------------------------------------------
FIRST AMERICAN FUNDS Presort Standard
c/o Fulfillment Agent, American Financial Printing Inc. U.S. Postage
404 Industrial Boulevard, N.E. Paid
Minneapolis, MN 55413 Mpls, MN
Permit No. 26388
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailing to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call First American Funds Investor Services at 800.677.FUND.
2139-01 11/2001 AR-EQUITY
PART C. OTHER INFORMATION
Item 15. Indemnification
The first four paragraphs of Item 27 of Part C of Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form N-1A, dated
November 27, 1987, are incorporated herein by reference.
On February 18, 1988 the indemnification provisions of the Maryland
General Corporation Law (the "Law") were amended to permit, among other things,
corporations to indemnify directors and officers unless it is proved that the
individual (1) acted in bad faith or with active and deliberate dishonesty, (2)
actually received an improper personal benefit in money, property or services,
or (3) in the case of a criminal proceeding, had reasonable cause to believe
that his act or omission was unlawful. The Law was also amended to permit
corporations to indemnify directors and officers for amounts paid in settlement
of stockholders' derivative suits.
The Registrant undertakes that no indemnification or advance will be
made unless it is consistent with Sections 17(h) or 17(i) of the Investment
Company Act of 1940, as now enacted or hereafter amended, and Securities and
Exchange Commission rules, regulations, and releases (including, without
limitation, Investment Company Act of 1940 Release No. 11330, September 2,
1980).
Insofar as the indemnification for liability arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
The Registrant maintains officers' and directors' liability insurance
providing coverage, with certain exceptions, for acts and omissions in the
course of the covered persons' duties as officers and directors.
Item 16. Exhibits
(1)(a) Amended and Restated Articles of Incorporation, as amended
through April 2, 1998 (Incorporated by reference to Exhibit
(1) to Post-Effective Amendment No. 36, Filed on April 15,
1998 (File Nos. 33-16905, 811-05309)).
(1)(b) Articles Supplementary, designating new series and new
share classes (Incorporated by reference to Exhibit (a)(2)
to Post-Effective Amendment No. 54, Filed on June 27, 2001
(File Nos. 33-16905, 811-05309)).
(2) Bylaws, as amended through June 1, 2001 (Incorporated by
reference to Exhibit (b) to Post-Effective Amendment No.
54, Filed on June 27, 2001 (File Nos. 33-16905,
811-05309)).
(3) Not applicable.
* (4) Form of Agreement and Plan of Reorganization.
(5) Not applicable.
(6)(a) Investment Advisory Agreement dated April 2, 1991, between
the Registrant and First Bank National Association, as
amended and supplemented through August 1994, and assigned
to U.S. Bancorp Piper Jaffray Asset Management, Inc. on May
2, 2001 (Incorporated by reference to Exhibit (5)(a) to
Post-Effective Amendment No. 21, Filed on May 15, 1995
(File Nos. 33-16905, 811-05309)).
(6)(b) Exhibit A to Investment Advisory Agreement (series and
advisory fees) (Incorporated by reference to Exhibit (d)(2)
to Post-Effective Amendment No. 54, Filed on June 27, 2001
(File Nos. 33-16905, 811-05309)).
(6)(c) Supplement to Advisory Agreement Relating to International
Fund dated December 31, 1993 (Incorporated by reference to
Exhibit (d)(3) to Post-Effective Amendment No. 46, Filed on
December 28, 2000 (File Nos. 33-16905, 811-05309)).
(6)(d) Supplement to Advisory Agreement Relating to Emerging
Markets Fund dated July 23, 1998 (Incorporated by reference
to Exhibit (d)(4) to Post-Effective Amendment No. 46, Filed
on December 28, 2000 (File Nos. 33-16905, 811-05309)).
(6)(e) Supplement to Advisory Agreement Relating to Strategic
Income Fund dated July 24, 1998 (Incorporated by reference
to Exhibit (d)(5) to Post-Effective Amendment No. 46, Filed
on December 28, 2000 (File Nos. 33-16905, 811-05309)).
(6)(f) Sub-Advisory Agreement dated July 1, 2001, between U.S.
Bancorp Piper Jaffray Asset Management, Inc. and Clay
Finlay Inc. with respect to International Fund
(Incorporated by reference to Exhibit (d)(6) to
Post-Effective Amendment No. 54, Filed on June 27, 2001
(File Nos. 33-16905, 811-05309)).
(6)(g) Sub-Advisory Agreement dated July 23, 1998, between U.S.
Bank National Association, as assigned to U.S. Bancorp
Piper Jaffray Asset Management, Inc. on May 2, 2001, and
Marvin & Palmer Associates, Inc., with respect to Emerging
Markets Fund (Incorporated by reference to Exhibit 5(f) to
Post-Effective Amendment No. 39, Filed on July 31, 1998
(File Nos. 33-16905, 811-05309)).
(6)(h) Sub-Advisory Agreement dated July 24, 1998, between U.S.
Bank National Association, as assigned to U.S. Bancorp
Piper Jaffray Asset Management, Inc. on May 2, 2001, and
Federated Global Investment Management Corp., with respect
to Strategic Income Fund (Incorporated by reference to
Exhibit 5(g) to Post-Effective Amendment No. 39, Filed on
July 31, 1998 (File Nos. 33-16905, 811-05309)).
(7)(a) Distribution Agreement [Class A and Class Y Shares,]
between the Registrant and Quasar Distributors, LLC
(Incorporated by reference to Exhibit e(1) to
Post-Effective Amendment No. 58, filed on September 21,
2001 (File Nos. 33-16905, 811-05309)).
(7)(b) Distribution and Service Agreement [Class B] between the
Registrant and Quasar Distributors, LLC (Incorporated by
reference to Exhibit e(2) to Post-Effective Amendment No.
58, filed on September 21, 2001 (File Nos. 33-16905,
811-05309)).
(7)(c) Distribution and Service Agreement [Class C] between the
Registrant and Quasar Distributors, LLC (Incorporated by
reference to Exhibit e(3) to Post-Effective Amendment No.
58, filed on September 21, 2001 (File Nos. 33-16905,
811-05309)).
(7)(d) Shareholder Service Plan and Agreement [Class S] between
Registrant and Quasar Distributors, LLC (Incorporated by
reference to Exhibit e(4) to Post-Effective Amendment No.
58, filed on September 21, 2001 (File Nos. 33-16905,
811-05309)).
(7)(e) Dealer Agreement (Incorporated by reference to Exhibit e(5)
to Post-Effective Amendment No. 58, filed on September 21,
2001 (File Nos. 33-16905, 811-05309)).
(8) Deferred Compensation Plan for Directors Trust Agreement
dated January 1, 2000 (Incorporated by reference to Exhibit
(f) to Post-Effective Amendment No. 46, Filed on December
28, 2000 (File Nos. 33-16905, 811-05309)).
(9)(a) Custodian Agreement dated September 20, 1993, between the
Registrant and First Trust National Association, as
supplemented through August 1994 (Incorporated by reference
to Exhibit (8) to Post-Effective Amendment No. 18 (File
Nos. 33-16905, 811-05309)).
(9)(b) Supplement dated March 15, 1994, to Custodian Agreement
dated September 20, 1993 (File Nos. 33-16905, 811-05309).
(9)(c) Further Supplement dated November 21, 1997, with respect to
International Index Fund, and July 23, 1998, with respect
to Strategic Income Fund and Emerging Markets Fund, to
Custodian Agreement dated September 20, 1993 (Incorporated
by reference to Exhibit 8(c) to Post-Effective Amendment
No. 39, Filed on July 31, 1998 (File Nos. 33-16905,
811-05309)).
(9)(d) Compensation Agreement pursuant to Custodian Agreement
dated September 20, 1993, as amended (Incorporated by
reference to Exhibit (g)(4) to Post-Effective Amendment No.
54, Filed on June 27, 2001 (File Nos. 33-16905,
811-05309)).
(9)(e) Compensation Agreement dated as of September 19, 2001,
pursuant to Custodian Agreement dated September 20, 1993,
as amended.
(9)(f) Assignment of Custodian Agreements and Security Lending
Agency Agreement to U.S. Bank National Association, dated
May 1, 1998 (Incorporated by reference to Exhibit (g)(5) to
Post-Effective Amendment No. 41, Filed on December 2, 1998
(File Nos. 33-16905, 811-05309)).
(9)(g) Further Supplement to Custodian Agreement dated December 8,
1999 (Incorporated by reference to Exhibit (g)(6) to
Post-Effective Amendment No. 44, Filed on January 28, 2000
(File Nos. 33-16905, 811-05309)).
(10)(a) Distribution Plan [Class A], Retail Class (Incorporated by
reference to Exhibit (m)(1) to Post-Effective Amendment No.
46, Filed on December 28, 2000 (File Nos. 33-16905,
811-05309)).
(10)(b) Distribution Plan [Class B] Contingent Deferred Sales
Change Class. (Incorporated by reference to Exhibit 15(b)
to Post-Effective Amendment No. 21, Filed on May 15, 1995
(File Nos. 33-16905, 811-05309)).
(10)(c) Service Plan [Class B] (Incorporated by reference to
Exhibit (15)(c) to Post-Effective Amendment No. 21, Filed
on May 15, 1995 (File Nos. 33-16905, 811-05309)).
(10)(d) Distribution Plan [Class C] Level-Load Class (Incorporated
by reference to Exhibit (m)(4) to Post-Effective Amendment
No. 42, Filed on February 1, 1999 (File Nos. 33-16905,
811-05309)).
(10)(e) Service Plan [Class C] (Incorporated by reference to
Exhibit (m)(5) to Post-Effective Amendment No. 42, Filed on
February 1, 1999 (File Nos. 33-16905, 811-05309)).
(10)(f) Multiple Class Plan Pursuant to Rule 18f-3, dated June 1,
2001 (Incorporated by reference to Exhibit (n)(1) to
Post-Effective Amendment No. 54, Filed on June 27, 2001
(File Nos. 33-16905, 811-05309)).
** (11) Opinion and consent of Dorsey & Whitney LLP.
** (12) Opinion of Faegre & Benson LLP regarding tax matters.
(13) Not applicable.
** (14) Consent of Ernst & Young LLP.
(15) None.
** (16) Powers of Attorney.
** (17)(a) Form of Capital Growth Fund Proxy Card.
** (17)(b) Form of Relative Value Fund Proxy Card.
** (17)(c) Form of Growth & Income Fund Proxy Card.
** (17)(d) Form of Science & Technology Fund Proxy Card.
** (17)(e) Forms of Voting Instructions
- --------------------------------------------------------------------------------
* Filed herewith as Exhibit A to the Prospectus/Proxy Statement included in
Part A to this Registration Statement.
** Filed herewith.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of
a prospectus which is a part of this registration statement
by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act of
1933, as amended (the "1933 Act"), the reoffering
prospectus will contain the information called for by the
applicable registration form for reofferings by persons who
may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus
that is filed under paragraph (1) above will be filed as a
part of an amendment to the registration statement and will
not be used until the amendment is effective, and that, in
determining any liability under the 1933 Act, each
post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein,
and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of them.
SIGNATURES
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of the registrant in the City of Minneapolis and State
of Minnesota, on the 4th day of March, 2002.
FIRST AMERICAN INVESTMENT FUNDS, INC.
Registrant
By: /s/ James L. Chosy
----------------------------
James L. Chosy
Secretary
As required by the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature Title Date
--------- ----- ----
/s/ Jeffery M. Wilson Senior Vice President March 4, 2002
- -------------------------------
Jeffery M. Wilson
*Robert J. Dayton Director
- -------------------------------
(Robert J. Dayton)
*Roger A. Gibson Director
- -------------------------------
(Roger A. Gibson)
*Andrew M. Hunter III Director
- -------------------------------
(Andrew M. Hunter III)
*Leonard W. Kedrowski Director
- -------------------------------
(Leonard W. Kedrowski)
*John M. Murphy, Jr. Director
- -------------------------------
(John M. Murphy, Jr.)
*Richard K. Riederer Director
- -------------------------------
(Richard K. Riederer)
*Joseph D. Strauss Director
- -------------------------------
(Joseph D. Strauss)
*Virginia L. Stringer Director
- -------------------------------
(Virginia L. Stringer)
*James M. Wade Director
- -------------------------------
(James M. Wade)
*By: /s/ James L. Chosy Attorney-in-fact March 4, 2002
---------------------------
James L. Chosy