$1.2 billion as of June 30, 2007

Advantus manages more than $14 billion in fixed income portfolios. Our bottom-up approach has evolved over 125 years of managing fixed income assets. This track record stems from an understanding of risk and how the market prices risk. We believe, our expertise in risk management helps us to identify the potential for superior value in the non-Treasury sectors, which can lead to competitive long-term performance and risk control.

We believe it is extremely difficult to accurately forecast interest rate changes over the long term; with this in mind, we allocate most of our time to researching candidate securities and identifying attractive sectors. We purchase investment-grade securities that are U.S. dollar denominated. Our goal is to produce consistent investment results, regardless of the interest rate environment.

We apply a bottom-up approach to fixed income portfolio management. We begin by analyzing the credit quality and cash flow characteristics of candidate securities and identifying the most attractive sectors. We look for securities that present the best relative value based on our yield curve, sector, economic and credit analysis. We then determine the target duration and maturity strategy based on our macroeconomic view and the Lehman Aggregate Index.

Bottom Up (80%)

Sector Analysis
Incremental yield spreads over Treasuries are then evaluated for the different sectors. Historical spread relationships are also analyzed and reviewed in the context of the current market environment. Our portfolio bias will tend to overweight the spread sectors due to their proven long-term return advantage.

Top Down (20%)

Duration Analysis
Based on our long-term, fundamental outlook for the economy and interest rates, we set our portfolio duration in a range that is typically plus or minus 10 percent of the benchmark duration. Key factors in determining portfolio duration are inflation rates, fiscal policy, monetary policy, and the business cycle. In addition to duration, we determine which maturities to own along the yield curve. Portfolio return simulations are conducted to analyze the benefits of various yield curve strategies and their effect on the portfolio's potential total return in different interest rate scenarios.

The portfolio typically holds 100 to 125 issues.

Past performance is not indicative of future results.