BRIDGES INVESTMENT FUND, INC.

8401 West Dodge Road

Omaha, Nebraska 68114

(402) 397-4700

September 28, 2004

PART B

INFORMATION REQUIRED IN A STATEMENT

OF ADDITIONAL INFORMATION

Capital Stock

Special Notices

 · This Statement of Additional Information is not a Prospectus.

 · This Statement of Additional Information should be read in conjunction with the Prospectus of Bridges Investment Fund, Inc. dated September 28, 2004.

 · Other Information, Part C, of the filing dated September 28, 2004, by Bridges Investment Fund, Inc. with the Securities and Exchange Commission may contain useful material for prospective investors and shareholders.

 · A copy of the Prospectus of Bridges Investment Fund, Inc. and Part C may be obtained from the office of the Fund at the address shown above.

 · The date of this Statement of Additional Information is September 28, 2004

The audited financial statements for the year ended December 31, 2002 are incorporated by reference in the Fund's registration statement of which this Statement of Additional Information is Part B.

TABLE OF CONTENTS

Location of Related			Location
Disclosure Info.			Page No.
in Prospectus			in This
Part A		Information Required in Statement of Additional Information	Part B
-	Cover Page		1
-	Table of Contents		2
-	Fund History		3
11	Description of the Fund and its Investments and Risks		3
11	Investment Policies, Strategies and Risks		3
-	Fund Policy Restrictions		3
-	Portfolio Turnover		5
14	Management of the Fund		6
-	Directors and Officers		6
-	Director Share Ownership		13
-	Meetings		13
-	Committees		13
-	Investment Advisory Contract		14
-	Code of Ethics		19
-	Proxy Voting Policy and Procedures Compensation		20 21
-	Control Persons and Principal Holders of Securities		22
14	Investment Advisory and Other Services		24
-	Control Persons		24
-	Affiliated Persons		25
16	Advisory Fees		25
-	Expense Limitation		25
-	Services Performed on Behalf of Fund		25
-	Other Services		26
-	Independent Registered Public Accounting Firm		27
-	Brokerage Allocation and Other Practices		28
-	Investment Adviser's Trade Aggregation Policy		30
17	Capital Stock and Other Securities		30
-	Cumulative Voting		31
18	Purchase, Redemption, and Pricing of Securities Being Offered		31
-	General Information		31
17	Valuation		31
-	Specimen Price Make Up Sheet		31
-	Other Disclosures		31
-	Description of Fund Plans		32
-	Standard Retirement Plan		32
-	Individual Retirement Custodial Account		33
23	Tax Status		36
-	Underwriter		36
-	Calculation of Performance Data		37
6	Past Performance of Fund		38
-	Information Supporting and Setting Qualifications for Investment Returns		41
-	Financial Statements		42
-	Appendix A – Specimen Price Make Up Sheet		43
-	Report of Independent Registered Public Accounting Firm		44
-	Schedule of Portfolio Investments		45
-	Statement of Assets and Liabilities		51
-	Statement of Operations		52
-	Statements of Changes in Net Assets		53
-	Notes to Financial Statements		54

2 

FUND HISTORY

The Fund was organized as an open-end investment company under the laws of Nebraska on March 20, 1963. The Fund commenced investment operations on July 1, 1963, and shares of Capital Stock were first sold to the general public on December 7, 1963. The Fund has conducted its business continuously since that year.

The Fund's primary purpose is to extend the professional investment services of the firms of Bridges Investment Management, Inc. and Bridges Investment Counsel, Inc. to investors whose funds are too small to permit economical administration as separate accounts. By acquiring shares of the Fund, investors with smaller accounts obtain securities diversification and continuous investment supervision, although an investment in the Fund does not remove the market risk inherently involved in making securities investments.

Description of the Fund and Its Investments and Risks

Investment Policies, Strategies and Risks – The primary investment objective of the Fund is long-term capital appreciation. The development of a moderate amount of current income is a secondary investment objective of the Fund. The Fund will invest in common stocks and securities convertible into common stocks to achieve its capital growth objective, bonds, debentures, and preferred stocks to meet its income objective. Refer to the Fund Prospectus for a complete discussion of the investment policy objectives for the Fund and the strategies employed to attain the Fund’s objectives.

Fund Policy Restrictions – The activities of the Fund and its investment policies are restricted as set forth in the Fund’s Prospectus and in the following discussion. The restrictions described below cannot be changed without the approval of a majority of the outstanding voting securities of the Fund.

The Fund will not concentrate its investments in a particular industry or group of related industries by committing more than 25% of total assets to securities in any one industry or group of related industries. With the exception of investments in U.S. government securities, the Fund will not make investments which will cause more than 5% of the total value of its assets (at the time of purchase) to be invested in the securities of any one issuer. Furthermore, in initial or subsequent investments, the Fund may not acquire more than 10% of the voting stock of any one issuer, and the Fund may not acquire more than 10% of any one class of the outstanding securities of any one issuer. For the purposes of this restriction, all kinds of securities of a company representing debt are considered as a single class irrespective of their differences, and all kinds of preferred stock of a company are considered a single class irrespective of their differences.

The Fund will not borrow money or pledge or mortgage its assets, except as a temporary measure, in which event total borrowings shall not exceed 10% of the value of its total assets. The Fund has never exercised the option to borrow money as a temporary measure. In addition, the Fund may not purchase securities on margin or make short sales. The Fund has authorized only one class of stock, and will not issue any preferred stock or other senior securities.

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The Fund will not make investments which will cause more than 5% of the value of its total assets (at the time of purchase) to be invested in securities of issuers which have a record of less than three years’ operation.

The Fund will not invest in companies for the purpose of exercising control or management, and the Fund will not invest in securities of other investment companies except by purchase in open market, where no commission or profit to a sponsor or dealer results from such purchase other than the customary broker’s commission, or where the acquisition is part of a plan of merger or consolidation. Such acquisitions, if any, of the securities of other registered investment companies by the Fund are not permitted if immediately after such purchase or acquisition:

1.The Fund owns in the aggregate more than 3% of the outstanding voting stock of another investment company;

2.The shares of the other registered investment company have an aggregate value in excess of 5% of the value of the total assets of the Fund; or

3.The shares of the other registered investment company and all other investment companies have an aggregate value in excess of 10% of the value of the total assets of the Fund.

Each investment of the Fund will be made with the expectation that the security acquired will be held for the long term. The Fund will not purchase securities with a view towards rapid turnover for capital gains. However, the management may sell securities for short term gains or losses if new information or changes in market conditions indicate such selling action is advisable.

The Fund will not invest outside of the area of securities. It will not purchase or sell real estate, commodities or commodity contracts. The Fund will not make loans to other persons. (The acquisition of a portion of an issue of publicly distributed bonds, debentures, or other debt securities is not to be considered the making of a loan.)

The Fund will not engage in the underwriting of the securities of other issuers.

The Fund will not purchase restricted or non-registered securities.

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The Fund will not purchase or sell put or call options, except the Fund may write or sell call options against shares held in its securities portfolio on the American Stock Exchange, Inc., the Chicago Board Options Exchange, Incorporated, the Pacific Stock Exchange Incorporated, and the PBW Stock Exchange, provided that any such call options will be limited to shares of common stocks which have an aggregate market value of less than 10% of the total value of the Fund’s assets at the time of the transaction, and further provided that not more than one-half of the shares held in any one issuer will be eligible for the writing of such call options. The Fund may purchase a call option with terms identical to a call option which has been previously written in order to liquidate or close an existing call option position. As of December 31, 2003, the Fund has not exercised its authority to write a covered call option.

The Fund may purchase bonds, debentures, and preferred stocks which have one or more interest or dividend payments in arrears, but, nevertheless, offer prospects of resuming the payment of the arrearage plus the current income rate. Such securities may offer a significant price improvement from a depressed level, thereby creating a capital gain potential similar to the advancement possible for common stock selections. The risk of owning this type of security is that income payments will not be resumed or that the principal will never be repaid. Further, the Fund may acquire issues, sometimes known as “junk bonds”, with above average yield and balance sheet risk. The purchase of this lower grade of securities will be limited to 5% of the value of the total assets of the Fund.

With respect to the ownership of U.S. Government securities, including investments in such securities for temporary defensive purposes, the Fund will invest primarily in issues of the U.S. Treasury that are backed by the full faith and credit of the United States of America. The Fund may purchase U.S. Treasury Bills, short term; U.S. Treasury Notes, intermediate term; and U.S. Treasury Bonds, long term instruments depending upon the attractiveness of interest rates and the expected trends of these yields in the future.

Portfolio Turnover – In the ten years ending December 31, 2003, the portfolio turnover rate for the Fund ranged from a high of 26% in 2003 to a low of 7% in 1995. The median portfolio turnover for the past 10 years was 15% and verage portfolio turnover rate for such period was 15.5%. The portfolio turnover rate in 2003 was 26% while in 2002 it was 23%. The Fund does not plan to materially change its portfolio turnover rate more than the ranges experienced in the past ten years; however, portfolio rates could increase significantly in order to respond to turbulent conditions in the securities market. Refer to Financial Highlights in the Prospectus for detailed year-to-year information on the portfolio turnover rate.

The rate of portfolio turnover is calculated by dividing (a) the lesser of total purchases or total sales of portfolio securities for the reporting period by (b) the monthly average of the value of the portfolio securities owned by the Fund during the reporting period. Such monthly average is calculated by totaling the market values of the portfolio securities as of the beginning and end of the first month of the reporting period and as of the end of each of the succeeding months in the period and dividing the sum by the number of months in the period plus one.

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For purposes of this calculation, there is excluded from both the numerator and denominator all securities, including options, whose maturity or expiration date at the time of acquisition were one year or less. All long-term securities, including long-term U.S. Government securities, are included. Purchases include any cash paid upon the conversion of one portfolio security into another. Purchases also include the cost of rights or warrants purchased. Sales include the net proceeds from the sale of rights or warrants and the net proceeds of portfolio securities which have been called or for which payment has been made through redemption or maturity.

In general, portfolio turnover rises when securities held need to be repositioned to adapt the Fund’s investment position to new opportunities or to protect against unforeseen, adverse market circumstances.

MANAGEMENT OF THE FUND

Directors and Officers

The Board of Directors of the Fund is responsible for the management of the business affairs of the Fund. The day-to-day operation of the Fund is handled by the officers who are chosen by, and accountable to, the Board of Directors. The officers have at their disposal the services of the investment adviser, Bridges Investment Management, Inc. This Firm is obligated under its investment advisory contract with the Fund to perform all services necessary in connection with the management of the Fund. The business experience of each of the officers and directors of the Fund and of the investment adviser during the past five years is described below. Information for directors who are “interested persons” of the Fund is set forth in a separate table. The determination of an interested person is based on the definition in Section 2(a)(19) of the Investment Company Act of 1940, and Securities and Exchange Commission Release (Release No. IC-24083, dated October 14, 1999), providing additional guidance to investment companies about the types of professional and business relationships that may be considered to be material for purposes of Section 2(a)(19). Interested persons include a director or officer of the Fund who has a significant or material business or professional relationship with the Fund’s investment adviser, Bridges Investment Management, Inc. All directors are elected for an annual term.

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Disinterested Persons

Also Known as Independent Directors

Name, Age, Position with Fund and Term of Office	Principal Occupation(s) and Directorships*
N. Phillips Dodge, Jr., 67 Director (1983 – present)	Mr. Dodge is President of N. P. Dodge Company, a leading commercial and residential real estate brokerage concern in the area of Omaha, Nebraska. Mr. Dodge has held this position since July, 1978. Mr. Dodge is also a principal officer and director of a number of subsidiary and affiliated companies in the property management, insurance, and real estate syndication fields. Mr. Dodge became a Director of American States Water Company (formerly Southern California Water Company) in April, 1990, and a Director of the Omaha Public Power District as of January 1, 2000, for a six year term.
John W. Estabrook, 76 Director (1979 – present)	Mr. Estabrook was the Chief Administrative Officer of the Nebraska Methodist Hospital and its holding company, Nebraska Methodist Health System, in Omaha, Nebraska, beginning June, 1959. Effective January 1, 1987, Mr. Estabrook relinquished the position of President of Nebraska Methodist Hospital, continuing the Presidency of the Nebraska Methodist Health System until his retirement on August 31, 1992.

Jon D. Hoffmaster, 56 Director (1993 – present)	From 1987 to 1998 Mr. Hoffmaster was employed by InfoUSA, where he served as President and Chief Operating Officer, Chief Financial Officer, Executive Vice President and director. From 1980 to 1987, Mr. Hoffmaster was President and Chief Executive Officer of First National Bank of Bellevue, Nebraska. Mr. Hoffmaster was deemed to be an Audit Committee Financial Expert within the meaning of the Sarbanes Oxley Act of 2002 and the regulations related thereto at the September 30, 2003 meeting of the independent directors of the Fund and the October 7, 2003 meeting of the Fund's Board of Directors.
John J. Koraleski, 53 Director (1995 – present)	Mr. Koraleski is Executive Vice President-Marketing & Sales of the Union Pacific Railroad Company headquartered in Omaha, Nebraska. Mr. Koraleski was employed by Union Pacific in June, 1972, where he has served in various capacities. He was promoted to his present position in March, 1999. As the Executive Vice President-Marketing & Sales, Mr. Koraleski is responsible for all sales, marketing, and commercial activities for the railroad and its Union Pacific Distribution Services subsidiary. He is a member of the Railroad's Operating Committee. Currently, Mr. Koraleski is Vice President-Finance and a Member of the Board of Trustees for Union Pacific Foundation. Prior to his current officer position with the Railroad, Mr. Koraleski was the Railroad's Chief Financial Officer, Controller of Union Pacific Corporation. In those positions, he was responsible for the Railroad's Infor mation Technologies and Real Estate Departments. Mr. Koraleski was deemed to be an Audit Committee Financial Expert within the meaning of the Sarbanes Oxley Act of 2002 and the regulations related thereto at the September 30, 2003 meeting of the independent directors of the Fund and the October 7, 2003 meeting of the Fund's Board of Directors. Mr. Koraleski was designated as the Lead Independent Director of the Fund effective April 13, 2004.
Gary L. Petersen, 60 Director (1987 – present)	Mr. Petersen is the retired President of Petersen Manufacturing Co. Inc. of DeWitt, Nebraska. Mr. Petersen commenced employment with the Company in February, 1966. He became President in May, 1979, and retired in June, 1986. Petersen Manufacturing Co. Inc. produced a broad line of hand tools for national and worldwide distribution under the brand names Vise-Grip, Unibit, Prosnip, and Punch Puller. Mr. Petersen has been designated as the Chairman of the Fund's Administration and Nominating Committee effective April 13, 2004.
John T. Reed, 60 Director (1999 – present)	Mr. Reed is Chairman of HMG Properties of Omaha, Nebraska, and a member of the Board of Directors of Level 3 Communications, Inc., Alegent Health and McCarthy Group, Inc. Mr. Reed was formerly a partner with an international public accounting firm for 32 years before retiring in August, 1996. Mr. Reed was deemed to be an Audit Committee Financial Expert within the meaning of the Sarbanes Oxley Act of 2002 and the regulations related thereto at the September 30, 2003 meeting of the independent directors of the Fund and the October 7, 2003 meeting of the Fund's Board of Directors.

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Name, Age, Position with Fund and Term of Office	Principal Occupation(s) and Directorships*
Roy A. Smith, 69 Director (1976 – present)	Mr. Smith was President of H. P. Smith Motors, Inc. for decades until the Company was sold to a new owner in the Third Quarter of 1997. Mr. Smith is currently President of Old Mill Toyota of Omaha, Nebraska, and is a director of the Mid City Bank of Omaha.
Janice D. Stoney, 63 Director (1999 – present)	Mrs. Stoney retired as Executive Vice President, Total Quality System, US WEST Communications in December, 1992. Mrs. Stoney began her career within the telephone industry as a service representative with the Northwestern Bell Telephone Company in August, 1959. Mrs. Stoney earned various officer positions that culminated in becoming President of Northwestern Bell Telephone Company from 1987 - 1989 and President of the Consumer Division of US WEST from 1989 - 1991. During her business career, Mrs. Stoney has served on the Board of Directors of the Federal Reserve Bank, Tenth District, Omaha Branch, from 1984 to 1988; the Northwestern Bell Telephone Company, 1985 to 1990; Tennant Company located in Minneapolis, Minnesota from 1986 to 1995; and US WEST Communications Group, Inc. 1989 to 1992. Mrs. Stoney currently serves on the Board of Directors of the Whirlpool Corporation, headquart ered in Benton Harbor, Michigan where she has served since 1987. She was elected in 1999 as a Director of The Williams Companies, Inc. headquartered in Tulsa, Oklahoma.
L.B. Thomas, 67 Director (1992 – present)	Mr. Thomas retired in October, 1996, from ConAgra, Inc. He retired as Senior Vice President, Risk Officer and Corporate Secretary for ConAgra, Inc., headquartered in Omaha, Nebraska. ConAgra had sales of approximately $25 billion world-wide and was the second largest processor of food products in the United States when Mr. Thomas retired. He was also a member of ConAgra's Management Executive Committee. Mr. Thomas joined ConAgra as assistant to the Treasurer in 1960. He was named Assistant Treasurer in 1966; Vice President, Finance in 1969; Vice President, Finance and Treasurer in 1974; added the Corporate Secretary responsibility in 1982; and became Senior Vice President in 1991. Mr. Thomas is a director of Lozier Corp. located in Omaha, Nebraska and the Exchange Bank of Mound City, Missouri, and a member and treasurer of the Nebraska Methodist Health System Board of Directors.

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Name, Age, Position with Fund and Term of Office

Principal Occupation(s) and Directorships*

John K. Wilson, 49 Director (1999 – present)

Mr. Wilson is President of Durham Resources, LLC. Durham Resources, LLC is a privately held investment company headquartered in Omaha, Nebraska. Mr. Wilson commenced his career with Durham Resources, LLC in February, 1983. Prior to becoming resident in May, 1994, Mr. Wilson served in the position of Secretary-Treasurer and Vice President-Finance. Mr. Wilson currently serves on the Advisory Board – U.S. Bank National Association, Omaha, Nebraska and as a director of MDU Resources Group, Inc. headquartered in Bismarck, North Dakota.

* Except as otherwise indicated, each individual has held the position shown or other positions in the same company for the last five years.

The address for all Fund Directors is 256 Durham Plaza, 8401 West Dodge Road, Omaha, Nebraska 68114.

Interested Directors and Officers

The following Directors and Officers are interested persons of the Fund. The determination of an interested person is based on the definition in Section 2(a)(19) of the Investment Company Act of 1940, and Securities and Exchange Commission Release (Release No. IC-24083, dated October 14, 1999), providing additional guidance to investment companies about the types of professional and business relationships that may be considered to be material for purposes of Section 2(a)(19).

Name, Age, Position with Fund and Term of Office

Principal Occupation(s) and Directorships*

Edson L. Bridges II, 71 (1) Chairman (1997 – present) Chief Executive Officer (1997 – 2004) Director (1963 – present)

Mr. Bridges became Chairman and Chief Executive Officer of Bridges Investment Fund, Inc. on April 11, 1997, after serving as President from September 28, 1970 through April 11, 1997. Mr. Bridges served as Chief Executive Officer of Bridges Investment Fund, Inc. from 1997 through April 13, 2004. In September, 1959, Mr. Bridges became associated with the predecessor firm to Bridges Investment Counsel, Inc. and is presently the President and Director of Bridges Investment Counsel, Inc. Mr. Bridges is also President and Director of Bridges Investor Services, Inc. Mr. Bridges is President and Director of Provident Trust Company, chartered to conduct business on March 11, 1992, and is a director and officer of Bridges Investment Management, Inc.

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Name, Age, Position with Fund and Term of Office

Principal Occupation(s) and Directorships*

Edson L. Bridges III, 45 (2) President (1997 – present) Chief Executive Officer (2004 – present) Director (1991 – present)

Mr. Bridges has been a full-time member of the professional staff of Bridges Investment Counsel, Inc. since August 1983. Mr. Bridges has been responsible for securities research and the investment management for an expanding base of discretionary management accounts, including the Fund, for more than eight years. Mr. Bridges was elected President of Bridges Investment Fund, Inc. on April 11, 1997, and he assumed the position of Portfolio Manager at the close of business on that date. Mr. Bridges was elected Chief Executive Officer of Bridges Investment Fund on April 13, 2004. Mr. Bridges has been Executive Vice President-Investments of Bridges Investment Counsel, Inc. since February, 1993, and he is a Director of that firm. Mr. Bridges is an officer and a Director of Bridges Investor Services, Inc. and Provident Trust Company. Mr. Bridges has been President and Director of Bridges Investment Management, Inc. since its initial organization in 1994. Mr. Bridges became a Director of Stratus Fund, Inc., an open-end, regulated investment company located in Lincoln, Nebraska, in October, 1990.

* Except as otherwise indicated, each individual has held the position shown or other positions in the same company for the last five years.

(1) Edson L. Bridges II is the father of Edson L. Bridges III. Mr. Bridges II is an interested person because he is a director and officer of the Fund and a director and officer of the Fund's investment adviser, Bridges Investment Management, Inc.

(2)Edson L. Bridges III is the son of Edson L. Bridges II. Mr. Bridges III is an interested person because he is a director and officer of the Fund and a director and officer of the Fund's investment adviser, Bridges Investment Management, Inc.

The officers of the Fund, other than Ms. Frohlich and Mr. Hadler, as disclosed below were elected by the Board of Directors on April 13, 2004, and their terms of office run from April 13, 2004, to April 13, 2005. Officers Starr Frohlich and Jason Hadler were elected by the Board of Directors on July 21, 2004, and their terms of office run from July 21, 2004 to April 13, 2005.

Additional Officers of the Fund

Name, Age, Position with Fund and Term of Office

Principal Occupation(s) and Directorships*

Nancy K. Dodge, 42 Treasurer (1986 – present)

Mrs. Dodge has been an employee of Bridges Investment Counsel, Inc. since January, 1980 and has been Vice President of Bridges Investment Management, Inc. since March 6, 2000. Her career has progressed through the accounting department and to current position as Vice President. Mrs. Dodge is the person primarily responsible for day to day operations for the Fund, and she is also the key person for handling relations with shareholders, the custodian bank, and the auditor. Mrs. Dodge is an officer and Director of Bridges Investor Services, Inc., and a Trust Administrator for Provident Trust Company.

10 

	Principal Occupation(s) and Directorships*
Randall D. Greer, 52 Vice President (2003 - present)	Mr. Greer has been an employee of Bridges Investment Counsel, Inc. and Vice President of Bridges Investment Management, Inc. since December 1, 2002. Mr. Greer was the Chief Investment Officer of Westchester Capital Management, Inc. from November, 2000 through November, 2002. Between October, 1975 and February, 2000, Mr. Greer held several management positions with Kirkpatrick, Pettis, Smith, Polian Inc., an investment banking firm and broker-dealer located in Omaha, Nebraska, most recently as a Principal. His responsibilities at Kirkpatrick Pettis included research, portfolio management and executive administration. Mr. Greer is a full-time member of the professional staff of Bridges Investment Counsel, Inc., and Bridges Investment Management, Inc. responsible for planning and administration as well as investment management for an expanding base of client accounts. Mr. Greer has also served as a Vice President of Bridges Investor Services, Inc. since April 8, 2003 and as a Vice President of Provident Trust Company since December 10, 2002.
Brian Kirkpatrick, 32 Vice President (2000 – present)	Mr. Kirkpatrick has been an employee of Bridges Investment Counsel, Inc. since August 24, 1992 and has been Vice President of Bridges Investment Management, Inc. since March 6, 2000. Mr. Kirkpatrick has been a full-time member of the professional staff of Bridges Investment Counsel, Inc., responsible for securities research, and the investment management for an expanding base of discretionary management accounts, including the Fund, for several years. Mr. Kirkpatrick is also a Trust Assistant for Provident Trust Company.
Mary Ann Mason, 52 Secretary (1987 – present)	Mrs. Mason has been an employee of Bridges Investment Counsel, Inc. since June, 1981 and an officer of Bridges Investment Management, Inc. since its initial organization in 1994. Mrs. Mason is currently Secretary/Treasurer of Bridges Investment Management, Inc. Mrs. Mason is also Corporate Secretary and Treasurer for Bridges Investment Counsel, Inc., Secretary, Treasurer and Trust Administrator for Provident Trust Company, Secretary and Treasurer for Bridges Investor Services, Inc. and a Director of Bridges Investor Services, Inc.
Linda Morris, 37 Assistant Treasurer (2000 – present)	Mrs. Morris has been an employee of Bridges Investment Counsel, Inc. since August, 1992. Her career with Bridges Investment Counsel, Inc. has been largely in the client accounting area. In recent years, Mrs. Morris has been the primary accounting person to determine the daily net asset value for the shares of the Fund. Mrs. Morris was elected Assistant Treasurer of the Fund in April, 1999. Mrs. Morris is also Associate Director of Accounting for Bridges Investment Counsel, Inc. and a Trust Assistant for Provident Trust Company.
Kathleen J. Stranik, 60 Assistant Secretary (1995 – present)	Mrs. Stranik has been an employee of Bridges Investment Counsel, Inc. since January, 1986 and an officer of Bridges Investment Management, Inc. since its original organization in 1994. Mrs. Stranik is currently Assistant Secretary and Assistant Treasurer of Bridges Investment Management, Inc. Mrs. Stranik has functioned as an executive secretary to both Edson L. Bridges II and Edson L. Bridges III throughout her career with the Fund. Mrs. Stranik is Vice President of Administration for Bridges Investment Counsel, Inc. an officer and director of Bridges Investment Services, Inc., Assistant Secretary, Assistant Treasurer and Trust Officer for Provident Trust Company.

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Trinh Wu, 46 Controller (2001 – present)	Mrs. Wu has been an employee of Bridges Investment Counsel, Inc. since February 1, 1997. Mrs. Wu has functioned as the lead accountant for the day to day operation of the Fund. Prior to employment at Bridges Investment Counsel, Inc., Mrs. Wu performed operating and accounting activities for 17 years in the Estate and Trust Department of the predecessor institutions to U.S. Bank, N.A. Nebraska. Mrs. Wu was elected to the position of Controller of the Fund at the October 16, 2001 meeting of the Board of Directors.
Susan T. Bailey 41 Assistant Secretary (2004-Present)	Mrs. Bailey has been an employee of Bridges Investment Counsel, Inc. since February 24, 2003. Mrs. Bailey is currently Executive Assistant for Edson L. Bridges II and Randall D. Greer, and she handles administrative matters for the various businesses operated by the Firm including the Fund. Prior to her employment at Bridges Investment Counsel, Inc., Susan's principal occupation has been working as a sales assistant for several securities brokerage firms, beginning with Piper Jaffray in September, 1992.
Starr Frohlich 32 Assistant Secretary (2004- present)	Ms. Frohlich is also a serves as Assistant Vice President, U.S. Bancorp Fund Services, LLC and as Compliance Administrator for a select group of U.S.Bancorp mutual fund clients. Ms. Frohlich reviews all 1940 Act, SEC and IRS compliance, prepares financial statements, facilitates board meetings, educates fund boards concerning regulatory issues, prepare tax returns and meets SEC filing requirements on behalf of mutual fund clients. Prior to joining U.S.Bancorp in 1997, Ms. Frohlich worked for Fabcon, Inc. a manufacturing company located in Minneapolis, Minnesota, as a Senior Accountant working mainly with financial statement preparation and expense analysis. Ms. Frohlich received her Bachelor of Science in Business degree in accounting from the University of Minnesota.
Jason Hadler 29 Assistant Treasurer (2004 - present)	Mr. Hadler is a CPA and provides fund administration duties for a select group of U.S. Bancorp mutual fund clients. In his capacity as a Compliance Administrator, Mr. Hadler handles daily client issues, performs 1940 Act, SEC and IRS compliance, reviews financial statements and board reports, coordinates the annual audit and meets SEC filing requirements on behalf of mutual fund clients. Mr. Hadler has over seven years experience in the financial services industry, including public accounting and mutual fund accounting. Mr. Hadler is a member of the Wisconsin Institute of Certified Public Accountants and received a Bachelor of Science degree in accounting from Marquette University.

* Except as otherwise indicated, each individual has held the position shown or other positions in the same company for the last five years.

The address for all Fund Officers is 256 Durham Plaza, 8401 West Dodge Road, Omaha, Nebraska 68114.

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Director Share Ownership

 

Set forth below are the dollar ranges of securities of the Fund beneficially owned by each director as of December 31, 2003.

Name of Director or Nominee	Dollar Range of Equity Securities in the Fund
	None	$1 - $10,000	$10,001 - $50,000	$50,001 - $100,000	Over $100,000
Edson L. Bridges II					X
Edson L. Bridges III					X
N. Phillips Dodge, Jr.					X
John W. Estabrook					X
Jon D. Hoffmaster			X
John J. Koraleski				X
Gary L. Petersen					X
John T. Reed		X
Roy A. Smith					X
Janice D. Stoney				X
L.B. Thomas			X
John K. Wilson				X

Meetings

During 2003, the Board of Directors held four meetings, the Administration and Nominating Committee held four meetings and Audit Committee held three meetings. Members of the various committees are listed below. All Fund Directors had a 100% attendance record at all meetings of the Board of Directors and all meetings of committees of which they are members (on a combined basis), with the exception of N. Phillips Dodge, Jr., who had a 75% attendance record, and Mr. Koraleski, who had a 50% attendance record for all meetings of Board of Directors and all meetings of committees of which they are members (on a combined basis). In addition, two meetings were held with only the independent directors present. All independent Fund Directors had a 100% attendance record at these meetings except Mr. Reed and Mr. Dodge, who had a 50% attendance record, and Mr. Koraleski, who was unable to be present for both of these meetings.

Committees

The Fund has an Administration and Nominating Committee and an Audit Committee, which are comprised solely of independent directors of the Fund. The Director members on each committee are identified below.

The Administration and Nominating Committee evaluates candidates' qualifications for Board membership, including such candidates' independence from the Fund's investment manager, and makes nominations for independent director membership on the Board. The Administration and Nominating Committee will consider nominees recommended by Fund shareholders. Such recommendations should be in writing and addressed to the Fund, Attention: Administration and Nominating Committee, with the name, address, biographical information and telephone number of the person recommended and of the recommending person. As set forth in its charter, the Administration and Nominating Committee periodically reviews the composition of the Board of Directors to determine whether it may be appropriate to add individuals with different backgrounds or skills sets from those already on the Board. To date, the Administration and Nominating Committee has not set any specific, minimum qualifications that the Administration and Nominating Committee believes must be met by a committee-recommended nominee for a position on the Fund's Board, nor has the Administration and Nominating Committee determined a specific process for identifying and evaluating nominees for director beyond the general criteria regarding board composition discussed above.

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In April, 2003, the Fund's Administration and Nominating Committee adopted a retirement policy whereby directors of the Board will not stand for reelection in the year in which that directors becomes 72 unless the Administration and Nominating Committee determines that an exception is applicable to an individual that continues to be employed in an executive position with a service provider of the Fund or an individual that has a significant portion of his or net worth invested in the Fund.

The Administration and Nominating Committee also periodically reviews and makes recommendations with respect to Board governance procedures and compensation. The Administration and Nominating Committee also reviews the Fund investment advisory agreement and makes recommendations to the independent directors and the Fund Board of Directors concerning such agreement.

The Audit Committee establishes the scope of review for the annual audit by the independent auditor, and its members work with representatives of the independent auditor to establish such guidelines and tests for the audit which are deemed appropriate and necessary.

The specific assignments to committees of the Board of Directors appear in the two tables set forth below:

ADMINISTRATION AND NOMINATING COMMITTEE	AUDIT COMMITTEE
	John W. Estabrook
N. P. Dodge, Jr.	Jon D. Hoffmaster, Chairman
Gary L. Petersen, Chairman	John J. Koraleski
Roy A. Smith	John T. Reed
Janice D. Stoney	L.B. Thomas
	John K. Wilson

Mr. John J. Koraleski is the Lead Independent Director of the Fund, and, in that capacity, Mr. Koraleski coordinates the activities of these two committees with the management of the Fund.

Investment Advisory Contract

At the 2004 Annual Meeting of the Fund held February 24, 2004, shareholders of the Fund approved a new investment advisory contract (the new advisory agreement) between the Fund and Bridges Investment Management, Inc. (BIM). The new investment advisory contract became effective as of April 17, 2004. Under the Fund's prior investment advisory contract with Bridges Investment Counsel, Inc. (BIC), a change in control of the ownership of BIC, which would cause the current advisory agreement to be terminated, would have occurred as a result of the death, disability or retirement of Edson L. Bridges II, who owns 87.5% of its common stock. As a result, and as part of its prudent long range planning to establish an orderly and well-managed transfer of advisory relationships, BIC formed BIM, as a wholly owned subsidiary in late 1994, and provided working capital and other resources to it since 1995. BIM commenced its investment advisory business in the first quarter of 2000 while operating as a wholly-owned subsidiary of BIC. Effective December 15, 2000, BIM separated from BIC and is no longer a wholly-owned subsidiary of BIC.

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Prior Investment Advisory Contract with BIC

The investment advisory contract with BIC was initially entered into with the Fund on April 17, 1963, with the Fund, and was subsequently amended July 31, 1963, October 22, 1970, February 15, 1972 and February 17, 1976. The prior advisory agreement continued in effect only so long as such continuance was specifically approved at least annually by the Board of Directors, or by vote of a majority of the outstanding voting securities of the Fund; in either case, the terms of the current advisory agreement and any renewal thereof must have been approved by the vote of a majority of Directors who are not parties to the current advisory agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. The prior advisory agreement could be terminated by either party on sixty days' written notice and terminated automatically if assigned. The prior advisory agreement was last submitted to the Fund's shareholders for their approval on February 18, 2003, and the purpose of that submission was to secure a continuation of the contract with BIC for the period from April 17, 2003, through April 17, 2004.

Under the prior advisory agreement, BIC furnished continuing investment supervision for the Fund and provided office space, facilities, equipment, and personnel for managing the assets of the Fund. In addition, BIC paid all of the expenses of registering the Fund with the Securities and Exchange Commission under the Investment Company Act of 1940 and the Securities Act of 1933 and agreed to pay all expenses of maintaining those registrations. Further, under the prior contract, BIC agreed to pay all expenses of initially qualifying and maintaining the qualification of shares of the Fund in whole or in part under the securities laws of such states as the Fund from time to time designated.

For these services, the Fund agreed to pay BIC a quarterly fee of one-eighth (1/8) of one percent (1%) of the average net asset value of the Fund, which equals 1/2 of 1% on an annual basis, as determined as of the close of each month of the applicable quarter. In the prior advisory agreement, BIC agreed to reimburse the Fund for its total expenses (exclusive of stamp and other taxes but including fees paid to BIC) to the extent such expenses in the aggregate exceeded one and one-half percent (1½%) of the average net asset value of the Fund for such year as determined by appraisals made as of the close of each month thereof.

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BIC's fees for the last three fiscal years were as follows: $315,093 in 2001, $258,339 in 2002 and $266,705 in 2003. The maximum limitation on expenses was set at 1½% in 1976, and other than a voluntary reimbursement made by BIC in 1987 which was not triggered by the maximum limitation, there have been no reimbursed expenses by BIC since 1976. The address for BIC is 256 Durham Plaza, 8401 West Dodge Road, Omaha, Nebraska 68114.

New Investment Advisory Contract with BIM

On January 13, 2004, the Board of Directors of the Fund approved an investment advisory contract (the new advisory agreement) to be entered into between the Fund and Bridges Investment Management, Inc. (BIM), and on February 24, 2004, the new advisory agreement with BIM was approved by the Fund shareholders. The terms of the new advisory agreement with BIM are substantially similar to the prior advisory agreement with BIC. The new advisory agreement with BIM continues in effect only so long as such continuance is specifically approved at least annually by the Fund Board of Directors, or by vote of a majority of the outstanding voting securities of the Fund; in either case, the terms of the new advisory agreement and any renewal thereof must have been approved by the vote of a majority of Directors who are not parties to the new advisory agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. The new advisory agreement may be terminated by either party on sixty days' written notice and terminates automatically if assigned. The new advisory agreement with BIM has been approved for the period from April 17, 2004, through April 17, 2005.

Through an outsourcing agreement with BIC, BIM provide office space, facilities, and equipment. In addition, BIM will pay all of the expenses related to registering the Fund with the Securities and Exchange Commission under the Investment Company Act of 1940 and the Securities Act of 1933 and has agreed to pay all expenses of maintaining those registrations. Further, under this contract, BIM has agreed to pay all expenses of initially qualifying and maintaining the qualification of shares of the Fund in whole or in part under the securities laws of such states as the Fund may from time to time designate.

For these services, the Fund agrees to pay BIM a quarterly fee of one-eighth (1/8) of one percent (1%) of the average net asset value of the Fund, which equals 1/2 of 1% on an annual basis, as determined by appraisals made as of the close of each month of the applicable quarter. However, in the new advisory agreement, BIM has agreed to reimburse the Fund for its total expenses (exclusive of stamp and other taxes but including fees paid to BIM) to the extent such expenses in the aggregate exceed one and one-half percent (1½%) of the average net asset value of the Fund for such year as determined as of the close of each month thereof. The fee structure under the new advisory agreement entered into with BIM is identical to the fee structure under the current advisory agreement with BIC. BIC's fees for the last three fiscal years were as follows: $315,093 in 2001, $258,339 in 2002 and $266,705 in 2003.

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The proposal to enter into the new investment advisory agreement with BIM and not renew the current investment advisory agreement with BIC, was initially made to the independent members of the Board of Directors at a meeting of independent directors held on September 30, 2003. This proposal was then favorably acted upon at the meeting of the Board of Directors held on January 13, 2004, and at the Fund's 2004 Annual Meeting of shareholders held February 24, 2004.

Prior to recommending approval of the new investment adviser agreement at their January 13, 2004, meeting, the independent Directors of the Fund reviewed the financial resources of BIM, the investment performance record, types of securities purchased, and asset size of the Fund in comparison with funds of similar size and comparable investment objectives, the operating costs relative to other funds, and other factors including the quality of investment advice and other services set forth in a special study prepared annually for the Board members by the investment manager. In addition, the independent Directors reviewed the expertise, personnel, and resources BIM is willing to commit to the management of the Fund, its compliance program, the cost of comparable services and the benefits to be received by BIM.

With respect to BIM's financial resources, BIM provided the Fund Board of Directors information showing (as of September 30, 2003) total assets of $1,610,749, no long-term debt, and total shareholders' equity of $1,514,402, with a current ratio (current assets to current liabilities) of 10.44 to 1.00 and an equity to total assets ratio of 94%. With respect to investment performance record, types of securities purchased, quality of investment advice, and operating costs, because Edson L. Bridges III has been, and will continue as, the person responsible for the day-to-day management of the Fund's portfolio, a position he has held since April 11, 1997, and because the transfer of the investment advisory arrangement from BIC to BIM is intended to continue the Fund operations in similar form with minimal disruption of operations and arrangements, the directors reviewed and focused on the Fund's past performance and operations in their evaluation and decision.

Based on information gathered from a leading mutual fund evaluator, the Fund directors compared the Fund's performance criteria to funds with similar investment objectives. The total fund comparison universe varied depending on the time frame of the comparison and other investment parameters included, but with respect to funds with a growth investment objective, the Fund ranked 15th of 1,233 funds over a trailing 12-month period (as of August 31, 2003), 16th of 933 funds over a 3-year period, 34th of 603 funds over a 5-year period, 42nd of 190 funds over a 10-year period, and 74th of 98 funds over a 15-year period.

The Fund directors reviewed the asset allocation of the Fund, including the percentage of Fund assets invested in stocks (83.6% as of August 31, 2003) and bonds (7.5% as of August 31, 2003), and the sector weighting of stocks owned by the Fund, with 20.0% of Fund stocks held in the "information economy" (including software, hardware, media and telecommunications stocks), 62.1% of Fund stocks held in the "service economy" (including healthcare, consumer services, business services and financial services), and 17.9% of Fund stocks held in the "manufacturing economy" (including consumer goods, industrial materials, energy and utilities).

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The Fund directors reviewed a number of financial ratios for the Fund's portfolio, including the current price/earnings ratio of Fund stocks (27.1 as of August 31, 2003), price/cash ratio (17.9) and price/book ratio (3.9), as well as the Fund's turnover ratio, which remained relatively constant at 14% (as of August 31, 2003), compared to a turnover ratio average of 111% for a comparison group of 566 large no-load growth funds. The directors also reviewed the Fund's expense ratio, which was 0.85% (as of August 31, 2003) compared to an average of 1.17% for the 566 large growth funds selected as the comparison group.

With respect to the Fund's compliance program, the Fund directors were provided information concerning both the historical practices to ensure compliance by Fund personnel, as well as current actions taken to strengthen the Fund compliance structure, including assignment of new officers in charge of the Fund's codes of ethics and oversight of trading policies and procedures.

In voting to approve the proposed advisory agreement in connection with the selection of BIM as successor adviser to the Fund, the Board of Directors considered its responsibility in such a situation to establish a process for the review of possible alternatives. The Board of Directors in assessing a successor adviser focused primarily on the nature and quality of the services to be delivered as well as the impact that the proposed change would have on the Fund's operations and the shareholder's interests.

Based upon the foregoing information and the detailed questions asked of and answered by BIM, the Board of Directors derived the following:

l	As further detailed below, the agreement with BIM results in the continuation of the Fund's operations in very similar form with minimal disruption of operations and arrangements that they believe have served the shareholders well.
l	The Board of Directors noted that entering into the agreement with BIM was consistent with its succession plans for BIC and that it addressed the risk of termination of the prior advisory agreement with BIC upon the death, disability or retirement of Edson L. Bridges II.
l	The Board of Directors noted that Edson L. Bridges III has more than 18 years experience with the Fund's portfolio and thus is very familiar with the Fund's history and operations. The Board of Directors further noted that Edson L. Bridges III has been responsible for the day-to-day management of the Fund's portfolio since April 11, 1997, with Edson L. Bridges II as the back-up person in this position, and that these positions and responsibilities would continue with BIM.

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l	The Board of Directors noted that the executive officers for BIM are substantially the same as those for BIC, and that such continuation in personnel in change from BIC to BIM would further provide for a smooth transition in investment adviser.
l	The Board of Directors approved of the fact that the Fund would maintain its current investment objectives.
l	The Board of Directors noted that the contractual terms with BIM are substantially the same as the Fund's current management agreement with BIC.
l	The Board of Directors noted that the advisory fee paid by the Fund would remain the same, and that the Board of Directors believes that the advisory fee to be paid by the Fund has been constant since inception in 1963.

In addition, at each Board of Directors meeting, the Board reviews the brokerage commissions and fees paid with respect to securities transactions undertaken for the Fund's portfolio during the prior three-month period for the cost efficiency of the services provided by the brokerage firms involved, all of which brokerage firms are non-affiliated with the Fund and its investment adviser. The Fund's Board of Directors reviewed an annual disclosure on soft dollar commission arrangements of the investment adviser and the benefits that the investment adviser and its clients may receive from the Fund's portfolio transactions at its April 12, 2002 Board meeting. The Board has regularly reviewed the brokerage commissions paid on each portfolio security transaction since 1995, and the actions taken by the management during the prior quarter with respect to portfolio transactions and commission levels have been approved by the Board of Directors.

Code of Ethics

Rule 17j-1 under the 1940 Act requires all registered investment companies and their investment advisers to adopt written codes of ethics and institute procedures designed to prevent “access persons” (as defined in Rule 17j-1) from engaging in any fraudulent, deceptive or manipulative trading practices. The Fund and the prior investment advisor, Bridges Investment Counsel, Inc., originally adopted a code of ethics in January, 1982, which was amended in 1994. On October 12, 1999, the Board of Directors for the Fund and the Board of Directors for Bridges Investment Counsel, Inc., adopted a joint Restated Code of Ethics (the “Rule 17j-1 Code”) that incorporates personal trading policies and procedures applicable to access persons of the Fund and of the investment adviser. The Rule 17j-1 Code has been adopted by the Board of Directors of Bridges Investment Management, Inc. and reaffirmed with Bridges Investment Management, Inc. as the investment adviser by the Fund Board of Directors. The Rule 17j-1 Code has been designed to address potential conflict of interests that can arise in connection with the trading activities of the Fund and investment advisory personnel. Generally, under SEC Rule 17j-1, access persons include directors and officers of the Fund and Bridges Investment Management, Inc., as well as employees who in connection with their regular duties, make, participate in, obtain information regarding, or make recommendations concerning, the purchase or sale of securities by the Fund.

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Pursuant to the Rule 17j-1 Code, access persons are generally permitted to engage in personal securities transactions, provided that such access person does not purchase or sell, directly or indirectly, any security in which he or she has, or by reason of such transaction acquires, any direct or indirect beneficial ownership and which to his or her actual knowledge at the time of such purchase or sale (a) is being considered for purchase or sale by the Fund; or (b) is being purchased or sold by the Fund; or (c) has been purchased or sold by the Fund within the most recent 15 days. In addition, the Code requires access persons to preclear personal securities investments before such transactions are initiated, and to internally report all personal securities transactions quarterly, as well as annual disclosure of all personal securities holdings and personal financial liabilities. Disinterested directors of the Fund are not required to make such reports unless the director knew, or in the ordinary course of fulfilling his or her duties, should have known, of the Fund’s consideration of, or the actual purchase or sale of the security purchased or sold by the Fund within the applicable time period.

In addition, on October 7, 2003, the Fund Board of Directors adopted a code of ethics under Section 406 of Sarbanes-Oxley Act (the "Section 406 Code of Ethics"), which applies to the Fund's principal executive officer, principal financial officer, principal investment officer and principal accounting officer. The Fund will provide copies of its Section 406 Code of Ethics to any person without charge upon written request at the office of the Fund, Attention: Mary Ann Mason, Secretary, 256 Durham Plaza, 8401 West Dodge Road, Omaha, Nebraska 68114.

Proxy Voting Policy and Procedures

The Fund's Board of Directors has adopted proxy voting policy and procedures that it believes are reasonably designed to ensure that proxies are voted in the best interest of Fund shareholders. The Fund authorizes Bridges Investment Management, Inc., as the Fund's investment adviser, to exercise its proxy voting responsibilities with a goal of maximizing the long-term value of Fund investments. The Fund's policy on voting proxies is segmented into six areas: executive and director compensation, shareholder rights, changes in corporate control, election of directors, approval of independent auditors, and corporate/social policy issues. Bridges Investment Management, Inc. officers and employees are to use the Fund's proxy voting policy as a guideline, but each voting decision involves a unique set of facts that need to be considered in determining whether the vote is in the best interests of the Fund and its shareholders.

In situations where Bridges Investment Management, Inc. or its affiliated parties have a material conflict of interest, the company will provide the Fund with full disclosure of the material conflict of interest, and forward the proxy to a proxy subcommittee appointed by the Fund's Administrative and Nominating Committee, which is comprised solely of independent directors, for voting in accordance with the Fund's proxy voting policy.

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The Fund's investment adviser, Bridges Investment Management, Inc. ("BIM"), has established an Investment Committee, which is responsible for determining the Fund's votes based on the Fund's proxy voting policy. In most instances, the BIM Investment Committee will delegate the proxy vote determination to individual committee members who are responsible for security analysis of the same securities. All questions concerning interpretation of the Fund's proxy policy are decided by a majority vote of the BIM Investment Committee. The BIM Investment Committee will maintain a list of securities in which there may be a conflict of interest under the Fund proxy voting policy.

The BIM proxy administrator reports to the BIM operations officer, and is responsible for carrying out the proxy voting process. The BIM operations officer is responsible for ensuring that proxies are voted according to the BIM Investment Committee's directions, and overseeing any third-party proxy voting vendors, maintaining required records, sending required notices to clients, and responding to client requests for proxy voting records. BIM utilizes the services of a third party proxy service vendor to assist in the processing of proxy voting of Fund portfolio securities.

Bridges Investment Management, Inc. will maintain records of proxy statements, votes cast, written requests for proxy voting records and written responses to such requests, and other required documentation. A copy of the Fund's Proxy Voting Policy and Proxy Voting Procedures is available upon request by calling Bridges Investment Management, Inc. at (402) 397-4700, or by sending a written request to Bridges Investment Management, Inc., Attention: Mary Ann Mason, 8401 West Dodge Road, Suite 256, Omaha, Nebraska 68114.

Compensation

No direct compensation or other remuneration was paid to the officers of Bridges Investment Fund, Inc. by the Fund in 2003. However, the Independent Directors as a group were paid a total of $18,450 by Bridges Investment Counsel, Inc. for their attendance at Audit Committee, Administration and Nominating Committee, and Board of Directors meetings during 2003. Subsequently, Bridges Investment Counsel, Inc. was reimbursed by the Fund for the actual fees paid to Independent Directors in the calendar quarter that follows the actual attendance by the member of the Board for regular meetings and special or committee sessions.

During 2004, each Director of the Fund will be paid a fee of $300 for each meeting of the Board of Directors at which he or she is in attendance. Each Independent Director will receive a fee of $150 for each Committee Meeting attended when held on a separate date from the regularly scheduled meeting of the Board of Directors. No fee will be paid for a committee session when such a meeting occurs in consecutive times on the same date as the meeting of the Board of Directors. Interested Directors Edson L. Bridges II and Edson L. Bridges III are not paid any Director fees.

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The compensation information on the following page is provided for all directors of the Fund and for each of the executive officers or any affiliated person of the Fund (with annual compensation in excess of $60,000) for the most recently ompleted fiscal year (2003):

Compensation Table

Name of Person, Position	Aggregate Compensation From Fund	Pension or Retirement Benefits Accrued as Part of Fund Expenses	Estimated Annual Benefits Upon Retirement	Total Compensation From Fund Paid to Directors
Executive Officers:
Edson L. Bridges II Chairman, and Director	None	None	None	None
Edson L. Bridges III	None	None	None	None
President, CEO and Director
Directors of the Fund:
Frederick N. Backer*	$1,575	None	None	$1,575
N. P. Dodge, Jr.	$1,275	None	None	$1,275
John W. Estabrook	$1,725	None	None	$1,725
Jon D. Hoffmaster	$1,725	None	None	$1,725
John J. Koraleski	$ 975	None	None	$ 975
Roger A. Kupka*	$1,575	None	None	$1,575
Gary L. Petersen	$1,575	None	None	$1,575
John T. Reed	$1,575	None	None	$1,575
Roy A. Smith	$1,575	None	None	$1,575
Janice D. Stoney	$1,575	None	None	$1,575
L.B. Thomas	$1,725	None	None	$1,725
John K. Wilson	$1,575	None	None	$1,575

*In accordance with the retirement policy of the Fund, directors Frederick N. Backer and Roger A Kupka did not stand for reelection as directors and their terms ended at the Fund's 2004 Annual Meeting on February 24, 2004.

Fund directors and officers do not receive any pension, retirement, or other plan benefits from the Fund.

Control Persons and Principal Holders of Securities

No person or shareholder has control of Bridges Investment Fund, Inc. Control is defined to mean the beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of the Fund.

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Provident Trust Company of Omaha, Nebraska, had 201 shareholders as of December 31, 2003, no one of whom owned more than 3.7% of the total outstanding voting shares of common stock. Provident Trust Company is managed by personnel of Bridges Investment Counsel, Inc. under a Management Agreement. At December 31, 2003, Provident Trust Company maintained accounts that held shares of Bridges Investment Fund, Inc. for its customers in the following capacities where Provident Trust Company has the right to vote the Fund shares: 193,572 shares as sole trustee, and 16,676 shares as co-trustee with an individual. The total shares held by Provident Trust Company in these two capacities is 210,248. The number of shares that Provident Trust Company has the right to vote in its capacity as trustee or co-trustee is 10.43% of the total Fund shares outstanding on December 31, 2003. Provident Trust Company does not own any shares of the Fund as principal. The records of the transfer agent for the Fund maintain the ownership of the shares in the name of the trust account or the beneficial owner. Ownership interests are reported in the Proxy Statement in the name of the trust account or the beneficial owners. Provident Trust Company's practice with respect to voting shares of the Fund will be to deliver proxies to the beneficial owners or other representatives for the customer accounts in all situations where such policy is administratively feasible and legally possible. Provident Trust Company has officers who are not employees of either Bridges Investment Counsel, Inc. or Bridges Investment Management, Inc. or officers of Bridges Investment Fund, Inc. who may vote proxies for trust customers in those instances where an independent point of view and the avoidance of a conflict of interest are important considerations. Fund Directors John W. Estabrook, Edson L. Bridges II and Edson L. Bridges III are also Directors of Provident Trust Company.

The officers and directors of the Fund owned beneficially and of record, or had the power to vote, 232,551 shares of the Fund, which was equal to 11.32% of the 2,054,022 shares outstanding as of January 31, 2004 (including Frederick N. Backer and Roger A Kupka who were Fund directors as of such date).

With respect to the attributed beneficial share interests reported for officers of the Fund for holdings of the Fund by the Bridges Investment Counsel, Inc. Pension Plan and the Bridges Investment Counsel, Inc. Profit Sharing Trust, all shares allocated to the accounts of participants are estimates as of January 31, 2004. While the aggregate shareholding numbers are accurate, the Trustees of the Profit Sharing Trust had not reported the allocations to participants for December 31, 2003, as of the filing date of this Statement of Additional Information because the financial information upon which the allocations are made to participants was not yet complete, and such information usually is not available for a variety of reasons, including consideration related to the filing of the corporate Federal Income Tax for Bridges Investment Counsel, Inc. Accordingly, the disclosure of beneficial interests in the Pension Plan are stated as of December 31, 2003, the allocations of percentage interests for the Profit Sharing Trust are attributed interests as of December 31, 2003 as well. This methodology was used to disclose the beneficial interest in these trusts as of January 31, 2004.

Bridges Investment Counsel, Inc. has a Cash or Deferred Profit Sharing Plan and Trust (the Profit Sharing Trust) and a Pension Plan and Trust for its employees, and both include some persons who are not officers or Directors of the Fund. rovident Trust Company, as non-discretionary Trustee of the Profit Sharing Trust, owned 45,665 Fund shares for the benefit of the Plan participants. Provident Trust Company, as Trustee of the Pension Plan and Trust held 12,916 shares of the Fund on behalf of the Pension Plan participants. The beneficial interests (based on the allocations of percentage interests as described below) of the officers and employees of Bridges Investment Counsel, Inc. in the Profit Sharing Plan and Trust and the Pension Plan and Trust who are also directors and officers of the Fund are included in the aggregate total of beneficial stock ownership stated above as of January 31, 2004.

Bridges Investment Counsel, Inc. initiated a 401(k) additional feature to the Firm’s Profit Sharing Trust in 1988. Provident Trust Company Trustee holds 12,856 shares for six participants who are officers of the Fund and its investment advisers: Edson L. Bridges III, whose ownership interest is 4,894 shares, Mary Ann Mason, whose ownership interest is 3,457 shares, Kathleen J. Stranik, whose ownership interest is 1,147 shares, Brian M. Kirkpatrick, whose ownership interest is 2,048 shares, Linda J. Morris, whose ownership interest is 594 shares, and Trinh Wu, whose ownership interest is 760 shares.

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With respect to shares reported for beneficial interests held in the Profit Sharing Plan and Trust, the shares shown are based upon September 30, 2003 actual figures, and the shares of the Pension Plan and Trust of Bridges Investment ounsel, Inc. shown are based upon actual figures as of the December 31, 2003 allocations of percentage interests in the retirement plans for each employee. However, actual ownership at December 31, 2003, will vary from the reported shares based upon new entrants to the plans, changes in compensation levels for existing participants, and other factors that determine a participant's percentage interest in each of these plans. These determinations may not be finalized before March 31, 2004 for both the Profit Sharing Plan and Trust; thus, the disclosures of beneficial interests as of January 31, 2004, are the best estimates possible from the available information as of the date of this Statement of Additional Information, except the beneficial interests in the Pension Plan have been determined to be correct for December 31, 2003.

Unless otherwise noted, all disclosures of shareholder ownership in this section of the Statement of Additional Information are made as of the close of business on January 31, 2004.

Investment Advisory and Other Services

Control Persons – Two persons, Edson L. Bridges II and Edson L. Bridges III, of the twelve members of the Board of Directors of the Fund are also directors and officers of the investment adviser, Bridges Investment Management, Inc.

The directors of Bridges Investment Management, Inc. are currently Edson L. Bridges II, Edson L. Bridges III, and Deborah L. Grant. The officers of Bridges Investment Management, Inc. are currently Edson L. Bridges III, President and Chief Executive Officer; Deborah L. Grant, Vice President and Chief Operating Officer; Randall D. Greer, Vice President; Nancy K. Dodge, Vice President; Brian M. Kirkpatrick, Vice President; Patricia S. Rohloff, Vice President; Mary Ann Mason, Secretary/Treasurer; and Kathleen J. Stranik, Assistant Secretary/Assistant Treasurer. Edson L. Bridges II is employed as an Executive Administrator to assist with management and administrative functions. Edson L. Bridges III currently owns 76.5% of the voting common stock and 63.9% of the total equity (voting and nonvoting stock) of Bridges Investment Management, Inc., with the remaining common stock owned by various Bridges Investment Management, Inc. employees, including the officers and directors described above. Edson L. Bridges II and Edson L. Bridges III, as co-trustees, have the right to vote Bridges Investment Management, Inc. shares representing 87.7% of its voting common stock. The voting trust arrangement has been entered into in order to comply with Nebraska Department of Banking, Bureau of Securities regulations concerning control of investment advisory representatives.

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Affiliated Persons – As directors and officers of both Bridges Investment Management, Inc. and Bridges Investment Fund, Inc., Mr. Edson L. Bridges II and Mr. Edson L. Bridges III are affiliated persons of both organizations. There are no other affiliated persons of the Fund who are also affiliated persons of the investment adviser.

Advisory Fees – Bridges Investment Fund, Inc. paid Bridges Investment Counsel, Inc. the following dollar amounts for the last three fiscal years as an investment advisory fee: $315,093 in 2001, $258,339 in 2002 and $266,705 in 2003. These fees are based on the month-ending net assets, averaged for a three-month period, and a 1/8 of 1% fee basis is applied to the resulting number. The annual fee basis is 1/2 of 1%. The annual fee is the sum of the four quarterly fees. The advisory fee was not reduced by any credits during the last three fiscal years. The advisory fee payments are the same under the new investment advisory agreement between the Fund and Bridges Investment Management, Inc. as under the prior investment advisory agreement between the Fund and Bridges Investment Counsel, Inc.

Expense Limitation – Under the new investment advisory agreement with the Fund, Bridges Investment Management, Inc. has agreed to pay any expenses properly owed by the Fund which exceed 1 1/2% of the average net assets for any year. There have been no expense reimbursements under an identical provision in the prior investment advisory agreement between Bridges Investment Counsel, Inc. and the Fund during the past three fiscal years.

Services Performed on Behalf of Fund – Services which are supplied or paid for wholly or in substantial part by the investment adviser in connection with the investment advisory contract are: occupancy and office rental; registration and filing fees; salaries and compensation of the Fund’s officers; trading department for securities; and Prospectus preparation and printing. In effect, Bridges Investment Management, Inc. supplies all personnel, equipment, facilities, and administrative services at its expense that would be provided for all investment advisory clients of the Firm. In addition, Bridges Investment Management, Inc. pays for all expenses of maintaining federal and state registrations and the majority of legal expenses of the Fund including the costs associated with Master Plans for Standard Retirement Plans. However, the legal fees for legal counsel for the independent directors will impose on-going legal expenses for the Fund. Lastly, the investment adviser performs all services not specifically identified to ensure an orderly business operation of the Fund.

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The Fund pays Bridges Investment Management, Inc. for accounting, clerical, and bookkeeping services related solely to special functions for the Fund and for postage, stationery, forms, supplies and printing -- including quarterly reports to shareholders. Bridges Investment Management, Inc. provides the staff personnel and services for these tasks, and is reimbursed at its cost for these services.

Other Services – The Fund pays for the services of the independent registered public accounting firm. The Fund also bears the cost of the insurance premiums to provide $525,000 in fidelity and errors and omissions coverages under an Investment Company Blanket Bond effective April 1, 1988. ICI Mutual Insurance Company, P.O. Box 730, Burlington, Vermont 05402-0730 is the carrier supplying the coverage.

U.S. Bank National Association, an affiliate of U.S. Bancorp Fund Services, LLC, 425 Walnut Street, M.L. CN-OH-W6TC, Cincinnati, Ohio 45202, serves as custodian of the Fund's assets pursuant to a Custody Agreement. Under the Custody Agreement, U.S. Bank National Association's duties include (i) holding securities of the Fund in a separate account in the name of the Fund, (ii) making receipts and disbursements of money on behalf of the Fund, (iii) collecting and receiving all income and other payments and distributions on account of the Fund's portfolio investments, (iv) maintaining books and records in accordance with applicable laws, and (v) making periodic reports to the Fund concerning the Fund's operations. U.S. Bank National Association does not exercise any supervisory function in management matters such as the purchase and sale of portfolio securities. The Fund pays the fees and costs of U.S. Bank National Association for its services as Fund Custodian.

As of October 11, 2004, U.S. Bancorp Fund Services, LLC, 615 East Michigan Street, Milwaukee, Wisconsin 53202, is the Dividend Disbursing and Transfer Agent for the Fund under a Transfer Agent Servicing Agreement. As transfer and dividend disbursing agent, U.S. Bancorp Fund Services, LLC's duties include (i) issuance and redemption of Fund shares, (ii) making dividend and other distributions to shareholders of the Fund, (iii) responding to correspondence by Fund shareholders and others relating to its duties, (iv) maintaining shareholder accounts, and (v) issuing Form 1099 information to Fund shareholders each year.

Prior to October 11, 2004, Bridges Investor Services, Inc., 8401 West Dodge Road, Omaha, Nebraska 68114, acted as Dividend Disbursing and Transfer Agent for the Fund. For the year ended December 31, 2003, the Fund paid a total of $25,303 to Bridges Investor Services, Inc. for all services provided to the Fund during 2003 (excluding reimbursement for expense disbursements by Services on behalf of the Fund).

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In addition, Bridges Investment Management, Inc. has entered into a separate Fund Accounting Servicing Agreement and Fund Sub-Administration Servicing Agreement with U.S. Bancorp Fund Services, LLC. Under the Fund Accounting Servicing Agreement, U.S. Bancorp Fund Services, LLC's duties include (i) portfolio accounting services, (ii) expense accrual and payment services, (iii) fund valuation and financial reporting services, (iv) tax accounting services, (v) compliance control services, and (vi) daily accounting functions. For these services, U.S. Bancorp Fund Services, LLC is entitled to receive fees, payable monthly based on the total annual rate of $26,000 for the first $25 million of Fund assets, .03% of the next $25 million of Fund assets, .02% of the next $50 million of Fund assets, and .01% of assets exceeding $100 million, in addition to reimbursement of certain out of pocket expenses, including pricing expenses.

Under the Fund Sub-Administration Servicing Agreement with Bridges Investment Management, Inc., U.S. Bancorp Fund Services, LLC's duties include blue sky preparation, filing and compliance, and SEC document preparation, filing and compliance. For these services, U.S. Bancorp Fund Services, LLC is entitled to receive fees, payable monthly based on the total annual rate of 0.04% of assets on the first $50 million of Fund assets, 0.03% on the next $50 million of Fund assets, and 0.02% of Fund assets exceeding $100 million, in addition to reimbursement for certain out of pocket expenses. These expenses are the contracted obligation of, and will be paid by, Bridges Investment Management, Inc. Accordingly, these sub-contracted services will not be a part of the operating costs of the Fund.

Independent Registered Public Accounting Firm – Deloitte & Touche LLP, First National Tower, 1601 Dodge Street, Suite 3100, Omaha, Nebraska 68102 conducts the annual audit of the Fund’s financial statements in accordance with standards established by the Public Company Accounting Oversight Board (United States). Representatives of Deloitte & Touche LLP meet with the Audit Committee of the Board of Directors to establish the scope of the audit. The federal and state income tax returns are prepared by Deloitte & Touche LLP. Lastly, Deloitte & Touche LLP, the Fund’s auditors for fiscal years 2003 and 2002, along with KPMG LLP, the Fund’s auditors for fiscal years 2000 and 2001, provide consents to permit the filing of financial statements with appropriate documents with the Securities and Exchange Commission.

On August 20, 2002, KPMG LLP resigned as the Fund's independent auditor, which action was accepted by the Audit Committee. The resignation of KPMG LLP was due to the impairment of independence under current interpretations of the Accounting Professional Code of Ethics caused by the acquisition of the Omaha office of Arthur Andersen LLP by KPMG LLP's Omaha office in mid-2002. A partner coming from Arthur Anderson LLP to KPMG LLP is related to a member of the Fund's Board of Directors.

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While service was provided by KPMG LLP as the Fund's independent auditor, including the Fund's fiscal years 2001 and 2000, and the interim period preceding such resignation, the reports of KPMG LLP contained no adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. There were no disagreements with KPMG LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which disagreements, if not resolved to the satisfaction of KPMG LLP, would have caused KPMG LLP to make reference to the subject matter of the disagreement in connection with their report.

The Fund, with the approval of the Audit Committee and subsequent approval by the Board of Directors, approved the engagement of Deloitte & Touche LLP as its new independent auditor of the Fund on November 25, 2002, for the fiscal year ending December 31, 2002. On January 13, 2004, the independent members of the Board of Directors recommended the selection of Deloitte & Touche LLP as auditors for the Fund for the year ending December 31, 2004, and the Board directed the submission of this recommendation to the shareholders for ratification. At the Fund's annual meeting of shareholder held on February 24, 2004, the shareholders ratified the selection of Deloitte & Touche LLP as the auditor for the year-ending 2004.

Brokerage Allocations and Other Practices

Transactions in the Fund’s portfolio of securities are effected through a number of brokers to reflect the availability of security research information, execution and other open market services, and goodwill or other factors.

The total brokerage fees paid on securities transactions for the Fund for the last three fiscal years were: $44,723 in 2001, $56,664 in 2002 and $50,581 in 2003. The Fund’s management has no plans to vary the brokerage commission activity from the pattern shown during the last three fiscal years. During 2003, brokerage commissions attributed to security research information were 93% of the total, while brokerage commission dollars attributed to execution and special brokerage services were 7% of the total.

Fifteen brokers were used by the Fund during 2003, resulting in an average compensation per brokerage firm of $3,372. The largest amount received by any firm was $7,960. The Fund has no plans to concentrate securities transaction orders with any single broker or group of brokers. There were no brokerage concerns or individuals acting as brokers who were affiliated with the Fund or its prior investment adviser, Bridges Investment Counsel, Inc. or current investment advisor, Bridges Investment Management, Inc. As of December 31, 2003, the Fund owned 9,999 shares of Citigroup, Inc. with a market value of $485,351. During the year 2003, the Fund paid commissions to a subsidiary of Citigroup, Inc., Salomon Smith Barney, who during 2003 became known as Citigroup Global Markets, Inc. The Fund paid Citigroup Global Markets, Inc. $2,250 in brokerage commissions on trades where they acted as principal, and $2,810 on trades where they acted as agent.

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The Fund also owned 20,000 shares of Morgan Stanley on December 31, 2003 with a market value of $1,157,400. During 2003, the Fund paid Morgan Stanley commissions of $4,088 on trades where they acted as agent.

The research information purchased with the Fund’s brokerage commissions was provided to the Fund’s prior investment adviser, Bridges Investment Counsel, Inc., and the current investment advisor, Bridges Investment Management, Inc. and this material benefited all clients of that Firm, including the Fund. Many clients of Bridges Investment Management, Inc. participate in an informal program of placing brokerage transactions to obtain security research information; thus, the Fund and its investment adviser benefit from the brokerage transactions of many clients of the investment adviser. Most brokerage firms do not price their research services; therefore, it is not possible to place a monetary value on such services.

The advent of negotiated brokerage commissions on May 1, 1975, ended the uniform commission schedule of New York Stock Exchange member firms. As a result, it is difficult to construct studies of comparable costs and services on each security transaction of the Fund. Accordingly, the disinterested directors of Bridges Investment Fund, Inc. have agreed that Bridges Investment Management, Inc. may cause the Fund to pay a member of an Exchange, broker, or dealer an amount of commission for effecting a securities transaction by the Fund in excess of the amount of commission which would have been charged by another person for effecting such transactions, providing that Bridges Investment Management, Inc. determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such Exchange member, broker, or dealer subject only to the limitations and definitions contained in Section 28(e) of the Securities Exchange Act of 1934 and to a periodic review by the disinterested directors of the actions of the investment adviser in directing the brokerage business of the Fund. Because of the practice of using securities transactions to purchase brokerage services and research, the Fund may not receive the lowest possible aggregate execution cost with respect to any given brokerage transaction.

Bridges Investment Counsel, Inc. was able to secure discounts from the uniform brokerage commission schedule which was in effect on April 30, 1975 for listed securities during the period from May 1, 1975, through December 31, 2003, and Bridges Investment Management, Inc. expects to be able to continue to secure discounts from such uniform brokerage commission schedule on an on-going basis. The Board of Directors reviews and approves the level of discounts and the actual brokerage costs on each transaction in the portfolio at each quarterly meeting. The investment adviser believes these discounts to be appropriate and similar to those earned by other institutional portfolios of the size of the Fund. Mr. Edson L. Bridges III, President of the Fund, selects the brokers to be employed for securities transactions of the Fund, and he determines the acceptability of the discount.

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Investment Adviser’s Trade Aggregation Policy – Bridges Investment Management, Inc. performs investment management and advisory services for various clients including the Fund. In certain instances, portfolio transactions for the Fund may be executed in an aggregated transaction to purchase or sell the same security for other accounts served by Bridges Investment Management, Inc. The objective of aggregated transactions is to obtain favorable execution and/or lower brokerage commissions, although there is no certainty that such objective will be achieved. Aggregated transactions in which the Fund participates will be effected only when Bridges Investment Management, Inc. believes that to do so will be in the best interest of the Fund. When this occurs, no client account will be favored over any other account.

Each account that participates in an aggregated order will participate at the average share price for all Bridges Investment Management, Inc. transactions in that security on a given business day, with transaction costs shared pro rata based on each account’s participation in the transaction. Bridges Investment Management, Inc. will prepare, before entering an aggregate order, a written statement (the “Allocation Statement”) for each proposed aggregated order, specifying the participating client accounts and how it intends to allocate the order. An order may be allocated on a basis different from that specified in the Allocation Statement if all client accounts receive fair and equitable treatment and the reason for the different allocation is explained in writing and is approved in writing by a Bridges Investment Management, Inc. compliance officer.

While it is possible that the use of aggregated orders may adversely affect the size of the position obtainable for the Fund, Bridges Investment Management, Inc., as the Fund investment adviser, believes that the procedure generally contributes to better overall execution of the Fund’s portfolio transactions. Bridges Investment Management, Inc. is not obligated to aggregate orders on behalf of clients, and its decision not to aggregate orders in any particular instance may result in less favorable execution of trades and in higher transaction costs to its clients, including the Fund.

Capital Stock and Other Securities

The Fund’s capital structure consists of 6,000,000 authorized shares of capital stock (par value of one dollar per share) with 3,488,011 shares issued as of December 31, 2003. Fund shares have equal rights as to voting, redemption, dividends, and liquidation, with cumulative voting for the election of directors. The shares are redeemable on written demand of the holder and are transferable. The shares have no preemptive or conversion rights and are not subject to assessment. Fractional shares have the same rights proportionately as full shares.

Shares redeemed by the Fund cannot be reissued, and the Fund’s authorized capital stock shall be deemed to be reduced by the number of shares redeemed. As of December 31, 2003, 1,471,451 shares of the Fund had been redeemed since inception of the Fund in 1963. The Fund’s net shares of capital stock outstanding were 2,016,560 as of December 31, 2003.

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Cumulative Voting – Fund shares are entitled to cumulative voting rights. This provision permits a shareholder to allocate the votes of his shares towards one or more directors in order to increase the influence of his ownership towards the director or directors selected for his support in an election of directors.

Purchase, Redemption, and Pricing of Securities Being Offered

General Information - Information concerning the methods of purchase and redemption of Fund shares are set forth in the Fund’s Prospectus. The Fund does not use letters of intent, contractual accumulation plans, withdrawal plans, or exchange privileges.

Shareholders who require assistance in gathering cost history and share information regarding their account with the Fund should anticipate that U.S. Bancorp Fund Services, LLC, as transfer agent, will bill the direct costs of such investigations directly to the shareholder with an explanation of the type of work conducted, the dates and time committed, and the expenses incurred by the transfer agent. In the normal situation, the maximum charge per inquiry of this type will be $25.00.

Valuation – The methods for determining the Net Asset Value per share of the Fund for purchase of shares and the Net Asset Value per share for the redemption of or sales of shares back to the Fund are described in the Fund’s Prospectus.

Specimen Price Make Up – Please refer to Appendix A for a copy of the Price Make Up form used by the Fund. The example or illustration uses the actual data and methods used for the Fund on December 31, 2003. The audited Balance Sheet information will provide the same information with a different format and classification of items for the purpose of proper financial statement presentation.

Other Disclosures -- The Fund prices its shares only once per day after the close of the New York Stock Exchange. There is no difference in the net offering price charged to the general public and that price which is charged to officers, directors, and employees of either the Fund or its investment adviser. The Fund does not use Rule 2a-7 under The General Rules and Regulations of The Investment Company Act of 1940 for the purpose of pricing its shares to the public.

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 Description of Fund Plans

 

Standard Retirement Plan – Bridges Investment Fund, Inc. offers a Standard Retirement Plan (as Amended and Restated as of January 1, 2000, and as subsequently amended effective January 1, 2002 and January 1, 2003) for corporations, self-employed individuals, and partnerships and their employees. Investors may choose a Money Purchase Pension Plan, a Profit Sharing Plan which includes a Salary Reduction Arrangement under Section 401(k) of the Internal Revenue Code within the Standard Retirement Plan, including a SIMPLE Model Amendment for employers with less than 100 employees. The prototype plan includes a Standard Custodial Agreement (as Amended and Restated as of January 1, 2000) under which U.S. Bank National Association will act as Custodian. All contributions, including dividends and cash distributions, to the Plan will be invested in the shares of the Fund at Net Asset Value.

Currently, the Custodian does not impose maintenance or other fees in connection with the above described Standard Retirement Plan; however, the Custodian may impose such fees from time to time by written agreement between the Custodian and the employer. In addition, the Custodian is entitled to reimbursement for certain expenses and taxes, including securities transfer taxes. The Custodian may resign or be removed, and a successor Custodian may be appointed.

If an investor desires to appoint a different bank as Custodian, he may make his own fee arrangements with the bank of his choice. For further details, see the form of Standard Retirement Plan No. 001, Profit Sharing, and No. 002, Money Purchase Pension, and their related Standard Custodial Agreements, copies of which may be obtained from the Fund’s office at the address shown on the cover of this Prospectus. The amended documents for the Standard Retirement Plan have been approved by the Internal Revenue Service as prototype master plans. The IRS has issued opinion letters to the Plans, and has assigned qualified serial numbers to these Plans.

In undertaking such a Retirement Plan involving investments over a period of years, it is important for the individual to consider his needs and whether or not the investment objectives of the Fund, described in this Prospectus, are likely to fulfill them. An investor who contemplates establishment of such a Plan should consult with his attorney and/or his public accountant.

The Prototype Standardized Profit Sharing Plan with cash or deferred arrangement known in our Fund as Standard Retirement Plan No. 001 (as Amended and Restated as of January 1, 2000, and as subsequently amended effective January 1, 2002 and January 1, 2003) Profit Sharing with a Salary Reduction Arrangement under Section 401(k) of the Internal Revenue Code received an opinion letter from the Internal Revenue Service on January 17, 2002. This Plan No. 001 is identified by Letter Serial No: K271573a. The Prototype Standardized Money Purchase Pension Plan described by our Fund as the Standard Retirement Plan No. 002 (as Amended and Restated as of January 1, 2000, and as subsequently amended effective January 1, 2002 and January 1, 2003) Money Purchase Pension received an opinion letter from the Internal Revenue Service on January 17, 2002. This Plan No. 002 is identified by Letter Serial No: K271574a. Both Plans have incorporated model amendments published by the Internal Revenue Service which adopt all changes required through January 1, 2003 under the tax laws that have been adopted since the Plans were restated.

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Individual Retirement Custodial Account

An investor may wish to purchase shares of Bridges Investment Fund, Inc. in conjunction with the retirement benefits provided by the Internal Revenue Code. An individual retirement account (IRA) may be established with the U.S. Bank National Association, as custodian, under a Custodial Account agreement and IRA Application form available from Bridges Investment Fund, Inc. The Custodial Account agreement may be used to establish a traditional IRA, a Roth IRA or a Coverdell Education Savings Account.

The Custodial Agreement provides that U.S. Bank National Association will furnish custodial services as required by the Internal Revenue Code. Currently, the investor is not charged any maintenance or other fees in connection with the IRA Custodial Account; however, the Custodian may impose such fees from time to time by written agreement between Custodian and investor. The investor may be subject to additional charges, from time to time, as will reasonably compensate the Custodian for extraordinary services resulting from unusual administrative responsibilities. The investor or the Custodian shall have the right to terminate the Account upon 60 days’ notice to the other party. In the event of such termination, the Custodian shall make distribution of the Account to the Investor or to another qualified plan or successor Custodian designated by the investor.

A traditional IRA established by an investor permits a maximum annual contribution for 2003 or 2004 of $3,000 or 100% of the investor’s annual compensation for personal services, whichever is less. This annual contribution limit is to be increased to $4,000 for 2005 through 2007 and to $5,000 in 2008. If an investor has a non-working spouse, an additional annual contribution of $3,000 is permitted to a separate IRA maintained by such non-working spouse for a total contribution of $6,000. For investors age 50 and over, additional catch-up contributions will be allowed beginning with the 2002 tax year. If the investor has reached age 50 before the close of the tax year, the regular contribution limit is raised by $500 for tax years 2002 through 2005, and by $1,000 for tax years 2006 and thereafter. The annual contribution to an IRA may be deductible under certain conditions, and earnings, if any, accumulate tax-free until distribution after age 59 1/2. Normally, distributions from the IRA Custodial Account prior to age 59 1/2, unless specifically exempted by law, will result in tax penalties in addition to being included in taxable income. In addition, there is a penalty on excess contributions and a penalty on insufficient payouts after age 70 1/2.

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The Custodial Agreement with U.S. Bank National Association sets forth provisions governing the investor’s IRA Account, expresses the prohibited actions under the law, sets forth the provisions of distribution of payments, provides the rules for reports and other information, outlines the Custodian’s responsibilities, and provides for amendments to, and termination of, the Custodial Account.

The IRA Application Form available from Bridges Investment Fund, Inc. is used to establish the Custodial Account and collects pertinent information to govern the Custodial Account. By executing the IRA Application Form, the investor acknowledges receipt of the Prospectus. A Disclosure Statement that is delivered when the Custodial Account is established covers appropriate notices of applicable provisions of the Internal Revenue Code, the fees charged by U.S. Bank National Association as custodian for the account, and other important information concerning the operation of the IRA Custodial Account. Prior to executing these documents, the investor should read all the documents provided concerning the IRA Custodial Account.

The provisions to redeem shares of the Fund, as described in this Prospectus, are not changed by the use of an IRA Custodial Account.

In establishing such an IRA Custodial Account as provided by this Prospectus and related documents, involving investments over a period of years, it is important for the individual to consider his or her needs and whether or not the investment objectives of the Fund, described in this Prospectus, are likely to fulfill them. The individual who contemplates the establishment of an IRA Custodial Account should consult with his or her attorney or tax adviser regarding appropriate advice as to the actions to be taken. Particular attention should be directed to the deductibility of contributions to IRAs and limitations on deductions for those persons who are covered by employer sponsored deferred benefit plans and other factors related to annual reported tax amounts of single and joint income.

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Additional consideration should be given by the individual who contemplates the establishment of an IRA Custodial Account to new choices and opportunities that were created in 1997.

1)The SIMPLE Individual Retirement Custodial Account, as described in Section 408(p) of the Internal Revenue Code may be established in connection with a Salary Reduction Agreement. Under this funding choice, it is possible to set aside more than the $3,000 per year contribution limit for the traditional IRA account. Depending upon the circumstances involved, it may be possible to receive employer matching contributions in the account.

2)The Roth Individual Retirement Custodial Account opportunity for investment was created by the Taxpayer Relief Act of 1997. The tax laws provide for a non-deductible annual contribution in taxable years 2002 through 2004 of up to $3,000 for a working spouse and a $3,000 contribution for a non-working spouse. These annual contribution limits are to be increased to $4,000 for 2005 through 2007 and to $5,000 for 2008. For investors age 50 and over, additional catch-up contributions will be allowed to the Roth IRA beginning with the 2002 tax year. If the investor has reached age 50 before the close of the tax year, the regular contribution limit is raised by $500 for tax years 2002 through 2005, and by $1,000 for tax years 2006 and thereafter. Benefits paid from the Roth IRA are to be non-taxable to the investor upon a qualified distribution from the Roth IRA, which includes distributions made after the investor reaches age 59 1/2. Investors may establish and maintain both the “Traditional” IRA and the “Roth” IRA Accounts, provided the assets are always maintained in separately segregated accounts and provided further that the titles therein accurately reflect the distinctions between the two types of funding permitted by statute. Investors will still have the same annual dollar limit per working spouse and non-working spouse, so that a choice must be made between the contributions to a traditional IRA that would represent an income deduction and the contributions to a Roth IRA that would be taxable underneath the annual dollar ceiling.

3)An individual may deposit up to $2,000 a year into a Coverdell Education Savings Custodial Account ("Education IRA") for a child under age 18 (unless the beneficiary is a “special needs beneficiary” as defined by the tax laws). The contributor may be a parent, relative, friend, or other person, including the child him/herself. The ability to contribute to an Education IRA phases out at modified adjusted gross income levels between $190,000 and $220,000 for joint return filers and between $95,000 and $110,000 for individual filers. Distributions from an Education IRA are tax-free up to the amount of qualified education expenses for a year. Qualified higher education expenses include tuition, fees, books, supplies, and, if the beneficiary is at least a half-time student, room and board. For taxable years after 2001, qualified education expenses include qualified elementary and secondary education expenses such as tuition, fees, tutoring, special needs services, books, supplies and equipment incurred in connection with the enrollment for attendance at any public, private or religious school that provides elementary or secondary education. Expenses include room and board, uniforms, and transportation that are required by the schools, including expenses for computer technology and related equipment used by the beneficiary while in school.

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Tax Status

The Fund is qualified or intends to qualify under Subchapter M of the Internal Revenue Code (26 U.S.C. 851-856). The Fund has no special or unusual tax aspects such as taxation resulting from foreign investment, or from states as a personal holding company, or from any tax loss carryforward.

Underwriter

Distributor - Quasar Distributors, LLC (the "Distributor") serves as the Fund's distributor. The principal executive offices of the Distributor are located at 615 East Michigan Street, Milwaukee, Wisconsin 53202. The Distributor is registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the NASD.

The Fund may enter into distribution agreements or shareholder servicing agreements with certain financial institutions ("Servicing Organizations") to perform certain distribution, shareholder servicing, administrative and accounting services for their customers ("Customers") who are beneficial owners of shares of the Fund.

A Service Organization may charge a Customer one or more of the following types of fees, as agreed upon by the Service Organization and the Customer, with respect to the cash management or other services provided by the Service Organization: (1) account fees (a fixed amount per month or per year); (2) transaction fees (a fixed amount per transaction processed); (3) compensating balance requirements ( a minimum dollar amount a Customer must maintain in order to obtain the services offered); or (4) account maintenance fees (a periodic charge based upon the percentage of assets in the account or of the dividend paid on those assets). A Customer of a Service Organization should read the Prospectus and SAI in conjunction with the service agreement and other literature describing the services and related fees that will be provided by the Service Organization to its Customers prior to any purchase of shares. No preference will be shown in the selection of Fund portfolio investments for the instruments of Service Organizations.

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Calculation of Performance Data

From time to time, quotations of the Fund’s performance may be included in advertisements, sale literature or reports to shareholders or prospective investors. These performance figures are calculated as described below.

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PAST PERFORMANCE OF THE FUND

The bar chart and table below show one measure of the risks of investing in the Fund, by showing the Fund’s performance from year to year for the past ten calendar years and by showing how the average annual total returns of the Fund’s shares compare to those of a broad-based market index. The Fund’s past investment performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future.

Performance History depicted in a bar graph is as follows:

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The Fund’s highest and lowest returns for a calendar quarter during the past ten years are a return of 28.12% for the 4^th Quarter 1999, and –18.35% for the 3^rd Quarter 2001.

Average Annual Total Returns

(for the periods ending December 31, 2003)

	Past One Year	Past Five Years	Past Ten Years
Return Before Taxes	35.83%	-0.32%	9.05%
Return After Taxes on Distributions	35.62%	-0.84%	7.79%
Return After Taxes on Distributions and Sale of Fund Shares	23.52%	-0.47%	7.35%
S & P 500 (reflects no deduction for fees, expenses or taxes)	28.63%	-0.57%	11.05%

The year-to-date total return as of June 30, 2004 for the Fund was 2.00%.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

Total Return is the change in value of an investment over a given period, assuming reinvestment of any dividends and capital gains. A cumulative total return reflects actual performance over a stated period of time. An average annual total return is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Average annual total returns smooth out variations in performance; they are not the same as the actual year-by-year results.

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AVERAGE ANNUAL TOTAL RETURN
1 YEAR	5 YEAR	10 YEAR
35.83%	-0.32%	9.05%

The Fund's past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future.

	BIF	S&P 500
	Year-End	Forward
	Market	Market
Year	Value	Value
1993	10,000.00	10,000.00
1994	10,027.83	10,135.54
1995	13,129.63	13,930.26
1996	15,498.34	17,121.01
1997	18,956.59	22,825.73
1998	24,162.79	29,335.65
1999	33,562.97	35,500.64
2000	28,835.75	32,266.79
2001	23,389.61	28,448.99
2002	17,509.29	22,176.53
2003	23,783.28	28,526.21

(Amounts in the table above represent year-end market values and are plotted as data points on a line graph in the actual prospectus.)

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INFORMATION SUPPORTING AND SETTING QUALIFICATIONS

FOR INVESTMENT RETURNS

Assumptions

1.The initial investment was made at the public offering price last calculated on the business day before the first day of the first fiscal year.

2.The subsequent account values are based on the net asset values of the Fund last calculated on the last business day of the first and each subsequent fiscal year.

3.The calculation for the final account value assumes the account was closed and the redemption was at the price last calculated on the last business day of the most recent fiscal year.

4.All dividends and capital gains distributions by the Fund were reinvested at the price on the reinvestment dates. The dividend for the Standard & Poor’s 500 Composite Index for the previous quarter was invested at the month-end price closest to the reinvestment date for the Fund.

5.Reinvestment fees for dividend and capital gains distributions were deducted before reinvestment in shares of the Fund. The Standard & Poor’s 500 Composite Index was not charged with any brokerage commissions, reinvestment fees, or operating expenses.

Appropriate Index

The Fund is to select an “appropriate broad-based securities market index” that is administered by an organization that is not an affiliated person of the Fund or its investment adviser. The securities index chosen must be adjusted to reflect reinvestment of dividends on securities in the index, but not the expenses of the Fund.

Use of Additional Indexes

In addition to the required comparison to a broadly-based index, mutual fund registrants with the Securities and Exchange Commission may compare their performances to other more narrowly-based indices that reflect the market sectors in which they invest. At this point in time, the Fund’s management has decided not to present any comparisons to more narrow indices. Management has investigated commercial paper, Treasury Bill, Treasury Note, Treasury Bond, and Corporate Bond indices to cover those portfolio segments not invested in the common stock market. Some problems with comparable information have been encountered particularly with respect to the difficulty of matching income reinvestment dates in the indices with the reinvestment calendar scheme in effect for the Fund.

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From time to time, in reports and promotional literature: (1) the Fund’s total return performance, ranking, or any other measure of the Fund’s performance may be compared to any or combination of the following: (a) a broad-based index; (b) other groups of mutual funds tracked by independent research firms ranking entities, or financial publications; (c) indices of securities comparable to those in which the Fund invests; (2) the Consumer Price Index (or any other measure for inflation, government statistics, such as GNP) may be used to illustrate investment attributes of the Fund or the general economic, business, investment, or financial environment in which the Fund operates; and (3) various financial, economic and market statistics developed by brokers, dealers and other persons may be used to illustrate aspects of the Fund’s performance. The Fund may also advertise the performance rankings assigned by various publications and statistical services, and any other data which may be presented from time to time by such analysts as Dow Jones and Morningstar, Inc., or as they appear in various financial and investment publications, including but not limited to The Wall Street Journal, Business Week, Forbes, Fortune, Money Magazine and other such publications.

As a prospective investor or shareholder, you may be interested in securing Part C of this filing, and you must receive Part A, the Prospectus, in order to make an investment in the Fund. You may request copies of Parts A, B, and C from the Fund’s office at the address shown on the Cover of Part B.

Financial Statements

The audited financial statements for the year ended December 31, 2003 appear beginning on page 40 in this Part B. As a unit, these statements include: The Report of the Independent Registered Public Accounting Firm, the Schedule of Portfolio Investments, the Statement of Assets and Liabilities, the Statement of Operations, Statements of Changes in Net Assets, and Notes to Financial Statements.

The audited financial statements for the year ended December 31, 2002 are incorporated by reference in the Fund's registration statement of which this Statement of Additional Information is Part B.

The Fund’s Management and Board of Directors encourages prospective investors and shareholders to review the audited financial statements, particularly the Schedule of Investments, to obtain a useful perspective about securities owned by the Fund.

The Price Make Up Sheet, Appendix A, is shown on page 39; then the financial statements follow as a unit to complete this Part B.

42 

APPENDIX A (Specimen)

PRICE MAKE UP SHEET

December 31, 2003

Journal Form, Ledger Form, Schedule, or Account Number	ACCOUNT (Cost Figures in Parentheses)	Actual Balance or Market Value Figures
ASSETS
01a-DR-C	Cash-Principal	21,866.48
01b-DR-C	Cash-Income	114,546.46
02a-LF51	Dividends Receivable	71,138.01
02b-LF52	Interest Receivable	64,583.83
04a-CRDJ	Accts. Receivable-Subscriptions to Capital Stock	24,894.26
04b-CRDJ	Accts. Receivable-Securities Sold	-0-
07 -Schedule 7	Inv. in Securities (47,614,085.19)	62,550,579.71
	TOTAL ASSETS	62,847,611.75
LIABILITIES:
13a-CRDJ	Accts. Pay.-Redemptions of Capital Stock	2,950.00
13b-CRDJ	Accts. Pay.-Purchase of Securities	-0-
14a-CRDJ	Accrued Liab.-Operating Expenses	128,258.75
14b-CRDJ	Accrued Liab.-Taxes	-0-
14 –CRDJ	Distributions Payable	129,967.30
	TOTAL LIABILITIES	261,176.05

19 NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL SHARES (Tot. Assets Minus Tot. Liab.)   62,586,435.70

20 -CRDJ DR-TA	Capital Stock-Total Shares Outstanding	2,016,559.043
	NET ASSET VALUE PER SHARE
	Purchase Price Per Share $____	31.04
	Redemption Price Per Share $____	x Div. @0.06445

Equalization Computation	Net Investment Income	Net Investment Income	0.00
	(Current Qtr.)	(Current Qtr.)
Dividend Income	180,587.45	Undistributed Net Income	6,723.47
Interest Income	80,411.69	(Previous Qtrs.)
Total Income	260,999.14	Total Acct. 21b	6,723.47
		Equalization/Share
Taxes Paid		Orders /
Expenses Unpaid	131,000.00	Net Shares Purch., Redemp.
Reimbursed Expenses		Balance, Equalization	(2,737.23)
Tot.Exp.Post Close		Equalization Entry
		Equalization Forward
Net Investment Inc.	129,999.14	Capital Shares Forward	2,016,559.643

43 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Bridges Investment Fund, Inc.

Omaha, Nebraska

We have audited the accompanying statement of assets and liabilities of Bridges Investment Fund, Inc., including the schedule of portfolio investments, as of December 31, 2003, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period ended December 31, 2003, and the financial highlights for each of the two years in the period ended December 31, 2003. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for the years ended December 31, 2001, 2000, and 1999, were audited by other auditors whose report thereon dated January 10, 2002 expressed an unqualified opinion on those financial highlights.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2003, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Bridges Investment Fund, Inc. as of December 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended December 31, 2003 and its financial highlights for each of the two years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Omaha, Nebraska

January 16, 2004

44 

BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 2003

Title of Security	Numberof Shares		Cost		FairValue
COMMON STOCKS - (90.6%)
Advertising - 1.4%
Omnicom Group, Inc.		10,000	$	654,802	$	873,300
Airfrieght & Logistics - 2.0%
Expeditors International Washington		15,000	$	553,554	$	564,900
Fedex Corporation		10,000		688,396		675,000
			$	1,241,950	$	1,239,900
Auto Parts & Equipment - 0.9%
Johnson Controls		5,000	$	385,750	$	580,600
Banking and Finance - 5.6%
Bank of America Corporation		3,000	$	224,014	$	241,290
Fifth Third Bancorp		10,000		486,523		591,000
First National of Nebraska, Inc.		250		401,835		987,500
State Street Corporation		15,000		62,367		781,200
Wells Fargo & Co.		15,000		515,731		883,350
			$	1,690,470	$	3,484,340
Beverages - Soft Drinks - 1.1%
PepsiCo, Inc.		15,000	$	192,169	$	699,300
Building - Residential/Commercial - 2.3%
Cavco Industries, Inc.*		250	$	3,378	$	6,000
Centex Corporation		5,000		265,517		538,250
D. R. Horton, Inc.		20,000		407,704		865,200
			$	676,599	$	1,409,450
Casino Hotels - 1.7%
Harrah's Entertainment, Inc.*		22,000	$	729,839	$	1,094,940
Computers - Hardware and Software  - 3.2%
Cisco Systems, Inc.*		40,000	$	361,396	$	969,200
Microsoft Corporation*		30,000		266,000		821,100
Retek, Inc.*		25,000		369,992		232,000
			$	997,388	$	2,022,300
Computers - Memory Devices - 0.7%
EMC Corporation/MASS*		35,000	$	494,601	$	452,200
Computers - Micro - 0.2%
Sun Microsystems, Inc.*		30,000	$	595,357	$	134,100
Conglomerates - Industrial - 0.5%
General Electric		10,000	$	270,842	$	309,800
Education - Higher - 0.3%
Apollo Group, Inc.		3,000	$	193,740	$	203,430
Data Processing and Management - 4.5%
Automatic Data Processing		10,000	$	398,716	$	396,100
Fair Isaac and Company, Incorporated		12,000		234,627		589,920
First Data Corporation		25,000		851,000		1,027,250
Fiserv, Inc.*		20,000		664,527		790,800
			$	2,148,870	$	2,804,070

*Nonincome-producing security

45 

BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)

DECEMBER 31, 2003

Title of Security	Numberof Shares		Cost		FairValue
COMMON STOCKS   (Continued)
Diversified Operations - 1.6%
Berkshire Hathaway Inc., Class B *	350	$	492,609	$	985,250
Drugs - Medicines - Cosmetics  - 4.6%
Abbott Laboratories	15,000	$	169,395	$	699,000
Amgen, Inc.*	15,000		463,500		926,850
Johnson & Johnson	15,000		338,948		774,900
Merck & Co., Inc.	10,000		197,534		462,000
		$	1,169,377	$	2,862,750
E-Commerce - 1.4%
Ebay, Inc.*	14,000	$	453,620	$	904,540
Electric - Generation - 1.9%
AES Corporation*	70,000	$	844,949	$	660,800
MDU Resources Group, Inc.	22,500		351,556		535,725
		$	1,196,505	$	1,196,525
Electronic Components - Conductors - 4.7%
Altera Corporation*	25,000	$	664,853	$	566,250
Analog Devices, Inc.*	15,000		539,290		684,750
Applied Materials, Inc.*	40,000		662,576		897,600
Intel Corporation	25,000		483,548		801,250
		$	2,350,267	$	2,949,850
Electronics  - 1.9%
Flextronics International Ltd.*	60,000	$	1,175,477	$	888,000
Solectron Corporation *	50,000		595,457		295,500
		$	1,770,934	$	1,183,500
Finance - Diversified - 2.6%
Citigroup, Inc.	9,999	$	481,932	$	485,351
Morgan Stanley Dean Witter & Co.	20,000		1,127,600		1,157,400
		$	1,609,532	$	1,642,751
Finance - Investment Banks - 1.3%
Goldman Sachs Group, Inc.	8,000	$	694,445	$	789,840
Finance - Real Estate  - 1.4%
Freddie Mac	15,000	$	461,417	$	874,800
Finance - Services  - 9.7%
Capital One Financial Corporation	53,500	$	1,935,422	$	3,279,015
Concord EFS, Inc.*	50,000		823,361		742,000
MBNA Corporation	45,000		921,635		1,118,250
Nelnet, Inc., Class A*	15,000		327,147		336,000
Paychex, Inc.	10,000		373,477		372,000
		$	4,381,042	$	5,847,265

*Nonincome-producing security

46 

BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)

DECEMBER 31, 2003

Title of Security	Numberof Shares		Cost		FairValue
COMMON STOCKS   (Continued)
Food Processing - 0.5%
General Mills, Inc.	7,000	$	312,687	$	317,100
Hotels/Resorts/Cruise Lines - 0.6%
Carnival Corporation, Class A	10,000	$	253,072	$	397,300
Insurance - Brokers - 0.9%
Marsh & McLennan Cos., Inc.	12,000	$	598,462	$	574,680
Insurance - Multiline  - 1.1%
American International Group, Inc.	10,000	$	566,397	$	662,800
Insurance - Property/Casualty - 0.7%
Progressive Corporation	5,000	$	368,147	$	417,950
Internet Software & Services - 0.6%
United Online, Inc.*	22,500	$	283,161	$	380,025
Machinery - Construction/Farming - 1.0%
Trinity Industries, Inc.	20,000	$	386,383	$	616,800
Medical Products - 0.4%
Stryker Corporation	3,000	$	230,903	$	255,030
Medical - Drugs - 1.4%
Pfizer, Inc.	25,000	$	787,050	$	883,250
Medical - Wholesale Drug Distribution - 1.0%
Cardinal Health, Inc.	10,000	$	606,276	$	611,600

Metal - Aluminum - 2.4%
Alcoa, Inc.	40,000	$	946,625	$	1,520,000
Movies & Entertainment - 1.1%
Viacom, Inc., Class B	15,000	$	593,509	$	665,700
Personal & Household Products - 0.8%
Colgate Palmolive Company	10,000	$	520,221	$	500,500
Petroleum Producing - 2.6%
BP PLC-Sponsored ADR	15,000	$	368,832	$	740,250
ChevronTexaco Corporation	10,000		340,535		863,900
		$	709,367	$	1,604,150
Publishing - 1.4%
Gannett, Inc.	10,000	$	799,707	$	891,600
Retail - Restaurants - 1.1%
Outback Steakhouse, Inc.*	15,000	$	509,594	$	663,150

*Nonincome-producing security

47 

BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)

DECEMBER 31, 2003

Title of Security	Numberof Shares		Cost		FairValue
COMMON STOCKS (Continued)
Retail Stores - Apparel and Clothing  - 1.9%
Gap, Inc.		50,000	$	521,360	$	1,160,500
Retail Stores - Building Materials and HomeImprovement - 2.1%
The Home Depot, Inc.		30,000	$	672,737	$	1,064,700
Lowes Companies		5,000		276,238		276,950
			$	948,975	$	1,341,650
Retail Stores - Consumer Electronics - 2.5%
Best Buy Company, Inc.*		30,000	$	687,851	$	1,567,200
Retail Stores - Department  - 1.2%
Target Corporation		20,000	$	316,811	$	768,000
Steel - 0.7%
Nucor Corporation		8,000	$	392,304	$	448,000
Telecommunications  - 4.1%
Level 3 Communications *		165,000	$	1,362,169	$	940,500
Sprint PCS Corporation *		30,000		629,783		168,600
Vodafone Group PLC		30,000		772,993		751,200
West Corporation *		35,000		687,401		813,050
			$	3,452,346	$	2,673,350
Telecommunications - Equipment - 0.9%
Nokia Corporation Sponsored ADR		40,000	$	421,175	$	680,000
Television - Cable - 0.6%
Comcast Corporation - Special Class A *		12,000	$	356,075	$	375,480
Tobacco - 3.5%
Altria Group, Inc.		40,000	$	1,621,692	$	2,176,800
TOTAL COMMON STOCKS (Cost - $42,042,275)			$	42,042,275	$	56,697,416
PREFERRED STOCKS - (1.0%)
Banking and Finance - 0.4%
Harris Preferred Capital Corp.,     7.375%, Series A		10,000	$	250,000	$	251,600
Financial - REITS - 0.4%
Equity Office Properties Trust, 7.75% Series G		5,000	$	134,766	$	135,400
Public Storage, 8.00% Series R		5,000		133,250		134,700
			$	268,016	$	270,100

*Nonincome-producing security

48 

BRIDGES INVESTMENT FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)

DECEMBER 31, 2003

Title of Security	Number of  Shares/Par		Cost		FairValue
Oil Comp. - Exploration and Production - 0.2%
Nexen, Inc. 9.375% Preferred - Series I		5,000	$	125,000	$	126,450
Total Preferred Stocks (Cost - $643,016)			$	643,016	$	648,150
Total Preferred and Common Stock			$	42,685,291	$	57,345,566
DEBT SECURITIES (8.3%)
Electronic Components - Conductors - 0.4%
Applied Materials, Inc. 7.125% Senior Notes due October 15, 2017		$250,000		$ 256,473		$ 280,418
Energy - Alternate Sources - 0.4%
CalEnergy Co., Inc., 7.630% Notes    due October 15, 2007	$	200,000	$	200,000	$	224,898
Finance - Services - 2.5%
American Express Credit Corporation .800% Commercial Paper due January 2, 2004**	$	600,000		$ 599,907		$ 599,907
Duke Capital Corporation 8% Senior Notes due October 1, 2019	$	250,000		277,140		292,180
General Electric Credit Corporation .880% Commercial Paper due January 4, 2004**	$	375,000		374,936		374,936
MBNA Corporation 7.50% Senior Notes due March 15, 2012	$	250,000		268,125		284,988
			$	1,520,108	$	1,552,011
Food - Packaged - 0.4%
Kraft Foods, Inc. 6.250% Notes due June 1, 2012	$	250,000		$ 263,873		$ 272,491
Hotels and Motels - 0.5%
Marriott International 7.875% Notes Series C    due September 15, 2009	$	250,000		$   250,068		$   287,325
Medical - Wholesale Drug Distribution - 0.5%
Cardinal Health, Inc. 6.75% Notes due February 15, 2011	$	250,000	$	260,689	$	285,130
Retail Stores - Department - 0.7%
Dillard Department Stores, Inc., 7.850%    Debentures, due October 1, 2012	$	150,000	$	151,348	$	157,110
Penney (J.C.) Co., Inc. 7.40% Notes due April 1, 2037	$	250,000	$	263,750		270,095
			$	415,098	$	427,205

** Commercial Paper is purchased at a discount and redeemed at par.

49

BRIDGES INVESTMENT FUND, INC
.SCHEDULE OF PORTFOLIO INVESTMENTS
(Continued)

DECEMBER 31, 2003

Title of Security	Number of  Shares/Par		Cost		FairValue
Services - Data Processing - 0.4%
Electronic Data Systems 7.125% Notes due October 15, 2009	$	250,000	$	263,750	$	266,818
Telecommunications - 0.9%
Level 3 Communications, Inc., 9.125% Senior    Notes due May 1, 2008	$	600,000	$	438,098	$	547,128
Tobacco - 0.4%
R.J. Reynolds Holding 7.250% Notes due June 1, 2012	$	250,000	$	260,975	$	242,185
U.S. Government - 1.2%
U.S. Treasury, 9.375% Bonds,    due February 15, 2006	$	200,000		256,223		231,063
U.S. Treasury, 9.125% Bonds,    due May 15, 2009	$	200,000		234,910		205,938
U.S. Treasury, 7.500% Bonds,    due November 15, 2016	$	300,000		308,531		382,406
			$	799,664	$	819,407
TOTAL DEBT SECURITIES (Cost - $4,928,796)			$	4,928,796	$ 5,205,016
TOTAL INVESTMENTS IN SECURITIES - (99.9%)  (Cost - $47,614,087)			$	47,614,087	$                        62,550,582
CASH AND RECEIVABLES  LESS TOTAL LIABILITIES - (0.1%)					35,853
NET ASSETS, December 31, 2003 - (100.0%)					$62,586,435

The accompanying notes to financial statementsare an integral part of this schedule.

50 

BRIDGES INVESTMENT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003

ASSETS
Investments, at fair value
Common and preferred stocks (cost $42,685,291)	$	57,345,566
Debt securities (cost $4,928,796)		5,205,016
Total investments	$	62,550,582
Cash		136,413
Receivables
Dividends and interest		135,722
Subscriptions to capital stock		24,894
TOTAL ASSETS	$	62,847,611
LIABILITIES
Redemption of capital stock	$	2,950
Investment advisor, management and service fees payable		76,041
Accrued operating expenses		52,218
Distributions payable		129,967
TOTAL LIABILITIES	$	261,176
NET ASSETS
Capital stock, $1 par value Authorized 6,000,000 shares, 2,016,560 shares outstanding	$	2,016,560
Paid-in surplus		47,571,890
Net unrealized appreciation on investments		14,936,495
Accumulated undistributed net realized loss		(1,945,234	)
Accumulated undistributed net investment income		6,724
TOTAL NET ASSETS	$	62,586,435
NET ASSET VALUE PER SHARE	$	31.04
OFFERING PRICE PER SHARE	$	31.04
REDEMPTION PRICE PER SHARE	$	31.04

The accompanying notes are an integral part of these financial statements.

51 

BRIDGES INVESTMENT FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003

INVESTMENT INCOME
Interest	$	310,229
Dividends  (Net of foreign withholding taxes of $5,379)		648,246
Total Investment Income				$	958,475
EXPENSES
Management fees		266,705
Custodian fees		37,171
Insurance and other administrative fees		30,854
Bookkeeping services		22,136
Printing and supplies		19,508
Professional services		42,143
Dividend disbursing and transfer agent fees		27,463
Computer programming		9,000
Taxes and licenses		1,065
Independent directors expense and fees		18,555
Total Expenses				$	474,600
NET INVESTMENT INCOME				$	483,875
NET REALIZED AND UNREALIZEDGAIN ON INVESTMENTS
Net realized loss on transactions in Investments	$	(1,491,376	)
Net increase in unrealized appreciation of investments		17,565,823
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS				$	16,074,447
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS				$	16,558,322

The accompanying notes are an integralpart of these financial statements.

52 

BRIDGES INVESTMENT FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

	2003			2002
INCREASE IN NET ASSETS
Operations -
Net investment income	$	483,875		$	409,162
Net realized loss on transactions in investments		(1,491,376	)		(138,613	)
Net increase(decrease) in unrealized appreciation of investments		17,565,823			(15,770,722	)
Net increase(decrease) in net assets resulting from operations	$	16,558,322		$	(15,500,173	)
Net equalization credits		(47	)		(5,237	)
Distributions to shareholders from - Net investment income		(477,290	)		(409,023	)
Net realized gain from securities		--			--
Net capital share transactions		650,909			1,524,062
Total increase/(decrease) in net assets	$	16,731,894		$	(14,390,371	)
NET ASSETS:
Beginning of year	$	45,854,541		$	60,244,912
End of year (includes $6,724 of undistributed net investment income in 2003)	$	62,586,435		$	45,854,541

The accompanying notes are an integral part of these financial statements.

53 

BRIDGES INVESTMENT FUND, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2003

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES     

Bridges Investment Fund, Inc. (Fund) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The primary investment objective of the Fund is long-term capital appreciation. In pursuit of that objective, the Fund invests primarily in common stocks. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America.

 

A.  Investments - 

Security transactions are recorded on trade date. Dividend income is recognized on the ex-divided date, and interest income is recognized on an accrual basis. Securities owned are reflected in the accompanying statement of assets and liabilities and the schedule of portfolio investments at fair value based on quoted market prices. Quoted market prices represent the last recorded sales price on the last business day of the calendar year for securities traded on a national securities exchange. If no sales were reported on that day, quoted market price represents the closing bid price. Securities for which quotations are not readily available are valued at fair value as determined by the Board of
Directors. The cost of investments reflected in the statement of assets and liabilities and the schedule of portfolio investments is approximately the same as the basis used for Federal income tax purposes. The difference between cost and fair value of securities is reflected separately as unrealized appreciation (depreciation) as applicable.

	2003			2002			Net Change
Net unrealized appreciation (depreciation):
Aggregate gross unrealized appreciation on securities	$	17,568,249		$	7,520,106
Aggregate gross unrealized depreciation on securities		(2,631,754	)		(10,149,434	)
Net	$	14,936,495		$	(2,629,328	)	$	17,565,823

The net realized gain (loss) from the sales of securities is determined for income tax and accounting purposes on the basis of the cost of specific securities.

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B. Federal Income Taxes -

 

The Fund intends to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and not be subject to federal income tax. Therefore, no income tax provision is required. The Fund also intends to distribute its taxable net investment income and realized gains, if any, to avoid the payment of any federal excise taxes. 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 amounts are distributed may differ from the year that the income or realized gains or losses were recorded by the Fund. For federal income tax purposes, the Fund has a capital loss carryover of $1,928,636 at December 31, 2003, which if not offset by subsequent capital gains will expire beginning in 2009. Also for federal income tax purposes, the Fund deferred the recognition of net capital losses incurred subsequent to October 31, 2003 ("Post October Losses") of $16,598. These losses will be realized on January 1, 2004.       

C. Distribution To Shareholders -         

The Fund accrues income dividends to shareholders on a quarterly basis as of the ex-dividend date. Distributions of net realized gains are made on an annual basis to shareholders as of the ex-dividend date.

 

D. Equalization -

The Fund uses the accounting practice of equalization by which a portion of the proceeds from sales and costs of redemption of capital shares, equivalent on a per share basis to the amount of undistributed net investment income on the date of the transactions, is credited or charged to undistributed income. As a result, undistributed net investment income per share is unaffected by sales or redemption of capital shares.

 

E. Use of Estimates         

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

 

(2) INVESTMENT ADVISORY CONTRACT      

Under an Investment Advisory Contract, Bridges Investment Counsel, Inc. (Investment Adviser) furnishes investment advisory services and performs certain administrative functions for the Fund. In return, the Fund has agreed to pay the Investment Adviser a management fee computed on a quarterly basis at the rate of 1/8 of 1% of the average net asset value of the Fund during the quarter, equivalent to 1/2 of 1% per annum. Certain officers and directors of the Fund are also officers and directors of the Investment Adviser. These officers do not receive any compensation from the Fund other than that which is received indirectly through the Investment Adviser.

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The contract between the Fund and the Investment Adviser provides that total expenses of the Fund in any year, exclusive of stamp and other taxes, but including fees paid to the Investment Adviser, shall not exceed, in total, a maximum of 1 and 1/2% of the average month end net asset value of the Fund for the year. Amounts, if any, expended in excess of this limitation are reimbursed by the Investment Adviser as specifically identified in the Investment Advisory Contract. There were no amounts reimbursed during the year ended December 31, 2003.


 

(3) DIVIDEND DISBURSING AND TRANSFER AGENT      

Dividend disbursing and transfer agent services are provided by Bridges Investor Services, Inc. (Transfer Agent). The fees paid to the Transfer Agent are
intended to approximate the cost to the Transfer Agent for providing such services. Certain officers and directors of the Fund are also officers and directors of the Transfer Agent.

 

(4) SECURITY TRANSACTIONS      

The cost of long-term investment purchases during the year ended December 31,  was:

		2003		2002
Other Securities	$	13,246,819	$	18,088,810

Net proceeds from sales of long-term investments during the year ended December 31, were:

		2003		2002
United States government obligations	$	853,484	$	702,000
Other Securities		12,654,679		10,209,786
Total Net Proceeds	$	13,508,163	$	10,911,786

(5) NET ASSET VALUE      

The net asset value per share represents the effective price for all subscriptions and redemptions.

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(6) CAPITAL STOCK      

Shares of capital stock issued and redeemed are as follows:

	2003		2002
Shares sold	182,181		278,124
Shares issued to shareholders in reinvestment of net investment income	14,521		12,549
	196,702		290,673
Shares redeemed	(169,911	)	(241,399	)
Net increase	26,791		49,274

Value of capital stock issued and redeemed is as follows:

	2003			2002
Shares sold	$	4,894,659		$	6,925,345
Shares issued to shareholders in reinvestment of net investment income		376,183			320,294
	$	5,270,842		$	7,245,639
Shares redeemed		(4,619,933	)		(5,721,577	)
Net increase	$	650,909		$	1,524,062

(7) DISTRIBUTIONS TO SHAREHOLDERS       

On December 31, 2003, a cash distribution was declared from net investment income accrued through December 31, 2003. This distribution was calculated as $.06445 per share. The dividend will be paid on January 21, 2004 to shareholders of record on December 31, 2003.

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FINANCIAL HIGHLIGHTS*

The financial highlights table is intended to help you understand the Fund's financial performance for the past 5 years. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Fund (assuming reinvestment of all dividends and distributions).

Per share income and capital changes for a share outstanding for each of the last five years were:

		2003			2002			2001			2000			1999
Net Asset Value, Beginning of Period	$	23.05		$	31.05		$	38.59		$	46.24		$	34.26
Income/(Loss) From Investment Operations
Net Investment Income	$	.24		$	.20		$	.26		$	.40		$	.30
Net Gains or (Losses) on Securities   (both realized and unrealized)		7.99			(8.00	)		(7.54	)		(6.84	)		12.89
Total From Investment Operations	$	8.23		$	(7.80	)	$	(7.28	)	$	(6.44	)	$	13.19
Less Distributions
Dividends from net investment income	$	(.24	)	$	(.20	)	$	(.26	)	$	(.40	)	$	(.30	)
Distributions from capital gains		-			-			-			(.81	)		(.91	)
Return of Capital		-			-			-			-			-
Total Distributions	$	(.24	)	$	(.20	)	$	(.26	)	$	(1.21	)	$	(1.21	)
Net Asset Value, End of Period	$	31.04		$	23.05		$	31.05		$	38.59		$	46.24
Total Return		35.83	%		(25.13)	%		(18.89)	%		(14.09)	%		38.90	%
Ratios/Supplemental Data
Net Assets, End of Period  (in thousands)	$	62,586		$	45,855		$	60,245		$	71,412		$	69,736
Ratio of Expenses to Average Net Assets**		.89	%		.85	%		.79	%		.72	%		.73	%
Ratio of Net Investment Income to Average Net Assets **		.91	%		.79	%		.79	%		.95	%		.78	%
Portfolio Turnover Rate		26	%		23	%		14	%		19	%		16	%

* Per share income and capital change data is computed using the weighted average number of shares outstanding method.

** Average net asset data is computed using monthly net asset value figures.

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