N-CSR 1 a2109403zn-csr.txt N-CSR ----------------------------- OMB APPROVAL ----------------------------- OMB Number: 3235-0570 Expires: November 30, 2005 Estimated average burden hours per response....... 5.0 ----------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-05309 --------------------------------------------- First American Investment Funds, Inc. ------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 800 Nicollet Mall Minneapolis, MN 55402 ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Robert H. Nelson 800 Nicollet Mall Minneapolis, MN 55402 ------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 800-677-3863 ---------------------------- Date of fiscal year end: September 30, 2003 -------------------------- Date of reporting period: March 31, 2003 ------------------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507. Item 1. Report to Shareholders [GRAPHIC] [FIRST AMERICAN FUNDS(TM) LOGO] 2003 SEMIANNUAL REPORT BOND FUNDS OUR STRENGTH WE ARE A PERFORMANCE-DRIVEN, INDEPENDENT-STYLE FIRM, BACKED BY THE RESOURCES AND STABILITY OF A LEADING FINANCIAL ORGANIZATION. OUR GOAL SUPERIOR LONG-TERM PERFORMANCE. OUR PLEDGE WE TAILOR OUR APPROACH TO YOUR INVESTMENT NEEDS AND MEASURE OUR PERFORMANCE AGAINST YOUR GOALS. [GRAPHIC] FIRST AMERICAN FUNDS ON THE COVER OUR CORPORATE CONSTITUTION THIS STATEMENT IS DESIGNED TO CAPTURE THE CHARACTER AND AMBITION OF OUR FIRM. WE ARE FOUNDED ON STRENGTH, FOCUSED ON OUR GOAL, AND COMMITTED TO OUR PLEDGE. OUR IMAGE-GEORGE WASHINGTON HIS RICH LEGACY AS PATRIOT AND LEADER IS WIDELY RECOGNIZED AS EMBODYING THE SOUND JUDGMENT, RELIABILITY, AND STRATEGIC VISION THAT ARE CENTRAL TO OUR BRAND. FASHIONED IN A STYLE REMINISCENT OF AN 18TH-CENTURY ENGRAVING, THE ILLUSTRATION CONVEYS THE SYMBOLIC STRENGTH AND VITALITY OF WASHINGTON, WHICH ARE ATTRIBUTES THAT WE VALUE AT FIRST AMERICAN FUNDS. [SIDENOTE] OUR FUND FAMILY HIGHER RISK AND RETURN POTENTIAL SECTOR FUNDS INTERNATIONAL FUND SMALL CAP FUNDS MID CAP FUNDS LARGE CAP FUNDS GROWTH & INCOME FUNDS INDEX FUNDS ASSET ALLOCATION FUNDS BOND FUNDS - CORE BOND - CORPORATE BOND - HIGH INCOME BOND - INTERMEDIATE GOVERNMENT BOND - INTERMEDIATE TERM BOND - SHORT TERM BOND - U.S. GOVERNMENT MORTGAGE TAX FREE BOND FUNDS MONEY MARKET FUNDS LOWER RISK AND RETURN POTENTIAL FUND CATEGORIES ARE PRESENTED ACCORDING TO RISK AND RETURN POTENTIAL. FUNDS WITHIN EACH CATEGORY ARE LISTED IN ALPHABETICAL ORDER. MUTUAL FUND INVESTING INVOLVES RISK; PRINCIPAL LOSS IS POSSIBLE. NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE FIRST AMERICAN FUNDS ONLINE @ firstamericanfunds.com Visit the First American Funds website for useful information on each of our funds, including fund prices, performance, fund management bios, dividends, and downloadable fact sheets. You'll also find college and retirement planning tools and general investor education. [GRAPHIC] ONLINE FEATURES AND FUNCTIONALITY INCLUDE: - The ability to deepen your understanding of the fund family by learning about the full range of investment choices available to you through First American Funds - The ability to educate yourself through market and investment strategy commentaries We stand behind our commitment to serve you with excellence. For more information, call First American Funds Investor Services at 800.677.FUND or visit firstamericanfunds.com. [SIDENOTE] TABLE OF CONTENTS Schedule of Investments 2 Statements of Assets and Liabilities 32 Statements of Operations 34 Statements of Changes in Net Assets 36 Financial Highlights 38 Notes to Financial Statements 44 1 SCHEDULE OF INVESTMENTS March 31, 2003 (unaudited) CORE BOND FUND
DESCRIPTION PAR (000) VALUE (000) ----------------------------------------------------------------- CORPORATE BONDS - 31.9% CONSUMER GOODS - 1.1% Bristol-Myers Squibb 5.750%, 10/01/11 $ 5,000 $ 5,371 General Mills 6.000%, 02/15/12 14,335 15,759 Unilever Capital 5.900%, 11/15/32 5,250 5,457 ---------- 26,587 ---------- ENERGY - 1.6% Amerada Hess 6.650%, 08/15/11 8,200 8,899 ConocoPhillips 3.625%, 10/15/07 (A) 8,400 8,549 Consolidated Natural Gas 7.250%, 10/01/04 4,070 4,348 Kinder Morgan Energy Partners 7.300%, 08/15/33 9,605 10,638 Valero Energy 6.875%, 04/15/12 (A) 6,300 6,766 ---------- 39,200 ---------- FINANCE - 13.9% Aetna Services 6.750%, 09/15/13 4,525 5,011 Associated P&C Holdings 6.750%, 07/15/03 (B) 4,895 4,951 Bank of America 7.125%, 09/15/06 7,000 7,997 BankBoston 6.375%, 04/15/08 8,350 9,263 Boeing Capital 5.800%, 01/15/13 (A) 7,760 7,690 Citigroup 5.625%, 08/27/12 (A) 20,000 21,359 Core Investment Grade Trust 4.727%, 11/30/07 (A) 20,215 20,585 Countrywide Home Loans, Series K 4.250%, 12/19/07 (A) 12,690 13,017 Credit Suisse First Boston 5.875%, 08/01/06 7,000 7,543 Donaldson Lufkin Jenrette 6.875%, 11/01/05 1,000 1,101 Dresdner Bank 7.250%, 09/15/15 8,052 8,618 ERAC USA Finance 7.350%, 06/15/08 (B) 7,000 7,895 First National Bank of Chicago 8.080%, 01/05/18 1,500 1,841 Ford Motor Credit 6.875%, 02/01/06 6,000 5,907 5.800%, 01/12/09 20,560 18,218 GE Global Insurance 7.750%, 06/15/30 7,000 8,015 General Motors Acceptance 6.125%, 08/28/07 (A) 20,750 21,121 6.875%, 09/15/11 2,000 1,972 Goldman Sachs 5.500%, 11/15/14 8,550 8,838 Household Finance 4.625%, 01/15/08 23,000 23,662 HSBC Bank 6.950%, 03/15/11 $ 2,025 $ 2,361 International Lease Finance 5.750%, 02/15/07 4,560 4,795 Series G 8.150%, 10/01/04 800 863 J.P. Morgan Chase 5.750%, 01/02/13 13,500 14,144 John Deere Capital 7.000%, 03/15/12 10,250 11,882 Lehman Brothers Holdings 6.625%, 01/18/12 10,000 11,211 MBNA America Bank 6.625%, 06/15/12 (A) (B) 9,000 9,431 Merrill Lynch 5.880%, 01/15/04 6,000 6,192 6.875%, 11/15/18 3,125 3,541 Series B 2.470%, 03/10/06 7,000 6,887 Morgan Stanley 6.799%, 06/15/12 (B) 7,500 8,292 5.300%, 03/01/13 (A) 10,550 10,752 National Rural Utilities 5.750%, 08/28/09 (A) 5,300 5,699 7.250%, 03/01/12 3,250 3,770 Newcourt Credit Group, Series B 6.875%, 02/16/05 7,490 7,920 Norwest 6.550%, 12/01/06 5,000 5,657 Salomon 7.000%, 06/15/03 6,300 6,371 Washington Mutual Bank 5.500%, 01/15/13 (A) 4,110 4,325 Westdeutsche Landesbank 6.050%, 01/15/09 6,200 6,871 ---------- 335,568 ---------- MANUFACTURING - 3.2% Aluminum Company of America 5.375%, 01/15/13 4,000 4,187 Bombardier 6.750%, 05/01/12 (A) (B) 3,250 2,470 Centex 7.500%, 01/15/12 5,445 6,162 DaimlerChrysler 4.750%, 01/15/08 15,500 15,646 Dow Chemical 6.000%, 10/01/12 8,200 8,366 Ford Motor 7.450%, 07/16/31 3,250 2,538 General Motors 8.875%, 05/15/03 2,000 2,011 Honeywell International 7.000%, 03/15/07 5,000 5,653 Raytheon 6.150%, 11/01/08 17,800 19,327 Weyerhaeuser 6.750%, 03/15/12 (A) 10,250 11,244 ---------- 77,604 ----------
The accompanying notes are an integral part of the financial statements. 2
DESCRIPTION PAR (000) VALUE (000) ----------------------------------------------------------------- REAL ESTATE - 0.9% Boston Properties (REIT) 6.250%, 01/15/13 (B) $ 6,000 $ 6,280 EOP Operating 6.750%, 02/15/08 6,000 6,650 Security Capital Group 7.750%, 11/15/03 2,850 2,965 Simon Property Group (REIT) 7.750%, 01/20/11 6,000 6,907 ---------- 22,802 ---------- SERVICES - 3.2% AOL Time Warner 6.875%, 05/01/12 14,300 15,195 AT&T Broadband 8.375%, 03/15/13 14,775 17,410 Duty Free International 7.000%, 01/15/04 (C) (D) 6,800 3,400 Kroger 6.750%, 04/15/12 14,650 16,224 UnitedHealth Group 6.600%, 12/01/03 10,000 10,336 Wyeth 5.250%, 03/15/13 15,300 15,715 ---------- 78,280 ---------- TRANSPORTATION - 1.0% America West Airlines, Series 99-1 7.930%, 01/02/19 2,660 2,713 Continental Airlines, Series 99-2 7.056%, 09/15/09 5,365 4,335 CSX, Series C 5.850%, 12/01/03 7,600 7,797 Northwest Airlines, Series 991A 6.810%, 02/01/20 3,976 2,982 Southwest Airlines, Series 2001-1, Class A-1 5.100%, 05/01/06 5,124 5,451 ---------- 23,278 ---------- UTILITIES - 6.4% Appalachian Power, Series E 4.800%, 06/15/05 3,000 3,098 AT&T 7.000%, 11/15/06 (A) 13,800 14,542 6.500%, 03/15/13 2,000 1,968 AT&T Wireless Services 7.875%, 03/01/11 3,050 3,325 8.125%, 05/01/12 2,000 2,180 British Telecom 8.375%, 12/15/10 8,250 9,969 Conectiv, Series A 6.730%, 06/01/06 5,856 6,232 Constellation Energy 7.000%, 04/01/12 6,030 6,714 Deutsche Telecom 7.750%, 06/15/05 500 550 8.000%, 06/15/10 6,200 7,244 FPL Group Capital 7.625%, 09/15/06 3,000 3,404 France Telecom 9.250%, 03/01/11 (A) (E) 7,960 9,536 GTE North, Series A, Callable 04/01/03 @ 104 9.600%, 01/01/21 2,500 2,612 Northern State Power - Minnesota, Series B 8.000%, 08/28/12 (A) $ 10,825 $ 13,268 Oncor Electric Delivery 6.375%, 01/15/15 (B) 8,000 8,715 PSEG Power 6.950%, 06/01/12 (A) 5,500 6,080 PSI Energy 7.850%, 10/15/07 9,100 9,990 Southern Capital Funding, Series A 5.300%, 02/01/07 7,980 8,476 Sprint 9.000%, 10/15/19 1,750 1,680 Sprint Capital 6.125%, 11/15/08 9,350 9,303 8.375%, 03/15/12 (A) 2,600 2,756 Verizon Global Funding 7.250%, 12/01/10 10,500 12,153 7.750%, 12/01/30 (A) 5,000 5,992 Verizon Wireless 5.375%, 12/15/06 3,300 3,516 ---------- 153,303 ---------- YANKEE - 0.6% Pemex Project 9.125%, 10/13/10 11,995 13,914 ---------- TOTAL CORPORATE BONDS (Cost $748,092) 770,536 ---------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 30.4% ADJUSTABLE RATE (G) - 0.0% GNMA Pool 7.750%, 08/20/23, #8259 7 8 ---------- FIXED RATE - 30.4% FHLMC Gold Pool 6.500%, 05/01/17, #G11272 (A) 16,455 17,375 6.500%, 01/01/28, #G00876 (A) 9,178 9,614 6.500%, 09/01/28, #C14872 13,167 13,768 6.500%, 12/01/28, #C00689 (A) 11,244 11,757 6.500%, 04/01/29, #C00742 6,683 6,980 6.500%, 01/01/30, #C55738 (A) 5,893 6,154 6.500%, 11/01/30, #G01149 (A) 1,566 1,636 6.500%, 02/01/31, #C47895 (A) 624 651 6.500%, 03/01/31, #G01244 18,610 19,459 6.500%, 05/01/31, #C51020 7,971 8,312 FHLMC Gold Pool TBA 6.500%, 11/01/28, #C00676 (F) 16,196 16,935 FHLMC Pool 7.500%, 04/01/07, #140151 17 18 FNMA Pool 7.750%, 06/01/08, #001464 32 34 6.255%, 09/01/13, #360500 6,500 7,272 5.500%, 02/01/14, #440780 (A) 14,352 15,020 7.000%, 02/01/15, #535206 (A) 3,513 3,766 7.000%, 08/01/16, #591038 (A) 8,332 8,889 5.500%, 12/01/17, #673010 (A) 23,445 24,332 6.000%, 12/01/17, #254547 (A) 19,881 20,807 6.000%, 10/01/22, #254513 (A) 22,946 23,928 7.000%, 04/01/26, #340798 3,459 3,666 7.000%, 05/01/26, #250551 2,873 3,045 6.500%, 05/01/28, #415794 4,825 5,047 6.000%, 12/01/28, #456276 (A) 8,174 8,496 6.500%, 02/01/29, #252255 (A) 12,474 13,047 6.500%, 03/01/29, #490758 10,050 10,512
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DESCRIPTION PAR (000) VALUE (000) ----------------------------------------------------------------- 6.000%, 05/01/29, #323715 (A) 11,041 $ 11,475 6.500%, 07/01/29, #252570 (A) 7,372 7,702 6.500%, 08/01/29, #252645 54 57 6.000%, 12/01/29, #545061 (A) 18,181 18,897 6.500%, 05/01/30, #535300 (A) 5,294 5,531 6.500%, 02/01/31, #568895 618 645 6.000%, 05/01/31, #511797 (A) 7,721 8,008 7.000%, 07/01/32, #254379 (A) 21,664 22,835 7.000%, 07/01/32, #545813 10,971 11,564 7.000%, 07/01/32, #545815 (A) 7,962 8,392 6.500%, 08/01/32, #658822 (A) 15,954 16,642 6.500%, 09/01/32, #656918 (A) 26,547 27,691 6.000%, 10/01/32, #661581 (A) 12,146 12,591 6.500%, 12/01/32, #669168 (A) 13,675 14,265 6.000%, 01/01/33, #676647 (A) 24,390 25,282 6.000%, 03/01/33, #688330 19,983 20,714 5.500%, 04/01/33, #694605 (A) 25,000 25,523 FNMA TBA 5.000%, 04/01/18 (F) 41,000 42,115 4.500%, 05/01/18 (F) 25,000 25,211 6.500%, 06/01/30 (F) 29,000 30,251 6.500%, 06/01/30 (F) 15,000 15,647 5.500%, 11/01/32 (F) 30,000 30,637 5.500%, 04/01/33 (F) 15,000 15,314 GNMA Pool 9.000%, 09/15/08, #025091 11 12 9.000%, 09/15/08, #026734 6 6 9.000%, 11/15/08, #023548 17 19 9.000%, 12/15/08, #026268 13 14 6.500%, 04/15/29, #487110 (A) 9,497 10,001 7.500%, 11/15/30, #537699 (A) 6,324 6,760 6.000%, 03/15/31, #541302 (A) 2,597 2,716 6.000%, 03/15/31, #541306 1,535 1,605 6.000%, 03/15/31, #554675 (A) 3,323 3,475 6.500%, 05/15/32, #587673 (A) 9,672 10,162 6.500%, 08/15/32, #590376 14,181 14,895 GNMA Pool TBA 6.000%, 03/15/33, #603520 (F) 25,000 26,078 ---------- 733,252 ---------- TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $721,549) 733,260 ---------- U.S. GOVERNMENT & AGENCY SECURITIES - 19.8% U.S. AGENCY DEBENTURES - 9.0% FHLB 4.470%, 11/15/06 75 78 7.000%, 06/29/09 700 743 7.000%, 08/19/09 500 533 FHLMC 3.750%, 04/15/04 (A) 20,500 21,047 5.000%, 05/15/04 (A) 23,000 23,938 4.250%, 06/15/05 (A) 14,500 15,288 2.875%, 09/26/05 (A) 14,000 14,084 FNMA 3.250%, 11/14/05 (A) 13,000 13,125 2.750%, 12/16/05 (A) 12,160 12,252 4.250%, 07/15/07 (A) 29,000 30,664 6.250%, 02/01/11 (A) 16,000 17,952 5.000%, 11/17/11 (A) 16,200 16,726 5.250%, 08/01/12 32,000 33,410 6.625%, 11/15/30 (A) 15,000 17,730 ---------- 217,570 ---------- U.S. TREASURIES - 10.8% U.S. Treasury Bonds 8.000%, 11/15/21 (A) $ 29,123 $ 40,581 6.000%, 02/15/26 32,250 36,961 5.375%, 02/15/31 (A) 44,695 48,369 U.S. Treasury Notes 3.250%, 12/31/03 (A) 20,000 20,325 5.875%, 02/15/04 (A) 400 417 7.250%, 08/15/04 (A) 200 216 7.875%, 11/15/04 (A) 800 883 1.750%, 12/31/04 (A) 13,500 13,580 1.500%, 02/28/05 (A) 14,975 14,989 6.500%, 05/15/05 (A) 200 221 6.500%, 08/15/05 (A) 500 556 5.625%, 02/15/06 (A) 1,000 1,104 6.875%, 05/15/06 500 572 3.000%, 02/15/08 (A) 15,260 15,441 3.875%, 02/15/13 (A) 35,919 36,076 U.S. Treasury Notes (TIPS) 3.625%, 01/15/08 (A) 15,181 16,989 3.875%, 04/15/29 (A) 9,394 11,542 ---------- 258,822 ---------- TOTAL U.S. GOVERNMENT & AGENCY SECURITIES (Cost $465,590) 476,392 ---------- ASSET-BACKED SECURITIES - 7.3% AUTOMOBILES - 3.1% Capital One Auto Finance Trust Series 2001-A, Class A4 5.400%, 05/15/08 10,000 10,615 Chase Manhattan Auto Owner Trust Series 2002-B, Class A4 4.210%, 01/15/09 10,000 10,441 DaimlerChrysler Auto Trust Series 2000-C, Class A3 6.820%, 09/06/04 2,463 2,477 WFS Financial Owner Trust Series 2003-1, Class A3 2.030%, 08/20/07 14,750 14,820 Whole Auto Loan Trust Series 2002-1, Class A3 2.600%, 08/15/06 21,790 22,138 World Omni Auto Receivables Trust Series 2001-B, Class A4 4.490%, 08/20/08 13,000 13,583 ---------- 74,074 ---------- COMMERCIAL - 1.7% Asset Securitization Series 1996-MD6, Class A1B 6.880%, 11/13/29 18,600 19,103 Bank of America - First Union NB Commercial Mortgages, Series 2001-3, Class A1 4.890%, 04/11/37 9,425 9,824 Merrill Lynch Mortgage Investors Series 1995-C3, Class A3 8.854%, 12/26/25 (G) 4,283 4,465 Morgan Stanley Capital Investments Series 1999-FNV1, Class A1 6.120%, 03/15/31 8,172 8,811 ---------- 42,203 ----------
The accompanying notes are an integral part of the financial statements. 4
DESCRIPTION PAR (000) VALUE (000) ----------------------------------------------------------------- CREDIT CARDS - 1.8% Citibank Credit Card Issuance Trust Series 2003-A2, Class A2 2.700%, 01/15/08 $ 10,575 $ 10,697 Series 2003-A3, Class A3 3.100%, 03/10/10 5,900 5,852 Citibank Credit Card Master Trust I Series 1997-6, Class A 0.000%, 08/15/06 (H) 8,800 8,599 Discover Card Master Trust Series 2001-5, Class A 5.300%, 11/16/06 7,000 7,304 Sears Credit Account Master Trust Series 1995-5, Class A 6.050%, 01/15/08 699 714 Series 2000-1, Class A 7.250%, 11/15/07 10,000 10,188 ---------- 43,354 ---------- HOME EQUITY - 0.6% Aames Mortgage Trust Series 1997-B, Class A6 6.920%, 06/15/27 2,855 2,861 Amresco Residential Security Mortgage Series 1997-3, Class A9 6.960%, 03/25/27 5,411 5,462 Contimortgage Home Equity Loan Trust Series 1998-1, Class A6 6.580%, 12/15/18 585 595 Series 1997-5, Class A5 6.630%, 12/15/20 736 750 Series 1997-3, Class A8 7.580%, 08/15/28 2,792 2,952 Delta Home Equity Loan Trust Series 1997-3 Class A6F 6.860%, 10/25/28 1,033 1,064 Green Tree Home Equity Loan Trust Series 1998-C, Class A6 6.290%, 07/15/29 154 154 ---------- 13,838 ---------- MANUFACTURED HOUSING - 0.1% Green Tree Financial Series 1993-4, Class A4 6.600%, 01/15/19 2,479 2,498 ---------- TRANSPORTATION - 0.0% Northwest Airlines Series 1997-1, Class 1C 7.039%, 07/02/08 539 383 ---------- TOTAL ASSET-BACKED SECURITIES (Cost $171,880) 176,350 ---------- CMO - PRIVATE MORTGAGE-BACKED SECURITIES - 5.0% FIXED RATE - 5.0% GE Capital Mortgage Services Series 1994-17, Class A6 7.000%, 05/25/24 7,000 7,175 Series 1994-17, Class A7 7.000%, 05/25/24 5,179 5,525 Greenwich Capital Commercial Funding Series 2002-C1, Class A4 4.948%, 01/11/35 15,000 15,383 Nomura Asset Securities Series 1998-D6, Class A1B 6.590%, 03/15/30 12,400 14,079 Wachovia Bank Commercial Mortgage Trust Series 2002-C1, Class A4 6.287%, 04/15/34 $ 11,365 $ 12,712 Washington Mutual Series 1999-WM2, Class 2A 7.000%, 11/19/14 2,199 2,260 Series 2001-AR6, Class A5 5.603%, 01/26/32 16,500 16,654 Series 2002-AR4, Class A7 5.598%, 04/25/32 15,000 15,176 Wells Fargo Mortgage Backed Securities Trust Series 2003-D, Class A1 4.931%, 02/25/33 31,371 32,206 Westam Mortgage Financial Series 11, Class A 6.360%, 08/29/20 348 369 ---------- TOTAL CMO - PRIVATE MORTGAGE-BACKED SECURITIES (Cost $118,842) 121,539 ---------- CMO - U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 3.4% FIXED RATE - 2.7% FHLMC REMIC Series T-47, Class A2 1.650%, 08/27/05 15,000 15,002 Series 1998-M1, Class A2 6.250%, 01/25/08 7,090 7,737 Series 6, Class C 9.050%, 06/15/19 119 130 Series 1022, Class J 6.000%, 12/15/20 166 169 Series 162, Class F 7.000%, 05/15/21 521 542 Series 188, Class H 7.000%, 09/15/21 1,133 1,175 Series 1201, Class E 7.400%, 12/15/21 13 13 Series 1790, Class A 7.000%, 04/15/22 458 474 Series 1723, Class PJ 7.000%, 02/15/24 (A) 7,133 7,684 Series 1699, Class TD 6.000%, 03/15/24 (A) 10,000 10,652 FNMA REMIC Series 1988-24, Class G 7.000%, 10/25/18 250 268 Series 1989-44, Class H 9.000%, 07/25/19 198 221 Series 1989-90, Class E 8.700%, 12/25/19 43 46 Series 1990-30, Class E 6.500%, 03/25/20 188 197 Series 1990-61, Class H 7.000%, 06/25/20 181 194 Series 1990-72, Class B 9.000%, 07/25/20 123 137 Series 1990-102, Class J 6.500%, 08/25/20 164 173 Series 1990-105, Class J 6.500%, 09/25/20 (A) 1,656 1,773 Series 1991-56, Class M 6.750%, 06/25/21 667 706 Series 1992-120, Class C 6.500%, 07/25/22 284 298
5
DESCRIPTION PAR (000)/SHARES VALUE (000) ----------------------------------------------------------------- Series 1991-1, Class PG 6.500%, 04/25/28 (A) $ 15,343 $ 16,271 ---------- 63,862 ---------- Z-BONDS (I) - 0.7% FHLMC REMIC Series 1118, Class Z 8.250%, 07/15/21 343 365 Series 1677, Class Z 7.500%, 07/15/23 (A) (G) 5,916 6,802 FNMA REMIC Series 1991-134, Class Z 7.000%, 10/25/21 (A) 1,245 1,326 Series 1996-35, Class Z 7.000%, 07/25/26 (A) 8,654 9,298 ---------- 17,791 ---------- TOTAL CMO - U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $74,699) 81,653 ---------- COMMERCIAL PAPER - 1.7% Corporate Asset Funding 1.250%, 04/09/03 40,000 39,989 ---------- TOTAL COMMERCIAL PAPER (Cost $39,989) 39,989 ---------- RELATED PARTY MONEY MARKET FUND - 8.1% First American Prime Obligations Fund, Class Y (J) 195,473,321 195,473 ---------- TOTAL RELATED PARTY MONEY MARKET FUND (Cost $195,473) 195,473 ---------- INVESTMENTS PURCHASED WITH CASH PROCEEDS FROM SECURITIES LENDING - 39.4% COMMERCIAL PAPER - 5.6% CS First Boston 1.638%, 12/01/03 16,669 16,669 Danske Bank 1.508%, 12/22/03 16,669 16,669 Goldman Sachs 1.518%, 08/28/03 21,670 21,670 Morgan Stanley 1.518%, 06/17/03 8,334 8,334 1.518%, 07/08/03 6,001 6,001 1.518%, 09/22/03 8,334 8,334 Orchard Park 1.475%, 01/06/04 16,669 16,669 UBS Financial 1.390%, 04/01/03 41,666 41,666 ---------- TOTAL COMMERCIAL PAPER 136,012 ---------- CORPORATE OBLIGATIONS - 4.3% CS First Boston 1.760%, 04/11/03 16,669 16,669 Deutsche Bank 1.470%, 04/11/03 8,334 8,334 1.580%, 12/11/03 6,668 6,668 General Electric Capital Corporation 1.355%, 07/09/07 8,334 8,334 Merrill Lynch 1.538%, 05/05/03 14,169 14,169 Monet Trust 1.360%, 12/28/03 16,669 16,669 SMM Trust 2002-M 1.450%, 09/23/03 $ 16,669 $ 16,669 URI Trust 1.460%, 09/18/03 16,669 16,669 ---------- TOTAL CORPORATE OBLIGATIONS 104,181 ---------- MONEY MARKET FUNDS - 3.7% AIM Liquid Assets Portfolio 28,337,105 28,337 Dreyfus Cash Manage Plus Fund 1,666,889 1,667 Evergreen Institutional Money Market Fund 5,834,110 5,834 HSBC Investor Money Market Fund - Class I 5,000,666 5,001 Merrill Lynch Premier Institutional Fund 32,285,158 32,285 Merrimac Cash Series Fund 5,000,666 5,001 One Group Institutional Prime Money Market Fund 10,001,331 10,001 Reserve Primary Fund 833,444 833 ---------- TOTAL MONEY MARKET FUNDS 88,959 ---------- OTHER SHORT-TERM INVESTMENTS - 3.6% Allied Irish Bank 1.340%, 05/09/03 8,334 8,334 1.330%, 06/02/03 16,669 16,669 Commonwealth Life 1.678%, 04/01/03 8,416 8,416 General Electric Capital Assurance 1.370%, 12/19/03 3,334 3,334 Premium Asset Trust 02-7 1.060%, 08/23/03 10,618 10,618 Security Life Denver 1.381%, 01/13/04 16,669 16,669 1.490%, 03/15/04 21,670 21,670 ---------- TOTAL OTHER SHORT-TERM INVESTMENTS 85,710 ---------- REPURCHASE AGREEMENTS - 22.2% Bear Stearns 1.420%, 04/10/03 33,338 33,338 CS First Boston 1.370%, 04/01/03 33,338 33,338 1.380%, 04/01/03 5,167 5,167 1.380%, 04/01/03 41,672 41,672 Goldman Sachs 1.520%, 04/01/03 25,003 25,003 1.420%, 04/07/03 16,669 16,669 1.360%, 06/10/03 8,334 8,334 1.400%, 06/11/03 8,334 8,334 Greenwich Capital Markets 1.430%, 04/01/03 50,007 50,007 Lehman Brothers 1.560%, 04/01/03 16,669 16,669 1.640%, 04/01/03 12,502 12,502 1.640%, 04/01/03 54,174 54,174 Merrill Lynch 1.360%, 04/01/03 20,836 20,836 1.500%, 04/01/03 50,007 50,007 1.560%, 04/01/03 25,003 25,003 1.560%, 04/01/03 33,338 33,338 Morgan Stanley 1.470%, 04/01/03 25,003 25,003 1.510%, 04/01/03 51,840 51,840 Salomon Smith Barney 1.540%, 04/01/03 25,003 25,003 ---------- TOTAL REPURCHASE AGREEMENTS 536,237 ----------
The accompanying notes are an integral part of the financial statements. 6
DESCRIPTION VALUE (000) ----------------------------------------------------------------- TOTAL INVESTMENTS PURCHASED WITH CASH PROCEEDS FROM SECURITIES LENDING (Cost $951,099) $ 951,099 ---------- TOTAL INVESTMENTS - 147.0% (Cost $3,487,213) 3,546,291 ---------- OTHER ASSETS AND LIABILITIES, NET - (47.0)% (1,133,471) ---------- TOTAL NET ASSETS - 100.0% $2,412,820 ----------
(A) This security or a portion of this security is out on loan at March 31, 2003. Total loaned securities had a value of $933,552,922 at March 31, 2003. See note 2 in Notes to Financial Statements. (B) Security sold within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "qualified institutional buyers." These securities have been determined to be liquid under the guidelines established by the Funds' board of directors. As of March 31, 2003, the value of these investments was $48,032,882 or 2.0% of total net assets. (C) Securities considered illiquid or restricted. See note 2 in Notes to Financial Statements. (D) Security valued at fair value under guidelines established and approved by the Funds' board of directors. Total fair valued securities had a value of $3,400,000, which represents 0.1% of total net assets at March 31, 2003. See note 2 in Notes to Financial Statements. (E) Delayed Interest (Step-Bonds) - Represents securities that remain zero-coupon securities until a predetermined date at which time the stated coupon rate becomes effective and interest becomes payable at regular intervals. Interest rate shown represents current yield at March 31, 2003, based upon the estimated timing and amount of future interest and principal payments. (F) On March 31, 2003, the total cost of investments purchased on a when-issued basis was $201,831,993. (G) Variable Rate Security - The rate shown is the rate in effect as of March 31, 2003. (H) Principal only. (I) Z-Bonds - Represents securities that pay no interest or principal during their accrual periods, but accrue additional principal at specified rates. Interest rate shown represents current yield based upon the cost basis and estimated future cash flows. (J) This money market fund is advised by U.S. Bancorp Asset Management, Inc., which also serves as advisor for this Fund. See note 3 in Notes to Financial Statements. CMO - Collateralized Mortgage Obligation FHLB - Federal Loan Home Bank FHLMC - Federal Home Loan Mortgage Corporation FNMA - Federal National Mortgage Association GNMA - Government National Mortgage Association REIT - Real Estate Investment Trust REMIC - Real Estate Mortgage Investment Conduit TBA - To Be Announced TIPS - Treasury Inflation Protection Security CORPORATE BOND FUND
DESCRIPTION PAR (000) VALUE (000) ----------------------------------------------------------------- CORPORATE BONDS - 92.6% CONSUMER GOODS - 2.8% General Mills 6.000%, 02/15/12 $ 1,950 $ 2,144 Tyson Foods 8.250%, 10/01/11 1,500 1,660 Unilever Capital 5.900%, 11/15/32 1,500 1,559 UST 6.625%, 07/15/12 2,000 2,211 ---------- 7,574 ---------- ENERGY - 4.5% Amerada Hess 7.875%, 10/01/29 1,970 2,186 ConocoPhillips 3.625%, 10/15/07 (A) 1,500 1,527 El Paso Energy 7.800%, 08/01/31 1,500 1,072 Kinder Morgan Energy Partners 7.300%, 08/15/33 1,000 1,107 Ocean Energy 4.375%, 10/01/07 1,990 2,049 Schlumberger Technology 6.500%, 04/15/12 (B) 1,485 1,680 Valero Energy 6.875%, 04/15/12 (A) 1,500 1,611 Williams 7.750%, 06/15/31 (A) 990 762 ---------- 11,994 ---------- FINANCE - 33.4% Abbey National Capital Trust, Callable 06/30/30 @ 100 8.963%, 12/29/49 (A) (C) 980 1,230 BankBoston 6.375%, 04/15/08 2,000 2,219 Bear Stearns 7.800%, 08/15/07 1,950 2,292 Boeing Capital 5.800%, 01/15/13 (A) 1,485 1,472 Capital One Bank 6.700%, 05/15/08 1,500 1,447 CIT 7.750%, 04/02/12 (A) 985 1,088 Core Investment Grade Trust 4.727%, 11/30/07 3,475 3,539 Countrywide Home Loans, Series K 4.250%, 12/19/07 (A) 2,000 2,052 Credit Suisse First Boston 5.875%, 08/01/06 (A) 3,000 3,233 Dresdner Bank 7.250%, 09/15/15 1,725 1,846 ERAC USA Finance 7.350%, 06/15/08 (B) 1,500 1,692 Ford Motor Credit 6.700%, 07/16/04 (A) 2,500 2,533 6.500%, 01/25/07 (A) 3,000 2,903 7.250%, 10/25/11 (A) 2,975 2,698 GATX Capital 8.250%, 09/01/03 1,500 1,498 GE Global Insurance 7.750%, 06/15/30 1,240 1,420
7
DESCRIPTION PAR (000) VALUE (000) ----------------------------------------------------------------- General Motors Acceptance 6.125%, 08/28/07 (A) $ 4,500 $ 4,580 6.875%, 09/15/11 (A) 4,000 3,943 Goldman Sachs 5.500%, 11/15/14 1,775 1,835 Household Finance 4.625%, 01/15/08 3,350 3,446 7.000%, 05/15/12 (A) 1,500 1,703 HSBC Capital Funding, Callable 06/30/10 @ 100 9.547%, 12/31/49 (A) (B) 1,190 1,482 ING Capital Funding Trust III, Callable 12/31/10 @ 100 8.439%, 12/31/10 1,500 1,756 J.P. Morgan Chase 5.750%, 01/02/13 (A) 3,600 3,772 Key Bank 7.000%, 02/01/11 1,830 2,108 Lehman Brothers Holdings 4.000%, 01/22/08 (A) 2,550 2,605 MBNA America Bank 6.625%, 06/15/12 (A) (B) 2,500 2,620 Merrill Lynch, Series B 2.470%, 03/10/06 1,950 1,919 Morgan Stanley 6.100%, 04/15/06 1,975 2,161 6.600%, 04/01/12 2,475 2,753 NB Capital Trust IV, Callable 04/15/17 @ 103.85 8.250%, 04/15/27 2,100 2,421 Newcourt Credit Group, Series B 6.875%, 02/16/05 2,475 2,617 Ohio National Life Insurance 8.875%, 07/15/04 (B) 2,000 2,164 Royal Bank of Scotland, Callable 09/30/31 @ 100 7.648%, 09/30/31 (A) (C) 2,000 2,364 SOC General Real Estate, Callable 09/30/07 @ 100 7.640%, 12/29/49 (B) (C) 1,465 1,635 Sovereign Bancorp 10.500%, 11/15/06 1,000 1,172 Washington Mutual Finance 6.250%, 05/15/06 (A) 2,475 2,727 Wells Fargo, Callable 12/15/06 @ 103.98 7.960%, 12/15/26 2,000 2,199 Zurich Capital Trust, Callable 06/01/07 @ 104.19 8.376%, 06/01/37 (B) 1,980 1,766 ---------- 88,910 ---------- MANUFACTURING - 11.0% Abitibi-Consolidated 8.550%, 08/01/10 (A) 980 1,079 American Standard 7.375%, 04/15/05 980 1,029 Bombardier 6.750%, 05/01/12 (A) (B) 750 570 Centex 7.500%, 01/15/12 1,950 2,207 Cooper Tire & Rubber 8.000%, 12/15/19 980 1,067 DaimlerChrysler 4.750%, 01/15/08 (A) $ 2,950 $ 2,978 Delphi Auto Systems 6.550%, 06/15/06 985 1,054 Dow Chemical 6.000%, 10/01/12 (A) 2,475 2,525 Ford Motor 7.450%, 07/16/31 2,950 2,304 Harman International Industries 7.125%, 02/15/07 1,950 2,095 Lockheed Martin 8.500%, 12/01/29 1,230 1,607 Mohawk Industries 7.200%, 04/15/12 1,000 1,130 Northrop Grumman 7.750%, 02/15/31 (A) 1,955 2,392 Phelps Dodge 8.750%, 06/01/11 (A) 750 812 Raytheon 6.300%, 03/15/05 1,950 2,075 Tyco International 6.125%, 01/15/09 (A) 1,975 1,837 Weyerhaeuser 6.125%, 03/15/07 (A) 1,950 2,110 6.750%, 03/15/12 500 548 ---------- 29,419 ---------- REAL ESTATE - 3.0% Boston Properties (REIT) 6.250%, 01/15/13 (B) 985 1,031 Hospitality Properties (REIT), Callable 08/15/12 @ 100 6.750%, 02/15/13 1,480 1,496 Prologis Trust (REIT) 7.050%, 07/15/06 1,500 1,635 Simon Property Group (REIT) 7.750%, 01/20/11 1,450 1,669 Vornado Realty (REIT) 5.625%, 06/15/07 1,975 2,013 ---------- 7,844 ---------- SERVICES - 15.2% AOL Time Warner 6.125%, 04/15/06 980 1,028 6.875%, 05/01/12 2,225 2,364 7.625%, 04/15/31 (A) 1,975 2,092 Aramark Services 6.750%, 08/01/04 2,000 2,087 AT&T Broadband 8.375%, 03/15/13 1,170 1,379 Autonation 9.000%, 08/01/08 1,000 1,047 Cendant 6.875%, 08/15/06 2,000 2,106 Clear Channel Communications 7.650%, 09/15/10 (A) 1,480 1,704 Cox Communications 7.750%, 11/01/10 (A) 990 1,146 Federated Department Stores 6.625%, 04/01/11 1,950 2,114 HCA Columbia Healthcare 8.750%, 09/01/10 1,000 1,160 Kroger 6.750%, 04/15/12 1,935 2,143
The accompanying notes are an integral part of the financial statements. 8
DESCRIPTION PAR (000) VALUE (000) ----------------------------------------------------------------- Lenfest Communications 8.375%, 11/01/05 $ 1,950 $ 2,165 McKesson 7.750%, 02/01/12 975 1,133 MGM Mirage 8.375%, 02/01/11 (A) 1,000 1,067 News America 6.625%, 01/09/08 (A) 2,000 2,199 Park Place Entertainment 7.875%, 12/15/05 1,000 1,027 Royal Caribbean Cruises 8.250%, 04/01/05 (A) 1,000 975 Starwood Hotels & Resorts 7.375%, 05/01/07 (B) 975 970 TCI Communications 8.750%, 08/01/15 1,000 1,215 Tenet Healthcare 6.375%, 12/01/11 (A) 1,485 1,429 Tricon Global Restaurant 7.650%, 05/15/08 1,000 1,075 Viacom 6.625%, 05/15/11 1,735 1,972 Walt Disney 6.375%, 03/01/12 (A) 990 1,062 Waste Management 6.500%, 11/15/08 2,000 2,176 Wyeth 5.250%, 03/15/13 (A) 1,740 1,787 ---------- 40,622 ---------- TRANSPORTATION - 2.4% Continental Airlines Series 2001-1, Class B 7.033%, 06/15/11 1,832 899 Delta Air Lines, Series 2001-1 7.711%, 09/18/11 (A) (C) 3,500 2,540 Norfolk Southern 7.800%, 05/15/27 1,975 2,372 United Air Lines, Series 2000-1 8.030%, 07/01/11 1,861 465 ---------- 6,276 ---------- UTILITIES - 19.6% Alliant Energy Resources 9.750%, 01/15/13 (B) 985 1,131 American Electric Power, Series C 5.375%, 03/15/10 (A) 1,475 1,491 AT&T 7.800%, 11/15/11 1,970 2,075 8.000%, 11/15/31 (A) 985 1,011 AT&T Wireless Services 8.125%, 05/01/12 (A) 2,000 2,180 British Telecom 8.375%, 12/15/10 (A) 1,975 2,386 Centerpoint Energy Resources 7.875%, 04/01/13 (B) 980 1,004 CenturyTel, Series H 8.375%, 10/15/10 985 1,199 Cincinnati Gas & Electric 5.700%, 09/15/12 1,980 2,092 Citizens Communications 7.625%, 08/15/08 1,485 1,697 Constellation Energy 6.125%, 09/01/09 (A) 985 1,048 Deutsche Telecom 8.000%, 06/15/10 (A) $ 2,465 $ 2,880 Dominion Resources, Series A 8.125%, 06/15/10 (A) 1,475 1,739 FirstEnergy, Series B 6.450%, 11/15/11 1,975 2,072 FPL Group Capital 7.625%, 09/15/06 1,975 2,241 France Telecom 9.250%, 03/01/11 (A) 1,975 2,366 MidAmerican Energy Holdings 5.875%, 10/01/12 990 1,027 Nevada Power, Callable 10/15/06 @ 105.44 10.875%, 10/15/09 (B) 980 1,009 Northern State Power - Minnesota, Series B 8.000%, 08/28/12 1,485 1,820 Oncor Electric Delivery 6.375%, 01/15/15 (B) 1,475 1,607 Progress Energy 7.000%, 10/30/31 (A) 2,000 2,112 Qwest Capital Funding 7.750%, 08/15/06 1,950 1,584 Southern Capital Funding, Series A 5.300%, 02/01/07 720 765 Sprint Capital 6.000%, 01/15/07 2,025 2,010 6.125%, 11/15/08 1,000 995 8.375%, 03/15/12 (A) 985 1,044 Telus 8.000%, 06/01/11 (A) 990 1,030 TXU Energy 7.000%, 03/15/13 (B) 1,475 1,488 Verizon Global Funding 7.250%, 12/01/10 1,485 1,719 7.750%, 12/01/30 (A) 1,980 2,373 Verizon Wireless 5.375%, 12/15/06 1,980 2,109 Western Resources 9.750%, 05/01/07 1,000 1,065 ---------- 52,369 ---------- YANKEE - 0.7% Pemex Project 9.125%, 10/13/10 1,500 1,740 ---------- TOTAL CORPORATE BONDS (Cost $240,848) 246,748 ---------- U.S. GOVERNMENT & AGENCY SECURITIES - 2.4% U.S. AGENCY DEBENTURE - 1.2% FHLB 4.125%, 05/13/05 (A) 3,000 3,154 ---------- U.S. TREASURIES - 1.2% U.S. Treasury Bond 5.375%, 02/15/31 (A) 1,500 1,623 U.S. Treasury Note 3.000%, 02/15/08 (A) 1,625 1,645 ---------- 3,268 ---------- TOTAL U.S. GOVERNMENT & AGENCY SECURITIES (Cost $6,397) 6,422 ----------
9
DESCRIPTION PAR (000)/SHARES VALUE (000) ----------------------------------------------------------------- ASSET-BACKED SECURITIES - 1.9% HOME EQUITY - 1.1% Green Tree Home Improvement Loan Trust Series 1997-A, Class HEM2 7.900%, 03/15/28 $ 1,300 $ 1,358 GRMT Mortgage Loan Trust Series 2001-1A, Class M1 7.772%, 07/20/31 1,500 1,635 ---------- 2,993 ---------- MANUFACTURED HOUSING - 0.4% Green Tree Financial Series 1996-8, Class A7 8.050%, 10/15/27 975 1,005 ---------- OTHER - 0.4% Aircraft Finance Trust Series 1999-1A, Class C 8.000%, 05/15/24 (D) 839 211 Juniper Series 2000-1, Class A3 8.220%, 04/15/12 (D) 1,000 700 ---------- 911 ---------- TOTAL ASSET-BACKED SECURITIES (Cost $5,517) 4,909 ---------- CMO - PRIVATE MORTGAGE-BACKED SECURITY - 0.8% FIXED RATE - 0.8% Norwest Asset Securities Series 1998-16, Class A1 6.500%, 06/25/13 2,093 2,170 ---------- TOTAL CMO - PRIVATE MORTGAGE-BACKED SECURITY (Cost $2,113) 2,170 ---------- RELATED PARTY MONEY MARKET FUND - 1.4% First American Prime Obligations Fund, Class Y (E) 3,817,115 3,817 ---------- TOTAL RELATED PARTY MONEY MARKET FUND (Cost $3,817) 3,817 ---------- INVESTMENTS PURCHASED WITH CASH PROCEEDS FROM SECURITIES LENDING - 26.6% COMMERCIAL PAPER - 3.8% CS First Boston 1.638%, 12/01/03 1,245 1,245 Danske Bank 1.508%, 12/22/03 1,245 1,245 Goldman Sachs 1.518%, 08/28/03 1,618 1,618 Morgan Stanley 1.518%, 06/17/03 622 622 1.518%, 07/08/03 448 448 1.518%, 09/22/03 622 622 Orchard Park 1.475%, 01/06/04 1,245 1,245 UBS Financial 1.390%, 04/01/03 3,111 3,111 ---------- TOTAL COMMERCIAL PAPER 10,156 ---------- CORPORATE OBLIGATIONS - 2.9% CS First Boston 1.760%, 04/11/03 1,245 1,245 Deutsche Bank 1.470%, 04/11/03 622 622 1.580%, 12/11/03 498 498 General Electric Capital Corporation 1.355%, 07/09/07 $ 622 $ 622 Merrill Lynch 1.538%, 05/05/03 1,058 1,058 Monet Trust 1.360%, 12/28/03 1,245 1,245 SMM Trust 2002-M 1.450%, 09/23/03 1,245 1,245 URI Trust 1.460%, 09/18/03 ,245 1,245 ---------- TOTAL CORPORATE OBLIGATIONS 7,780 ---------- MONEY MARKET FUNDS - 2.5% AIM Liquid Assets Portfolio 2,115,886 2,116 Dreyfus Cash Manage Plus Fund 124,464 124 Evergreen Institutional Money Market Fund 435,624 436 HSBC Investor Money Market Fund - Class I 373,392 373 Merrill Lynch Premier Institutional Fund 2,410,680 2,411 Merrimac Cash Series Fund 373,392 373 One Group Institutional Prime Money Market Fund 746,783 747 Reserve Primary Fund 62,232 62 ---------- TOTAL MONEY MARKET FUNDS 6,642 ---------- OTHER SHORT-TERM INVESTMENTS - 2.4% Allied Irish Bank 1.340%, 05/09/03 1,245 1,245 1.330%, 06/02/03 622 622 Commonwealth Life 1.678%, 04/01/03 628 628 General Electric Capital Assurance 1.370%, 12/19/03 249 249 Premium Asset Trust 02-7 1.060%, 08/23/03 793 793 Security Life Denver 1.381%, 01/13/04 1,618 1,618 1.490%, 03/15/04 1,245 1,245 ---------- TOTAL OTHER SHORT-TERM INVESTMENTS 6,400 ---------- REPURCHASE AGREEMENTS - 15.0% Bear Stearns 1.420%, 04/10/03 2,489 2,489 CS First Boston 1.370%, 04/01/03 2,489 2,489 1.380%, 04/01/03 386 386 1.380%, 04/01/03 3,111 3,111 Goldman Sachs 1.520%, 04/01/03 1,867 1,867 1.420%, 04/07/03 1,245 1,245 1.360%, 06/10/03 622 622 1.400%, 06/11/03 622 622 Greenwich Capital Markets 1.430%, 04/01/03 3,734 3,734 Lehman Brothers 1.560%, 04/01/03 1,245 1,245 1.640%, 04/01/03 933 933 1.640%, 04/01/03 4,045 4,045 Merrill Lynch 1.360%, 04/01/03 3,734 3,734 1.500%, 04/01/03 1,867 1,867 1.560%, 04/01/03 1,556 1,556 1.560%, 04/01/03 2,489 2,489 Morgan Stanley 1.470%, 04/01/03 1,867 1,867 1.510%, 04/01/03 3,871 3,871
The accompanying notes are an integral part of the financial statements. 10
DESCRIPTION PAR (000) VALUE (000) ----------------------------------------------------------------- Salomon Smith Barney 1.540%, 04/01/03 $ 1,867 $ 1,867 ---------- TOTAL REPURCHASE AGREEMENTS 40,039 ---------- TOTAL INVESTMENTS PURCHASED WITH CASH PROCEEDS FROM SECURITIES LENDING (Cost $71,017) 71,017 ---------- TOTAL INVESTMENTS - 125.7% (Cost $329,709) 335,083 ---------- OTHER ASSETS AND LIABILITIES, NET - (25.7)% (68,513) ---------- TOTAL NET ASSETS - 100.0% $266,570 ----------
(A) This security or a portion of this security is out on loan at March 31, 2003. Total loaned securities had a value of $69,527,131 at March 31, 2003. See note 2 in Notes to Financial Statements. (B) Security sold within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "qualified institutional buyers." These securities have been determined to be liquid under the guidelines established by the Funds' board of directors. As of March 31, 2003, the value of these investments was $21,848,885 or 8.2% of total net assets. (C) Variable Rate Security - The rate shown is the rate in effect as of March 31, 2003. (D) Securities considered illiquid or restricted. See note 2 in Notes to Financial Statements. (E) This money market fund is advised by U.S. Bancorp Asset Management, Inc., which also serves as advisor for this Fund. See note 3 in Notes to Financial Statements. CMO - Collateralized Mortgage Obligation FHLB - Federal Home Loan Bank REIT - Real Estate Investment Trust HIGH INCOME BOND FUND
DESCRIPTION PAR (000)(I) VALUE (000) ----------------------------------------------------------------- HIGH YIELD CORPORATE BONDS - 84.1% CONSUMER GOODS - 4.8% Agrilink Foods, Callable 11/01/03 @ 105.938 11.875%, 11/01/08 $ 500 $ 542 Canandaigua Brands, Callable 03/01/04 @ 104.250 8.500%, 03/01/09 500 529 Constellation Brands, Series B, Callable 01/15/07 @ 104.063 8.125%, 01/15/12 250 261 Corn Products International 8.250%, 07/15/07 1,500 1,563 Dean Foods 6.625%, 05/15/09 500 512 Del Monte, Callable 12/15/07 @ 104.313 8.625%, 12/15/12 (A) 500 520 Delhaize America 7.375%, 04/15/06 500 502 9.000%, 04/15/31 1,000 985 Ingles Markets, Callable 12/01/06 @ 104.440 8.875%, 12/01/11 1,000 920 Playtex Family Products, Callable 06/01/06 @ 104.688 9.375%, 06/01/11 1,000 1,090 Roundy's, Callable 06/15/07 @ 104.438 8.875%, 06/15/12 1,000 995 Sealy Mattress, Series B, Callable 04/01/03 @ 105.437 10.875%, 12/15/07 (C) 500 526 Simmons, Callable 03/15/04 @ 105.125 10.250%, 03/15/09 1,000 1,075 Swift & Co., Callable 10/01/06 @ 106.250 12.500%, 01/01/10 (A) 750 727 ---------- 10,747 ---------- ENERGY - 9.2% ANR Pipeline, Callable 03/15/07 @ 104.438 8.875%, 03/15/10 (A) 250 266 Chesapeake Energy, Callable 04/01/06 @ 104.063 8.125%, 04/01/11 800 848 El Paso 6.950%, 12/15/07 (B) 1,000 835 7.000%, 05/15/11 (B) 3,000 2,370 7.750%, 01/15/32 (B) 2,000 1,430 El Paso Energy Partners, Callabe 12/01/07 @ 105.313 10.625%, 12/01/12 (A) (B) 1,000 1,092 Newfield Exploration, Callable 08/15/07 @ 104.188 8.375%, 08/15/12 1,000 1,085 Parker Drilling, Series B, Callable 11/15/04 @ 105.063 10.125%, 11/15/09 (B) 1,000 1,045
11
DESCRIPTION PAR (000)(I) VALUE (000) ----------------------------------------------------------------- Pogo Producing, Series B, Callable 04/01/03 @ 104.375 8.750%, 05/15/07 $ 500 $ 520 Premcor Refining, Callable 02/01/08 @ 104.750 9.500%, 02/01/13 (A) (B) 1,000 1,070 Pride International, Callable 06/01/04 @ 105.000 10.000%, 06/01/09 1,000 1,080 Southern Natural Gas, Callable 03/15/07 @ 104.440 8.875%, 03/15/10 (A) 250 264 Swift Energy, Callable 08/01/04 @ 105.120 10.250%, 08/01/09 1,000 1,040 Tesoro Petroleum, Callable 04/01/07 @ 104.813 9.625%, 04/01/12 1,000 860 Series B, Callable 11/01/05 @ 104.813 9.625%, 11/01/08 500 432 Vintage Petroleum, Callable 04/01/03 @ 103.234 8.625%, 02/01/09 500 508 Western Oil Sands 8.375%, 05/01/12 (D) 1,000 1,030 Westport Resources, Callable 11/01/06 @ 104.125 8.250%, 11/01/11 (A) 250 267 Williams 6.500%, 08/01/06 (B) 1,500 1,335 7.125%, 09/01/11 (B) 2,000 1,710 7.750%, 06/15/31 (B) 2,000 1,540 ---------- 20,627 ---------- MANUFACTURING - 21.9% Abitibi-Consolidated 8.550%, 08/01/10 (B) (D) 2,000 2,203 AK Steel, Callable 06/15/07 @ 103.875 7.750%, 06/15/12 500 460 American Axle & Manufacturing, Callable 03/01/04 @ 104.875 9.750%, 03/01/09 500 535 American Standard 7.375%, 02/01/08 (B) 1,000 1,080 Amkor Technologies, Callable 05/01/03 @ 104.625 9.250%, 05/01/06 (B) 500 490 Anchor Glass Container, Callable 02/15/08 @ 105.500 11.000%, 02/15/13 (A) 1,000 1,040 Appleton Papers, Series B, Callable 12/15/05 @ 106.250 12.500%, 12/15/08 500 564 Applied Extrusion Technologies, Series B, Callable 07/01/06 @ 105.370 10.750%, 07/01/11 1,000 680 Avaya, Callable 04/01/06 @ 105.563 11.125%, 04/01/09 500 512 Ball, Callable 12/15/07 @ 103.438 6.875%, 12/15/12 (A) $ 250 $ 258 BE Aerospace, Callable 11/01/03 @ 104.750 9.500%, 11/01/08 500 332 Beazer Homes USA, Callable 04/15/07 @ 104.190 8.375%, 04/15/12 1,000 1,045 Bowater Canada 7.950%, 11/15/11 (D) 500 512 Buckeye Technologies, Callable 04/01/03 @ 103.080 9.250%, 09/15/08 1,000 915 Cascades, Callable 02/15/08 @ 103.625 7.250%, 02/15/13 (A) (D) 1,000 1,040 Collins & Aikman Products, Callable 04/01/03 @ 103.833 11.500%, 04/15/06 (B) 425 368 Crown European Holdings, Callable 03/01/07 @ 104.750 9.500%, 03/01/11 (A) (D) 1,000 1,000 Cummins, Callable 12/01/06 @ 104.750 9.500%, 12/01/10 (A) 200 210 Dana 6.500%, 03/15/08 1,000 885 6.500%, 03/01/09 800 708 Diamond Brands Operating, Callable 04/15/03 @ 105.063 10.125%, 04/15/08 (E) (F) 50 -- Dura Operating, Series B, Callable 04/15/07 @ 104.313 8.625%, 04/15/12 500 477 Equistar Chemical Funding 10.125%, 09/01/08 750 718 FMC, Callable 11/01/06 @ 105.125 10.250%, 11/01/09 (A) 550 605 Georgia-Pacific 7.500%, 05/15/06 (B) 1,000 965 8.125%, 05/15/11 (B) 1,500 1,395 8.875%, 05/15/31 1,000 850 Glenoit, Callable 04/01/03 @ 105.500 11.000%, 04/15/07 (E) (F) 100 -- Greif Brothers, Callable 08/01/07 @ 104.438 8.875%, 08/01/12 (A) 700 731 Huntsman ICI Chemicals, Callable 07/01/04 @ 105.063 10.125%, 07/01/09 1,000 950 IMC Global, Series B 10.875%, 06/01/08 750 799 Johnsondiversey, Series B, Callable 05/15/07 @ 104.813 9.625%, 05/15/12 500 537 KB Home, Callable 02/01/07 @ 103.875 7.750%, 02/01/10 500 506 Lear, Series B 8.110%, 05/15/09 (B) 1,500 1,627
The accompanying notes are an integral part of the financial statements. 12
DESCRIPTION PAR (000)(I) VALUE (000) ----------------------------------------------------------------- Levi Strauss 7.000%, 11/01/06 $ 500 $ 430 Lucent Technologies 5.500%, 11/15/08 (B) 1,000 760 6.450%, 03/15/29 1,500 967 Lyondell Chemical, Callable 05/01/04 @ 105.440 10.875%, 05/01/09 (B) 1,500 1,387 Series B, Callable 05/01/04 @ 104.938 9.875%, 05/01/07 (B) 1,000 1,000 Massey Energy 6.950%, 03/01/07 1,000 860 Nortel Networks 6.125%, 02/15/06 (B) (D) 1,500 1,372 Nova Chemicals 7.400%, 04/01/09 (B) (D) 500 485 Oregon Steel Mills, Callable 07/15/06 @ 105.000 10.000%, 07/15/09 250 242 Owens-Brockway Glass Container, Callable 02/15/06 @ 104.440 8.875%, 02/15/09 1,000 1,032 Owens-Illinois 8.100%, 05/15/07 1,000 980 Perkinelmer, Callable 01/15/08 @ 104.438 8.875%, 01/15/13 (A) 500 517 Russell, Callable 05/01/06 @ 104.625 9.250%, 05/01/10 500 540 Schuler Homes, Callable 07/15/05 @ 104.690 9.375%, 07/15/09 1,000 1,070 Sequa 9.000%, 08/01/09 1,500 1,485 Stone Container, Callable 07/01/07 @ 104.188 8.375%, 07/01/12 (B) 1,300 1,391 Technical Olympic USA, Callable 07/01/06 @ 104.500 9.000%, 07/01/10 1,000 990 TRW Automotive, Callable 02/15/08 @ 104.688 9.375%, 02/15/13 (A) 500 504 Tyco International 6.375%, 02/15/06 (D) 1,000 971 6.750%, 02/15/11 (D) 3,000 2,820 6.875%, 01/15/29 (D) 1,000 880 WCI Communities, Callable 05/01/07 @ 104.563 9.125%, 05/01/12 1,000 960 William Lyon Homes, Callable 04/01/08 @ 105.375 10.750%, 04/01/13 1,000 986 Xerox 9.750%, 01/15/09 (A) (B) 500 532 7.200%, 04/01/16 (B) 1,000 880 ---------- 49,038 ---------- REAL ESTATE - 0.6% Meristar Hospitality 9.125%, 01/15/11 $ 1,000 $ 855 Ventas Realty 9.000%, 05/01/12 500 535 ---------- 1,390 ---------- SERVICES - 31.8% Acme Television, Series B, Callable 04/01/03 @ 102.719 10.875%, 09/30/04 (C) 500 514 Allied Waste North America, Series B, Callable 01/01/04 @ 103.938 7.875%, 01/01/09 (B) 2,000 2,047 Callable 08/01/04 @ 105.000 10.000%, 08/01/09 (B) 2,000 2,077 AMC Entertainment, Callable 02/01/07 @ 104.938 9.875%, 02/01/12 (B) 500 502 American Media, Callable 01/15/07 @ 104.438 8.875%, 01/15/11 (A) 100 108 Asbury Automotive Group, Callable 06/15/07 @ 104.500 9.000%, 06/15/12 1,000 852 Autonation 9.000%, 08/01/08 1,500 1,571 Bally Total Fitness Holdings, Series D, Callable 04/01/03 @ 104.938 9.875%, 10/15/07 (B) 500 419 Biovail, Callable 04/01/06 @ 103.938 7.875%, 04/01/10 (D) 1,000 1,042 Boca Resorts, Callable 04/15/04 @ 104.938 9.875%, 04/15/09 1,000 1,035 Boyd Gaming, Callable 12/15/07 @ 103.875 7.750%, 12/15/12 (A) 1,000 1,000 British Sky Broadcasting 6.875%, 02/23/09 (D) 1,000 1,059 Buffets, Callable 07/15/06 @ 105.625 11.250%, 07/15/10 500 431 Charter Communications Holdings, Callable 04/01/04 @ 104.313 8.625%, 04/01/09 2,500 1,175 Corus Entertainment, Callable 03/01/07 @ 104.375 8.750%, 03/01/12 (D) 500 520 Coventry Health Care, Callable 02/15/07 @ 104.063 8.125%, 02/15/12 750 801 CSC Holdings, Callable 04/01/03 @ 104.800 9.875%, 02/15/13 (B) 750 786 Series B 7.625%, 04/01/11 2,000 2,010 Dex Media East, Callable 11/15/07 @ 106.063 12.125%, 11/15/12 (A) 500 582
13
DESCRIPTION PAR (000)(I) VALUE (000) ----------------------------------------------------------------- DirecTV Holdings, Callable 03/15/08 @ 104.188 8.375%, 03/15/13 (A) $ 1,000 $ 1,104 Dominos, Series B, Callable 01/15/04 @ 105.188 10.375%, 01/15/09 1,100 1,188 Echostar DBS, Callable 01/15/06 @ 104.563 9.125%, 01/15/09 3,000 3,270 Emmis Communications, Series B, Callable 03/15/04 @ 104.063 8.125%, 03/15/09 (B) 500 518 Fisher Scientific International, Callable 05/01/07 @ 104.060 8.125%, 05/01/12 (A) (B) 1,000 1,065 Gap 6.900%, 09/15/07 500 515 Hanger Orthopedic, Callable 02/15/06 @ 105.188 10.375%, 02/15/09 350 375 HCA Columbia Healthcare 8.750%, 09/01/10 3,500 4,062 Hilton Hotels 8.250%, 02/15/11 1,000 1,033 HMH Properties, Series B, Callable 08/01/03 @ 103.985 7.875%, 08/01/08 (B) 1,025 966 Hollywood Entertainment, Callable 03/15/07 @ 104.813 9.625%, 03/15/11 750 776 Houghton Mifflin, Callable 02/01/08 @ 104.938 9.875%, 02/01/13 (A) 1,000 1,083 IASIS Healthcare, Callable 10/15/04 @ 106.500 13.000%, 10/15/09 1,000 1,103 Iron Mountain, Callable 04/01/06 @ 104.313 8.625%, 04/01/13 500 528 Isle of Capri Casinos, Callable 04/15/04 @ 104.375 8.750%, 04/15/09 1,500 1,553 J.C. Penney 7.600%, 04/01/07 (B) 1,000 1,015 7.950%, 04/01/17 1,000 960 Lamar Media, Callable 04/01/03 @ 104.313 8.625%, 09/15/07 500 522 Mandalay Resort Group, Series B 10.250%, 08/01/07 (B) 1,500 1,616 Mediacom, Callable 01/15/06 @ 104.750 9.500%, 01/15/13 1,000 1,038 MGM Mirage 8.375%, 02/01/11 (B) 2,500 2,669 Mohegan Tribal Gaming 8.125%, 01/01/06 1,500 1,575 Moore North America, Callable 01/15/07 @ 103.938 7.875%, 01/15/11 (A) 250 258 Nextel Communications, Callable 04/01/03 @ 105.325 10.650%, 09/15/07 (C) $ 1,000 $ 1,049 Park Place Entertainment 8.875%, 09/15/08 2,000 2,125 Paxson Communications, Callable 01/15/06 @ 106.125 12.250%, 01/15/09 750 589 Pegasus Communications, Series B, Callable 04/01/03 @ 104.875 9.750%, 12/01/06 300 228 Penn National Gaming, Callable 03/15/06 @ 104.440 8.875%, 03/15/10 1,000 1,025 Premier Parks, Callable 04/01/03 @ 105.000 10.000%, 04/01/08 (C) 1,000 970 Primedia, Callable 05/15/06 @ 104.438 8.875%, 05/15/11 800 806 R. H. Donnelley Finance, Callable 12/15/07 @ 105.438 10.875%, 12/15/12 (A) 1,000 1,145 Resorts International Hotel & Casino, Callable 03/15/07 @ 106.000 11.500%, 03/15/09 800 696 Rite Aid 7.125%, 01/15/07 (B) 1,500 1,343 Rotech Healthcare, Callable 04/01/07 @ 104.750 9.500%, 04/01/12 (A) 750 741 Royal Caribbean Cruises 8.250%, 04/01/05 (B) (D) 1,000 975 Service Corporation International 7.700%, 04/15/09 1,000 983 Sinclair Broadcast Group, Callable 03/15/07 @ 104.000 8.000%, 03/15/12 (A) 1,000 1,030 Six Flags, Callable 02/01/06 @ 104.438 8.875%, 02/01/10 500 464 Starwood Hotels & Resorts 6.750%, 11/15/05 1,000 1,010 Station Casinos, Callable 07/01/05 @ 103.703 9.875%, 07/01/10 500 549 Triad Hospital Holdings, Series B, Callable 05/15/04 @ 105.500 11.000%, 05/15/09 750 827 Tricon Global Restaurant 7.650%, 05/15/08 1,000 1,075 8.875%, 04/15/11 600 675 United Rentals, Series B, Callable 04/15/05 @ 105.375 10.750%, 04/15/08 (B) 500 518 Callable 01/15/04 @ 104.625 9.250%, 01/15/09 (B) 1,000 870 Venetian Casino, Callable 06/15/06 @ 105.500 11.000%, 06/15/10 500 525
The accompanying notes are an integral part of the financial statements. 14
DESCRIPTION PAR (000)(I) VALUE (000) ----------------------------------------------------------------- Waste Management 6.500%, 11/15/08 $ 1,500 $ 1,632 7.750%, 05/15/32 1,000 1,139 Wynn Las Vegas, Callable 11/01/06 @ 112.000 12.000%, 11/01/10 500 523 Young Broadcasting, Callable 03/01/06 @ 105.000 10.000%, 03/01/11 500 534 ---------- 71,369 ---------- TRANSPORTATION - 1.0% CP Ships 10.375%, 07/15/12 500 525 Continental Airlines, Series 2001-1, Class B 7.033%, 12/15/12 928 455 Delta Air Lines 7.900%, 12/15/09 1,000 520 Northwest Airlines 9.875%, 03/15/07 500 258 Stena, Callable 04/01/03 @ 104.375 8.750%, 06/15/07 (D) 525 542 ---------- 2,300 ---------- UTILITIES - 14.8% AES 9.375%, 09/15/10 (B) 3,000 2,588 Allegheny Energy Supply 8.250%, 04/15/12 (A) 1,000 755 Aquila 9.450%, 02/01/11 1,000 845 Calpine 7.625%, 04/15/06 (B) 500 293 8.500%, 02/15/11 (B) 1,500 844 CMS Energy 7.500%, 01/15/09 1,500 1,245 8.500%, 04/15/11 1,000 840 Crown Castle International, Callable 08/01/04 @ 105.625 11.250%, 08/01/11 (C) 700 560 Callable 08/01/05 @ 105.375 10.750%, 08/01/11 (B) 500 483 Illinova, Callable 07/15/03 @ 103.450 7.500%, 07/15/25 800 654 Mirant Americas Generation 8.300%, 05/01/11 1,000 510 Mirant Mid-Atlantic, Series C 10.060%, 12/30/28 974 829 Mission Energy Holdings 13.500%, 07/15/08 500 190 Nevada Power, Callable 10/15/06 @ 105.440 10.875%, 10/15/09 (A) 2,000 2,060 Nextel Communications, Callable 11/15/04 @ 104.690 9.375%, 11/15/09 (B) 4,000 4,205 Northwestern 8.750%, 03/15/12 800 616 Panamsat, Callable 02/01/07 @ 104.250 8.500%, 02/01/12 (A) 1,000 1,030 PSEG Energy Holdings 8.625%, 02/15/08 (B) $ 1,500 $ 1,526 Qwest 8.875%, 03/15/12 (A) 1,000 1,063 Qwest Capital Funding 7.750%, 08/15/06 3,000 2,438 6.875%, 07/15/28 1,000 685 Qwest Services, Callable 12/15/06 @ 106.750 13.500%, 12/15/10 (A) 1,000 1,058 Telus 7.500%, 06/01/07 (D) 1,000 1,040 8.000%, 06/01/11 (D) 3,000 3,120 Triton PCS, Callable 11/15/06 @ 104.375 8.750%, 11/15/11 500 420 Viatel, Callable 04/15/03 @ 105.625 11.250%, 04/15/08 (E) (G) 75 Voicestream Wireless, Callable 11/15/04 @ 105.190 10.375%, 11/15/09 1,000 1,100 Callable 11/15/04 @ 105.938 10.875%, 11/15/09 (C) 650 611 Western Resources 9.750%, 05/01/07 1,500 1,598 ---------- 33,206 ---------- TOTAL HIGH YIELD CORPORATE BONDS (Cost $183,215) 188,677 ---------- CORPORATE BONDS - 7.2% FINANCE - 0.9% Capital One Bank 6.700%, 05/15/08 500 482 Ford Motor Credit 6.875%, 02/01/06 1,000 985 5.800%, 01/12/09 500 443 ---------- 1,910 ---------- MANUFACTURING - 0.7% Noranda 8.375%, 02/15/11 1,000 1,033 Phelps Dodge 8.750%, 06/01/11 (B) 500 542 ---------- 1,575 ---------- SERVICES - 1.1% Comcast Cable Communications 7.125%, 06/15/13 500 543 Tenet Healthcare 6.500%, 06/01/12 (B) 2,000 1,930 ---------- 2,473 ---------- TRANSPORTATION - 1.1% American Airlines, Series 1999-1, Class A-2 7.024%, 04/15/11 2,000 1,540 Continental Airlines, Series 99-2 7.056%, 09/15/09 175 141 Delta Air Lines, Series 2000-1, Class B 7.920%, 05/18/12 1,000 730 Northwest Airlines, Series 991A 6.810%, 08/01/21 168 126 ---------- 2,537 ----------
15
DESCRIPTION PAR (000)(I)/SHARES VALUE (000) ----------------------------------------------------------------- UTILITIES - 3.4% Alliant Energy Resources 9.750%, 01/15/13 (A) $ 1,000 $ 1,148 AT&T Wireless Services 7.875%, 03/01/11 500 545 Centerpoint Energy Resources 7.875%, 04/01/13 (A) 1,500 1,537 France Telecom 8.500%, 03/01/31 (C) 1,000 1,291 Sprint Capital 8.375%, 03/15/12 (B) 1,000 1,060 TXU, Series J 6.375%, 06/15/06 (B) 2,000 1,960 ---------- 7,541 ---------- TOTAL CORPORATE BONDS (Cost $16,177) 16,036 ---------- U.S. GOVERNMENT & AGENCY SECURITIES - 2.3% U.S. TREASURIES - 2.3% U.S. Treasury Notes 3.000%, 02/29/04 (B) 1,000 1,017 2.125%, 08/31/04 (B) 1,000 1,012 1.625%, 01/31/05 (B) 1,000 1,003 5.750%, 11/15/05 (B) 2,000 2,202 ---------- TOTAL U.S. GOVERNMENT & AGENCY SECURITIES (Cost $5,203) 5,234 ---------- ASSET-BACKED SECURITIES - 0.1% MANUFACTURED HOUSING - 0.0% Green Tree Financial Series 1998-1, Class A1 6.040%, 11/01/29 31 31 ---------- OTHER - 0.1% Aircraft Finance Trust Series 1999-1A, Class C 8.000%, 05/15/24 (E) 839 211 ---------- TOTAL ASSET-BACKED SECURITIES (Cost $805) 242 ---------- COMMON STOCKS - 0.2% BERMUDA - 0.0% Viatel Holdings (E) 294 -- ---------- GREAT BRITAIN - 0.2% Jazztel (H) (EU) 1,759,722 288 ---------- UNITED STATES - 0.0% NII Holdings, Class B (H) 623 16 ---------- TOTAL COMMON STOCKS (Cost $2,316) 304 ---------- PREFERRED STOCKS - 0.1% CAYMAN ISLANDS - 0.0% NII Holdings, Series B (E) (G) 5,751 4 ---------- UNITED STATES - 0.1% Nebco Evans Holdings PIK (H) 300 -- Nextel Communications PIK, Series D (H) 80 85 Pegasus Communications (E) (G) 15,109 -- Sinclair Capital 750 80 ---------- 165 ---------- TOTAL PREFERRED STOCKS (Cost $154) 169 ---------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITY - 0.0% FIXED RATE - 0.0% FNMA Pool 6.695%, 08/01/05, #109031 $ 35 $ 37 ---------- TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITY (Cost $34) 37 ---------- WARRANTS - 0.0% CANADA - 0.0% AT&T Canada, Expires 08/15/07 (A) (E) (G) (H) 100 -- ---------- NORWAY - 0.0% Enitel Asa, Expires 04/03/05 (A) (H) 1,000 -- ---------- UNITED STATES - 0.0% Electronic Retailing Systems International, Expires 02/01/04 (H) 75 -- Sterling Chemical Holdings, Expires 08/15/08 (G) (H) 100 -- UIH Australia Pacific, Expires 05/15/06 (A) (H) 150 -- ---------- -- ---------- TOTAL WARRANTS (Cost $6) -- ---------- RELATED PARTY MONEY MARKET FUND - 2.8% First American Prime Obligations Fund, Class Y (J) 6,314,535 6,315 ---------- TOTAL RELATED PARTY MONEY MARKET FUND (Cost $6,315) 6,315 ---------- INVESTMENTS PURCHASED WITH CASH PROCEEDS FROM SECURITIES LENDING - 25.2% COMMERCIAL PAPER - 3.6% CS First Boston 1.638%, 12/01/03 991 991 Danske Bank 1.508%, 12/22/03 991 991 Goldman Sachs 1.518%, 08/28/03 1,289 1,289 Morgan Stanley 1.518%, 06/17/03 496 496 1.518%, 07/08/03 357 357 1.518%, 09/22/03 496 496 Orchard Park 1.475%, 01/06/04 991 991 UBS Financial 1.390%, 04/01/03 2,478 2,478 ---------- TOTAL COMMERCIAL PAPER 8,089 ---------- CORPORATE OBLIGATIONS - 2.7% CS First Boston 1.760%, 04/11/03 991 991 Deutsche Bank 1.470%, 04/11/03 496 496 1.580%, 12/11/03 397 397 General Electric Capital Corporation 1.355%, 07/09/07 496 496 Merrill Lynch 1.538%, 05/05/03 843 843 Monet Trust 1.360%, 12/28/03 991 991
The accompanying notes are an integral part of the financial statements. 16
DESCRIPTION PAR (000)(I)/SHARES VALUE (000) ----------------------------------------------------------------- SMM Trust 2002-M 1.450%, 09/23/03 $ 991 $ 991 URI Trust 1.460%, 09/18/03 991 991 ---------- TOTAL CORPORATE OBLIGATIONS 6,196 ---------- MONEY MARKET FUNDS - 2.4% AIM Liquid Assets Portfolio 1,685,432 1,685 Dreyfus Cash Manage Plus Fund 99,143 99 Evergreen Institutional Money Market Fund 347,001 347 HSBC Investor Money Market Fund - Class I 297,429 298 Merrill Lynch Premier Institutional Fund 1,920,254 1,921 Merrimac Cash Series Fund 297,429 297 One Group Institutional Prime Money Market Fund 594,858 595 Reserve Primary Fund 49,572 50 ---------- TOTAL MONEY MARKET FUNDS 5,292 ---------- OTHER SHORT-TERM INVESTMENTS - 2.3% Allied Irish Bank 1.340%, 05/09/03 991 991 1.330%, 06/02/03 496 496 Commonwealth Life 1.678%, 04/01/03 501 501 General Electric Capital Assurance 1.370%, 12/19/03 198 198 Premium Asset Trust 02-7 1.060%, 08/23/03 632 632 Security Life Denver 1.381%, 01/13/04 1,289 1,289 1.490%, 03/15/04 991 991 ---------- TOTAL OTHER SHORT-TERM INVESTMENTS 5,098 ---------- REPURCHASE AGREEMENTS - 14.2% Bear Stearns 1.420%, 04/10/03 1,983 1,983 CS First Boston 1.370%, 04/01/03 1,983 1,983 1.380%, 04/01/03 307 307 1.380%, 04/01/03 2,479 2,479 Goldman Sachs 1.520%, 04/01/03 1,487 1,487 1.420%, 04/07/03 991 991 1.360%, 06/10/03 496 496 1.400%, 06/11/03 496 496 Greenwich Capital Markets 1.430%, 04/01/03 2,974 2,974 Lehman Brothers 1.560%, 04/01/03 991 991 1.640%, 04/01/03 744 744 1.640%, 04/01/03 3,222 3,222 Merrill Lynch 1.360%, 04/01/03 2,974 2,974 1.500%, 04/01/03 1,487 1,487 1.560%, 04/01/03 1,239 1,239 1.560%, 04/01/03 1,983 1,983 Morgan Stanley 1.470%, 04/01/03 1,487 1,487 1.510%, 04/01/03 3,084 3,084 Salomon Smith Barney 1.540%, 04/01/03 1,487 1,487 ---------- TOTAL REPURCHASE AGREEMENTS 31,894 ---------- ----------
DESCRIPTION VALUE (000) ----------------------------------------------------------------- TOTAL INVESTMENTS PURCHASED WITH CASH PROCEEDS FROM SECURITIES LENDING (Cost $56,569) $ 56,569 ---------- TOTAL INVESTMENTS - 122.0% (Cost $270,794) 273,583 ---------- OTHER ASSETS AND LIABILITIES, NET - (22.0)% (49,282) ---------- TOTAL NET ASSETS - 100.0% $224,301 ----------
(A) Security sold within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "qualified institutional buyers." These securities have been determined to be liquid under the guidelines established by the Funds' board of directors. As of March 31, 2003, the value of these investments was $27,409,955 or 12.2% of total net assets. (B) This security or a portion of this security is out on loan at March 31, 2003. Total loaned securities had a value of $55,134,987 at March 31, 2003. See note 2 in Notes to Financial Statements. (C) Delayed Interest (Step-Bonds) - Represents securities that remain zero-coupon securities until a predetermined date at which time the stated coupon rate becomes effective and interest becomes payable at regular intervals. Interest rate shown represents current yield at March 31, 2003, based upon the estimated timing and amount of future interest and principal payments. (D) Represents a foreign high yield (non-investment grade) bond. On March 31, 2003, the value of these investments was $20,611,928, which represents 9.2% of total net assets. (E) Securities considered illiquid or restricted. See note 2 in Notes to Financial Statements. (F) Security currently in default. (G) Security valued at fair value under guidelines established and approved by the Funds' board of directors. Total fair valued securities had a value of $4,313, which represents 0.0% of total net assets at March 31, 2003. See note 2 in Notes to Financial Statements. (H) Non-income producing security. (I) In U.S. dollars unless otherwise indicated. (J) This money market fund is advised by U.S. Bancorp Asset Management, Inc., which also serves as advisor for this Fund. See note 3 in Notes to Financial Statements. EU - Euro FNMA - Federal National Mortgage Association PIK - Payment-in-kind interest is generally paid by issuing additional par of the security rather than paying cash. 17 INTERMEDIATE GOVERNMENT BOND FUND
DESCRIPTION PAR (000)/SHARES VALUE (000) ---------------------------------------------------------------- U.S. GOVERNMENT & AGENCY SECURITIES - 99.5% U.S. AGENCY DEBENTURES - 10.4% FHLB 4.125%, 01/14/05 $ 10,000 $ 10,454 6.625%, 11/15/10 7,500 8,830 FHLMC 3.250%, 02/25/08 5,000 5,020 5.875%, 03/21/11 7,500 8,262 FNMA 2.625%, 04/21/06 (A) 5,000 5,000 3.500%, 01/28/08 10,000 10,063 ---------- 47,629 ---------- U.S. TREASURIES - 89.1% U.S. Treasury Bond (STRIPS) 0.000%, 11/15/04 (B) 100,795 98,637 U.S. Treasury Bonds 11.875%, 11/15/03 9,700 10,343 9.375%, 02/15/06 44,150 53,332 5.000%, 08/15/11 5,000 5,484 U.S. Treasury Note (TIPS) 3.625%, 01/15/08 3,766 4,214 U.S. Treasury Notes 2.875%, 06/30/04 15,000 15,307 2.125%, 10/31/04 22,000 22,271 1.625%, 01/31/05 13,000 13,043 7.000%, 07/15/06 82,750 95,434 6.500%, 10/15/06 16,550 18,929 6.000%, 08/15/09 23,600 27,376 5.000%, 02/15/11 15,500 17,035 4.000%, 11/15/12 13,000 13,189 3.875%, 02/15/13 12,500 12,555 ---------- 407,149 ---------- TOTAL U.S. GOVERNMENT & AGENCY SECURITIES (Cost $428,707) 454,778 ---------- RELATED PARTY MONEY MARKET FUND - 0.9% First American Prime Obligations Fund, Class Y (C) 3,830,185 3,830 ---------- TOTAL RELATED PARTY MONEY MARKET FUND (Cost $3,830) 3,830 ---------- TOTAL INVESTMENTS - 100.4% (Cost $432,537) 458,608 ---------- OTHER ASSETS AND LIABILITIES, NET - (0.4)% (1,681) ---------- TOTAL NET ASSETS - 100.0% $456,927 ----------
(A) On March 31, 2003, the total cost of investments purchased on a when-issued basis was $4,995,313. (B) Principal only. (C) This money market fund is advised by U.S. Bancorp Asset Management, Inc., which also serves as advisor for this Fund. See note 3 in Notes to Financial Statements. FHLB - Federal Home Loan Bank FHLMC - Federal Home Loan Mortgage Corporation FNMA - Federal National Mortgage Association STRIPS - Separate Trading of Registered Interest and Principal of Securities TIPS - Treasury Inflation Protection Security INTERMEDIATE TERM BOND FUND
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- CORPORATE BONDS - 48.0% CONSUMER GOODS - 2.5% Bristol-Myers Squibb 4.750%, 10/01/06 $ 2,725 $ 2,891 Colgate-Palmolive, Series B 7.090%, 05/18/05 4,130 4,585 Conagra Foods 7.875%, 09/15/10 7,100 8,554 General Mills 6.000%, 02/15/12 8,000 8,795 Kraft Foods 6.250%, 06/01/12 3,500 3,643 Proctor & Gamble 8.000%, 11/15/03 50 52 Tyson Foods 6.625%, 10/01/04 5,165 5,347 ---------- 33,867 ---------- ENERGY - 2.6% Amerada Hess 6.650%, 08/15/11 4,360 4,732 Anadarko Petroleum 6.125%, 03/15/12 4,000 4,400 BP Amoco 8.500%, 04/15/07 1,000 1,180 Conoco 5.900%, 04/15/04 3,500 3,651 Conoco Funding 6.350%, 10/15/11 (A) 3,000 3,387 Duke Capital 7.250%, 10/01/04 (A) 1,500 1,542 Occidental Petroleum 4.250%, 03/15/10 5,000 5,011 Oneok 7.750%, 08/15/06 2,500 2,757 Southern California Gas 4.800%, 10/01/12 3,000 3,092 Texaco Capital 7.090%, 02/01/07 1,000 1,138 Valero Energy 6.875%, 04/15/12 (A) 3,415 3,668 ---------- 34,558 ---------- FINANCE - 22.9% ABN AMRO 7.250%, 05/31/05 (A) 6,800 7,528 Aetna Services 6.750%, 09/15/13 1,375 1,523 Amsouth Bancorp 7.750%, 05/15/04 2,525 2,692 Associated P&C Holdings 6.750%, 07/15/03 (B) 1,500 1,517 Bank of America 7.125%, 09/15/06 5,000 5,712 Bank One 6.625%, 04/15/03 50 50 BankBoston 6.375%, 04/15/08 1,450 1,609 Bear Stearns 6.875%, 10/01/05 5,000 5,526 Boeing Capital 5.800%, 01/15/13 5,000 4,955
The accompanying notes are an integral part of the financial statements. 18
IDESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- Citigroup 5.625%, 08/27/12 (A) $ 7,000 $ 7,476 Core Investment Grade Trust 4.727%, 11/30/07 (A) 43,045 43,833 Countrywide Home Loans, Series K 4.250%, 12/19/07 (A) 8,025 8,232 Credit Suisse First Boston 5.875%, 08/01/06 3,500 3,772 Ford Motor Credit 5.800%, 01/12/09 14,400 12,760 General Electric Capital, Series A 4.250%, 01/15/08 (A) 20,000 20,763 General Motors Acceptance 6.125%, 08/28/07 (A) 18,250 18,576 Goldman Sachs 5.500%, 11/15/14 7,500 7,753 Household Finance 4.625%, 01/15/08 16,310 16,779 HSBC Bank 6.950%, 03/15/11 4,225 4,927 International Lease Finance 5.700%, 11/03/03 2,000 2,050 Series G 8.150%, 10/01/04 2,500 2,697 J. P. Morgan Chase 4.000%, 02/01/08 (A) 10,625 10,789 6.625%, 03/15/12 (A) 2,050 2,286 John Deere Capital 5.520%, 04/30/04 3,000 3,120 7.000%, 03/15/12 3,125 3,623 Key Bank 7.000%, 02/01/11 4,000 4,607 Lehman Brothers Holdings 11.625%, 05/15/05 2,450 2,889 MBNA America Bank 6.750%, 03/15/08 (B) 5,075 5,428 Merrill Lynch, Series B 2.470%, 03/10/06 6,060 5,962 Morgan Stanley 3.625%, 04/01/08 (A) 9,705 9,668 6.799%, 06/15/12 (B) 33,090 36,582 National Rural Utilities 5.750%, 08/28/09 3,850 4,140 Newcourt Credit Group Series A 7.125%, 12/17/03 1,785 1,833 Series B 6.875%, 02/16/05 2,800 2,961 Safeco 7.875%, 04/01/05 1,000 1,000 Sears Roebuck Acceptance 6.700%, 04/15/12 (A) 2,000 2,017 Suntrust Banks 6.125%, 02/15/04 3,000 3,121 Synovus Financial 6.125%, 10/15/03 3,000 3,075 Wachovia 7.050%, 08/01/05 7,000 7,788 Washington Mutual Bank 5.500%, 01/15/13 (A) 2,375 2,499 Wells Fargo 6.375%, 08/01/11 (A) 6,700 7,578 Westdeutsche Landesbank 6.750%, 06/15/05 $ 6,415 $ 6,988 ---------- 308,684 ---------- MANUFACTURING - 3.8% Aluminum Company of America 5.375%, 01/15/13 3,000 3,140 Centex 7.500%, 01/15/12 3,000 3,395 DaimlerChrysler 4.750%, 01/15/08 10,500 10,599 Delphi Auto Systems 6.550%, 06/15/06 (A) 4,000 4,279 Dupont 8.125%, 03/15/04 1,000 1,060 Lockheed Martin 7.700%, 06/15/08 5,750 6,755 Praxair 6.900%, 11/01/06 1,000 1,125 Raytheon 6.150%, 11/01/08 10,500 11,401 Tyco International 4.950%, 08/01/03 (A) 3,000 3,000 Weyerhaeuser 5.250%, 12/15/09 6,500 6,650 ---------- 51,404 ---------- REAL ESTATE - 1.2% Boston Properties (REIT) 6.250%, 01/15/13 (B) 3,245 3,396 EOP Operating 6.750%, 02/15/08 5,000 5,542 Mack-Cali Realty (REIT) 7.250%, 03/15/09 3,500 3,944 Security Capital Group 7.750%, 11/15/03 3,700 3,850 ---------- 16,732 ---------- SERVICES - 4.6% AOL Time Warner 6.875%, 05/01/12 9,975 10,599 AT&T Broadband 8.375%, 03/15/13 8,000 9,427 Dayton Hudson 5.875%, 11/01/08 5,000 5,528 Federated Department Stores 6.625%, 09/01/08 3,825 4,202 Kroger 7.450%, 03/01/08 8,015 9,129 News America 6.625%, 01/09/08 (A) 5,000 5,498 UnitedHealth Group 6.600%, 12/01/03 6,225 6,434 Viacom 5.625%, 08/15/12 (A) 2,000 2,135 Wyeth 5.250%, 03/15/13 (A) 8,550 8,782 ---------- 61,734 ---------- TRANSPORTATION - 1.2% Federal Express, Series A2 7.890%, 09/23/08 602 686 Louisville & Nashville Railroad, Series F 3.375%, 04/01/03 (C) 636 636
19
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- Northwest Airlines, Series 2001-01, Class A-1 7.041%, 04/01/22 $ 5,000 $ 4,500 Southwest Airlines, Series 2001-1, Class A-1 5.100%, 05/01/06 3,327 3,540 Union Pacific 6.625%, 02/01/08 (A) 6,000 6,795 ---------- 16,157 ---------- UTILITIES - 8.8% AT&T 7.500%, 04/01/04 1,150 1,196 7.000%, 11/15/06 (A) 7,460 7,861 AT&T Wireless Services 7.875%, 03/01/11 1,000 1,090 8.125%, 05/01/12 1,895 2,066 Baltimore Gas & Electric 5.250%, 12/15/06 4,985 5,205 Bellsouth Capital Funding 7.750%, 02/15/10 3,000 3,586 British Telecom 8.375%, 12/15/10 2,000 2,417 Citizens Communications 7.625%, 08/15/08 (A) 12,970 14,818 Conectiv, Series A 6.730%, 06/01/06 4,200 4,469 Constellation Energy 7.000%, 04/01/12 (A) 3,550 3,953 Deutsche Telecom 8.000%, 06/15/10 2,000 2,337 Dominion Resources 3.875%, 01/15/04 4,500 4,561 DTE Energy 7.050%, 06/01/11 2,570 2,923 FPL Group Capital 7.625%, 09/15/06 4,540 5,151 France Telecom 9.250%, 03/01/11 (D) 3,525 4,223 GTE California 6.700%, 09/01/09 1,000 1,130 Northern State Power - Minnesota, Series B 8.000%, 08/28/12 5,500 6,741 Oncor Electric Delivery 6.375%, 01/15/15 (B) 4,000 4,358 Pepco Holdings 3.750%, 02/15/06 5,000 5,055 PG&E 6.250%, 08/01/03 50 50 PSEG Power 6.950%, 06/01/12 (A) 4,500 4,974 PSI Energy 7.850%, 10/15/07 3,450 3,788 SBC Communications 5.875%, 08/15/12 2,000 2,173 Southern Capital Funding, Series A 5.300%, 02/01/07 4,000 4,249 Southwestern Bell Telephone, Series C 6.560%, 11/15/05 1,000 1,105 Sprint Capital 6.125%, 11/15/08 3,760 3,741 6.375%, 05/01/09 (A) 3,000 2,977 Verizon Global Funding 7.250%, 12/01/10 3,750 4,340 6.875%, 06/15/12 (A) 3,925 4,471 Vodafone Group 7.625%, 02/15/05 (A) (B) $ 3,500 $ 3,855 ---------- 118,863 ---------- YANKEE - 0.4% Pemex Project 9.125%, 10/13/10 3,500 4,060 Pohang Iron & Steel 7.125%, 07/15/04 875 924 Sweden Kingdom, Callable 11/01/10 @ 100 10.250%, 11/01/15 400 538 ---------- 5,522 ---------- TOTAL CORPORATE BONDS (Cost $629,157) 647,521 ---------- U.S. GOVERNMENT & AGENCY SECURITIES - 28.4% U.S. AGENCY DEBENTURES - 16.4% FFCB 4.250%, 07/01/03 (A) 10,000 10,077 6.100%, 11/04/04 (A) 6,350 6,811 5.750%, 09/01/05 (A) 5,000 5,455 FHLB 4.500%, 07/07/03 (A) 10,000 10,089 6.250%, 08/13/04 (A) 3,000 3,197 3.875%, 12/15/04 (A) 5,000 5,199 6.060%, 05/24/06 (A) 5,000 5,565 6.090%, 06/02/06 (A) 4,000 4,460 6.375%, 08/15/06 (A) 6,000 6,769 5.795%, 06/19/08 (A) 500 563 FHLMC 5.750%, 07/15/03 (A) 10,000 10,132 6.875%, 01/15/05 (A) 13,000 14,220 2.625%, 05/13/05, Callable 05/13/03 @ 100 (A) 5,000 5,006 5.950%, 01/19/06 (A) 6,000 6,624 3.500%, 09/15/07 (A) 13,505 13,859 3.250%, 02/25/08, Callable 02/25/05 @ 100 13,000 13,053 FNMA 4.750%, 11/14/03 (A) 15,000 15,337 5.125%, 02/13/04 (A) 5,000 5,173 2.400%, 11/19/04, Callable 05/19/03 @ 100 (A) 5,000 5,006 7.125%, 02/15/05 (A) 5,000 5,509 3.875%, 03/15/05 (A) 500 522 6.400%, 09/27/05 (A) 6,000 6,657 6.000%, 12/15/05 (A) 375 414 2.750%, 12/16/05, Callable 12/16/03 @ 100 (A) 13,300 13,400 2.625%, 04/21/06, Callable 04/21/04 @ 100 (E) 13,000 13,001 5.250%, 08/01/12 26,000 27,146 TVA 6.375%, 06/15/05 (A) 8,000 8,663 ---------- 221,907 ---------- U.S. TREASURIES - 12.0% U.S. Treasury Bond (STRIPS) 0.000%, 11/15/04 (A) (F) 50,650 49,566 U.S. Treasury Bonds 13.750%, 08/15/04 (A) 8,000 9,358 9.875%, 11/15/15 (A) 5,000 7,732 U.S. Treasury Notes 5.500%, 05/31/03 (A) 5,000 5,036 3.250%, 12/31/03 (A) 18,450 18,750 1.625%, 01/31/05 (A) 1,250 1,254 1.500%, 02/28/05 (A) 4,475 4,479 3.000%, 02/15/08 6,500 6,577 5.000%, 08/15/11 (A) 23,000 25,225
The accompanying notes are an integral part of the financial statements. 20
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- 3.875%, 02/15/13 (A) $ 33,499 $ 33,645 ---------- 161,622 ---------- TOTAL U.S. GOVERNMENT & AGENCY SECURITIES (Cost $371,432) 383,529 ---------- ASSET-BACKED SECURITIES - 7.8% AUTOMOBILES - 3.0% Capital One Auto Finance Trust Series 2002-1, Class A4 4.160%, 07/15/07 3,000 3,153 Series 2001-A, Class A4 5.400%, 05/15/08 5,000 5,307 Honda Auto Receivables Owner Trust Series 2002-4, Class A4 2.700%, 03/17/08 7,345 7,416 MMCA Automobile Trust Series 2002-2, Class A4 4.300%, 03/15/10 4,525 4,613 Toyota Auto Receivables Owners Trust Series 2002-B, Class A4 4.390%, 05/15/09 6,000 6,310 Whole Auto Loan Trust Series 2002-1, Class A3 2.600%, 08/15/06 13,000 13,208 ---------- 40,007 ---------- COMMERCIAL - 0.3% Morgan Stanley Capital Investments Series 1999-FNV1, Class A1 6.120%, 03/15/31 4,002 4,316 ---------- CREDIT CARDS - 2.4% Citibank Credit Card Issuance Trust Series 2003-A2, Class A2 2.700%, 01/15/08 (A) 10,000 10,115 Citibank Credit Card Master Trust I Series 1997-6, Class A 0.000%, 08/15/06 (F) 2,275 2,223 MBNA Credit Card Master Note Trust Series 2003-A1, Class A1 3.300%, 07/15/10 12,560 12,621 MBNA Master Credit Card Trust Series 1998-D, Class A 5.800%, 12/15/05 4,000 4,049 Sears Credit Account Master Trust Series 2000-1, Series A 7.250%, 11/15/07 4,000 4,075 ---------- 33,083 ---------- HOME EQUITY - 2.0% Advanta Mortgage Loan Trust Series 1997-1, Class A5 7.350%, 05/25/27 $ 660 $ 674 AFC Home Equity Loan Trust Series 1996-4, Class 1A7 6.860%, 03/25/27 3,101 3,242 Amresco Residential Security Mortgage Series 1997-3, Class A9 6.960%, 03/25/27 3,693 3,728 Contimortgage Home Equity Loan Trust Series 1997-5, Class A5 6.630%, 12/15/20 1,421 1,448 Series 1997-2, Class A9 7.090%, 04/15/28 2,007 2,012 Series 1997-3, Class A9 7.120%, 08/15/28 $ 4,074 $ 4,305 Delta Funding Home Equity Loan Trust Series 1997-4, Class A5F 6.670%, 01/25/28 952 1,041 EQCC Home Equity Loan Trust Series 1996-1, Class A4 6.560%, 03/15/23 825 829 Series 1997-1, Class A7 7.120%, 05/15/28 1,174 1,207 Mellon Residential Funding Series 2001-HEIL, Class A3 5.945%, 02/25/11 5,000 5,067 Prudential Securities Financial Series 1993-8, Class A 5.775%, 11/15/14 1,241 1,241 Series 1994-5, Class A1 5.660%, 05/25/24 1,175 1,201 Residential Asset Securities Series 1998-KS1, Class AI9 6.440%, 03/25/28 688 715 ---------- 26,710 ---------- MANUFACTURED HOUSING - 0.1% Green Tree Financial Series 1996-9, Class A5 7.200%, 01/15/28 476 480 Green Tree Home Improvement Loan Trust Series 1997-E, Class HEA6 6.620%, 01/15/29 994 999 ---------- 1,479 ---------- TOTAL ASSET-BACKED SECURITIES (Cost $103,370) 105,595 ---------- CMO - U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 5.9% FIXED RATE - 5.9% FHLMC REMIC Series 2483, Class DA 5.500%, 06/15/08 (A) 5,000 5,080 Series 2496, Class OA 5.000%, 09/15/08 (A) 5,000 5,079 Series 1606, Class H 6.000%, 11/15/08 (A) 4,125 4,400 Series 2503, Class JA 5.500%, 07/15/10 4,089 4,185 Series 2389, Class VA 6.000%, 02/15/11 (A) 4,467 4,812 Series 2358, Class PA 6.000%, 06/15/11 2,294 2,314 Series 2440, Class NJ 6.000%, 01/15/18 (A) 7,000 7,102 Series 2500, Class PA 5.000%, 06/15/18 4,674 4,784 Series 2456, Class CD 5.500%, 06/15/19 (A) 4,398 4,457 Series 1167, Class E 7.500%, 11/15/21 120 128 Series 1286, Class A 6.000%, 05/15/22 393 405 Series 1633, Class PK 6.000%, 09/15/22 (A) 5,643 5,807 Series 1634, Class PH 6.000%, 11/15/22 4,557 4,730 Series 2166, Class AC 6.500%, 03/15/26 987 996
21
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- FNMA REMIC Series 1993-83, Class VD 6.500%, 07/25/04 (A) $ 3,770 $ 3,784 Series 1993-55, Class J 6.500%, 11/25/07 577 599 Series 2002-55, Class QR 5.000%, 02/25/09 (A) 5,000 5,082 Series 2002-49, Class KJ 4.500%, 12/25/09 (A) 5,000 5,117 Series 2002-70, Class QL 4.500%, 12/25/17 (A) 3,700 3,819 Series 1990-89, Class K 6.500%, 07/25/20 76 80 Series 1996-10, Class C 6.500%, 12/25/23 (A) 1,216 1,226 GNMA REMIC Series 2001-62, Class VK 6.500%, 01/16/11 (A) 4,472 4,850 ---------- TOTAL CMO - U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $78,621) 78,836 ---------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 3.4% FIXED RATE - 3.4% FHLMC 7.000%, 08/01/07, #183713 2 2 FHLMC Gold Pool 5.500%, 09/01/06, #G40394 (A) 2,604 2,693 5.500%, 03/01/16, #E00960 (A) 5,823 6,072 6.000%, 04/01/29, #C00748 (A) 2,600 2,698 FNMA Pool 7.250%, 07/01/04, #034511 10 10 6.000%, 07/01/06, #252632 926 959 6.000%, 08/01/08, #050776 409 430 5.500%, 02/01/14, #440780 (A) 4,192 4,387 6.000%, 03/01/16, #535791 (A) 7,836 8,242 5.500%, 04/01/16, #572856 (A) 2,963 3,077 10.000%, 11/01/18, #050145 303 341 9.000%, 12/01/20, #303753 351 381 9.500%, 06/01/21, #341727 127 142 6.000%, 05/01/29, #323715 (A) 2,632 2,736 6.000%, 02/01/31, #562842 (A) 2,426 2,517 6.000%, 03/01/31, #570874 (A) 3,679 3,818 6.000%, 09/01/32, #652304 (A) 5,529 5,731 GNMA Pool 9.000%, 08/15/21, #312046 529 590 9.000%, 05/20/25, #002007 123 135 8.500%, 07/20/25, #002038 213 233 ---------- TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $42,796) 45,194 ---------- CMO - PRIVATE MORTGAGE-BACKED SECURITIES - 3.2% FIXED RATE - 3.2% Greenwich Capital Commercial Funding Series 2002-C1, Class A4 4.948%, 01/11/35 10,000 10,255 HSBC Mortgage Loan Trust Series 2000-HSB1, Class A3 7.110%, 12/16/30 601 602 Nomura Asset Securities Series 1998-D6, Class A1B 6.590%, 03/15/30 (A) 11,675 13,256 Norwest Asset Securities Series 1999-15, Class A1 6.250%, 06/25/14 $ 2,017 $ 2,067 Residential Accredit Loans Series 1997-QS13, Class M3 7.250%, 12/25/27 2,706 2,902 Salomon Brothers Mortgage Securities Series 1986-1, Class A 6.000%, 12/25/11 339 349 Wachovia Bank Commercial Mortgage Trust Series 2002-C1, Class A4 6.287%, 04/15/34 (A) 11,400 12,751 Washington Mutual Series 1999-WM2, Class 2A 7.000%, 11/19/14 1,118 1,149 Westam Mortgage Financial Series 11, Class A 6.360%, 08/26/20 208 221 ---------- TOTAL CMO - PRIVATE MORTGAGE-BACKED SECURITIES (Cost $42,642) 43,552 ---------- FOREIGN GOVERNMENT BOND - 0.3% MEXICO - 0.3% United Mexican States 7.500%, 01/14/12 (A) 3,500 3,806 ---------- TOTAL FOREIGN GOVERNMENT BOND (Cost $3,599) 3,806 ---------- MUNICIPAL BOND - 0.0% Orange California Redevelopment Agency, Tax Allocation Revenue (C) 6.500%, 10/01/03 25 26 ---------- TOTAL MUNICIPAL BOND (Cost $25) 26 ---------- RELATED PARTY MONEY MARKET FUND - 3.0% First American Prime Obligations Fund, Class Y (G) 40,227,359 40,227 ---------- TOTAL RELATED PARTY MONEY MARKET FUND (Cost $40,227) 40,227 ---------- INVESTMENTS PURCHASED WITH CASH PROCEEDS FROM SECURITIES LENDING - 40.2% COMMERCIAL PAPER - 5.7% CS First Boston 1.638%, 12/01/03 9,501 9,501 Danske Bank 1.508%, 12/22/03 9,501 9,501 Goldman Sachs 1.518%, 08/28/03 12,351 12,351 Morgan Stanley 1.518%, 06/17/03 4,751 4,751 1.518%, 07/08/03 3,420 3,420 1.518%, 09/22/03 4,751 4,751 Orchard Park 1.475%, 01/06/04 9,501 9,501 UBS Financial 1.390%, 04/01/03 23,749 23,749 ---------- TOTAL COMMERCIAL PAPER 77,525 ---------- CORPORATE OBLIGATIONS - 4.4% CS First Boston 1.760%, 04/11/03 9,501 9,501 Deutsche Bank 1.470%, 04/11/03 4,750 4,750 1.580%, 12/11/03 3,800 3,800
The accompanying notes are an integral part of the financial statements. 22
DESCRIPTION PAR (000)/SHARES VALUE (000) ---------------------------------------------------------------- General Electric Capital Corporation 1.355%, 07/09/07 $ 4,751 $ 4,751 Merrill Lynch 1.538%, 05/05/03 8,076 8,076 Monet Trust 1.360%, 12/28/03 9,501 9,501 SMM Trust 2002-M 1.450%, 09/23/03 9,501 9,501 URI Trust 1.460%, 09/18/03 9,501 9,501 ---------- TOTAL CORPORATE OBLIGATIONS 59,381 ---------- MONEY MARKET FUNDS - 3.8% AIM Liquid Assets Portfolio 16,151,569 16,152 Dreyfus Cash Manage Plus Fund 950,092 950 Evergreen Institutional Money Market Fund 3,325,323 3,325 HSBC Investor Money Market Fund - Class I 2,850,277 2,850 Merrill Lynch Premier Institutional Fund 18,401,878 18,402 Merrimac Cash Series Fund 2,850,277 2,850 One Group Institutional Prime Money Market Fund 5,700,554 5,701 Reserve Primary Fund 475,046 475 ---------- TOTAL MONEY MARKET FUNDS 50,705 ---------- OTHER SHORT-TERM INVESTMENTS - 3.6% Allied Irish Bank 1.340%, 05/09/03 $ 9,501 9,501 1.330%, 06/02/03 4,751 4,751 Commonwealth Life 1.678%, 04/01/03 4,797 4,797 General Electric Capital Assurance 1.370%, 12/19/03 1,900 1,900 Premium Asset Trust 02-7 1.060%, 08/23/03 6,052 6,052 Security Life Denver 1.381%, 01/13/04 12,351 12,351 1.490%, 03/15/04 9,501 9,501 ---------- TOTAL OTHER SHORT-TERM INVESTMENTS 48,853 ---------- REPURCHASE AGREEMENTS - 22.7% Bear Stearns 1.420%, 04/10/03 19,002 19,002 CS First Boston 1.370%, 04/01/03 19,002 19,002 1.380%, 04/01/03 23,752 23,752 1.380%, 04/01/03 2,945 2,945 Goldman Sachs 1.520%, 04/01/03 14,251 14,251 1.420%, 04/07/03 9,501 9,501 1.360%, 06/10/03 4,750 4,750 1.400%, 06/11/03 4,750 4,750 Greenwich Capital Markets 1.430%, 04/01/03 28,503 28,503 Lehman Brothers 1.560%, 04/01/03 9,501 9,501 1.640%, 04/01/03 7,126 7,126 1.640%, 04/01/03 30,878 30,878 Merrill Lynch 1.360%, 04/01/03 28,503 28,503 1.500%, 04/01/03 14,251 14,251 1.560%, 04/01/03 11,876 11,876 1.560%, 04/01/03 19,002 19,002 Morgan Stanley 1.470%, 04/01/03 14,251 14,251 1.510%, 04/01/03 $ 29,548 $ 29,548 Salomon Smith Barney 1.540%, 04/01/03 14,251 14,251 ---------- TOTAL REPURCHASE AGREEMENTS 305,643 ---------- TOTAL INVESTMENTS PURCHASED WITH CASH PROCEEDS FROM SECURITIES LENDING (Cost $542,107) 542,107 ---------- TOTAL INVESTMENTS - 140.2% (Cost $1,853,976) 1,890,393 ---------- OTHER ASSETS AND LIABILITIES, NET - (40.2)% (541,878) ---------- TOTAL NET ASSETS - 100.0% $1,348,515 ----------
(A) This security or a portion of this security is out on loan at March 31, 2003. Total loaned securities had a value of $531,027,566 at March 31, 2003. See note 2 in Notes to Financial Statements. (B) Security sold within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "qualified institutional buyers." These securities have been determined to be liquid under the guidelines established by the Funds' board of directors. As of March 31, 2003, the value of these investments was $55,136,500 or 4.1% of total net assets. (C) Securities considered illiquid or restricted. See note 2 in Notes to Financial Statements. (D) Delayed Interest (Step-Bonds) - Represents securities that remain zero-coupon securities until a predetermined date at which time the stated coupon rate becomes effective and interest becomes payable at regular intervals. Interest rate shown represents current yield at March 31, 2003, based upon the estimated timing and amount of future interest and principal payments. (E) On March 31, 2003, the total cost of investments purchased on a when-issued basis was $12,987,813. (F) Principal only. (G) This money market fund is advised by U.S. Bancorp Asset Management, Inc., which also serves as advisor for this Fund. See note 3 in Notes to Financial Statements. CMO - Collateralized Mortgage Obligation FFCB - Federal Farm Credit Bank FHLB - Federal Home Loan Bank FHLMC - Federal Home Loan Mortgage Corporation FNMA - Federal National Mortgage Assocation GNMA - Government National Mortgage Association REIT - Real Estate Investment Trust REMIC - Real Estate Mortgage Investment Conduit STRIPS - Separate Trading of Registered Interest and Principal of Securities TVA - Tennessee Valley Authority 23 SHORT TERM BOND FUND
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- ASSET-BACKED SECURITIES - 30.6% AUTOMOBILES - 9.3% AESOP Funding II Series 2003-2A, Class A1 2.740%, 06/20/07 (D) $ 10,000 $ 10,073 Americredit Automobile Receivables Trust Series 2002-C, Class A2 1.940%, 08/12/05 5,250 5,259 Auto Bond Receivables Trust Series 1993-I, Class A 6.125%, 11/15/21 (A) (B) 106 -- Capital Auto Receivables Asset Trust Series 2001-2, Class A3 4.600%, 09/15/05 2,500 2,516 Series 2002-5, Class A3B 2.300%, 04/17/06 3,000 3,033 Series 2001-2, Class A4 5.000%, 12/15/06 6,000 6,230 Capital One Auto Finance Trust Series 2001-A, Class A4 5.400%, 05/15/08 3,000 3,184 Chase Manhattan Auto Owner Trust Series 2001-A, Class A3 4.550%, 08/15/05 1,389 1,410 DaimlerChrysler Auto Trust Series 2000-E, Class A3 6.110%, 11/08/04 4,448 4,496 Series 2000-D, Class A3 6.660%, 01/08/05 1,512 1,531 DaimlerChrysler Master Owner Trust Series 2002-A, Class A 1.349%, 05/15/07 (C) 5,000 5,001 Ford Credit Auto Owner Trust Series 2000-G, Class A4 6.620%, 07/15/04 707 713 Series 2001-B, Class A5 5.360%, 06/15/05 3,000 3,101 Honda Auto Receivables Owner Trust Series 2003-1, Class A3 1.920%, 11/20/06 4,000 4,008 Series 2002-4, Class A4 2.700%, 03/17/08 3,500 3,534 Household Automotive Trust Series 2001-2, Class A3 4.830%, 03/17/06 2,596 2,640 Navistar Financial Owner Trust Series 2002-B, Class A3A 1.533%, 03/15/07 (C) 6,500 6,499 Nissan Auto Lease Trust Series 2002-A, Class A3B 2.560%, 08/15/07 (D) 7,000 7,096 Nissan Auto Receivables Owner Trust Series 2002-C, Class A4 3.330%, 01/15/08 4,600 4,728 Toyota Auto Receivables Owner Trust Series 2003-A, Class A4 2.200%, 03/15/10 4,000 3,956 WFS Financial Owner Trust Series 2002-4, Class A3A 2.390%, 08/20/07 6,000 6,056 ---------- 85,064 ---------- CREDIT CARDS - 9.3% American Express Credit Account Master Trust Series 2002-3, Class A 1.397%, 12/15/09 (C) $ 5,000 $ 4,996 Bank One Issuance Trust Series 2002-A3, Class A3 3.590%, 05/17/10 (E) 6,000 6,103 Capital One Master Trust Series 1998-4, Class A 5.430%, 01/15/07 5,000 5,115 Series 2001-7A, Class A 3.850%, 08/15/07 5,000 5,126 Series 2001-8A, Class A 4.600%, 08/17/09 6,000 6,329 Citibank Credit Card Issuance Trust Series 2001-A8, Class A8 4.100%, 12/07/06 3,700 3,851 Dayton Hudson Credit Card Master Trust Series 1998-1, Class A 5.900%, 05/25/06 3,570 3,619 Discover Card Master Trust I Series 2000-9, Class A 6.350%, 01/15/06 2,000 2,198 Series 1993-3, Class A 6.200%, 05/16/06 2,200 2,265 Series 2001-5, Class A 5.300%, 11/15/06 4,980 5,196 Series 1999-6, Class A 6.850%, 07/15/07 5,000 5,440 Fleet Credit Card Master Trust II Series 2003-A, Class A 2.400%, 07/15/08 (E) 8,500 8,522 Household Private Label Credit Card Trust Series 2001-2, Class A 4.950%, 06/16/08 2,000 2,088 MBNA Master Credit Card Trust Series 1997-I, Class A 6.550%, 01/15/07 3,500 3,738 Series 1999-M, Class A 6.600%, 04/16/07 2,000 2,152 Nationsbank Credit Card Master Trust Series 1993-2, Class A 6.000%, 12/15/05 7,275 7,508 Sears Credit Account Master Trust Series 1999-3, Class A 6.450%, 11/17/09 2,000 2,140 Standard Credit Card Master Trust Series 1993-2, Class A 5.950%, 10/07/04 3,000 3,058 World Financial Network Credit Card Master Trust Series 1996-B, Class A 6.950%, 04/15/06 5,400 5,435 ---------- 84,879 ---------- EQUIPMENT LEASES - 0.4% CIT Equipment Collateral Series 2001-1, Class A3 5.230%, 10/20/04 827 834 Series 2001-A, Class A4 4.840%, 09/20/12 2,981 3,122 First Sierra Receivables Series 2000-2, Class A3 7.490%, 12/18/03 44 44 ---------- 4,000 ----------
The accompanying notes are an integral part of the financial statements. 24
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- HOME EQUITY - 7.3% Aames Mortgage Trust Series 2002-1, Class A2 5.378%, 06/25/29 (F) $ 3,800 $ 3,995 Advanta Mortgage Loan Trust Series 2000-2, Class A4 7.930%, 04/25/23 (F) 2,300 2,494 AFC Home Equity Loan Trust Series 1997-2, Class 1A5 6.970%, 06/25/27 956 1,024 Chase Funding Mortgage Loan Series 2002-4, Class 1A2 2.810%, 10/25/17 4,000 4,038 Series 2003-1, Class 2A1 2.176%, 12/25/21 5,408 5,419 Series 1998-1, Class IA4 6.340%, 04/25/25 3,004 3,050 Contimortgage Home Equity Loan Trust Series 1998-2, Class A7 6.570%, 03/15/23 2,000 2,125 Emergent Home Equity Loan Trust Series 1997-3, Class A5 7.290%, 10/20/28 2,599 2,783 EQCC Home Equity Loan Trust Series 1997-3, Class A8 6.410%, 12/15/04 1,551 1,580 Equivantage Home Equity Loan Trust Series 1996-1, Class A 6.550%, 10/25/25 719 754 Series 1996-4, Class A 6.750%, 01/25/28 1,808 1,828 FNMA Series 2002-W11, Class AF3 3.318%, 11/25/32 4,700 4,706 GE Home Equity Loan Trust Series 1991-1, Class B 8.700%, 09/15/11 537 538 IMC Home Equity Loan Trust Series 1998-3, Class A7 6.720%, 08/20/29 (F) 5,000 5,268 Irwin Home Equity Series 2001-2, Class 2A5 6.520%, 02/25/27 (F) 3,900 4,291 Money Store Home Equity Trust Series 1993-B, Class A2 6.975%, 07/15/08 222 222 Series 1993-B, Class A3 6.100%, 05/15/22 345 349 Series 1994-A, Class A4 6.275%, 12/15/22 755 777 Series 1996-C, Class A6 7.690%, 05/15/24 952 955 Series 1996-D, Class A7 7.110%, 04/15/25 1,602 1,627 Series 1997-B, Class A8 6.900%, 07/15/38 612 626 New Century Home Equity Loan Trust Series 1997-NC6, Class A7 7.190%, 01/25/29 (F) 4,665 4,982 Prudential Securities Financial Series 1994-5, Class A1 5.660%, 05/25/24 385 393 Residential Asset Mortgage Products Series 2002-RS6, Class AI3 3.821%, 01/25/28 $ 7,000 $ 7,154 Saxon Asset Securities Trust Series 2001-1, Class AF5 6.853%, 03/25/32 (F) 5,000 5,373 ---------- 66,351 ---------- MANUFACTURED HOUSING - 0.2% Oakwood Mortgage Investors Series 1999-A, Class A2 5.890%, 04/15/29 1,479 1,491 ---------- RECREATIONAL VEHICLES - 0.8% Distribution Financial Services RV Trust Series 1999-3, Class A4 6.650%, 03/15/11 1,260 1,288 Series 2001-1, Class A3 4.740%, 05/15/13 5,750 5,846 ---------- 7,134 ---------- UTILITIES - 3.3% Comed Transitional Funding Trust Series 1998-1, Class A5 5.440%, 03/25/07 5,500 5,763 Detroit Edison Securitization Funding Series 2001-1, Class A3 5.875%, 03/01/10 5,000 5,493 Massachusetts RRB Special Purpose Trust Series 1999-1, Class A4 6.910%, 09/15/09 5,200 5,828 Peco Energy Transition Trust Series 1999-A, Class A4 5.800%, 03/01/07 2,350 2,481 Series 1999-A, Class A6 6.050%, 03/01/09 5,000 5,543 Public Service New Hampshire Funding Series 2001-1, Class A2 5.730%, 11/01/10 5,000 5,411 ---------- 30,519 ---------- TOTAL ASSET-BACKED SECURITIES (Cost $272,889) 279,438 ---------- U.S. GOVERNMENT & AGENCY SECURITIES - 28.4% U.S. AGENCY DEBENTURES - 20.2% FFCB 2.080%, 12/20/04 3,000 3,030 FHLB 5.375%, 01/05/04 (E) 5,725 5,910 5.250%, 02/13/04 (E) 7,000 7,249 4.875%, 04/16/04 (E) 10,000 10,384 4.875%, 05/14/04 (E) 2,000 2,079 3.625%, 10/15/04 8,000 8,269 4.000%, 02/15/05 (E) 5,000 5,222 3.000%, 08/15/05 (E) 7,000 7,186 5.375%, 02/15/06 (E) 5,000 5,446 2.500%, 03/24/06, Callable 09/24/03 @ 100 7,500 7,501 5.375%, 05/15/06 (E) 3,000 3,275 FHLMC 3.250%, 11/15/04 (E) 6,000 6,171 7.000%, 07/15/05 (E) 3,500 3,906 2.875%, 09/26/05 (E) 7,775 7,822 5.500%, 07/15/06 3,000 3,299 4.300%, 08/08/07 (E) 5,000 5,045
25
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- FNMA 4.750%, 03/15/04 (E) $ 5,000 $ 5,173 6.500%, 08/15/04 (E) 6,000 6,415 2.700%, 08/20/04 (E) 5,000 5,024 1.875%, 12/15/04 5,000 5,032 2.020%, 02/28/05, Callable 08/28/03 @ 100 (E) 3,200 3,206 7.000%, 07/15/05 (E) 13,375 14,925 3.000%, 11/14/05, Callable 05/14/03 @ 100 (E) 6,500 6,511 5.500%, 05/02/06 (E) 10,000 10,883 4.375%, 10/15/06 (E) 5,000 5,323 4.750%, 01/02/07 (E) 6,000 6,383 3.500%, 10/15/07, Callable 10/15/04 @ 100 (E) 5,000 5,060 4.000%, 02/07/08, Callable 05/07/03 @ 100 (E) 8,000 8,018 SLMA 5.000%, 06/30/04 (E) 5,000 5,228 3.375%, 07/15/04 (E) 5,500 5,644 ---------- 184,619 ---------- U.S. TREASURIES - 8.2% U.S. Treasury Notes 3.000%, 02/29/04 (E) 8,000 8,134 7.250%, 05/15/04 (E) 9,300 9,926 2.250%, 07/31/04 (E) 7,000 7,089 2.000%, 11/30/04 (E) 5,000 5,051 1.750%, 12/31/04 (E) 8,000 8,047 7.500%, 02/15/05 (E) 7,000 7,782 6.750%, 05/15/05 (E) 8,000 8,862 5.750%, 11/15/05 (E) 6,000 6,607 3.500%, 11/15/06 (E) 5,000 5,212 4.375%, 05/15/07 (E) 7,500 8,055 ---------- 74,765 ---------- TOTAL U.S. GOVERNMENT & AGENCY SECURITIES (Cost $253,079) 259,384 ---------- CORPORATE BONDS - 25.1% CONSUMER GOODS - 3.0% Bristol-Myers Squibb 4.750%, 10/01/06 4,400 4,669 Colgate-Palmolive, Series D 5.340%, 03/27/06 2,950 3,159 Conagra Foods 7.500%, 09/15/05 8,207 9,129 Gillette, Callable 10/15/04 @ 100 3.500%, 10/15/07 6,000 6,030 Unilever Capital 6.875%, 11/01/05 (E) 4,000 4,458 ---------- 27,445 ---------- ENERGY - 0.7% Conoco 5.900%, 04/15/04 6,000 6,260 ---------- FINANCE - 14.6% American General Finance 5.750%, 11/01/03 2,887 2,963 Bank of America, Series B 6.200%, 08/15/03 2,775 2,825 Bank One 7.625%, 08/01/05 7,000 7,866 Bayerische Landesbank 4.125%, 01/14/05 $ 5,000 $ 5,176 2.500%, 03/30/06 5,500 5,430 Citigroup 5.500%, 08/09/06 4,000 4,347 3.500%, 02/01/08 4,000 4,016 Conoco Funding 5.450%, 10/15/06 3,600 3,916 Countrywide Funding, Series D 6.875%, 09/15/05 1,500 1,645 Countrywide Home Loan Series J 5.250%, 06/15/04 2,000 2,083 Series F 6.510%, 02/11/05 1,500 1,607 Credit Suisse First Boston 7.750%, 05/15/06 (D) 7,350 8,285 ERAC USA Finance 6.375%, 05/15/03 (D) 3,000 3,013 Fleetboston Financial 7.125%, 04/15/06 2,425 2,677 General Electric Capital, Series A 2.850%, 01/30/06 (E) 6,000 6,099 5.350%, 03/30/06 (E) 4,000 4,325 General Motors Acceptance 4.150%, 02/07/05 7,000 6,996 Goldman Sachs 6.625%, 12/01/04 (D) 1,500 1,613 4.125%, 01/15/08 5,000 5,141 International Lease Finance 5.625%, 06/01/07 (E) 5,000 5,268 Key Bank 7.250%, 06/01/05 2,000 2,205 7.125%, 08/15/06 4,000 4,488 Lehman Brothers Holdings, Series F 7.500%, 09/01/06 3,000 3,443 Marsh & McLennan 6.625%, 06/15/04 4,132 4,368 Mellon Funding 7.500%, 06/15/05 2,100 2,353 Merrill Lynch, Series B 6.130%, 05/16/06 3,655 3,986 Metropolitan Life Global Funding I 4.750%, 06/20/07 (D) 8,000 8,450 Morgan Stanley 7.750%, 06/15/05 2,500 2,788 Paine Webber 6.450%, 12/01/03 1,025 1,060 Wells Fargo Financial 4.875%, 06/12/07 5,000 5,345 Westdeutsche Landesbank 6.750%, 06/15/05 8,600 9,368 ---------- 133,145 ---------- MANUFACTURING - 2.2% Aluminum Company of America, Series B 6.125%, 06/15/05 6,000 6,525 DaimlerChrysler, Series A 7.375%, 09/15/06 (E) 3,945 4,398 Dover 6.450%, 11/15/05 4,860 5,378
The accompanying notes are an integral part of the financial statements. 26
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- Nike 5.500%, 08/15/06 $ 3,891 $ 4,216 ---------- 20,517 ---------- SERVICES - 2.9% Abbott Laboratories 5.125%, 07/01/04 4,000 4,179 McDonald's, Series G 4.150%, 02/15/05 3,825 3,969 Target 7.500%, 02/15/05 5,850 6,431 5.950%, 05/15/06 4,725 5,189 Wal-Mart Stores 4.150%, 06/15/05 6,000 6,305 ---------- 26,073 ---------- YANKEE - 1.7% African Development Bank 6.750%, 10/01/04 2,925 3,141 Diageo Capital 6.125%, 08/15/05 6,090 6,659 Ontario (Province of) 7.625%, 06/22/04 (E) 5,000 5,373 ---------- 15,173 ---------- TOTAL CORPORATE BONDS (Cost $226,508) 228,613 ---------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 8.4% ADJUSTABLE RATE (C) - 6.4% FHLMC Pool 4.989%, 01/01/29, #846946 (E) 2,047 2,119 6.047%, 04/01/30, #972055 (E) 2,240 2,335 5.475%, 05/01/30, #847014 (E) 1,865 1,907 4.887%, 10/01/32, #847063 (E) 5,890 6,069 FHLMC TBA 0.000%, 04/01/33 (G) 7,000 7,077 FNMA Pool 3.850%, 02/01/28, #415285 (E) 1,242 1,275 5.975%, 06/01/31, #625338 (E) 3,673 3,840 5.218%, 03/01/32, #545791 (E) 2,628 2,712 5.043%, 05/01/32, #634948 (E) 3,600 3,720 4.500%, 10/01/32, #661645 (E) 6,783 6,949 FNMA Pool TBA 4.115%, 03/01/33, #555369 (G) 8,000 8,240 GNMA Pool 5.750%, 08/20/21, #8824 (E) 924 958 5.750%, 07/20/22, #8006 (E) 1,078 1,116 5.750%, 09/20/25, #8699 (E) 648 671 5.375%, 04/20/26, #8847 654 676 5.750%, 08/20/27, #80106 226 234 5.375%, 01/20/28, #80154 349 358 5.250%, 05/20/29, #80283 (E) 1,991 2,035 4.250%, 06/20/29, #80291 (E) 3,494 3,570 4.500%, 11/20/30, #80469 (E) 1,705 1,734 4.500%, 04/20/31, #80507 (E) 1,204 1,229 ---------- 58,824 ---------- FIXED RATE - 2.0% FHLMC Gold Pool 5.500%, 10/01/06, #M90680 (E) 1,376 1,427 FHLMC Pool 7.750%, 07/01/09, #184513 27 28 FNMA Pool 6.500%, 12/01/03, #535694 (E) 294 295 6.465%, 06/01/04, #375610 (E) $ 4,696 $ 4,737 6.195%, 06/01/07, #410601 5,000 5,512 GNMA Pool 9.000%, 05/15/16, #158777 157 174 9.000%, 04/15/21, #780398 442 495 10.000%, 02/15/25, #780081 330 375 4.500%, 08/20/31, #80535 (E) 3,741 3,808 5.500%, 02/20/32, #80580 (E) 1,242 1,264 ---------- 18,115 ---------- TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $76,500) 76,939 ---------- CMO - U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 3.6% FIXED RATE - 3.4% FHLMC REMIC Series 2420, Class MQ 4.500%, 12/15/07 (E) 7,794 7,865 Series H001, Class A3 2.893%, 10/15/09 (E) 7,000 7,043 Series 2533, Class PA 4.750%, 03/15/10 (E) 7,000 7,232 Series 2114, Class PC 6.000%, 08/15/16 (E) 2,784 2,787 Series 1022, Class J 6.000%, 12/15/20 164 167 FNMA REMIC Series 2002-89, Class TU 5.000%, 04/25/07 (E) 3,863 3,901 Series 1996-W4, Class A4 6.743%, 12/25/11 (E) 492 493 Series 1993-163, Class PK 6.250%, 10/25/21 (E) 1,065 1,070 Series 1992-150, Class MA 5.500%, 09/25/22 545 577 ---------- 31,135 ---------- Z-BOND (H) - 0.2% FHLMC REMIC Series 1541, Class Z 6.750%, 11/15/21 (E) 1,352 1,365 ---------- TOTAL CMO - U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $32,467) 32,500 ---------- CMO - PRIVATE MORTGAGE-BACKED SECURITIES - 2.0% ADJUSTABLE RATE (C) - 0.0% Patten Series 1995-1A 1.833%, 09/01/13 (A) (B) (D) 8 7 ---------- FIXED RATE - 2.0% Countrywide Home Loans Series 2002-J4, Class 1A3 5.500%, 10/25/32 6,758 6,924 Series 2002-27, Class A4 5.500%, 12/25/32 6,465 6,620 J.P. Morgan Commercial Mortgage Finance Series 1999-C7, Class A2 6.507%, 10/15/35 4,350 4,896 ---------- 18,440 ---------- TOTAL CMO - PRIVATE MORTGAGE-BACKED SECURITIES (Cost $18,530) 18,447 ----------
27
DESCRIPTION PAR (000)/SHARES VALUE (000) ---------------------------------------------------------------- COMMERCIAL PAPER - 1.6% Moat Funding 1.370%, 04/01/03 $ 15,000 $ 15,000 ---------- TOTAL COMMERCIAL PAPER (Cost $15,000) 15,000 ---------- RELATED PARTY MONEY MARKET FUND - 0.7% First American Prime Obligations Fund, Class Y (I) 6,484,715 6,485 ---------- TOTAL RELATED PARTY MONEY MARKET FUND (Cost $6,485) 6,485 ---------- INVESTMENTS PURCHASED WITH CASH PROCEEDS FROM SECURITIES LENDING - 37.1% COMMERCIAL PAPER - 5.3% CS First Boston 1.638%, 12/01/03 5,929 5,929 Danske Bank 1.508%, 12/22/03 5,930 5,930 Goldman Sachs 1.518%, 08/28/03 7,708 7,708 Morgan Stanley 1.518%, 06/17/03 2,965 2,965 1.518%, 07/08/03 2,135 2,135 1.518%, 09/22/03 2,965 2,965 Orchard Park 1.475%, 01/06/04 5,930 5,930 UBS Financial 1.390%, 04/01/03 14,822 14,822 ---------- TOTAL COMMERCIAL PAPER 48,384 ---------- CORPORATE OBLIGATIONS - 4.1% CS First Boston 1.760%, 04/11/03 5,929 5,929 Deutsche Bank 1.470%, 04/11/03 2,965 2,965 1.580%, 12/11/03 2,372 2,372 General Electric Capital Corporation 1.355%, 07/09/07 2,965 2,965 Merrill Lynch 1.538%, 05/05/03 5,040 5,040 Monet Trust 1.360%, 12/28/03 5,930 5,930 SMM Trust 2002-M 1.450%, 09/23/03 5,930 5,930 URI Trust 1.460%, 09/18/03 5,930 5,930 ---------- TOTAL CORPORATE OBLIGATIONS 37,061 ---------- MONEY MARKET FUNDS - 3.5% AIM Liquid Assets Portfolio 10,080,276 10,080 Dreyfus Cash Manage Plus Fund 592,957 593 Evergreen Institutional Money Market Fund 2,075,351 2,075 HSBC Investor Money Market Fund - Class I 1,778,872 1,779 Merrill Lynch Premier Institutional Fund 11,484,705 11,485 Merrimac Cash Series Fund 1,778,872 1,779 One Group Institutional Prime Money Market Fund 3,557,745 3,558 Reserve Primary Fund 296,479 296 ---------- TOTAL MONEY MARKET FUNDS 31,645 ----------
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- OTHER SHORT-TERM INVESTMENTS - 3.3% Allied Irish Bank 1.340%, 05/09/03 $ 5,929 $ 5,929 1.330%, 06/02/03 2,965 2,965 Commonwealth Life 1.678%, 04/01/03 2,994 2,994 General Electric Capital Assurance 1.370%, 12/19/03 1,186 1,186 Premium Asset Trust 02-7 1.060%, 08/23/03 3,777 3,777 Security Life Denver 1.381%, 01/13/04 7,708 7,708 1.490%, 03/15/04 5,930 5,930 ---------- TOTAL OTHER SHORT-TERM INVESTMENTS 30,489 ---------- REPURCHASE AGREEMENTS - 20.9% Bear Stearns 1.420%, 04/10/03 11,859 11,859 CS First Boston 1.370%, 04/01/03 11,859 11,859 1.380%, 04/01/03 1,838 1,838 1.380%, 04/01/03 14,824 14,824 Goldman Sachs 1.520%, 04/01/03 8,894 8,894 1.420%, 04/07/03 5,929 5,929 1.360%, 06/10/03 2,965 2,965 1.400%, 06/11/03 2,965 2,965 Greenwich Capital Markets 1.430%, 04/01/03 17,789 17,789 Lehman Brothers 1.560%, 04/01/03 5,930 5,930 1.640%, 04/01/03 4,447 4,447 1.640%, 04/01/03 19,271 19,271 Merrill Lynch 1.360%, 04/01/03 17,789 17,789 1.500%, 04/01/03 8,894 8,894 1.560%, 04/01/03 7,412 7,412 1.560%, 04/01/03 11,859 11,859 Morgan Stanley 1.470%, 04/01/03 8,894 8,894 1.510%, 04/01/03 18,441 18,441 Salomon Smith Barney 1.540%, 04/01/03 8,894 8,894 ---------- TOTAL REPURCHASE AGREEMENTS 190,753 ---------- TOTAL INVESTMENTS PURCHASED WITH CASH PROCEEDS FROM SECURITIES LENDING (Cost $338,332) 338,332 ---------- TOTAL INVESTMENTS - 137.5% (Cost $1,239,790) 1,255,138 ---------- OTHER ASSETS AND LIABILITIES, NET - (37.5)% (342,011) ---------- TOTAL NET ASSETS - 100.0% $ 913,127 ----------
The accompanying notes are an integral part of the financial statements. 28 (A) Securities considered illiquid or restricted. See note 2 in Notes to Financial Statements. (B) Security valued at fair value under guidelines established and approved by the Funds' board of directors. Total fair valued securities had a value of $6,641, which represents 0.0% of total net assets at March 31, 2003. See note 2 in Notes to Financial Statements. (C) Variable Rate Security - The rate shown is the rate in effect as of March 31, 2003. (D) Security sold within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "qualified institutional buyers." These securities have been determined to be liquid under the guidelines established by the Funds' board of directors. As of March 31, 2003, the value of these investments was $38,536,358 or 4.2% of total net assets. (E) This security or a portion of this security is out on loan at March 31, 2003. Total loaned securities had a value of $331,242,957 at March 31, 2003. See note 2 in Notes to Financial Statements. (F) Delayed Interest (Step-Bonds) - Represents securities that remain zero-coupon securities until a predetermined date at which time the stated coupon rate becomes effective and interest becomes payable at regular intervals. Interest rate shown represents current yield at March 31, 2003, based upon the estimated timing and amount of future interest and principal payments. (G) On March 31, 2003 the total cost of investments purchased on a when-issued basis was $15,328,438. (H) Z-Bonds - Represents securities that pay no interest or principal during their accrual periods, but accrue additional principal at specified rates. Interest rate disclosed represents current yield based upon the cost basis and estimated future cash flows. (I) This money market fund is advised by U.S. Bancorp Asset Management, Inc., which also serves as advisor for this Fund. See note 3 in Notes to Financial Statements. CMO - Collateralized Mortgage Obligation FFCB - Federal Farm Credit Bank FHLB - Federal Home Loan Bank FHLMC - Federal Home Loan Mortgage Corporation FNMA - Federal National Mortgage Association GNMA - Government National Mortgage Association REMIC - Real Estate Mortgage Investment Conduit SLMA - Student Loan Marketing Association TBA - To Be Announced U.S. GOVERNMENT MORTGAGE FUND
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 79.6% ADJUSTABLE RATE (A) - 1.4% FNMA Pool 4.461%, 08/01/27, #545271 $ 3,913 $ 4,047 ---------- FIXED RATE - 78.2% FHLMC Gold Pool 8.500%, 03/01/06, #E00022 25 26 7.500%, 04/01/08, #E45929 40 43 7.000%, 07/01/11, #E20252 153 164 7.000%, 11/01/11, #E65619 58 62 7.500%, 09/01/12, #G10735 720 774 5.500%, 12/01/12, #E68353 2,096 2,195 5.500%, 05/01/13, #G10814 874 915 6.000%, 10/01/13, #E72802 1,981 2,083 5.500%, 01/01/14, #E00617 3,749 3,923 7.000%, 09/01/14, #E00746 912 975 6.000%, 09/01/22, #C90580 3,385 3,527 6.500%, 01/01/28, #G00876 2,920 3,059 6.500%, 01/01/30, #C55738 7,469 7,801 7.500%, 01/01/30, #C35768 653 696 6.500%, 03/01/31, #G01244 4,420 4,621 7.000%, 06/01/32, #C68248 3,060 3,223 FHLMC Gold Pool TBA 6.500%, 11/01/28, #C00676 (B) 5,730 5,991 6.000%, 12/01/30, #C53880 (B) 8,348 8,658 FHLMC Pool 9.500%, 09/01/04, #380053 1 1 FNMA Pool 7.000%, 11/01/11, #250738 70 75 7.000%, 11/01/11, #349630 54 58 7.000%, 11/01/11, #351122 48 51 6.000%, 04/01/13, #425550 1,010 1,064 6.500%, 08/01/13, #251901 825 879 6.000%, 11/01/13, #556195 2,427 2,561 6.000%, 12/01/13, #449173 2,312 2,434 7.000%, 07/01/14, #252637 1,144 1,226 7.000%, 10/01/14, #252799 613 657 6.500%, 07/01/17, #254373 4,046 4,284 7.000%, 07/01/17, #254414 4,062 4,334 5.500%, 10/01/17, #665315 3,245 3,368 5.500%, 12/01/17, #673010 3,282 3,406 6.000%, 12/01/17, #254547 2,802 2,932 5.000%, 04/01/18, #685197 5,000 5,133 6.000%, 10/01/22, #254513 3,971 4,141 8.000%, 07/01/24, #190264 179 195 6.500%, 10/01/27, #400141 253 265 7.000%, 12/01/27, #313941 2,547 2,695 6.500%, 10/01/28, #442671 2,254 2,357 6.500%, 12/01/28, #323422 2,950 3,085 6.500%, 02/01/29, #252255 2,536 2,652 6.000%, 05/01/31, #511797 2,854 2,960 7.000%, 09/01/31, #596680 4,166 4,418 7.500%, 09/01/31, #602427 1,886 2,007 6.500%, 10/01/31, #603674 2,387 2,490 6.500%, 01/01/32, #622707 2,687 2,803 7.000%, 03/01/32, #635970 3,775 3,979 6.500%, 06/01/32, #596712 9,564 10,027 7.000%, 07/01/32, #545813 2,743 2,891 7.000%, 07/01/32, #545815 2,787 2,937 6.000%, 08/01/32, #656269 4,167 4,320 6.500%, 08/01/32, #649874 4,762 4,968 6.500%, 08/01/32, #656871 2,714 2,831 6.500%, 08/01/32, #658822 3,744 3,905 6.000%, 09/01/32, #254447 4,384 4,544
29
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- 6.000%, 10/01/32, #661581 $ 960 $ 995 6.500%, 11/01/32, #254516 4,749 4,954 6.000%, 01/01/33, #676647 4,878 5,056 5.500%, 03/01/33, #689109 5,153 5,260 FNMA TBA 4.500%, 03/01/18 (B) 3,000 3,043 5.000%, 04/01/18 (B) 5,500 5,648 5.500%, 11/01/32 (B) 8,000 8,167 GNMA Pool 8.000%, 01/15/07, #315126 17 19 9.000%, 07/15/09, #390782 65 70 9.000%, 11/15/09, #359559 77 84 8.000%, 10/15/10, #414750 161 175 6.500%, 07/15/13, #462638 1,571 1,686 8.500%, 05/15/17, #219152 23 25 8.500%, 06/15/21, #307921 17 19 7.500%, 12/15/22, #347332 274 295 8.000%, 05/15/23, #352469 79 87 9.500%, 02/15/25, #365292 112 124 9.500%, 02/15/25, #392967 1 1 9.500%, 02/15/25, #401796 17 19 9.500%, 03/15/25, #407257 15 17 9.500%, 04/15/25, #386741 40 44 7.000%, 09/15/27, #455304 126 134 6.500%, 07/15/28, #780825 4,294 4,533 7.000%, 11/15/29, #781113 2,458 2,613 7.000%, 07/15/31, #781324 2,918 3,098 6.500%, 08/20/31, #3120 2,806 2,940 7.500%, 12/15/31, #570134 1,664 1,779 6.500%, 02/15/32, #569621 3,472 3,648 6.500%, 08/15/32, #590376 5,338 5,607 GNMA Pool TBA 6.000%, 03/15/33, #603520 (B) 5,000 5,216 ---------- 217,025 ---------- TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $216,629) 221,072 ---------- CMO - U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES - 8.3% FIXED RATE - 8.3% FHLMC REMIC Series 2498, Series UA 5.500%, 09/15/12 2,500 2,582 Series T-10, Class A3 6.540%, 01/25/17 1,339 1,364 Series 2000, Class B 6.500%, 03/15/26 1,311 1,341 Series 2382, Class DA 5.500%, 10/15/30 2,751 2,861 FNMA REMIC Series 1993-210, Class PL 6.500%, 04/25/23 4,250 4,708 Series 2002-W1, Class 2A 7.500%, 02/25/42 4,313 4,730 GNMA REMIC Series 1999-22, Class BD 7.000%, 05/21/25 3,307 3,334 Series 2001-61, Class ED 6.000%, 12/16/31 2,000 2,087 ---------- TOTAL CMO - U.S. GOVERNMENT AGENCY MORTGAGE-BACKED SECURITIES (Cost $21,948) 23,007 ---------- ASSET-BACKED SECURITIES - 4.8% AUTOMOBILES - 1.8% WFS Financial Owner Trust Series 2002-1, Class A3B 1.540%, 12/20/06 (A) $ 5,000 $ 5,003 ---------- HOME EQUITY - 1.5% Corestates Home Equity Trust Series 1994-1, Class A 6.650%, 05/15/09 460 459 First Plus Home Loan Trust Series 1998-3, Class A7 6.950%, 10/10/22 2,896 3,045 GRMT Mortgage Loan Trust Series 2001-1A, Class M1 7.772%, 07/20/31 500 545 ---------- 4,049 ---------- MANUFACTURED HOUSING - 1.5% Oakwood Mortgage Investors Series 1999-A, Class A2 5.890%, 04/15/29 751 757 Vanderbilt Mortgage Finance Series 1999-B, Class 1A4 6.545%, 04/07/18 3,250 3,425 ---------- 4,182 ---------- TOTAL ASSET-BACKED SECURITIES (Cost $13,124) 13,234 ---------- CMO - PRIVATE MORTGAGE-BACKED SECURITIES - 4.3% ADJUSTABLE RATE (A) - 0.7% First Nationwide Trust Series 2001-3, Class 2A1 8.206%, 01/25/23 1,755 1,938 ---------- FIXED RATE - 3.6% Citicorp Mortgage Securities Series 2001-6, Class M 6.500%, 05/25/29 2,821 2,995 Residential Accredit Loans Series 1997-QS13, Class M3 7.250%, 12/25/27 1,884 2,020 Wells Fargo Mortgage Backed Securities Trust, Series 2003-D, Class A 14.931%, 02/25/33 (C) 4,902 5,032 ---------- 10,047 ---------- TOTAL CMO - PRIVATE MORTGAGE-BACKED SECURITIES (Cost $11,683) 11,985 ---------- COMMERCIAL PAPER - 3.6% Corporate Asset Funding 1.250%, 04/09/03 5,000 4,999 Dorada Finance 1.290%, 04/10/03 5,000 4,998 ---------- TOTAL COMMERCIAL PAPER (Cost $9,997) 9,997 ----------
The accompanying notes are an integral part of the financial statements. 30
DESCRIPTION PAR (000) VALUE (000) ---------------------------------------------------------------- RELATED PARTY MONEY MARKET FUND - 11.7% First American Government Obligations Fund, Class Y (D) 32,444,878 $ 32,445 ---------- TOTAL RELATED PARTY MONEY MARKET FUND (Cost $32,445) 32,445 ---------- TOTAL INVESTMENTS - 112.3% (Cost $305,826) 311,740 ---------- OTHER ASSETS AND LIABILITIES, NET - (12.3)% (34,224) ---------- TOTAL NET ASSETS - 100.0% $277,516 ----------
(A) Variable Rate Security - The rate shown is the rate in effect as of March 31, 2003. (B) On March 31, 2003, the total cost of investments purchased on a when-issued basis was $36,723,169. (C) Securities considered illiquid or restricted. See note 2 in Notes to Financial Statements. (D) This money market fund is advised by U.S. Bancorp Asset Management, Inc., which also serves as advisor for this Fund. See note 3 in Notes to Financial Statements. CMO - Collateralized Mortgage Obligation FHLMC - Federal Home Loan Mortgage Corporation FNMA - Federal National Mortgage Association GNMA - Government National Mortgage Association REMIC - Real Estate Mortgage Investment Conduit TBA - To Be Announced 31 STATEMENTS OF ASSETS AND LIABILITIES March 31, 2003 (unaudited), in thousands, except per share data
CORE BOND CORPORATE BOND FUND FUND ---------------------------------------------------------------------------------------------------------- ASSETS: Investments in securities, at value*+ $ 3,546,291 $ 335,083 Cash -- 76 Cash denominated in foreign currencies, at value** -- -- Dividends and interest receivable 21,256 4,425 Receivable for investment securities sold 9,853 -- Capital shares sold 2,803 431 Prepaid expenses and other assets 39 11 ---------------------------------------------------------------------------------------------------------- TOTAL ASSETS 3,580,242 340,026 ========================================================================================================== LIABILITIES: Bank overdraft 88 -- Payable for investment securities purchased 211,147 2,170 Capital shares redeemed 3,674 89 Payable upon return of securities loaned 951,099 71,017 Payable for advisory, co-administration, and custodian fees 1,329 157 Payable for distribution and shareholder servicing fees 85 21 Accrued expenses and other liabilities -- 2 ---------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 1,167,422 73,456 ========================================================================================================== NET ASSETS $ 2,412,820 $ 266,570 ========================================================================================================== COMPOSITION OF NET ASSETS: Portfolio capital $ 2,353,589 $ 295,958 Undistributed (distributions in excess of) net investment income (1,544) (178) Accumulated net realized gain (loss) on investments 1,697 (34,584) Net unrealized appreciation of investments 59,078 5,374 Net unrealized depreciation on forward foreign currency contracts, foreign currency, and translation of assets and liabilities denominated in foreign currency -- -- ---------------------------------------------------------------------------------------------------------- NET ASSETS $ 2,412,820 $ 266,570 ========================================================================================================== *Investments in securities, at cost $ 3,487,213 $ 329,709 **Cash denominated in foreign currencies, at cost $ -- $ -- +Including securities loaned $ 933,553 $ 69,527 CLASS A: Net assets $ 199,594 $ 10,521 Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 17,349 1,067 Net asset value and redemption price per share $ 11.50 $ 9.86 Maximum offering price per share (1) $ 12.01 $ 10.30 CLASS B: Net assets $ 31,303 $ 15,942 Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 2,739 1,623 Net asset value and offering price per share (2) $ 11.43 $ 9.82 CLASS C: Net assets $ 15,096 $ 5,337 Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 1,316 544 Net asset value and offering price per share (2) $ 11.47 $ 9.81 Maximum offering price per share (1) $ 11.59 $ 9.91 CLASS S: Net assets $ 49,457 $ 3,171 Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 4,300 322 Net asset value, offering price, and redemption price per share $ 11.50 $ 9.86 CLASS Y: Net assets $ 2,117,370 $ 231,599 Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 184,086 23,504 Net asset value, offering price, and redemption price per share $ 11.50 $ 9.85
32
INTERMEDIATE U.S. GOVERNMENT INTERMEDIATE GOVERNMENT HIGH INCOME BOND TERM SHORT TERM MORTGAGE BOND FUND FUND(3) BOND FUND BOND FUND FUND ----------------------------------------------------------------------------------------------------------------------------------- ASSETS: Investments in securities, at value*+ $ 273,583 $ 458,608 $ 1,890,393 $ 1,255,138 $ 311,740 Cash 15 -- -- 6 1 Cash denominated in foreign currencies, at value** 3,043 -- -- -- -- Dividends and interest receivable 4,803 3,959 13,361 7,593 1,255 Receivable for investment securities sold 155 -- 32,868 3,080 17,264 Capital shares sold 345 432 7,507 2,418 1,307 Prepaid expenses and other assets 27 4 34 31 15 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS 281,971 463,003 1,944,163 1,268,266 331,582 =================================================================================================================================== LIABILITIES: Bank overdraft -- -- 381 -- -- Payable for investment securities purchased 274 4,995 49,592 15,334 53,808 Capital shares redeemed 642 849 2,908 1,004 81 Payable upon return of securities loaned 56,569 -- 542,107 338,332 -- Payable for advisory, co-administration, and custodian fees 156 232 649 446 148 Payable for distribution and shareholder servicing fees 29 -- 11 23 29 Accrued expenses and other liabilities -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 57,670 6,076 595,648 355,139 54,066 =================================================================================================================================== NET ASSETS $ 224,301 $ 456,927 $ 1,348,515 $ 913,127 $ 277,516 =================================================================================================================================== COMPOSITION OF NET ASSETS: Portfolio capital $ 255,927 $ 414,949 $ 1,309,294 $ 905,218 $ 271,944 Undistributed (distributions in excess of) net investment income (47) (90) 361 (931) (983) Accumulated net realized gain (loss) on investments (34,318) 15,997 2,443 (6,508) 641 Net unrealized appreciation of investments 2,789 26,071 36,417 15,348 5,914 Net unrealized depreciation on forward foreign currency contracts, foreign currency, and translation of assets and liabilities denominated in foreign currency (50) -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ NET ASSETS $ 224,301 $ 456,927 $ 1,348,515 $ 913,127 $ 277,516 =================================================================================================================================== *Investments in securities, at cost $ 270,794 $ 432,537 $ 1,853,976 $ 1,239,790 $ 305,826 **Cash denominated in foreign currencies, at cost $ 3,076 $ -- $ -- $ -- $ -- +Including securities loaned $ 55,135 $ -- $ 531,028 $ 331,243 $ -- CLASS A: Net assets $ 45,327 $ 1,522 $ 72,036 $ 168,731 $ 22,120 Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 5,307 152 6,942 16,410 2,007 Net asset value and redemption price per share $ 8.54 $ 10.05 $ 10.38 $ 10.28 $ 11.02 Maximum offering price per share (1) $ 8.92 $ 10.28 $ 10.62 $ 10.52 $ 11.51 CLASS B: Net assets $ 6,721 -- -- -- $ 10,348 Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 790 -- -- -- 938 Net asset value and offering price per share (2) $ 8.50 -- -- -- $ 11.04 CLASS C: Net assets $ 17,085 -- -- -- $ 15,334 Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 2,006 -- -- -- 1,396 Net asset value and offering price per share (2) $ 8.52 -- -- -- $ 10.98 Maximum offering price per share (1) $ 8.61 -- -- -- $ 11.09 CLASS S: Net assets $ 263 -- $ 12,246 $ 8,553 $ 22,192 Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 31 -- 1,180 832 2,020 Net asset value, offering price, and redemption price per share $ 8.61 -- $ 10.38 $ 10.28 $ 10.98 CLASS Y: Net assets $ 154,905 $ 455,405 $ 1,264,233 $ 735,843 $ 207,522 Shares issued and outstanding ($0.0001 par value -- 2 billion authorized) 18,130 45,317 122,166 71,539 18,821 Net asset value, offering price, and redemption price per share $ 8.54 $ 10.05 $ 10.35 $ 10.29 $ 11.03
(1) The offering price is calculated by dividing the net asset value by 1 minus the maximum sales charge. For a description of front-end sales charges, see note 1 in Notes to Financial Statements. (2) Class B and C have a contingent deferred sales charge. For a description of this sales charge, see notes 1 and 3 in Notes to Financial Statements. (3) Commenced operations on October 25, 2002. The accompanying notes are an integral part of the financial statements. 33 STATEMENTS OF OPERATIONS For the six months ended March 31, 2003 (unaudited), in thousands
CORE BOND CORPORATE BOND FUND FUND ---------------------------------------------------------------------------------------- INVESTMENT INCOME: Interest $ 35,492 $ 7,934 Dividends -- -- Securities lending 164 19 ---------------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 35,656 7,953 ======================================================================================== EXPENSES: Investment advisory fees 3,579 859 Co-administration fees and expenses (including per account transfer agency fees) 2,004 344 Custodian fees 72 12 Directors' fees 11 2 Registration fees 2 17 Professional fees 19 3 Other 16 2 Printing 28 4 Distribution and shareholder servicing fees - Class A 156 12 Distribution and shareholder servicing fees - Class B 88 85 Distribution and shareholder servicing fees - Class C 50 26 Shareholder servicing fees - Class S 36 4 ---------------------------------------------------------------------------------------- TOTAL EXPENSES 6,061 1,370 ======================================================================================== Less: Fee waivers (720) (323) ---------------------------------------------------------------------------------------- TOTAL NET EXPENSES 5,341 1,047 ======================================================================================== INVESTMENT INCOME - NET 30,315 6,906 ======================================================================================== REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS - NET: Net realized gain (loss) on investments 27,492 1,732 Net realized gain on forward foreign currency contracts and foreign currency transactions -- -- Net change in unrealized appreciation or depreciation of investments (22,856) 4,974 Net change in unrealized appreciation or depreciation of forward foreign currency contracts, foreign currency, and translation of other assets and liabilities denominated in foreign currency -- -- ---------------------------------------------------------------------------------------- NET GAIN ON INVESTMENTS 4,636 6,706 ======================================================================================== NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 34,951 $ 13,612 ========================================================================================
34
HIGH INTERMEDIATE INTERMEDIATE U.S. INCOME BOND GOVERNMENT TERM SHORT TERM GOVERNMENT FUND BOND FUND(1) BOND FUND BOND FUND MORTGAGE FUND ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Interest $ 7,608 $ 9,813 $ 31,463 $ 14,879 $ 5,714 Dividends 10 -- -- -- -- Securities lending -- -- 192 97 -- ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 7,618 9,813 31,655 14,976 5,714 =================================================================================================================================== EXPENSES: Investment advisory fees 608 1,059 3,219 1,967 619 Co-administration fees and expenses (including per account transfer agency fees) 247 593 1,785 1,085 347 Custodian fees 9 21 64 39 12 Directors' fees 1 3 8 5 2 Registration fees 17 3 -- 4 14 Professional fees 2 6 14 9 3 Other 2 3 9 7 2 Printing 3 8 19 11 4 Distribution and shareholder servicing fees - Class A 27 1 83 210 23 Distribution and shareholder servicing fees - Class B 23 -- -- -- 39 Distribution and shareholder servicing fees - Class C 38 -- -- -- 48 Shareholder servicing fees - Class S -- -- 14 8 28 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL EXPENSES 977 1,697 5,215 3,345 1,141 =================================================================================================================================== Less: Fee waivers (64) (426) (1,295) (855) (137) ----------------------------------------------------------------------------------------------------------------------------------- TOTAL NET EXPENSES 913 1,271 3,920 2,490 1,004 =================================================================================================================================== INVESTMENT INCOME - NET 6,705 8,542 27,735 12,486 4,710 =================================================================================================================================== REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS - NET: Net realized gain (loss) on investments (2,801) 16,532 22,482 1,228 745 Net realized gain on forward foreign currency contracts and foreign currency transactions 11 -- -- -- -- Net change in unrealized appreciation or depreciation of investments 14,611 26,071 (15,284) (329) (107) Net change in unrealized appreciation or depreciation of forward foreign currency contracts, foreign currency, and translation of other assets and liabilities denominated in foreign currency -- (43) -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- NET GAIN ON INVESTMENTS 11,778 42,603 7,198 899 638 =================================================================================================================================== NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 18,483 $ 51,145 $ 34,933 $ 13,385 $ 5,348 ===================================================================================================================================
(1) Commenced operations on October 25, 2002. The accompanying notes are an integral part of the financial statements. 35 STATEMENTS OF CHANGES IN NET ASSETS in thousands
CORE BOND CORPORATE BOND FUND FUND ------------------------------------------------------------------------------------------------------------------- 10/1/02 10/1/01 10/1/02 10/1/01 TO TO TO TO 3/31/03 9/30/02 3/31/03 9/30/02 ------------------------------------------------------------------------------------------------------------------- (UNAUDITED) (UNAUDITED) OPERATIONS: Investment income - net $ 30,315 $ 73,522 $ 6,906 $ 14,023 Net realized gain (loss) on investments 27,492 13,696 1,732 (8,043) Net realized gain on forward foreign currency contracts and foreign currency transactions -- -- -- -- Net change in unrealized appreciation or depreciation of investments (22,856) (5,915) 4,974 (1,455) Net change in unrealized appreciation or depreciation of forward foreign currency contracts, foreign currency, and translation of other assets and liabilities denominated in foreign currency -- -- -- -- ------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 34,951 81,303 13,612 4,525 =================================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM: Investment income - net: Class A (2,643) (5,694) (264) (563) Class B (306) (643) (414) (1,089) Class C (174) (393) (126) (269) Class S (599) (1,583) (96) (227) Class Y (28,137) (64,394) (6,184) (12,232) Net realized gain on investments: Class A -- -- -- (6) Class B -- -- -- (13) Class C -- -- -- (3) Class S -- -- -- (2) Class Y -- -- -- (114) Return of capital: Class A -- (51) -- (1) Class B -- (7) -- (3) Class C -- (4) -- (1) Class S -- (14) -- (1) Class Y -- (501) -- (33) ------------------------------------------------------------------------------------------------------------------- Total distributions (31,859) (73,284) (7,084) (14,557) =================================================================================================================== CAPITAL SHARE TRANSACTIONS (2): Class A: Proceeds from sales 18,670 52,786 3,489 2,755 Reinvestment of distributions 1,904 4,057 195 423 Payments for redemptions (29,639) (54,463) (2,074) (3,903) Shares issued in connection with the acquisition of Fund net assets 86,055 -- -- -- ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class A transactions 76,990 2,380 1,610 (725) ------------------------------------------------------------------------------------------------------------------- Class B: Proceeds from sales 2,121 4,648 1,016 1,464 Reinvestment of distributions 272 581 289 759 Payments for redemptions (2,966) (3,694) (4,530) (5,196) Shares issued in connection with the acquisition of Fund net assets 15,099 -- -- -- ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class B transactions 14,526 1,535 (3,225) (2,973) ------------------------------------------------------------------------------------------------------------------- Class C: Proceeds from sales 1,938 7,032 337 1,921 Reinvestment of distributions 170 386 119 256 Payments for redemptions (2,385) (4,975) (534) (1,872) Shares issued in connection with the acquisition of Fund net assets 5,671 -- -- -- ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class C transactions 5,394 2,443 (78) 305 ------------------------------------------------------------------------------------------------------------------- Class S: Proceeds from sales 7,364 11,652 172 2,448 Reinvestment of distributions 590 1,586 92 221 Payments for redemptions (21,933) (15,236) (748) (2,184) Shares issued in connection with the acquisition of Fund net assets 30,116 -- -- -- ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class S transactions 16,137 (1,998) (484) 485 ------------------------------------------------------------------------------------------------------------------- Class Y: Proceeds from sales 172,738 235,496 46,476 67,697 Reinvestment of distributions 9,129 18,366 681 1,323 Payments for redemptions (242,738) (424,808) (25,970) (41,314) Shares issued in connection with the acquisition of Common Trust Fund net assets 13,076 -- -- -- Shares issued in connection with the acquisition of Fund net assets 957,884 -- -- -- ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class Y transactions 910,089 (170,946) 21,187 27,706 ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 1,023,136 (166,586) 19,010 24,798 ------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 1,026,228 (158,567) 25,538 14,766 NET ASSETS AT BEGINNING OF PERIOD 1,386,592 1,545,159 241,032 226,266 =================================================================================================================== NET ASSETS AT END OF PERIOD $ 2,412,820 $ 1,386,592 $ 266,570 $ 241,032 =================================================================================================================== UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME AT END OF PERIOD $ (1,544) $ -- $ (178) $ -- ===================================================================================================================
36
INTERMEDIATE HIGH INCOME BOND GOVERNMENT INTERMEDIATE TERM FUND BOND FUND BOND FUND ----------------------------------------------------------------------------------------------------------------------------------- 10/1/02 10/1/02 10/25/02 (1) 10/1/02 10/1/01 TO TO TO TO TO 3/31/03 9/30/02 3/31/03 3/31/03 9/30/02 ----------------------------------------------------------------------------------------------------------------------------------- (UNAUDITED) (UNAUDITED) (UNAUDITED) OPERATIONS: Investment income - net $ 6,705 $ 14,614 $ 8,542 $ 27,735 $ 49,380 Net realized gain (loss) on investments (2,801) (13,064) 16,532 22,482 (1,622) Net realized gain on forward foreign currency contracts and foreign currency transactions 11 2 -- -- -- Net change in unrealized appreciation or depreciation of investments 14,611 4,732 26,071 (15,284) 12,719 Net change in unrealized appreciation or depreciation of forward foreign currency contracts, foreign currency, and translation of other assets and liabilities denominated in foreign currency (43) (19) -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 18,483 6,265 51,145 34,933 60,477 =================================================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM: Investment income - net: Class A (836) (1,501) (15) (1,356) (3,120) Class B (156) (253) -- -- -- Class C (267) (390) -- -- -- Class S (1) -- -- (229) (160) Class Y (5,495) (12,433) (8,617) (25,784) (46,355) Net realized gain on investments: Class A -- -- (1) -- -- Class B -- -- -- -- -- Class C -- -- -- -- -- Class S -- -- -- -- -- Class Y -- -- (534) -- -- Return of capital: Class A -- -- -- -- (54) Class B -- -- -- -- -- Class C -- -- -- -- -- Class S -- -- -- -- (5) Class Y -- -- -- -- (816) ----------------------------------------------------------------------------------------------------------------------------------- Total distributions (6,755) (14,577) (9,167) (27,369) (50,510) =================================================================================================================================== CAPITAL SHARE TRANSACTIONS (2): Class A: Proceeds from sales 7,879 2,976 1,512 15,565 28,252 Reinvestment of distributions 503 874 15 1,001 2,308 Payments for redemptions (5,905) (3,999) (6) (10,012) (27,067) Shares issued in connection with the acquisition of Fund net assets 23,374 -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class A transactions 25,851 (149) 1,521 6,554 3,493 ----------------------------------------------------------------------------------------------------------------------------------- Class B: Proceeds from sales 830 2,189 -- -- -- Reinvestment of distributions 83 133 -- -- -- Payments for redemptions (589) (328) -- -- -- Shares issued in connection with the acquisition of Fund net assets 1,910 -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class B transactions 2,234 1,994 -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Class C: Proceeds from sales 2,241 3,547 -- -- -- Reinvestment of distributions 247 337 -- -- -- Payments for redemptions (1,896) (1,565) -- -- -- Shares issued in connection with the acquisition of Fund net assets 9,735 -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class C transactions 10,327 2,319 -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Class S: Proceeds from sales 15 131 -- 8,443 6,552 Reinvestment of distributions 1 -- -- 194 105 Payments for redemptions (5) (125) -- (2,522) (1,422) Shares issued in connection with the acquisition of Fund net assets 243 -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class S transactions 254 6 -- 6,115 5,235 ----------------------------------------------------------------------------------------------------------------------------------- Class Y: Proceeds from sales 21,201 39,319 498,317 461,752 294,924 Reinvestment of distributions 1,079 2,521 544 10,623 15,604 Payments for redemptions (48,669) (54,456) (85,433) (193,860) (220,100) Shares issued in connection with the acquisition of Common Trust Fund net assets -- -- -- -- -- Shares issued in connection with the acquisition of Fund net assets 36,227 -- -- -- -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class Y transactions 9,838 (12,616) 413,428 278,515 90,428 ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 48,504 (8,446) 414,949 291,184 99,156 ----------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 60,232 (16,758) 456,927 298,748 109,123 NET ASSETS AT BEGINNING OF PERIOD 164,069 180,827 1,049,767 940,644 651,626 =================================================================================================================================== NET ASSETS AT END OF PERIOD $ 224,301 $ 164,069 $ 456,927 $ 1,348,515 $ 1,049,767 =================================================================================================================================== UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME AT END OF PERIOD $ (47) $ 3 $ (90) $ 361 $ (5) =================================================================================================================================== SHORT TERM BOND U.S. GOVERNMENT FUND MORTGAGE FUND ------------------------------------------------------------------------------------------------------------------- 10/1/02 10/1/01 10/1/02 10/1/01 TO TO TO TO 3/31/03 9/30/02 3/31/03 9/30/02 ------------------------------------------------------------------------------------------------------------------- (UNAUDITED) (UNAUDITED) OPERATIONS: Investment income - net $ 12,486 $ 20,442 $ 4,710 $ 10,205 Net realized gain (loss) on investments 1,228 1,832 745 7,575 Net realized gain on forward foreign currency contracts and foreign currency transactions -- -- -- -- Net change in unrealized appreciation or depreciation of investments (329) 3,212 (107) (3,630) Net change in unrealized appreciation or depreciation of forward foreign currency contracts, foreign currency, and translation of other assets and liabilities denominated in foreign currency -- -- -- -- ------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from operations 13,385 25,486 5,348 14,150 =================================================================================================================== DISTRIBUTIONS TO SHAREHOLDERS FROM: Investment income - net: Class A (2,752) (5,904) (430) (546) Class B -- -- (151) (144) Class C -- -- (194) (58) Class S (105) (60) (507) (1,076) Class Y (10,556) (15,035) (4,574) (9,186) Net realized gain on investments: Class A -- -- (183) -- Class B -- -- (75) -- Class C -- -- (81) -- Class S -- -- (238) -- Class Y -- -- (1,877) -- Return of capital: Class A -- (137) -- -- Class B -- -- -- -- Class C -- -- -- -- Class S -- (3) -- -- Class Y -- (405) -- -- ------------------------------------------------------------------------------------------------------------------- Total distributions (13,413) (21,544) (8,310) (11,010) =================================================================================================================== CAPITAL SHARE TRANSACTIONS (2): Class A: Proceeds from sales 44,741 67,442 8,935 10,556 Reinvestment of distributions 2,112 4,441 531 468 Payments for redemptions (41,314) (42,362) (4,113) (2,049) Shares issued in connection with the acquisition of Fund net assets -- -- -- -- ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class A transactions 5,539 29,521 5,353 8,975 ------------------------------------------------------------------------------------------------------------------- Class B: Proceeds from sales -- -- 5,077 4,740 Reinvestment of distributions -- -- 213 130 Payments for redemptions -- -- (1,086) (754) Shares issued in connection with the acquisition of Fund net assets -- -- -- -- ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class B transactions -- -- 4,204 4,116 ------------------------------------------------------------------------------------------------------------------- Class C: Proceeds from sales -- -- 10,792 5,832 Reinvestment of distributions -- -- 271 56 Payments for redemptions -- -- (1,455) (214) Shares issued in connection with the acquisition of Fund net assets -- -- -- -- ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class C transactions -- -- 9,608 5,674 ------------------------------------------------------------------------------------------------------------------- Class S: Proceeds from sales 5,218 3,946 3,994 9,678 Reinvestment of distributions 80 40 740 1,072 Payments for redemptions (435) (708) (3,625) (8,787) Shares issued in connection with the acquisition of Fund net assets -- -- -- -- ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class S transactions 4,863 3,278 1,109 1,963 ------------------------------------------------------------------------------------------------------------------- Class Y: Proceeds from sales 352,553 325,792 48,302 35,474 Reinvestment of distributions 4,025 5,649 1,119 1,500 Payments for redemptions (105,451) (127,339) (20,672) (42,257) Shares issued in connection with the acquisition of Common Trust Fund net assets -- -- -- -- Shares issued in connection with the acquisition of Fund net assets -- -- -- -- ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from Class Y transactions 251,127 204,102 28,749 (5,283) ------------------------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions 261,529 236,901 49,023 15,445 ------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 261,501 240,843 46,061 18,585 NET ASSETS AT BEGINNING OF PERIOD 410,783 231,455 212,870 =================================================================================================================== NET ASSETS AT END OF PERIOD $ 913,127 $ 651,626 $ 277,516 $ 231,455 =================================================================================================================== UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET INVESTMENT INCOME AT END OF PERIOD $ (931) $ (4) $ (983) $ 163 ===================================================================================================================
(1) Commencement of operations. (2) See note 4 in Notes to Financial Statements for additional information. The accompanying notes are an integral part of the financial statements. 37 FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended September 30, unless otherwise indicated.
REALIZED AND NET ASSET UNREALIZED DIVIDENDS NET ASSET VALUE NET GAINS OR FROM NET DISTRIBUTIONS VALUE BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM END OF OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS PERIOD ---------------------------------------------------------------------------------------------------------------------- CORE BOND FUND Class A 2003(1) $11.45 $0.23 $0.06 $(0.24) $ -- $11.50 2002 11.37 0.55 0.08 (0.55) -- 11.45 2001(2) 10.69 0.61 0.69 (0.62) -- 11.37 2000 10.65 0.61 0.04 (0.61) -- 10.69 1999 11.69 0.59 (0.89) (0.59) (0.15) 10.65 1998 10.97 0.57 0.73 (0.57) (0.01) 11.69 Class B 2003(1) $11.38 $0.21 $0.04 $(0.20) $ -- $11.43 2002 11.29 0.47 0.09 (0.47) -- 11.38 2001(2) 10.63 0.52 0.68 (0.54) -- 11.29 2000 10.58 0.53 0.05 (0.53) -- 10.63 1999 11.63 0.51 (0.90) (0.51) (0.15) 10.58 1998 10.91 0.49 0.73 (0.49) (0.01) 11.63 Class C 2003(1) $11.42 $0.20 $0.05 $(0.20) $ -- $11.47 2002 11.34 0.47 0.08 (0.47) -- 11.42 2001(2) 10.66 0.52 0.70 (0.54) -- 11.34 2000 10.64 0.52 0.04 (0.54) -- 10.66 1999(3) 11.33 0.38 (0.69) (0.38) -- 10.64 Class S 2003(1) $11.45 $0.23 $0.06 $(0.24) $ -- $11.50 2002 11.37 0.55 0.08 (0.55) -- 11.45 2001(2)(4) 11.28 0.01 0.08 -- -- 11.37 Class Y 2003(1) $11.45 $0.25 $0.06 $(0.26) $ -- $11.50 2002 11.37 0.58 0.08 (0.58) -- 11.45 2001(2) 10.69 0.63 0.70 (0.65) -- 11.37 2000 10.65 0.63 0.04 (0.63) -- 10.69 1999 11.69 0.61 (0.89) (0.61) (0.15) 10.65 1998 10.96 0.60 0.74 (0.60) (0.01) 11.69 CORPORATE BOND FUND Class A 2003(1) $ 9.60 $0.26 $0.27 $(0.27) $ -- $ 9.86 2002 10.01 0.57 (0.39) (0.58) (0.01) 9.60 2001(2) 10.03 0.72 0.35 (0.73) (0.36) 10.01 2000(5) 10.00 0.48 0.02 (0.47) -- 10.03 Class B 2003(1) $ 9.57 $0.23 $0.25 $(0.23) $ -- $ 9.82 2002 9.98 0.49 (0.38) (0.51) (0.01) 9.57 2001(2) 10.02 0.66 0.32 (0.66) (0.36) 9.98 2000(5) 10.00 0.45 0.01 (0.44) -- 10.02 Class C 2003(1) $ 9.55 $0.23 $0.26 $(0.23) $ -- $ 9.81 2002 9.97 0.49 (0.40) (0.50) (0.01) 9.55 2001(2) 10.01 0.63 0.35 (0.66) (0.36) 9.97 2000(5) 10.00 0.45 (0.01) (0.43) -- 10.01 Class S 2003(1) $ 9.60 $0.27 $0.26 $(0.27) $ -- $ 9.86 2002 10.01 0.56 (0.38) (0.58) (0.01) 9.60 2001(2)(4) 9.93 0.01 0.07 -- -- 10.01 Class Y 2003(1) $ 9.59 $0.28 $0.26 $(0.28) $ -- $ 9.85 2002 10.00 0.59 (0.39) (0.60) (0.01) 9.59 2001(2) 10.03 0.75 0.33 (0.75) (0.36) 10.00 2000(5) 10.00 0.49 0.02 (0.48) -- 10.03
38
RATIO OF NET RATIO OF INVESTMENT RATIO OF NET EXPENSES TO INCOME TO RATIO OF INVESTMENT AVERAGE AVERAGE NET NET ASSETS EXPENSES TO INCOME NET ASSETS ASSETS PORTFOLIO TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER RETURN(6) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE ------------------------------------------------------------------------------------------------------------------------------- CORE BOND FUND Class A 2003(1) 2.59% $ 199,594 0.95% 4.02% 1.05% 3.92% 85% 2002 5.77 122,354 0.95 4.93 1.03 4.85 115 2001(2) 12.50 119,067 0.95 5.50 1.13 5.32 81 2000 6.33 110,490 0.95 5.76 1.14 5.57 54 1999 (2.67) 137,133 0.95 5.29 1.14 5.10 90 1998 12.29 205,237 0.95 5.10 1.11 4.94 147 Class B 2003(1) 2.21% $ 31,303 1.70% 3.27% 1.80% 3.17% 85% 2002 5.12 16,741 1.70 4.17 1.78 4.09 115 2001(2) 11.59 15,071 1.70 4.75 1.88 4.57 81 2000 5.70 11,550 1.70 5.02 1.89 4.83 54 1999 (3.48) 14,639 1.70 4.53 1.89 4.34 90 1998 11.54 17,242 1.70 4.35 1.86 4.19 147 Class C 2003(1) 2.19% $ 15,096 1.70% 3.28% 1.80% 3.18% 85% 2002 5.02 9,672 1.70 4.18 1.78 4.10 115 2001(2) 11.68 7,148 1.70 4.65 1.88 4.47 81 2000 5.50 566 1.70 5.02 1.89 4.83 54 1999(3) (2.75) 719 1.35 5.09 1.89 4.55 90 Class S 2003(1) 2.59% $ 49,457 0.95% 4.03% 1.05% 3.93% 85% 2002 5.77 33,270 0.95 4.93 1.03 4.85 115 2001(2)(4) 0.80 35,062 1.58 6.36 1.76 6.18 81 Class Y 2003(1) 2.73% $2,117,370 0.70% 4.26% 0.80% 4.16% 85% 2002 6.04 1,204,555 0.70 5.18 0.78 5.10 115 2001(2) 12.76 1,368,812 0.70 5.76 0.88 5.58 81 2000 6.59 1,299,941 0.70 6.03 0.89 5.84 54 1999 (2.44) 1,239,900 0.70 5.57 0.89 5.38 90 1998 12.66 1,210,661 0.70 5.35 0.86 5.19 147 CORPORATE BOND FUND Class A 2003(1) 5.63% $ 10,521 1.00% 5.48% 1.26% 5.22% 39% 2002 1.83 8,663 1.00 5.77 1.27 5.50 117 2001(2) 10.94 9,820 0.75 6.95 1.20 6.50 187 2000(5) 5.17 771 0.72 7.52 1.24 7.00 124 Class B 2003(1) 5.14% $ 15,942 1.75% 4.74% 2.01% 4.48% 39% 2002 1.07 18,728 1.75 5.02 2.02 4.75 117 2001(2) 10.06 22,608 1.65 6.45 2.11 5.99 187 2000(5) 4.70 103 1.48 6.86 1.99 6.35 124 Class C 2003(1) 5.26% $ 5,337 1.75% 4.73% 2.01% 4.47% 39% 2002 0.98 5,283 1.75 5.02 2.02 4.75 117 2001(2) 10.10 5,209 1.50 6.07 1.94 5.63 187 2000(5) 4.54 143 1.48 6.79 1.99 6.28 124 Class S 2003(1) 5.63% $ 3,171 1.00% 5.48% 1.26% 5.22% 39% 2002 1.84 3,557 1.00 5.77 1.27 5.50 117 2001(2)(4) 0.81 3,237 0.89 7.60 1.36 7.13 187 Class Y 2003(1) 5.76% $ 231,599 0.75% 5.73% 1.01% 5.47% 39% 2002 2.08 204,801 0.75 6.03 1.02 5.76 117 2001(2) 11.09 185,392 0.51 7.26 0.95 6.82 187 2000(5) 5.32 89,990 0.48 7.75 0.99 7.24 124
(1) For the six months ended March 31, 2003 (unaudited). All ratios for the period have been annualized, except total return and portfolio turnover. (2) Per share data calculated using average shares outstanding method. (3) Class of shares has been offered since February 1, 1999. All ratios for the period have been annualized, except total return and portfolio turnover. (4) Class of shares has been offered since September 24, 2001. All ratios for the period have been annualized, except total return and portfolio turnover. (5) Commenced operations on February 1, 2000. All ratios for the period have been annualized, except total return and portfolio turnover. (6) Total returns do not reflect sales charges. Total return would have been lower had certain expenses not been waived. The accompanying notes are an integral part of the financial statements. 39 FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended September 30, unless otherwise indicated.
REALIZED AND NET ASSET UNREALIZED DIVIDENDS VALUE NET GAINS OR FROM NET DISTRIBUTIONS BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS CAPITAL ------------------------------------------------------------------------------------------------------------------------------------ HIGH INCOME BOND FUND (1) Class A 2003(2)(3) $ 7.90 $0.31 $0.69 $(0.36) $ -- $ -- 2002 9.23 0.65 (1.21) (0.70) -- (0.07) 2001(3)(4) 9.93 0.02 (0.68) (0.04) -- -- Class B 2003(2)(3) $ 7.87 $0.28 $0.67 $(0.32) $ -- $ -- 2002 9.19 0.69 (1.31) (0.63) -- (0.07) 2001(3)(4) 9.88 0.02 (0.67) (0.04) -- -- Class C 2003(2)(3) $ 7.89 $0.28 $0.67 $(0.32) $ -- $ -- 2002 9.21 0.64 (1.27) (0.62) -- (0.07) 2001(3)(4) 9.90 0.05 (0.70) (0.04) -- -- Class S 2003(2)(3) $ 7.98 $0.30 $0.69 $(0.36) $ -- $ -- 2002 9.32 0.73 (1.30) (0.70) -- (0.07) 2001(3)(5) 9.50 0.01 (0.19) -- -- -- Class Y 2003(2)(3) $ 7.92 $0.32 $0.67 $(0.37) $ -- $ -- 2002 9.24 0.74 (1.28) (0.71) -- (0.07) 2001(3)(4) 9.92 0.05 (0.69) (0.04) -- -- INTERMEDIATE GOVERNMENT BOND FUND (6) Class A 2003 $10.00 $0.16 $0.06 $(0.17) $ -- $ -- Class Y 2003 $10.00 $0.18 $0.05 $(0.18) $ -- $ -- INTERMEDIATE TERM BOND FUND (7) Class A 2003(2) $10.35 $0.21 $0.03 $(0.21) $ -- $ -- 2002 10.26 0.50 0.10 (0.50) -- (0.01) 2001(3)(8) 9.70 0.54 0.55 (0.51) (0.02) -- 2000(9) 9.68 0.58 0.02 (0.58) -- -- 1999(9) 10.07 0.54 (0.38) (0.54) (0.01) -- 1998(9) 9.88 0.55 0.19 (0.55) -- -- 1997(9) 9.77 0.56 0.11 (0.56) -- -- Class S 2003(2) $10.35 $0.21 $0.03 $(0.21) $ -- $ -- 2002 10.26 0.51 0.09 (0.50) -- (0.01) 2001(3)(10) 9.78 0.48 0.53 (0.51) (0.02) -- Class Y 2003(2) $10.32 $0.22 $0.03 $(0.22) $ -- $ -- 2002 10.23 0.52 0.10 (0.52) -- (0.01) 2001(3)(8) 9.68 0.56 0.54 (0.53) (0.02) -- 2000(9) 9.66 0.60 0.02 (0.60) -- -- 1999(9) 10.04 0.56 (0.37) (0.56) (0.01) -- 1998(9) 9.86 0.56 0.18 (0.56) -- -- 1997(9) 9.74 0.57 0.12 (0.57) -- --
40
RATIO RATIO OF OF NET RATIO EXPENSES INVESTMENT NET NET RATIO OF OF NET TO INCOME ASSET ASSETS EXPENSES INVESTMENT AVERAGE TO AVERAGE VALUE END OF TO INCOME NET ASSETS NET ASSETS PORTFOLIO END OF TOTAL PERIOD AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER PERIOD RETURN(11) (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE ------------------------------------------------------------------------------------------------------------------------------------ HIGH INCOME BOND FUND (1) Class A 2003(2)(3) $ 8.54 12.86% $ 45,327 1.20% 7.46% 1.27% 7.39% 101% 2002 7.90 (6.66) 23,900 1.10 7.64 1.47 7.27 86 2001(3)(4) 9.23 (6.55) 161 1.10 6.53 1.33 6.30 53 Class B 2003(2)(3) $ 8.50 12.33% $ 6,721 1.95% 6.80% 2.02% 6.73% 101% 2002 7.87 (7.26) 774 1.80 7.49 2.28 7.01 86 2001(3)(4) 9.19 (6.47) 40 1.77 6.02 2.02 5.77 53 Class C 2003(2)(3) $ 8.52 12.31% $ 17,085 1.95% 6.75% 2.02% 6.68% 101% 2002 7.89 (7.34) 7,213 1.83 7.08 2.26 6.65 86 2001(3)(4) 9.21 (6.50) 3,749 1.94 5.53 2.21 5.26 53 Class S 2003(2)(3) $ 8.61 12.66% $ 263 1.20% 7.07% 1.27% 7.00% 101% 2002 7.98 (6.66) 87 1.01 8.46 1.57 7.90 86 2001(3)(5) 9.32 (1.90) -- 0.00 1.23 0.00 1.23 53 Class Y 2003(2)(3) $ 8.54 12.72% $ 154,905 0.95% 7.83% 1.02% 7.76% 101% 2002 7.92 (6.33) 21,157 0.82 8.19 1.27 7.74 86 2001(3)(4) 9.24 (6.47) 8,308 0.96 6.06 1.23 5.79 53 INTERMEDIATE GOVERNMENT BOND FUND (6) Class A 2003 $10.05 2.35% $ 1,522 0.75% 3.82% 1.05% 3.52% 32% Class Y 2003 $10.05 2.39% $ 455,405 0.60% 4.09% 0.80% 3.89% 32% INTERMEDIATE TERM BOND FUND (7) Class A 2003(2) $10.38 2.37% $ 72,036 0.75% 4.17% 1.04% 3.88% 79% 2002 10.35 6.11 65,291 0.75 4.96 1.02 4.69 40 2001(3)(8) 10.26 11.46 61,225 0.85 5.62 0.96 5.51 30 2000(9) 9.70 6.41 27,431 0.82 6.08 0.95 5.95 18 1999(9) 9.68 1.66 33,779 0.81 5.47 0.95 5.33 64 1998(9) 10.07 7.57 29,550 0.75 5.50 0.96 5.29 27 1997(9) 9.88 7.09 20,691 0.75 5.71 0.98 5.48 41 Class S 2003(2) $10.38 2.37% $ 12,246 0.75% 4.15% 1.04% 3.86% 79% 2002 10.35 6.12 6,070 0.75 4.86 1.02 4.59 40 2001(3)(10) 10.26 10.58 724 0.84 5.41 0.95 5.30 30 Class Y 2003(2) $10.35 2.45% $1,264,233 0.60% 4.31% 0.79% 4.12% 79% 2002 10.32 6.29 978,406 0.60 5.11 0.77 4.94 40 2001(3)(8) 10.23 11.61 878,695 0.60 5.83 0.70 5.73 30 2000(9) 9.68 6.67 408,708 0.57 6.33 0.70 6.20 18 1999(9) 9.66 1.91 284,047 0.56 5.71 0.70 5.57 64 1998(9) 10.04 7.83 291,289 0.50 5.75 0.71 5.54 27 1997(9) 9.86 7.36 254,521 0.50 5.96 0.73 5.73 41
(1) The financial highlights for the High Income Bond Fund as set forth herein include the historical financial highlights of the First American High Yield Bond Fund Class A shares, Class B shares, Class C shares, Class S shares, and Class Y shares. The assets of the First American High Yield Bond Fund were acquired by High Income Bond Fund on March 14, 2003. In connection with such acquisition, Class A shares, Class B shares, Class C shares, Class S shares, and Class Y shares of the First American High Yield Bond Fund were exchanged for Class A shares, Class B shares, Class C shares, Class S shares, and Class Y shares of High Income Bond Fund, respectively. Historical per-share amounts have been adjusted to reflect the conversion ratios utilized for the merger of the High Income Bond Fund and the First American High Yield Bond Fund. (2) For the six months ended March 31, 2003 (unaudited). All ratios for the period have been annualized, except total return and portfolio turnover. (3) Per share data calculated using average shares outstanding method. (4) Commenced operations on August 30, 2001. All ratios for the period have been annualized, except total return and portfolio turnover. (5) Class of shares has been offered since September 24, 2001. All ratios for the period have been annualized, except total return and portfolio turnover. (6) Commenced operations on October 25, 2002. All ratios for the period have been annualized, except total return and portfolio turnover. (7) The financial highlights for the Intermediate Term Bond Fund as set forth herein include the historical financial highlights of the Firstar Intermediate Bond Fund Class A shares, Class Y shares, and Class I shares. The assets of the Firstar Intermediate Bond Fund were acquired by Intermediate Term Bond Fund on September 24, 2001. In connection with such acquisition, Class A shares, Class Y shares, and Class I shares of the Firstar Intermediate Bond Fund were exchanged for Class A shares, Class S shares, and Class Y shares of Intermediate Term Bond Fund, respectively. Historical per-share amounts have been adjusted to reflect the conversion ratios utilized for the merger of the Intermediate Term Bond Fund and the Firstar Intermediate Bond Fund. (8) Effective in 2001, the Fund's fiscal year end was changed to September 30 from October 31. All ratios for the period have been annualized, except total return and portfolio turnover. (9) For the fiscal year ended October 31. (10) Class of shares has been offered since November 27, 2000. All ratios for the period have been annualized, except total return and portfolio turnover. (11) Total returns do not reflect sales charges. Total return would have been lower had certain expenses not been waived. The accompanying notes are an integral part of the financial statements. 41 FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended September 30, unless otherwise indicated.
REALIZED AND NET ASSET UNREALIZED DIVIDENDS VALUE NET GAINS OR FROM NET DISTRIBUTIONS BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS CAPITAL ----------------------------------------------------------------------------------------------------------------------- SHORT TERM BOND FUND Class A 2003 (1) $10.29 $0.16 $ -- $(0.17) $ -- $ -- 2002 10.27 0.42 0.04 (0.43) -- (0.01) 2001 (2) 9.91 0.61 0.40 (0.65) -- -- 2000 9.86 0.58 0.02 (0.55) -- -- 1999 10.04 0.52 (0.18) (0.52) -- -- 1998 9.94 0.53 0.10 (0.53) -- -- Class S 2003 (1) $10.29 $0.16 $ -- $(0.17) $ -- $ -- 2002 10.27 0.42 0.04 (0.43) -- (0.01) 2001 (2) (3) 10.25 0.01 0.01 -- -- -- Class Y 2003 (1) $10.30 $0.16 $0.01 $(0.18) $ -- $ -- 2002 10.27 0.43 0.05 (0.44) -- (0.01) 2001 (2) 9.91 0.63 0.39 (0.66) -- -- 2000 9.87 0.59 0.01 (0.56) -- -- 1999 10.04 0.52 (0.17) (0.52) -- -- 1998 9.94 0.53 0.10 (0.53) -- -- U.S. GOVERNMENT MORTGAGE FUND (4) Class A 2003 (1) $11.16 $0.21 $0.02 $(0.25) $(0.12) $ -- 2002 11.01 0.50 0.20 (0.55) -- -- 2001 (2) (5) 10.44 0.51 0.60 (0.54) -- -- 2000 (6) 10.34 0.53 0.08 (0.51) -- -- 1999 (7) 10.74 0.54 (0.40) (0.54) -- -- 1998 (7) 10.62 0.57 0.12 (0.57) -- -- 1997 (7) 10.67 0.60 (0.07) (0.58) -- -- Class B 2003 (1) $11.18 $0.18 $0.01 $(0.21) $(0.12) $ -- 2002 11.03 0.42 0.20 (0.47) -- -- 2001 (2) (5) 10.45 0.43 0.62 (0.47) -- -- 2000 (6) 10.36 0.45 0.08 (0.44) -- -- 1999 (7) 10.74 0.47 (0.38) (0.47) -- -- 1998 (7) 10.61 0.50 0.13 (0.50) -- -- 1997 (7) 10.66 0.51 (0.05) (0.51) -- -- Class C 2003 (1) $11.13 $0.18 $ -- $(0.21) $(0.12) $ -- 2002 11.00 0.46 0.15 (0.48) -- -- 2001 (2) (3) 10.98 0.05 (0.03) -- -- -- Class S 2003 (1) $11.12 $0.20 $0.03 $(0.25) $(0.12) $ -- 2002 10.97 0.49 0.20 (0.54) -- -- 2001 (2) (5) 10.40 0.62 0.49 (0.54) -- -- 2000 (6) 10.31 0.53 0.07 (0.51) -- -- 1999 (7) 10.70 0.53 (0.38) (0.54) -- -- 1998 (7) 10.58 0.57 0.12 (0.57) -- -- 1997 (7) 10.64 0.56 (0.04) (0.58) -- -- Class Y 2003 (1) $11.16 $0.22 $0.03 $(0.26) $(0.12) $ -- 2002 11.01 0.53 0.19 (0.57) -- -- 2001 (2) (5) 10.44 0.53 0.60 (0.56) -- -- 2000 (6) 10.34 0.55 0.08 (0.53) -- -- 1999 (7) 10.74 0.58 (0.41) (0.57) -- -- 1998 (7) 10.62 0.60 0.12 (0.60) -- -- 1997 (7) 10.67 0.61 (0.05) (0.61) -- --
42
RATIO OF NET RATIO OF INVESTMENT RATIO OF NET EXPENSES TO INCOME TO NET ASSET NET ASSETS RATIO OF INVESTMENT AVERAGE AVERAGE VALUE END OF EXPENSES TO INCOME NET ASSETS NET ASSETS PORTFOLIO END OF TOTAL PERIOD AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER PERIOD RETURN(8) (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE ------------------------------------------------------------------------------------------------------------------------------------ SHORT TERM BOND FUND Class A 2003 (1) $10.28 1.55% $168,731 0.75% 3.06% 1.04% 2.77% 21% 2002 10.29 4.59 163,358 0.75 4.06 1.04 3.77 59 2001 (2) 10.27 10.48 133,177 0.60 6.04 1.15 5.49 69 2000 9.91 6.30 80,992 0.60 6.12 1.13 5.59 95 1999 9.86 3.43 5,318 0.60 5.16 1.12 4.64 65 1998 10.04 6.55 5,036 0.60 5.33 1.12 4.81 112 Class S 2003 (1) $10.28 1.55% $ 8,553 0.75% 3.04% 1.04% 2.75% 21% 2002 10.29 4.61 3,685 0.75 3.88 1.04 3.59 59 2001 (2) (3) 10.27 0.20 362 1.20 6.37 1.80 5.77 69 Class Y 2003 (1) $10.29 1.62% $735,843 0.60% 3.20% 0.79% 3.01% 21% 2002 10.30 4.85 484,583 0.60 4.18 0.79 3.99 59 2001 (2) 10.27 10.64 277,244 0.46 6.24 1.02 5.68 69 2000 9.91 6.29 92,092 0.51 5.94 0.98 5.47 95 1999 9.87 3.53 119,522 0.60 5.15 0.87 4.88 65 1998 10.04 6.55 173,136 0.60 5.33 0.87 5.06 112 ------------------------------------------------------------------------------------------------------------------------------------ U.S. GOVERNMENT MORTGAGE FUND (4) Class A 2003 (1) $11.02 2.09% $ 22,120 0.95% 3.66% 1.06% 3.55% 70% 2002 11.16 6.53 16,985 0.95 4.61 1.08 4.48 197 2001 (2) (5) 11.01 10.88 7,751 1.04 5.15 1.19 5.00 22 2000 (6) 10.44 6.05 3,644 1.04 5.36 1.15 5.25 23 1999 (7) 10.34 1.37 4,620 0.98 5.15 1.09 5.04 26 1998 (7) 10.74 6.66 4,664 0.97 5.35 1.07 5.25 55 1997 (7) 10.62 5.20 5,181 0.97 5.56 1.07 5.46 100 Class B 2003 (1) $11.04 1.73% $ 10,348 1.70% 2.91% 1.81% 2.80% 70% 2002 11.18 5.79 6,235 1.70 3.85 1.83 3.72 197 2001 (2) (5) 11.03 10.25 2,039 1.71 4.37 1.86 4.22 22 2000 (6) 10.45 5.27 139 1.74 4.66 1.85 4.55 23 1999 (7) 10.36 0.86 282 1.68 4.47 1.79 4.36 26 1998 (7) 10.74 6.02 149 1.67 4.67 1.77 4.57 55 1997 (7) 10.61 4.47 466 1.67 4.84 1.77 4.74 100 Class C 2003 (1) $10.98 1.66% $ 15,334 1.70% 2.88% 1.81% 2.77% 70% 2002 11.13 5.78 5,834 1.70 3.92 1.83 3.79 197 2001 (2) (3) 11.00 0.18 105 0.82 5.26 1.12 4.96 22 Class S 2003 (1) $10.98 2.10% $ 22,192 0.95% 3.67% 1.06% 3.56% 70% 2002 11.12 6.55 21,355 0.95 4.59 1.08 4.46 197 2001 (2) (5) 10.97 10.94 19,092 0.97 6.52 1.15 6.34 22 2000 (6) 10.40 5.96 5,145 1.04 5.36 1.15 5.25 23 1999 (7) 10.31 1.45 8,584 0.98 5.17 1.09 5.06 26 1998 (7) 10.70 6.67 6,140 0.97 5.34 1.07 5.24 55 1997 (7) 10.58 5.10 7,049 0.97 5.52 1.07 5.42 100 Class Y 2003 (1) $11.03 2.31% $207,522 0.70% 3.92% 0.81% 3.81% 70% 2002 11.16 6.79 181,046 0.70 4.84 0.83 4.71 197 2001 (2) (5) 11.01 11.14 183,883 0.71 5.37 0.85 5.23 22 2000 (6) 10.44 6.34 53,896 0.74 5.66 1.15 5.25 23 1999 (7) 10.34 1.67 72,483 0.68 5.45 1.09 5.04 26 1998 (7) 10.74 6.98 93,683 0.67 5.64 1.07 5.24 55 1997 (7) 10.62 5.51 72,753 0.67 5.84 1.07 5.44 100
(1) For the six months ended March 31, 2003 (unaudited). All ratios for the period have been annualized, except total return and portfolio turnover. (2) Per share data calculated using average shares outstanding method. (3) Class of shares has been offered since September 24, 2001. All ratios for the period have been annualized, except total return and portfolio turnover. (4) The financial highlights for the U.S. Government Securities Fund as set forth herein include the historical financial highlights of the Firstar U.S. Government Securities Fund Class A shares, Class B shares, Class Y shares, and Class I shares.The assets of the Firstar U.S. Government Securities Fund were acquired by U.S. Government Securities Fund on September 24, 2001. In connection with such acquisition, Class A shares, Class B shares, Class Y shares, and Class I shares of the Firstar U.S.Government Securities Fund were exchanged for Class A shares, Class B shares, Class S shares, and Class Y shares of U.S. Government Securities Fund, respectively. (5) Effective in 2001, the Fund's fiscal year end was changed to September 30 from October 31. All ratios for the period have been annualized, except total return and portfolio turnover. (6) Effective in 2000, the Fund's fiscal year end was changed to October 31 from November 30. All ratios for the period have been annualized, except total return and portfolio turnover. (7) For the fiscal year ended November 30. (8) Total returns do not reflect sales charges. Total return would have been lower had certain expenses not been waived. The accompanying notes are an integral part of the financial statements. 43 NOTES TO Financial STATEMENTS March 31, 2003 (unaudited) 1 > ORGANIZATION The First American Core Bond Fund (formerly Fixed Income Fund), Corporate Bond Fund, High Income Bond Fund (formerly Strategic Income Fund), Intermediate Government Bond Fund, Intermediate Term Bond Fund, Short Term Bond Fund, and U.S. Government Mortgage Fund (formerly U.S. Government Securities Fund) (each a "Fund" and collectively, the "Funds") are mutual funds offered by First American Investment Funds, Inc. ("FAIF"), which is a member of First American Family of Funds. FAIF currently offers 37 funds, including the Funds included in this report. FAIF is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. FAIF's articles of incorporation permit the Funds' board of directors to create additional funds in the future. FAIF offers Class A, Class B, Class C, Class S, and Class Y shares. Class A shares of Intermediate Government Bond Fund, Intermediate Term Bond Fund, and Short Term Bond Fund are sold with a front-end sales charge of 2.25%. Class A shares of Core Bond Fund, Corporate Bond Fund, High Income Bond Fund, and U.S. Government Mortgage Fund are sold with a front-end sales charge of 4.25%. Class B shares are subject to a contingent deferred sales charge for six years and automatically convert to Class A shares after eight years. Class C shares are sold with a front-end sales charge of 1.00%, are subject to a contingent deferred sales charge for 18 months, and will not convert to Class A shares. Class S and Class Y shares have no sales charge and are offered only to qualifying institutional investors. Class B and Class C shares are not offered by the Intermediate Government Bond Fund, Intermediate Term Bond Fund, or Short Term Bond Fund. Class S shares are not offered by the Intermediate Government Bond Fund. The Funds' prospectuses provide descriptions of each Fund's investment objectives, policies, and strategies. All classes of shares in a Fund have identical voting, dividend, liquidation, and other rights, and the same terms and conditions, except that the level of distribution and shareholder servicing fees charged may differ among classes and each class has exclusive voting rights on any matters relating to that class' servicing or distribution arrangements. 2 > SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies followed by the Funds are as follows: SECURITY VALUATION - Security valuations for the Funds' investments are furnished by one or more independent pricing services that have been approved by the Funds' board of directors. Investments in equity securities that are traded on a national securities exchange (or reported on the NASDAQ national market system) are stated at the last quoted sales price if readily available for such securities on each business day. Other equity securities traded in the over-the-counter market and listed equity securities for which no sale was reported on that date are stated at the last quoted bid price. Debt obligations exceeding 60 days to maturity are valued by an independent pricing service. The pricing service may employ methodologies that utilize actual market transactions, broker-dealer supplied valuations, or other formula driven valuation techniques. These techniques generally consider such factors as yields or prices of bonds of comparable quality, type of issue, coupon, maturity, ratings, and general market conditions. Securities for which prices are not available from an independent pricing service but where an active market exists are valued using market quotations obtained from one or more dealers that make markets in the securities or from a widely used quotation system. When market quotations are not readily available, securities are valued at fair value as determined in good faith by procedures established and approved by the Funds' board of directors. As of March 31, 2003, Core Bond Fund, High Income Bond Fund, and Short Term Bond Fund held fair value securities with a value of $3,400,000, $4,313, and $6,641, respectively. Debt obligations with 60 days or less remaining until maturity may be valued at their amortized cost, which approximates market value. Foreign securities are valued at the closing prices on the principal exchanges on which they trade. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates. Exchange rates are provided daily by recognized independent pricing agents. Investments in open-end mutual funds are valued at the respective net asset value of each underlying fund, determined at the close of the New York Stock Exchange (generally 3:00 p.m. central time) on the valuation date. SECURITY TRANSACTIONS AND INVESTMENT INCOME - The Funds record security transactions on the trade date of the security purchase or sale. Dividend income is recorded on the ex-dividend date. Interest income, including 44 amortization of bond premium and discount, is recorded on an accrual basis. Security gains and losses are determined on the basis of identified cost, which is the same basis used for federal income tax purposes. DISTRIBUTIONS TO SHAREHOLDERS - Distributions from net investment income are declared and paid on a monthly basis. Any net realized capital gains on sales of securities for a Fund are distributed to shareholders at least annually. EXPENSES - Expenses that are directly related to one of the Funds are charged directly to that Fund. Other operating expenses are generally allocated to the Funds on the basis of relative net assets of all Funds within the First American Fund complex. Class specific expenses, such as 12b-1 fees, are borne by that class. Income, other expenses, and realized and unrealized gains and losses of a Fund are allocated to each respective class in proportion to the relative net assets of each class. FEDERAL TAXES - It is each Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable income. Accordingly, no provision for federal income taxes is required. Net investment income and net realized gains (losses) may differ for financial statement and tax purposes because of temporary or permanent book/tax differences. These differences are primarily due to losses deferred due to wash sales, paydowns on pass through obligations, and tax mark to market adjustments under Section 311(e) of the Taxpayer Relief Act of 1997. To the extent these differences are permanent, adjustments are made to the appropriate equity accounts in the period that the difference arises. The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. In addition, due to the timing of dividend distributions, the fiscal year in which the amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the Fund. The character of the distributions paid during the semiannual period ended March 31, 2003 (estimated) and the fiscal year ended September 30, 2002, was as follows:
2003 -------------------------------------------------------------------------------------------- ORDINARY LONG TERM TOTAL FUND INCOME (000) GAIN (000) (000) -------------------------------------------------------------------------------------------- Core Bond Fund $31,859 $ -- $31,859 Corporate Bond Fund 7,084 -- 7,084 High Income Bond Fund 6,755 -- 6,755 Intermediate Government Bond Fund 8,632 535 9,167 Intermediate Term Bond Fund 27,369 -- 27,369 Short Term Bond Fund 13,413 -- 13,413 U.S. Government Mortgage Fund 5,856 2,454 8,310 2002 ---------------------------------------------------------------------------------------------------------------- ORDINARY LONG TERM RETURN OF TOTAL FUND INCOME (000) GAIN (000) CAPITAL (000) (000) ---------------------------------------------------------------------------------------------------------------- Core Bond Fund $72,708 $ -- $ 576 $73,284 Corporate Bond Fund 14,518 -- 39 14,557 High Income Bond Fund 14,577 -- -- 14,577 Intermediate Term Bond Fund 49,635 -- 875 50,510 Short Term Bond Fund 20,999 -- 545 21,544 U.S. Government Mortgage Fund 11,010 -- -- 11,010
45 As of September 30, 2002, the Funds' most recently completed fiscal year end, the components of accumulated earnings (deficit) on a tax basis were:
ACCUMULATED TOTAL UNDISTRIBUTED UNDISTRIBUTED CAPITAL AND UNREALIZED ACCUMULATED ORDINARY LONG TERM POST-OCTOBER APPRECIATION EARNINGS FUND INCOME (000) CAPITAL GAINS (000) LOSSES (000) (DEPRECIATION) (000) (DEFICIT) (000) --------------------------------------------------------------------------------------------------------------------------------- Core Bond Fund $ -- $ -- $(19,103) $ 57,017 $ 37,915 Corporate Bond Fund -- -- (36,226) 310 (35,916) High Income Bond Fund 3 -- (31,528) (11,472) (42,997) Intermediate Term Bond Fund -- -- (19,950) 51,612 31,662 Short Term Bond Fund -- -- (7,450) 15,392 7,942 U.S. Government Mortgage Fund 163 2,350 -- 6,021 8,534
The differences between book and tax basis unrealized appreciation (depreciation) is primarily due to the deferral of losses due to wash sales and tax mark to market adjustments made under Section 311(e) of the Taxpayer Relief Act of 1997. As of September 30, 2002, the Funds' most recently completed fiscal year end, the following Funds have capital loss carryforwards:
FUND AMOUNT (000) EXPIRATION DATE ----------------------------------------------------------------- Core Bond Fund $19,103 2003-2008 Corporate Bond Fund 27,439 2005-2007 High Income Bond Fund 22,033 2003-2010 Intermediate Term Bond Fund 18,239 2003-2010 Short Term Bond Fund 6,653 2003-2008
In accordance with Section 382 of the Internal Revenue Code, utilization of all or a portion of the above capital loss carryovers is limited on an annual basis for the Corporate Bond Fund and Intermediate Term Bond Fund in the amount of $6,352,310 and $2,720,363, respectively, per tax year for a portion of their capital loss carryover. Certain Funds incurred a loss for tax purposes for the period from November 1, 2001 to September 30, 2002. As permitted by tax regulations, the Funds intend to elect to defer and treat these losses as arising in the fiscal year ending September 30, 2003. The following Funds had deferred losses:
FUND AMOUNT (000) ------------------------------------------------------------ Corporate Bond Fund $8,788 High Income Bond Fund 9,495 Intermediate Term Bond Fund 1,711 Short Term Bond Fund 797
FOREIGN CURRENCY TRANSLATION - The books and records of the High Income Bond Fund are maintained in U.S. dollars on the following basis: - market value of investment securities, assets, and liabilities at the current rate of exchange; and - purchases and sales of investment securities, income, and expenses at the relevant rates of exchange prevailing on the respective dates of such transactions. The High Income Bond Fund does not isolate the portion of gains and losses on investments in equity securities that is due to changes in the foreign exchange rates from that which is due to changes in market prices of equity securities. The High Income Bond Fund does isolate the effect of fluctuations in foreign currency rates when determining the gain or loss upon sale or maturity of foreign currency denominated debt obligations pursuant to the federal income tax regulations. Such amounts are categorized as foreign currency gain or loss for both financial reporting and income tax reporting purposes. The High Income Bond Fund reports certain foreign currency related transactions as components of realized gains for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes. SECURITIES PURCHASED ON A WHEN-ISSUED BASIS - Delivery and payment for securities that have been purchased by a Fund on a forward-commitment or when-issued basis can take place up to a month or more after the transaction date. During this 46 period, such securities are subject to market fluctuations and the portfolio maintains, in a segregated account with its custodian, assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a when-issued or forward-commitment basis may increase the volatility of the Fund's net asset value if the Fund makes such purchases while remaining substantially fully invested. At March 31, 2003, Core Bond Fund, Intermediate Government Bond Fund, Intermediate Term Bond Fund, Short Term Bond Fund and U.S. Government Mortgage Fund had outstanding when-issued commitments with a cost of $201,831,993, $4,995,313, $12,987,813, $15,328,438, and $36,723,169, respectively. In connection with the ability to purchase securities on a when-issued basis, the Core Bond Fund, Corporate Bond Fund, High Income Bond Fund, Intermediate Government Bond Fund, Intermediate Term Bond Fund, Short Term Bond Fund, and U.S. Government Mortgage Fund may also enter into dollar rolls in which the Fund sells securities purchased on a forward-commitment basis and simultaneously contracts with a counterparty to repurchase similar (same type, coupon, and maturity) but not identical securities on a specified future date. Dollar rolls are considered a form of leverage. As an inducement to "roll over" its purchase commitments, the Fund receives negotiated fees. For the semiannual period ended March 31, 2003, the Funds earned no fees from dollar roll transactions. ILLIQUID OR RESTRICTED SECURITIES - At March 31, 2003, investments in securities in the Core Bond Fund, Corporate Bond Fund, High Income Bond Fund, Intermediate Term Bond Fund, Short Term Bond Fund, and U.S. Government Mortgage Fund included issues that are illiquid or restricted. Restricted securities are often purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Funds' board of directors as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 15% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. At March 31, 2003, the aggregate value of illiquid or restricted securities subject to this limitation was as follows:
PERCENTAGE OF FUND VALUE NET ASSETS ------------------------------------------------------------------------------- Core Bond Fund $35,606,112 1.5% Corporate Bond Fund 911,115 0.3 High Income Bond Fund 215,772 0.1 Intermediate Term Bond 661,405 0.1 Short Term Bond Fund 6,641 0.0 U.S. Government Mortgage Fund 5,032,205 1.8
Information concerning restricted securities is as follows:
CORE BOND FUND ------------------------------------------------------------------------------- DATES SECURITY PAR ACQUIRED COST BASIS ------------------------------------------------------------------------------- Duty Free International $ 6,800,000 1/99-7/99 $ 6,787,170 Wells Fargo Mortgage Backed Securities Trust 31,371,379 1/03 31,900,026
CORPORATE BOND FUND ------------------------------------------------------------------------------- DATES SECURITY PAR ACQUIRED COST BASIS ------------------------------------------------------------------------------- Aircraft Finance Trust $ 839,357 2/00 $ 773,253 Juniper 1,000,000 2/00 1,000,000
HIGH INCOME BOND FUND ------------------------------------------------------------------------------- DATES SECURITY PAR/SHARES ACQUIRED COST BASIS ------------------------------------------------------------------------------- Aircraft Finance Trust $839,357 2/00 $773,264 AT&T Canada 100 1/98 231 Diamond Brands Operating 50,000 4/98 50,000 Glenoit 100,000 3/97-8/97 101,654 NII Holdings, Series B 5,751 11/02 4,695 Pegasus Communications 15,109 1/03 -- Viatel 75,000 9/02 -- Viatel Holdings 294 9/02 82,139
INTERMEDIATE TERM BOND FUND ------------------------------------------------------------------------------- DATES SECURITY PAR ACQUIRED COST BASIS ------------------------------------------------------------------------------- Louisville & Nashville Railroad, Series F $636,000 10/02 $636,000 Orange California Redevelopment Agency 25,000 10/02 25,353
SHORT TERM BOND FUND ------------------------------------------------------------------------------- DATES SECURITY PAR ACQUIRED COST BASIS ------------------------------------------------------------------------------- Auto Bond Receivables Trust $106,397 11/98-11/00 $106,396 Patten 7,590 7/95-9/00 7,512
U.S. GOVERNMENT MORTGAGE FUND ------------------------------------------------------------------------------- DATES SECURITY PAR ACQUIRED COST BASIS ------------------------------------------------------------------------------- Wells Fargo Mortgage Backed Securities Trust $4,901,778 1/03 $4,984,379
47 SECURITIES LENDING - Each Fund may lend up to one-third of the value of its total assets to broker-dealers, banks, or other institutional borrowers of securities in order to earn additional income. Each Fund's policy is to maintain collateral in the form of cash, U.S. government securities, or other high-grade debt obligations equal to at least 100% of the value of securities loaned. The collateral is then "marked-to-market" daily until the securities are returned. USBAM serves as the securities lending agent for the Funds in transactions involving the lending of portfolio securities on behalf of the Funds. For these services, the securities lending fees paid to USBAM from the Funds for the six months ended March 31, 2003, were as follows:
FUND AMOUNT (000) ---------------------------------------------------------- Core Bond Fund $152 Corporate Bond Fund 17 High Income Bond Fund 3 Intermediate Term Bond Fund 165 Short Term Bond Fund 80
HISTORICAL FINANCIAL STATEMENT INFORMATION - The financial information presented for Intermediate Term Bond Fund and U.S. Government Mortgage Fund, prior to September 24, 2001, is that of Firstar Intermediate Bond Fund and Firstar U.S. Government Securities Fund, respectively. USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The preparation of financial statements, in conformity with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported results of operations during the reporting period. Actual results could differ from those estimates. 3 > FEES AND EXPENSES ADVISORY FEES - Pursuant to an investment advisory agreement (the "Agreement"), U.S. Bancorp Asset Management, Inc. ("USBAM"), manages each Fund's assets and furnishes related office facilities, equipment, research and personnel. The Agreement requires each Fund to pay USBAM a monthly fee based upon average daily net assets. The fee for each Fund is equal to an annual rate as presented below applied to the Fund's average daily net assets. Core Bond Fund 0.50% Corporate Bond Fund 0.70 High Income Bond Fund 0.70 Intermediate Government Bond Fund 0.50 Intermediate Term Bond Fund 0.50 Short Term Bond Fund 0.50 U.S. Government Mortgage Fund 0.50
USBAM voluntarily waived fees during the most recently completed semiannual period so that the total fund operating expenses did not exceed expense limitations described in the Funds' prospectus. The Funds may invest in the money market funds that are series of First American Funds, Inc. ("FAF"), subject to certain limitations. The terms of such transactions are identical to those of nonrelated entities except that, to avoid duplicative investment advisory fees, USBAM reimburses each FAIF Fund an amount equal to the investment advisory fee paid by FAF to USBAM related to such investments. SUB-ADVISOR FEES - Federated Global Research Corp., a subsidiary of Federated Investors, Inc. ("Federated"), served as sub-advisor to the High Income Bond Fund under an agreement with USBAM (the "Sub-Advisory Agreement") through March 14, 2003. For its services under the Sub-Advisory Agreement, Federated was paid a monthly fee by USBAM, calculated on an annual basis equal to 0.20% of the first $25 million of the Fund's average daily net assets, 0.165% of the Fund's average daily net assets in excess of $25 million up to $50 million, 0.13% of the Fund's average daily net assets in excess of $50 million up to $100 million, and 0.105% of the Fund's average daily net assets in excess of $100 million. CO-ADMINISTRATION FEES - USBAM and U.S. Bancorp Fund Services, LLC ("USBFS") (collectively, the "Administrators"), serve as co-administrators pursuant to a co-administration agreement between the Administrators and the Funds. USBAM is a subsidiary of U.S. Bank National Association ("U.S. Bank"). Both U.S. Bank and USBFS are direct subsidiaries of U.S. Bancorp. Under the co-administration agreement, the Administrators are compensated to provide, or compensate other entities to provide services to the Funds. These services include various legal, oversight and administrative services, accounting services, transfer agency and dividend disbursing services, and shareholder services. The Funds pay the Administrators at an annual rate, calculated daily and paid monthly based on the average daily net assets of all open-end mutual funds in the First American Family of Funds, equal to each Fund's pro rata share of an amount equal to 0.25% of the aggregate average daily net assets up to $8 billion, 0.235% on the next $17 billion of aggregate average daily net assets, 0.22% on the next $25 billion of aggregate average daily net assets, and 0.20% of the aggregate average daily net assets of all open-end mutual funds in the First American Family of Funds in excess of $50 billion. In addition, the Funds pay the Administrators 48 annual fees of $18,500 per class and additional per account fees for transfer agent services. For the semiannual period ended March 31, 2003, administration and transfer agent fees paid to USBAM and USBFS for the Funds included in this semiannual report were as follows:
FUND AMOUNT (000) ---------------------------------------------------------- Core Bond Fund $1,967 Corporate Bond Fund 336 High Income Bond Fund 238 Intermediate Government Bond Fund 581 Intermediate Term Bond Fund 1,764 Short Term Bond Fund 1,079 U.S. Government Mortgage Fund 339
CUSTODIAN FEES - U.S. Bank serves as the Funds' custodian pursuant to a custodian agreement with FAIF. The fee for each Fund is equal to an annual rate of 0.01% of average daily net assets, which is computed daily and paid monthly. DISTRIBUTION AND SHAREHOLDER SERVICING FEES - Quasar Distributors, LLC ("Quasar"), a subsidiary of U.S. Bancorp, serves as the distributor of the Funds pursuant to a distribution agreement with FAIF. Under the respective distribution agreement, each of the Funds pays Quasar a monthly distribution and/or shareholder servicing fee at an annual rate of 0.25%, 1.00%, and 1.00% of each Fund's average daily net assets of the Class A shares, Class B shares, and Class C shares, respectively, which may be used by Quasar to provide compensation for sales support, distribution activities, and shareholder servicing activities. FAIF has also adopted and entered into a shareholder service plan and agreement with Quasar. Each Fund pays to Quasar a monthly shareholder servicing fee equal to an annual rate of 0.25% of each Fund's average daily net assets of the Class S shares. The distributor is currently waiving fees equal to 0.10% of average daily net assets for Class A and Class S shares in the Intermediate Government Bond Fund, Intermediate Term Bond Fund, and Short Term Bond Fund. No distribution or shareholder servicing fees are paid by Class Y shares. For the semiannual period ended March 31, 2003, total distribution and shareholder servicing fees waived by the distributor for the Funds included in this semiannual report were as follows:
FUND AMOUNT (000) ---------------------------------------------------------- Intermediate Government Bond Fund $-- Intermediate Term Bond Fund 39 Short Term Bond Fund 87
Under the distribution agreements, the following amounts were retained by Quasar or paid to affiliates of USBAM for the semiannual period ended March 31, 2003:
FUND AMOUNT (000) ---------------------------------------------------------- Core Bond Fund $192 Corporate Bond Fund 49 High Income Bond Fund 43 Intermediate Government Bond Fund 1 Intermediate Term Bond Fund 44 Short Term Bond Fund 96 U.S. Government Mortgage Fund 107
OTHER FEES - In addition to the investment advisory fees, custodian fees, distribution and shareholder servicing fees, and co-administration fees, each Fund is responsible for paying most other operating expenses including fees and expenses of outside directors, registration fees, printing of shareholder reports, legal, auditing, insurance, and other miscellaneous expenses. For the semiannual period ended March 31, 2003, legal fees and expenses were paid to a law firm of which the Secretary and two Assistant Secretaries of the Funds are partners. 49 SALES CHARGES - Class B shares are subject to a contingent deferred sales charge ("CDSC") imposed on redemptions made in Class B shares for the first six years. The CDSC varies depending on the number of years from time of payment for the purchase of Class B shares until the redemption of such shares.
CONTINGENT DEFERRED SALES CHARGE AS A PERCENTAGE OF DOLLAR YEAR SINCE PURCHASE AMOUNT SUBJECT TO CHARGE ------------------------------------------------------------ First 5.00% Second 5.00% Third 4.00% Fourth 3.00% Fifth 2.00% Sixth 1.00% Seventh 0.00% Eighth 0.00%
Class B shares will automatically convert to Class A shares eight years after the first day of the month shares are purchased. A CDSC of 1.00% is imposed on redemptions made in Class C shares for the first 18 months. The CDSC for Class B and Class C shares is imposed on the value of the purchased shares, or the value at the time of redemption, whichever is less. For the semiannual period ended March 31, 2003, total front-end and contingent deferred sales charges retained by affiliates of USBAM for distributing the Funds' shares were as follows:
FUND AMOUNT (000) ---------------------------------------------------------- Core Bond Fund $146 Corporate Bond Fund 61 High Income Bond Fund 65 Intermediate Government Bond Fund 25 Intermediate Term Bond Fund 33 Short Term Bond Fund 251 U.S. Government Mortgage Fund 367
50 4 > CAPITAL SHARE TRANSACTIONS FAIF has 420 billion shares of $0.0001 par value capital stock authorized. Capital share transactions for the Funds were as follows:
HIGH INTERMEDIATE CORE BOND CORPORATE BOND INCOME BOND GOVERNMENT FUND (000) FUND (000) FUND (000) BOND FUND (000) ------------------------------------------------------------------------------------------------------------------------------------ 10/1/02 10/1/01 10/1/02 10/1/01 10/1/02 10/1/01 10/25/02 (1) TO TO TO TO TO TO TO 3/31/03 9/30/02 3/31/03 9/30/02 3/31/03 9/30/02 3/31/03 ------------------------------------------------------------------------------------------------------------------------------------ (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) Class A: Shares issued 1,634 4,694 360 281 937 354 151 Shares issued in lieu of cash distributions 167 362 20 43 60 103 2 Shares redeemed (2,599) (4,850) (215) (403) (709) (473) (1) Shares issued in connection with the acquistion of Fund net assets 7,465 -- -- -- 2,765 -- -- ------------------------------------------------------------------------------------------------------------------------------------ TOTAL CLASS A TRANSACTIONS 6,667 206 165 (79) 3,053 (16) 152 ==================================================================================================================================== Class B: Shares issued 186 417 105 150 100 258 -- Shares issued in lieu of cash distributions 24 52 30 78 10 16 -- Shares redeemed (261) (332) (470) (536) (72) (40) -- Shares issued in connection with the acquistion of Fund net assets 1,319 -- -- -- 227 -- -- ------------------------------------------------------------------------------------------------------------------------------------ TOTAL CLASS B TRANSACTIONS 1,268 137 (335) (308) 265 234 -- ==================================================================================================================================== Class C: Shares issued 171 626 35 198 271 419 -- Shares issued in lieu of cash distributions 15 34 12 27 30 40 -- Shares redeemed (210) (444) (56) (194) (230) (187) -- Shares issued in connection with the acquistion of Fund net assets 493 -- -- -- 1,155 -- -- ------------------------------------------------------------------------------------------------------------------------------------ TOTAL CLASS C TRANSACTIONS 469 216 (9) 31 1,226 272 -- ==================================================================================================================================== Class S: Shares issued 647 1,039 18 249 2 16 -- Shares issued in lieu of cash distributions 52 142 10 23 -- -- -- Shares redeemed (1,917) (1,361) (77) (224) -- (15) -- Shares issued in connection with the acquistion of Fund net assets 2,613 -- -- -- 28 -- -- ------------------------------------------------------------------------------------------------------------------------------------ TOTAL CLASS S TRANSACTIONS 1,395 (180) (49) 48 30 1 -- ==================================================================================================================================== Class Y: Shares issued 15,141 20,969 4,781 6,921 2,558 4,613 53,770 Shares issued in lieu of cash distributions 802 1,640 71 136 130 297 55 Shares redeemed (21,303) (37,873) (2,694) (4,243) (5,814) (6,453) (8,508) Shares issued in connection with the acquistion of Common Trust Fund net assets 1,167 -- -- -- -- -- -- Shares issued in connection with the acquistion of Fund net assets 83,108 -- -- -- 4,283 -- -- ------------------------------------------------------------------------------------------------------------------------------------ TOTAL CLASS Y TRANSACTIONS 78,915 (15,264) 2,158 2,814 1,157 (1,543) 45,317 ==================================================================================================================================== NET INCREASE (DECREASE) IN CAPITAL SHARES 88,714 (14,885) 1,930 2,506 5,731 (1,052) 45,469 ==================================================================================================================================== INTERMEDIATE TERM SHORT TERM BOND U.S. GOVERNMENT BOND FUND (000) FUND (000) MORTGAGE FUND (000) ----------------------------------------------------------------------------------------------------------------------------------- 10/1/02 10/1/01 10/1/02 10/1/01 10/1/02 10/1/01 TO TO TO TO TO TO 3/31/03 9/30/02 3/31/03 9/30/02 3/31/03 9/30/02 ----------------------------------------------------------------------------------------------------------------------------------- (UNAUDITED) (UNAUDITED) (UNAUDITED) Class A: Shares issued 1,507 2,778 4,358 6,633 807 961 Shares issued in lieu of cash distributions 98 228 206 438 48 43 Shares redeemed (970) (2,667) (4,025) (4,170) (370) (186) ----------------------------------------------------------------------------------------------------------------------------------- TOTAL CLASS A TRANSACTIONS 635 339 539 2,901 485 818 =================================================================================================================================== Class B: Shares issued -- -- -- -- 459 430 Shares issued in lieu of cash distributions -- -- -- -- 19 12 Shares redeemed -- -- -- -- (98) (69) ----------------------------------------------------------------------------------------------------------------------------------- TOTAL CLASS B TRANSACTIONS -- -- -- -- 380 373 =================================================================================================================================== Class C: Shares issued -- -- -- -- 979 529 Shares issued in lieu of cash distributions -- -- -- -- 25 5 Shares redeemed -- -- -- -- (132) (20) ----------------------------------------------------------------------------------------------------------------------------------- TOTAL CLASS C TRANSACTIONS -- -- -- -- 872 514 =================================================================================================================================== Class S: Shares issued 819 645 509 388 362 886 Shares issued in lieu of cash distributions 19 10 8 4 67 99 Shares redeemed (245) (139) (43) (69) (329) (805) ----------------------------------------------------------------------------------------------------------------------------------- TOTAL CLASS S TRANSACTIONS 593 516 474 323 100 180 =================================================================================================================================== Class Y: Shares issued 45,210 29,153 34,353 32,058 4,371 3,231 Shares issued in lieu of cash distributions 1,037 1,547 393 557 102 137 Shares redeemed (18,858) (21,788) (10,267) (12,544) (1,868) (3,854) ----------------------------------------------------------------------------------------------------------------------------------- TOTAL CLASS Y TRANSACTIONS 27,389 8,912 24,479 20,071 2,605 (486) =================================================================================================================================== NET INCREASE IN CAPITAL SHARES 28,617 9,767 25,492 23,295 4,442 1,399 ===================================================================================================================================
(1) Commencement of operations. 51 5 > INVESTMENT SECURITY TRANSACTIONS During the semiannual period ended March 31, 2003, purchases of securities and proceeds from sales of securities, other than temporary investments in short-term securities, were as follows:
U.S. GOVERNMENT OTHER INVESTMENT SECURITIES SECURITIES --------------------------------------------------------------------------------------- PURCHASES PURCHASES FUND (000) SALES (000) (000) SALES (000) --------------------------------------------------------------------------------------- Core Bond Fund $834,399 $818,156 $337,528 $385,529 Corporate Bond Fund 9,221 10,469 104,906 84,441 High Income Bond Fund 118,993 101,345 40,493 70,324 Intermediate Government Bond Fund 152,641 214,035 -- -- Intermediate Term Bond Fund 649,340 654,630 624,432 270,862 Short Term Bond Fund 170,189 82,417 267,862 79,707 U.S. Government Mortgage Fund 187,470 159,267 7,927 6,008
At March 31, 2003, the total cost of securities for federal income tax purposes and the related aggregate gross unrealized appreciation and depreciation for securities held by the Funds is as follows:
AGGREGATE AGGREGATE FEDERAL GROSS GROSS INCOME APPRECIATION DEPRECIATION TAX COST FUND (000) (000) NET (000) (000) ---------------------------------------------------------------------------------------------- Core Bond Fund $68,720 $(9,738) $58,982 $2,536,210 Corporate Bond Fund 12,302 (7,018) 5,284 258,782 High Income Bond Fund 10,523 (7,734) 2,789 214,225 Intermediate Government Bond Fund 26,206 (135) 26,071 432,537 Intermediate Term Bond Fund 40,158 (3,830) 36,328 1,311,958 Short Term Bond Fund 16,798 (1,450) 15,348 916,458 U.S. Government Mortgage Fund 6,101 (187) 5,914 305,826
6 > CONCENTRATION OF RISKS The High Income Bond Fund is subject to special risks associated with investing in foreign securities and to a decline in net asset value resulting from changes in exchange rates between the United States dollar and foreign currencies. The High Income Bond Fund is also subject to risks associated with investing in securities issued by issuers in emerging market countries. Because of the special risks associated with foreign investing, the High Income Bond Fund may be subject to greater volatility than most mutual funds which invest primarily in domestic securities. The High Income Bond Fund invests in lower-rated (i.e., rated Ba or lower by Moody's or BB or lower by Standard & Poor's) corporate and foreign debt obligations, which are commonly referred to as "junk bonds". Lower-rated securities will usually offer higher yields than higher-rated securities. However, there is more risk associated with these investments. These lower-rated bonds may be more susceptible to real or perceived adverse economic conditions than investment grade bonds. Lower-rated securities tend to have more price volatility and carry more risk to principal than higher-rated securities. The rating of long-term securities as a percentage of total value of investments at the semiannual period ended March 31, 2003, is as follows:
STANDARD & POOR'S/ HIGH INCOME BOND MOODY'S RATINGS FUND ---------------------------------------------------------- AAA/Aaa 5% A/A 1 BBB/Baa 6 BB/Ba 40 B/B 38 CCC/Caa 9 C 1 ---------------------------------------------------------- 100%
Securities rated by only one agency are shown in that category. Securities rated by both agencies are shown with their highest rating. 52 7 > Fund Mergers On October 25, 2002, the Core Bond Fund acquired substantially all of the assets of the Common Income Common Trust Fund (KS) (sponsored by U.S. Bank) in exchange for Class Y shares of the Core Bond Fund. In addition, the First American Intermediate Government Bond Fund shell portfolio acquired substantially all of the assets of the U.S. Government Bond Common Trust Fund (sponsored by U.S. Bank) in exchange for Class Y shares of the Intermediate Government Bond Fund. The following table illustrates the specifics of the of the common trust fund conversions into the Core Bond Fund and the Intermediate Government Bond Fund included in this semiannual report:
ACQUIRED SHARES ISSUED TO ACQUIRING FUNDS NET SHAREHOLDERS OF FUND COMBINED ASSETS ACQUIRED FUND NET ASSETS NET ASSETS TAX STATUS ACQUIRED FUND ACQUIRING FUND (000) (000) (000) (000) OF TRANSFER ------------------------------------------------------------------------------------------------------------------------------------ Common Income Trust Fund Core Bond Fund - Class Y $ 13,076 (1) 1,176 $1,318,694 $1,331,770 Non-taxable U.S. Government Bond Common Intermediate Government Trust Fund Bond Fund - Class Y (2) 520,605 52,061 -- 520,605 Non-taxable
(1) Includes unrealized appreciation of $794,486. (2) Shell portfolio On March 13, 2003, shareholders of FAIF approved the Agreement and Plan of Reorganization, recommended by the Funds' board of directors, providing for the reorganization of several First American Funds into other existing First American Funds. On March 14, 2003, Bond IMMDEXTM Fund merged into Core Bond Fund and High Yield Bond Fund merged into High Income Bond Fund. The following table illustrates the specifics of the mergers of the Funds included in this semiannual report:
ACQUIRED SHARES ISSUED TO ACQUIRING FUNDS NET SHAREHOLDERS OF FUND COMBINED ASSETS ACQUIRED FUND NET ASSETS NET ASSETS TAX STATUS ACQUIRED FUND ACQUIRING FUND (000) (000) (000) (000) OF TRANSFER ----------------------------------------------------------------------------------------------------------------------------------- Bond IMMDEX(TM) Fund Core Bond Fund (1) $1,094,825 (2) $1,339,160 $2,433,985 Non-taxable Class A 7,465 Class B 1,319 Class C 493 Class S 2,613 Class Y 83,108 High Yield Bond Fund High Income Bond Fund (1) 71,489 (3) 156,457 227,946 Non-taxable Class A 2,765 Class B 227 Class C 1,155 Class S 28 Class Y 4,283
(1) Accounting survivor. (2) Includes unrealized appreciation in the amount $17,432. (3) Includes capital loss carryovers and unrealized depreciation in the amount of $30 and $357, respectively. 53 Board of Directors First American Investment Funds, Inc. ROGER GIBSON Director of First American Investment Funds, Inc. Vice President, Cargo-United Airlines LEONARD KEDROWSKI Director of First American Investment Funds, Inc. Owner and President of Executive and Management Consulting, Inc. JOHN MURPHY JR. Director of First American Investment Funds, Inc. Retired; former Executive Vice President of U.S. Bancorp RICHARD RIEDERER Director of First American Investment Funds, Inc. Retired; former President and Chief Executive Officer of Weirton Steel JOSEPH STRAUSS Director of First American Investment Funds, Inc. Former Chairperson of First American Investment Funds, Inc. Owner and President of Strauss Management Company VIRGINIA STRINGER Chairperson of First American Investment Funds, Inc. Owner and President of Strategic Management Resources, Inc. JAMES WADE Director of First American Investment Funds, Inc. Owner and President of Jim Wade Homes [FIRST AMERICAN FUNDS(TM) LOGO] DIRECT FUND CORRESPONDENCE TO: FIRST AMERICAN FUNDS P.O. Box 1330 Minneapolis, MN 55440-1330 This report and the financial statements contained herein are submitted for the general information of the shareholders of the corporation and are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. Further, there is no assurance that certain securities will remain in or out of each fund's portfolio. This material must be preceded or accompanied by a current prospectus, which contains more complete information about First American Funds, including risks, fees, and expenses. Please contact your investment professional, call First American Funds Investor Services at 800.677.FUND, or visit firstamericanfunds.com for additional information about First American Funds. Past performance does not guarantee future results. The principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. INVESTMENT ADVISOR U.S. BANCORP ASSET MANAGEMENT, INC. 800 Nicollet Mall Minneapolis, Minnesota 55402 CO-ADMINISTRATORS U.S. BANCORP ASSET MANAGEMENT, INC. 800 Nicollet Mall Minneapolis, Minnesota 55402 U.S. BANCORP FUND SERVICES, LLC 615 East Michigan Street Milwaukee, Wisconsin 53202 CUSTODIAN U.S. BANK NATIONAL ASSOCIATION 180 East Fifth Street St. Paul, Minnesota 55101 DISTRIBUTOR QUASAR DISTRIBUTORS, LLC 615 East Michigan Street, 2nd floor Milwaukee, Wisconsin 53202 INDEPENDENT AUDITORS ERNST & YOUNG LLP 220 South Sixth Street Suite 1400 Minneapolis, Minnesota 55402 COUNSEL DORSEY & WHITNEY LLP 50 South Sixth Street Suite 1500 Minneapolis, Minnesota 55402 FIRST AMERICAN FUNDS P.O. Box 1330 Minneapolis, MN 55440-1330 In an attempt to reduce shareholder costs and help eliminate duplication, First American Funds will try to limit their mailing to one report for each address that lists one or more shareholders with the same last name. If you would like additional copies, please call First American Funds Investor Services at 800.677.FUND. Visit us at firstamericanfunds.com. 2053-03 5/2003 SAR-BOND Item 2 - Did registrant adopt a code of ethics, as of the end of the period covered by this report, that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party? If not, why not? Briefly describe any amendments or waivers that occurred during the period. State here if code of ethics/amendments/waivers are on website and give website address-. State here if fund will send code of ethics to shareholders without charge upon request-- N/A (not answered until July 15, 2003 and only annually for funds) Item 3 - Did the registrant's board of directors determine that the registrant either: (i) has at least one audit committee financial expert serving on its audit committee; or (ii) does not have an audit committee financial expert serving on its audit committee? If yes, disclose name of financial expert and whether he/she is "independent," (fund may, but is not required, to disclose name/independence of more than one financial expert) If no, explain why not. - N/A (not answered until July 15, 2003 and only annually for funds) Item 4 - Disclose annually only (not answered until December 15, 2003) (a) Audit Fees - Disclose aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. N/A. (b) Audit-Related Fees - Disclose aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. N/A. (c) Tax Fees - Disclose aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. Registrants shall describe the nature of the services comprising the fees disclosed under this category. N/A. (d) All Other Fees - Disclose aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. N/A. (e)(1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. N/A. (e)(2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. N/A. (f) If greater than 50%, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees. N/A. (g) Disclose the aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant. N/A. (h) Disclose whether the registrant's audit committee has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. N/A. Items 5-6 - Reserved Item 7 - For closed - end funds that contain voting securities in their portfolio, describe the policies and procedures that it uses to determine how to vote proxies relating to those portfolio securities. N/A. Item 8 -- Reserved Item 9(a)- Disclose the conclusions of the registrant's principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, about the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR 270.30a-2(c))) based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph. N/A. Item 9(b)-- Disclose whether or not there were significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. N/A Item 10 - Exhibits 10(a) - Attach code of ethics or amendments/waivers, unless code of ethics or amendments/waivers is on website or offered to shareholders upon request without charge. N/A. 10(b) - Attach certifications (4 in total pursuant to Sections 302 and 906 for CEO/CFO). Attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. First American Investment Funds, Inc. By /s/ Thomas S. Schreier, Jr. ---------------------------- Thomas S. Schreier, Jr. President Date: May ____, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ Thomas S. Schreier, Jr. ---------------------------- Thomas S. Schreier, Jr. President Date: May ____, 2003 By /s/ Robert H. Nelson --------------------- Robert H. Nelson Treasurer Date: May ____, 2003