<Page>
-----------------------------
OMB APPROVAL
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OMB Number: 3235-0570
Expires: November 30, 2005
Estimated average burden
hours per response....... 5.0
-----------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05309
---------------------------------------------
First American Investment Funds, Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
800 Nicollet Mall Minneapolis, MN 55402
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Robert H. Nelson 800 Nicollet Mall Minneapolis, MN 55402
- -------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 800-677-3863
----------------------------
Date of fiscal year end: September 30, 2003
--------------------------
Date of reporting period: March 31, 2003
-------------------------
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its
regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street,
NW, Washington, DC 20549-0609. The OMB has reviewed this collection of
information under the clearance requirements of 44 U.S.C. Section 3507.
<Page>
Item 1. Report to Shareholders
<Page>
[GRAPHIC]
[FIRST AMERICAN FUNDS(TM) LOGO]
2003
SEMIANNUAL
REPORT
BOND FUNDS
OUR STRENGTH
WE ARE A PERFORMANCE-DRIVEN,
INDEPENDENT-STYLE FIRM, BACKED
BY THE RESOURCES AND STABILITY OF A
LEADING FINANCIAL ORGANIZATION.
OUR GOAL
SUPERIOR LONG-TERM PERFORMANCE.
OUR PLEDGE
WE TAILOR OUR APPROACH TO YOUR
INVESTMENT NEEDS AND MEASURE OUR
PERFORMANCE AGAINST YOUR GOALS.
<Page>
[GRAPHIC]
FIRST AMERICAN FUNDS
ON THE COVER
OUR CORPORATE CONSTITUTION
THIS STATEMENT IS DESIGNED TO CAPTURE THE CHARACTER AND AMBITION OF OUR FIRM. WE
ARE FOUNDED ON STRENGTH, FOCUSED ON OUR GOAL, AND COMMITTED TO OUR PLEDGE.
OUR IMAGE-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.
[SIDENOTE]
OUR FUND FAMILY
HIGHER RISK AND RETURN POTENTIAL
SECTOR FUNDS
INTERNATIONAL FUND
SMALL CAP FUNDS
MID CAP FUNDS
LARGE CAP FUNDS
GROWTH & INCOME FUNDS
INDEX FUNDS
ASSET ALLOCATION FUNDS
BOND FUNDS
- CORE BOND
- CORPORATE BOND
- HIGH INCOME BOND
- INTERMEDIATE GOVERNMENT BOND
- INTERMEDIATE TERM BOND
- SHORT TERM BOND
- U.S. GOVERNMENT MORTGAGE
TAX FREE BOND FUNDS
MONEY MARKET FUNDS
LOWER RISK AND RETURN POTENTIAL
FUND CATEGORIES ARE PRESENTED ACCORDING TO RISK
AND RETURN POTENTIAL. FUNDS WITHIN EACH CATEGORY
ARE LISTED IN ALPHABETICAL ORDER.
MUTUAL FUND INVESTING INVOLVES RISK; PRINCIPAL LOSS IS POSSIBLE.
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
<Page>
FIRST AMERICAN FUNDS ONLINE
@ firstamericanfunds.com
Visit the First American Funds website for useful information on each of our
funds, including fund prices, performance, fund management bios, dividends, and
downloadable fact sheets. You'll also find college and retirement planning tools
and general investor education.
[GRAPHIC]
ONLINE FEATURES AND FUNCTIONALITY INCLUDE:
- - The ability to deepen your understanding of the fund family by learning
about the full range of investment choices available to you through First
American Funds
- - The ability to educate yourself through market and investment strategy
commentaries
We stand behind our commitment to serve you with excellence. For more
information, call First American Funds Investor Services at 800.677.FUND or
visit firstamericanfunds.com.
[SIDENOTE]
TABLE OF CONTENTS
Schedule of Investments 2
Statements of Assets and Liabilities 32
Statements of Operations 34
Statements of Changes in Net Assets 36
Financial Highlights 38
Notes to Financial Statements 44
1
<Page>
SCHEDULE OF INVESTMENTS March 31, 2003 (unaudited)
CORE BOND FUND
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- -----------------------------------------------------------------
CORPORATE BONDS - 31.9%
CONSUMER GOODS - 1.1%
Bristol-Myers Squibb
5.750%, 10/01/11 $ 5,000 $ 5,371
General Mills
6.000%, 02/15/12 14,335 15,759
Unilever Capital
5.900%, 11/15/32 5,250 5,457
----------
26,587
----------
ENERGY - 1.6%
Amerada Hess
6.650%, 08/15/11 8,200 8,899
ConocoPhillips
3.625%, 10/15/07 (A) 8,400 8,549
Consolidated Natural Gas
7.250%, 10/01/04 4,070 4,348
Kinder Morgan Energy Partners
7.300%, 08/15/33 9,605 10,638
Valero Energy
6.875%, 04/15/12 (A) 6,300 6,766
----------
39,200
----------
FINANCE - 13.9%
Aetna Services
6.750%, 09/15/13 4,525 5,011
Associated P&C Holdings
6.750%, 07/15/03 (B) 4,895 4,951
Bank of America
7.125%, 09/15/06 7,000 7,997
BankBoston
6.375%, 04/15/08 8,350 9,263
Boeing Capital
5.800%, 01/15/13 (A) 7,760 7,690
Citigroup
5.625%, 08/27/12 (A) 20,000 21,359
Core Investment Grade Trust
4.727%, 11/30/07 (A) 20,215 20,585
Countrywide Home Loans, Series K
4.250%, 12/19/07 (A) 12,690 13,017
Credit Suisse First Boston
5.875%, 08/01/06 7,000 7,543
Donaldson Lufkin Jenrette
6.875%, 11/01/05 1,000 1,101
Dresdner Bank
7.250%, 09/15/15 8,052 8,618
ERAC USA Finance
7.350%, 06/15/08 (B) 7,000 7,895
First National Bank of Chicago
8.080%, 01/05/18 1,500 1,841
Ford Motor Credit
6.875%, 02/01/06 6,000 5,907
5.800%, 01/12/09 20,560 18,218
GE Global Insurance
7.750%, 06/15/30 7,000 8,015
General Motors Acceptance
6.125%, 08/28/07 (A) 20,750 21,121
6.875%, 09/15/11 2,000 1,972
Goldman Sachs
5.500%, 11/15/14 8,550 8,838
Household Finance
4.625%, 01/15/08 23,000 23,662
HSBC Bank
6.950%, 03/15/11 $ 2,025 $ 2,361
International Lease Finance
5.750%, 02/15/07 4,560 4,795
Series G
8.150%, 10/01/04 800 863
J.P. Morgan Chase
5.750%, 01/02/13 13,500 14,144
John Deere Capital
7.000%, 03/15/12 10,250 11,882
Lehman Brothers Holdings
6.625%, 01/18/12 10,000 11,211
MBNA America Bank
6.625%, 06/15/12 (A) (B) 9,000 9,431
Merrill Lynch
5.880%, 01/15/04 6,000 6,192
6.875%, 11/15/18 3,125 3,541
Series B
2.470%, 03/10/06 7,000 6,887
Morgan Stanley
6.799%, 06/15/12 (B) 7,500 8,292
5.300%, 03/01/13 (A) 10,550 10,752
National Rural Utilities
5.750%, 08/28/09 (A) 5,300 5,699
7.250%, 03/01/12 3,250 3,770
Newcourt Credit Group, Series B
6.875%, 02/16/05 7,490 7,920
Norwest
6.550%, 12/01/06 5,000 5,657
Salomon
7.000%, 06/15/03 6,300 6,371
Washington Mutual Bank
5.500%, 01/15/13 (A) 4,110 4,325
Westdeutsche Landesbank
6.050%, 01/15/09 6,200 6,871
----------
335,568
----------
MANUFACTURING - 3.2%
Aluminum Company of America
5.375%, 01/15/13 4,000 4,187
Bombardier
6.750%, 05/01/12 (A) (B) 3,250 2,470
Centex
7.500%, 01/15/12 5,445 6,162
DaimlerChrysler
4.750%, 01/15/08 15,500 15,646
Dow Chemical
6.000%, 10/01/12 8,200 8,366
Ford Motor
7.450%, 07/16/31 3,250 2,538
General Motors
8.875%, 05/15/03 2,000 2,011
Honeywell International
7.000%, 03/15/07 5,000 5,653
Raytheon
6.150%, 11/01/08 17,800 19,327
Weyerhaeuser
6.750%, 03/15/12 (A) 10,250 11,244
----------
77,604
----------
</Table>
The accompanying notes are an integral part of the financial statements.
2
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- -----------------------------------------------------------------
REAL ESTATE - 0.9%
Boston Properties (REIT)
6.250%, 01/15/13 (B) $ 6,000 $ 6,280
EOP Operating
6.750%, 02/15/08 6,000 6,650
Security Capital Group
7.750%, 11/15/03 2,850 2,965
Simon Property Group (REIT)
7.750%, 01/20/11 6,000 6,907
----------
22,802
----------
SERVICES - 3.2%
AOL Time Warner
6.875%, 05/01/12 14,300 15,195
AT&T Broadband
8.375%, 03/15/13 14,775 17,410
Duty Free International
7.000%, 01/15/04 (C) (D) 6,800 3,400
Kroger
6.750%, 04/15/12 14,650 16,224
UnitedHealth Group
6.600%, 12/01/03 10,000 10,336
Wyeth
5.250%, 03/15/13 15,300 15,715
----------
78,280
----------
TRANSPORTATION - 1.0%
America West Airlines, Series 99-1
7.930%, 01/02/19 2,660 2,713
Continental Airlines, Series 99-2
7.056%, 09/15/09 5,365 4,335
CSX, Series C
5.850%, 12/01/03 7,600 7,797
Northwest Airlines, Series 991A
6.810%, 02/01/20 3,976 2,982
Southwest Airlines, Series 2001-1, Class A-1
5.100%, 05/01/06 5,124 5,451
----------
23,278
----------
UTILITIES - 6.4%
Appalachian Power, Series E
4.800%, 06/15/05 3,000 3,098
AT&T
7.000%, 11/15/06 (A) 13,800 14,542
6.500%, 03/15/13 2,000 1,968
AT&T Wireless Services
7.875%, 03/01/11 3,050 3,325
8.125%, 05/01/12 2,000 2,180
British Telecom
8.375%, 12/15/10 8,250 9,969
Conectiv, Series A
6.730%, 06/01/06 5,856 6,232
Constellation Energy
7.000%, 04/01/12 6,030 6,714
Deutsche Telecom
7.750%, 06/15/05 500 550
8.000%, 06/15/10 6,200 7,244
FPL Group Capital
7.625%, 09/15/06 3,000 3,404
France Telecom
9.250%, 03/01/11 (A) (E) 7,960 9,536
GTE North, Series A, Callable 04/01/03 @ 104
9.600%, 01/01/21 2,500 2,612
Northern State Power - Minnesota, Series B
8.000%, 08/28/12 (A) $ 10,825 $ 13,268
Oncor Electric Delivery
6.375%, 01/15/15 (B) 8,000 8,715
PSEG Power
6.950%, 06/01/12 (A) 5,500 6,080
PSI Energy
7.850%, 10/15/07 9,100 9,990
Southern Capital Funding, Series A
5.300%, 02/01/07 7,980 8,476
Sprint
9.000%, 10/15/19 1,750 1,680
Sprint Capital
6.125%, 11/15/08 9,350 9,303
8.375%, 03/15/12 (A) 2,600 2,756
Verizon Global Funding
7.250%, 12/01/10 10,500 12,153
7.750%, 12/01/30 (A) 5,000 5,992
Verizon Wireless
5.375%, 12/15/06 3,300 3,516
----------
153,303
----------
YANKEE - 0.6%
Pemex Project
9.125%, 10/13/10 11,995 13,914
----------
TOTAL CORPORATE BONDS
(Cost $748,092) 770,536
----------
U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES - 30.4%
ADJUSTABLE RATE (G) - 0.0%
GNMA Pool
7.750%, 08/20/23, #8259 7 8
----------
FIXED RATE - 30.4%
FHLMC Gold Pool
6.500%, 05/01/17, #G11272 (A) 16,455 17,375
6.500%, 01/01/28, #G00876 (A) 9,178 9,614
6.500%, 09/01/28, #C14872 13,167 13,768
6.500%, 12/01/28, #C00689 (A) 11,244 11,757
6.500%, 04/01/29, #C00742 6,683 6,980
6.500%, 01/01/30, #C55738 (A) 5,893 6,154
6.500%, 11/01/30, #G01149 (A) 1,566 1,636
6.500%, 02/01/31, #C47895 (A) 624 651
6.500%, 03/01/31, #G01244 18,610 19,459
6.500%, 05/01/31, #C51020 7,971 8,312
FHLMC Gold Pool TBA
6.500%, 11/01/28, #C00676 (F) 16,196 16,935
FHLMC Pool
7.500%, 04/01/07, #140151 17 18
FNMA Pool
7.750%, 06/01/08, #001464 32 34
6.255%, 09/01/13, #360500 6,500 7,272
5.500%, 02/01/14, #440780 (A) 14,352 15,020
7.000%, 02/01/15, #535206 (A) 3,513 3,766
7.000%, 08/01/16, #591038 (A) 8,332 8,889
5.500%, 12/01/17, #673010 (A) 23,445 24,332
6.000%, 12/01/17, #254547 (A) 19,881 20,807
6.000%, 10/01/22, #254513 (A) 22,946 23,928
7.000%, 04/01/26, #340798 3,459 3,666
7.000%, 05/01/26, #250551 2,873 3,045
6.500%, 05/01/28, #415794 4,825 5,047
6.000%, 12/01/28, #456276 (A) 8,174 8,496
6.500%, 02/01/29, #252255 (A) 12,474 13,047
6.500%, 03/01/29, #490758 10,050 10,512
</Table>
3
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- -----------------------------------------------------------------
6.000%, 05/01/29, #323715 (A) 11,041 $ 11,475
6.500%, 07/01/29, #252570 (A) 7,372 7,702
6.500%, 08/01/29, #252645 54 57
6.000%, 12/01/29, #545061 (A) 18,181 18,897
6.500%, 05/01/30, #535300 (A) 5,294 5,531
6.500%, 02/01/31, #568895 618 645
6.000%, 05/01/31, #511797 (A) 7,721 8,008
7.000%, 07/01/32, #254379 (A) 21,664 22,835
7.000%, 07/01/32, #545813 10,971 11,564
7.000%, 07/01/32, #545815 (A) 7,962 8,392
6.500%, 08/01/32, #658822 (A) 15,954 16,642
6.500%, 09/01/32, #656918 (A) 26,547 27,691
6.000%, 10/01/32, #661581 (A) 12,146 12,591
6.500%, 12/01/32, #669168 (A) 13,675 14,265
6.000%, 01/01/33, #676647 (A) 24,390 25,282
6.000%, 03/01/33, #688330 19,983 20,714
5.500%, 04/01/33, #694605 (A) 25,000 25,523
FNMA TBA
5.000%, 04/01/18 (F) 41,000 42,115
4.500%, 05/01/18 (F) 25,000 25,211
6.500%, 06/01/30 (F) 29,000 30,251
6.500%, 06/01/30 (F) 15,000 15,647
5.500%, 11/01/32 (F) 30,000 30,637
5.500%, 04/01/33 (F) 15,000 15,314
GNMA Pool
9.000%, 09/15/08, #025091 11 12
9.000%, 09/15/08, #026734 6 6
9.000%, 11/15/08, #023548 17 19
9.000%, 12/15/08, #026268 13 14
6.500%, 04/15/29, #487110 (A) 9,497 10,001
7.500%, 11/15/30, #537699 (A) 6,324 6,760
6.000%, 03/15/31, #541302 (A) 2,597 2,716
6.000%, 03/15/31, #541306 1,535 1,605
6.000%, 03/15/31, #554675 (A) 3,323 3,475
6.500%, 05/15/32, #587673 (A) 9,672 10,162
6.500%, 08/15/32, #590376 14,181 14,895
GNMA Pool TBA
6.000%, 03/15/33, #603520 (F) 25,000 26,078
----------
733,252
----------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES
(Cost $721,549) 733,260
----------
U.S. GOVERNMENT & AGENCY SECURITIES - 19.8%
U.S. AGENCY DEBENTURES - 9.0%
FHLB
4.470%, 11/15/06 75 78
7.000%, 06/29/09 700 743
7.000%, 08/19/09 500 533
FHLMC
3.750%, 04/15/04 (A) 20,500 21,047
5.000%, 05/15/04 (A) 23,000 23,938
4.250%, 06/15/05 (A) 14,500 15,288
2.875%, 09/26/05 (A) 14,000 14,084
FNMA
3.250%, 11/14/05 (A) 13,000 13,125
2.750%, 12/16/05 (A) 12,160 12,252
4.250%, 07/15/07 (A) 29,000 30,664
6.250%, 02/01/11 (A) 16,000 17,952
5.000%, 11/17/11 (A) 16,200 16,726
5.250%, 08/01/12 32,000 33,410
6.625%, 11/15/30 (A) 15,000 17,730
----------
217,570
----------
U.S. TREASURIES - 10.8%
U.S. Treasury Bonds
8.000%, 11/15/21 (A) $ 29,123 $ 40,581
6.000%, 02/15/26 32,250 36,961
5.375%, 02/15/31 (A) 44,695 48,369
U.S. Treasury Notes
3.250%, 12/31/03 (A) 20,000 20,325
5.875%, 02/15/04 (A) 400 417
7.250%, 08/15/04 (A) 200 216
7.875%, 11/15/04 (A) 800 883
1.750%, 12/31/04 (A) 13,500 13,580
1.500%, 02/28/05 (A) 14,975 14,989
6.500%, 05/15/05 (A) 200 221
6.500%, 08/15/05 (A) 500 556
5.625%, 02/15/06 (A) 1,000 1,104
6.875%, 05/15/06 500 572
3.000%, 02/15/08 (A) 15,260 15,441
3.875%, 02/15/13 (A) 35,919 36,076
U.S. Treasury Notes (TIPS)
3.625%, 01/15/08 (A) 15,181 16,989
3.875%, 04/15/29 (A) 9,394 11,542
----------
258,822
----------
TOTAL U.S. GOVERNMENT & AGENCY SECURITIES
(Cost $465,590) 476,392
----------
ASSET-BACKED SECURITIES - 7.3%
AUTOMOBILES - 3.1%
Capital One Auto Finance Trust
Series 2001-A, Class A4
5.400%, 05/15/08 10,000 10,615
Chase Manhattan Auto Owner Trust
Series 2002-B, Class A4
4.210%, 01/15/09 10,000 10,441
DaimlerChrysler Auto Trust
Series 2000-C, Class A3
6.820%, 09/06/04 2,463 2,477
WFS Financial Owner Trust
Series 2003-1, Class A3
2.030%, 08/20/07 14,750 14,820
Whole Auto Loan Trust
Series 2002-1, Class A3
2.600%, 08/15/06 21,790 22,138
World Omni Auto Receivables Trust
Series 2001-B, Class A4
4.490%, 08/20/08 13,000 13,583
----------
74,074
----------
COMMERCIAL - 1.7%
Asset Securitization
Series 1996-MD6, Class A1B
6.880%, 11/13/29 18,600 19,103
Bank of America - First Union NB Commercial
Mortgages, Series 2001-3, Class A1
4.890%, 04/11/37 9,425 9,824
Merrill Lynch Mortgage Investors
Series 1995-C3, Class A3
8.854%, 12/26/25 (G) 4,283 4,465
Morgan Stanley Capital Investments
Series 1999-FNV1, Class A1
6.120%, 03/15/31 8,172 8,811
----------
42,203
----------
</Table>
The accompanying notes are an integral part of the financial statements.
4
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- -----------------------------------------------------------------
CREDIT CARDS - 1.8%
Citibank Credit Card Issuance Trust
Series 2003-A2, Class A2
2.700%, 01/15/08 $ 10,575 $ 10,697
Series 2003-A3, Class A3
3.100%, 03/10/10 5,900 5,852
Citibank Credit Card Master Trust I
Series 1997-6, Class A
0.000%, 08/15/06 (H) 8,800 8,599
Discover Card Master Trust
Series 2001-5, Class A
5.300%, 11/16/06 7,000 7,304
Sears Credit Account Master Trust
Series 1995-5, Class A
6.050%, 01/15/08 699 714
Series 2000-1, Class A
7.250%, 11/15/07 10,000 10,188
----------
43,354
----------
HOME EQUITY - 0.6%
Aames Mortgage Trust
Series 1997-B, Class A6
6.920%, 06/15/27 2,855 2,861
Amresco Residential Security Mortgage
Series 1997-3, Class A9
6.960%, 03/25/27 5,411 5,462
Contimortgage Home Equity Loan Trust
Series 1998-1, Class A6
6.580%, 12/15/18 585 595
Series 1997-5, Class A5
6.630%, 12/15/20 736 750
Series 1997-3, Class A8
7.580%, 08/15/28 2,792 2,952
Delta Home Equity Loan Trust
Series 1997-3 Class A6F
6.860%, 10/25/28 1,033 1,064
Green Tree Home Equity Loan Trust
Series 1998-C, Class A6
6.290%, 07/15/29 154 154
----------
13,838
----------
MANUFACTURED HOUSING - 0.1%
Green Tree Financial
Series 1993-4, Class A4
6.600%, 01/15/19 2,479 2,498
----------
TRANSPORTATION - 0.0%
Northwest Airlines
Series 1997-1, Class 1C
7.039%, 07/02/08 539 383
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $171,880) 176,350
----------
CMO - PRIVATE MORTGAGE-BACKED SECURITIES - 5.0%
FIXED RATE - 5.0%
GE Capital Mortgage Services
Series 1994-17, Class A6
7.000%, 05/25/24 7,000 7,175
Series 1994-17, Class A7
7.000%, 05/25/24 5,179 5,525
Greenwich Capital Commercial Funding
Series 2002-C1, Class A4
4.948%, 01/11/35 15,000 15,383
Nomura Asset Securities
Series 1998-D6, Class A1B
6.590%, 03/15/30 12,400 14,079
Wachovia Bank Commercial Mortgage Trust
Series 2002-C1, Class A4
6.287%, 04/15/34 $ 11,365 $ 12,712
Washington Mutual
Series 1999-WM2, Class 2A
7.000%, 11/19/14 2,199 2,260
Series 2001-AR6, Class A5
5.603%, 01/26/32 16,500 16,654
Series 2002-AR4, Class A7
5.598%, 04/25/32 15,000 15,176
Wells Fargo Mortgage Backed Securities Trust
Series 2003-D, Class A1
4.931%, 02/25/33 31,371 32,206
Westam Mortgage Financial
Series 11, Class A
6.360%, 08/29/20 348 369
----------
TOTAL CMO - PRIVATE MORTGAGE-BACKED SECURITIES
(Cost $118,842) 121,539
----------
CMO - U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES - 3.4%
FIXED RATE - 2.7%
FHLMC REMIC
Series T-47, Class A2
1.650%, 08/27/05 15,000 15,002
Series 1998-M1, Class A2
6.250%, 01/25/08 7,090 7,737
Series 6, Class C
9.050%, 06/15/19 119 130
Series 1022, Class J
6.000%, 12/15/20 166 169
Series 162, Class F
7.000%, 05/15/21 521 542
Series 188, Class H
7.000%, 09/15/21 1,133 1,175
Series 1201, Class E
7.400%, 12/15/21 13 13
Series 1790, Class A
7.000%, 04/15/22 458 474
Series 1723, Class PJ
7.000%, 02/15/24 (A) 7,133 7,684
Series 1699, Class TD
6.000%, 03/15/24 (A) 10,000 10,652
FNMA REMIC
Series 1988-24, Class G
7.000%, 10/25/18 250 268
Series 1989-44, Class H
9.000%, 07/25/19 198 221
Series 1989-90, Class E
8.700%, 12/25/19 43 46
Series 1990-30, Class E
6.500%, 03/25/20 188 197
Series 1990-61, Class H
7.000%, 06/25/20 181 194
Series 1990-72, Class B
9.000%, 07/25/20 123 137
Series 1990-102, Class J
6.500%, 08/25/20 164 173
Series 1990-105, Class J
6.500%, 09/25/20 (A) 1,656 1,773
Series 1991-56, Class M
6.750%, 06/25/21 667 706
Series 1992-120, Class C
6.500%, 07/25/22 284 298
</Table>
5
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000)/SHARES VALUE (000)
- -----------------------------------------------------------------
Series 1991-1, Class PG
6.500%, 04/25/28 (A) $ 15,343 $ 16,271
----------
63,862
----------
Z-BONDS (I) - 0.7%
FHLMC REMIC
Series 1118, Class Z
8.250%, 07/15/21 343 365
Series 1677, Class Z
7.500%, 07/15/23 (A) (G) 5,916 6,802
FNMA REMIC
Series 1991-134, Class Z
7.000%, 10/25/21 (A) 1,245 1,326
Series 1996-35, Class Z
7.000%, 07/25/26 (A) 8,654 9,298
----------
17,791
----------
TOTAL CMO - U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES
(Cost $74,699) 81,653
----------
COMMERCIAL PAPER - 1.7%
Corporate Asset Funding
1.250%, 04/09/03 40,000 39,989
----------
TOTAL COMMERCIAL PAPER
(Cost $39,989) 39,989
----------
RELATED PARTY MONEY MARKET FUND - 8.1%
First American Prime
Obligations Fund, Class Y (J) 195,473,321 195,473
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $195,473) 195,473
----------
INVESTMENTS PURCHASED WITH CASH PROCEEDS
FROM SECURITIES LENDING - 39.4%
COMMERCIAL PAPER - 5.6%
CS First Boston
1.638%, 12/01/03 16,669 16,669
Danske Bank
1.508%, 12/22/03 16,669 16,669
Goldman Sachs
1.518%, 08/28/03 21,670 21,670
Morgan Stanley
1.518%, 06/17/03 8,334 8,334
1.518%, 07/08/03 6,001 6,001
1.518%, 09/22/03 8,334 8,334
Orchard Park
1.475%, 01/06/04 16,669 16,669
UBS Financial
1.390%, 04/01/03 41,666 41,666
----------
TOTAL COMMERCIAL PAPER 136,012
----------
CORPORATE OBLIGATIONS - 4.3%
CS First Boston
1.760%, 04/11/03 16,669 16,669
Deutsche Bank
1.470%, 04/11/03 8,334 8,334
1.580%, 12/11/03 6,668 6,668
General Electric Capital Corporation
1.355%, 07/09/07 8,334 8,334
Merrill Lynch
1.538%, 05/05/03 14,169 14,169
Monet Trust
1.360%, 12/28/03 16,669 16,669
SMM Trust 2002-M
1.450%, 09/23/03 $ 16,669 $ 16,669
URI Trust
1.460%, 09/18/03 16,669 16,669
----------
TOTAL CORPORATE OBLIGATIONS 104,181
----------
MONEY MARKET FUNDS - 3.7%
AIM Liquid Assets Portfolio 28,337,105 28,337
Dreyfus Cash Manage Plus Fund 1,666,889 1,667
Evergreen Institutional Money
Market Fund 5,834,110 5,834
HSBC Investor Money Market
Fund - Class I 5,000,666 5,001
Merrill Lynch Premier
Institutional Fund 32,285,158 32,285
Merrimac Cash Series Fund 5,000,666 5,001
One Group Institutional Prime
Money Market Fund 10,001,331 10,001
Reserve Primary Fund 833,444 833
----------
TOTAL MONEY MARKET FUNDS 88,959
----------
OTHER SHORT-TERM INVESTMENTS - 3.6%
Allied Irish Bank
1.340%, 05/09/03 8,334 8,334
1.330%, 06/02/03 16,669 16,669
Commonwealth Life
1.678%, 04/01/03 8,416 8,416
General Electric Capital Assurance
1.370%, 12/19/03 3,334 3,334
Premium Asset Trust 02-7
1.060%, 08/23/03 10,618 10,618
Security Life Denver
1.381%, 01/13/04 16,669 16,669
1.490%, 03/15/04 21,670 21,670
----------
TOTAL OTHER SHORT-TERM INVESTMENTS 85,710
----------
REPURCHASE AGREEMENTS - 22.2%
Bear Stearns
1.420%, 04/10/03 33,338 33,338
CS First Boston
1.370%, 04/01/03 33,338 33,338
1.380%, 04/01/03 5,167 5,167
1.380%, 04/01/03 41,672 41,672
Goldman Sachs
1.520%, 04/01/03 25,003 25,003
1.420%, 04/07/03 16,669 16,669
1.360%, 06/10/03 8,334 8,334
1.400%, 06/11/03 8,334 8,334
Greenwich Capital Markets
1.430%, 04/01/03 50,007 50,007
Lehman Brothers
1.560%, 04/01/03 16,669 16,669
1.640%, 04/01/03 12,502 12,502
1.640%, 04/01/03 54,174 54,174
Merrill Lynch
1.360%, 04/01/03 20,836 20,836
1.500%, 04/01/03 50,007 50,007
1.560%, 04/01/03 25,003 25,003
1.560%, 04/01/03 33,338 33,338
Morgan Stanley
1.470%, 04/01/03 25,003 25,003
1.510%, 04/01/03 51,840 51,840
Salomon Smith Barney
1.540%, 04/01/03 25,003 25,003
----------
TOTAL REPURCHASE AGREEMENTS 536,237
----------
</Table>
The accompanying notes are an integral part of the financial statements.
6
<Page>
<Table>
<Caption>
DESCRIPTION VALUE (000)
- -----------------------------------------------------------------
TOTAL INVESTMENTS PURCHASED WITH CASH PROCEEDS
FROM SECURITIES LENDING
(Cost $951,099) $ 951,099
----------
TOTAL INVESTMENTS - 147.0%
(Cost $3,487,213) 3,546,291
----------
OTHER ASSETS AND LIABILITIES, NET - (47.0)% (1,133,471)
----------
TOTAL NET ASSETS - 100.0% $2,412,820
----------
</Table>
(A) This security or a portion of this security is out on loan at March 31,
2003. Total loaned securities had a value of $933,552,922 at March 31,
2003. See note 2 in Notes to Financial Statements.
(B) Security sold within the terms of a private placement memorandum, exempt
from registration under Rule 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional buyers." These securities have been determined to
be liquid under the guidelines established by the Funds' board of
directors. As of March 31, 2003, the value of these investments was
$48,032,882 or 2.0% of total net assets.
(C) Securities considered illiquid or restricted. See note 2 in Notes to
Financial Statements.
(D) Security valued at fair value under guidelines established and approved by
the Funds' board of directors. Total fair valued securities had a value of
$3,400,000, which represents 0.1% of total net assets at March 31, 2003.
See note 2 in Notes to Financial Statements.
(E) Delayed Interest (Step-Bonds) - Represents securities that remain
zero-coupon securities until a predetermined date at which time the stated
coupon rate becomes effective and interest becomes payable at regular
intervals. Interest rate shown represents current yield at March 31, 2003,
based upon the estimated timing and amount of future interest and principal
payments.
(F) On March 31, 2003, the total cost of investments purchased on a when-issued
basis was $201,831,993.
(G) Variable Rate Security - The rate shown is the rate in effect as of
March 31, 2003.
(H) Principal only.
(I) Z-Bonds - Represents securities that pay no interest or principal during
their accrual periods, but accrue additional principal at specified rates.
Interest rate shown represents current yield based upon the cost basis and
estimated future cash flows.
(J) This money market fund is advised by U.S. Bancorp Asset Management, Inc.,
which also serves as advisor for this Fund. See note 3 in Notes to
Financial Statements.
CMO - Collateralized Mortgage Obligation
FHLB - Federal Loan Home Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
REIT - Real Estate Investment Trust
REMIC - Real Estate Mortgage Investment Conduit
TBA - To Be Announced
TIPS - Treasury Inflation Protection Security
CORPORATE BOND FUND
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- -----------------------------------------------------------------
CORPORATE BONDS - 92.6%
CONSUMER GOODS - 2.8% General Mills
6.000%, 02/15/12 $ 1,950 $ 2,144
Tyson Foods
8.250%, 10/01/11 1,500 1,660
Unilever Capital
5.900%, 11/15/32 1,500 1,559
UST
6.625%, 07/15/12 2,000 2,211
----------
7,574
----------
ENERGY - 4.5%
Amerada Hess
7.875%, 10/01/29 1,970 2,186
ConocoPhillips
3.625%, 10/15/07 (A) 1,500 1,527
El Paso Energy
7.800%, 08/01/31 1,500 1,072
Kinder Morgan Energy Partners
7.300%, 08/15/33 1,000 1,107
Ocean Energy
4.375%, 10/01/07 1,990 2,049
Schlumberger Technology
6.500%, 04/15/12 (B) 1,485 1,680
Valero Energy
6.875%, 04/15/12 (A) 1,500 1,611
Williams
7.750%, 06/15/31 (A) 990 762
----------
11,994
----------
FINANCE - 33.4%
Abbey National Capital Trust,
Callable 06/30/30 @ 100
8.963%, 12/29/49 (A) (C) 980 1,230
BankBoston
6.375%, 04/15/08 2,000 2,219
Bear Stearns
7.800%, 08/15/07 1,950 2,292
Boeing Capital
5.800%, 01/15/13 (A) 1,485 1,472
Capital One Bank
6.700%, 05/15/08 1,500 1,447
CIT
7.750%, 04/02/12 (A) 985 1,088
Core Investment Grade Trust
4.727%, 11/30/07 3,475 3,539
Countrywide Home Loans, Series K
4.250%, 12/19/07 (A) 2,000 2,052
Credit Suisse First Boston
5.875%, 08/01/06 (A) 3,000 3,233
Dresdner Bank
7.250%, 09/15/15 1,725 1,846
ERAC USA Finance
7.350%, 06/15/08 (B) 1,500 1,692
Ford Motor Credit
6.700%, 07/16/04 (A) 2,500 2,533
6.500%, 01/25/07 (A) 3,000 2,903
7.250%, 10/25/11 (A) 2,975 2,698
GATX Capital
8.250%, 09/01/03 1,500 1,498
GE Global Insurance
7.750%, 06/15/30 1,240 1,420
</Table>
7
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- -----------------------------------------------------------------
General Motors Acceptance
6.125%, 08/28/07 (A) $ 4,500 $ 4,580
6.875%, 09/15/11 (A) 4,000 3,943
Goldman Sachs
5.500%, 11/15/14 1,775 1,835
Household Finance
4.625%, 01/15/08 3,350 3,446
7.000%, 05/15/12 (A) 1,500 1,703
HSBC Capital Funding,
Callable 06/30/10 @ 100
9.547%, 12/31/49 (A) (B) 1,190 1,482
ING Capital Funding Trust III,
Callable 12/31/10 @ 100
8.439%, 12/31/10 1,500 1,756
J.P. Morgan Chase
5.750%, 01/02/13 (A) 3,600 3,772
Key Bank
7.000%, 02/01/11 1,830 2,108
Lehman Brothers Holdings
4.000%, 01/22/08 (A) 2,550 2,605
MBNA America Bank
6.625%, 06/15/12 (A) (B) 2,500 2,620
Merrill Lynch, Series B
2.470%, 03/10/06 1,950 1,919
Morgan Stanley
6.100%, 04/15/06 1,975 2,161
6.600%, 04/01/12 2,475 2,753
NB Capital Trust IV,
Callable 04/15/17 @ 103.85
8.250%, 04/15/27 2,100 2,421
Newcourt Credit Group, Series B
6.875%, 02/16/05 2,475 2,617
Ohio National Life Insurance
8.875%, 07/15/04 (B) 2,000 2,164
Royal Bank of Scotland,
Callable 09/30/31 @ 100
7.648%, 09/30/31 (A) (C) 2,000 2,364
SOC General Real Estate,
Callable 09/30/07 @ 100
7.640%, 12/29/49 (B) (C) 1,465 1,635
Sovereign Bancorp
10.500%, 11/15/06 1,000 1,172
Washington Mutual Finance
6.250%, 05/15/06 (A) 2,475 2,727
Wells Fargo,
Callable 12/15/06 @ 103.98
7.960%, 12/15/26 2,000 2,199
Zurich Capital Trust,
Callable 06/01/07 @ 104.19
8.376%, 06/01/37 (B) 1,980 1,766
----------
88,910
----------
MANUFACTURING - 11.0%
Abitibi-Consolidated
8.550%, 08/01/10 (A) 980 1,079
American Standard
7.375%, 04/15/05 980 1,029
Bombardier
6.750%, 05/01/12 (A) (B) 750 570
Centex
7.500%, 01/15/12 1,950 2,207
Cooper Tire & Rubber
8.000%, 12/15/19 980 1,067
DaimlerChrysler
4.750%, 01/15/08 (A) $ 2,950 $ 2,978
Delphi Auto Systems
6.550%, 06/15/06 985 1,054
Dow Chemical
6.000%, 10/01/12 (A) 2,475 2,525
Ford Motor
7.450%, 07/16/31 2,950 2,304
Harman International Industries
7.125%, 02/15/07 1,950 2,095
Lockheed Martin
8.500%, 12/01/29 1,230 1,607
Mohawk Industries
7.200%, 04/15/12 1,000 1,130
Northrop Grumman
7.750%, 02/15/31 (A) 1,955 2,392
Phelps Dodge
8.750%, 06/01/11 (A) 750 812
Raytheon
6.300%, 03/15/05 1,950 2,075
Tyco International
6.125%, 01/15/09 (A) 1,975 1,837
Weyerhaeuser
6.125%, 03/15/07 (A) 1,950 2,110
6.750%, 03/15/12 500 548
----------
29,419
----------
REAL ESTATE - 3.0%
Boston Properties (REIT)
6.250%, 01/15/13 (B) 985 1,031
Hospitality Properties (REIT),
Callable 08/15/12 @ 100
6.750%, 02/15/13 1,480 1,496
Prologis Trust (REIT)
7.050%, 07/15/06 1,500 1,635
Simon Property Group (REIT)
7.750%, 01/20/11 1,450 1,669
Vornado Realty (REIT)
5.625%, 06/15/07 1,975 2,013
----------
7,844
----------
SERVICES - 15.2%
AOL Time Warner
6.125%, 04/15/06 980 1,028
6.875%, 05/01/12 2,225 2,364
7.625%, 04/15/31 (A) 1,975 2,092
Aramark Services
6.750%, 08/01/04 2,000 2,087
AT&T Broadband
8.375%, 03/15/13 1,170 1,379
Autonation
9.000%, 08/01/08 1,000 1,047
Cendant
6.875%, 08/15/06 2,000 2,106
Clear Channel Communications
7.650%, 09/15/10 (A) 1,480 1,704
Cox Communications
7.750%, 11/01/10 (A) 990 1,146
Federated Department Stores
6.625%, 04/01/11 1,950 2,114
HCA Columbia Healthcare
8.750%, 09/01/10 1,000 1,160
Kroger
6.750%, 04/15/12 1,935 2,143
</Table>
The accompanying notes are an integral part of the financial statements.
8
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- -----------------------------------------------------------------
Lenfest Communications
8.375%, 11/01/05 $ 1,950 $ 2,165
McKesson
7.750%, 02/01/12 975 1,133
MGM Mirage
8.375%, 02/01/11 (A) 1,000 1,067
News America
6.625%, 01/09/08 (A) 2,000 2,199
Park Place Entertainment
7.875%, 12/15/05 1,000 1,027
Royal Caribbean Cruises
8.250%, 04/01/05 (A) 1,000 975
Starwood Hotels & Resorts
7.375%, 05/01/07 (B) 975 970
TCI Communications
8.750%, 08/01/15 1,000 1,215
Tenet Healthcare
6.375%, 12/01/11 (A) 1,485 1,429
Tricon Global Restaurant
7.650%, 05/15/08 1,000 1,075
Viacom
6.625%, 05/15/11 1,735 1,972
Walt Disney
6.375%, 03/01/12 (A) 990 1,062
Waste Management
6.500%, 11/15/08 2,000 2,176
Wyeth
5.250%, 03/15/13 (A) 1,740 1,787
----------
40,622
----------
TRANSPORTATION - 2.4%
Continental Airlines
Series 2001-1, Class B
7.033%, 06/15/11 1,832 899
Delta Air Lines, Series 2001-1
7.711%, 09/18/11 (A) (C) 3,500 2,540
Norfolk Southern
7.800%, 05/15/27 1,975 2,372
United Air Lines, Series 2000-1
8.030%, 07/01/11 1,861 465
----------
6,276
----------
UTILITIES - 19.6%
Alliant Energy Resources
9.750%, 01/15/13 (B) 985 1,131
American Electric Power, Series C
5.375%, 03/15/10 (A) 1,475 1,491
AT&T
7.800%, 11/15/11 1,970 2,075
8.000%, 11/15/31 (A) 985 1,011
AT&T Wireless Services
8.125%, 05/01/12 (A) 2,000 2,180
British Telecom
8.375%, 12/15/10 (A) 1,975 2,386
Centerpoint Energy Resources
7.875%, 04/01/13 (B) 980 1,004
CenturyTel, Series H
8.375%, 10/15/10 985 1,199
Cincinnati Gas & Electric
5.700%, 09/15/12 1,980 2,092
Citizens Communications
7.625%, 08/15/08 1,485 1,697
Constellation Energy
6.125%, 09/01/09 (A) 985 1,048
Deutsche Telecom
8.000%, 06/15/10 (A) $ 2,465 $ 2,880
Dominion Resources, Series A
8.125%, 06/15/10 (A) 1,475 1,739
FirstEnergy, Series B
6.450%, 11/15/11 1,975 2,072
FPL Group Capital
7.625%, 09/15/06 1,975 2,241
France Telecom
9.250%, 03/01/11 (A) 1,975 2,366
MidAmerican Energy Holdings
5.875%, 10/01/12 990 1,027
Nevada Power,
Callable 10/15/06 @ 105.44
10.875%, 10/15/09 (B) 980 1,009
Northern State Power - Minnesota, Series B
8.000%, 08/28/12 1,485 1,820
Oncor Electric Delivery
6.375%, 01/15/15 (B) 1,475 1,607
Progress Energy
7.000%, 10/30/31 (A) 2,000 2,112
Qwest Capital Funding
7.750%, 08/15/06 1,950 1,584
Southern Capital Funding, Series A
5.300%, 02/01/07 720 765
Sprint Capital
6.000%, 01/15/07 2,025 2,010
6.125%, 11/15/08 1,000 995
8.375%, 03/15/12 (A) 985 1,044
Telus
8.000%, 06/01/11 (A) 990 1,030
TXU Energy
7.000%, 03/15/13 (B) 1,475 1,488
Verizon Global Funding
7.250%, 12/01/10 1,485 1,719
7.750%, 12/01/30 (A) 1,980 2,373
Verizon Wireless
5.375%, 12/15/06 1,980 2,109
Western Resources
9.750%, 05/01/07 1,000 1,065
----------
52,369
----------
YANKEE - 0.7%
Pemex Project
9.125%, 10/13/10 1,500 1,740
----------
TOTAL CORPORATE BONDS
(Cost $240,848) 246,748
----------
U.S. GOVERNMENT & AGENCY SECURITIES - 2.4%
U.S. AGENCY DEBENTURE - 1.2%
FHLB
4.125%, 05/13/05 (A) 3,000 3,154
----------
U.S. TREASURIES - 1.2%
U.S. Treasury Bond
5.375%, 02/15/31 (A) 1,500 1,623
U.S. Treasury Note
3.000%, 02/15/08 (A) 1,625 1,645
----------
3,268
----------
TOTAL U.S. GOVERNMENT & AGENCY SECURITIES
(Cost $6,397) 6,422
----------
</Table>
9
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000)/SHARES VALUE (000)
- -----------------------------------------------------------------
ASSET-BACKED SECURITIES - 1.9%
HOME EQUITY - 1.1%
Green Tree Home Improvement Loan Trust
Series 1997-A, Class HEM2
7.900%, 03/15/28 $ 1,300 $ 1,358
GRMT Mortgage Loan Trust
Series 2001-1A, Class M1
7.772%, 07/20/31 1,500 1,635
----------
2,993
----------
MANUFACTURED HOUSING - 0.4%
Green Tree Financial
Series 1996-8, Class A7
8.050%, 10/15/27 975 1,005
----------
OTHER - 0.4%
Aircraft Finance Trust
Series 1999-1A, Class C
8.000%, 05/15/24 (D) 839 211
Juniper
Series 2000-1, Class A3
8.220%, 04/15/12 (D) 1,000 700
----------
911
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $5,517) 4,909
----------
CMO - PRIVATE MORTGAGE-BACKED SECURITY - 0.8%
FIXED RATE - 0.8%
Norwest Asset Securities
Series 1998-16, Class A1
6.500%, 06/25/13 2,093 2,170
----------
TOTAL CMO - PRIVATE MORTGAGE-BACKED SECURITY
(Cost $2,113) 2,170
----------
RELATED PARTY MONEY MARKET FUND - 1.4%
First American Prime
Obligations Fund, Class Y (E) 3,817,115 3,817
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $3,817) 3,817
----------
INVESTMENTS PURCHASED WITH CASH PROCEEDS
FROM SECURITIES LENDING - 26.6%
COMMERCIAL PAPER - 3.8%
CS First Boston
1.638%, 12/01/03 1,245 1,245
Danske Bank
1.508%, 12/22/03 1,245 1,245
Goldman Sachs
1.518%, 08/28/03 1,618 1,618
Morgan Stanley
1.518%, 06/17/03 622 622
1.518%, 07/08/03 448 448
1.518%, 09/22/03 622 622
Orchard Park
1.475%, 01/06/04 1,245 1,245
UBS Financial
1.390%, 04/01/03 3,111 3,111
----------
TOTAL COMMERCIAL PAPER 10,156
----------
CORPORATE OBLIGATIONS - 2.9%
CS First Boston
1.760%, 04/11/03 1,245 1,245
Deutsche Bank
1.470%, 04/11/03 622 622
1.580%, 12/11/03 498 498
General Electric Capital Corporation
1.355%, 07/09/07 $ 622 $ 622
Merrill Lynch
1.538%, 05/05/03 1,058 1,058
Monet Trust
1.360%, 12/28/03 1,245 1,245
SMM Trust 2002-M
1.450%, 09/23/03 1,245 1,245
URI Trust
1.460%, 09/18/03 ,245 1,245
----------
TOTAL CORPORATE OBLIGATIONS 7,780
----------
MONEY MARKET FUNDS - 2.5%
AIM Liquid Assets Portfolio 2,115,886 2,116
Dreyfus Cash Manage Plus Fund 124,464 124
Evergreen Institutional Money
Market Fund 435,624 436
HSBC Investor Money Market
Fund - Class I 373,392 373
Merrill Lynch Premier
Institutional Fund 2,410,680 2,411
Merrimac Cash Series Fund 373,392 373
One Group Institutional Prime
Money Market Fund 746,783 747
Reserve Primary Fund 62,232 62
----------
TOTAL MONEY MARKET FUNDS 6,642
----------
OTHER SHORT-TERM INVESTMENTS - 2.4%
Allied Irish Bank
1.340%, 05/09/03 1,245 1,245
1.330%, 06/02/03 622 622
Commonwealth Life
1.678%, 04/01/03 628 628
General Electric Capital Assurance
1.370%, 12/19/03 249 249
Premium Asset Trust 02-7
1.060%, 08/23/03 793 793
Security Life Denver
1.381%, 01/13/04 1,618 1,618
1.490%, 03/15/04 1,245 1,245
----------
TOTAL OTHER SHORT-TERM INVESTMENTS 6,400
----------
REPURCHASE AGREEMENTS - 15.0%
Bear Stearns
1.420%, 04/10/03 2,489 2,489
CS First Boston
1.370%, 04/01/03 2,489 2,489
1.380%, 04/01/03 386 386
1.380%, 04/01/03 3,111 3,111
Goldman Sachs
1.520%, 04/01/03 1,867 1,867
1.420%, 04/07/03 1,245 1,245
1.360%, 06/10/03 622 622
1.400%, 06/11/03 622 622
Greenwich Capital Markets
1.430%, 04/01/03 3,734 3,734
Lehman Brothers
1.560%, 04/01/03 1,245 1,245
1.640%, 04/01/03 933 933
1.640%, 04/01/03 4,045 4,045
Merrill Lynch
1.360%, 04/01/03 3,734 3,734
1.500%, 04/01/03 1,867 1,867
1.560%, 04/01/03 1,556 1,556
1.560%, 04/01/03 2,489 2,489
Morgan Stanley
1.470%, 04/01/03 1,867 1,867
1.510%, 04/01/03 3,871 3,871
</Table>
The accompanying notes are an integral part of the financial statements.
10
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- -----------------------------------------------------------------
Salomon Smith Barney
1.540%, 04/01/03 $ 1,867 $ 1,867
----------
TOTAL REPURCHASE AGREEMENTS 40,039
----------
TOTAL INVESTMENTS PURCHASED WITH CASH PROCEEDS
FROM SECURITIES LENDING
(Cost $71,017) 71,017
----------
TOTAL INVESTMENTS - 125.7%
(Cost $329,709) 335,083
----------
OTHER ASSETS AND LIABILITIES, NET - (25.7)% (68,513)
----------
TOTAL NET ASSETS - 100.0% $266,570
----------
</Table>
(A) This security or a portion of this security is out on loan at March 31,
2003. Total loaned securities had a value of $69,527,131 at March 31, 2003.
See note 2 in Notes to Financial Statements.
(B) Security sold within the terms of a private placement memorandum, exempt
from registration under Rule 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional buyers." These securities have been determined to
be liquid under the guidelines established by the Funds' board of
directors. As of March 31, 2003, the value of these investments was
$21,848,885 or 8.2% of total net assets.
(C) Variable Rate Security - The rate shown is the rate in effect as of March
31, 2003.
(D) Securities considered illiquid or restricted. See note 2 in Notes to
Financial Statements.
(E) This money market fund is advised by U.S. Bancorp Asset Management, Inc.,
which also serves as advisor for this Fund. See note 3 in Notes to
Financial Statements.
CMO - Collateralized Mortgage Obligation
FHLB - Federal Home Loan Bank
REIT - Real Estate Investment Trust
HIGH INCOME BOND FUND
<Table>
<Caption>
DESCRIPTION PAR (000)(I) VALUE (000)
- -----------------------------------------------------------------
HIGH YIELD CORPORATE BONDS - 84.1%
CONSUMER GOODS - 4.8%
Agrilink Foods,
Callable 11/01/03 @ 105.938
11.875%, 11/01/08 $ 500 $ 542
Canandaigua Brands,
Callable 03/01/04 @ 104.250
8.500%, 03/01/09 500 529
Constellation Brands, Series B,
Callable 01/15/07 @ 104.063
8.125%, 01/15/12 250 261
Corn Products International
8.250%, 07/15/07 1,500 1,563
Dean Foods
6.625%, 05/15/09 500 512
Del Monte,
Callable 12/15/07 @ 104.313
8.625%, 12/15/12 (A) 500 520
Delhaize America
7.375%, 04/15/06 500 502
9.000%, 04/15/31 1,000 985
Ingles Markets,
Callable 12/01/06 @ 104.440
8.875%, 12/01/11 1,000 920
Playtex Family Products,
Callable 06/01/06 @ 104.688
9.375%, 06/01/11 1,000 1,090
Roundy's,
Callable 06/15/07 @ 104.438
8.875%, 06/15/12 1,000 995
Sealy Mattress, Series B,
Callable 04/01/03 @ 105.437
10.875%, 12/15/07 (C) 500 526
Simmons,
Callable 03/15/04 @ 105.125
10.250%, 03/15/09 1,000 1,075
Swift & Co.,
Callable 10/01/06 @ 106.250
12.500%, 01/01/10 (A) 750 727
----------
10,747
----------
ENERGY - 9.2%
ANR Pipeline,
Callable 03/15/07 @ 104.438
8.875%, 03/15/10 (A) 250 266
Chesapeake Energy,
Callable 04/01/06 @ 104.063
8.125%, 04/01/11 800 848
El Paso
6.950%, 12/15/07 (B) 1,000 835
7.000%, 05/15/11 (B) 3,000 2,370
7.750%, 01/15/32 (B) 2,000 1,430
El Paso Energy Partners,
Callabe 12/01/07 @ 105.313
10.625%, 12/01/12 (A) (B) 1,000 1,092
Newfield Exploration,
Callable 08/15/07 @ 104.188
8.375%, 08/15/12 1,000 1,085
Parker Drilling, Series B,
Callable 11/15/04 @ 105.063
10.125%, 11/15/09 (B) 1,000 1,045
</Table>
11
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000)(I) VALUE (000)
- -----------------------------------------------------------------
Pogo Producing, Series B,
Callable 04/01/03 @ 104.375
8.750%, 05/15/07 $ 500 $ 520
Premcor Refining,
Callable 02/01/08 @ 104.750
9.500%, 02/01/13 (A) (B) 1,000 1,070
Pride International,
Callable 06/01/04 @ 105.000
10.000%, 06/01/09 1,000 1,080
Southern Natural Gas,
Callable 03/15/07 @ 104.440
8.875%, 03/15/10 (A) 250 264
Swift Energy,
Callable 08/01/04 @ 105.120
10.250%, 08/01/09 1,000 1,040
Tesoro Petroleum,
Callable 04/01/07 @ 104.813
9.625%, 04/01/12 1,000 860
Series B, Callable 11/01/05 @ 104.813
9.625%, 11/01/08 500 432
Vintage Petroleum,
Callable 04/01/03 @ 103.234
8.625%, 02/01/09 500 508
Western Oil Sands
8.375%, 05/01/12 (D) 1,000 1,030
Westport Resources,
Callable 11/01/06 @ 104.125
8.250%, 11/01/11 (A) 250 267
Williams
6.500%, 08/01/06 (B) 1,500 1,335
7.125%, 09/01/11 (B) 2,000 1,710
7.750%, 06/15/31 (B) 2,000 1,540
----------
20,627
----------
MANUFACTURING - 21.9%
Abitibi-Consolidated
8.550%, 08/01/10 (B) (D) 2,000 2,203
AK Steel,
Callable 06/15/07 @ 103.875
7.750%, 06/15/12 500 460
American Axle & Manufacturing,
Callable 03/01/04 @ 104.875
9.750%, 03/01/09 500 535
American Standard
7.375%, 02/01/08 (B) 1,000 1,080
Amkor Technologies,
Callable 05/01/03 @ 104.625
9.250%, 05/01/06 (B) 500 490
Anchor Glass Container,
Callable 02/15/08 @ 105.500
11.000%, 02/15/13 (A) 1,000 1,040
Appleton Papers, Series B,
Callable 12/15/05 @ 106.250
12.500%, 12/15/08 500 564
Applied Extrusion Technologies, Series B,
Callable 07/01/06 @ 105.370
10.750%, 07/01/11 1,000 680
Avaya,
Callable 04/01/06 @ 105.563
11.125%, 04/01/09 500 512
Ball, Callable 12/15/07 @ 103.438
6.875%, 12/15/12 (A) $ 250 $ 258
BE Aerospace,
Callable 11/01/03 @ 104.750
9.500%, 11/01/08 500 332
Beazer Homes USA,
Callable 04/15/07 @ 104.190
8.375%, 04/15/12 1,000 1,045
Bowater Canada
7.950%, 11/15/11 (D) 500 512
Buckeye Technologies,
Callable 04/01/03 @ 103.080
9.250%, 09/15/08 1,000 915
Cascades,
Callable 02/15/08 @ 103.625
7.250%, 02/15/13 (A) (D) 1,000 1,040
Collins & Aikman Products,
Callable 04/01/03 @ 103.833
11.500%, 04/15/06 (B) 425 368
Crown European Holdings,
Callable 03/01/07 @ 104.750
9.500%, 03/01/11 (A) (D) 1,000 1,000
Cummins,
Callable 12/01/06 @ 104.750
9.500%, 12/01/10 (A) 200 210
Dana
6.500%, 03/15/08 1,000 885
6.500%, 03/01/09 800 708
Diamond Brands Operating,
Callable 04/15/03 @ 105.063
10.125%, 04/15/08 (E) (F) 50 --
Dura Operating, Series B,
Callable 04/15/07 @ 104.313
8.625%, 04/15/12 500 477
Equistar Chemical Funding
10.125%, 09/01/08 750 718
FMC, Callable 11/01/06 @ 105.125
10.250%, 11/01/09 (A) 550 605
Georgia-Pacific
7.500%, 05/15/06 (B) 1,000 965
8.125%, 05/15/11 (B) 1,500 1,395
8.875%, 05/15/31 1,000 850
Glenoit, Callable 04/01/03 @ 105.500
11.000%, 04/15/07 (E) (F) 100 --
Greif Brothers,
Callable 08/01/07 @ 104.438
8.875%, 08/01/12 (A) 700 731
Huntsman ICI Chemicals,
Callable 07/01/04 @ 105.063
10.125%, 07/01/09 1,000 950
IMC Global, Series B
10.875%, 06/01/08 750 799
Johnsondiversey, Series B,
Callable 05/15/07 @ 104.813
9.625%, 05/15/12 500 537
KB Home,
Callable 02/01/07 @ 103.875
7.750%, 02/01/10 500 506
Lear, Series B
8.110%, 05/15/09 (B) 1,500 1,627
</Table>
The accompanying notes are an integral part of the financial statements.
12
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000)(I) VALUE (000)
- -----------------------------------------------------------------
Levi Strauss
7.000%, 11/01/06 $ 500 $ 430
Lucent Technologies
5.500%, 11/15/08 (B) 1,000 760
6.450%, 03/15/29 1,500 967
Lyondell Chemical,
Callable 05/01/04 @ 105.440
10.875%, 05/01/09 (B) 1,500 1,387
Series B, Callable 05/01/04 @ 104.938
9.875%, 05/01/07 (B) 1,000 1,000
Massey Energy
6.950%, 03/01/07 1,000 860
Nortel Networks
6.125%, 02/15/06 (B) (D) 1,500 1,372
Nova Chemicals
7.400%, 04/01/09 (B) (D) 500 485
Oregon Steel Mills,
Callable 07/15/06 @ 105.000
10.000%, 07/15/09 250 242
Owens-Brockway Glass Container,
Callable 02/15/06 @ 104.440
8.875%, 02/15/09 1,000 1,032
Owens-Illinois
8.100%, 05/15/07 1,000 980
Perkinelmer,
Callable 01/15/08 @ 104.438
8.875%, 01/15/13 (A) 500 517
Russell,
Callable 05/01/06 @ 104.625
9.250%, 05/01/10 500 540
Schuler Homes,
Callable 07/15/05 @ 104.690
9.375%, 07/15/09 1,000 1,070
Sequa
9.000%, 08/01/09 1,500 1,485
Stone Container,
Callable 07/01/07 @ 104.188
8.375%, 07/01/12 (B) 1,300 1,391
Technical Olympic USA,
Callable 07/01/06 @ 104.500
9.000%, 07/01/10 1,000 990
TRW Automotive,
Callable 02/15/08 @ 104.688
9.375%, 02/15/13 (A) 500 504
Tyco International
6.375%, 02/15/06 (D) 1,000 971
6.750%, 02/15/11 (D) 3,000 2,820
6.875%, 01/15/29 (D) 1,000 880
WCI Communities,
Callable 05/01/07 @ 104.563
9.125%, 05/01/12 1,000 960
William Lyon Homes,
Callable 04/01/08 @ 105.375
10.750%, 04/01/13 1,000 986
Xerox
9.750%, 01/15/09 (A) (B) 500 532
7.200%, 04/01/16 (B) 1,000 880
----------
49,038
----------
REAL ESTATE - 0.6%
Meristar Hospitality
9.125%, 01/15/11 $ 1,000 $ 855
Ventas Realty
9.000%, 05/01/12 500 535
----------
1,390
----------
SERVICES - 31.8%
Acme Television, Series B,
Callable 04/01/03 @ 102.719
10.875%, 09/30/04 (C) 500 514
Allied Waste North America, Series B,
Callable 01/01/04 @ 103.938
7.875%, 01/01/09 (B) 2,000 2,047
Callable 08/01/04 @ 105.000
10.000%, 08/01/09 (B) 2,000 2,077
AMC Entertainment,
Callable 02/01/07 @ 104.938
9.875%, 02/01/12 (B) 500 502
American Media,
Callable 01/15/07 @ 104.438
8.875%, 01/15/11 (A) 100 108
Asbury Automotive Group,
Callable 06/15/07 @ 104.500
9.000%, 06/15/12 1,000 852
Autonation
9.000%, 08/01/08 1,500 1,571
Bally Total Fitness Holdings, Series D,
Callable 04/01/03 @ 104.938
9.875%, 10/15/07 (B) 500 419
Biovail, Callable 04/01/06 @ 103.938
7.875%, 04/01/10 (D) 1,000 1,042
Boca Resorts,
Callable 04/15/04 @ 104.938
9.875%, 04/15/09 1,000 1,035
Boyd Gaming,
Callable 12/15/07 @ 103.875
7.750%, 12/15/12 (A) 1,000 1,000
British Sky Broadcasting
6.875%, 02/23/09 (D) 1,000 1,059
Buffets,
Callable 07/15/06 @ 105.625
11.250%, 07/15/10 500 431
Charter Communications Holdings,
Callable 04/01/04 @ 104.313
8.625%, 04/01/09 2,500 1,175
Corus Entertainment,
Callable 03/01/07 @ 104.375
8.750%, 03/01/12 (D) 500 520
Coventry Health Care,
Callable 02/15/07 @ 104.063
8.125%, 02/15/12 750 801
CSC Holdings,
Callable 04/01/03 @ 104.800
9.875%, 02/15/13 (B) 750 786
Series B
7.625%, 04/01/11 2,000 2,010
Dex Media East,
Callable 11/15/07 @ 106.063
12.125%, 11/15/12 (A) 500 582
</Table>
13
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000)(I) VALUE (000)
- -----------------------------------------------------------------
DirecTV Holdings,
Callable 03/15/08 @ 104.188
8.375%, 03/15/13 (A) $ 1,000 $ 1,104
Dominos, Series B,
Callable 01/15/04 @ 105.188
10.375%, 01/15/09 1,100 1,188
Echostar DBS,
Callable 01/15/06 @ 104.563
9.125%, 01/15/09 3,000 3,270
Emmis Communications, Series B,
Callable 03/15/04 @ 104.063
8.125%, 03/15/09 (B) 500 518
Fisher Scientific International,
Callable 05/01/07 @ 104.060
8.125%, 05/01/12 (A) (B) 1,000 1,065
Gap
6.900%, 09/15/07 500 515
Hanger Orthopedic,
Callable 02/15/06 @ 105.188
10.375%, 02/15/09 350 375
HCA Columbia Healthcare
8.750%, 09/01/10 3,500 4,062
Hilton Hotels
8.250%, 02/15/11 1,000 1,033
HMH Properties, Series B,
Callable 08/01/03 @ 103.985
7.875%, 08/01/08 (B) 1,025 966
Hollywood Entertainment,
Callable 03/15/07 @ 104.813
9.625%, 03/15/11 750 776
Houghton Mifflin,
Callable 02/01/08 @ 104.938
9.875%, 02/01/13 (A) 1,000 1,083
IASIS Healthcare,
Callable 10/15/04 @ 106.500
13.000%, 10/15/09 1,000 1,103
Iron Mountain,
Callable 04/01/06 @ 104.313
8.625%, 04/01/13 500 528
Isle of Capri Casinos,
Callable 04/15/04 @ 104.375
8.750%, 04/15/09 1,500 1,553
J.C. Penney
7.600%, 04/01/07 (B) 1,000 1,015
7.950%, 04/01/17 1,000 960
Lamar Media,
Callable 04/01/03 @ 104.313
8.625%, 09/15/07 500 522
Mandalay Resort Group, Series B
10.250%, 08/01/07 (B) 1,500 1,616
Mediacom,
Callable 01/15/06 @ 104.750
9.500%, 01/15/13 1,000 1,038
MGM Mirage
8.375%, 02/01/11 (B) 2,500 2,669
Mohegan Tribal Gaming
8.125%, 01/01/06 1,500 1,575
Moore North America,
Callable 01/15/07 @ 103.938
7.875%, 01/15/11 (A) 250 258
Nextel Communications,
Callable 04/01/03 @ 105.325
10.650%, 09/15/07 (C) $ 1,000 $ 1,049
Park Place Entertainment
8.875%, 09/15/08 2,000 2,125
Paxson Communications,
Callable 01/15/06 @ 106.125
12.250%, 01/15/09 750 589
Pegasus Communications, Series B,
Callable 04/01/03 @ 104.875
9.750%, 12/01/06 300 228
Penn National Gaming,
Callable 03/15/06 @ 104.440
8.875%, 03/15/10 1,000 1,025
Premier Parks,
Callable 04/01/03 @ 105.000
10.000%, 04/01/08 (C) 1,000 970
Primedia,
Callable 05/15/06 @ 104.438
8.875%, 05/15/11 800 806
R. H. Donnelley Finance,
Callable 12/15/07 @ 105.438
10.875%, 12/15/12 (A) 1,000 1,145
Resorts International Hotel & Casino,
Callable 03/15/07 @ 106.000
11.500%, 03/15/09 800 696
Rite Aid
7.125%, 01/15/07 (B) 1,500 1,343
Rotech Healthcare,
Callable 04/01/07 @ 104.750
9.500%, 04/01/12 (A) 750 741
Royal Caribbean Cruises
8.250%, 04/01/05 (B) (D) 1,000 975
Service Corporation International
7.700%, 04/15/09 1,000 983
Sinclair Broadcast Group,
Callable 03/15/07 @ 104.000
8.000%, 03/15/12 (A) 1,000 1,030
Six Flags,
Callable 02/01/06 @ 104.438
8.875%, 02/01/10 500 464
Starwood Hotels & Resorts
6.750%, 11/15/05 1,000 1,010
Station Casinos,
Callable 07/01/05 @ 103.703
9.875%, 07/01/10 500 549
Triad Hospital Holdings, Series B,
Callable 05/15/04 @ 105.500
11.000%, 05/15/09 750 827
Tricon Global Restaurant
7.650%, 05/15/08 1,000 1,075
8.875%, 04/15/11 600 675
United Rentals, Series B,
Callable 04/15/05 @ 105.375
10.750%, 04/15/08 (B) 500 518
Callable 01/15/04 @ 104.625
9.250%, 01/15/09 (B) 1,000 870
Venetian Casino,
Callable 06/15/06 @ 105.500
11.000%, 06/15/10 500 525
</Table>
The accompanying notes are an integral part of the financial statements.
14
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000)(I) VALUE (000)
- -----------------------------------------------------------------
Waste Management
6.500%, 11/15/08 $ 1,500 $ 1,632
7.750%, 05/15/32 1,000 1,139
Wynn Las Vegas,
Callable 11/01/06 @ 112.000
12.000%, 11/01/10 500 523
Young Broadcasting,
Callable 03/01/06 @ 105.000
10.000%, 03/01/11 500 534
----------
71,369
----------
TRANSPORTATION - 1.0%
CP Ships
10.375%, 07/15/12 500 525
Continental Airlines, Series 2001-1, Class B
7.033%, 12/15/12 928 455
Delta Air Lines
7.900%, 12/15/09 1,000 520
Northwest Airlines
9.875%, 03/15/07 500 258
Stena, Callable 04/01/03 @ 104.375
8.750%, 06/15/07 (D) 525 542
----------
2,300
----------
UTILITIES - 14.8%
AES
9.375%, 09/15/10 (B) 3,000 2,588
Allegheny Energy Supply
8.250%, 04/15/12 (A) 1,000 755
Aquila
9.450%, 02/01/11 1,000 845
Calpine
7.625%, 04/15/06 (B) 500 293
8.500%, 02/15/11 (B) 1,500 844
CMS Energy
7.500%, 01/15/09 1,500 1,245
8.500%, 04/15/11 1,000 840
Crown Castle International,
Callable 08/01/04 @ 105.625
11.250%, 08/01/11 (C) 700 560
Callable 08/01/05 @ 105.375
10.750%, 08/01/11 (B) 500 483
Illinova, Callable 07/15/03 @ 103.450
7.500%, 07/15/25 800 654
Mirant Americas Generation
8.300%, 05/01/11 1,000 510
Mirant Mid-Atlantic, Series C
10.060%, 12/30/28 974 829
Mission Energy Holdings
13.500%, 07/15/08 500 190
Nevada Power,
Callable 10/15/06 @ 105.440
10.875%, 10/15/09 (A) 2,000 2,060
Nextel Communications,
Callable 11/15/04 @ 104.690
9.375%, 11/15/09 (B) 4,000 4,205
Northwestern
8.750%, 03/15/12 800 616
Panamsat,
Callable 02/01/07 @ 104.250
8.500%, 02/01/12 (A) 1,000 1,030
PSEG Energy Holdings
8.625%, 02/15/08 (B) $ 1,500 $ 1,526
Qwest
8.875%, 03/15/12 (A) 1,000 1,063
Qwest Capital Funding
7.750%, 08/15/06 3,000 2,438
6.875%, 07/15/28 1,000 685
Qwest Services,
Callable 12/15/06 @ 106.750
13.500%, 12/15/10 (A) 1,000 1,058
Telus
7.500%, 06/01/07 (D) 1,000 1,040
8.000%, 06/01/11 (D) 3,000 3,120
Triton PCS,
Callable 11/15/06 @ 104.375
8.750%, 11/15/11 500 420
Viatel, Callable 04/15/03 @ 105.625
11.250%, 04/15/08 (E) (G) 75
Voicestream Wireless,
Callable 11/15/04 @ 105.190
10.375%, 11/15/09 1,000 1,100
Callable 11/15/04 @ 105.938
10.875%, 11/15/09 (C) 650 611
Western Resources
9.750%, 05/01/07 1,500 1,598
----------
33,206
----------
TOTAL HIGH YIELD CORPORATE BONDS
(Cost $183,215) 188,677
----------
CORPORATE BONDS - 7.2%
FINANCE - 0.9%
Capital One Bank
6.700%, 05/15/08 500 482
Ford Motor Credit
6.875%, 02/01/06 1,000 985
5.800%, 01/12/09 500 443
----------
1,910
----------
MANUFACTURING - 0.7%
Noranda
8.375%, 02/15/11 1,000 1,033
Phelps Dodge
8.750%, 06/01/11 (B) 500 542
----------
1,575
----------
SERVICES - 1.1%
Comcast Cable Communications
7.125%, 06/15/13 500 543
Tenet Healthcare
6.500%, 06/01/12 (B) 2,000 1,930
----------
2,473
----------
TRANSPORTATION - 1.1%
American Airlines, Series 1999-1, Class A-2
7.024%, 04/15/11 2,000 1,540
Continental Airlines, Series 99-2
7.056%, 09/15/09 175 141
Delta Air Lines, Series 2000-1, Class B
7.920%, 05/18/12 1,000 730
Northwest Airlines, Series 991A
6.810%, 08/01/21 168 126
----------
2,537
----------
</Table>
15
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000)(I)/SHARES VALUE (000)
- -----------------------------------------------------------------
UTILITIES - 3.4%
Alliant Energy Resources
9.750%, 01/15/13 (A) $ 1,000 $ 1,148
AT&T Wireless Services
7.875%, 03/01/11 500 545
Centerpoint Energy Resources
7.875%, 04/01/13 (A) 1,500 1,537
France Telecom
8.500%, 03/01/31 (C) 1,000 1,291
Sprint Capital
8.375%, 03/15/12 (B) 1,000 1,060
TXU, Series J
6.375%, 06/15/06 (B) 2,000 1,960
----------
7,541
----------
TOTAL CORPORATE BONDS
(Cost $16,177) 16,036
----------
U.S. GOVERNMENT & AGENCY SECURITIES - 2.3%
U.S. TREASURIES - 2.3%
U.S. Treasury Notes
3.000%, 02/29/04 (B) 1,000 1,017
2.125%, 08/31/04 (B) 1,000 1,012
1.625%, 01/31/05 (B) 1,000 1,003
5.750%, 11/15/05 (B) 2,000 2,202
----------
TOTAL U.S. GOVERNMENT & AGENCY SECURITIES
(Cost $5,203) 5,234
----------
ASSET-BACKED SECURITIES - 0.1%
MANUFACTURED HOUSING - 0.0%
Green Tree Financial
Series 1998-1, Class A1
6.040%, 11/01/29 31 31
----------
OTHER - 0.1%
Aircraft Finance Trust
Series 1999-1A, Class C
8.000%, 05/15/24 (E) 839 211
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $805) 242
----------
COMMON STOCKS - 0.2%
BERMUDA - 0.0%
Viatel Holdings (E) 294 --
----------
GREAT BRITAIN - 0.2%
Jazztel (H) (EU) 1,759,722 288
----------
UNITED STATES - 0.0%
NII Holdings, Class B (H) 623 16
----------
TOTAL COMMON STOCKS
(Cost $2,316) 304
----------
PREFERRED STOCKS - 0.1%
CAYMAN ISLANDS - 0.0%
NII Holdings, Series B (E) (G) 5,751 4
----------
UNITED STATES - 0.1%
Nebco Evans Holdings PIK (H) 300 --
Nextel Communications PIK, Series D (H) 80 85
Pegasus Communications (E) (G) 15,109 --
Sinclair Capital 750 80
----------
165
----------
TOTAL PREFERRED STOCKS
(Cost $154) 169
----------
U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITY - 0.0%
FIXED RATE - 0.0%
FNMA Pool
6.695%, 08/01/05, #109031 $ 35 $ 37
----------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITY
(Cost $34) 37
----------
WARRANTS - 0.0%
CANADA - 0.0%
AT&T Canada, Expires
08/15/07 (A) (E) (G) (H) 100 --
----------
NORWAY - 0.0%
Enitel Asa, Expires
04/03/05 (A) (H) 1,000 --
----------
UNITED STATES - 0.0%
Electronic Retailing Systems International,
Expires 02/01/04 (H) 75 --
Sterling Chemical Holdings,
Expires 08/15/08 (G) (H) 100 --
UIH Australia Pacific,
Expires 05/15/06 (A) (H) 150 --
----------
--
----------
TOTAL WARRANTS
(Cost $6) --
----------
RELATED PARTY MONEY MARKET FUND - 2.8%
First American Prime
Obligations Fund, Class Y (J) 6,314,535 6,315
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $6,315) 6,315
----------
INVESTMENTS PURCHASED WITH CASH PROCEEDS
FROM SECURITIES LENDING - 25.2%
COMMERCIAL PAPER - 3.6%
CS First Boston
1.638%, 12/01/03 991 991
Danske Bank
1.508%, 12/22/03 991 991
Goldman Sachs
1.518%, 08/28/03 1,289 1,289
Morgan Stanley
1.518%, 06/17/03 496 496
1.518%, 07/08/03 357 357
1.518%, 09/22/03 496 496
Orchard Park
1.475%, 01/06/04 991 991
UBS Financial
1.390%, 04/01/03 2,478 2,478
----------
TOTAL COMMERCIAL PAPER 8,089
----------
CORPORATE OBLIGATIONS - 2.7%
CS First Boston
1.760%, 04/11/03 991 991
Deutsche Bank
1.470%, 04/11/03 496 496
1.580%, 12/11/03 397 397
General Electric Capital Corporation
1.355%, 07/09/07 496 496
Merrill Lynch
1.538%, 05/05/03 843 843
Monet Trust
1.360%, 12/28/03 991 991
</Table>
The accompanying notes are an integral part of the financial statements.
16
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000)(I)/SHARES VALUE (000)
- -----------------------------------------------------------------
SMM Trust 2002-M
1.450%, 09/23/03 $ 991 $ 991
URI Trust
1.460%, 09/18/03 991 991
----------
TOTAL CORPORATE OBLIGATIONS 6,196
----------
MONEY MARKET FUNDS - 2.4%
AIM Liquid Assets Portfolio 1,685,432 1,685
Dreyfus Cash Manage Plus Fund 99,143 99
Evergreen Institutional
Money Market Fund 347,001 347
HSBC Investor Money
Market Fund - Class I 297,429 298
Merrill Lynch Premier
Institutional Fund 1,920,254 1,921
Merrimac Cash Series Fund 297,429 297
One Group Institutional Prime
Money Market Fund 594,858 595
Reserve Primary Fund 49,572 50
----------
TOTAL MONEY MARKET FUNDS 5,292
----------
OTHER SHORT-TERM INVESTMENTS - 2.3%
Allied Irish Bank
1.340%, 05/09/03 991 991
1.330%, 06/02/03 496 496
Commonwealth Life
1.678%, 04/01/03 501 501
General Electric Capital Assurance
1.370%, 12/19/03 198 198
Premium Asset Trust 02-7
1.060%, 08/23/03 632 632
Security Life Denver
1.381%, 01/13/04 1,289 1,289
1.490%, 03/15/04 991 991
----------
TOTAL OTHER SHORT-TERM INVESTMENTS 5,098
----------
REPURCHASE AGREEMENTS - 14.2%
Bear Stearns
1.420%, 04/10/03 1,983 1,983
CS First Boston
1.370%, 04/01/03 1,983 1,983
1.380%, 04/01/03 307 307
1.380%, 04/01/03 2,479 2,479
Goldman Sachs
1.520%, 04/01/03 1,487 1,487
1.420%, 04/07/03 991 991
1.360%, 06/10/03 496 496
1.400%, 06/11/03 496 496
Greenwich Capital Markets
1.430%, 04/01/03 2,974 2,974
Lehman Brothers
1.560%, 04/01/03 991 991
1.640%, 04/01/03 744 744
1.640%, 04/01/03 3,222 3,222
Merrill Lynch
1.360%, 04/01/03 2,974 2,974
1.500%, 04/01/03 1,487 1,487
1.560%, 04/01/03 1,239 1,239
1.560%, 04/01/03 1,983 1,983
Morgan Stanley
1.470%, 04/01/03 1,487 1,487
1.510%, 04/01/03 3,084 3,084
Salomon Smith Barney
1.540%, 04/01/03 1,487 1,487
----------
TOTAL REPURCHASE AGREEMENTS 31,894
----------
----------
</Table>
<Table>
<Caption>
DESCRIPTION VALUE (000)
- -----------------------------------------------------------------
TOTAL INVESTMENTS PURCHASED WITH CASH PROCEEDS
FROM SECURITIES LENDING
(Cost $56,569) $ 56,569
----------
TOTAL INVESTMENTS - 122.0%
(Cost $270,794) 273,583
----------
OTHER ASSETS AND LIABILITIES, NET - (22.0)% (49,282)
----------
TOTAL NET ASSETS - 100.0% $224,301
----------
</Table>
(A) Security sold within the terms of a private placement memorandum, exempt
from registration under Rule 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional buyers." These securities have been determined to
be liquid under the guidelines established by the Funds' board of
directors. As of March 31, 2003, the value of these investments was
$27,409,955 or 12.2% of total net assets.
(B) This security or a portion of this security is out on loan at March 31,
2003. Total loaned securities had a value of $55,134,987 at March 31, 2003.
See note 2 in Notes to Financial Statements.
(C) Delayed Interest (Step-Bonds) - Represents securities that remain
zero-coupon securities until a predetermined date at which time the stated
coupon rate becomes effective and interest becomes payable at regular
intervals. Interest rate shown represents current yield at March 31, 2003,
based upon the estimated timing and amount of future interest and principal
payments.
(D) Represents a foreign high yield (non-investment grade) bond. On March 31,
2003, the value of these investments was $20,611,928, which represents 9.2%
of total net assets.
(E) Securities considered illiquid or restricted. See note 2 in Notes to
Financial Statements.
(F) Security currently in default.
(G) Security valued at fair value under guidelines established and approved by
the Funds' board of directors. Total fair valued securities had a value of
$4,313, which represents 0.0% of total net assets at March 31, 2003. See
note 2 in Notes to Financial Statements.
(H) Non-income producing security.
(I) In U.S. dollars unless otherwise indicated.
(J) This money market fund is advised by U.S. Bancorp Asset Management, Inc.,
which also serves as advisor for this Fund. See note 3 in Notes to
Financial Statements.
EU - Euro
FNMA - Federal National Mortgage Association
PIK - Payment-in-kind interest is generally paid by issuing additional par of
the security rather than paying cash.
17
<Page>
INTERMEDIATE GOVERNMENT BOND FUND
<Table>
<Caption>
DESCRIPTION PAR (000)/SHARES VALUE (000)
- ----------------------------------------------------------------
U.S. GOVERNMENT & AGENCY SECURITIES - 99.5%
U.S. AGENCY DEBENTURES - 10.4%
FHLB
4.125%, 01/14/05 $ 10,000 $ 10,454
6.625%, 11/15/10 7,500 8,830
FHLMC
3.250%, 02/25/08 5,000 5,020
5.875%, 03/21/11 7,500 8,262
FNMA
2.625%, 04/21/06 (A) 5,000 5,000
3.500%, 01/28/08 10,000 10,063
----------
47,629
----------
U.S. TREASURIES - 89.1%
U.S. Treasury Bond (STRIPS)
0.000%, 11/15/04 (B) 100,795 98,637
U.S. Treasury Bonds
11.875%, 11/15/03 9,700 10,343
9.375%, 02/15/06 44,150 53,332
5.000%, 08/15/11 5,000 5,484
U.S. Treasury Note (TIPS)
3.625%, 01/15/08 3,766 4,214
U.S. Treasury Notes
2.875%, 06/30/04 15,000 15,307
2.125%, 10/31/04 22,000 22,271
1.625%, 01/31/05 13,000 13,043
7.000%, 07/15/06 82,750 95,434
6.500%, 10/15/06 16,550 18,929
6.000%, 08/15/09 23,600 27,376
5.000%, 02/15/11 15,500 17,035
4.000%, 11/15/12 13,000 13,189
3.875%, 02/15/13 12,500 12,555
----------
407,149
----------
TOTAL U.S. GOVERNMENT & AGENCY SECURITIES
(Cost $428,707) 454,778
----------
RELATED PARTY MONEY MARKET FUND - 0.9%
First American Prime
Obligations Fund, Class Y (C) 3,830,185 3,830
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $3,830) 3,830
----------
TOTAL INVESTMENTS - 100.4%
(Cost $432,537) 458,608
----------
OTHER ASSETS AND LIABILITIES, NET - (0.4)% (1,681)
----------
TOTAL NET ASSETS - 100.0% $456,927
----------
</Table>
(A) On March 31, 2003, the total cost of investments purchased on a when-issued
basis was $4,995,313.
(B) Principal only.
(C) This money market fund is advised by U.S. Bancorp Asset Management, Inc.,
which also serves as advisor for this Fund. See note 3 in Notes to
Financial Statements.
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
STRIPS - Separate Trading of Registered Interest and Principal of Securities
TIPS - Treasury Inflation Protection Security
INTERMEDIATE TERM BOND FUND
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
CORPORATE BONDS - 48.0%
CONSUMER GOODS - 2.5%
Bristol-Myers Squibb
4.750%, 10/01/06 $ 2,725 $ 2,891
Colgate-Palmolive, Series B
7.090%, 05/18/05 4,130 4,585
Conagra Foods
7.875%, 09/15/10 7,100 8,554
General Mills
6.000%, 02/15/12 8,000 8,795
Kraft Foods
6.250%, 06/01/12 3,500 3,643
Proctor & Gamble
8.000%, 11/15/03 50 52
Tyson Foods
6.625%, 10/01/04 5,165 5,347
----------
33,867
----------
ENERGY - 2.6%
Amerada Hess
6.650%, 08/15/11 4,360 4,732
Anadarko Petroleum
6.125%, 03/15/12 4,000 4,400
BP Amoco
8.500%, 04/15/07 1,000 1,180
Conoco
5.900%, 04/15/04 3,500 3,651
Conoco Funding
6.350%, 10/15/11 (A) 3,000 3,387
Duke Capital
7.250%, 10/01/04 (A) 1,500 1,542
Occidental Petroleum
4.250%, 03/15/10 5,000 5,011
Oneok
7.750%, 08/15/06 2,500 2,757
Southern California Gas
4.800%, 10/01/12 3,000 3,092
Texaco Capital
7.090%, 02/01/07 1,000 1,138
Valero Energy
6.875%, 04/15/12 (A) 3,415 3,668
----------
34,558
----------
FINANCE - 22.9%
ABN AMRO
7.250%, 05/31/05 (A) 6,800 7,528
Aetna Services
6.750%, 09/15/13 1,375 1,523
Amsouth Bancorp
7.750%, 05/15/04 2,525 2,692
Associated P&C Holdings
6.750%, 07/15/03 (B) 1,500 1,517
Bank of America
7.125%, 09/15/06 5,000 5,712
Bank One
6.625%, 04/15/03 50 50
BankBoston
6.375%, 04/15/08 1,450 1,609
Bear Stearns
6.875%, 10/01/05 5,000 5,526
Boeing Capital
5.800%, 01/15/13 5,000 4,955
</Table>
The accompanying notes are an integral part of the financial statements.
18
<Page>
<Table>
<Caption>
IDESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
Citigroup
5.625%, 08/27/12 (A) $ 7,000 $ 7,476
Core Investment Grade Trust
4.727%, 11/30/07 (A) 43,045 43,833
Countrywide Home Loans, Series K
4.250%, 12/19/07 (A) 8,025 8,232
Credit Suisse First Boston
5.875%, 08/01/06 3,500 3,772
Ford Motor Credit
5.800%, 01/12/09 14,400 12,760
General Electric Capital, Series A
4.250%, 01/15/08 (A) 20,000 20,763
General Motors Acceptance
6.125%, 08/28/07 (A) 18,250 18,576
Goldman Sachs
5.500%, 11/15/14 7,500 7,753
Household Finance
4.625%, 01/15/08 16,310 16,779
HSBC Bank
6.950%, 03/15/11 4,225 4,927
International Lease Finance
5.700%, 11/03/03 2,000 2,050
Series G
8.150%, 10/01/04 2,500 2,697
J. P. Morgan Chase
4.000%, 02/01/08 (A) 10,625 10,789
6.625%, 03/15/12 (A) 2,050 2,286
John Deere Capital
5.520%, 04/30/04 3,000 3,120
7.000%, 03/15/12 3,125 3,623
Key Bank
7.000%, 02/01/11 4,000 4,607
Lehman Brothers Holdings
11.625%, 05/15/05 2,450 2,889
MBNA America Bank
6.750%, 03/15/08 (B) 5,075 5,428
Merrill Lynch, Series B
2.470%, 03/10/06 6,060 5,962
Morgan Stanley
3.625%, 04/01/08 (A) 9,705 9,668
6.799%, 06/15/12 (B) 33,090 36,582
National Rural Utilities
5.750%, 08/28/09 3,850 4,140
Newcourt Credit Group
Series A
7.125%, 12/17/03 1,785 1,833
Series B
6.875%, 02/16/05 2,800 2,961
Safeco
7.875%, 04/01/05 1,000 1,000
Sears Roebuck Acceptance
6.700%, 04/15/12 (A) 2,000 2,017
Suntrust Banks
6.125%, 02/15/04 3,000 3,121
Synovus Financial
6.125%, 10/15/03 3,000 3,075
Wachovia
7.050%, 08/01/05 7,000 7,788
Washington Mutual Bank
5.500%, 01/15/13 (A) 2,375 2,499
Wells Fargo
6.375%, 08/01/11 (A) 6,700 7,578
Westdeutsche Landesbank
6.750%, 06/15/05 $ 6,415 $ 6,988
----------
308,684
----------
MANUFACTURING - 3.8%
Aluminum Company of America
5.375%, 01/15/13 3,000 3,140
Centex
7.500%, 01/15/12 3,000 3,395
DaimlerChrysler
4.750%, 01/15/08 10,500 10,599
Delphi Auto Systems
6.550%, 06/15/06 (A) 4,000 4,279
Dupont
8.125%, 03/15/04 1,000 1,060
Lockheed Martin
7.700%, 06/15/08 5,750 6,755
Praxair
6.900%, 11/01/06 1,000 1,125
Raytheon
6.150%, 11/01/08 10,500 11,401
Tyco International
4.950%, 08/01/03 (A) 3,000 3,000
Weyerhaeuser
5.250%, 12/15/09 6,500 6,650
----------
51,404
----------
REAL ESTATE - 1.2%
Boston Properties (REIT)
6.250%, 01/15/13 (B) 3,245 3,396
EOP Operating
6.750%, 02/15/08 5,000 5,542
Mack-Cali Realty (REIT)
7.250%, 03/15/09 3,500 3,944
Security Capital Group
7.750%, 11/15/03 3,700 3,850
----------
16,732
----------
SERVICES - 4.6%
AOL Time Warner
6.875%, 05/01/12 9,975 10,599
AT&T Broadband
8.375%, 03/15/13 8,000 9,427
Dayton Hudson
5.875%, 11/01/08 5,000 5,528
Federated Department Stores
6.625%, 09/01/08 3,825 4,202
Kroger
7.450%, 03/01/08 8,015 9,129
News America
6.625%, 01/09/08 (A) 5,000 5,498
UnitedHealth Group
6.600%, 12/01/03 6,225 6,434
Viacom
5.625%, 08/15/12 (A) 2,000 2,135
Wyeth
5.250%, 03/15/13 (A) 8,550 8,782
----------
61,734
----------
TRANSPORTATION - 1.2%
Federal Express, Series A2
7.890%, 09/23/08 602 686
Louisville & Nashville Railroad, Series F
3.375%, 04/01/03 (C) 636 636
</Table>
19
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
Northwest Airlines, Series 2001-01, Class A-1
7.041%, 04/01/22 $ 5,000 $ 4,500
Southwest Airlines, Series 2001-1, Class A-1
5.100%, 05/01/06 3,327 3,540
Union Pacific
6.625%, 02/01/08 (A) 6,000 6,795
----------
16,157
----------
UTILITIES - 8.8%
AT&T
7.500%, 04/01/04 1,150 1,196
7.000%, 11/15/06 (A) 7,460 7,861
AT&T Wireless Services
7.875%, 03/01/11 1,000 1,090
8.125%, 05/01/12 1,895 2,066
Baltimore Gas & Electric
5.250%, 12/15/06 4,985 5,205
Bellsouth Capital Funding
7.750%, 02/15/10 3,000 3,586
British Telecom
8.375%, 12/15/10 2,000 2,417
Citizens Communications
7.625%, 08/15/08 (A) 12,970 14,818
Conectiv, Series A
6.730%, 06/01/06 4,200 4,469
Constellation Energy
7.000%, 04/01/12 (A) 3,550 3,953
Deutsche Telecom
8.000%, 06/15/10 2,000 2,337
Dominion Resources
3.875%, 01/15/04 4,500 4,561
DTE Energy
7.050%, 06/01/11 2,570 2,923
FPL Group Capital
7.625%, 09/15/06 4,540 5,151
France Telecom
9.250%, 03/01/11 (D) 3,525 4,223
GTE California
6.700%, 09/01/09 1,000 1,130
Northern State Power - Minnesota, Series B
8.000%, 08/28/12 5,500 6,741
Oncor Electric Delivery
6.375%, 01/15/15 (B) 4,000 4,358
Pepco Holdings
3.750%, 02/15/06 5,000 5,055
PG&E
6.250%, 08/01/03 50 50
PSEG Power
6.950%, 06/01/12 (A) 4,500 4,974
PSI Energy
7.850%, 10/15/07 3,450 3,788
SBC Communications
5.875%, 08/15/12 2,000 2,173
Southern Capital Funding, Series A
5.300%, 02/01/07 4,000 4,249
Southwestern Bell Telephone, Series C
6.560%, 11/15/05 1,000 1,105
Sprint Capital
6.125%, 11/15/08 3,760 3,741
6.375%, 05/01/09 (A) 3,000 2,977
Verizon Global Funding
7.250%, 12/01/10 3,750 4,340
6.875%, 06/15/12 (A) 3,925 4,471
Vodafone Group
7.625%, 02/15/05 (A) (B) $ 3,500 $ 3,855
----------
118,863
----------
YANKEE - 0.4%
Pemex Project
9.125%, 10/13/10 3,500 4,060
Pohang Iron & Steel
7.125%, 07/15/04 875 924
Sweden Kingdom, Callable 11/01/10 @ 100
10.250%, 11/01/15 400 538
----------
5,522
----------
TOTAL CORPORATE BONDS
(Cost $629,157) 647,521
----------
U.S. GOVERNMENT & AGENCY SECURITIES - 28.4%
U.S. AGENCY DEBENTURES - 16.4%
FFCB
4.250%, 07/01/03 (A) 10,000 10,077
6.100%, 11/04/04 (A) 6,350 6,811
5.750%, 09/01/05 (A) 5,000 5,455
FHLB
4.500%, 07/07/03 (A) 10,000 10,089
6.250%, 08/13/04 (A) 3,000 3,197
3.875%, 12/15/04 (A) 5,000 5,199
6.060%, 05/24/06 (A) 5,000 5,565
6.090%, 06/02/06 (A) 4,000 4,460
6.375%, 08/15/06 (A) 6,000 6,769
5.795%, 06/19/08 (A) 500 563
FHLMC
5.750%, 07/15/03 (A) 10,000 10,132
6.875%, 01/15/05 (A) 13,000 14,220
2.625%, 05/13/05,
Callable 05/13/03 @ 100 (A) 5,000 5,006
5.950%, 01/19/06 (A) 6,000 6,624
3.500%, 09/15/07 (A) 13,505 13,859
3.250%, 02/25/08,
Callable 02/25/05 @ 100 13,000 13,053
FNMA
4.750%, 11/14/03 (A) 15,000 15,337
5.125%, 02/13/04 (A) 5,000 5,173
2.400%, 11/19/04,
Callable 05/19/03 @ 100 (A) 5,000 5,006
7.125%, 02/15/05 (A) 5,000 5,509
3.875%, 03/15/05 (A) 500 522
6.400%, 09/27/05 (A) 6,000 6,657
6.000%, 12/15/05 (A) 375 414
2.750%, 12/16/05,
Callable 12/16/03 @ 100 (A) 13,300 13,400
2.625%, 04/21/06,
Callable 04/21/04 @ 100 (E) 13,000 13,001
5.250%, 08/01/12 26,000 27,146
TVA
6.375%, 06/15/05 (A) 8,000 8,663
----------
221,907
----------
U.S. TREASURIES - 12.0%
U.S. Treasury Bond (STRIPS)
0.000%, 11/15/04 (A) (F) 50,650 49,566
U.S. Treasury Bonds
13.750%, 08/15/04 (A) 8,000 9,358
9.875%, 11/15/15 (A) 5,000 7,732
U.S. Treasury Notes
5.500%, 05/31/03 (A) 5,000 5,036
3.250%, 12/31/03 (A) 18,450 18,750
1.625%, 01/31/05 (A) 1,250 1,254
1.500%, 02/28/05 (A) 4,475 4,479
3.000%, 02/15/08 6,500 6,577
5.000%, 08/15/11 (A) 23,000 25,225
</Table>
The accompanying notes are an integral part of the financial statements.
20
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
3.875%, 02/15/13 (A) $ 33,499 $ 33,645
----------
161,622
----------
TOTAL U.S. GOVERNMENT & AGENCY SECURITIES
(Cost $371,432) 383,529
----------
ASSET-BACKED SECURITIES - 7.8%
AUTOMOBILES - 3.0%
Capital One Auto Finance Trust
Series 2002-1, Class A4
4.160%, 07/15/07 3,000 3,153
Series 2001-A, Class A4
5.400%, 05/15/08 5,000 5,307
Honda Auto Receivables Owner Trust
Series 2002-4, Class A4
2.700%, 03/17/08 7,345 7,416
MMCA Automobile Trust
Series 2002-2, Class A4
4.300%, 03/15/10 4,525 4,613
Toyota Auto Receivables Owners Trust
Series 2002-B, Class A4
4.390%, 05/15/09 6,000 6,310
Whole Auto Loan Trust
Series 2002-1, Class A3
2.600%, 08/15/06 13,000 13,208
----------
40,007
----------
COMMERCIAL - 0.3%
Morgan Stanley Capital Investments
Series 1999-FNV1, Class A1
6.120%, 03/15/31 4,002 4,316
----------
CREDIT CARDS - 2.4%
Citibank Credit Card Issuance Trust
Series 2003-A2, Class A2
2.700%, 01/15/08 (A) 10,000 10,115
Citibank Credit Card Master Trust I
Series 1997-6, Class A
0.000%, 08/15/06 (F) 2,275 2,223
MBNA Credit Card Master Note Trust
Series 2003-A1, Class A1
3.300%, 07/15/10 12,560 12,621
MBNA Master Credit Card Trust
Series 1998-D, Class A
5.800%, 12/15/05 4,000 4,049
Sears Credit Account Master Trust
Series 2000-1, Series A
7.250%, 11/15/07 4,000 4,075
----------
33,083
----------
HOME EQUITY - 2.0%
Advanta Mortgage Loan Trust
Series 1997-1, Class A5
7.350%, 05/25/27 $ 660 $ 674
AFC Home Equity Loan Trust
Series 1996-4, Class 1A7
6.860%, 03/25/27 3,101 3,242
Amresco Residential Security Mortgage
Series 1997-3, Class A9
6.960%, 03/25/27 3,693 3,728
Contimortgage Home Equity Loan Trust
Series 1997-5, Class A5
6.630%, 12/15/20 1,421 1,448
Series 1997-2, Class A9
7.090%, 04/15/28 2,007 2,012
Series 1997-3, Class A9
7.120%, 08/15/28 $ 4,074 $ 4,305
Delta Funding Home Equity Loan Trust
Series 1997-4, Class A5F
6.670%, 01/25/28 952 1,041
EQCC Home Equity Loan Trust
Series 1996-1, Class A4
6.560%, 03/15/23 825 829
Series 1997-1, Class A7
7.120%, 05/15/28 1,174 1,207
Mellon Residential Funding
Series 2001-HEIL, Class A3
5.945%, 02/25/11 5,000 5,067
Prudential Securities Financial
Series 1993-8, Class A
5.775%, 11/15/14 1,241 1,241
Series 1994-5, Class A1
5.660%, 05/25/24 1,175 1,201
Residential Asset Securities
Series 1998-KS1, Class AI9
6.440%, 03/25/28 688 715
----------
26,710
----------
MANUFACTURED HOUSING - 0.1%
Green Tree Financial
Series 1996-9, Class A5
7.200%, 01/15/28 476 480
Green Tree Home Improvement Loan Trust
Series 1997-E, Class HEA6
6.620%, 01/15/29 994 999
----------
1,479
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $103,370) 105,595
----------
CMO - U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES - 5.9%
FIXED RATE - 5.9%
FHLMC REMIC
Series 2483, Class DA
5.500%, 06/15/08 (A) 5,000 5,080
Series 2496, Class OA
5.000%, 09/15/08 (A) 5,000 5,079
Series 1606, Class H
6.000%, 11/15/08 (A) 4,125 4,400
Series 2503, Class JA
5.500%, 07/15/10 4,089 4,185
Series 2389, Class VA
6.000%, 02/15/11 (A) 4,467 4,812
Series 2358, Class PA
6.000%, 06/15/11 2,294 2,314
Series 2440, Class NJ
6.000%, 01/15/18 (A) 7,000 7,102
Series 2500, Class PA
5.000%, 06/15/18 4,674 4,784
Series 2456, Class CD
5.500%, 06/15/19 (A) 4,398 4,457
Series 1167, Class E
7.500%, 11/15/21 120 128
Series 1286, Class A
6.000%, 05/15/22 393 405
Series 1633, Class PK
6.000%, 09/15/22 (A) 5,643 5,807
Series 1634, Class PH
6.000%, 11/15/22 4,557 4,730
Series 2166, Class AC
6.500%, 03/15/26 987 996
</Table>
21
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
FNMA REMIC
Series 1993-83, Class VD
6.500%, 07/25/04 (A) $ 3,770 $ 3,784
Series 1993-55, Class J
6.500%, 11/25/07 577 599
Series 2002-55, Class QR
5.000%, 02/25/09 (A) 5,000 5,082
Series 2002-49, Class KJ
4.500%, 12/25/09 (A) 5,000 5,117
Series 2002-70, Class QL
4.500%, 12/25/17 (A) 3,700 3,819
Series 1990-89, Class K
6.500%, 07/25/20 76 80
Series 1996-10, Class C
6.500%, 12/25/23 (A) 1,216 1,226
GNMA REMIC
Series 2001-62, Class VK
6.500%, 01/16/11 (A) 4,472 4,850
----------
TOTAL CMO - U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES
(Cost $78,621) 78,836
----------
U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES - 3.4%
FIXED RATE - 3.4%
FHLMC
7.000%, 08/01/07, #183713 2 2
FHLMC Gold Pool
5.500%, 09/01/06, #G40394 (A) 2,604 2,693
5.500%, 03/01/16, #E00960 (A) 5,823 6,072
6.000%, 04/01/29, #C00748 (A) 2,600 2,698
FNMA Pool
7.250%, 07/01/04, #034511 10 10
6.000%, 07/01/06, #252632 926 959
6.000%, 08/01/08, #050776 409 430
5.500%, 02/01/14, #440780 (A) 4,192 4,387
6.000%, 03/01/16, #535791 (A) 7,836 8,242
5.500%, 04/01/16, #572856 (A) 2,963 3,077
10.000%, 11/01/18, #050145 303 341
9.000%, 12/01/20, #303753 351 381
9.500%, 06/01/21, #341727 127 142
6.000%, 05/01/29, #323715 (A) 2,632 2,736
6.000%, 02/01/31, #562842 (A) 2,426 2,517
6.000%, 03/01/31, #570874 (A) 3,679 3,818
6.000%, 09/01/32, #652304 (A) 5,529 5,731
GNMA Pool
9.000%, 08/15/21, #312046 529 590
9.000%, 05/20/25, #002007 123 135
8.500%, 07/20/25, #002038 213 233
----------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES
(Cost $42,796) 45,194
----------
CMO - PRIVATE MORTGAGE-BACKED SECURITIES - 3.2%
FIXED RATE - 3.2%
Greenwich Capital Commercial Funding
Series 2002-C1, Class A4
4.948%, 01/11/35 10,000 10,255
HSBC Mortgage Loan Trust
Series 2000-HSB1, Class A3
7.110%, 12/16/30 601 602
Nomura Asset Securities
Series 1998-D6, Class A1B
6.590%, 03/15/30 (A) 11,675 13,256
Norwest Asset Securities
Series 1999-15, Class A1
6.250%, 06/25/14 $ 2,017 $ 2,067
Residential Accredit Loans
Series 1997-QS13, Class M3
7.250%, 12/25/27 2,706 2,902
Salomon Brothers Mortgage Securities
Series 1986-1, Class A
6.000%, 12/25/11 339 349
Wachovia Bank Commercial Mortgage Trust
Series 2002-C1, Class A4
6.287%, 04/15/34 (A) 11,400 12,751
Washington Mutual
Series 1999-WM2, Class 2A
7.000%, 11/19/14 1,118 1,149
Westam Mortgage Financial
Series 11, Class A
6.360%, 08/26/20 208 221
----------
TOTAL CMO - PRIVATE MORTGAGE-BACKED SECURITIES
(Cost $42,642) 43,552
----------
FOREIGN GOVERNMENT BOND - 0.3%
MEXICO - 0.3%
United Mexican States
7.500%, 01/14/12 (A) 3,500 3,806
----------
TOTAL FOREIGN GOVERNMENT BOND
(Cost $3,599) 3,806
----------
MUNICIPAL BOND - 0.0%
Orange California Redevelopment Agency,
Tax Allocation Revenue (C)
6.500%, 10/01/03 25 26
----------
TOTAL MUNICIPAL BOND
(Cost $25) 26
----------
RELATED PARTY MONEY MARKET FUND - 3.0%
First American Prime
Obligations Fund, Class Y (G) 40,227,359 40,227
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $40,227) 40,227
----------
INVESTMENTS PURCHASED WITH CASH PROCEEDS
FROM SECURITIES LENDING - 40.2%
COMMERCIAL PAPER - 5.7%
CS First Boston
1.638%, 12/01/03 9,501 9,501
Danske Bank
1.508%, 12/22/03 9,501 9,501
Goldman Sachs
1.518%, 08/28/03 12,351 12,351
Morgan Stanley
1.518%, 06/17/03 4,751 4,751
1.518%, 07/08/03 3,420 3,420
1.518%, 09/22/03 4,751 4,751
Orchard Park
1.475%, 01/06/04 9,501 9,501
UBS Financial
1.390%, 04/01/03 23,749 23,749
----------
TOTAL COMMERCIAL PAPER 77,525
----------
CORPORATE OBLIGATIONS - 4.4%
CS First Boston
1.760%, 04/11/03 9,501 9,501
Deutsche Bank
1.470%, 04/11/03 4,750 4,750
1.580%, 12/11/03 3,800 3,800
</Table>
The accompanying notes are an integral part of the financial statements.
22
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000)/SHARES VALUE (000)
- ----------------------------------------------------------------
General Electric Capital Corporation
1.355%, 07/09/07 $ 4,751 $ 4,751
Merrill Lynch
1.538%, 05/05/03 8,076 8,076
Monet Trust
1.360%, 12/28/03 9,501 9,501
SMM Trust 2002-M
1.450%, 09/23/03 9,501 9,501
URI Trust
1.460%, 09/18/03 9,501 9,501
----------
TOTAL CORPORATE OBLIGATIONS 59,381
----------
MONEY MARKET FUNDS - 3.8%
AIM Liquid Assets Portfolio 16,151,569 16,152
Dreyfus Cash Manage Plus Fund 950,092 950
Evergreen Institutional Money
Market Fund 3,325,323 3,325
HSBC Investor Money Market
Fund - Class I 2,850,277 2,850
Merrill Lynch Premier
Institutional Fund 18,401,878 18,402
Merrimac Cash Series Fund 2,850,277 2,850
One Group Institutional Prime
Money Market Fund 5,700,554 5,701
Reserve Primary Fund 475,046 475
----------
TOTAL MONEY MARKET FUNDS 50,705
----------
OTHER SHORT-TERM INVESTMENTS - 3.6%
Allied Irish Bank
1.340%, 05/09/03 $ 9,501 9,501
1.330%, 06/02/03 4,751 4,751
Commonwealth Life
1.678%, 04/01/03 4,797 4,797
General Electric Capital Assurance
1.370%, 12/19/03 1,900 1,900
Premium Asset Trust 02-7
1.060%, 08/23/03 6,052 6,052
Security Life Denver
1.381%, 01/13/04 12,351 12,351
1.490%, 03/15/04 9,501 9,501
----------
TOTAL OTHER SHORT-TERM INVESTMENTS 48,853
----------
REPURCHASE AGREEMENTS - 22.7%
Bear Stearns
1.420%, 04/10/03 19,002 19,002
CS First Boston
1.370%, 04/01/03 19,002 19,002
1.380%, 04/01/03 23,752 23,752
1.380%, 04/01/03 2,945 2,945
Goldman Sachs
1.520%, 04/01/03 14,251 14,251
1.420%, 04/07/03 9,501 9,501
1.360%, 06/10/03 4,750 4,750
1.400%, 06/11/03 4,750 4,750
Greenwich Capital Markets
1.430%, 04/01/03 28,503 28,503
Lehman Brothers
1.560%, 04/01/03 9,501 9,501
1.640%, 04/01/03 7,126 7,126
1.640%, 04/01/03 30,878 30,878
Merrill Lynch
1.360%, 04/01/03 28,503 28,503
1.500%, 04/01/03 14,251 14,251
1.560%, 04/01/03 11,876 11,876
1.560%, 04/01/03 19,002 19,002
Morgan Stanley
1.470%, 04/01/03 14,251 14,251
1.510%, 04/01/03 $ 29,548 $ 29,548
Salomon Smith Barney
1.540%, 04/01/03 14,251 14,251
----------
TOTAL REPURCHASE AGREEMENTS 305,643
----------
TOTAL INVESTMENTS PURCHASED WITH CASH PROCEEDS
FROM SECURITIES LENDING
(Cost $542,107) 542,107
----------
TOTAL INVESTMENTS - 140.2%
(Cost $1,853,976) 1,890,393
----------
OTHER ASSETS AND LIABILITIES, NET - (40.2)% (541,878)
----------
TOTAL NET ASSETS - 100.0% $1,348,515
----------
</Table>
(A) This security or a portion of this security is out on loan at March 31,
2003. Total loaned securities had a value of $531,027,566 at March 31,
2003. See note 2 in Notes to Financial Statements.
(B) Security sold within the terms of a private placement memorandum, exempt
from registration under Rule 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional buyers." These securities have been determined to
be liquid under the guidelines established by the Funds' board of
directors. As of March 31, 2003, the value of these investments was
$55,136,500 or 4.1% of total net assets.
(C) Securities considered illiquid or restricted. See note 2 in Notes to
Financial Statements.
(D) Delayed Interest (Step-Bonds) - Represents securities that remain
zero-coupon securities until a predetermined date at which time the stated
coupon rate becomes effective and interest becomes payable at regular
intervals. Interest rate shown represents current yield at March 31, 2003,
based upon the estimated timing and amount of future interest and principal
payments.
(E) On March 31, 2003, the total cost of investments purchased on a when-issued
basis was $12,987,813.
(F) Principal only.
(G) This money market fund is advised by U.S. Bancorp Asset Management, Inc.,
which also serves as advisor for this Fund. See note 3 in Notes to
Financial Statements.
CMO - Collateralized Mortgage Obligation
FFCB - Federal Farm Credit Bank
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Assocation
GNMA - Government National Mortgage Association
REIT - Real Estate Investment Trust
REMIC - Real Estate Mortgage Investment Conduit
STRIPS - Separate Trading of Registered Interest and Principal of Securities
TVA - Tennessee Valley Authority
23
<Page>
SHORT TERM BOND FUND
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
ASSET-BACKED SECURITIES - 30.6%
AUTOMOBILES - 9.3%
AESOP Funding II
Series 2003-2A, Class A1
2.740%, 06/20/07 (D) $ 10,000 $ 10,073
Americredit Automobile Receivables Trust
Series 2002-C, Class A2
1.940%, 08/12/05 5,250 5,259
Auto Bond Receivables Trust
Series 1993-I, Class A
6.125%, 11/15/21 (A) (B) 106 --
Capital Auto Receivables Asset Trust
Series 2001-2, Class A3
4.600%, 09/15/05 2,500 2,516
Series 2002-5, Class A3B
2.300%, 04/17/06 3,000 3,033
Series 2001-2, Class A4
5.000%, 12/15/06 6,000 6,230
Capital One Auto Finance Trust
Series 2001-A, Class A4
5.400%, 05/15/08 3,000 3,184
Chase Manhattan Auto Owner Trust
Series 2001-A, Class A3
4.550%, 08/15/05 1,389 1,410
DaimlerChrysler Auto Trust
Series 2000-E, Class A3
6.110%, 11/08/04 4,448 4,496
Series 2000-D, Class A3
6.660%, 01/08/05 1,512 1,531
DaimlerChrysler Master Owner Trust
Series 2002-A, Class A
1.349%, 05/15/07 (C) 5,000 5,001
Ford Credit Auto Owner Trust
Series 2000-G, Class A4
6.620%, 07/15/04 707 713
Series 2001-B, Class A5
5.360%, 06/15/05 3,000 3,101
Honda Auto Receivables Owner Trust
Series 2003-1, Class A3
1.920%, 11/20/06 4,000 4,008
Series 2002-4, Class A4
2.700%, 03/17/08 3,500 3,534
Household Automotive Trust
Series 2001-2, Class A3
4.830%, 03/17/06 2,596 2,640
Navistar Financial Owner Trust
Series 2002-B, Class A3A
1.533%, 03/15/07 (C) 6,500 6,499
Nissan Auto Lease Trust
Series 2002-A, Class A3B
2.560%, 08/15/07 (D) 7,000 7,096
Nissan Auto Receivables Owner Trust
Series 2002-C, Class A4
3.330%, 01/15/08 4,600 4,728
Toyota Auto Receivables Owner Trust
Series 2003-A, Class A4
2.200%, 03/15/10 4,000 3,956
WFS Financial Owner Trust
Series 2002-4, Class A3A
2.390%, 08/20/07 6,000 6,056
----------
85,064
----------
CREDIT CARDS - 9.3%
American Express Credit Account Master Trust
Series 2002-3, Class A
1.397%, 12/15/09 (C) $ 5,000 $ 4,996
Bank One Issuance Trust
Series 2002-A3, Class A3
3.590%, 05/17/10 (E) 6,000 6,103
Capital One Master Trust
Series 1998-4, Class A
5.430%, 01/15/07 5,000 5,115
Series 2001-7A, Class A
3.850%, 08/15/07 5,000 5,126
Series 2001-8A, Class A
4.600%, 08/17/09 6,000 6,329
Citibank Credit Card Issuance Trust
Series 2001-A8, Class A8
4.100%, 12/07/06 3,700 3,851
Dayton Hudson Credit Card Master Trust
Series 1998-1, Class A
5.900%, 05/25/06 3,570 3,619
Discover Card Master Trust I
Series 2000-9, Class A
6.350%, 01/15/06 2,000 2,198
Series 1993-3, Class A
6.200%, 05/16/06 2,200 2,265
Series 2001-5, Class A
5.300%, 11/15/06 4,980 5,196
Series 1999-6, Class A
6.850%, 07/15/07 5,000 5,440
Fleet Credit Card Master Trust II
Series 2003-A, Class A
2.400%, 07/15/08 (E) 8,500 8,522
Household Private Label Credit Card Trust
Series 2001-2, Class A
4.950%, 06/16/08 2,000 2,088
MBNA Master Credit Card Trust
Series 1997-I, Class A
6.550%, 01/15/07 3,500 3,738
Series 1999-M, Class A
6.600%, 04/16/07 2,000 2,152
Nationsbank Credit Card Master Trust
Series 1993-2, Class A
6.000%, 12/15/05 7,275 7,508
Sears Credit Account Master Trust
Series 1999-3, Class A
6.450%, 11/17/09 2,000 2,140
Standard Credit Card Master Trust
Series 1993-2, Class A
5.950%, 10/07/04 3,000 3,058
World Financial Network Credit Card Master Trust
Series 1996-B, Class A
6.950%, 04/15/06 5,400 5,435
----------
84,879
----------
EQUIPMENT LEASES - 0.4%
CIT Equipment Collateral
Series 2001-1, Class A3
5.230%, 10/20/04 827 834
Series 2001-A, Class A4
4.840%, 09/20/12 2,981 3,122
First Sierra Receivables
Series 2000-2, Class A3
7.490%, 12/18/03 44 44
----------
4,000
----------
</Table>
The accompanying notes are an integral part of the financial statements.
24
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
HOME EQUITY - 7.3%
Aames Mortgage Trust
Series 2002-1, Class A2
5.378%, 06/25/29 (F) $ 3,800 $ 3,995
Advanta Mortgage Loan Trust
Series 2000-2, Class A4
7.930%, 04/25/23 (F) 2,300 2,494
AFC Home Equity Loan Trust
Series 1997-2, Class 1A5
6.970%, 06/25/27 956 1,024
Chase Funding Mortgage Loan
Series 2002-4, Class 1A2
2.810%, 10/25/17 4,000 4,038
Series 2003-1, Class 2A1
2.176%, 12/25/21 5,408 5,419
Series 1998-1, Class IA4
6.340%, 04/25/25 3,004 3,050
Contimortgage Home Equity Loan Trust
Series 1998-2, Class A7
6.570%, 03/15/23 2,000 2,125
Emergent Home Equity Loan Trust
Series 1997-3, Class A5
7.290%, 10/20/28 2,599 2,783
EQCC Home Equity Loan Trust
Series 1997-3, Class A8
6.410%, 12/15/04 1,551 1,580
Equivantage Home Equity Loan Trust
Series 1996-1, Class A
6.550%, 10/25/25 719 754
Series 1996-4, Class A
6.750%, 01/25/28 1,808 1,828
FNMA
Series 2002-W11, Class AF3
3.318%, 11/25/32 4,700 4,706
GE Home Equity Loan Trust
Series 1991-1, Class B
8.700%, 09/15/11 537 538
IMC Home Equity Loan Trust
Series 1998-3, Class A7
6.720%, 08/20/29 (F) 5,000 5,268
Irwin Home Equity
Series 2001-2, Class 2A5
6.520%, 02/25/27 (F) 3,900 4,291
Money Store Home Equity Trust
Series 1993-B, Class A2
6.975%, 07/15/08 222 222
Series 1993-B, Class A3
6.100%, 05/15/22 345 349
Series 1994-A, Class A4
6.275%, 12/15/22 755 777
Series 1996-C, Class A6
7.690%, 05/15/24 952 955
Series 1996-D, Class A7
7.110%, 04/15/25 1,602 1,627
Series 1997-B, Class A8
6.900%, 07/15/38 612 626
New Century Home Equity Loan Trust
Series 1997-NC6, Class A7
7.190%, 01/25/29 (F) 4,665 4,982
Prudential Securities Financial
Series 1994-5, Class A1
5.660%, 05/25/24 385 393
Residential Asset Mortgage Products
Series 2002-RS6, Class AI3
3.821%, 01/25/28 $ 7,000 $ 7,154
Saxon Asset Securities Trust
Series 2001-1, Class AF5
6.853%, 03/25/32 (F) 5,000 5,373
----------
66,351
----------
MANUFACTURED HOUSING - 0.2%
Oakwood Mortgage Investors
Series 1999-A, Class A2
5.890%, 04/15/29 1,479 1,491
----------
RECREATIONAL VEHICLES - 0.8%
Distribution Financial Services RV Trust
Series 1999-3, Class A4
6.650%, 03/15/11 1,260 1,288
Series 2001-1, Class A3
4.740%, 05/15/13 5,750 5,846
----------
7,134
----------
UTILITIES - 3.3%
Comed Transitional Funding Trust
Series 1998-1, Class A5
5.440%, 03/25/07 5,500 5,763
Detroit Edison Securitization Funding
Series 2001-1, Class A3
5.875%, 03/01/10 5,000 5,493
Massachusetts RRB Special Purpose Trust
Series 1999-1, Class A4
6.910%, 09/15/09 5,200 5,828
Peco Energy Transition Trust
Series 1999-A, Class A4
5.800%, 03/01/07 2,350 2,481
Series 1999-A, Class A6
6.050%, 03/01/09 5,000 5,543
Public Service New Hampshire Funding
Series 2001-1, Class A2
5.730%, 11/01/10 5,000 5,411
----------
30,519
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $272,889) 279,438
----------
U.S. GOVERNMENT & AGENCY SECURITIES - 28.4%
U.S. AGENCY DEBENTURES - 20.2%
FFCB
2.080%, 12/20/04 3,000 3,030
FHLB
5.375%, 01/05/04 (E) 5,725 5,910
5.250%, 02/13/04 (E) 7,000 7,249
4.875%, 04/16/04 (E) 10,000 10,384
4.875%, 05/14/04 (E) 2,000 2,079
3.625%, 10/15/04 8,000 8,269
4.000%, 02/15/05 (E) 5,000 5,222
3.000%, 08/15/05 (E) 7,000 7,186
5.375%, 02/15/06 (E) 5,000 5,446
2.500%, 03/24/06, Callable
09/24/03 @ 100 7,500 7,501
5.375%, 05/15/06 (E) 3,000 3,275
FHLMC
3.250%, 11/15/04 (E) 6,000 6,171
7.000%, 07/15/05 (E) 3,500 3,906
2.875%, 09/26/05 (E) 7,775 7,822
5.500%, 07/15/06 3,000 3,299
4.300%, 08/08/07 (E) 5,000 5,045
</Table>
25
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
FNMA
4.750%, 03/15/04 (E) $ 5,000 $ 5,173
6.500%, 08/15/04 (E) 6,000 6,415
2.700%, 08/20/04 (E) 5,000 5,024
1.875%, 12/15/04 5,000 5,032
2.020%, 02/28/05, Callable
08/28/03 @ 100 (E) 3,200 3,206
7.000%, 07/15/05 (E) 13,375 14,925
3.000%, 11/14/05, Callable
05/14/03 @ 100 (E) 6,500 6,511
5.500%, 05/02/06 (E) 10,000 10,883
4.375%, 10/15/06 (E) 5,000 5,323
4.750%, 01/02/07 (E) 6,000 6,383
3.500%, 10/15/07, Callable
10/15/04 @ 100 (E) 5,000 5,060
4.000%, 02/07/08, Callable
05/07/03 @ 100 (E) 8,000 8,018
SLMA
5.000%, 06/30/04 (E) 5,000 5,228
3.375%, 07/15/04 (E) 5,500 5,644
----------
184,619
----------
U.S. TREASURIES - 8.2%
U.S. Treasury Notes
3.000%, 02/29/04 (E) 8,000 8,134
7.250%, 05/15/04 (E) 9,300 9,926
2.250%, 07/31/04 (E) 7,000 7,089
2.000%, 11/30/04 (E) 5,000 5,051
1.750%, 12/31/04 (E) 8,000 8,047
7.500%, 02/15/05 (E) 7,000 7,782
6.750%, 05/15/05 (E) 8,000 8,862
5.750%, 11/15/05 (E) 6,000 6,607
3.500%, 11/15/06 (E) 5,000 5,212
4.375%, 05/15/07 (E) 7,500 8,055
----------
74,765
----------
TOTAL U.S. GOVERNMENT & AGENCY SECURITIES
(Cost $253,079) 259,384
----------
CORPORATE BONDS - 25.1%
CONSUMER GOODS - 3.0%
Bristol-Myers Squibb
4.750%, 10/01/06 4,400 4,669
Colgate-Palmolive, Series D
5.340%, 03/27/06 2,950 3,159
Conagra Foods
7.500%, 09/15/05 8,207 9,129
Gillette, Callable 10/15/04 @ 100
3.500%, 10/15/07 6,000 6,030
Unilever Capital
6.875%, 11/01/05 (E) 4,000 4,458
----------
27,445
----------
ENERGY - 0.7%
Conoco
5.900%, 04/15/04 6,000 6,260
----------
FINANCE - 14.6%
American General Finance
5.750%, 11/01/03 2,887 2,963
Bank of America, Series B
6.200%, 08/15/03 2,775 2,825
Bank One
7.625%, 08/01/05 7,000 7,866
Bayerische Landesbank
4.125%, 01/14/05 $ 5,000 $ 5,176
2.500%, 03/30/06 5,500 5,430
Citigroup
5.500%, 08/09/06 4,000 4,347
3.500%, 02/01/08 4,000 4,016
Conoco Funding
5.450%, 10/15/06 3,600 3,916
Countrywide Funding, Series D
6.875%, 09/15/05 1,500 1,645
Countrywide Home Loan
Series J
5.250%, 06/15/04 2,000 2,083
Series F
6.510%, 02/11/05 1,500 1,607
Credit Suisse First Boston
7.750%, 05/15/06 (D) 7,350 8,285
ERAC USA Finance
6.375%, 05/15/03 (D) 3,000 3,013
Fleetboston Financial
7.125%, 04/15/06 2,425 2,677
General Electric Capital, Series A
2.850%, 01/30/06 (E) 6,000 6,099
5.350%, 03/30/06 (E) 4,000 4,325
General Motors Acceptance
4.150%, 02/07/05 7,000 6,996
Goldman Sachs
6.625%, 12/01/04 (D) 1,500 1,613
4.125%, 01/15/08 5,000 5,141
International Lease Finance
5.625%, 06/01/07 (E) 5,000 5,268
Key Bank
7.250%, 06/01/05 2,000 2,205
7.125%, 08/15/06 4,000 4,488
Lehman Brothers Holdings, Series F
7.500%, 09/01/06 3,000 3,443
Marsh & McLennan
6.625%, 06/15/04 4,132 4,368
Mellon Funding
7.500%, 06/15/05 2,100 2,353
Merrill Lynch, Series B
6.130%, 05/16/06 3,655 3,986
Metropolitan Life Global Funding I
4.750%, 06/20/07 (D) 8,000 8,450
Morgan Stanley
7.750%, 06/15/05 2,500 2,788
Paine Webber
6.450%, 12/01/03 1,025 1,060
Wells Fargo Financial
4.875%, 06/12/07 5,000 5,345
Westdeutsche Landesbank
6.750%, 06/15/05 8,600 9,368
----------
133,145
----------
MANUFACTURING - 2.2%
Aluminum Company of America, Series B
6.125%, 06/15/05 6,000 6,525
DaimlerChrysler, Series A
7.375%, 09/15/06 (E) 3,945 4,398
Dover
6.450%, 11/15/05 4,860 5,378
</Table>
The accompanying notes are an integral part of the financial statements.
26
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
Nike
5.500%, 08/15/06 $ 3,891 $ 4,216
----------
20,517
----------
SERVICES - 2.9%
Abbott Laboratories
5.125%, 07/01/04 4,000 4,179
McDonald's, Series G
4.150%, 02/15/05 3,825 3,969
Target
7.500%, 02/15/05 5,850 6,431
5.950%, 05/15/06 4,725 5,189
Wal-Mart Stores
4.150%, 06/15/05 6,000 6,305
----------
26,073
----------
YANKEE - 1.7%
African Development Bank
6.750%, 10/01/04 2,925 3,141
Diageo Capital
6.125%, 08/15/05 6,090 6,659
Ontario (Province of)
7.625%, 06/22/04 (E) 5,000 5,373
----------
15,173
----------
TOTAL CORPORATE BONDS
(Cost $226,508) 228,613
----------
U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES - 8.4%
ADJUSTABLE RATE (C) - 6.4%
FHLMC Pool
4.989%, 01/01/29, #846946 (E) 2,047 2,119
6.047%, 04/01/30, #972055 (E) 2,240 2,335
5.475%, 05/01/30, #847014 (E) 1,865 1,907
4.887%, 10/01/32, #847063 (E) 5,890 6,069
FHLMC TBA
0.000%, 04/01/33 (G) 7,000 7,077
FNMA Pool
3.850%, 02/01/28, #415285 (E) 1,242 1,275
5.975%, 06/01/31, #625338 (E) 3,673 3,840
5.218%, 03/01/32, #545791 (E) 2,628 2,712
5.043%, 05/01/32, #634948 (E) 3,600 3,720
4.500%, 10/01/32, #661645 (E) 6,783 6,949
FNMA Pool TBA
4.115%, 03/01/33, #555369 (G) 8,000 8,240
GNMA Pool
5.750%, 08/20/21, #8824 (E) 924 958
5.750%, 07/20/22, #8006 (E) 1,078 1,116
5.750%, 09/20/25, #8699 (E) 648 671
5.375%, 04/20/26, #8847 654 676
5.750%, 08/20/27, #80106 226 234
5.375%, 01/20/28, #80154 349 358
5.250%, 05/20/29, #80283 (E) 1,991 2,035
4.250%, 06/20/29, #80291 (E) 3,494 3,570
4.500%, 11/20/30, #80469 (E) 1,705 1,734
4.500%, 04/20/31, #80507 (E) 1,204 1,229
----------
58,824
----------
FIXED RATE - 2.0%
FHLMC Gold Pool
5.500%, 10/01/06, #M90680 (E) 1,376 1,427
FHLMC Pool
7.750%, 07/01/09, #184513 27 28
FNMA Pool
6.500%, 12/01/03, #535694 (E) 294 295
6.465%, 06/01/04, #375610 (E) $ 4,696 $ 4,737
6.195%, 06/01/07, #410601 5,000 5,512
GNMA Pool
9.000%, 05/15/16, #158777 157 174
9.000%, 04/15/21, #780398 442 495
10.000%, 02/15/25, #780081 330 375
4.500%, 08/20/31, #80535 (E) 3,741 3,808
5.500%, 02/20/32, #80580 (E) 1,242 1,264
----------
18,115
----------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES
(Cost $76,500) 76,939
----------
CMO - U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES - 3.6%
FIXED RATE - 3.4%
FHLMC REMIC
Series 2420, Class MQ
4.500%, 12/15/07 (E) 7,794 7,865
Series H001, Class A3
2.893%, 10/15/09 (E) 7,000 7,043
Series 2533, Class PA
4.750%, 03/15/10 (E) 7,000 7,232
Series 2114, Class PC
6.000%, 08/15/16 (E) 2,784 2,787
Series 1022, Class J
6.000%, 12/15/20 164 167
FNMA REMIC
Series 2002-89, Class TU
5.000%, 04/25/07 (E) 3,863 3,901
Series 1996-W4, Class A4
6.743%, 12/25/11 (E) 492 493
Series 1993-163, Class PK
6.250%, 10/25/21 (E) 1,065 1,070
Series 1992-150, Class MA
5.500%, 09/25/22 545 577
----------
31,135
----------
Z-BOND (H) - 0.2%
FHLMC REMIC
Series 1541, Class Z
6.750%, 11/15/21 (E) 1,352 1,365
----------
TOTAL CMO - U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES
(Cost $32,467) 32,500
----------
CMO - PRIVATE MORTGAGE-BACKED SECURITIES - 2.0%
ADJUSTABLE RATE (C) - 0.0%
Patten
Series 1995-1A
1.833%, 09/01/13 (A) (B) (D) 8 7
----------
FIXED RATE - 2.0%
Countrywide Home Loans
Series 2002-J4, Class 1A3
5.500%, 10/25/32 6,758 6,924
Series 2002-27, Class A4
5.500%, 12/25/32 6,465 6,620
J.P. Morgan Commercial Mortgage Finance
Series 1999-C7, Class A2
6.507%, 10/15/35 4,350 4,896
----------
18,440
----------
TOTAL CMO - PRIVATE MORTGAGE-BACKED SECURITIES
(Cost $18,530) 18,447
----------
</Table>
27
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000)/SHARES VALUE (000)
- ----------------------------------------------------------------
COMMERCIAL PAPER - 1.6%
Moat Funding
1.370%, 04/01/03 $ 15,000 $ 15,000
----------
TOTAL COMMERCIAL PAPER
(Cost $15,000) 15,000
----------
RELATED PARTY MONEY MARKET FUND - 0.7%
First American Prime
Obligations Fund, Class Y (I) 6,484,715 6,485
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $6,485) 6,485
----------
INVESTMENTS PURCHASED WITH CASH PROCEEDS
FROM SECURITIES LENDING - 37.1%
COMMERCIAL PAPER - 5.3%
CS First Boston
1.638%, 12/01/03 5,929 5,929
Danske Bank
1.508%, 12/22/03 5,930 5,930
Goldman Sachs
1.518%, 08/28/03 7,708 7,708
Morgan Stanley
1.518%, 06/17/03 2,965 2,965
1.518%, 07/08/03 2,135 2,135
1.518%, 09/22/03 2,965 2,965
Orchard Park
1.475%, 01/06/04 5,930 5,930
UBS Financial
1.390%, 04/01/03 14,822 14,822
----------
TOTAL COMMERCIAL PAPER 48,384
----------
CORPORATE OBLIGATIONS - 4.1%
CS First Boston
1.760%, 04/11/03 5,929 5,929
Deutsche Bank
1.470%, 04/11/03 2,965 2,965
1.580%, 12/11/03 2,372 2,372
General Electric Capital Corporation
1.355%, 07/09/07 2,965 2,965
Merrill Lynch
1.538%, 05/05/03 5,040 5,040
Monet Trust
1.360%, 12/28/03 5,930 5,930
SMM Trust 2002-M
1.450%, 09/23/03 5,930 5,930
URI Trust
1.460%, 09/18/03 5,930 5,930
----------
TOTAL CORPORATE OBLIGATIONS 37,061
----------
MONEY MARKET FUNDS - 3.5%
AIM Liquid Assets Portfolio 10,080,276 10,080
Dreyfus Cash Manage Plus Fund 592,957 593
Evergreen Institutional Money
Market Fund 2,075,351 2,075
HSBC Investor Money Market
Fund - Class I 1,778,872 1,779
Merrill Lynch Premier
Institutional Fund 11,484,705 11,485
Merrimac Cash Series Fund 1,778,872 1,779
One Group Institutional Prime
Money Market Fund 3,557,745 3,558
Reserve Primary Fund 296,479 296
----------
TOTAL MONEY MARKET FUNDS 31,645
----------
</Table>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
OTHER SHORT-TERM INVESTMENTS - 3.3%
Allied Irish Bank
1.340%, 05/09/03 $ 5,929 $ 5,929
1.330%, 06/02/03 2,965 2,965
Commonwealth Life
1.678%, 04/01/03 2,994 2,994
General Electric Capital Assurance
1.370%, 12/19/03 1,186 1,186
Premium Asset Trust 02-7
1.060%, 08/23/03 3,777 3,777
Security Life Denver
1.381%, 01/13/04 7,708 7,708
1.490%, 03/15/04 5,930 5,930
----------
TOTAL OTHER SHORT-TERM INVESTMENTS 30,489
----------
REPURCHASE AGREEMENTS - 20.9%
Bear Stearns
1.420%, 04/10/03 11,859 11,859
CS First Boston
1.370%, 04/01/03 11,859 11,859
1.380%, 04/01/03 1,838 1,838
1.380%, 04/01/03 14,824 14,824
Goldman Sachs
1.520%, 04/01/03 8,894 8,894
1.420%, 04/07/03 5,929 5,929
1.360%, 06/10/03 2,965 2,965
1.400%, 06/11/03 2,965 2,965
Greenwich Capital Markets
1.430%, 04/01/03 17,789 17,789
Lehman Brothers
1.560%, 04/01/03 5,930 5,930
1.640%, 04/01/03 4,447 4,447
1.640%, 04/01/03 19,271 19,271
Merrill Lynch
1.360%, 04/01/03 17,789 17,789
1.500%, 04/01/03 8,894 8,894
1.560%, 04/01/03 7,412 7,412
1.560%, 04/01/03 11,859 11,859
Morgan Stanley
1.470%, 04/01/03 8,894 8,894
1.510%, 04/01/03 18,441 18,441
Salomon Smith Barney
1.540%, 04/01/03 8,894 8,894
----------
TOTAL REPURCHASE AGREEMENTS 190,753
----------
TOTAL INVESTMENTS PURCHASED WITH CASH PROCEEDS
FROM SECURITIES LENDING
(Cost $338,332) 338,332
----------
TOTAL INVESTMENTS - 137.5%
(Cost $1,239,790) 1,255,138
----------
OTHER ASSETS AND LIABILITIES, NET - (37.5)% (342,011)
----------
TOTAL NET ASSETS - 100.0% $ 913,127
----------
</Table>
The accompanying notes are an integral part of the financial statements.
28
<Page>
(A) Securities considered illiquid or restricted. See note 2 in Notes to
Financial Statements.
(B) Security valued at fair value under guidelines established and approved by
the Funds' board of directors. Total fair valued securities had a value of
$6,641, which represents 0.0% of total net assets at March 31, 2003. See
note 2 in Notes to Financial Statements.
(C) Variable Rate Security - The rate shown is the rate in effect as of March
31, 2003.
(D) Security sold within the terms of a private placement memorandum, exempt
from registration under Rule 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional buyers." These securities have been determined to
be liquid under the guidelines established by the Funds' board of
directors. As of March 31, 2003, the value of these investments was
$38,536,358 or 4.2% of total net assets.
(E) This security or a portion of this security is out on loan at March 31,
2003. Total loaned securities had a value of $331,242,957 at March 31,
2003. See note 2 in Notes to Financial Statements.
(F) Delayed Interest (Step-Bonds) - Represents securities that remain
zero-coupon securities until a predetermined date at which time the stated
coupon rate becomes effective and interest becomes payable at regular
intervals. Interest rate shown represents current yield at March 31, 2003,
based upon the estimated timing and amount of future interest and principal
payments.
(G) On March 31, 2003 the total cost of investments purchased on a when-issued
basis was $15,328,438.
(H) Z-Bonds - Represents securities that pay no interest or principal during
their accrual periods, but accrue additional principal at specified
rates. Interest rate disclosed represents current yield based upon the
cost basis and estimated future cash flows.
(I) This money market fund is advised by U.S. Bancorp Asset Management, Inc.,
which also serves as advisor for this Fund. See note 3 in Notes to
Financial Statements.
CMO - Collateralized Mortgage Obligation
FFCB - Federal Farm Credit Bank
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
REMIC - Real Estate Mortgage Investment Conduit
SLMA - Student Loan Marketing Association
TBA - To Be Announced
U.S. GOVERNMENT MORTGAGE FUND
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES - 79.6%
ADJUSTABLE RATE (A) - 1.4%
FNMA Pool
4.461%, 08/01/27, #545271 $ 3,913 $ 4,047
----------
FIXED RATE - 78.2%
FHLMC Gold Pool
8.500%, 03/01/06, #E00022 25 26
7.500%, 04/01/08, #E45929 40 43
7.000%, 07/01/11, #E20252 153 164
7.000%, 11/01/11, #E65619 58 62
7.500%, 09/01/12, #G10735 720 774
5.500%, 12/01/12, #E68353 2,096 2,195
5.500%, 05/01/13, #G10814 874 915
6.000%, 10/01/13, #E72802 1,981 2,083
5.500%, 01/01/14, #E00617 3,749 3,923
7.000%, 09/01/14, #E00746 912 975
6.000%, 09/01/22, #C90580 3,385 3,527
6.500%, 01/01/28, #G00876 2,920 3,059
6.500%, 01/01/30, #C55738 7,469 7,801
7.500%, 01/01/30, #C35768 653 696
6.500%, 03/01/31, #G01244 4,420 4,621
7.000%, 06/01/32, #C68248 3,060 3,223
FHLMC Gold Pool TBA
6.500%, 11/01/28, #C00676 (B) 5,730 5,991
6.000%, 12/01/30, #C53880 (B) 8,348 8,658
FHLMC Pool
9.500%, 09/01/04, #380053 1 1
FNMA Pool
7.000%, 11/01/11, #250738 70 75
7.000%, 11/01/11, #349630 54 58
7.000%, 11/01/11, #351122 48 51
6.000%, 04/01/13, #425550 1,010 1,064
6.500%, 08/01/13, #251901 825 879
6.000%, 11/01/13, #556195 2,427 2,561
6.000%, 12/01/13, #449173 2,312 2,434
7.000%, 07/01/14, #252637 1,144 1,226
7.000%, 10/01/14, #252799 613 657
6.500%, 07/01/17, #254373 4,046 4,284
7.000%, 07/01/17, #254414 4,062 4,334
5.500%, 10/01/17, #665315 3,245 3,368
5.500%, 12/01/17, #673010 3,282 3,406
6.000%, 12/01/17, #254547 2,802 2,932
5.000%, 04/01/18, #685197 5,000 5,133
6.000%, 10/01/22, #254513 3,971 4,141
8.000%, 07/01/24, #190264 179 195
6.500%, 10/01/27, #400141 253 265
7.000%, 12/01/27, #313941 2,547 2,695
6.500%, 10/01/28, #442671 2,254 2,357
6.500%, 12/01/28, #323422 2,950 3,085
6.500%, 02/01/29, #252255 2,536 2,652
6.000%, 05/01/31, #511797 2,854 2,960
7.000%, 09/01/31, #596680 4,166 4,418
7.500%, 09/01/31, #602427 1,886 2,007
6.500%, 10/01/31, #603674 2,387 2,490
6.500%, 01/01/32, #622707 2,687 2,803
7.000%, 03/01/32, #635970 3,775 3,979
6.500%, 06/01/32, #596712 9,564 10,027
7.000%, 07/01/32, #545813 2,743 2,891
7.000%, 07/01/32, #545815 2,787 2,937
6.000%, 08/01/32, #656269 4,167 4,320
6.500%, 08/01/32, #649874 4,762 4,968
6.500%, 08/01/32, #656871 2,714 2,831
6.500%, 08/01/32, #658822 3,744 3,905
6.000%, 09/01/32, #254447 4,384 4,544
</Table>
29
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
6.000%, 10/01/32, #661581 $ 960 $ 995
6.500%, 11/01/32, #254516 4,749 4,954
6.000%, 01/01/33, #676647 4,878 5,056
5.500%, 03/01/33, #689109 5,153 5,260
FNMA TBA
4.500%, 03/01/18 (B) 3,000 3,043
5.000%, 04/01/18 (B) 5,500 5,648
5.500%, 11/01/32 (B) 8,000 8,167
GNMA Pool
8.000%, 01/15/07, #315126 17 19
9.000%, 07/15/09, #390782 65 70
9.000%, 11/15/09, #359559 77 84
8.000%, 10/15/10, #414750 161 175
6.500%, 07/15/13, #462638 1,571 1,686
8.500%, 05/15/17, #219152 23 25
8.500%, 06/15/21, #307921 17 19
7.500%, 12/15/22, #347332 274 295
8.000%, 05/15/23, #352469 79 87
9.500%, 02/15/25, #365292 112 124
9.500%, 02/15/25, #392967 1 1
9.500%, 02/15/25, #401796 17 19
9.500%, 03/15/25, #407257 15 17
9.500%, 04/15/25, #386741 40 44
7.000%, 09/15/27, #455304 126 134
6.500%, 07/15/28, #780825 4,294 4,533
7.000%, 11/15/29, #781113 2,458 2,613
7.000%, 07/15/31, #781324 2,918 3,098
6.500%, 08/20/31, #3120 2,806 2,940
7.500%, 12/15/31, #570134 1,664 1,779
6.500%, 02/15/32, #569621 3,472 3,648
6.500%, 08/15/32, #590376 5,338 5,607
GNMA Pool TBA
6.000%, 03/15/33, #603520 (B) 5,000 5,216
----------
217,025
----------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES
(Cost $216,629) 221,072
----------
CMO - U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES - 8.3%
FIXED RATE - 8.3%
FHLMC REMIC
Series 2498, Series UA
5.500%, 09/15/12 2,500 2,582
Series T-10, Class A3
6.540%, 01/25/17 1,339 1,364
Series 2000, Class B
6.500%, 03/15/26 1,311 1,341
Series 2382, Class DA
5.500%, 10/15/30 2,751 2,861
FNMA REMIC
Series 1993-210, Class PL
6.500%, 04/25/23 4,250 4,708
Series 2002-W1, Class 2A
7.500%, 02/25/42 4,313 4,730
GNMA REMIC
Series 1999-22, Class BD
7.000%, 05/21/25 3,307 3,334
Series 2001-61, Class ED
6.000%, 12/16/31 2,000 2,087
----------
TOTAL CMO - U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES
(Cost $21,948) 23,007
----------
ASSET-BACKED SECURITIES - 4.8%
AUTOMOBILES - 1.8%
WFS Financial Owner Trust
Series 2002-1, Class A3B
1.540%, 12/20/06 (A) $ 5,000 $ 5,003
----------
HOME EQUITY - 1.5%
Corestates Home Equity Trust
Series 1994-1, Class A
6.650%, 05/15/09 460 459
First Plus Home Loan Trust
Series 1998-3, Class A7
6.950%, 10/10/22 2,896 3,045
GRMT Mortgage Loan Trust
Series 2001-1A, Class M1
7.772%, 07/20/31 500 545
----------
4,049
----------
MANUFACTURED HOUSING - 1.5%
Oakwood Mortgage Investors
Series 1999-A, Class A2
5.890%, 04/15/29 751 757
Vanderbilt Mortgage Finance
Series 1999-B, Class 1A4
6.545%, 04/07/18 3,250 3,425
----------
4,182
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $13,124) 13,234
----------
CMO - PRIVATE MORTGAGE-BACKED SECURITIES - 4.3%
ADJUSTABLE RATE (A) - 0.7%
First Nationwide Trust
Series 2001-3, Class 2A1
8.206%, 01/25/23 1,755 1,938
----------
FIXED RATE - 3.6%
Citicorp Mortgage Securities
Series 2001-6, Class M
6.500%, 05/25/29 2,821 2,995
Residential Accredit Loans
Series 1997-QS13, Class M3
7.250%, 12/25/27 1,884 2,020
Wells Fargo Mortgage Backed
Securities Trust, Series 2003-D, Class A
14.931%, 02/25/33 (C) 4,902 5,032
----------
10,047
----------
TOTAL CMO - PRIVATE MORTGAGE-BACKED SECURITIES
(Cost $11,683) 11,985
----------
COMMERCIAL PAPER - 3.6%
Corporate Asset Funding
1.250%, 04/09/03 5,000 4,999
Dorada Finance
1.290%, 04/10/03 5,000 4,998
----------
TOTAL COMMERCIAL PAPER
(Cost $9,997) 9,997
----------
</Table>
The accompanying notes are an integral part of the financial statements.
30
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ----------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND - 11.7%
First American Government
Obligations Fund, Class Y (D) 32,444,878 $ 32,445
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $32,445) 32,445
----------
TOTAL INVESTMENTS - 112.3%
(Cost $305,826) 311,740
----------
OTHER ASSETS AND LIABILITIES, NET - (12.3)% (34,224)
----------
TOTAL NET ASSETS - 100.0% $277,516
----------
</Table>
(A) Variable Rate Security - The rate shown is the rate in effect as of March
31, 2003.
(B) On March 31, 2003, the total cost of investments purchased on a when-issued
basis was $36,723,169.
(C) Securities considered illiquid or restricted. See note 2 in Notes to
Financial Statements.
(D) This money market fund is advised by U.S. Bancorp Asset Management, Inc.,
which also serves as advisor for this Fund. See note 3 in Notes to
Financial Statements.
CMO - Collateralized Mortgage Obligation
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
REMIC - Real Estate Mortgage Investment Conduit
TBA - To Be Announced
31
<Page>
STATEMENTS OF ASSETS AND LIABILITIES March 31, 2003 (unaudited), in thousands,
except per share data
<Table>
<Caption>
CORE BOND CORPORATE BOND
FUND FUND
- ----------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value*+ $ 3,546,291 $ 335,083
Cash -- 76
Cash denominated in foreign currencies, at value** -- --
Dividends and interest receivable 21,256 4,425
Receivable for investment securities sold 9,853 --
Capital shares sold 2,803 431
Prepaid expenses and other assets 39 11
- ----------------------------------------------------------------------------------------------------------
TOTAL ASSETS 3,580,242 340,026
==========================================================================================================
LIABILITIES:
Bank overdraft 88 --
Payable for investment securities purchased 211,147 2,170
Capital shares redeemed 3,674 89
Payable upon return of securities loaned 951,099 71,017
Payable for advisory, co-administration, and custodian fees 1,329 157
Payable for distribution and shareholder servicing fees 85 21
Accrued expenses and other liabilities -- 2
- ----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,167,422 73,456
==========================================================================================================
NET ASSETS $ 2,412,820 $ 266,570
==========================================================================================================
COMPOSITION OF NET ASSETS:
Portfolio capital $ 2,353,589 $ 295,958
Undistributed (distributions in excess of) net investment income (1,544) (178)
Accumulated net realized gain (loss) on investments 1,697 (34,584)
Net unrealized appreciation of investments 59,078 5,374
Net unrealized depreciation on forward foreign currency
contracts, foreign currency, and translation of assets and
liabilities denominated in foreign currency -- --
- ----------------------------------------------------------------------------------------------------------
NET ASSETS $ 2,412,820 $ 266,570
==========================================================================================================
*Investments in securities, at cost $ 3,487,213 $ 329,709
**Cash denominated in foreign currencies, at cost $ -- $ --
+Including securities loaned $ 933,553 $ 69,527
CLASS A:
Net assets $ 199,594 $ 10,521
Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 17,349 1,067
Net asset value and redemption price per share $ 11.50 $ 9.86
Maximum offering price per share (1) $ 12.01 $ 10.30
CLASS B:
Net assets $ 31,303 $ 15,942
Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 2,739 1,623
Net asset value and offering price per share (2) $ 11.43 $ 9.82
CLASS C:
Net assets $ 15,096 $ 5,337
Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 1,316 544
Net asset value and offering price per share (2) $ 11.47 $ 9.81
Maximum offering price per share (1) $ 11.59 $ 9.91
CLASS S:
Net assets $ 49,457 $ 3,171
Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 4,300 322
Net asset value, offering price, and redemption price per share $ 11.50 $ 9.86
CLASS Y:
Net assets $ 2,117,370 $ 231,599
Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 184,086 23,504
Net asset value, offering price, and redemption price per share $ 11.50 $ 9.85
</Table>
32
<Page>
<Table>
<Caption>
INTERMEDIATE U.S.
GOVERNMENT INTERMEDIATE GOVERNMENT
HIGH INCOME BOND TERM SHORT TERM MORTGAGE
BOND FUND FUND(3) BOND FUND BOND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value*+ $ 273,583 $ 458,608 $ 1,890,393 $ 1,255,138 $ 311,740
Cash 15 -- -- 6 1
Cash denominated in foreign currencies, at value** 3,043 -- -- -- --
Dividends and interest receivable 4,803 3,959 13,361 7,593 1,255
Receivable for investment securities sold 155 -- 32,868 3,080 17,264
Capital shares sold 345 432 7,507 2,418 1,307
Prepaid expenses and other assets 27 4 34 31 15
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 281,971 463,003 1,944,163 1,268,266 331,582
===================================================================================================================================
LIABILITIES:
Bank overdraft -- -- 381 -- --
Payable for investment securities purchased 274 4,995 49,592 15,334 53,808
Capital shares redeemed 642 849 2,908 1,004 81
Payable upon return of securities loaned 56,569 -- 542,107 338,332 --
Payable for advisory, co-administration, and custodian fees 156 232 649 446 148
Payable for distribution and shareholder servicing fees 29 -- 11 23 29
Accrued expenses and other liabilities -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 57,670 6,076 595,648 355,139 54,066
===================================================================================================================================
NET ASSETS $ 224,301 $ 456,927 $ 1,348,515 $ 913,127 $ 277,516
===================================================================================================================================
COMPOSITION OF NET ASSETS:
Portfolio capital $ 255,927 $ 414,949 $ 1,309,294 $ 905,218 $ 271,944
Undistributed (distributions in excess of) net investment income (47) (90) 361 (931) (983)
Accumulated net realized gain (loss) on investments (34,318) 15,997 2,443 (6,508) 641
Net unrealized appreciation of investments 2,789 26,071 36,417 15,348 5,914
Net unrealized depreciation on forward foreign currency
contracts, foreign currency, and translation of assets and
liabilities denominated in foreign currency (50) -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 224,301 $ 456,927 $ 1,348,515 $ 913,127 $ 277,516
===================================================================================================================================
*Investments in securities, at cost $ 270,794 $ 432,537 $ 1,853,976 $ 1,239,790 $ 305,826
**Cash denominated in foreign currencies, at cost $ 3,076 $ -- $ -- $ -- $ --
+Including securities loaned $ 55,135 $ -- $ 531,028 $ 331,243 $ --
CLASS A:
Net assets $ 45,327 $ 1,522 $ 72,036 $ 168,731 $ 22,120
Shares issued and outstanding ($0.0001 par value --
2 billion authorized) 5,307 152 6,942 16,410 2,007
Net asset value and redemption price per share $ 8.54 $ 10.05 $ 10.38 $ 10.28 $ 11.02
Maximum offering price per share (1) $ 8.92 $ 10.28 $ 10.62 $ 10.52 $ 11.51
CLASS B:
Net assets $ 6,721 -- -- -- $ 10,348
Shares issued and outstanding ($0.0001 par value --
2 billion authorized) 790 -- -- -- 938
Net asset value and offering price per share (2) $ 8.50 -- -- -- $ 11.04
CLASS C:
Net assets $ 17,085 -- -- -- $ 15,334
Shares issued and outstanding ($0.0001 par value --
2 billion authorized) 2,006 -- -- -- 1,396
Net asset value and offering price per share (2) $ 8.52 -- -- -- $ 10.98
Maximum offering price per share (1) $ 8.61 -- -- -- $ 11.09
CLASS S:
Net assets $ 263 -- $ 12,246 $ 8,553 $ 22,192
Shares issued and outstanding ($0.0001 par value --
2 billion authorized) 31 -- 1,180 832 2,020
Net asset value, offering price, and redemption price per share $ 8.61 -- $ 10.38 $ 10.28 $ 10.98
CLASS Y:
Net assets $ 154,905 $ 455,405 $ 1,264,233 $ 735,843 $ 207,522
Shares issued and outstanding ($0.0001 par value --
2 billion authorized) 18,130 45,317 122,166 71,539 18,821
Net asset value, offering price, and redemption price per share $ 8.54 $ 10.05 $ 10.35 $ 10.29 $ 11.03
</Table>
(1) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge. For a description of front-end sales charges, see
note 1 in Notes to Financial Statements.
(2) Class B and C have a contingent deferred sales charge. For a description of
this sales charge, see notes 1 and 3 in Notes to Financial Statements.
(3) Commenced operations on October 25, 2002.
The accompanying notes are an integral part of the financial statements.
33
<Page>
STATEMENTS OF OPERATIONS For the six months ended March 31, 2003 (unaudited), in
thousands
<Table>
<Caption>
CORE BOND CORPORATE BOND
FUND FUND
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 35,492 $ 7,934
Dividends -- --
Securities lending 164 19
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 35,656 7,953
========================================================================================
EXPENSES:
Investment advisory fees 3,579 859
Co-administration fees and expenses
(including per account transfer agency fees) 2,004 344
Custodian fees 72 12
Directors' fees 11 2
Registration fees 2 17
Professional fees 19 3
Other 16 2
Printing 28 4
Distribution and shareholder servicing fees - Class A 156 12
Distribution and shareholder servicing fees - Class B 88 85
Distribution and shareholder servicing fees - Class C 50 26
Shareholder servicing fees - Class S 36 4
- ----------------------------------------------------------------------------------------
TOTAL EXPENSES 6,061 1,370
========================================================================================
Less: Fee waivers (720) (323)
- ----------------------------------------------------------------------------------------
TOTAL NET EXPENSES 5,341 1,047
========================================================================================
INVESTMENT INCOME - NET 30,315 6,906
========================================================================================
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS - NET:
Net realized gain (loss) on investments 27,492 1,732
Net realized gain on forward foreign currency contracts
and foreign currency transactions -- --
Net change in unrealized appreciation or
depreciation of investments (22,856) 4,974
Net change in unrealized appreciation or depreciation
of forward foreign currency contracts, foreign
currency, and translation of other assets and
liabilities denominated in foreign currency -- --
- ----------------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 4,636 6,706
========================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 34,951 $ 13,612
========================================================================================
</Table>
34
<Page>
<Table>
<Caption>
HIGH INTERMEDIATE INTERMEDIATE U.S.
INCOME BOND GOVERNMENT TERM SHORT TERM GOVERNMENT
FUND BOND FUND(1) BOND FUND BOND FUND MORTGAGE FUND
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 7,608 $ 9,813 $ 31,463 $ 14,879 $ 5,714
Dividends 10 -- -- -- --
Securities lending -- -- 192 97 --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 7,618 9,813 31,655 14,976 5,714
===================================================================================================================================
EXPENSES:
Investment advisory fees 608 1,059 3,219 1,967 619
Co-administration fees and expenses
(including per account transfer agency fees) 247 593 1,785 1,085 347
Custodian fees 9 21 64 39 12
Directors' fees 1 3 8 5 2
Registration fees 17 3 -- 4 14
Professional fees 2 6 14 9 3
Other 2 3 9 7 2
Printing 3 8 19 11 4
Distribution and shareholder servicing fees - Class A 27 1 83 210 23
Distribution and shareholder servicing fees - Class B 23 -- -- -- 39
Distribution and shareholder servicing fees - Class C 38 -- -- -- 48
Shareholder servicing fees - Class S -- -- 14 8 28
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 977 1,697 5,215 3,345 1,141
===================================================================================================================================
Less: Fee waivers (64) (426) (1,295) (855) (137)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET EXPENSES 913 1,271 3,920 2,490 1,004
===================================================================================================================================
INVESTMENT INCOME - NET 6,705 8,542 27,735 12,486 4,710
===================================================================================================================================
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS - NET:
Net realized gain (loss) on investments (2,801) 16,532 22,482 1,228 745
Net realized gain on forward foreign currency contracts
and foreign currency transactions 11 -- -- -- --
Net change in unrealized appreciation or
depreciation of investments 14,611 26,071 (15,284) (329) (107)
Net change in unrealized appreciation or depreciation
of forward foreign currency contracts, foreign
currency, and translation of other assets and
liabilities denominated in foreign currency -- (43) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 11,778 42,603 7,198 899 638
===================================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 18,483 $ 51,145 $ 34,933 $ 13,385 $ 5,348
===================================================================================================================================
</Table>
(1) Commenced operations on October 25, 2002.
The accompanying notes are an integral part of the financial statements.
35
<Page>
STATEMENTS OF CHANGES IN NET ASSETS in thousands
<Table>
<Caption>
CORE BOND CORPORATE BOND
FUND FUND
- -------------------------------------------------------------------------------------------------------------------
10/1/02 10/1/01 10/1/02 10/1/01
TO TO TO TO
3/31/03 9/30/02 3/31/03 9/30/02
- -------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
OPERATIONS:
Investment income - net $ 30,315 $ 73,522 $ 6,906 $ 14,023
Net realized gain (loss) on investments 27,492 13,696 1,732 (8,043)
Net realized gain on forward foreign currency
contracts and foreign currency transactions -- -- -- --
Net change in unrealized appreciation or
depreciation of investments (22,856) (5,915) 4,974 (1,455)
Net change in unrealized appreciation or
depreciation of forward foreign currency
contracts, foreign currency, and translation
of other assets and liabilities denominated
in foreign currency -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 34,951 81,303 13,612 4,525
===================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (2,643) (5,694) (264) (563)
Class B (306) (643) (414) (1,089)
Class C (174) (393) (126) (269)
Class S (599) (1,583) (96) (227)
Class Y (28,137) (64,394) (6,184) (12,232)
Net realized gain on investments:
Class A -- -- -- (6)
Class B -- -- -- (13)
Class C -- -- -- (3)
Class S -- -- -- (2)
Class Y -- -- -- (114)
Return of capital:
Class A -- (51) -- (1)
Class B -- (7) -- (3)
Class C -- (4) -- (1)
Class S -- (14) -- (1)
Class Y -- (501) -- (33)
- -------------------------------------------------------------------------------------------------------------------
Total distributions (31,859) (73,284) (7,084) (14,557)
===================================================================================================================
CAPITAL SHARE TRANSACTIONS (2):
Class A:
Proceeds from sales 18,670 52,786 3,489 2,755
Reinvestment of distributions 1,904 4,057 195 423
Payments for redemptions (29,639) (54,463) (2,074) (3,903)
Shares issued in connection with the
acquisition of Fund net assets 86,055 -- -- --
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class A transactions 76,990 2,380 1,610 (725)
- -------------------------------------------------------------------------------------------------------------------
Class B:
Proceeds from sales 2,121 4,648 1,016 1,464
Reinvestment of distributions 272 581 289 759
Payments for redemptions (2,966) (3,694) (4,530) (5,196)
Shares issued in connection with the
acquisition of Fund net assets 15,099 -- -- --
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class B transactions 14,526 1,535 (3,225) (2,973)
- -------------------------------------------------------------------------------------------------------------------
Class C:
Proceeds from sales 1,938 7,032 337 1,921
Reinvestment of distributions 170 386 119 256
Payments for redemptions (2,385) (4,975) (534) (1,872)
Shares issued in connection with the
acquisition of Fund net assets 5,671 -- -- --
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class C transactions 5,394 2,443 (78) 305
- -------------------------------------------------------------------------------------------------------------------
Class S:
Proceeds from sales 7,364 11,652 172 2,448
Reinvestment of distributions 590 1,586 92 221
Payments for redemptions (21,933) (15,236) (748) (2,184)
Shares issued in connection with the
acquisition of Fund net assets 30,116 -- -- --
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class S transactions 16,137 (1,998) (484) 485
- -------------------------------------------------------------------------------------------------------------------
Class Y:
Proceeds from sales 172,738 235,496 46,476 67,697
Reinvestment of distributions 9,129 18,366 681 1,323
Payments for redemptions (242,738) (424,808) (25,970) (41,314)
Shares issued in connection with the
acquisition of Common Trust Fund net assets 13,076 -- -- --
Shares issued in connection with the
acquisition of Fund net assets 957,884 -- -- --
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class Y transactions 910,089 (170,946) 21,187 27,706
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital share transactions 1,023,136 (166,586) 19,010 24,798
- -------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 1,026,228 (158,567) 25,538 14,766
NET ASSETS AT BEGINNING OF PERIOD 1,386,592 1,545,159 241,032 226,266
===================================================================================================================
NET ASSETS AT END OF PERIOD $ 2,412,820 $ 1,386,592 $ 266,570 $ 241,032
===================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME AT END OF PERIOD $ (1,544) $ -- $ (178) $ --
===================================================================================================================
</Table>
36
<Page>
<Table>
<Caption>
INTERMEDIATE
HIGH INCOME BOND GOVERNMENT INTERMEDIATE TERM
FUND BOND FUND BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
10/1/02 10/1/02 10/25/02 (1) 10/1/02 10/1/01
TO TO TO TO TO
3/31/03 9/30/02 3/31/03 3/31/03 9/30/02
- -----------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
OPERATIONS:
Investment income - net $ 6,705 $ 14,614 $ 8,542 $ 27,735 $ 49,380
Net realized gain (loss) on investments (2,801) (13,064) 16,532 22,482 (1,622)
Net realized gain on forward foreign currency
contracts and foreign currency transactions 11 2 -- -- --
Net change in unrealized appreciation or
depreciation of investments 14,611 4,732 26,071 (15,284) 12,719
Net change in unrealized appreciation or
depreciation of forward foreign currency
contracts, foreign currency, and translation
of other assets and liabilities denominated
in foreign currency (43) (19) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 18,483 6,265 51,145 34,933 60,477
===================================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (836) (1,501) (15) (1,356) (3,120)
Class B (156) (253) -- -- --
Class C (267) (390) -- -- --
Class S (1) -- -- (229) (160)
Class Y (5,495) (12,433) (8,617) (25,784) (46,355)
Net realized gain on investments:
Class A -- -- (1) -- --
Class B -- -- -- -- --
Class C -- -- -- -- --
Class S -- -- -- -- --
Class Y -- -- (534) -- --
Return of capital:
Class A -- -- -- -- (54)
Class B -- -- -- -- --
Class C -- -- -- -- --
Class S -- -- -- -- (5)
Class Y -- -- -- -- (816)
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions (6,755) (14,577) (9,167) (27,369) (50,510)
===================================================================================================================================
CAPITAL SHARE TRANSACTIONS (2):
Class A:
Proceeds from sales 7,879 2,976 1,512 15,565 28,252
Reinvestment of distributions 503 874 15 1,001 2,308
Payments for redemptions (5,905) (3,999) (6) (10,012) (27,067)
Shares issued in connection with the
acquisition of Fund net assets 23,374 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class A transactions 25,851 (149) 1,521 6,554 3,493
- -----------------------------------------------------------------------------------------------------------------------------------
Class B:
Proceeds from sales 830 2,189 -- -- --
Reinvestment of distributions 83 133 -- -- --
Payments for redemptions (589) (328) -- -- --
Shares issued in connection with the
acquisition of Fund net assets 1,910 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class B transactions 2,234 1,994 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Class C:
Proceeds from sales 2,241 3,547 -- -- --
Reinvestment of distributions 247 337 -- -- --
Payments for redemptions (1,896) (1,565) -- -- --
Shares issued in connection with the
acquisition of Fund net assets 9,735 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class C transactions 10,327 2,319 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Class S:
Proceeds from sales 15 131 -- 8,443 6,552
Reinvestment of distributions 1 -- -- 194 105
Payments for redemptions (5) (125) -- (2,522) (1,422)
Shares issued in connection with the
acquisition of Fund net assets 243 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class S transactions 254 6 -- 6,115 5,235
- -----------------------------------------------------------------------------------------------------------------------------------
Class Y:
Proceeds from sales 21,201 39,319 498,317 461,752 294,924
Reinvestment of distributions 1,079 2,521 544 10,623 15,604
Payments for redemptions (48,669) (54,456) (85,433) (193,860) (220,100)
Shares issued in connection with the
acquisition of Common Trust Fund net assets -- -- -- -- --
Shares issued in connection with the
acquisition of Fund net assets 36,227 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class Y transactions 9,838 (12,616) 413,428 278,515 90,428
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital share transactions 48,504 (8,446) 414,949 291,184 99,156
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 60,232 (16,758) 456,927 298,748 109,123
NET ASSETS AT BEGINNING OF PERIOD 164,069 180,827 1,049,767 940,644 651,626
===================================================================================================================================
NET ASSETS AT END OF PERIOD $ 224,301 $ 164,069 $ 456,927 $ 1,348,515 $ 1,049,767
===================================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME AT END OF PERIOD $ (47) $ 3 $ (90) $ 361 $ (5)
===================================================================================================================================
<Caption>
SHORT TERM BOND U.S. GOVERNMENT
FUND MORTGAGE FUND
- -------------------------------------------------------------------------------------------------------------------
10/1/02 10/1/01 10/1/02 10/1/01
TO TO TO TO
3/31/03 9/30/02 3/31/03 9/30/02
- -------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
OPERATIONS:
Investment income - net $ 12,486 $ 20,442 $ 4,710 $ 10,205
Net realized gain (loss) on investments 1,228 1,832 745 7,575
Net realized gain on forward foreign currency
contracts and foreign currency transactions -- -- -- --
Net change in unrealized appreciation or
depreciation of investments (329) 3,212 (107) (3,630)
Net change in unrealized appreciation or
depreciation of forward foreign currency
contracts, foreign currency, and translation
of other assets and liabilities denominated
in foreign currency -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 13,385 25,486 5,348 14,150
===================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (2,752) (5,904) (430) (546)
Class B -- -- (151) (144)
Class C -- -- (194) (58)
Class S (105) (60) (507) (1,076)
Class Y (10,556) (15,035) (4,574) (9,186)
Net realized gain on investments:
Class A -- -- (183) --
Class B -- -- (75) --
Class C -- -- (81) --
Class S -- -- (238) --
Class Y -- -- (1,877) --
Return of capital:
Class A -- (137) -- --
Class B -- -- -- --
Class C -- -- -- --
Class S -- (3) -- --
Class Y -- (405) -- --
- -------------------------------------------------------------------------------------------------------------------
Total distributions (13,413) (21,544) (8,310) (11,010)
===================================================================================================================
CAPITAL SHARE TRANSACTIONS (2):
Class A:
Proceeds from sales 44,741 67,442 8,935 10,556
Reinvestment of distributions 2,112 4,441 531 468
Payments for redemptions (41,314) (42,362) (4,113) (2,049)
Shares issued in connection with the
acquisition of Fund net assets -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class A transactions 5,539 29,521 5,353 8,975
- -------------------------------------------------------------------------------------------------------------------
Class B:
Proceeds from sales -- -- 5,077 4,740
Reinvestment of distributions -- -- 213 130
Payments for redemptions -- -- (1,086) (754)
Shares issued in connection with the
acquisition of Fund net assets -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class B transactions -- -- 4,204 4,116
- -------------------------------------------------------------------------------------------------------------------
Class C:
Proceeds from sales -- -- 10,792 5,832
Reinvestment of distributions -- -- 271 56
Payments for redemptions -- -- (1,455) (214)
Shares issued in connection with the
acquisition of Fund net assets -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class C transactions -- -- 9,608 5,674
- -------------------------------------------------------------------------------------------------------------------
Class S:
Proceeds from sales 5,218 3,946 3,994 9,678
Reinvestment of distributions 80 40 740 1,072
Payments for redemptions (435) (708) (3,625) (8,787)
Shares issued in connection with the
acquisition of Fund net assets -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class S transactions 4,863 3,278 1,109 1,963
- -------------------------------------------------------------------------------------------------------------------
Class Y:
Proceeds from sales 352,553 325,792 48,302 35,474
Reinvestment of distributions 4,025 5,649 1,119 1,500
Payments for redemptions (105,451) (127,339) (20,672) (42,257)
Shares issued in connection with the
acquisition of Common Trust Fund net assets -- -- -- --
Shares issued in connection with the
acquisition of Fund net assets -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class Y transactions 251,127 204,102 28,749 (5,283)
- -------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital share transactions 261,529 236,901 49,023 15,445
- -------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 261,501 240,843 46,061 18,585
NET ASSETS AT BEGINNING OF PERIOD 410,783 231,455 212,870
===================================================================================================================
NET ASSETS AT END OF PERIOD $ 913,127 $ 651,626 $ 277,516 $ 231,455
===================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME AT END OF PERIOD $ (931) $ (4) $ (983) $ 163
===================================================================================================================
</Table>
(1) Commencement of operations.
(2) See note 4 in Notes to Financial Statements for additional information.
The accompanying notes are an integral part of the financial statements.
37
<Page>
FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended
September 30, unless otherwise indicated.
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS NET ASSET
VALUE NET GAINS OR FROM NET DISTRIBUTIONS VALUE
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM END OF
OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS PERIOD
- ----------------------------------------------------------------------------------------------------------------------
CORE BOND FUND
Class A
2003(1) $11.45 $0.23 $0.06 $(0.24) $ -- $11.50
2002 11.37 0.55 0.08 (0.55) -- 11.45
2001(2) 10.69 0.61 0.69 (0.62) -- 11.37
2000 10.65 0.61 0.04 (0.61) -- 10.69
1999 11.69 0.59 (0.89) (0.59) (0.15) 10.65
1998 10.97 0.57 0.73 (0.57) (0.01) 11.69
Class B
2003(1) $11.38 $0.21 $0.04 $(0.20) $ -- $11.43
2002 11.29 0.47 0.09 (0.47) -- 11.38
2001(2) 10.63 0.52 0.68 (0.54) -- 11.29
2000 10.58 0.53 0.05 (0.53) -- 10.63
1999 11.63 0.51 (0.90) (0.51) (0.15) 10.58
1998 10.91 0.49 0.73 (0.49) (0.01) 11.63
Class C
2003(1) $11.42 $0.20 $0.05 $(0.20) $ -- $11.47
2002 11.34 0.47 0.08 (0.47) -- 11.42
2001(2) 10.66 0.52 0.70 (0.54) -- 11.34
2000 10.64 0.52 0.04 (0.54) -- 10.66
1999(3) 11.33 0.38 (0.69) (0.38) -- 10.64
Class S
2003(1) $11.45 $0.23 $0.06 $(0.24) $ -- $11.50
2002 11.37 0.55 0.08 (0.55) -- 11.45
2001(2)(4) 11.28 0.01 0.08 -- -- 11.37
Class Y
2003(1) $11.45 $0.25 $0.06 $(0.26) $ -- $11.50
2002 11.37 0.58 0.08 (0.58) -- 11.45
2001(2) 10.69 0.63 0.70 (0.65) -- 11.37
2000 10.65 0.63 0.04 (0.63) -- 10.69
1999 11.69 0.61 (0.89) (0.61) (0.15) 10.65
1998 10.96 0.60 0.74 (0.60) (0.01) 11.69
CORPORATE BOND FUND
Class A
2003(1) $ 9.60 $0.26 $0.27 $(0.27) $ -- $ 9.86
2002 10.01 0.57 (0.39) (0.58) (0.01) 9.60
2001(2) 10.03 0.72 0.35 (0.73) (0.36) 10.01
2000(5) 10.00 0.48 0.02 (0.47) -- 10.03
Class B
2003(1) $ 9.57 $0.23 $0.25 $(0.23) $ -- $ 9.82
2002 9.98 0.49 (0.38) (0.51) (0.01) 9.57
2001(2) 10.02 0.66 0.32 (0.66) (0.36) 9.98
2000(5) 10.00 0.45 0.01 (0.44) -- 10.02
Class C
2003(1) $ 9.55 $0.23 $0.26 $(0.23) $ -- $ 9.81
2002 9.97 0.49 (0.40) (0.50) (0.01) 9.55
2001(2) 10.01 0.63 0.35 (0.66) (0.36) 9.97
2000(5) 10.00 0.45 (0.01) (0.43) -- 10.01
Class S
2003(1) $ 9.60 $0.27 $0.26 $(0.27) $ -- $ 9.86
2002 10.01 0.56 (0.38) (0.58) (0.01) 9.60
2001(2)(4) 9.93 0.01 0.07 -- -- 10.01
Class Y
2003(1) $ 9.59 $0.28 $0.26 $(0.28) $ -- $ 9.85
2002 10.00 0.59 (0.39) (0.60) (0.01) 9.59
2001(2) 10.03 0.75 0.33 (0.75) (0.36) 10.00
2000(5) 10.00 0.49 0.02 (0.48) -- 10.03
</Table>
38
<Page>
<Table>
<Caption>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES TO INCOME TO
RATIO OF INVESTMENT AVERAGE AVERAGE NET
NET ASSETS EXPENSES TO INCOME NET ASSETS ASSETS PORTFOLIO
TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
RETURN(6) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- -------------------------------------------------------------------------------------------------------------------------------
CORE BOND FUND
Class A
2003(1) 2.59% $ 199,594 0.95% 4.02% 1.05% 3.92% 85%
2002 5.77 122,354 0.95 4.93 1.03 4.85 115
2001(2) 12.50 119,067 0.95 5.50 1.13 5.32 81
2000 6.33 110,490 0.95 5.76 1.14 5.57 54
1999 (2.67) 137,133 0.95 5.29 1.14 5.10 90
1998 12.29 205,237 0.95 5.10 1.11 4.94 147
Class B
2003(1) 2.21% $ 31,303 1.70% 3.27% 1.80% 3.17% 85%
2002 5.12 16,741 1.70 4.17 1.78 4.09 115
2001(2) 11.59 15,071 1.70 4.75 1.88 4.57 81
2000 5.70 11,550 1.70 5.02 1.89 4.83 54
1999 (3.48) 14,639 1.70 4.53 1.89 4.34 90
1998 11.54 17,242 1.70 4.35 1.86 4.19 147
Class C
2003(1) 2.19% $ 15,096 1.70% 3.28% 1.80% 3.18% 85%
2002 5.02 9,672 1.70 4.18 1.78 4.10 115
2001(2) 11.68 7,148 1.70 4.65 1.88 4.47 81
2000 5.50 566 1.70 5.02 1.89 4.83 54
1999(3) (2.75) 719 1.35 5.09 1.89 4.55 90
Class S
2003(1) 2.59% $ 49,457 0.95% 4.03% 1.05% 3.93% 85%
2002 5.77 33,270 0.95 4.93 1.03 4.85 115
2001(2)(4) 0.80 35,062 1.58 6.36 1.76 6.18 81
Class Y
2003(1) 2.73% $2,117,370 0.70% 4.26% 0.80% 4.16% 85%
2002 6.04 1,204,555 0.70 5.18 0.78 5.10 115
2001(2) 12.76 1,368,812 0.70 5.76 0.88 5.58 81
2000 6.59 1,299,941 0.70 6.03 0.89 5.84 54
1999 (2.44) 1,239,900 0.70 5.57 0.89 5.38 90
1998 12.66 1,210,661 0.70 5.35 0.86 5.19 147
CORPORATE BOND FUND
Class A
2003(1) 5.63% $ 10,521 1.00% 5.48% 1.26% 5.22% 39%
2002 1.83 8,663 1.00 5.77 1.27 5.50 117
2001(2) 10.94 9,820 0.75 6.95 1.20 6.50 187
2000(5) 5.17 771 0.72 7.52 1.24 7.00 124
Class B
2003(1) 5.14% $ 15,942 1.75% 4.74% 2.01% 4.48% 39%
2002 1.07 18,728 1.75 5.02 2.02 4.75 117
2001(2) 10.06 22,608 1.65 6.45 2.11 5.99 187
2000(5) 4.70 103 1.48 6.86 1.99 6.35 124
Class C
2003(1) 5.26% $ 5,337 1.75% 4.73% 2.01% 4.47% 39%
2002 0.98 5,283 1.75 5.02 2.02 4.75 117
2001(2) 10.10 5,209 1.50 6.07 1.94 5.63 187
2000(5) 4.54 143 1.48 6.79 1.99 6.28 124
Class S
2003(1) 5.63% $ 3,171 1.00% 5.48% 1.26% 5.22% 39%
2002 1.84 3,557 1.00 5.77 1.27 5.50 117
2001(2)(4) 0.81 3,237 0.89 7.60 1.36 7.13 187
Class Y
2003(1) 5.76% $ 231,599 0.75% 5.73% 1.01% 5.47% 39%
2002 2.08 204,801 0.75 6.03 1.02 5.76 117
2001(2) 11.09 185,392 0.51 7.26 0.95 6.82 187
2000(5) 5.32 89,990 0.48 7.75 0.99 7.24 124
</Table>
(1) For the six months ended March 31, 2003 (unaudited). All ratios for the
period have been annualized, except total return and portfolio turnover.
(2) Per share data calculated using average shares outstanding method.
(3) Class of shares has been offered since February 1, 1999. All ratios for the
period have been annualized, except total return and portfolio turnover.
(4) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(5) Commenced operations on February 1, 2000. All ratios for the period have
been annualized, except total return and portfolio turnover.
(6) Total returns do not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
The accompanying notes are an integral part of the financial statements.
39
<Page>
FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended
September 30, unless otherwise indicated.
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF
OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS CAPITAL
- ------------------------------------------------------------------------------------------------------------------------------------
HIGH INCOME BOND FUND (1)
Class A
2003(2)(3) $ 7.90 $0.31 $0.69 $(0.36) $ -- $ --
2002 9.23 0.65 (1.21) (0.70) -- (0.07)
2001(3)(4) 9.93 0.02 (0.68) (0.04) -- --
Class B
2003(2)(3) $ 7.87 $0.28 $0.67 $(0.32) $ -- $ --
2002 9.19 0.69 (1.31) (0.63) -- (0.07)
2001(3)(4) 9.88 0.02 (0.67) (0.04) -- --
Class C
2003(2)(3) $ 7.89 $0.28 $0.67 $(0.32) $ -- $ --
2002 9.21 0.64 (1.27) (0.62) -- (0.07)
2001(3)(4) 9.90 0.05 (0.70) (0.04) -- --
Class S
2003(2)(3) $ 7.98 $0.30 $0.69 $(0.36) $ -- $ --
2002 9.32 0.73 (1.30) (0.70) -- (0.07)
2001(3)(5) 9.50 0.01 (0.19) -- -- --
Class Y
2003(2)(3) $ 7.92 $0.32 $0.67 $(0.37) $ -- $ --
2002 9.24 0.74 (1.28) (0.71) -- (0.07)
2001(3)(4) 9.92 0.05 (0.69) (0.04) -- --
INTERMEDIATE GOVERNMENT BOND FUND (6)
Class A
2003 $10.00 $0.16 $0.06 $(0.17) $ -- $ --
Class Y
2003 $10.00 $0.18 $0.05 $(0.18) $ -- $ --
INTERMEDIATE TERM BOND FUND (7)
Class A
2003(2) $10.35 $0.21 $0.03 $(0.21) $ -- $ --
2002 10.26 0.50 0.10 (0.50) -- (0.01)
2001(3)(8) 9.70 0.54 0.55 (0.51) (0.02) --
2000(9) 9.68 0.58 0.02 (0.58) -- --
1999(9) 10.07 0.54 (0.38) (0.54) (0.01) --
1998(9) 9.88 0.55 0.19 (0.55) -- --
1997(9) 9.77 0.56 0.11 (0.56) -- --
Class S
2003(2) $10.35 $0.21 $0.03 $(0.21) $ -- $ --
2002 10.26 0.51 0.09 (0.50) -- (0.01)
2001(3)(10) 9.78 0.48 0.53 (0.51) (0.02) --
Class Y
2003(2) $10.32 $0.22 $0.03 $(0.22) $ -- $ --
2002 10.23 0.52 0.10 (0.52) -- (0.01)
2001(3)(8) 9.68 0.56 0.54 (0.53) (0.02) --
2000(9) 9.66 0.60 0.02 (0.60) -- --
1999(9) 10.04 0.56 (0.37) (0.56) (0.01) --
1998(9) 9.86 0.56 0.18 (0.56) -- --
1997(9) 9.74 0.57 0.12 (0.57) -- --
</Table>
40
<Page>
<Table>
<Caption>
RATIO
RATIO OF OF NET
RATIO EXPENSES INVESTMENT
NET NET RATIO OF OF NET TO INCOME
ASSET ASSETS EXPENSES INVESTMENT AVERAGE TO AVERAGE
VALUE END OF TO INCOME NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL PERIOD AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN(11) (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ------------------------------------------------------------------------------------------------------------------------------------
HIGH INCOME BOND FUND (1)
Class A
2003(2)(3) $ 8.54 12.86% $ 45,327 1.20% 7.46% 1.27% 7.39% 101%
2002 7.90 (6.66) 23,900 1.10 7.64 1.47 7.27 86
2001(3)(4) 9.23 (6.55) 161 1.10 6.53 1.33 6.30 53
Class B
2003(2)(3) $ 8.50 12.33% $ 6,721 1.95% 6.80% 2.02% 6.73% 101%
2002 7.87 (7.26) 774 1.80 7.49 2.28 7.01 86
2001(3)(4) 9.19 (6.47) 40 1.77 6.02 2.02 5.77 53
Class C
2003(2)(3) $ 8.52 12.31% $ 17,085 1.95% 6.75% 2.02% 6.68% 101%
2002 7.89 (7.34) 7,213 1.83 7.08 2.26 6.65 86
2001(3)(4) 9.21 (6.50) 3,749 1.94 5.53 2.21 5.26 53
Class S
2003(2)(3) $ 8.61 12.66% $ 263 1.20% 7.07% 1.27% 7.00% 101%
2002 7.98 (6.66) 87 1.01 8.46 1.57 7.90 86
2001(3)(5) 9.32 (1.90) -- 0.00 1.23 0.00 1.23 53
Class Y
2003(2)(3) $ 8.54 12.72% $ 154,905 0.95% 7.83% 1.02% 7.76% 101%
2002 7.92 (6.33) 21,157 0.82 8.19 1.27 7.74 86
2001(3)(4) 9.24 (6.47) 8,308 0.96 6.06 1.23 5.79 53
INTERMEDIATE GOVERNMENT BOND FUND (6)
Class A
2003 $10.05 2.35% $ 1,522 0.75% 3.82% 1.05% 3.52% 32%
Class Y
2003 $10.05 2.39% $ 455,405 0.60% 4.09% 0.80% 3.89% 32%
INTERMEDIATE TERM BOND FUND (7)
Class A
2003(2) $10.38 2.37% $ 72,036 0.75% 4.17% 1.04% 3.88% 79%
2002 10.35 6.11 65,291 0.75 4.96 1.02 4.69 40
2001(3)(8) 10.26 11.46 61,225 0.85 5.62 0.96 5.51 30
2000(9) 9.70 6.41 27,431 0.82 6.08 0.95 5.95 18
1999(9) 9.68 1.66 33,779 0.81 5.47 0.95 5.33 64
1998(9) 10.07 7.57 29,550 0.75 5.50 0.96 5.29 27
1997(9) 9.88 7.09 20,691 0.75 5.71 0.98 5.48 41
Class S
2003(2) $10.38 2.37% $ 12,246 0.75% 4.15% 1.04% 3.86% 79%
2002 10.35 6.12 6,070 0.75 4.86 1.02 4.59 40
2001(3)(10) 10.26 10.58 724 0.84 5.41 0.95 5.30 30
Class Y
2003(2) $10.35 2.45% $1,264,233 0.60% 4.31% 0.79% 4.12% 79%
2002 10.32 6.29 978,406 0.60 5.11 0.77 4.94 40
2001(3)(8) 10.23 11.61 878,695 0.60 5.83 0.70 5.73 30
2000(9) 9.68 6.67 408,708 0.57 6.33 0.70 6.20 18
1999(9) 9.66 1.91 284,047 0.56 5.71 0.70 5.57 64
1998(9) 10.04 7.83 291,289 0.50 5.75 0.71 5.54 27
1997(9) 9.86 7.36 254,521 0.50 5.96 0.73 5.73 41
</Table>
(1) The financial highlights for the High Income Bond Fund as set forth herein
include the historical financial highlights of the First American High
Yield Bond Fund Class A shares, Class B shares, Class C shares, Class S
shares, and Class Y shares. The assets of the First American High Yield
Bond Fund were acquired by High Income Bond Fund on March 14, 2003. In
connection with such acquisition, Class A shares, Class B shares, Class C
shares, Class S shares, and Class Y shares of the First American High Yield
Bond Fund were exchanged for Class A shares, Class B shares, Class C
shares, Class S shares, and Class Y shares of High Income Bond Fund,
respectively. Historical per-share amounts have been adjusted to reflect
the conversion ratios utilized for the merger of the High Income Bond Fund
and the First American High Yield Bond Fund.
(2) For the six months ended March 31, 2003 (unaudited). All ratios for the
period have been annualized, except total return and portfolio turnover.
(3) Per share data calculated using average shares outstanding method.
(4) Commenced operations on August 30, 2001. All ratios for the period have
been annualized, except total return and portfolio turnover.
(5) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(6) Commenced operations on October 25, 2002. All ratios for the period have
been annualized, except total return and portfolio turnover.
(7) The financial highlights for the Intermediate Term Bond Fund as set forth
herein include the historical financial highlights of the Firstar
Intermediate Bond Fund Class A shares, Class Y shares, and Class I shares.
The assets of the Firstar Intermediate Bond Fund were acquired by
Intermediate Term Bond Fund on September 24, 2001. In connection with such
acquisition, Class A shares, Class Y shares, and Class I shares of the
Firstar Intermediate Bond Fund were exchanged for Class A shares, Class S
shares, and Class Y shares of Intermediate Term Bond Fund, respectively.
Historical per-share amounts have been adjusted to reflect the conversion
ratios utilized for the merger of the Intermediate Term Bond Fund and the
Firstar Intermediate Bond Fund.
(8) 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 and portfolio turnover.
(9) For the fiscal year ended October 31.
(10) Class of shares has been offered since November 27, 2000. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(11) Total returns do not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
The accompanying notes are an integral part of the financial statements.
41
<Page>
FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended
September 30, unless otherwise indicated.
<Table>
<Caption>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF
OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS CAPITAL
- -----------------------------------------------------------------------------------------------------------------------
SHORT TERM BOND FUND
Class A
2003 (1) $10.29 $0.16 $ -- $(0.17) $ -- $ --
2002 10.27 0.42 0.04 (0.43) -- (0.01)
2001 (2) 9.91 0.61 0.40 (0.65) -- --
2000 9.86 0.58 0.02 (0.55) -- --
1999 10.04 0.52 (0.18) (0.52) -- --
1998 9.94 0.53 0.10 (0.53) -- --
Class S
2003 (1) $10.29 $0.16 $ -- $(0.17) $ -- $ --
2002 10.27 0.42 0.04 (0.43) -- (0.01)
2001 (2) (3) 10.25 0.01 0.01 -- -- --
Class Y
2003 (1) $10.30 $0.16 $0.01 $(0.18) $ -- $ --
2002 10.27 0.43 0.05 (0.44) -- (0.01)
2001 (2) 9.91 0.63 0.39 (0.66) -- --
2000 9.87 0.59 0.01 (0.56) -- --
1999 10.04 0.52 (0.17) (0.52) -- --
1998 9.94 0.53 0.10 (0.53) -- --
U.S. GOVERNMENT MORTGAGE FUND (4)
Class A
2003 (1) $11.16 $0.21 $0.02 $(0.25) $(0.12) $ --
2002 11.01 0.50 0.20 (0.55) -- --
2001 (2) (5) 10.44 0.51 0.60 (0.54) -- --
2000 (6) 10.34 0.53 0.08 (0.51) -- --
1999 (7) 10.74 0.54 (0.40) (0.54) -- --
1998 (7) 10.62 0.57 0.12 (0.57) -- --
1997 (7) 10.67 0.60 (0.07) (0.58) -- --
Class B
2003 (1) $11.18 $0.18 $0.01 $(0.21) $(0.12) $ --
2002 11.03 0.42 0.20 (0.47) -- --
2001 (2) (5) 10.45 0.43 0.62 (0.47) -- --
2000 (6) 10.36 0.45 0.08 (0.44) -- --
1999 (7) 10.74 0.47 (0.38) (0.47) -- --
1998 (7) 10.61 0.50 0.13 (0.50) -- --
1997 (7) 10.66 0.51 (0.05) (0.51) -- --
Class C
2003 (1) $11.13 $0.18 $ -- $(0.21) $(0.12) $ --
2002 11.00 0.46 0.15 (0.48) -- --
2001 (2) (3) 10.98 0.05 (0.03) -- -- --
Class S
2003 (1) $11.12 $0.20 $0.03 $(0.25) $(0.12) $ --
2002 10.97 0.49 0.20 (0.54) -- --
2001 (2) (5) 10.40 0.62 0.49 (0.54) -- --
2000 (6) 10.31 0.53 0.07 (0.51) -- --
1999 (7) 10.70 0.53 (0.38) (0.54) -- --
1998 (7) 10.58 0.57 0.12 (0.57) -- --
1997 (7) 10.64 0.56 (0.04) (0.58) -- --
Class Y
2003 (1) $11.16 $0.22 $0.03 $(0.26) $(0.12) $ --
2002 11.01 0.53 0.19 (0.57) -- --
2001 (2) (5) 10.44 0.53 0.60 (0.56) -- --
2000 (6) 10.34 0.55 0.08 (0.53) -- --
1999 (7) 10.74 0.58 (0.41) (0.57) -- --
1998 (7) 10.62 0.60 0.12 (0.60) -- --
1997 (7) 10.67 0.61 (0.05) (0.61) -- --
</Table>
42
<Page>
<Table>
<Caption>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES TO INCOME TO
NET ASSET NET ASSETS RATIO OF INVESTMENT AVERAGE AVERAGE
VALUE END OF EXPENSES TO INCOME NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL PERIOD AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN(8) (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT TERM BOND FUND
Class A
2003 (1) $10.28 1.55% $168,731 0.75% 3.06% 1.04% 2.77% 21%
2002 10.29 4.59 163,358 0.75 4.06 1.04 3.77 59
2001 (2) 10.27 10.48 133,177 0.60 6.04 1.15 5.49 69
2000 9.91 6.30 80,992 0.60 6.12 1.13 5.59 95
1999 9.86 3.43 5,318 0.60 5.16 1.12 4.64 65
1998 10.04 6.55 5,036 0.60 5.33 1.12 4.81 112
Class S
2003 (1) $10.28 1.55% $ 8,553 0.75% 3.04% 1.04% 2.75% 21%
2002 10.29 4.61 3,685 0.75 3.88 1.04 3.59 59
2001 (2) (3) 10.27 0.20 362 1.20 6.37 1.80 5.77 69
Class Y
2003 (1) $10.29 1.62% $735,843 0.60% 3.20% 0.79% 3.01% 21%
2002 10.30 4.85 484,583 0.60 4.18 0.79 3.99 59
2001 (2) 10.27 10.64 277,244 0.46 6.24 1.02 5.68 69
2000 9.91 6.29 92,092 0.51 5.94 0.98 5.47 95
1999 9.87 3.53 119,522 0.60 5.15 0.87 4.88 65
1998 10.04 6.55 173,136 0.60 5.33 0.87 5.06 112
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE FUND (4)
Class A
2003 (1) $11.02 2.09% $ 22,120 0.95% 3.66% 1.06% 3.55% 70%
2002 11.16 6.53 16,985 0.95 4.61 1.08 4.48 197
2001 (2) (5) 11.01 10.88 7,751 1.04 5.15 1.19 5.00 22
2000 (6) 10.44 6.05 3,644 1.04 5.36 1.15 5.25 23
1999 (7) 10.34 1.37 4,620 0.98 5.15 1.09 5.04 26
1998 (7) 10.74 6.66 4,664 0.97 5.35 1.07 5.25 55
1997 (7) 10.62 5.20 5,181 0.97 5.56 1.07 5.46 100
Class B
2003 (1) $11.04 1.73% $ 10,348 1.70% 2.91% 1.81% 2.80% 70%
2002 11.18 5.79 6,235 1.70 3.85 1.83 3.72 197
2001 (2) (5) 11.03 10.25 2,039 1.71 4.37 1.86 4.22 22
2000 (6) 10.45 5.27 139 1.74 4.66 1.85 4.55 23
1999 (7) 10.36 0.86 282 1.68 4.47 1.79 4.36 26
1998 (7) 10.74 6.02 149 1.67 4.67 1.77 4.57 55
1997 (7) 10.61 4.47 466 1.67 4.84 1.77 4.74 100
Class C
2003 (1) $10.98 1.66% $ 15,334 1.70% 2.88% 1.81% 2.77% 70%
2002 11.13 5.78 5,834 1.70 3.92 1.83 3.79 197
2001 (2) (3) 11.00 0.18 105 0.82 5.26 1.12 4.96 22
Class S
2003 (1) $10.98 2.10% $ 22,192 0.95% 3.67% 1.06% 3.56% 70%
2002 11.12 6.55 21,355 0.95 4.59 1.08 4.46 197
2001 (2) (5) 10.97 10.94 19,092 0.97 6.52 1.15 6.34 22
2000 (6) 10.40 5.96 5,145 1.04 5.36 1.15 5.25 23
1999 (7) 10.31 1.45 8,584 0.98 5.17 1.09 5.06 26
1998 (7) 10.70 6.67 6,140 0.97 5.34 1.07 5.24 55
1997 (7) 10.58 5.10 7,049 0.97 5.52 1.07 5.42 100
Class Y
2003 (1) $11.03 2.31% $207,522 0.70% 3.92% 0.81% 3.81% 70%
2002 11.16 6.79 181,046 0.70 4.84 0.83 4.71 197
2001 (2) (5) 11.01 11.14 183,883 0.71 5.37 0.85 5.23 22
2000 (6) 10.44 6.34 53,896 0.74 5.66 1.15 5.25 23
1999 (7) 10.34 1.67 72,483 0.68 5.45 1.09 5.04 26
1998 (7) 10.74 6.98 93,683 0.67 5.64 1.07 5.24 55
1997 (7) 10.62 5.51 72,753 0.67 5.84 1.07 5.44 100
</Table>
(1) For the six months ended March 31, 2003 (unaudited). All ratios for the
period have been annualized, except total return and portfolio turnover.
(2) Per share data calculated using average shares outstanding method.
(3) Class of shares has been offered since September 24, 2001. All ratios for
the period have been annualized, except total return and portfolio
turnover.
(4) The financial highlights for the U.S. Government Securities Fund as set
forth herein include the historical financial highlights of the Firstar
U.S. Government Securities Fund Class A shares, Class B shares, Class Y
shares, and Class I shares.The assets of the Firstar U.S. Government
Securities Fund were acquired by U.S. Government Securities Fund on
September 24, 2001. In connection with such acquisition, Class A shares,
Class B shares, Class Y shares, and Class I shares of the Firstar
U.S.Government Securities Fund were exchanged for Class A shares, Class B
shares, Class S shares, and Class Y shares of U.S. Government Securities
Fund, respectively.
(5) 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 and portfolio turnover.
(6) 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 and portfolio turnover.
(7) For the fiscal year ended November 30.
(8) Total returns do not reflect sales charges. Total return would have been
lower had certain expenses not been waived.
The accompanying notes are an integral part of the financial statements.
43
<Page>
NOTES TO Financial STATEMENTS March 31, 2003 (unaudited)
1 > ORGANIZATION
The First American Core Bond Fund (formerly Fixed Income Fund), Corporate
Bond Fund, High Income Bond Fund (formerly Strategic Income Fund),
Intermediate Government Bond Fund, Intermediate Term Bond Fund, Short Term
Bond Fund, and U.S. Government Mortgage Fund (formerly U.S. Government
Securities Fund) (each a "Fund" and collectively, the "Funds") are mutual
funds offered by First American Investment Funds, Inc. ("FAIF"), which is a
member of First American Family of Funds. FAIF currently offers 37 funds,
including the Funds included in this report. 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 Funds'
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 of Intermediate Government Bond Fund, Intermediate Term Bond Fund,
and Short Term Bond Fund are sold with a front-end sales charge of 2.25%.
Class A shares of Core Bond Fund, Corporate Bond Fund, High Income Bond
Fund, and U.S. Government Mortgage Fund are sold with a front-end sales
charge of 4.25%. Class B shares are 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 of
1.00%, are subject to a contingent deferred sales charge for 18 months, and
will not convert to Class A shares. Class S and Class Y shares have no
sales charge and are offered only to qualifying institutional investors.
Class B and Class C shares are not offered by the Intermediate Government
Bond Fund, Intermediate Term Bond Fund, or Short Term Bond Fund. Class S
shares are not offered by the Intermediate Government Bond Fund.
The Funds' prospectuses provide descriptions of each Fund's investment
objectives, policies, and strategies. All classes of shares in a Fund have
identical voting, dividend, liquidation, and other rights, and the same
terms and conditions, except that the level of distribution and shareholder
servicing fees charged may differ among classes and each class has
exclusive voting rights on any matters relating to that class' servicing or
distribution arrangements.
2 > SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Funds are as follows:
SECURITY VALUATION - Security valuations for the Funds' investments are
furnished by one or more independent pricing services that have been
approved by the Funds' 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 60 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
Funds' board of directors. As of March 31, 2003, Core Bond Fund, High
Income Bond Fund, and Short Term Bond Fund held fair value securities with
a value of $3,400,000, $4,313, and $6,641, respectively. Debt obligations
with 60 days or less remaining until maturity may be valued at their
amortized cost, which approximates market value. Foreign securities are
valued at the closing prices on the principal exchanges 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. Investments in
open-end mutual funds are valued at the respective net asset value of each
underlying fund, determined at the close of the New York Stock Exchange
(generally 3:00 p.m. central time) on the valuation date.
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
44
<Page>
amortization of bond premium and discount, is recorded on an 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 - Distributions from net investment income
are declared and paid on a monthly basis. Any net realized capital gains on
sales of securities for a Fund are distributed to shareholders at least
annually.
EXPENSES - Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses are generally
allocated to the Funds on the basis of relative net assets of all Funds
within the First American Fund complex. Class specific expenses, such
as 12b-1 fees, are borne by that class. Income, other expenses, and
realized and unrealized gains and losses of a Fund are allocated to each
respective class in proportion to the relative net assets of each class.
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.
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 losses
deferred due to wash sales, paydowns on pass through obligations, and tax
mark to market adjustments under Section 311(e) of the Taxpayer Relief Act
of 1997.
To the extent these differences are permanent, adjustments are made to the
appropriate equity accounts in the period that the difference arises.
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.
The character of the distributions paid during the semiannual period ended
March 31, 2003 (estimated) and the fiscal year ended September 30, 2002,
was as follows:
<Table>
<Caption>
2003
--------------------------------------------------------------------------------------------
ORDINARY LONG TERM TOTAL
FUND INCOME (000) GAIN (000) (000)
--------------------------------------------------------------------------------------------
Core Bond Fund $31,859 $ -- $31,859
Corporate Bond Fund 7,084 -- 7,084
High Income Bond Fund 6,755 -- 6,755
Intermediate Government Bond Fund 8,632 535 9,167
Intermediate Term Bond Fund 27,369 -- 27,369
Short Term Bond Fund 13,413 -- 13,413
U.S. Government Mortgage Fund 5,856 2,454 8,310
<Caption>
2002
----------------------------------------------------------------------------------------------------------------
ORDINARY LONG TERM RETURN OF TOTAL
FUND INCOME (000) GAIN (000) CAPITAL (000) (000)
----------------------------------------------------------------------------------------------------------------
Core Bond Fund $72,708 $ -- $ 576 $73,284
Corporate Bond Fund 14,518 -- 39 14,557
High Income Bond Fund 14,577 -- -- 14,577
Intermediate Term Bond Fund 49,635 -- 875 50,510
Short Term Bond Fund 20,999 -- 545 21,544
U.S. Government Mortgage Fund 11,010 -- -- 11,010
</Table>
45
<Page>
As of September 30, 2002, the Funds' most recently completed fiscal year end,
the components of accumulated earnings (deficit) on a tax basis were:
<Table>
<Caption>
ACCUMULATED TOTAL
UNDISTRIBUTED UNDISTRIBUTED CAPITAL AND UNREALIZED ACCUMULATED
ORDINARY LONG TERM POST-OCTOBER APPRECIATION EARNINGS
FUND INCOME (000) CAPITAL GAINS (000) LOSSES (000) (DEPRECIATION) (000) (DEFICIT) (000)
- ---------------------------------------------------------------------------------------------------------------------------------
Core Bond Fund $ -- $ -- $(19,103) $ 57,017 $ 37,915
Corporate Bond Fund -- -- (36,226) 310 (35,916)
High Income Bond Fund 3 -- (31,528) (11,472) (42,997)
Intermediate Term Bond Fund -- -- (19,950) 51,612 31,662
Short Term Bond Fund -- -- (7,450) 15,392 7,942
U.S. Government Mortgage Fund 163 2,350 -- 6,021 8,534
</Table>
The differences between book and tax basis unrealized appreciation
(depreciation) is primarily due to the deferral of losses due to wash sales and
tax mark to market adjustments made under Section 311(e) of the Taxpayer Relief
Act of 1997.
As of September 30, 2002, the Funds' most recently completed fiscal year end,
the following Funds have capital loss carryforwards:
<Table>
<Caption>
FUND AMOUNT (000) EXPIRATION DATE
-----------------------------------------------------------------
Core Bond Fund $19,103 2003-2008
Corporate Bond Fund 27,439 2005-2007
High Income Bond Fund 22,033 2003-2010
Intermediate Term Bond Fund 18,239 2003-2010
Short Term Bond Fund 6,653 2003-2008
</Table>
In accordance with Section 382 of the Internal Revenue Code, utilization of all
or a portion of the above capital loss carryovers is limited on an annual basis
for the Corporate Bond Fund and Intermediate Term Bond Fund in the amount of
$6,352,310 and $2,720,363, respectively, per tax year for a portion of their
capital loss carryover.
Certain Funds incurred a loss for tax purposes for the period from November 1,
2001 to September 30, 2002. As permitted by tax regulations, the Funds intend to
elect to defer and treat these losses as arising in the fiscal year ending
September 30, 2003. The following Funds had deferred losses:
<Table>
<Caption>
FUND AMOUNT (000)
------------------------------------------------------------
Corporate Bond Fund $8,788
High Income Bond Fund 9,495
Intermediate Term Bond Fund 1,711
Short Term Bond Fund 797
</Table>
FOREIGN CURRENCY TRANSLATION - The books and records of the High Income Bond
Fund are maintained in U.S. dollars on the following basis:
- - market value of investment securities, assets, and liabilities at the
current rate of exchange; and
- - purchases and sales of investment securities, income, and expenses at the
relevant rates of exchange prevailing on the respective dates of such
transactions.
The High Income Bond Fund does 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 High Income Bond Fund does isolate the effect of fluctuations in foreign
currency rates when determining the gain or loss upon sale or maturity of
foreign currency denominated debt obligations pursuant to the federal income tax
regulations. Such amounts are categorized as foreign currency gain or loss for
both financial reporting and income tax reporting purposes.
The High Income Bond Fund reports 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.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS - Delivery and payment for
securities that have been purchased by a Fund on a forward-commitment or
when-issued basis can take place up to a month or more after the transaction
date. During this
46
<Page>
period, such securities are subject to market fluctuations and the portfolio
maintains, in a segregated account with its custodian, assets with a market
value equal to or greater than the amount of its purchase commitments. The
purchase of securities on a when-issued or forward-commitment basis may increase
the volatility of the Fund's net asset value if the Fund makes such purchases
while remaining substantially fully invested. At March 31, 2003, Core Bond Fund,
Intermediate Government Bond Fund, Intermediate Term Bond Fund, Short Term Bond
Fund and U.S. Government Mortgage Fund had outstanding when-issued commitments
with a cost of $201,831,993, $4,995,313, $12,987,813, $15,328,438, and
$36,723,169, respectively.
In connection with the ability to purchase securities on a when-issued basis,
the Core Bond Fund, Corporate Bond Fund, High Income Bond Fund, Intermediate
Government Bond Fund, Intermediate Term Bond Fund, Short Term Bond Fund, and
U.S. Government Mortgage Fund may also enter into dollar rolls in which the Fund
sells securities purchased on a forward-commitment basis and simultaneously
contracts with a counterparty to repurchase similar (same type, coupon, and
maturity) but not identical securities on a specified future date. Dollar rolls
are considered a form of leverage. As an inducement to "roll over" its purchase
commitments, the Fund receives negotiated fees. For the semiannual period ended
March 31, 2003, the Funds earned no fees from dollar roll transactions.
ILLIQUID OR RESTRICTED SECURITIES - At March 31, 2003, investments in securities
in the Core Bond Fund, Corporate Bond Fund, High Income Bond Fund, Intermediate
Term Bond Fund, Short Term Bond Fund, and U.S. Government Mortgage Fund included
issues that are illiquid or restricted. Restricted securities are often
purchased in private placement transactions, are not registered under the
Securities Act of 1933, may have contractual restrictions on resale, and are
valued under methods approved by the Funds' board of directors as reflecting
fair value. A security may also be considered illiquid if it lacks a readily
available market or if its valuation has not changed for a certain period of
time. The Fund intends to invest no more than 15% of its net assets (determined
at the time of purchase and reviewed periodically) in illiquid securities.
Certain restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limitation.
At March 31, 2003, the aggregate value of illiquid or restricted securities
subject to this limitation was as follows:
<Table>
<Caption>
PERCENTAGE OF
FUND VALUE NET ASSETS
- -------------------------------------------------------------------------------
Core Bond Fund $35,606,112 1.5%
Corporate Bond Fund 911,115 0.3
High Income Bond Fund 215,772 0.1
Intermediate Term Bond 661,405 0.1
Short Term Bond Fund 6,641 0.0
U.S. Government Mortgage Fund 5,032,205 1.8
</Table>
Information concerning restricted securities is as follows:
<Table>
<Caption>
CORE BOND FUND
- -------------------------------------------------------------------------------
DATES
SECURITY PAR ACQUIRED COST BASIS
- -------------------------------------------------------------------------------
Duty Free International $ 6,800,000 1/99-7/99 $ 6,787,170
Wells Fargo Mortgage Backed
Securities Trust 31,371,379 1/03 31,900,026
</Table>
<Table>
<Caption>
CORPORATE BOND FUND
- -------------------------------------------------------------------------------
DATES
SECURITY PAR ACQUIRED COST BASIS
- -------------------------------------------------------------------------------
Aircraft Finance Trust $ 839,357 2/00 $ 773,253
Juniper 1,000,000 2/00 1,000,000
</Table>
<Table>
<Caption>
HIGH INCOME BOND FUND
- -------------------------------------------------------------------------------
DATES
SECURITY PAR/SHARES ACQUIRED COST BASIS
- -------------------------------------------------------------------------------
Aircraft Finance Trust $839,357 2/00 $773,264
AT&T Canada 100 1/98 231
Diamond Brands Operating 50,000 4/98 50,000
Glenoit 100,000 3/97-8/97 101,654
NII Holdings, Series B 5,751 11/02 4,695
Pegasus Communications 15,109 1/03 --
Viatel 75,000 9/02 --
Viatel Holdings 294 9/02 82,139
</Table>
<Table>
<Caption>
INTERMEDIATE TERM BOND FUND
- -------------------------------------------------------------------------------
DATES
SECURITY PAR ACQUIRED COST BASIS
- -------------------------------------------------------------------------------
Louisville & Nashville
Railroad, Series F $636,000 10/02 $636,000
Orange California
Redevelopment Agency 25,000 10/02 25,353
</Table>
<Table>
<Caption>
SHORT TERM BOND FUND
- -------------------------------------------------------------------------------
DATES
SECURITY PAR ACQUIRED COST BASIS
- -------------------------------------------------------------------------------
Auto Bond Receivables Trust $106,397 11/98-11/00 $106,396
Patten 7,590 7/95-9/00 7,512
</Table>
<Table>
<Caption>
U.S. GOVERNMENT MORTGAGE FUND
- -------------------------------------------------------------------------------
DATES
SECURITY PAR ACQUIRED COST BASIS
- -------------------------------------------------------------------------------
Wells Fargo Mortgage Backed
Securities Trust $4,901,778 1/03 $4,984,379
</Table>
47
<Page>
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 100% of the value of
securities loaned. The collateral is then "marked-to-market" daily until
the securities are returned.
USBAM serves as the securities lending agent for the Funds in transactions
involving the lending of portfolio securities on behalf of the Funds. For
these services, the securities lending fees paid to USBAM from the Funds
for the six months ended March 31, 2003, were as follows:
<Table>
<Caption>
FUND AMOUNT (000)
----------------------------------------------------------
Core Bond Fund $152
Corporate Bond Fund 17
High Income Bond Fund 3
Intermediate Term Bond Fund 165
Short Term Bond Fund 80
</Table>
HISTORICAL FINANCIAL STATEMENT INFORMATION - The financial information
presented for Intermediate Term Bond Fund and U.S. Government Mortgage
Fund, prior to September 24, 2001, is that of Firstar Intermediate Bond
Fund and Firstar U.S. Government Securities Fund, respectively.
USE OF ESTIMATES IN THE 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 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
ADVISORY FEES - Pursuant to an investment advisory agreement (the
"Agreement"), U.S. Bancorp Asset Management, Inc. ("USBAM"), manages each
Fund's assets and furnishes related office facilities, equipment, research
and personnel. The Agreement requires each Fund to pay USBAM a monthly fee
based upon average daily net assets.
The fee for each Fund is equal to an annual rate as presented below applied
to the Fund's average daily net assets.
<Table>
Core Bond Fund 0.50%
Corporate Bond Fund 0.70
High Income Bond Fund 0.70
Intermediate Government Bond Fund 0.50
Intermediate Term Bond Fund 0.50
Short Term Bond Fund 0.50
U.S. Government Mortgage Fund 0.50
</Table>
USBAM voluntarily waived fees during the most recently completed semiannual
period so that the total fund operating expenses did not exceed expense
limitations described in the Funds' prospectus.
The Funds may invest in the money market funds that are series of First
American Funds, Inc. ("FAF"), subject to certain limitations. The terms of
such transactions are identical to those of nonrelated entities except
that, to avoid duplicative investment advisory fees, USBAM reimburses each
FAIF Fund an amount equal to the investment advisory fee paid by FAF to
USBAM related to such investments.
SUB-ADVISOR FEES - Federated Global Research Corp., a subsidiary of
Federated Investors, Inc. ("Federated"), served as sub-advisor to the High
Income Bond Fund under an agreement with USBAM (the "Sub-Advisory
Agreement") through March 14, 2003. For its services under the Sub-Advisory
Agreement, Federated was paid a monthly fee by USBAM, calculated on an
annual basis equal to 0.20% of the first $25 million of the Fund's average
daily net assets, 0.165% of the Fund's average daily net assets in excess
of $25 million up to $50 million, 0.13% of the Fund's average daily net
assets in excess of $50 million up to $100 million, and 0.105% of the
Fund's average daily net assets in excess of $100 million.
CO-ADMINISTRATION FEES - USBAM and U.S. Bancorp Fund Services, LLC
("USBFS") (collectively, the "Administrators"), serve as co-administrators
pursuant to a co-administration agreement between the Administrators and
the Funds. USBAM is a subsidiary of U.S. Bank National Association ("U.S.
Bank"). Both U.S. Bank and USBFS are direct subsidiaries of U.S. Bancorp.
Under the co-administration agreement, the Administrators are compensated
to provide, or compensate other entities to provide services to the Funds.
These services include various legal, oversight and administrative
services, accounting services, transfer agency and dividend disbursing
services, and shareholder services. The Funds pay the Administrators at an
annual rate, calculated daily and paid monthly based on the average daily
net assets of all open-end mutual funds in the First American Family of
Funds, equal to each Fund's pro rata share of an amount equal to 0.25% of
the aggregate average daily net assets up to $8 billion, 0.235% on the next
$17 billion of aggregate average daily net assets, 0.22% on the next $25
billion of aggregate average daily net assets, and 0.20% of the aggregate
average daily net assets of all open-end mutual funds in the First American
Family of Funds in excess of $50 billion. In addition, the Funds pay the
Administrators
48
<Page>
annual fees of $18,500 per class and additional per account fees for
transfer agent services.
For the semiannual period ended March 31, 2003, administration and transfer
agent fees paid to USBAM and USBFS for the Funds included in this
semiannual report were as follows:
<Table>
<Caption>
FUND AMOUNT (000)
----------------------------------------------------------
Core Bond Fund $1,967
Corporate Bond Fund 336
High Income Bond Fund 238
Intermediate Government Bond Fund 581
Intermediate Term Bond Fund 1,764
Short Term Bond Fund 1,079
U.S. Government Mortgage Fund 339
</Table>
CUSTODIAN FEES - U.S. Bank serves as the Funds' custodian pursuant to a
custodian agreement with FAIF. The fee for each Fund is equal to an annual
rate of 0.01% of average daily net assets, which is computed daily and paid
monthly.
DISTRIBUTION AND SHAREHOLDER SERVICING FEES - Quasar Distributors, LLC
("Quasar"), a subsidiary of U.S. Bancorp, serves as the distributor of the
Funds pursuant to a distribution agreement with FAIF. Under the respective
distribution agreement, each of the Funds pays Quasar a monthly
distribution and/or shareholder servicing fee at an annual rate of 0.25%,
1.00%, and 1.00% of each Fund's average daily net assets of the Class A
shares, Class B shares, and Class C shares, respectively, which may be used
by Quasar to provide compensation for sales support, distribution
activities, and shareholder servicing activities.
FAIF has also adopted and entered into a shareholder service plan and
agreement with Quasar. Each Fund pays to Quasar a monthly shareholder
servicing fee equal to an annual rate of 0.25% of each Fund's average daily
net assets of the Class S shares. The distributor is currently waiving fees
equal to 0.10% of average daily net assets for Class A and Class S shares
in the Intermediate Government Bond Fund, Intermediate Term Bond Fund, and
Short Term Bond Fund. No distribution or shareholder servicing fees are
paid by Class Y shares.
For the semiannual period ended March 31, 2003, total distribution and
shareholder servicing fees waived by the distributor for the Funds included
in this semiannual report were as follows:
<Table>
<Caption>
FUND AMOUNT (000)
----------------------------------------------------------
Intermediate Government Bond Fund $--
Intermediate Term Bond Fund 39
Short Term Bond Fund 87
</Table>
Under the distribution agreements, the following amounts were retained by
Quasar or paid to affiliates of USBAM for the semiannual period ended March
31, 2003:
<Table>
<Caption>
FUND AMOUNT (000)
----------------------------------------------------------
Core Bond Fund $192
Corporate Bond Fund 49
High Income Bond Fund 43
Intermediate Government Bond Fund 1
Intermediate Term Bond Fund 44
Short Term Bond Fund 96
U.S. Government Mortgage Fund 107
</Table>
OTHER FEES - In addition to the investment advisory fees, custodian fees,
distribution and shareholder servicing fees, and co-administration fees,
each Fund is responsible for paying most other operating expenses including
fees and expenses of outside directors, registration fees, printing of
shareholder reports, legal, auditing, insurance, and other miscellaneous
expenses.
For the semiannual period ended March 31, 2003, legal fees and expenses
were paid to a law firm of which the Secretary and two Assistant
Secretaries of the Funds are partners.
49
<Page>
SALES CHARGES - Class B shares are subject to a contingent deferred sales
charge ("CDSC") imposed on redemptions made in Class B shares for the first
six years. 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.
<Table>
<Caption>
CONTINGENT DEFERRED SALES CHARGE
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 0.00%
Eighth 0.00%
</Table>
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 18 months.
The CDSC for Class B and Class C shares is imposed on the value of the
purchased shares, or the value at the time of redemption, whichever is
less.
For the semiannual period ended March 31, 2003, total front-end and
contingent deferred sales charges retained by affiliates of USBAM for
distributing the Funds' shares were as follows:
<Table>
<Caption>
FUND AMOUNT (000)
----------------------------------------------------------
Core Bond Fund $146
Corporate Bond Fund 61
High Income Bond Fund 65
Intermediate Government Bond Fund 25
Intermediate Term Bond Fund 33
Short Term Bond Fund 251
U.S. Government Mortgage Fund 367
</Table>
50
<Page>
4 > CAPITAL SHARE TRANSACTIONS
FAIF has 420 billion shares of $0.0001 par value capital stock authorized.
Capital share transactions for the Funds were as follows:
<Table>
<Caption>
HIGH INTERMEDIATE
CORE BOND CORPORATE BOND INCOME BOND GOVERNMENT
FUND (000) FUND (000) FUND (000) BOND FUND (000)
- ------------------------------------------------------------------------------------------------------------------------------------
10/1/02 10/1/01 10/1/02 10/1/01 10/1/02 10/1/01 10/25/02 (1)
TO TO TO TO TO TO TO
3/31/03 9/30/02 3/31/03 9/30/02 3/31/03 9/30/02 3/31/03
- ------------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
Class A:
Shares issued 1,634 4,694 360 281 937 354 151
Shares issued in lieu of cash distributions 167 362 20 43 60 103 2
Shares redeemed (2,599) (4,850) (215) (403) (709) (473) (1)
Shares issued in connection with the
acquistion of Fund net assets 7,465 -- -- -- 2,765 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS A TRANSACTIONS 6,667 206 165 (79) 3,053 (16) 152
====================================================================================================================================
Class B:
Shares issued 186 417 105 150 100 258 --
Shares issued in lieu of cash distributions 24 52 30 78 10 16 --
Shares redeemed (261) (332) (470) (536) (72) (40) --
Shares issued in connection with the
acquistion of Fund net assets 1,319 -- -- -- 227 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS B TRANSACTIONS 1,268 137 (335) (308) 265 234 --
====================================================================================================================================
Class C:
Shares issued 171 626 35 198 271 419 --
Shares issued in lieu of cash distributions 15 34 12 27 30 40 --
Shares redeemed (210) (444) (56) (194) (230) (187) --
Shares issued in connection with the
acquistion of Fund net assets 493 -- -- -- 1,155 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS C TRANSACTIONS 469 216 (9) 31 1,226 272 --
====================================================================================================================================
Class S:
Shares issued 647 1,039 18 249 2 16 --
Shares issued in lieu of cash distributions 52 142 10 23 -- -- --
Shares redeemed (1,917) (1,361) (77) (224) -- (15) --
Shares issued in connection with the
acquistion of Fund net assets 2,613 -- -- -- 28 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS S TRANSACTIONS 1,395 (180) (49) 48 30 1 --
====================================================================================================================================
Class Y:
Shares issued 15,141 20,969 4,781 6,921 2,558 4,613 53,770
Shares issued in lieu of cash distributions 802 1,640 71 136 130 297 55
Shares redeemed (21,303) (37,873) (2,694) (4,243) (5,814) (6,453) (8,508)
Shares issued in connection with the
acquistion of Common Trust Fund net assets 1,167 -- -- -- -- -- --
Shares issued in connection with the
acquistion of Fund net assets 83,108 -- -- -- 4,283 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS Y TRANSACTIONS 78,915 (15,264) 2,158 2,814 1,157 (1,543) 45,317
====================================================================================================================================
NET INCREASE (DECREASE) IN CAPITAL SHARES 88,714 (14,885) 1,930 2,506 5,731 (1,052) 45,469
====================================================================================================================================
<Caption>
INTERMEDIATE TERM SHORT TERM BOND U.S. GOVERNMENT
BOND FUND (000) FUND (000) MORTGAGE FUND (000)
- -----------------------------------------------------------------------------------------------------------------------------------
10/1/02 10/1/01 10/1/02 10/1/01 10/1/02 10/1/01
TO TO TO TO TO TO
3/31/03 9/30/02 3/31/03 9/30/02 3/31/03 9/30/02
- -----------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
Class A:
Shares issued 1,507 2,778 4,358 6,633 807 961
Shares issued in lieu of cash distributions 98 228 206 438 48 43
Shares redeemed (970) (2,667) (4,025) (4,170) (370) (186)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS A TRANSACTIONS 635 339 539 2,901 485 818
===================================================================================================================================
Class B:
Shares issued -- -- -- -- 459 430
Shares issued in lieu of cash distributions -- -- -- -- 19 12
Shares redeemed -- -- -- -- (98) (69)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS B TRANSACTIONS -- -- -- -- 380 373
===================================================================================================================================
Class C:
Shares issued -- -- -- -- 979 529
Shares issued in lieu of cash distributions -- -- -- -- 25 5
Shares redeemed -- -- -- -- (132) (20)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS C TRANSACTIONS -- -- -- -- 872 514
===================================================================================================================================
Class S:
Shares issued 819 645 509 388 362 886
Shares issued in lieu of cash distributions 19 10 8 4 67 99
Shares redeemed (245) (139) (43) (69) (329) (805)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS S TRANSACTIONS 593 516 474 323 100 180
===================================================================================================================================
Class Y:
Shares issued 45,210 29,153 34,353 32,058 4,371 3,231
Shares issued in lieu of cash distributions 1,037 1,547 393 557 102 137
Shares redeemed (18,858) (21,788) (10,267) (12,544) (1,868) (3,854)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS Y TRANSACTIONS 27,389 8,912 24,479 20,071 2,605 (486)
===================================================================================================================================
NET INCREASE IN CAPITAL SHARES 28,617 9,767 25,492 23,295 4,442 1,399
===================================================================================================================================
</Table>
(1) Commencement of operations.
51
<Page>
5 > INVESTMENT SECURITY TRANSACTIONS
During the semiannual period ended March 31, 2003, purchases of securities
and proceeds from sales of securities, other than temporary investments in
short-term securities, were as follows:
<Table>
<Caption>
U.S. GOVERNMENT OTHER INVESTMENT
SECURITIES SECURITIES
---------------------------------------------------------------------------------------
PURCHASES PURCHASES
FUND (000) SALES (000) (000) SALES (000)
---------------------------------------------------------------------------------------
Core Bond Fund $834,399 $818,156 $337,528 $385,529
Corporate Bond Fund 9,221 10,469 104,906 84,441
High Income Bond Fund 118,993 101,345 40,493 70,324
Intermediate
Government Bond Fund 152,641 214,035 -- --
Intermediate Term Bond Fund 649,340 654,630 624,432 270,862
Short Term Bond Fund 170,189 82,417 267,862 79,707
U.S. Government Mortgage Fund 187,470 159,267 7,927 6,008
</Table>
At March 31, 2003, the total cost of securities for federal income tax
purposes and the related aggregate gross unrealized appreciation and
depreciation for securities held by the Funds is as follows:
<Table>
<Caption>
AGGREGATE AGGREGATE FEDERAL
GROSS GROSS INCOME
APPRECIATION DEPRECIATION TAX COST
FUND (000) (000) NET (000) (000)
----------------------------------------------------------------------------------------------
Core Bond Fund $68,720 $(9,738) $58,982 $2,536,210
Corporate Bond Fund 12,302 (7,018) 5,284 258,782
High Income Bond Fund 10,523 (7,734) 2,789 214,225
Intermediate
Government Bond Fund 26,206 (135) 26,071 432,537
Intermediate Term Bond Fund 40,158 (3,830) 36,328 1,311,958
Short Term Bond Fund 16,798 (1,450) 15,348 916,458
U.S. Government Mortgage Fund 6,101 (187) 5,914 305,826
</Table>
6 > CONCENTRATION OF RISKS
The High Income Bond Fund is subject to special risks associated with
investing in foreign securities and to a decline in net asset value
resulting from changes in exchange rates between the United States dollar
and foreign currencies. The High Income Bond Fund is also subject to risks
associated with investing in securities issued by issuers in emerging
market countries. Because of the special risks associated with foreign
investing, the High Income Bond Fund may be subject to greater volatility
than most mutual funds which invest primarily in domestic securities.
The High Income Bond Fund invests in lower-rated (i.e., rated Ba or lower
by Moody's or BB or lower by Standard & Poor's) corporate and foreign debt
obligations, which are commonly referred to as "junk bonds". Lower-rated
securities will usually offer higher yields than higher-rated securities.
However, there is more risk associated with these investments. These
lower-rated bonds may be more susceptible to real or perceived adverse
economic conditions than investment grade bonds. Lower-rated securities
tend to have more price volatility and carry more risk to principal than
higher-rated securities.
The rating of long-term securities as a percentage of total value of
investments at the semiannual period ended March 31, 2003, is as follows:
<Table>
<Caption>
STANDARD & POOR'S/ HIGH INCOME BOND
MOODY'S RATINGS FUND
----------------------------------------------------------
AAA/Aaa 5%
A/A 1
BBB/Baa 6
BB/Ba 40
B/B 38
CCC/Caa 9
C 1
----------------------------------------------------------
100%
</Table>
Securities rated by only one agency are shown in that category. Securities
rated by both agencies are shown with their highest rating.
52
<Page>
7 > Fund Mergers
On October 25, 2002, the Core Bond Fund acquired substantially all of the
assets of the Common Income Common Trust Fund (KS) (sponsored by U.S. Bank)
in exchange for Class Y shares of the Core Bond Fund. In addition, the
First American Intermediate Government Bond Fund shell portfolio acquired
substantially all of the assets of the U.S. Government Bond Common Trust
Fund (sponsored by U.S. Bank) in exchange for Class Y shares of the
Intermediate Government Bond Fund. The following table illustrates the
specifics of the of the common trust fund conversions into the Core Bond
Fund and the Intermediate Government Bond Fund included in this semiannual
report:
<Table>
<Caption>
ACQUIRED SHARES ISSUED TO ACQUIRING
FUNDS NET SHAREHOLDERS OF FUND COMBINED
ASSETS ACQUIRED FUND NET ASSETS NET ASSETS TAX STATUS
ACQUIRED FUND ACQUIRING FUND (000) (000) (000) (000) OF TRANSFER
- ------------------------------------------------------------------------------------------------------------------------------------
Common Income Trust Fund Core Bond Fund - Class Y $ 13,076 (1) 1,176 $1,318,694 $1,331,770 Non-taxable
U.S. Government Bond Common Intermediate Government
Trust Fund Bond Fund - Class Y (2) 520,605 52,061 -- 520,605 Non-taxable
</Table>
(1) Includes unrealized appreciation of $794,486.
(2) Shell portfolio
On March 13, 2003, shareholders of FAIF approved the Agreement and Plan of
Reorganization, recommended by the Funds' board of directors, providing for
the reorganization of several First American Funds into other existing
First American Funds. On March 14, 2003, Bond IMMDEXTM Fund merged into
Core Bond Fund and High Yield Bond Fund merged into High Income Bond Fund.
The following table illustrates the specifics of the mergers of the Funds
included in this semiannual report:
<Table>
<Caption>
ACQUIRED SHARES ISSUED TO ACQUIRING
FUNDS NET SHAREHOLDERS OF FUND COMBINED
ASSETS ACQUIRED FUND NET ASSETS NET ASSETS TAX STATUS
ACQUIRED FUND ACQUIRING FUND (000) (000) (000) (000) OF TRANSFER
- -----------------------------------------------------------------------------------------------------------------------------------
Bond IMMDEX(TM) Fund Core Bond Fund (1) $1,094,825 (2) $1,339,160 $2,433,985 Non-taxable
Class A 7,465
Class B 1,319
Class C 493
Class S 2,613
Class Y 83,108
High Yield Bond Fund High Income Bond Fund (1) 71,489 (3) 156,457 227,946 Non-taxable
Class A 2,765
Class B 227
Class C 1,155
Class S 28
Class Y 4,283
</Table>
(1) Accounting survivor.
(2) Includes unrealized appreciation in the amount $17,432.
(3) Includes capital loss carryovers and unrealized depreciation in the amount
of $30 and $357, respectively.
53
<Page>
Board of Directors First American Investment Funds, Inc.
ROGER GIBSON
Director of First American Investment Funds, Inc.
Vice President, Cargo-United Airlines
LEONARD KEDROWSKI
Director of First American Investment Funds, Inc.
Owner and President of Executive and Management Consulting, Inc.
JOHN MURPHY JR.
Director of First American Investment Funds, Inc.
Retired; former Executive Vice President of U.S. Bancorp
RICHARD RIEDERER
Director of First American Investment Funds, Inc.
Retired; former President and Chief Executive Officer of Weirton Steel
JOSEPH STRAUSS
Director of First American Investment Funds, Inc.
Former Chairperson of First American Investment Funds, Inc.
Owner and President of Strauss Management Company
VIRGINIA STRINGER
Chairperson of First American Investment Funds, Inc.
Owner and President of Strategic Management Resources, Inc.
JAMES WADE
Director of First American Investment Funds, Inc.
Owner and President of Jim Wade Homes
<Page>
[FIRST AMERICAN FUNDS(TM) LOGO]
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.
This material must be preceded or accompanied by a current prospectus, which
contains more complete information about First American Funds, including risks,
fees, and expenses. Please contact your investment professional, call First
American Funds Investor Services at 800.677.FUND, or visit
firstamericanfunds.com for additional information about First American Funds.
Past performance does not guarantee future results. The principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
INVESTMENT ADVISOR
U.S. BANCORP ASSET MANAGEMENT, INC.
800 Nicollet Mall
Minneapolis, Minnesota 55402
CO-ADMINISTRATORS
U.S. BANCORP ASSET MANAGEMENT, INC.
800 Nicollet Mall
Minneapolis, Minnesota 55402
U.S. BANCORP FUND SERVICES, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
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, Wisconsin 53202
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
220 South Sixth Street
Suite 1400
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY LLP
50 South Sixth Street
Suite 1500
Minneapolis, Minnesota 55402
FIRST AMERICAN FUNDS
P.O. Box 1330
Minneapolis, MN 55440-1330
In an attempt to reduce shareholder costs and help eliminate duplication,
First American 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. Visit us at firstamericanfunds.com.
2053-03 5/2003 SAR-BOND
<Page>
Item 2 - Did registrant adopt a code of ethics, as of the end of the period
covered by this report, that applies to the registrant's principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party? If not, why not?
Briefly describe any amendments or waivers that occurred during the period.
State here if code of ethics/amendments/waivers are on website and give website
address-. State here if fund will send code of ethics to shareholders without
charge upon request-- N/A (not answered until July 15, 2003 and only annually
for funds)
Item 3 - Did the registrant's board of directors determine that the registrant
either: (i) has at least one audit committee financial expert serving on its
audit committee; or (ii) does not have an audit committee financial expert
serving on its audit committee? If yes, disclose name of financial expert and
whether he/she is "independent," (fund may, but is not required, to disclose
name/independence of more than one financial expert) If no, explain why not. -
N/A (not answered until July 15, 2003 and only annually for funds)
Item 4 - Disclose annually only (not answered until December 15, 2003)
(a) Audit Fees - Disclose aggregate fees billed for each of the last two
fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for
those fiscal years. N/A.
(b) Audit-Related Fees - Disclose aggregate fees billed in each of the
last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not
reported under paragraph (a) of this Item. Registrants shall describe
the nature of the services comprising the fees disclosed under this
category. N/A.
(c) Tax Fees - Disclose aggregate fees billed in each of the last two
fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the
fees disclosed under this category. N/A.
(d) All Other Fees - Disclose aggregate fees billed in each of the last
two fiscal years for products and services provided by the principal
accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category. N/A.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. N/A.
(e)(2) Disclose the percentage of services described in each of paragraphs
(b) through (d) of this Item that were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
N/A.
(f) If greater than 50%, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial
statements for the most recent fiscal year that were attributed to
work performed by
<Page>
persons other than the principal accountant's full-time, permanent
employees. N/A.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to
the registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted with
or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant for each of the last
two fiscal years of the registrant. N/A.
(h) Disclose whether the registrant's audit committee has considered
whether the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any subadviser whose
role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling,
controlled by, or under common control with the investment adviser
that provides ongoing services to the registrant that were not
pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal
accountant's independence. N/A.
Items 5-6 - Reserved
Item 7 - For closed - end funds that contain voting securities in their
portfolio, describe the policies and procedures that it uses to determine how to
vote proxies relating to those portfolio securities. N/A.
Item 8 -- Reserved
Item 9(a)- Disclose the conclusions of the registrant's principal executive
officer or officers and principal financial officer or officers, or persons
performing similar functions, about the effectiveness of the registrant's
disclosure controls and procedures (as defined in Rule 30a-2(c) under the Act
(17 CFR 270.30a-2(c))) based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of the report that
includes the disclosure required by this paragraph. N/A.
Item 9(b)-- Disclose whether or not there were significant changes in the
registrant's internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses. N/A
Item 10 - Exhibits
10(a) - Attach code of ethics or amendments/waivers, unless code of ethics or
amendments/waivers is on website or offered to shareholders upon request without
charge. N/A.
10(b) - Attach certifications (4 in total pursuant to Sections 302 and 906 for
CEO/CFO). Attached hereto.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
First American Investment Funds, Inc.
By /s/ Thomas S. Schreier, Jr.
----------------------------
Thomas S. Schreier, Jr.
President
Date: May ____, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ Thomas S. Schreier, Jr.
----------------------------
Thomas S. Schreier, Jr.
President
Date: May ____, 2003
By /s/ Robert H. Nelson
---------------------
Robert H. Nelson
Treasurer
Date: May ____, 2003