WELLS FARGO FUNDS TRUST
SUPPLEMENT DATED OCTOBER 18, 2000 TO THE
STATEMENT OF ADDITIONAL INFORMATION
DATED AUGUST 1, 2000
CALIFORNIA TAX-FREE MONEY MARKET FUND
CALIFORNIA TAX-FREE MONEY MARKET TRUST
CASH INVESTMENT MONEY MARKET FUND
GOVERNMENT MONEY MARKET FUND
MINNESOTA MONEY MARKET FUND
MONEY MARKET FUND
MONEY MARKET TRUST
NATIONAL TAX-FREE INSTITUTIONAL MONEY MARKET FUND
NATIONAL TAX-FREE MONEY MARKET FUND
NATIONAL TAX-FREE MONEY MARKET TRUST
OVERLAND EXPRESS SWEEP FUND
PRIME INVESTMENT MONEY MARKET FUND
TREASURY PLUS INSTITUTIONAL MONEY MARKET FUND
TREASURY PLUS MONEY MARKET FUND
100% TREASURY MONEY MARKET FUND
Class A, Class B, Service Class, Single Class, Trust and Institutional Class
The following subsections of the statement of additional information section
titled "Additional Permitted Investment Activities and Associated Risks" are
revised as follows:
Asset-Backed Securities
The Funds may purchase asset-backed securities unrelated to mortgage
loans. These asset-backed securities may consist of undivided fractional
interests in pools of consumer loans or receivables held by a Special Purpose
Vehicle. Examples include certificates for automobile receivables (CARS) and
credit card receivables (CARDS). Payments of principal and interest on these
asset-backed securities are "passed through" on a monthly or other periodic
basis to certificate holders and are typically supported by some form of credit
enhancement, such as a letter of credit, surety bond, limited guaranty, or
subordination. The extent of credit enhancement varies, but usually amounts to
only a fraction of the asset-backed security's par value until exhausted.
Ultimately, asset-backed securities are dependent upon payment of the assets
held by the issuer, and the Fund should expect no recourse to the entity that
sold the assets to the issuer. The actual maturity and realized yield may vary
based upon the prepayment experience of the underlying asset pool and prevailing
interest rates at the time of prepayment.
Commercial Paper
The Funds may invest in commercial paper (including variable amount master
demand notes) which refers to short-term, unsecured promissory notes issued in
order to finance short-term credit needs. Commercial paper is usually sold on a
discount basis and has a maturity at the time of issuance not exceeding nine
months. Investments by the Funds in commercial paper will consist of issues that
are rated in one of the two highest rating categories by a Nationally Recognized
Ratings Organization ("NRRO"). Commercial paper may include variable- and
floating-rate instruments.
Floating- and Variable-Rate Obligations
The Funds, except the 100% Treasury Money Market Fund, may purchase
floating- and variable-rate obligations such as demand notes, bonds, and
commercial paper. These obligations may have stated maturities in excess of 397
days to the extent permitted by Rule 2a-7. They may permit the holder to demand
payment of principal at any time, or at specified intervals not exceeding 397
days. The Funds may only invest in floating- or variable-rate securities that
bear interest at a rate that resets based on standard money market rate indices
or which are remarketed at current market interest rates. The issuer of such
obligations may have a right, after a given period, to prepay in its discretion
the outstanding principal amount of the obligations plus accrued interest upon a
specified number of days' notice to the holders of such obligations.
The Advisor, on behalf of each Fund, considers on an ongoing basis the
creditworthiness of the issuers of the floating- and variable-rate demand
obligations in such Fund's portfolio. Floating- and variable-rate instruments
are subject to interest-rate risk and credit risk.
Funding Agreements
Funding Agreements are investment contracts with insurance companies
which pay interest at a fixed or variable or floating rate, and principal on a
certain mutually agreeable maturity date. The term to maturity cannot exceed 397
days. Funding Agreements may or may not allow the Fund to demand repayment of
principal after an agreed upon waiting period or upon certain other conditions.
The insurance company may also have a corresponding right to prepay the
principal with accrued interest upon a specified number of days' notice to the
Fund. The maturity date of some Funding Agreements may be extended upon the
mutual agreement and consent of the insurance company and the Fund.
Illiquid Securities
The Funds, except the 100% Treasury Money Market Fund, may invest in
securities not registered under the 1933 Act and other securities subject to
legal or other restrictions on resale, and for which there may not be a readily
available market. Because such securities may be less liquid than other
investments, they may be difficult to sell promptly at an acceptable price.
Delay or difficulty in selling securities may result in a loss or be costly to a
Fund.
Letters of Credit
Certain of the debt obligations (including certificates of
participation, commercial paper and other short-term obligations) which the
Funds may purchase may be backed by an unconditional and irrevocable letter of
credit of a bank, savings bank or insurance company which assumes the obligation
for payment of principal and interest in the event of default by the issuer.
Only banks, savings banks and insurance companies which, in the opinion of Wells
Fargo Bank, are of comparable quality to issuers of other permitted investments
of each such Fund may be used for letter of credit-backed investments.
Money Market Instruments
The Funds may invest in money market instruments. Money market instruments
consist of: (a) short-term securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities (including government-sponsored
enterprises) (U.S. Government obligations"); (b) negotiable certificates of
deposit, bankers' acceptances and fixed time deposits and other short-term
obligations of domestic banks (including foreign branches) that have more than
$1 billion in total assets at the time of the investment and are members of the
Federal Reserve System or are examined by the Comptroller of the Currency or
whose deposits are insured by the Federal Deposit Insurance Corporation
("FDIC"); (c) commercial paper rated in one of the two highest ratings
categories by a nationally recognized rating organization, or, if unrated, of
comparable quality as determined by Wells Fargo Bank; (d) certain repurchase
agreements; and (e) short-term U.S. dollar-denominated obligations of foreign
banks (including U.S. branches) that at the time of investment; (i) have more
than $10 billion, or the equivalent in other currencies, in total assets; (ii)
are among the largest foreign banks in the world as determined on the basis of
assets; and (iii) have branches or agencies in the United States.
Other Investment Companies
The Funds may invest in shares of other open-end management investment
companies, up to the limits prescribed in Section 12(d)(1)(A) and (B) of the
1940 Act, and any rules, regulations, or orders obtained thereunder. Other
investment companies in which the Funds invest can be expected to charge fees
for operating expenses such as investment advisory and administration fees, that
would be in addition to those charged by the Funds.
Repurchase Agreements
The Funds, except the 100% Treasury Money Market, National Tax-Free
Money Market, National Tax-Free Institutional Money Market, California Tax-Free
Money Market, and Minnesota Money Market Funds, and the National Tax-Free Money
Market and California Tax-Free Money Market Trusts, may enter into repurchase
agreements wherein the seller of a security to the Fund agrees to repurchase
that security from the Fund at a mutually agreed upon time and price. A Fund may
enter into repurchase agreements only with respect to securities that could
otherwise be purchased by the Fund. All repurchase agreements will be fully
collateralized at least 102% based on values that are marked to market daily.
The maturities of the underlying securities in a repurchase agreement
transaction may be greater than twelve months, although the maximum term of a
repurchase agreement will always be less than twelve months. If the seller
defaults and the value of the underlying securities has declined, a Fund may
incur a loss. In addition, if bankruptcy proceedings are commenced with respect
to the seller of the security, the Fund's disposition of the security may be
delayed or limited.
Each Fund may not enter into a repurchase agreement with a maturity of
more than seven days, if, as a result, more than 10% of the market value of such
Fund's total assets would be invested in repurchase agreements with maturities
of more than seven days and illiquid securities. A Fund will only enter into
repurchase agreements with counter-parties who are U.S. Government Securities
Dealers reporting to the Federal Reserve Bank of New York and commercial banks
that meet credit quality guidelines established by the Board of Trustees and
that are not affiliated with the investment adviser. The Funds may participate
in pooled repurchase agreement transactions with other funds advised by Wells
Fargo Bank.
The Funds may enter into reverse repurchase agreements (an agreement
under which a Fund sells its portfolio securities and agrees to repurchase them
at an agreed-upon date and price). At the time a Fund enters into a reverse
repurchase agreement it will place in a segregated custodial account liquid
assets such as U.S. Government securities or other liquid high-grade debt
securities having a value equal to or greater than the repurchase price
(including accrued interest) and will subsequently monitor the account to ensure
that such value is maintained.
Variable Rate and Amount Master Notes
The Funds may invest in variable amount master demand notes, obligations which
permit the investment of fluctuating amounts at varying market rates of interest
pursuant to arrangements between the issuer and a commercial bank acting as
agent for the payee of such notes whereby both parties have the right to vary
the amount of the outstanding indebtedness on the notes.
Because these obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such instruments generally will
be traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value. Accordingly, where
these obligations are not secured by letters of credit or other credit support
arrangements, a Fund's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand. Such obligations frequently
are not rated by credit rating agencies and each Fund may invest in obligations
which are not so rated only if the Advisor determines that at the time of
investment the obligations are of comparable quality to the other obligations in
which such Fund may invest.
