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[LOGO]
Semi-Annual Report
TAX-FREE FUNDS
December 31, 1999
ARIZONA TAX-FREE FUND
CALIFORNIA LIMITED TERM TAX-FREE FUND
CALIFORNIA TAX-FREE FUND
COLORADO TAX-FREE FUND
MINNESOTA INTERMEDIATE TAX-FREE FUND
MINNESOTA TAX-FREE FUND
NATIONAL LIMITED TERM TAX-FREE FUND
NATIONAL TAX-FREE FUND
OREGON TAX-FREE FUND
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TAX-FREE FUNDS
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TABLE OF CONTENTS
LETTER TO SHAREHOLDER..........................................................1
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PERFORMANCE HIGHLIGHTS
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ARIZONA TAX-FREE FUND........................................................2
CALIFORNIA LIMITED TERM TAX-FREE FUND........................................4
CALIFORNIA TAX-FREE FUND.....................................................6
COLORADO TAX-FREE FUND.......................................................8
MINNESOTA INTERMEDIATE TAX-FREE FUND........................................10
MINNESOTA TAX-FREE FUND.....................................................12
NATIONAL LIMITED TERM TAX-FREE FUND.........................................14
NATIONAL TAX-FREE FUND......................................................16
OREGON TAX-FREE FUND........................................................18
PORTFOLIO OF INVESTMENTS
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ARIZONA TAX-FREE FUND.......................................................20
CALIFORNIA LIMITED TERM TAX-FREE FUND.......................................22
CALIFORNIA TAX-FREE FUND....................................................24
COLORADO TAX-FREE FUND......................................................32
MINNESOTA INTERMEDIATE TAX-FREE FUND........................................35
MINNESOTA TAX-FREE FUND.....................................................43
NATIONAL LIMITED TERM TAX-FREE FUND.........................................47
NATIONAL TAX-FREE FUND......................................................52
OREGON TAX-FREE FUND........................................................59
FINANCIAL STATEMENTS
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STATEMENTS OF ASSETS AND LIABILITIES........................................62
STATEMENTS OF OPERATIONS....................................................64
STATEMENTS OF CHANGES IN NET ASSETS.........................................66
FINANCIAL HIGHLIGHTS........................................................72
NOTES TO FINANCIAL HIGHLIGHTS.................................................78
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NOTES TO FINANCIAL STATEMENTS.................................................79
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LIST OF ABBREVIATIONS.........................................................85
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NOT FDIC INSURED--NO BANK GUARANTEE--MAY LOSE VALUE
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TAX-FREE FUNDS
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DEAR VALUED SHAREHOLDER,
It's a pleasure to provide you with this Wells Fargo Tax-Free Funds
semi-annual report for the period ended December 31, 1999, and we thank you for
your continued investment in Wells Fargo Funds. The report includes
performance information for the nine Wells Fargo Tax-Free Funds during the
six-month period.
The economy finished 1999 on a positive note, despite the Federal Reserve
Board's (the "Fed") three interest rate increases, leaving it well-positioned
for a record 10th straight year of economic growth. With Y2K a nonevent, the
latest growth cycle is poised to become the longest expansion on record if
growth continues through early 2000.
Beginning in June 1999, the economic expansion entered a "peaking phase," and
the financial markets started looking quite different from late 1998 and early
1999. During a peaking phase, real economic growth remains solid, but stops
accelerating. Once the pace of real economic growth peaked early in the
reporting period, stock markets around the globe stopped outpacing bonds.
During the period and throughout 1999, housing bonds were the best-performing
sector in the municipal market. However, rising interest rates, including
long-term municipal interest rates, continued to drag on the Funds and the
municipal bond market overall. To a lesser extent, holdings of health care
bonds negatively impacted the performance of many of the Wells Fargo Tax-Free
Funds.
While economic growth may be on the verge of slowing in early 2000, the Fed
may be inclined to raise interest rates again during the spring and summer of
2000 to help curb inflation. These interest rate increases, however, are
expected to be modest and could sufficiently cool the economy. If inflation
remains stable and equity returns come down from current levels, the
much-ignored municipal bond asset class may get more attention.
Whatever the market conditions, we recommend that you continually review your
investment portfolio to determine an appropriate mix of investments to meet
your ongoing financial needs. We appreciate your business and strive to offer
a variety of investment options to help you potentially achieve your financial
goals. If you have any questions about your investment or need more
information, please contact us at 1-800-222-8222.
Again, thank you for choosing Wells Fargo Funds.
Sincerely,
/S/ MICHAEL J. HOGAN /S/ W. RODNEY HUGHES
MICHAEL J. HOGAN W. RODNEY HUGHES
EXECUTIVE VICE PRESIDENT, PRESIDENT,
WELLS FARGO BANK, N.A. WELLS FARGO FUNDS
1
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TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
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ARIZONA TAX-FREE FUND
INVESTMENT OBJECTIVE
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The Wells Fargo Arizona Tax-Free Fund (the "Fund") seeks current income exempt
from federal income tax and Arizona personal income tax. The Fund invests in
high-quality Arizona municipal obligations.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGER
Stephen Galiani
INCEPTION DATE
03/02/92
PERFORMANCE HIGHLIGHTS
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The Fund's Class A shares returned (4.21)%(1) for the six-month period ended
December 31, 1999, excluding sales charges. The Fund underperformed its
benchmark, the Lehman Brothers Municipal Bond Index(2) (the "Index"), which
returned (1.17)% during the period. The Fund's Class A shares distributed
$0.24 per share in dividend income and $0.02 in capital gains during the
period. Please keep in mind past performance is no guarantee of future
results.
When measured against a comparable taxable investment, the Fund's tax-free
yield is generally higher. The Fund's distribution rate for Class A shares was
4.66% during the period. For example, an investor would need to earn a yield
of 8.42% during the period from a taxable investment to match the Fund's 4.83%
tax-free SEC yield, assuming the maximum combined federal and Arizona state
personal income tax bracket.
During the second half of 1999, the focus was on improving the Fund's current
return with additions of housing and health care bonds, since these tend to be
the highest-yielding sectors of the municipal market. These positions improved
the Fund's distribution yield, but had a mixed impact on performance. Along
with rising interest rates, the health care sector negatively impacted the
Fund's performance as spreads widened. On the other hand, housing bonds, which
represented the best performing sector in the municipal market during 1999,
made a positive contribution.
Late in the period, the Fund took advantage of rising interest rates by
executing swaps and sales. This helped the Fund realize capital losses, which
offset some of the capital gains realized earlier in the year and minimized
the Fund's taxable capital gains payout.
STRATEGIC OUTLOOK
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Interest rates may decline later in 2000. To enable the Fund to benefit, it
will maintain its duration and average maturity beyond those of the Index. The
Fund's substantial positions in discounted and non-callable bonds, which have
the potential to rally strongly when interest rates fall, also are expected to
be maintained.
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(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
(2) The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The total return of the index does not include the effect of
sales charges, and you cannot invest directly in an index. Had the index
incurred operating expenses, its performance would have been lower.
(3) Performance shown for Class A, Class B and Institutional Class shares of
the Wells Fargo Arizona Tax-Free Fund for periods prior to November 8, 1999,
reflects performance of the Class A, Class B and Institutional Class shares of
the Stagecoach Arizona Tax-Free Fund, its predecessor fund. Effective at the
close of business November 5, 1999, the Stagecoach and Norwest Advantage Funds
were reorganized into the Wells Fargo Funds. The Stagecoach Arizona Tax-Free
Fund is the successor fund to the Pacifica Arizona Tax-Exempt Fund (10/95 to
9/96) and the Westcore Arizona IntermediateTax-Free Fund (3/92 to 9/95).
Historical performance has been calculated using returns produced by these
predecessor funds for the applicable periods. Class A shares performance
reflects Pacifica Trust Class A and Westcore Trust performance. Class B share
performance also reflects such performance but has been adjusted to reflect
Class B share expense levels as of the inception date of 9/6/96. For
Institutional Class shares, performance reflects the Investor Class shares of
the Pacifica Arizona Tax-Exempt Fund, a predecessor portfolio with the same
investment objective and policies as the Stagecoach Arizona Tax-Free Fund. For
periods prior to October 1, 1995, the performance shown reflects the performance
of the shares of the Arizona Intermediate Tax-Free Fund of Westcore Trust. For
Class A shares, the maximum front-end sales charge is 4.50%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. Class B share
performance including sales charge assumes the maximum contingent deferred sales
charge for the corresponding time period. Institutional Class shares are sold
without sales charges.
(4) Source: Lipper Analytical Services, Inc. The Lipper Arizona Municipal Debt
Funds Average is an average of funds that limit their assets to those securities
that are exempt from taxation in a specified state (double tax-exempt) or city
(triple tax-exempt). The total
2
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
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AVERAGE ANNUAL TOTAL RETURN(3) (%) (AS OF DECEMBER 31, 1999)
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<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
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Since Since
6-Month 1-Year 5-Year Inception 6-Month 1-Year 5-Year Inception
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ARIZONA TAX-FREE FUND
CLASS A (4.21) (6.60) 4.63 4.81 (8.51) (10.77) 3.68 4.19
CLASS B (4.51) (7.20) 3.62 3.79 (9.18) (11.65) 3.30 3.79
INSTITUTIONAL CLASS (4.15) (6.51) 4.79 4.91
LIPPER ARIZONA MUNICIPAL
DEBT FUNDS AVERAGE(4) (2.90) (4.29) 5.95
LEHMAN BROTHERS MUNICIPAL
BOND INDEX (1.17) (2.06) 6.91
</TABLE>
CHARACTERISTICS(5) (AS OF DECEMBER 31, 1999)
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<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(6) AA+
WEIGHTED AVERAGE COUPON 5.52%
ESTIMATED DURATION 10.26 YEARS
PORTFOLIO TURNOVER 14%
NUMBER OF HOLDINGS 31
SEC YIELD(7) (A, B, I) 4.83%, 4.30%, 5.23%
DISTRIBUTION RATE(8) (A, B, I) 4.66%, 4.12%, 5.04%
TAXABLE EQUIVALENT YIELD(9)
(A, B, I) 8.42%, 7.50%, 9.12%
</TABLE>
GROWTH OF $10,000 INVESTMENT(10)
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INCEPTION WELLS FARGO ARIZONA LEHMAN BROTHERS MUNICIPAL BOND INDEX WELLS FARGO ARIZONA
TAX-FREE FUND - CLASS A $10,000 TAX-FREE FUND - CLASS I
$9,550 $10,000
<S> <C> <C> <C>
Mar-92 $9,524 $10,004 $9,971
Apr-92 $9,604 $10,093 $10,056
May-92 $9,718 $10,212 $10,175
Jun-92 $9,858 $10,384 $10,322
Jul-92 $9,897 $10,695 $10,362
Aug-92 $10,002 $10,590 $10,472
Sep-92 $10,111 $10,659 $10,586
Oct-92 $9,998 $10,555 $10,467
Nov-92 $10,194 $10,744 $10,673
Dec-92 $10,292 $10,853 $10,776
Jan-93 $10,457 $10,979 $10,949
Feb-93 $10,770 $11,377 $11,276
Mar-93 $10,602 $11,256 $11,100
Apr-93 $10,694 $11,370 $11,196
May-93 $10,738 $11,433 $11,243
Jun-93 $10,903 $11,624 $11,416
Jul-93 $10,870 $11,639 $11,381
Aug-93 $11,096 $11,882 $11,618
Sep-93 $11,254 $12,017 $11,783
Oct-93 $11,276 $12,040 $11,806
Nov-93 $11,196 $11,934 $11,722
Dec-93 $11,378 $12,186 $11,913
Jan-94 $11,508 $12,325 $12,049
Feb-94 $11,209 $12,005 $11,736
Mar-94 $10,956 $11,517 $11,470
Apr-94 $11,017 $11,615 $11,535
May-94 $11,090 $11,716 $11,612
Jun-94 $11,049 $11,644 $11,568
Jul-94 $11,208 $11,857 $11,734
Aug-94 $11,261 $11,899 $11,790
Sep-94 $11,149 $11,724 $11,673
Oct-94 $10,965 $11,515 $11,480
Nov-94 $10,801 $11,307 $11,309
Dec-94 $11,002 $11,556 $11,519
Jan-95 $11,248 $11,886 $11,777
Feb-95 $11,515 $12,231 $12,057
Mar-95 $11,608 $12,372 $12,154
Apr-95 $11,657 $12,387 $12,205
May-95 $11,905 $12,782 $12,465
Jun-95 $11,880 $12,670 $12,439
Jul-95 $11,999 $12,790 $12,563
Aug-95 $12,117 $12,952 $12,686
Sep-95 $12,161 $13,034 $12,732
Oct-95 $12,274 $13,224 $12,854
Nov-95 $12,410 $13,443 $13,000
Dec-95 $12,509 $13,573 $13,106
Jan-96 $12,604 $13,676 $13,208
Feb-96 $12,534 $13,583 $13,138
Mar-96 $12,328 $13,409 $12,924
Apr-96 $12,335 $13,371 $12,922
May-96 $12,285 $13,366 $12,885
Jun-96 $12,401 $13,512 $13,007
Jul-96 $12,554 $13,633 $13,171
Aug-96 $12,508 $13,630 $13,113
Sep-96 $12,612 $13,821 $13,224
Oct-96 $12,747 $13,977 $13,380
Nov-96 $12,990 $14,233 $13,638
Dec-96 $12,939 $14,174 $13,587
Jan-97 $12,980 $14,200 $13,632
Feb-97 $13,062 $14,331 $13,720
Mar-97 $12,888 $14,140 $13,539
Apr-97 $12,986 $14,259 $13,631
May-97 $13,161 $14,475 $13,818
Jun-97 $13,307 $14,629 $13,987
Jul-97 $13,706 $15,035 $14,396
Aug-97 $13,532 $14,893 $14,215
Sep-97 $13,705 $15,071 $14,412
Oct-97 $13,758 $15,167 $14,483
Nov-97 $13,840 $15,257 $14,572
Dec-97 $14,065 $15,479 $14,799
Jan-98 $14,182 $15,639 $14,926
Feb-98 $14,162 $15,643 $14,906
Mar-98 $14,134 $15,657 $14,891
Apr-98 $14,014 $15,587 $14,765
May-98 $14,263 $15,833 $15,028
Jun-98 $14,313 $15,895 $15,068
Jul-98 $14,329 $15,935 $15,085
Aug-98 $14,604 $16,182 $15,375
Sep-98 $14,788 $16,384 $15,584
Oct-98 $14,722 $16,384 $15,500
Nov-98 $14,771 $16,441 $15,552
Dec-98 $14,772 $16,492 $15,569
Jan-99 $14,964 $16,689 $15,772
Feb-99 $14,819 $16,615 $15,619
Mar-99 $14,873 $16,638 $15,662
Apr-99 $14,873 $16,680 $15,678
May-99 $14,729 $16,818 $15,512
Jun-99 $14,403 $16,576 $15,185
Jul-99 $14,432 $16,636 $15,216
Aug-99 $14,188 $16,503 $14,960
Sep-99 $14,129 $16,509 $14,883
Oct-99 $13,815 $16,331 $14,554
Nov-99 $13,970 $16,504 $14,735
Dec-99 $13,797 $16,381 $14,555
</TABLE>
CREDIT QUALITY(6)
(AS OF DECEMBER 31, 1999)
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 51%
AA 28%
A 9%
BBB 8%
Cash 4%
</TABLE>
MATURITY DISTRIBUTION(5)
(AS OF DECEMBER 31, 1999)
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Years
0-1 (3%)
1-5 (3%)
5-10 (32%)
10-20 (34%)
20-30 (28%)
</TABLE>
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return of the Average does not include the effect of sales charges. Past
performance is no guarantee of future results. You cannot invest directly in a
Lipper average.
(5) Portfolio holdings are subject to change.
(6) The average credit rating is compiled from ratings from Standards & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's
is a trademark of McGraw-Hill, Inc., and has been licensed. The Fund is not
sponsored, sold or promoted by these rating agencies and these rating agencies
make no representation regarding the advisability of investing in the Fund.
(7) The formula used to calculate the SEC yield is described in detail in the
Fund's Statement of Additional Information, and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
(8) The distribution rate is based on the actual distributions made by the
Fund. The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
(9) A portion of the Fund's income may be subject to federal, state and/or
local income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
42.64%. Any capital gains distributions may be taxable.
(10) The chart compares the performance of the Wells Fargo Arizona Tax-Free Fund
Class A and Institutional Class shares since inception with the Lehman Brothers
Municipal Bond Index. The chart assumes a hypothetical $10,000 investment in
Class A and Institutional Class shares and reflects all operating expenses and,
for Class A shares, assumes the maximum initial sales charge of 4.50%. The Fund
is a professionally managed mutual fund.
3
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
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CALIFORNIA LIMITED TERM TAX-FREE FUND
INVESTMENT OBJECTIVE
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The Wells Fargo California Limited Term Tax-Free Fund (the "Fund") seeks a
high level of current income exempt from federal income tax and California
personal income tax, while preserving capital. The Fund invests in short- and
intermediate-term, investment grade California municipal obligations.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGER
Laura Milner
INCEPTION DATE
11/18/92
PERFORMANCE HIGHLIGHTS
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The Fund's Class A shares returned 0.71%(1) for the six-month period ended
December 31, 1999, excluding sales charges, underperforming the Lehman
Brothers 3-Year Municipal Bond Index(2), which returned 1.29%. The Fund's
Class A shares distributed $0.20 per share in dividend income and $0.05 in
capital gains during the period. Please keep in mind past performance is no
guarantee of future results.
When measured against a comparable taxable investment, the Fund's tax-free
yield is generally higher. The Fund's distribution rate for Class A shares was
3.73% during the period. For example, an investor would need to earn a yield
of 7.01% during the period from a taxable investment to match the Fund's 3.84%
tax-free SEC yield, assuming the maximum combined federal and California state
personal income tax bracket.
During the period, the Fund's performance was hurt by its longer duration
compared to its benchmark. Longer duration bonds underperformed shorter
duration bonds during the period as interest rates rose. The Fund's exposure
to A-rated paper also negatively impacted performance, as higher-rated bonds
outperformed lower-rated bonds during the period.
The strong U.S. economy prompted the Federal Reserve Board (the "Fed") to
raise interest rates in November 1999. Municipal yields followed suit and
negatively affected the Fund's performance. Positions with The Association of
Bay Area Governments for Episcopal Homes, which are often confused with
hospital bonds by some in the market, impacted the Fund's performance. In
general, health care bonds underperformed the market in 1999.
In expectation of rising interest rates, the Fund's duration was shortened
during the period, and that duration is expected to be shortened further with
the sale of longer-duration bonds and a replenishing of the cash position. The
Fund's target duration is three years.
STRATEGIC OUTLOOK
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With Y2K ending up a nonevent, the Fed may raise rates again in an effort to
slow the U.S. economy during the first half of 2000. Bond yields are expected
to follow suit. For the municipal market, a strong economy generally
translates into reduced bond issuance creating a favorable climate. It's
expected that municipals will perform better than other fixed income
instruments during 2000.
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(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
(2) The Lehman Brothers 3-Year Municipal Bond Index is an unmanaged index
composed of municipal bonds with an approximate maturity of three years. The
total return of the index does not include the effect of sales charges, and you
cannot invest directly in an index. Had the index incurred operating expenses,
its performance would have been lower.
(3) Performance shown for Class A and Institutional Class shares of the Wells
Fargo California Limited Term Tax-Free Fund for periods prior to November 8,
1999, reflects performance of the Class A and Institutional Class shares of the
Stagecoach California Tax-Free Income Fund, its predecessor fund. Effective at
the close of business November 5, 1999, the Stagecoach and Norwest Advantage
Funds were reorganized into the Wells Fargo Funds. For Class A shares, the
maximum front-end sales charge is 4.50%. Institutional Class shares are sold
without sales charges.
(4) Source: Lipper Analytical Services, Inc. The Lipper California
Short-Intermediate Municipal Debt Funds (CAS) Average is an average of funds
that invest at least 65% of their assets in municipal debt issues that are
exempt from taxation in California, with dollar-weighted average maturities of
one to five years. The total return of the Average does not include the effect
of sales charges. Past performance is no guarantee of future results. You cannot
invest directly in a Lipper average.
4
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(3) (%) (AS OF DECEMBER 31, 1999)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
---------------------------------- -----------------------------------
Since Since
6-Month 1-Year 5-Year Inception 6-Month 1-Year 5-Year Inception
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CALIFORNIA LIMITED TERM TAX-FREE FUND
CLASS A 0.71 0.04 4.68 4.23 (3.81) (4.43) 3.73 3.55
INSTITUTIONAL CLASS 0.74 0.14 4.72 4.25
LIPPER CALIFORNIA
SHORT-INTERMEDIATE
MUNICIPAL DEBT FUNDS
AVERAGE(4) 0.34 0.24 4.44
LEHMAN BROTHERS 3-YEAR
MUNICIPAL BOND INDEX 1.29 1.96 5.17
</TABLE>
CHARACTERISTICS(5) (AS OF DECEMBER 31, 1999)
- ----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(6) AA
WEIGHTED AVERAGE COUPON 6.13%
ESTIMATED DURATION 3.65 YEARS
PORTFOLIO TURNOVER 14%
NUMBER OF HOLDINGS 32
SEC YIELD(7) (A, I) 3.84%, 4.17%
DISTRIBUTION RATE(8) (A, I) 3.73%, 4.06%
TAXABLE EQUIVALENT YIELD(9) (A, I) 7.01%, 7.61%
</TABLE>
GROWTH OF $10,000 INVESTMENT(10)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO LEHMAN BROTHERS WELLS FARGO
CALIFORNIA LIMITED TERM 3-YEAR MUNICIPAL CALIFORNIA LIMITED
TAX-FREE FUND - CLASS A BOND INDEX TERM TAX-FREE FUND - CLASS I
<S> <C> <C> <C>
Inception $9,550 $10,000 $10,000
Nov-92 $9,559 $10,070 $10,008
Dec-92 $9,632 $10,130 $10,084
Jan-93 $9,719 $10,206 $10,176
Feb-93 $9,922 $10,367 $10,389
Mar-93 $9,841 $10,336 $10,303
Apr-93 $9,893 $10,395 $10,358
May-93 $9,908 $10,424 $10,373
Jun-93 $9,997 $10,490 $10,467
Jul-93 $9,972 $10,496 $10,441
Aug-93 $10,112 $10,593 $10,587
Sep-93 $10,192 $10,640 $10,671
Oct-93 $10,213 $10,662 $10,693
Nov-93 $10,184 $10,648 $10,663
Dec-93 $10,316 $10,760 $10,801
Jan-94 $10,389 $10,847 $10,877
Feb-94 $10,241 $10,746 $10,722
Mar-94 $10,125 $10,616 $10,601
Apr-94 $10,159 $10,679 $10,636
May-94 $10,194 $10,729 $10,674
Jun-94 $10,178 $10,732 $10,657
Jul-94 $10,275 $10,821 $10,758
Aug-94 $10,291 $10,860 $10,774
Sep-94 $10,254 $10,833 $10,736
Oct-94 $10,218 $10,807 $10,698
Nov-94 $10,149 $10,788 $10,627
Dec-94 $10,202 $10,834 $10,681
Jan-95 $10,317 $10,924 $10,802
Feb-95 $10,461 $11,039 $10,953
Mar-95 $10,549 $11,138 $11,045
Apr-95 $10,569 $11,176 $11,066
May-95 $10,719 $11,347 $11,223
Jun-95 $10,722 $11,374 $11,226
Jul-95 $10,816 $11,494 $11,324
Aug-95 $10,892 $11,584 $11,404
Sep-95 $10,937 $11,617 $11,451
Oct-95 $11,001 $11,673 $11,518
Nov-95 $11,078 $11,747 $11,599
Dec-95 $11,134 $11,796 $11,658
Jan-96 $11,224 $11,888 $11,752
Feb-96 $11,214 $11,890 $11,741
Mar-96 $11,141 $11,861 $11,665
Apr-96 $11,144 $11,876 $11,668
May-96 $11,141 $11,886 $11,665
Jun-96 $11,197 $11,957 $11,723
Jul-96 $11,276 $12,023 $11,806
Aug-96 $11,284 $12,042 $11,815
Sep-96 $11,358 $12,115 $11,893
Oct-96 $11,447 $12,200 $11,975
Nov-96 $11,572 $12,314 $12,121
Dec-96 $11,563 $12,321 $12,111
Jan-97 $11,614 $12,375 $12,154
Feb-97 $11,670 $12,435 $12,213
Mar-97 $11,582 $12,371 $12,131
Apr-97 $11,630 $12,424 $12,170
May-97 $11,737 $12,526 $12,296
Jun-97 $11,806 $12,600 $12,369
Jul-97 $11,969 $12,750 $12,531
Aug-97 $11,940 $12,724 $12,500
Sep-97 $12,011 $12,815 $12,575
Oct-97 $12,052 $12,872 $12,619
Nov-97 $12,076 $12,910 $12,644
Dec-97 $12,155 $12,997 $12,728
Jan-98 $12,265 $13,083 $12,846
Feb-98 $12,277 $13,111 $12,858
Mar-98 $12,268 $13,132 $12,848
Apr-98 $12,235 $13,113 $12,813
May-98 $12,344 $13,235 $12,929
Jun-98 $12,382 $13,280 $12,969
Jul-98 $12,435 $13,328 $13,025
Aug-98 $12,602 $13,457 $13,204
Sep-98 $12,748 $13,543 $13,346
Oct-98 $12,765 $13,608 $13,377
Nov-98 $12,802 $13,641 $13,416
Dec-98 $12,818 $13,674 $13,431
Jan-99 $12,945 $13,798 $13,565
Feb-99 $12,908 $13,813 $13,526
Mar-99 $12,936 $13,826 $13,569
Apr-99 $12,941 $13,869 $13,561
May-99 $12,892 $13,849 $13,509
Jun-99 $12,733 $13,766 $13,352
Jul-99 $12,811 $13,835 $13,422
Aug-99 $12,788 $13,852 $13,397
Sep-99 $12,840 $13,904 $13,466
Oct-99 $12,805 $13,906 $13,430
Nov-99 $12,870 $13,967 $13,487
Dec-99 $12,823 $13,944 $13,450
</TABLE>
CREDIT QUALITY(6)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 49%
AA 22%
A 27%
Cash 2%
</TABLE>
MATURITY DISTRIBUTION(5)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Years
0-1 (6%)
1-5 (51%)
5-10 (43%)
</TABLE>
- --------------------------------------------------------------------------------
(5) Portfolio holdings are subject to change.
(6) The average credit rating is compiled from ratings from Standards & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's
is a trademark of McGraw-Hill, Inc., and has been licensed. The Fund is not
sponsored, sold or promoted by these rating agencies and these rating agencies
make no representation regarding the advisability of investing in the Fund.
(7) The formula used to calculate the SEC yield is described in detail in the
Fund's Statement of Additional Information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
(8) The distribution rate is based on the actual distributions made by the
Fund. The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
(9) A portion of the Fund's income may be subject to federal, state and/or
local income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
45.22%. Any capital gains distributions may be taxable.
(10) The chart compares the performance of the Wells Fargo California Limited
Term Tax-Free Fund Class A and Institutional Class shares since inception with
the Lehman Brothers 3-Year Municipal Bond Index. The chart assumes a
hypothetical $10,000 investment in Class A and Institutional Class shares and
reflects all operating expenses and, for Class A shares, assumes the maximum
initial sales charge of 4.50%. The Fund is a professionally managed mutual fund.
5
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo California Tax-Free Fund (the "Fund") seeks to provide
investors with a high level of current income exempt from federal income tax
and California personal income tax, while preserving capital by investing in
medium- to long-term investment grade, California municipal securities.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGER
Stephen Galiani
INCEPTION DATE
10/06/88
PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's Class A shares returned (2.24)%(1) for the six-month period ended
December 31, 1999, excluding sales charges. The Fund underperformed its
benchmark, the Lehman Brothers Municipal Bond Index(2) (the "Index"), which
returned (1.17)% during the period. The Fund's Class A shares distributed
$0.26 per share in dividend income and $0.03 in capital gains during the
period. Please keep in mind past performance is no guarantee of future
results.
When measured against a comparable taxable investment, the Fund's tax-free
yield is generally higher. The Fund's distribution rate for Class A shares was
4.77% during the period. For example, an investor would need to earn a yield
of 8.38% during the period from a taxable investment to match the Fund's 4.59%
tax-free SEC yield, assuming the maximum combined federal and California state
personal income tax bracket.
During the second half of 1999, interest rates continued to rise and
municipal bonds posted negative total returns. In addition, the yield curve
steepened, so longer maturity bonds suffered disproportionately. The Fund
performed well relative to the Lipper California Municipal Debt Funds
Average(3), but the Fund's duration and average maturity were longer than its
benchmark, which contributed to the Fund's underperformance.
A combination of housing and health care bonds of higher and lower investment
grade quality were added to the Fund during the period, as were some other
lower investment grade bonds. These positions improved the Fund's distribution
yield, but had a mixed impact on performance. The health care bonds and lower
investment grade paper negatively impacted performance. On the other hand,
housing bonds, the best performing sector of the municipal market during 1999,
made a positive contribution. Higher-yielding investment grade paper will
continue to be added to potentially improve the Fund's current yield, while
maintaining a high average credit quality.
Late in the period, the Fund took advantage of rising interest rates by
executing swaps and sales. This helped the Fund realize capital losses, which
offset some of the capital gains realized earlier in the year and minimized
the Fund's taxable capital gains payout.
STRATEGIC OUTLOOK
- --------------------------------------------------------------------------------
Interest rates may decline later in 2000. To enable the Fund to benefit, it
will maintain its duration and average maturity beyond those of the Index. The
Fund's substantial positions in discounted and non-callable bonds, which have
the potential to rally strongly when interest rates fall, also are expected to
be maintained.
- --------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
(2) The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The total return of the average does not include the effect of
sales charges, and you cannot invest directly in a Lipper index. Had the index
incurred operating expenses, its performance would have been lower.
(3) Source: Lipper Analytical Services, Inc. The Lipper California Municipal
Debt Funds Average is an average of funds that limit their assets to those
securities that are exempt from federal income tax and California personal tax.
The total return of the Lipper category average does not include the effect of
sales charges. You cannot invest directly in a Lipper average.
(4) Performance shown for Class A, Class B, Class C and Institutional
Class shares of the California Tax-Free Fund for periods prior to November 8,
1999, reflects performance of the Class A, Class B, Class C and Institutional
Class shares of the Stagecoach California Tax-Free Bond Fund, its predecessor
fund. Effective at the close of business November 5, 1999, the Stagecoach and
Norwest Advantage Funds were reorganized into the Wells Fargo Funds. Performance
shown for the Class A shares for periods prior to December 12, 1997 reflects
performance of the Class A shares of the Overland Express California Tax-Free
Bond Fund (the accounting survivor of a merger of the Stagecoach and Overland
Funds on December 12, 1997). Performance shown for the Class C shares of the
Fund reflects performance of the Class D shares of the Overland Fund; for
periods prior to July 1, 1993, Class C share performance of the Fund reflects
performance of the Class A shares of the Overland Fund, adjusted to reflect the
sales charges and expenses of the Class B shares of the Wells Fargo Fund.
Performance shown for the Class B shares of the Fund for periods prior to
December 12, 1997 reflects performance of the Class D shares of the Overland
Fund, although for periods prior to July 1, 1993 Class B share performance of
the Fund reflects performance of the Class A shares of the Overland Fund,
adjusted to reflect the sales charges and expenses of the Class B shares of the
Fund. For Class A shares, the maximum front-end sales charge is 4.50%. The
6
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(4) (%) (AS OF DECEMBER 31, 1999)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
--------------------------------- ---------------------------------
6-Month 1-Year 5-Year 10-Year 6-Month 1-Year 5-Year 10-Year
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CALIFORNIA TAX-FREE FUND
CLASS A (2.24) (3.65) 6.31 6.64 (6.65) (8.01) 5.33 6.15
CLASS B (2.68) (4.35) 5.53 5.90 (7.43) (8.94) 5.21 5.90
CLASS C (2.59) (4.27) 5.54 5.91 (3.54) (5.18) 5.54 5.91
INSTITUTIONAL CLASS (2.17) (3.55) 6.34 6.66
LIPPER CALIFORNIA
MUNICIPAL DEBT FUNDS
AVERAGE (3.45) (5.16) 6.08 6.08
LEHMAN BROTHERS MUNICIPAL
BOND INDEX (1.17) (2.06) 6.91 6.89
</TABLE>
CHARACTERISTICS(5) (AS OF DECEMBER 31, 1999)
- ----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(6) AA+
WEIGHTED AVERAGE COUPON 5.19%
ESTIMATED DURATION 8.81 YEARS
PORTFOLIO TURNOVER 14%
NUMBER OF HOLDINGS 301
SEC YIELD(7)
(A, B, C, I) 4.59%, 4.05%, 4.05%, 4.98%
DISTRIBUTION RATE(8)
(A, B, C, I) 4.77%, 4.24%, 4.24%, 5.16%
TAXABLE EQUIVALENT YIELD(9)
(A, B, C, I) 8.38%, 7.39%, 7.39%, 9.09%
</TABLE>
GROWTH OF $10,000 INVESTMENT(10)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DEC-89 WELLS FARGO CALIFORNIA LEHMAN BROTHERS WELLS FARGO CALIFORNIA
TAX-FREE FUND - A MUNICIPAL BOND INDEX TAX-FREE FUND - I
$9,550 $10,000 $10,000
<S> <C> <C> <C>
Jan-90 $9,428 $9,953 $9,874
Feb-90 $9,577 $10,042 $10,030
Mar-90 $9,614 $10,045 $10,069
Apr-90 $9,482 $9,972 $9,931
May-90 $9,719 $10,190 $10,179
Jun-90 $9,814 $10,279 $10,278
Jul-90 $9,986 $10,430 $10,458
Aug-90 $9,697 $10,279 $10,156
Sep-90 $9,688 $10,285 $10,146
Oct-90 $9,853 $10,472 $10,319
Nov-90 $10,088 $10,682 $10,565
Dec-90 $10,166 $10,729 $10,648
Jan-91 $10,335 $10,873 $10,824
Feb-91 $10,394 $10,967 $10,887
Mar-91 $10,414 $10,972 $10,908
Apr-91 $10,576 $11,118 $11,076
May-91 $10,697 $11,217 $11,204
Jun-91 $10,664 $11,205 $11,168
Jul-91 $10,814 $11,342 $11,326
Aug-91 $10,945 $11,492 $11,463
Sep-91 $11,097 $11,641 $11,623
Oct-91 $11,187 $11,746 $11,717
Nov-91 $11,184 $11,779 $11,713
Dec-91 $11,348 $12,032 $11,886
Jan-92 $11,334 $12,060 $11,871
Feb-92 $11,405 $12,063 $11,945
Mar-92 $11,444 $12,068 $11,985
Apr-92 $11,547 $12,176 $12,094
May-92 $11,673 $12,319 $12,226
Jun-92 $11,887 $12,526 $12,449
Jul-92 $12,276 $12,902 $12,857
Aug-92 $12,107 $12,776 $12,681
Sep-92 $12,170 $12,859 $12,746
Oct-92 $11,933 $12,733 $12,498
Nov-92 $12,230 $12,961 $12,809
Dec-92 $12,371 $13,093 $12,956
Jan-93 $12,514 $13,245 $13,106
Feb-93 $12,977 $13,724 $13,591
Mar-93 $12,877 $13,579 $13,486
Apr-93 $13,026 $13,716 $13,643
May-93 $13,118 $13,793 $13,740
Jun-93 $13,366 $14,023 $13,998
Jul-93 $13,357 $14,041 $13,990
Aug-93 $13,689 $14,333 $14,337
Sep-93 $13,880 $14,497 $14,538
Oct-93 $13,908 $14,524 $14,566
Nov-93 $13,769 $14,396 $14,421
Dec-93 $13,977 $14,700 $14,638
Jan-94 $14,151 $14,868 $14,821
Feb-94 $13,873 $14,483 $14,530
Mar-94 $13,409 $13,893 $14,044
Apr-94 $13,388 $14,011 $14,022
May-94 $13,529 $14,133 $14,169
Jun-94 $13,495 $14,047 $14,134
Jul-94 $13,725 $14,304 $14,374
Aug-94 $13,779 $14,354 $14,431
Sep-94 $13,618 $14,143 $14,263
Oct-94 $13,418 $13,891 $14,053
Nov-94 $13,179 $13,640 $13,803
Dec-94 $13,372 $13,940 $14,005
Jan-95 $13,743 $14,338 $14,394
Feb-95 $14,077 $14,755 $14,743
Mar-95 $14,200 $14,925 $14,872
Apr-95 $14,204 $14,942 $14,876
May-95 $14,634 $15,419 $15,326
Jun-95 $14,434 $15,284 $15,118
Jul-95 $14,522 $15,429 $15,210
Aug-95 $14,711 $15,625 $15,407
Sep-95 $14,832 $15,724 $15,534
Oct-95 $15,101 $15,953 $15,816
Nov-95 $15,386 $16,217 $16,114
Dec-95 $15,563 $16,373 $16,300
Jan-96 $15,643 $16,498 $16,384
Feb-96 $15,503 $16,385 $16,237
Mar-96 $15,265 $16,176 $15,988
Apr-96 $15,198 $16,130 $15,918
May-96 $15,210 $16,124 $15,930
Jun-96 $15,388 $16,300 $16,116
Jul-96 $15,557 $16,446 $16,294
Aug-96 $15,569 $16,443 $16,306
Sep-96 $15,807 $16,673 $16,556
Oct-96 $15,979 $16,862 $16,735
Nov-96 $16,288 $17,170 $17,059
Dec-96 $16,191 $17,098 $16,958
Jan-97 $16,219 $17,131 $16,987
Feb-97 $16,376 $17,288 $17,152
Mar-97 $16,146 $17,058 $16,910
Apr-97 $16,291 $17,202 $17,062
May-97 $16,536 $17,461 $17,318
Jun-97 $16,680 $17,648 $17,469
Jul-97 $17,224 $18,137 $18,039
Aug-97 $17,025 $17,967 $17,831
Sep-97 $17,218 $18,180 $18,033
Oct-97 $17,324 $18,297 $18,144
Nov-97 $17,403 $18,405 $18,227
Dec-97 $17,642 $18,673 $18,479
Jan-98 $17,871 $18,866 $18,719
Feb-98 $17,871 $18,871 $18,704
Mar-98 $17,861 $18,888 $18,710
Apr-98 $17,787 $18,803 $18,635
May-98 $18,079 $19,100 $18,924
Jun-98 $18,147 $19,175 $18,996
Jul-98 $18,173 $19,223 $19,041
Aug-98 $18,479 $19,521 $19,361
Sep-98 $18,771 $19,765 $19,668
Oct-98 $18,763 $19,765 $19,660
Nov-98 $18,829 $19,834 $19,730
Dec-98 $18,844 $19,895 $19,748
Jan-99 $19,080 $20,132 $19,978
Feb-99 $18,978 $20,044 $19,889
Mar-99 $19,049 $20,072 $19,948
Apr-99 $19,056 $20,122 $19,974
May-99 $18,889 $20,289 $19,800
Jun-99 $18,572 $19,997 $19,469
Jul-99 $18,630 $20,069 $19,531
Aug-99 $18,413 $19,908 $19,305
Sep-99 $18,434 $19,916 $19,311
Oct-99 $18,167 $19,701 $19,035
Nov-99 $18,377 $19,910 $19,275
Dec-99 $18,156 $19,761 $19,047
</TABLE>
CREDIT QUALITY(6)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 69%
AA 9%
A 12%
BBB 10%
</TABLE>
MATURITY DISTRIBUTION(5)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Years
0-1 (1%)
1-5 (1%)
5-10 (35%)
10-20 (56%)
20+ (7%)
</TABLE>
- --------------------------------------------------------------------------------
maximum contingent deferred sales charge for Class B shares is 5.00%. The
maximum contingent deferred sales charge for Class C shares is 1.00%. Class B
and Class C share performance including sales charge assumes maximum contingent
deferred sales charge for the corresponding time period. Institutional Class
shares are sold without sales charges.
(5) Portfolio holdings are subject to change.
(6) The average credit rating is compiled from ratings from Standards & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's
is a trademark of McGraw-Hill, Inc., and has been licensed. The Fund is not
sponsored, sold or promoted by these rating agencies and these rating agencies
make no representation regarding the advisability of investing in the Fund.
(7) The formula used to calculate the SEC yield is described in detail in the
Fund's Statement of Additional Information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
(8) The distribution rate is based on the actual distributions made by the
Fund. The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
(9) A portion of the Fund's income may be subject to federal, state and/or
local income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
45.22%. Any capital gains distributions may be taxable.
(10) The chart compares the performance of the Wells Fargo California Tax-Free
Fund Class A and Institutional Class shares since inception with the Lehman
Brothers Municipal Bond Index. The chart assumes a hypothetical $10,000
investment in Class A and Institutional Class shares and reflects all operating
expenses and, for Class A shares, assumes the maximum initial sales charge of
4.50%. The Fund is a professionally managed mutual fund.
7
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo Colorado Tax-Free Fund (the "Fund") seeks a high level of
current income exempt from federal income tax and Colorado personal income
tax, while preserving capital.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGERS
William T. Jackson, CFA
Mark Walter
INCEPTION DATE
06/01/93
PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's Class A shares returned (3.39)%(1) for the six-month period ended
December 31, 1999, excluding sales charges, underperforming the Lehman
Brothers Municipal Bond Index(2), which returned (1.17)%. The Fund's Class A
shares distributed $0.27 per share in dividend income and minimal capital
gains during the period. Please keep in mind past performance is no guarantee
of future results.
When measured against a comparable taxable investment, the Fund's tax-free
yield is generally higher. The Fund's distribution rate for Class A shares was
5.26% during the period. For example, an investor would need to earn a yield
of 9.09% during the period from a taxable investment to match the Fund's 5.23%
tax-free SEC yield, assuming the maximum combined federal and Colorado state
personal income tax bracket.
During the period, the Fund's performance was hurt by rising interest rates,
including long-term municipal interest rates, because of its slightly longer
duration compared to its benchmark. Market participants also began avoiding
additional purchases of issues related to health care and publicly-owned
electric utilities due to credit quality concerns. Bonds in these sectors
already owned by the Fund suffered additional price declines relative to other
sectors.
The Fund's performance was helped by shorter duration holdings. For example,
the Fund held a number of positions of single-family mortgage revenue bonds
and special assessment bonds with relatively short durations. These were some
of the best-performing positions in the portfolio during the period. The Fund
executed tax swaps during the period to minimize the distribution of taxable
capital gains to shareholders. The Fund also took advantage of rising interest
rates by buying bonds with higher coupons with the potential to generate
higher income levels than previously held investments. In addition, the Fund
improved its call protection to increase the sustainability of its dividends
should interest rates fall.
STRATEGIC OUTLOOK
- --------------------------------------------------------------------------------
Considering the vigilance of federal policy officials to keep inflation low
and economic growth at acceptable levels, it's possible interest rate markets
may have overreacted given positive news related to price levels of basic
commodities and retail goods. It may be prudent to hold long bonds that have
suffered severe price declines in 1999 because to sell them would prove hasty
for the Fund, limiting its upside potential in the future.
- --------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
(2) The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The total return of the index does not include the effect of
sales charges, and you cannot invest directly in an index. Had the index
incurred operating expenses, its performance would have been lower.
(3) Performance shown for Class A, Class B and Institutional Class shares of
the Wells Fargo Colorado Tax-Free Fund for periods prior to November 8, 1999,
reflects performance of the Class A, Class B and Institutional Class shares of
the Norwest Advantage Colorado Tax-Free Fund, its predecessor fund. Effective at
the close of business November 5, 1999, the Stagecoach and Norwest Advantage
Funds were reorganized into the Wells Fargo Funds. Performance shown for
Class B shares for periods prior to August 2, 1993 reflects performance of the
Class A shares of the Norwest Advantage Fund adjusted for Class B sales charges
and expenses. For Class A shares, the maximum front-end sales charge is 4.50%.
The maximum contingent deferred sales charge for Class B shares is 5.00%.
Class B share performance including sales charge assumes the maximum contingent
deferred sales charge for the corresponding time period. Institutional Class
shares are sold without sales charges.
8
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(3) (%)(AS OF DECEMBER 31, 1999)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
----------------------------------- ----------------------------------------
Since Since
6-Month 1-Year 5-Year Inception 6-Month 1-Year 5-Year Inception
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COLORADO TAX-FREE FUND
CLASS A (3.39) (5.48) 6.31 4.79 (7.74) (9.74) 5.33 4.06
CLASS B (3.65) (6.09) 5.53 4.05 (8.36) (10.58) 5.21 4.05
INSTITUTIONAL CLASS (3.29) (5.39) 6.33 4.81
LIPPER COLORADO MUNICIPAL
DEBT FUNDS AVERAGE(4) (2.96) (4.59) 5.92
LEHMAN BROTHERS MUNICIPAL
BOND INDEX (1.17) (2.06) 6.91
</TABLE>
CHARACTERISTICS(5) (AS OF DECEMBER 31, 1999)
- ----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(6) AA
WEIGHTED AVERAGE COUPON 4.82%
ESTIMATED DURATION 10.37 YEARS
PORTFOLIO TURNOVER 22%
NUMBER OF HOLDINGS 68
SEC YIELD(7) (A, B, I) 5.23%, 4.70%, 5.47%
DISTRIBUTION RATE(8) (A, B, I) 5.26%, 4.75%, 5.50%
TAXABLE EQUIVALENT YIELD(9)
(A, B, I) 9.09%, 8.17%, 9.51%
</TABLE>
GROWTH OF $10,000 INVESTMENT(10)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO LEHMAN BROTHERS WELLS FARGO
COLORADO MUNICIPAL COLORADO
TAX-FREE FUND - BOND INDEX TAX-FREE CLASS FUND -
CLASS A CLASS I
<S> <C> <C> <C>
May-93 $9,550 $10,000 $10,000
Jun-93 $9,685 $10,197 $10,142
Jul-93 $9,671 $10,222 $10,127
Aug-93 $9,923 $10,434 $10,391
Sep-93 $10,061 $10,562 $10,535
Oct-93 $10,056 $10,579 $10,530
Nov-93 $9,933 $10,493 $10,401
Dec-93 $10,176 $10,716 $10,655
Jan-94 $10,335 $10,848 $10,822
Feb-94 $10,027 $10,551 $10,500
Mar-94 $9,617 $10,146 $10,081
Apr-94 $9,645 $10,273 $10,099
May-94 $9,743 $10,339 $10,202
Jun-94 $9,671 $10,295 $10,127
Jul-94 $9,833 $10,468 $10,297
Aug-94 $9,864 $10,508 $10,329
Sep-94 $9,714 $10,367 $10,171
Oct-94 $9,558 $10,215 $10,009
Nov-94 $9,383 $10,022 $9,825
Dec-94 $9,573 $10,203 $10,024
Jan-95 $9,767 $10,467 $10,227
Feb-95 $10,024 $10,763 $10,507
Mar-95 $10,112 $10,908 $10,600
Apr-95 $10,142 $10,921 $10,619
May-95 $10,471 $11,268 $10,964
Jun-95 $10,391 $11,198 $10,881
Jul-95 $10,508 $11,362 $11,003
Aug-95 $10,661 $11,517 $11,164
Sep-95 $10,720 $11,591 $11,225
Oct-95 $10,874 $11,724 $11,386
Nov-95 $11,061 $11,881 $11,593
Dec-95 $11,200 $11,953 $11,727
Jan-96 $11,280 $12,074 $11,812
Feb-96 $11,195 $12,025 $11,734
Mar-96 $11,058 $11,876 $11,590
Apr-96 $10,998 $11,834 $11,527
May-96 $11,032 $11,801 $11,551
Jun-96 $11,169 $11,913 $11,694
Jul-96 $11,300 $12,027 $11,832
Aug-96 $11,279 $12,027 $11,810
Sep-96 $11,463 $12,151 $12,002
Oct-96 $11,596 $12,304 $12,142
Nov-96 $11,751 $12,553 $12,304
Dec-96 $11,746 $12,496 $12,299
Jan-97 $11,811 $12,545 $12,368
Feb-97 $11,893 $12,663 $12,453
Mar-97 $11,733 $12,493 $12,285
Apr-97 $11,842 $12,586 $12,400
May-97 $12,024 $12,765 $12,590
Jun-97 $12,145 $12,905 $12,718
Jul-97 $12,541 $13,268 $13,132
Aug-97 $12,345 $13,139 $12,927
Sep-97 $12,516 $13,306 $13,118
Oct-97 $12,641 $13,376 $13,237
Nov-97 $12,718 $13,438 $13,330
Dec-97 $12,955 $13,650 $13,565
Jan-98 $13,071 $13,802 $13,699
Feb-98 $13,071 $13,800 $13,687
Mar-98 $13,076 $13,791 $13,692
Apr-98 $12,958 $13,715 $13,581
May-98 $13,222 $13,948 $13,844
Jun-98 $13,274 $13,999 $13,899
Jul-98 $13,292 $14,022 $13,918
Aug-98 $13,521 $14,266 $14,158
Sep-98 $13,723 $14,478 $14,370
Oct-98 $13,612 $14,484 $14,254
Nov-98 $13,714 $14,528 $14,360
Dec-98 $13,750 $14,573 $14,398
Jan-99 $13,894 $14,796 $14,549
Feb-99 $13,777 $14,662 $14,426
Mar-99 $13,768 $14,655 $14,417
Apr-99 $13,810 $14,695 $14,474
May-99 $13,723 $14,592 $14,369
Jun-99 $13,452 $14,320 $14,086
Jul-99 $13,470 $14,416 $14,105
Aug-99 $13,306 $14,363 $13,933
Sep-99 $13,206 $14,412 $13,828
Oct-99 $13,028 $14,311 $13,641
Nov-99 $13,165 $14,467 $13,786
Dec-99 $12,996 $14,392 $13,622
</TABLE>
CREDIT QUALITY(6)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 36%
AA 29%
A 9%
BBB 5%
Cash 3%
Unrated 18%
</TABLE>
MATURITY DISTRIBUTION(5)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Years
0-1 (10%)
1-5 (4%)
5-10 (10%)
10-20 (33%)
20+ (43%)
</TABLE>
- --------------------------------------------------------------------------------
(4) Source: Lipper Analytical Services, Inc. The Lipper Colorado Municipal Debt
Funds Average is an average of funds that limit their assets to those securities
that are exempt from taxation in a specified state (double tax-exempt) or city
(triple tax-exempt). The total return of the Average does not include the effect
of sales charges. Past performance is no guarantee of future results. You cannot
invest directly in a Lipper average.
(5) Portfolio holdings are subject to change.
(6) The average credit rating is compiled from ratings from Standards & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's
is a trademark of McGraw-Hill, Inc., and has been licensed. The Fund is not
sponsored, sold or promoted by these rating agencies and these rating agencies
make no representation regarding the advisability of investing in the Fund.
(7) The formula used to calculate the SEC yield is described in detail in the
Fund's Statement of Additional Information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
(8) The distribution rate is based on the actual distributions made by the
Fund. The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
(9) A portion of the Fund's income may be subject to federal, state and/or
local income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
42.47%. Any capital gains distributions may be taxable.
(10) The chart compares the performance of the Wells Fargo Colorado Tax-Free
Fund Class A and Institutional Class shares since inception with the Lehman
Brothers Municipal Bond Index. The chart assumes a hypothetical $10,000
investment in Class A and Institutional Class shares and reflects all operating
expenses and, for Class A shares, assumes the maximum initial sales charge of
4.50%. The Fund is a professionally managed mutual fund.
9
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo Minnesota Intermediate Tax-Free Fund (the "Fund") seeks a high
level of current income exempt from federal income tax and Minnesota personal
tax, without assuming undue risk.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGER
Patricia Hovanetz, CFA
INCEPTION DATE
09/30/76
PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's Class I shares returned (0.92)%(1) for the six-month period ended
December 31, 1999, excluding sales charges. The Fund slightly underperformed
its benchmark, the Lehman Brothers 10-Year Municipal Bond Index(2), which
returned 0.49%. The Fund's Class I shares distributed $0.24 per share in
dividend income and minimal capital gains during the period. Please keep in
mind past performance is no guarantee of future results.
When measured against a comparable taxable investment, the Fund's tax-free
yield is generally higher. The Fund's distribution rate for Class I shares was
5.04% during the period. For example, an investor would need to earn a yield
of 8.58% during the period from a taxable investment to match the Fund's 4.77%
tax-free SEC yield, assuming the maximum combined federal and Minnesota state
personal income tax bracket.
During the period, the Fund's performance was hurt by a longer duration
compared to its benchmark. Municipal yields rose unexpectedly during the
period, and a November 1999 rally was short-lived as December tax selling
kicked in and created a supply and demand imbalance. Performance also was
impacted by a decline in value in the nonrated segment of the portfolio that
was proportionately more than the highly-rated segment. During June and
July of 1999, two large municipal issues came to market in Minnesota. The
issues seemed attractively priced and good-sized positions were purchased.
However, the deteriorating market continued to negatively affect the Fund's
performance during the period.
The Fund is structured with a core segment of high book yield, short-duration
holdings and a long-duration, high-convexity segment. The low price volatility
of the short segment of the portfolio helped to cushion the decline in the
long-duration portion, producing a total return in line with the average and a
yield that was well above average.
STRATEGIC OUTLOOK
- --------------------------------------------------------------------------------
In the near term, interest rates are expected to remain around current
levels, and volatility will continue as the market anticipates each meeting of
the Federal Reserve Board (the "Fed"). Even though inflation is currently low,
the strong global economic growth and the tight domestic labor markets may
keep the Fed biased toward raising interest rates.
In the long term, if inflation remains stable, the recent market returns
provided by competing asset classes such as technology stocks may not be
sustainable. Municipals, as a largely neglected asset class in the current
environment, have become relatively cheap and may garner more attention when
equity returns come down from stratospheric levels.
- --------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
(2) The Lehman Brothers 10-Year Municipal Bond Index is an unmanaged index
composed of municipal bonds with average maturities of 10 years. The total
return of the index does not include the effect of sales charges, and you cannot
invest directly in an index. Had the index incurred operating expenses, its
performance would have been lower.
(3) Performance shown for the Institutional Class shares of the Wells Fargo
Minnesota Intermediate Tax-Free Fund for periods prior to November 8, 1999
reflects performance of the Institutional Class shares of the Norwest Advantage
Minnesota Intermediate Tax-Free Fund, its predecessor fund. Effective at the
close of business November 5, 1999, the Stagecoach and Norwest Advantage Funds
were reorganized into the Wells Fargo Funds. Performance of the Institutional
Class shares of the Fund, prior to October 1, 1997, reflects the performance of
a common trust fund adjusted to reflect Institutional Class expenses. Norwest
Bank Minnesota, N.A. managed the common trust fund with an investment objective
and principal investment strategy that were
10
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(3) (%) (AS OF DECEMBER 31, 1999)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge
---------------------------------
6-Month 1-Year 5-Year 10-Year
<S> <C> <C> <C> <C>
MINNESOTA INTERMEDIATE
TAX-FREE FUND
INSTITUTIONAL CLASS (0.92) (1.72) 5.61 5.63
LIPPER OTHER STATES
INTERMEDIATE MUNICIPAL DEBT
FUNDS AVERAGE(4) (0.70) (2.06) 5.20 5.32
LEHMAN BROTHERS 10-YEAR
MUNICIPAL BOND INDEX 0.49 (1.25) 7.12 7.10
</TABLE>
CHARACTERISTICS(5) (AS OF DECEMBER 31, 1999)
- ----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(6) AA
WEIGHTED AVERAGE COUPON 5.03%
ESTIMATED DURATION 6.05 YEARS
PORTFOLIO TURNOVER 3%
NUMBER OF HOLDINGS 228
SEC YIELD(7) (I) 4.77%
DISTRIBUTION RATE(8) (I) 5.04%
TAXABLE EQUIVALENT YIELD(9) (I) 8.58%
</TABLE>
GROWTH OF $10,000 INVESTMENT(10)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DEC-89 WELLS FARGO MINNESOTA LEHMAN BROTHERS 10-YEAR
INTERMEDIATE TERM TAX-FREE FUND - I MUNICIPAL BOND INDEX
$10,000 $10,000
<S> <C> <C>
Jan-90 $9,975 $9,953
Feb-90 $10,057 $10,042
Mar-90 $10,059 $10,045
Apr-90 $10,019 $9,972
May-90 $10,182 $10,190
Jun-90 $10,260 $10,279
Jul-90 $10,377 $10,430
Aug-90 $10,307 $10,279
Sep-90 $10,332 $10,285
Oct-90 $10,462 $10,472
Nov-90 $10,622 $10,682
Dec-90 $10,667 $10,729
Jan-91 $10,785 $10,873
Feb-91 $10,876 $10,967
Mar-91 $10,885 $10,972
Apr-91 $10,976 $11,118
May-91 $11,066 $11,217
Jun-91 $11,068 $11,205
Jul-91 $11,155 $11,342
Aug-91 $11,258 $11,492
Sep-91 $11,352 $11,641
Oct-91 $11,417 $11,746
Nov-91 $11,471 $11,779
Dec-91 $11,606 $12,032
Jan-92 $11,662 $12,060
Feb-92 $11,688 $12,063
Mar-92 $11,691 $12,068
Apr-92 $11,770 $12,176
May-92 $11,867 $12,319
Jun-92 $11,992 $12,526
Jul-92 $12,242 $12,902
Aug-92 $12,177 $12,776
Sep-92 $12,251 $12,859
Oct-92 $12,189 $12,733
Nov-92 $12,356 $12,961
Dec-92 $12,454 $13,093
Jan-93 $12,566 $13,245
Feb-93 $12,840 $13,724
Mar-93 $12,726 $13,579
Apr-93 $12,813 $13,716
May-93 $12,867 $13,793
Jun-93 $13,024 $14,023
Jul-93 $13,031 $14,041
Aug-93 $13,306 $14,333
Sep-93 $13,441 $14,497
Oct-93 $13,460 $14,524
Nov-93 $13,395 $14,396
Dec-93 $13,584 $14,700
Jan-94 $13,725 $14,868
Feb-94 $13,455 $14,483
Mar-94 $13,156 $13,893
Apr-94 $13,196 $14,011
May-94 $13,260 $14,133
Jun-94 $13,227 $14,047
Jul-94 $13,350 $14,304
Aug-94 $13,422 $14,354
Sep-94 $13,298 $14,143
Oct-94 $13,117 $13,891
Nov-94 $12,860 $13,640
Dec-94 $13,164 $13,940
Jan-95 $13,417 $14,338
Feb-95 $13,746 $14,755
Mar-95 $13,847 $14,925
Apr-95 $13,887 $14,942
May-95 $14,206 $15,419
Jun-95 $14,159 $15,284
Jul-95 $14,291 $15,429
Aug-95 $14,435 $15,625
Sep-95 $14,488 $15,724
Oct-95 $14,648 $15,953
Nov-95 $14,804 $16,217
Dec-95 $14,920 $16,373
Jan-96 $15,030 $16,498
Feb-96 $14,988 $16,385
Mar-96 $14,837 $16,176
Apr-96 $14,817 $16,130
May-96 $14,811 $16,124
Jun-96 $14,903 $16,300
Jul-96 $15,037 $16,446
Aug-96 $15,042 $16,443
Sep-96 $15,183 $16,673
Oct-96 $15,314 $16,862
Nov-96 $15,526 $17,170
Dec-96 $15,488 $17,098
Jan-97 $15,517 $17,131
Feb-97 $15,636 $17,288
Mar-97 $15,474 $17,058
Apr-97 $15,579 $17,202
May-97 $15,755 $17,461
Jun-97 $15,900 $17,648
Jul-97 $16,269 $18,137
Aug-97 $16,123 $17,967
Sep-97 $16,300 $18,180
Oct-97 $16,402 $18,297
Nov-97 $16,454 $18,405
Dec-97 $16,664 $18,673
Jan-98 $16,802 $18,866
Feb-98 $16,816 $18,871
Mar-98 $16,820 $18,888
Apr-98 $16,738 $18,803
May-98 $16,995 $19,100
Jun-98 $17,047 $19,175
Jul-98 $17,084 $19,223
Aug-98 $17,342 $19,521
Sep-98 $17,514 $19,765
Oct-98 $17,498 $19,765
Nov-98 $17,550 $19,834
Dec-98 $17,595 $19,895
Jan-99 $17,772 $20,132
Feb-99 $17,697 $20,044
Mar-99 $17,700 $20,072
Apr-99 $17,752 $20,122
May-99 $17,666 $20,289
Jun-99 $17,452 $19,997
Jul-99 $17,507 $20,069
Aug-99 $17,401 $19,908
Sep-99 $17,364 $19,916
Oct-99 $17,238 $19,701
Nov-99 $17,364 $19,910
Dec-99 $17,292 $19,761
</TABLE>
CREDIT QUALITY(6)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 47%
AA 25%
A 10%
BBB 6%
SPI 3%
Unrated 8%
Cash 1%
</TABLE>
MATURITY DISTRIBUTION(5)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Years
0-1 (7%)
1-5 (25%)
5-10 (23%)
10-20 (31%)
20+ (14%)
</TABLE>
- --------------------------------------------------------------------------------
substantially similar to those of the Fund. The performance for the Fund
includes performance of its predecessor common trust fund for periods before it
became a mutual fund on October 1, 1997. The common trust fund's performance was
adjusted to reflect the Fund's 1997 estimate of expense ratios for the first
year of operations as a mutual fund, including any applicable sales load
(without giving effect to any fee waivers or expense reimbursements). The common
trust fund was not registered under the Investment Company Act of 1940 ("1940
Act") nor subject to certain investment limitations, diversification
requirements, and other restrictions imposed by the 1940 Act or the Internal
Revenue Code which, if applicable, may have adversely affected the performance
results.
(4) Source: Lipper Analytical Services, Inc. The Lipper Other States
Intermediate Municipal Debt Funds Average is an average of funds that invest in
municipal debt issues with dollar-weighted average maturities of five to 10
years and are exempt from taxation on a specified city or state basis. The total
return of the Average does not include the effect of sales charges. Past
performance is no guarantee of future results. You cannot invest directly in a
Lipper Average.
(5) Portfolio holdings are subject to change.
(6) The average credit rating is compiled from ratings from Standards & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's
is a trademark of McGraw-Hill, Inc., and has been licensed. The Fund is not
sponsored, sold or promoted by these rating agencies and these rating agencies
make no representation regarding the advisability of investing in the Fund.
(7) The formula used to calculate the SEC yield is described in detail in the
Fund's Statement of Additional Information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
(8) The distribution rate is based on the actual distributions made by the
Fund. The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
(9) A portion of the Fund's income may be subject to federal, state and/or
local income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
44.43%. Any capital gains distributions may be taxable.
(10) The chart compares the performance of the Wells Fargo Minnesota
Intermediate Tax-Free Fund Institutional Class shares since inception with the
Lehman Brothers 10-Year Municipal Bond Index. The chart assumes a hypothetical
$10,000 investment in Institutional Class shares and reflects all operating
expenses. The Fund is a professionally managed mutual fund.
11
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo Minnesota Tax-Free Fund (the "Fund") seeks a high level of
current income exempt from federal income tax and Minnesota personal tax,
without assuming undue risk.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGER
Patricia Hovanetz, CFA
INCEPTION DATE
01/12/88
PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's Class A shares returned (4.55)%(1) for the six-month period ended
December 31, 1999, excluding sales charges. The Fund underperformed its
benchmark, the Lehman Brothers Municipal Bond Index(2), which returned
(1.17)%. The Fund's Class A shares distributed $0.27 per share in dividend
income and minimal capital gains during the period. Please keep in mind past
performance is no guarantee of future results.
When measured against a comparable taxable investment, the Fund's tax-free
yield is generally higher. The Fund's distribution rate for Class A shares was
5.09% during the period. For example, an investor would need to earn a yield
of 9.39% during the period from a taxable investment to match the Fund's 5.22%
tax-free SEC yield, assuming the maximum combined federal and Minnesota state
personal income tax bracket.
During the period, the Fund's performance was hurt by a longer duration
compared to its benchmark. Municipal yields rose unexpectedly during the
period, and a November 1999 rally was short-lived as December tax selling
kicked in and created a supply and demand imbalance. Performance also was
impacted by a decline in value in the nonrated segment of the portfolio that
was proportionately more than the highly-rated segment. During June and
July of 1999, two large municipal issues came to market in Minnesota. The
issues seemed attractively priced and good-sized positions were purchased.
However, the deteriorating bond market continued to negatively affect the
Fund's performance during the period.
STRATEGIC OUTLOOK
- --------------------------------------------------------------------------------
In the near term, interest rates are expected to remain around current
levels, and volatility will continue as the market anticipates each meeting of
the Federal Reserve Board (the "Fed"). Even though inflation is currently low,
the strong global economic growth and the tight domestic labor markets may
keep the Fed biased toward raising interest rates.
In the long term, if inflation remains stable, the recent market returns
provided by competing asset classes such as technology stocks may not be
sustainable. Municipals, as a largely neglected asset class in the current
environment, have become relatively cheap and may garner more attention when
equity returns come down from stratospheric levels.
- --------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
(2) The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The total return of the index does not include the effect of
sales charges, and you cannot invest directly in an index. Had the index
incurred operating expenses, its performance would have been lower.
(3) Performance shown for Class A, Class B and Institutional Class shares of
the Wells Fargo Minnesota Tax-Free Fund for periods prior to November 8, 1999,
reflects performance of the Class A, Class B and Institutional Class shares of
the Norwest Advantage Minnesota Tax-Free Fund, its predecessor fund. Effective
at the close of business November 5, 1999, the Stagecoach and Norwest Advantage
Funds were reorganized into the Wells Fargo Funds. Performance of the Class B
shares for periods prior to August 6, 1993 reflects performance of the Class A
shares adjusted to reflect Class B shares sales charges and expenses. For
Class A shares, the maximum front-end sales charge is 4.50%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. Class B share
performance including sales charge assumes the maximum contingent deferred sales
charge for the corresponding time period. Institutional Class shares are sold
without sales charges.
12
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(3) (%) (AS OF DECEMBER 31, 1999)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
--------------------------------- ---------------------------------
6-Month 1-Year 5-Year 10-Year 6-Month 1-Year 5-Year 10-Year
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MINNESOTA TAX-FREE FUND
CLASS A (4.55) (5.93) 5.82 5.59 (8.85) (10.17) 4.85 5.10
CLASS B (4.91) (6.55) 5.03 4.78 (9.56) (11.03) 4.70 4.78
INSTITUTIONAL CLASS (4.55) (5.93) 5.80 5.59
LIPPER MINNESOTA
MUNICIPAL DEBT FUNDS
AVERAGE(4) (2.77) (4.11) 5.47 5.95
LEHMAN BROTHERS MUNICIPAL
BOND INDEX (1.17) (2.06) 6.91 6.89
</TABLE>
CHARACTERISTICS(5) (AS OF DECEMBER 31, 1999)
- ----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(6) AA-
WEIGHTED AVERAGE COUPON 4.91%
ESTIMATED DURATION 10.07 YEARS
PORTFOLIO TURNOVER 37%
NUMBER OF HOLDINGS 84
SEC YIELD(7) (A, B, I) 5.22%, 4.70%, 5.46%
DISTRIBUTION RATE(8) (A, B, I) 5.09%, 4.57%, 5.33%
TAXABLE EQUIVALENT YIELD(9)
(A, B, I) 9.39%, 8.46%, 9.83%
</TABLE>
GROWTH OF $10,000 INVESTMENT(10)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DEC-89 WELLS FARGO LEHMAN BROTHERS WELLS FARGO
MINNESOTA TAX-FREE FUND - A MUNICIPAL BOND INDEX MINNESOTA TAX-FREE FUND - I
$9,550 $10,000 $10,000
<S> <C> <C> <C>
Jan-90 $9,523 $9,970 $9,972
Feb-90 $9,606 $10,045 $10,058
Mar-90 $9,601 $10,029 $10,053
Apr-90 $9,525 $9,963 $9,973
May-90 $9,710 $10,179 $10,168
Jun-90 $9,791 $10,274 $10,252
Jul-90 $9,899 $10,417 $10,365
Aug-90 $9,809 $10,267 $10,271
Sep-90 $9,815 $10,269 $10,278
Oct-90 $9,976 $10,495 $10,446
Nov-90 $10,116 $10,709 $10,593
Dec-90 $10,156 $10,735 $10,635
Jan-91 $10,258 $10,912 $10,742
Feb-91 $10,337 $11,006 $10,824
Mar-91 $10,340 $11,000 $10,827
Apr-91 $10,433 $11,152 $10,925
May-91 $10,512 $11,236 $11,007
Jun-91 $10,539 $11,222 $11,035
Jul-91 $10,591 $11,340 $11,090
Aug-91 $10,689 $11,493 $11,193
Sep-91 $10,769 $11,669 $11,277
Oct-91 $10,833 $11,764 $11,344
Nov-91 $10,865 $11,784 $11,377
Dec-91 $11,023 $12,035 $11,542
Jan-92 $11,058 $12,060 $11,579
Feb-92 $11,087 $12,042 $11,609
Mar-92 $11,140 $12,024 $11,665
Apr-92 $11,205 $12,138 $11,733
May-92 $11,304 $12,280 $11,837
Jun-92 $11,424 $12,492 $11,962
Jul-92 $11,660 $12,902 $12,209
Aug-92 $11,577 $12,750 $12,123
Sep-92 $11,653 $12,856 $12,202
Oct-92 $11,582 $12,725 $12,128
Nov-92 $11,745 $12,958 $12,298
Dec-92 $11,855 $13,108 $12,413
Jan-93 $11,969 $13,328 $12,533
Feb-93 $12,299 $13,816 $12,878
Mar-93 $12,166 $13,614 $12,740
Apr-93 $12,289 $13,744 $12,868
May-93 $12,360 $13,792 $12,943
Jun-93 $12,550 $14,063 $13,142
Jul-93 $12,572 $14,098 $13,164
Aug-93 $12,845 $14,390 $13,463
Sep-93 $13,050 $14,567 $13,665
Oct-93 $13,044 $14,591 $13,659
Nov-93 $12,911 $14,471 $13,532
Dec-93 $13,187 $14,779 $13,808
Jan-94 $13,322 $14,961 $13,963
Feb-94 $12,968 $14,551 $13,579
Mar-94 $12,452 $13,992 $13,051
Apr-94 $12,500 $14,169 $13,102
May-94 $12,601 $14,259 $13,207
Jun-94 $12,514 $14,198 $13,117
Jul-94 $12,654 $14,436 $13,250
Aug-94 $12,732 $14,493 $13,331
Sep-94 $12,522 $14,297 $13,112
Oct-94 $12,332 $14,088 $12,912
Nov-94 $12,091 $13,822 $12,660
Dec-94 $12,395 $14,071 $12,992
Jan-95 $12,758 $14,435 $13,358
Feb-95 $13,136 $14,844 $13,754
Mar-95 $13,243 $15,044 $13,866
Apr-95 $13,249 $15,062 $13,873
May-95 $13,678 $15,540 $14,322
Jun-95 $13,549 $15,443 $14,187
Jul-95 $13,623 $15,670 $14,264
Aug-95 $13,781 $15,884 $14,430
Sep-95 $13,859 $15,985 $14,512
Oct-95 $14,094 $16,169 $14,758
Nov-95 $14,357 $16,386 $15,033
Dec-95 $14,528 $16,486 $15,213
Jan-96 $14,615 $16,652 $15,303
Feb-96 $14,483 $16,584 $15,180
Mar-96 $14,273 $16,378 $14,945
Apr-96 $14,224 $16,321 $14,893
May-96 $14,221 $16,275 $14,891
Jun-96 $14,402 $16,430 $15,081
Jul-96 $14,520 $16,588 $15,204
Aug-96 $14,477 $16,588 $15,159
Sep-96 $14,716 $16,758 $15,409
Oct-96 $14,878 $16,970 $15,579
Nov-96 $15,140 $17,312 $15,853
Dec-96 $15,078 $17,234 $15,788
Jan-97 $15,074 $17,302 $15,784
Feb-97 $15,191 $17,464 $15,907
Mar-97 $14,981 $17,230 $15,687
Apr-97 $15,146 $17,358 $15,859
May-97 $15,356 $17,604 $16,079
Jun-97 $15,506 $17,798 $16,236
Jul-97 $15,980 $18,298 $16,732
Aug-97 $15,767 $18,121 $16,525
Sep-97 $15,978 $18,351 $16,730
Oct-97 $16,103 $18,448 $16,862
Nov-97 $16,198 $18,533 $16,961
Dec-97 $16,458 $18,826 $17,234
Jan-98 $16,630 $19,035 $17,414
Feb-98 $16,631 $19,033 $17,415
Mar-98 $16,637 $19,019 $17,421
Apr-98 $16,521 $18,915 $17,300
May-98 $16,848 $19,236 $17,641
Jun-98 $16,913 $19,308 $17,710
Jul-98 $16,935 $19,338 $17,733
Aug-98 $17,234 $19,675 $18,062
Sep-98 $17,485 $19,968 $18,308
Oct-98 $17,366 $19,976 $18,184
Nov-98 $17,447 $20,036 $18,269
Dec-98 $17,483 $20,098 $18,306
Jan-99 $17,645 $20,406 $18,476
Feb-99 $17,565 $20,222 $18,392
Mar-99 $17,570 $20,212 $18,398
Apr-99 $17,621 $20,266 $18,451
May-99 $17,515 $20,125 $18,340
Jun-99 $17,230 $19,750 $18,042
Jul-99 $17,220 $19,883 $18,031
Aug-99 $16,938 $19,809 $17,736
Sep-99 $16,781 $19,876 $17,572
Oct-99 $16,481 $19,737 $17,257
Nov-99 $16,634 $19,952 $17,418
Dec-99 $16,445 $19,849 $17,220
</TABLE>
CREDIT QUALITY(6)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 43%
AA 27%
A 6%
BBB 7%
SPI 2%
Unrated 15%
</TABLE>
MATURITY DISTRIBUTION(5)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Years
0-1 (4%)
1-5 (7%)
5-10 (8%)
10-20 (32%)
20+ (49%)
</TABLE>
- --------------------------------------------------------------------------------
(4) Source: Lipper Analytical Services, Inc. The Lipper Minnesota Municipal
Debt Funds Average is an average of funds that limit their assets to those
securities that are exempt from taxation in a specified state (double
tax-exempt) or city (triple tax-exempt). The total return of the Average does
not include the effects of sales charges. Past performance is no guarantee of
future results. You cannot invest directly in a Lipper average.
(5) Portfolio holdings are subject to change.
(6) The average credit rating is compiled from ratings from Standards & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's
is a trademark of McGraw-Hill, Inc., and has been licensed. The Fund is not
sponsored, sold or promoted by these rating agencies and these rating agencies
make no representation regarding the advisability of investing in the Fund.
(7) The formula used to calculate the SEC yield is described in detail in the
Fund's Statement of Additional Information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
(8) The distribution rate is based on the actual distributions made by the
Fund. The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
(9) A portion of the Fund's income may be subject to federal, state and/or
local income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
44.43%. Any capital gains distributions may be taxable.
(10) The chart compares the performance of the Wells Fargo Minnesota Tax-Free
Fund Class A and Institutional Class shares since inception with the Lehman
Brothers Municipal Bond Index. The chart assumes a hypothetical $10,000
investment in Class A and Institutional Class shares and reflects all operating
expenses and, for Class A shares, assumes the maximum initial sales charge of
4.50%. The Fund is a professionally managed mutual fund.
13
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo National Limited Term Tax-Free Fund (the "Fund") seeks current
income exempt from federal income taxes.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGER
Patricia Hovanetz, CFA
INCEPTION DATE
10/01/96
PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's Class I shares returned 0.59%(1) for the six-month period ended
December 31, 1999, excluding sales charges. The Fund underperformed its
benchmark, the Lehman Brothers 3-Year Municipal Bond Index(2), which returned
1.29%. The Fund's Class I shares distributed $0.24 per share in dividend
income and no capital gains during the period. Please keep in mind past
performance is no guarantee of future results.
When measured against a comparable taxable investment, the Fund's tax-free
yield is generally higher. The Fund's distribution rate for Class I shares was
4.56% during the period. For example, an investor would need to earn a yield
of 7.96% during the period from a taxable investment to match the Fund's 4.81%
tax-free SEC yield, assuming the maximum federal income tax bracket.
During the period, municipal yields in the intermediate maturity range rose,
a move that was unexpected. The erosion in value occurred gradually but was
sustained for most of the period. A rally began in November 1999, but was
short-lived as December tax selling kicked in and created a supply and demand
imbalance. The Fund's underperformance also was a result of a somewhat longer
duration compared to its benchmark. The Fund was forced to liquidate to raise
cash on weak market days producing below-average performance.
The best-performing segment of the portfolio was high coupon escrowed
holdings and higher coupon housing bonds because of their lower price
volatility in a rising interest rate environment. By the same token, the
worst-performing segment was lower coupons and longer maturities whose higher
durations made them subject to greater price declines in that type of
environment.
STRATEGIC OUTLOOK
- --------------------------------------------------------------------------------
In the near term, interest rates are expected to remain around current
levels, and volatility will continue as the market anticipates each meeting of
the Federal Reserve Board (the "Fed"). Even though inflation is currently low,
the strong global economic growth and the tight domestic labor markets may
keep the Fed biased toward raising interest rates.
In the long term, if inflation remains stable, the recent market returns
provided by competing asset classes, such as technology stocks, may not be
sustainable. Municipals, as a largely neglected asset class in the current
environment, have become relatively cheap and may garner more attention when
equity returns come down from stratospheric levels.
- --------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
(2) The Lehman Brothers 3-Year Municipal Bond Index is an unmanaged index
composed of municipal bonds with approximate maturities of three years. The
total return of the index does not include the effect of sales charges, and you
cannot invest directly in an index. Had the index incurred operating expenses,
its performance would have been lower.
14
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(3) (%) (AS OF DECEMBER 31, 1999)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge
--------------------------
Since
6-Month 1-Year Inception
<S> <C> <C> <C>
NATIONAL LIMITED TERM TAX-FREE FUND
INSTITUTIONAL CLASS 0.59 0.08 5.25
LIPPER SHORT-INTERMEDIATE MUNICIPAL
DEBT FUNDS AVERAGE(4) 0.57 0.32
LEHMAN BROTHERS 3-YEAR MUNICIPAL
BOND INDEX 1.29 1.96
</TABLE>
CHARACTERISTICS(5) (AS OF DECEMBER 31, 1999)
- ----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(6) A1/AA-
WEIGHTED AVERAGE COUPON 5.12%
ESTIMATED DURATION 3.73 YEARS
PORTFOLIO TURNOVER 7%
NUMBER OF HOLDINGS 117
SEC YIELD(7) (I) 4.81%
DISTRIBUTION RATE(8) (I) 4.56%
TAXABLE EQUIVALENT YIELD(9) (I) 7.96%
</TABLE>
GROWTH OF $10,000 INVESTMENT(10)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO LEHMAN BROTHERS
NATIONAL LIMITED TERM TAX-FREE FUND - I 3-YEAR MUNICIPAL BOND INDEX
<S> <C> <C>
Sep-96 $10,000 $10,000
Oct-96 $10,387 $10,070
Nov-96 $10,537 $10,165
Dec-96 $10,515 $10,170
Jan-97 $10,555 $10,214
Feb-97 $10,621 $10,265
Mar-97 $10,566 $10,211
Apr-97 $10,616 $10,255
May-97 $10,699 $10,339
Jun-97 $10,780 $10,400
Jul-97 $10,977 $10,524
Aug-97 $10,905 $10,503
Sep-97 $10,998 $10,577
Oct-97 $11,071 $10,625
Nov-97 $11,101 $10,656
Dec-97 $11,207 $10,728
Jan-98 $11,281 $10,799
Feb-98 $11,287 $10,822
Mar-98 $11,330 $10,839
Apr-98 $11,285 $10,824
May-98 $11,414 $10,925
Jun-98 $11,455 $10,962
Jul-98 $11,488 $11,001
Aug-98 $11,619 $11,108
Sep-98 $11,715 $11,179
Oct-98 $11,736 $11,233
Nov-98 $11,756 $11,260
Dec-98 $11,799 $11,287
Jan-99 $11,896 $11,389
Feb-99 $11,879 $11,402
Mar-99 $11,875 $11,412
Apr-99 $11,904 $11,448
May-99 $11,867 $11,432
Jun-99 $11,739 $11,363
Jul-99 $11,805 $11,420
Aug-99 $11,780 $11,433
Sep-99 $11,789 $11,477
Oct-99 $11,765 $11,478
Nov-99 $11,832 $11,529
Dec-99 $11,808 $11,510
</TABLE>
CREDIT QUALITY(6)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 45%
AA 11%
A 16%
BBB 15%
Cash 3%
Unrated 10%
</TABLE>
MATURITY DISTRIBUTION(5)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Years
0-1 (6%)
1-5 (41%)
5-10 (53%)
</TABLE>
- --------------------------------------------------------------------------------
(3) Performance shown for the Institutional Class shares of the Wells Fargo
National Limited Term Tax-Free Fund for periods prior to November 8, 1999,
reflects performance of the Institutional Class shares of the Norwest Advantage
Limited Term Tax-Free Fund, its predecessor fund. Effective at the close of
business November 5, 1999, the Norwest Advantage and Stagecoach Funds were
reorganized into the Wells Fargo Funds.
(4) Source: Lipper Analytical Services, Inc. The Lipper Short/Intermediate
Municipal Debt Funds Average is an average of funds that invest in municipal
debt issues with dollar-weighted average maturities of one to five years. The
total return of the Average does not include the effects of sales charges. Past
performance is no guarantee of future results. You cannot invest directly in a
Lipper average.
(5) Portfolio holdings are subject to change.
(6) The average credit rating is compiled from ratings from Standards & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's
is a trademark of McGraw-Hill, Inc., and has been licensed. The Fund is not
sponsored, sold or promoted by these rating agencies and these rating agencies
make no representation regarding the advisability of investing in the Fund.
(7) The formula used to calculate the SEC yield is described in detail in the
Fund's Statement of Additional Information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
(8) The distribution rate is based on the actual distributions made by the
Fund. The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
(9) A portion of the Fund's income may be subject to federal, state and/or
local income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the federal income tax rate of 39.60%. Any capital
gains distributions may be taxable.
(10) The chart compares the performance of the Wells Fargo National Limited
Term Tax-Free Fund Institutional Class shares since inception with the Lehman
Brothers 3-Year Municipal Bond Index. The chart assumes a hypothetical $10,000
investment in Institutional Class shares and reflects all operating expenses.
The Fund is a professionally managed mutual fund.
15
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo National Tax-Free Fund (the "Fund") seeks current income
exempt from federal income taxes.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGER
William T. Jackson, CFA
INCEPTION DATE
08/01/89
PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's Class A shares returned (3.65)%(1) during the six-month period
ended December 31, 1999, excluding sales charges, underperforming the Lehman
Brothers Municipal Bond Index(2), which returned (1.17)%. The Fund's Class A
shares distributed $0.27 per share in dividend income and minimal capital
gains during the period. Please keep in mind past performance is no guarantee
of future results.
When measured against a comparable taxable investment, the Fund's tax-free
yield is generally higher. The Fund's distribution rate for Class A shares was
5.21% during the period. For example, an investor would need to earn a yield
of 8.97% during the period from a taxable investment to match the Fund's 5.42%
tax-free SEC yield, assuming the maximum federal income tax bracket.
Rising interest rates during the period, including long-term municipal
interest rates, hurt the Fund's performance. In addition, market participants
began avoiding additional purchases of health care-related issues and
publicly-owned electric utilities due to credit quality concerns in each of
these sectors. Bonds in these sectors already owned by the Fund suffered
additional price declines relative to other sectors.
The Fund's performance was helped by shorter duration holdings. For example,
the Fund held a number of positions of single-family mortgage revenue bonds
and special assessment bonds with relatively short durations. These were some
of the best-performing positions in the portfolio during the period. The Fund
executed tax swaps during the period to minimize the distribution of taxable
capital gains to shareholders. The Fund also took advantage of rising interest
rates by buying bonds with higher coupons with the potential to generate
higher income levels than previously held investments. In addition, the Fund
improved its call protection to increase the sustainability of its dividends
should interest rates fall.
STRATEGIC OUTLOOK
- --------------------------------------------------------------------------------
Considering the vigilance of federal policy officials to keep inflation low
and economic growth at acceptable levels, it's possible interest rate markets
may have overreacted given positive news related to price levels of basic
commodities and retail goods. It may be prudent to hold long bonds that have
suffered severe price declines in 1999 because to sell them would prove hasty
for the Fund, limiting its upside potential in the future.
- --------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
(2) The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The total return of the index does not include the effect of
sales charges, and you cannot invest directly in an index. Had the index
incurred operating expenses, its performance would have been lower.
(3) Performance shown for the Class A, Class B and Institutional Class shares
of the Wells Fargo National Tax-Free Fund for periods prior to November 8, 1999,
reflects performance of the Class A, Class B and Institutional Class shares of
the Norwest Advantage Tax-Free Income Fund (the accounting survivor of a merger
of the Norwest Advantage Tax-Free Income Fund and the Stagecoach National
Tax-Free Fund), its predecessor fund. Effective at the close of business
November 5, 1999, the Norwest Advantage and Stagecoach Funds were reorganized
into the Wells Fargo Funds. Performance of the Class B shares for periods prior
to August 6, 1993 reflects performance of the Class A shares of the Norwest
Advantage Fund adjusted to reflect Class B shares sales charges and expenses.
Performance shown for Class C shares for periods prior to November 8, 1999
reflects performance of the Class B shares of the Norwest Advantage Fund
adjusted for Class C sales charges and expenses. For Class A shares, the maximum
front-end sales charge is 4.50%. The maximum contingent deferred sales charge
for Class B shares is 5.00%. The maximum contingent deferred sales charge for
Class C shares is 1.00%. Class B and Class C share performance assumes the
maximum contingent deferred sales charge for the corresponding time period.
Institutional Class shares are sold without sales charges.
(4) Source: Lipper Analytical Services, Inc. The Lipper General Municipal Debt
Funds Average is an average of funds that invest at least 65% of their assets in
municipal debt issues in the top four credit ratings. The total return of the
Average does not include the effect of sales charges. Past performance is no
guarantee of future results. You cannot invest directly in a Lipper average.
16
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(3) (%) (AS OF DECEMBER 31, 1999)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
--------------------------------- ---------------------------------
6-Month 1-Year 5-Year 10-Year 6-Month 1-Year 5-Year 10-Year
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NATIONAL TAX-FREE FUND
CLASS A (3.65) (5.38) 6.33 5.82 (7.99) (9.63) 5.36 5.33
CLASS B (4.00) (6.08) 5.54 5.05 (8.69) (10.57) 5.22 5.05
CLASS C (4.00) (6.08) 5.54 5.05 (4.94) (6.98) 5.54 5.05
INSTITUTIONAL CLASS (3.62) 6.32 5.82 5.80
LIPPER GENERAL MUNICIPAL
DEBT FUNDS AVERAGE(4) (2.86) (4.63) 5.76 6.18
LEHMAN BROTHERS MUNICIPAL
BOND INDEX (1.17) (2.06) 6.91 6.89
</TABLE>
CHARACTERISTICS(5) (AS OF DECEMBER 31, 1999)
- ----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(6) AA
WEIGHTED AVERAGE COUPON 6.24%
ESTIMATED DURATION 10.32 YEARS
PORTFOLIO TURNOVER 15%
NUMBER OF HOLDINGS 167
SEC YIELD(7)
(A, B, C, I) 5.42%, 4.91%, 4.91%, 5.88%
DISTRIBUTION RATE(8)
(A, B, C, I) 5.21%, 4.69%, 4.69%, 5.65%
TAXABLE EQUIVALENT YIELD(9)
(A, B, C, I) 8.97%, 8.13%, 8.13%, 9.74%
</TABLE>
GROWTH OF $10,000 INVESTMENT(10)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO LEHMAN BROTHERS WELLS FARGO
NATIONAL TAX-FREE FUND - A MUNICIPAL BOND INDEX NATIONAL TAX-FREE FUND - I
<S> <C> <C> <C>
Dec-89 $9,550 $10,000 $10,000
Jan-90 $9,501 $9,953 $9,949
Feb-90 $9,572 $10,042 $10,023
Mar-90 $9,580 $10,045 $10,032
Apr-90 $9,470 $9,972 $9,916
May-90 $9,686 $10,190 $10,142
Jun-90 $9,782 $10,279 $10,243
Jul-90 $9,929 $10,430 $10,397
Aug-90 $9,757 $10,279 $10,217
Sep-90 $9,813 $10,285 $10,275
Oct-90 $9,943 $10,472 $10,411
Nov-90 $10,102 $10,682 $10,578
Dec-90 $10,112 $10,729 $10,588
Jan-91 $10,255 $10,873 $10,738
Feb-91 $10,393 $10,967 $10,883
Mar-91 $10,343 $10,972 $10,830
Apr-91 $10,467 $11,118 $10,961
May-91 $10,573 $11,217 $11,072
Jun-91 $10,549 $11,205 $11,047
Jul-91 $10,657 $11,342 $11,159
Aug-91 $10,754 $11,492 $11,260
Sep-91 $10,860 $11,641 $11,372
Oct-91 $10,917 $11,746 $11,431
Nov-91 $10,927 $11,779 $11,441
Dec-91 $11,063 $12,032 $11,584
Jan-92 $11,111 $12,060 $11,634
Feb-92 $11,158 $12,063 $11,683
Mar-92 $11,186 $12,068 $11,713
Apr-92 $11,283 $12,176 $11,815
May-92 $11,383 $12,319 $11,919
Jun-92 $11,515 $12,526 $12,057
Jul-92 $11,711 $12,902 $12,263
Aug-92 $11,669 $12,776 $12,219
Sep-92 $11,744 $12,859 $12,298
Oct-92 $11,568 $12,733 $12,113
Nov-92 $11,736 $12,961 $12,289
Dec-92 $11,874 $13,093 $12,434
Jan-93 $11,947 $13,245 $12,510
Feb-93 $12,212 $13,724 $12,787
Mar-93 $12,131 $13,579 $12,702
Apr-93 $12,232 $13,716 $12,808
May-93 $12,278 $13,793 $12,857
Jun-93 $12,486 $14,023 $13,075
Jul-93 $12,503 $14,041 $13,092
Aug-93 $12,759 $14,333 $13,373
Sep-93 $12,867 $14,497 $13,473
Oct-93 $12,889 $14,524 $13,497
Nov-93 $12,706 $14,396 $13,318
Dec-93 $13,000 $14,700 $13,626
Jan-94 $13,185 $14,868 $13,807
Feb-94 $12,807 $14,483 $13,411
Mar-94 $12,286 $13,893 $12,865
Apr-94 $12,406 $14,011 $12,991
May-94 $12,491 $14,133 $13,080
Jun-94 $12,447 $14,047 $13,034
Jul-94 $12,626 $14,304 $13,221
Aug-94 $12,674 $14,354 $13,272
Sep-94 $12,502 $14,143 $13,105
Oct-94 $12,335 $13,891 $12,916
Nov-94 $12,100 $13,640 $12,685
Dec-94 $12,368 $13,940 $12,965
Jan-95 $12,697 $14,338 $13,295
Feb-95 $13,011 $14,755 $13,638
Mar-95 $13,092 $14,925 $13,723
Apr-95 $13,123 $14,942 $13,741
May-95 $13,544 $15,419 $14,182
Jun-95 $13,417 $15,284 $14,049
Jul-95 $13,532 $15,429 $14,170
Aug-95 $13,679 $15,625 $14,338
Sep-95 $13,757 $15,724 $14,420
Oct-95 $13,946 $15,953 $14,618
Nov-95 $14,273 $16,217 $14,946
Dec-95 $14,454 $16,373 $15,135
Jan-96 $14,577 $16,498 $15,278
Feb-96 $14,470 $16,385 $15,151
Mar-96 $14,281 $16,176 $14,953
Apr-96 $14,246 $16,130 $14,933
May-96 $14,260 $16,124 $14,932
Jun-96 $14,380 $16,300 $15,073
Jul-96 $14,565 $16,446 $15,267
Aug-96 $14,534 $16,443 $15,219
Sep-96 $14,728 $16,673 $15,437
Oct-96 $14,930 $16,862 $15,649
Nov-96 $15,176 $17,170 $15,891
Dec-96 $15,139 $17,098 $15,853
Jan-97 $15,165 $17,131 $15,896
Feb-97 $15,303 $17,288 $16,024
Mar-97 $15,079 $17,058 $15,789
Apr-97 $15,239 $17,202 $15,957
May-97 $15,463 $17,461 $16,208
Jun-97 $15,622 $17,648 $16,375
Jul-97 $16,108 $18,137 $16,884
Aug-97 $15,913 $17,967 $16,663
Sep-97 $16,121 $18,180 $16,897
Oct-97 $16,238 $18,297 $17,003
Nov-97 $16,369 $18,405 $17,157
Dec-97 $16,693 $18,673 $17,479
Jan-98 $16,828 $18,866 $17,638
Feb-98 $16,813 $18,871 $17,622
Mar-98 $16,837 $18,888 $17,647
Apr-98 $16,682 $18,803 $17,485
May-98 $17,061 $19,100 $17,865
Jun-98 $17,130 $19,175 $17,938
Jul-98 $17,154 $19,223 $17,963
Aug-98 $17,471 $19,521 $18,312
Sep-98 $17,738 $19,765 $18,591
Oct-98 $17,643 $19,765 $18,492
Nov-98 $17,761 $19,834 $18,599
Dec-98 $17,767 $19,895 $18,622
Jan-99 $17,955 $20,132 $18,801
Feb-99 $17,836 $20,044 $18,677
Mar-99 $17,825 $20,072 $18,683
Apr-99 $17,896 $20,122 $18,757
May-99 $17,750 $20,289 $18,586
Jun-99 $17,449 $19,997 $18,271
Jul-99 $17,441 $20,069 $18,263
Aug-99 $17,193 $19,908 $18,022
Sep-99 $17,098 $19,916 $17,922
Oct-99 $16,831 $19,701 $17,643
Nov-99 $17,031 $19,910 $17,837
Dec-99 $16,812 $19,761 $17,610
</TABLE>
CREDIT QUALITY(6)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 42%
AA 21%
A 11%
BBB 14%
Unrated 12%
</TABLE>
MATURITY DISTRIBUTION(5)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Years
0-1 4%
1-5 8%
5-10 9%
10-20 27%
20+ 52%
</TABLE>
- --------------------------------------------------------------------------------
(5) Portfolio holdings are subject to change.
(6) The average credit rating is compiled from ratings from Standards & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's
is a trademark of McGraw-Hill, Inc., and has been licensed. The Fund is not
sponsored, sold or promoted by these rating agencies and these rating agencies
make no representation regarding the advisability of investing in the Fund.
(7) The formula used to calculate the SEC yield is described in detail in the
Fund's Statement of Additional Information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
(8) The distribution rate is based on the actual distributions made by the
Fund. The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
(9) A portion of the Fund's income may be subject to federal, state and/or
local income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the federal income tax rate of 39.60%. Any capital
gains distributions may be taxable.
(10) The chart compares the performance of the Wells Fargo National Tax-Free
Fund Class A and Institutional Class shares since inception with the Lehman
Brothers Municipal Bond Index. The chart assumes a hypothetical $10,000
investment in Class A and Institutional Class shares and reflects all operating
expenses and, for Class A shares, assumes the maximum initial sales charge of
4.50%. The Fund is a professionally managed mutual fund.
17
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
OREGON TAX-FREE FUND
INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
The Wells Fargo Oregon Tax-Free Fund (the "Fund") seeks a high level of
current income exempt from federal income tax and Oregon personal income tax.
The Fund invests in high-quality Oregon municipal obligations.
ADVISOR
Wells Fargo Bank, N.A.
FUND MANAGER
Stephen Galiani
INCEPTION DATE
06/01/88
PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's Class A shares returned (4.12)%(1) for the six-month period ended
December 31, 1999, excluding sales charges. Because of its long-duration
strategy and longer average maturity, the Fund underperformed its benchmark,
the Lehman Brothers Municipal Bond Index(2), which returned (1.17)% during the
period. The Fund's Class A shares distributed $0.39 per share in dividend
income and $0.02 in capital gains during the period. Please keep in mind past
performance is no guarantee of future results.
When measured against a comparable taxable investment, the Fund's tax-free
yield is generally higher. The Fund's distribution rate during the period for
Class A shares was 4.87% during the period. For example, an investor would
need to earn a yield of 9.01% during the period from a taxable investment to
match the Fund's 4.95% tax-free SEC yield, assuming the maximum combined
federal and Oregon state personal income tax bracket.
During the second half of 1999, interest rates continued to rise and
municipal bonds posted negative total returns. In addition, the yield curve
steepened so longer maturity bonds suffered disproportionately.
With a focus on the Fund's current return during the period, a combination of
housing and health care bonds of higher and lower grade quality were added.
Some other lower investment grade bonds also were added. These positions
helped maintain the Fund's high distribution yield but had a mixed impact on
performance. The health care bonds and lower investment grade paper negatively
impacted performance. Housing bonds, which represented the best performing
sector of the municipal market during 1999, made a positive contribution.
Late in the period, the Fund took advantage of rising interest rates by
executing swaps and sales that realized capital losses, which offset some of
the capital gains realized earlier in the year and minimized the Fund's
taxable capital gains payout.
STRATEGIC OUTLOOK
- --------------------------------------------------------------------------------
Interest rates may decline later in 2000. To enable the Fund to benefit, it
will maintain its duration and average maturity beyond those of the Index. The
Fund's substantial positions in discounted and non-callable bonds, which have
the potential to rally strongly when interest rates fall, also are expected to
be maintained.
- --------------------------------------------------------------------------------
(1) FIGURES QUOTED REPRESENT PAST PERFORMANCE, WHICH IS NO GUARANTEE OF FUTURE
RESULTS. Investment return and 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. The Fund's manager has voluntarily waived all or a portion
of its management fees or assumed responsibility for other expenses, which
reduces operating expenses and increases total return to shareholders. Without
these reductions the Fund's returns would have been lower. These reductions may
be discontinued at any time.
(2) The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The total return of the index does not include the effect of
sales charges, and you cannot invest directly in an index. Had the index
incurred operating expenses, its performance would have been lower.
(3) Performance shown for Class A, Class B and Institutional Class shares of
the Oregon Tax-Free Fund for periods prior to November 8, 1999, reflects
performance of the Class A, Class B and Institutional Class shares of the
Stagecoach Oregon Tax-Free Fund, its predecessor fund. Effective at the close of
business November 5, 1999, the Stagecoach and Norwest Advantage Funds were
reorganized into the Wells Fargo Funds. Performance shown for the Class A,
Class B and Institutional Class shares of the Oregon Tax-Free Fund for periods
between October 1, 1995 and September 6, 1996, reflects performance of the
Investor Class shares of the Pacifica Oregon Tax-Exempt Fund, a predecessor
portfolio with the same investment objective and policies as the Fund. For
periods prior to October 1, 1995, the performance shown reflects the performance
of the shares of the Oregon Tax- Exempt Fund of Westcore Trust. For Class A
shares, the maximum front-end sales charge is 4.50%. The maximum contingent
deferred sales charge for Class B shares is 5.00%. Class B share performance
including sales charge assumes the maximum contingent deferred sales charge for
the corresponding time period. Institutional Class shares are sold without sales
charges.
18
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(3) (%) (AS OF DECEMBER 31, 1999)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
--------------------------------- -----------------------------------
6-Month 1-Year 5-Year 10-Year 6-Month 1-Year 5-Year 10-Year
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OREGON TAX-FREE FUND
CLASS A (4.12) (5.99) 5.19 5.54 (8.44) (10.22) 4.23 5.05
CLASS B (4.42) (6.65) 4.32 4.73 (9.10) (11.14) 3.99 4.73
INSTITUTIONAL CLASS (4.08) (5.87) 5.30 5.59
LIPPER OREGON MUNICIPAL
DEBT FUNDS AVERAGE(4) (2.76) (4.43) 5.78 5.83
LEHMAN BROTHERS MUNICIPAL
BOND INDEX (1.17) (2.06) 6.91 6.89
</TABLE>
CHARACTERISTICS(5) (AS OF DECEMBER 31, 1999)
- ----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(6) AA-
WEIGHTED AVERAGE COUPON 5.07%
ESTIMATED DURATION 10.00 YEARS
PORTFOLIO TURNOVER 25%
NUMBER OF HOLDINGS 40
SEC YIELD(7) (A, B, I) 4.95%, 4.42%, 5.36%
DISTRIBUTION RATE(8) (A, B, I) 4.87%, 4.33%, 5.27%
TAXABLE EQUIVALENT YIELD(9)
(A, B, I) 9.01%, 8.04%, 9.75%
</TABLE>
GROWTH OF $10,000 INVESTMENT(10)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DEC-89 WELLS FARGO LEHMAN BROTHERS WELLS FARGO
OREGON TAX-FREE FUND - A MUNICIPAL BOND INDEX OREGON TAX-FREE FUND - I
$9,550 $10,000 $10,000
<S> <C> <C> <C>
Jan-90 $9,474 $9,953 $9,921
Feb-90 $9,581 $10,042 $10,033
Mar-90 $9,544 $10,045 $9,995
Apr-90 $9,467 $9,972 $9,914
May-90 $9,659 $10,190 $10,116
Jun-90 $9,753 $10,279 $10,214
Jul-90 $9,905 $10,430 $10,373
Aug-90 $9,730 $10,279 $10,189
Sep-90 $9,772 $10,285 $10,233
Oct-90 $9,894 $10,472 $10,362
Nov-90 $10,058 $10,682 $10,532
Dec-90 $10,124 $10,729 $10,602
Jan-91 $10,241 $10,873 $10,725
Feb-91 $10,350 $10,967 $10,838
Mar-91 $10,387 $10,972 $10,877
Apr-91 $10,484 $11,118 $10,979
May-91 $10,585 $11,217 $11,085
Jun-91 $10,559 $11,205 $11,058
Jul-91 $10,720 $11,342 $11,226
Aug-91 $10,827 $11,492 $11,338
Sep-91 $10,936 $11,641 $11,452
Oct-91 $11,015 $11,746 $11,535
Nov-91 $10,986 $11,779 $11,505
Dec-91 $11,194 $12,032 $11,723
Jan-92 $11,207 $12,060 $11,736
Feb-92 $11,244 $12,063 $11,774
Mar-92 $11,253 $12,068 $11,784
Apr-92 $11,349 $12,176 $11,885
May-92 $11,479 $12,319 $12,021
Jun-92 $11,652 $12,526 $12,202
Jul-92 $12,029 $12,902 $12,597
Aug-92 $11,871 $12,776 $12,431
Sep-92 $11,894 $12,859 $12,455
Oct-92 $11,713 $12,733 $12,266
Nov-92 $11,969 $12,961 $12,534
Dec-92 $12,093 $13,093 $12,664
Jan-93 $12,192 $13,245 $12,768
Feb-93 $12,578 $13,724 $13,172
Mar-93 $12,433 $13,579 $13,020
Apr-93 $12,569 $13,716 $13,163
May-93 $12,668 $13,793 $13,266
Jun-93 $12,890 $14,023 $13,498
Jul-93 $12,908 $14,041 $13,517
Aug-93 $13,211 $14,333 $13,835
Sep-93 $13,389 $14,497 $14,021
Oct-93 $13,385 $14,524 $14,017
Nov-93 $13,346 $14,396 $13,977
Dec-93 $13,590 $14,700 $14,232
Jan-94 $13,742 $14,868 $14,391
Feb-94 $13,426 $14,483 $14,059
Mar-94 $12,869 $13,893 $13,476
Apr-94 $12,806 $14,011 $13,411
May-94 $12,963 $14,133 $13,575
Jun-94 $12,828 $14,047 $13,434
Jul-94 $13,066 $14,304 $13,683
Aug-94 $13,112 $14,354 $13,731
Sep-94 $12,877 $14,143 $13,485
Oct-94 $12,570 $13,891 $13,164
Nov-94 $12,316 $13,640 $12,897
Dec-94 $12,709 $13,940 $13,309
Jan-95 $13,126 $14,338 $13,746
Feb-95 $13,494 $14,755 $14,131
Mar-95 $13,585 $14,925 $14,227
Apr-95 $13,592 $14,942 $14,234
May-95 $13,990 $15,419 $14,650
Jun-95 $13,848 $15,284 $14,502
Jul-95 $13,935 $15,429 $14,593
Aug-95 $14,059 $15,625 $14,723
Sep-95 $14,159 $15,724 $14,828
Oct-95 $14,355 $15,953 $15,032
Nov-95 $14,593 $16,217 $15,281
Dec-95 $14,722 $16,373 $15,417
Jan-96 $14,764 $16,498 $15,462
Feb-96 $14,688 $16,385 $15,384
Mar-96 $14,493 $16,176 $15,181
Apr-96 $14,435 $16,130 $15,121
May-96 $14,449 $16,124 $15,138
Jun-96 $14,587 $16,300 $15,274
Jul-96 $14,725 $16,446 $15,430
Aug-96 $14,719 $16,443 $15,417
Sep-96 $14,887 $16,673 $15,605
Oct-96 $15,022 $16,862 $15,749
Nov-96 $15,312 $17,170 $16,046
Dec-96 $15,208 $17,098 $15,950
Jan-97 $15,241 $17,131 $15,987
Feb-97 $15,364 $17,288 $16,119
Mar-97 $15,133 $17,058 $15,869
Apr-97 $15,257 $17,202 $16,001
May-97 $15,450 $17,461 $16,207
Jun-97 $15,592 $17,648 $16,359
Jul-97 $16,067 $18,137 $16,870
Aug-97 $15,913 $17,967 $16,702
Sep-97 $16,094 $18,180 $16,904
Oct-97 $16,188 $18,297 $16,995
Nov-97 $16,263 $18,405 $17,087
Dec-97 $16,516 $18,673 $17,356
Jan-98 $16,688 $18,866 $17,531
Feb-98 $16,646 $18,871 $17,487
Mar-98 $16,617 $18,888 $17,468
Apr-98 $16,519 $18,803 $17,356
May-98 $16,760 $19,100 $17,609
Jun-98 $16,810 $19,175 $17,673
Jul-98 $16,848 $19,223 $17,714
Aug-98 $17,129 $19,521 $17,999
Sep-98 $17,351 $19,765 $18,233
Oct-98 $17,296 $19,765 $18,176
Nov-98 $17,366 $19,834 $18,262
Dec-98 $17,414 $19,895 $18,302
Jan-99 $17,646 $20,132 $18,546
Feb-99 $17,497 $20,044 $18,401
Mar-99 $17,510 $20,072 $18,416
Apr-99 $17,558 $20,122 $18,467
May-99 $17,421 $20,289 $18,313
Jun-99 $17,075 $19,997 $17,960
Jul-99 $17,146 $20,069 $18,036
Aug-99 $16,904 $19,908 $17,782
Sep-99 $16,854 $19,916 $17,730
Oct-99 $16,527 $19,701 $17,376
Nov-99 $16,627 $19,910 $17,495
Dec-99 $16,371 $19,761 $17,228
</TABLE>
CREDIT QUALITY(6)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA 38%
AA 30%
A 7%
BBB 25%
</TABLE>
MATURITY DISTRIBUTION(5)
(AS OF DECEMBER 31, 1999)
- ----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Years
0-1 (1%)
5-10 (46%)
10-20 (26%)
20+ (27%)
</TABLE>
- --------------------------------------------------------------------------------
(4) Source: Lipper Analytical Services, Inc. The Lipper Oregon Municipal Debt
Funds Average is an average of funds that limit their assets to those securities
that are exempt from federal income tax and Oregon personal income tax. The
total return of the Average does not include the effects of sales charges. Past
performance is no guarantee of future results. You cannot invest directly in a
Lipper average.
(5) Portfolio holdings are subject to change.
(6) The average credit rating is compiled from ratings from Standards & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's
is a trademark of McGraw-Hill, Inc., and has been licensed. The Fund is not
sponsored, sold or promoted by these rating agencies and these rating agencies
make no representation regarding the advisability of investing in the Fund.
(7) The formula used to calculate the SEC yield is described in detail in the
Fund's Statement of Additional Information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
(8) The distribution rate is based on the actual distributions made by the
Fund. The distribution rate is calculated by annualizing the Fund's most recent
income dividend and dividing that figure by the applicable current public
offering price.
(9) A portion of the Fund's income may be subject to federal, state and/or
local income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the combined federal and state income tax rate of
45.04%. Any capital gains distributions may be taxable.
(10) The chart compares the performance of the Wells Fargo Oregon Tax-Free Fund
Class A and Institutional Class shares since inception with the Lehman Brothers
Municipal Bond Index. The chart assumes a hypothetical $10,000 investment in
Class A and Institutional Class shares and reflects all operating expenses and,
for Class A shares, assumes the maximum initial sales charge of 4.50%. The Fund
is a professionally managed mutual fund.
19
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
ARIZONA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 95.82%
ARIZONA - 91.94%
$1,000,000 ARIZONA HFA REVENUE 4.75% 10/01/30 $ 787,500
350,000 ARIZONA HFA REVENUE 6.63 07/01/20 335,388
170,000 BULLHEAD CITY AZ SPECIAL
ASSESSMENT PARKWAY IMPROVEMENT
DISTRICT 6.10 01/01/03 175,313
500,000 CHANDLER AZ STREET & HIGHWAY
USER REVENUE 6.00 07/01/11 523,495
500,000 GLENDALE AZ IDA SERIES A MBIA
INSURED 5.38 05/15/28 453,750
110,000 GLENDALE AZ IMPROVEMENT
DISTRICT #59 6.00 01/01/01 111,738
175,000 GLENDALE AZ IMPROVEMENT
DISTRICT #59 6.00 01/01/02 179,372
250,000 MARICOPA COUNTY ARIZONA IDA
REVENUE 5.25 11/15/37 213,750
500,000 MARICOPA COUNTY AZ IDA 5.00 07/01/16 399,375
500,000 MARICOPA COUNTY AZ IDA MFHR 5.15 07/01/29 432,285
750,000 MARICOPA COUNTY AZ IDA MFHR
WHISPERING PALMS APARTMENTS
SERIES A 5.85 07/01/19 731,925
570,000 MARICOPA COUNTY AZ IDA
MULTIFAMILY HOUSING REVENUE
GNMA COLLATERALIZED 5.50 12/20/37 503,789
250,000 MARICOPA COUNTY AZ IDA
MULTIFAMILY HOUSING REVENUE
MBIA INSURED 5.30 07/01/28 224,993
500,000 MARICOPA COUNTY AZ IDA REVENUE
SUN HEALTHCARE 5.30 04/01/29 398,280
500,000 MARICOPA COUNTY AZ USD PHOENIX
ELEMENTARY MBIA INSURED 6.00 07/01/08 527,594
1,000,000 MESA AZ GO FGIC INSURED 6.50 07/01/09 1,093,750
500,000 MESA AZ IDA DISCOVERY HEALTH
SYSTEMS SERIES A 5.63 01/01/29 462,790
500,000 MOHAVE COUNTY AZ IDA BAPTIST
HOSPITAL REVENUE MBIA INSURED 5.70 09/01/15 493,725
750,000 NAVAJO COUNTY AZ PCR SERIES A 5.88 08/15/28 705,938
750,000 PHOENIX AZ CIVIC IMPROVEMENT
CORPORATION AMT LIEN 5.00 07/01/14 680,513
1,000,000 PHOENIX AZ GO SERIES A 6.25 07/01/16 1,057,040
500,000 PHOENIX AZ GO SERIES B 4.50 07/01/20 400,030
900,000 PHOENIX AZ IDA HOSPITAL
REVENUE REFUNDED SERIES B 5.65 12/01/12 892,124
1,440,000 PIMA COUNTY AZ IDA MFHR
WILLOWICK APARTMENTS 5.50 03/01/28 1,306,382
500,000 PIMA COUNTY AZ IDA SFMR SERIES
A-1 5.20 05/01/31 426,925
550,000 TEMPE AZ GO SERIES A 4.00 07/01/18 418,000
500,000 TUCSON AZ STREET & HIGHWAY
REVENUE SERIES C FGIC INSURED 7.00 07/01/11 573,680
500,000 TUCSON AZ STREET & HIGHWAY
REVENUE SERIES C FGIC INSURED 7.00 07/01/12 575,304
500,000 YAVAPAI COUNTY AZ IDA REVENUE 5.45 06/01/33 435,000
15,519,748
-----------
GUAM - 3.88%
700,000 GUAM HOUSING SINGLE FAMILY
MORTGAGE BACKED SERIES A 5.75 09/01/31 655,648
-----------
16,175,396
TOTAL MUNICIPAL BONDS (COST $17,416,596)
-----------
</TABLE>
20
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
ARIZONA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 2.83%
478,535 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET TRUST FUND+X+ $ 478,535
-----------
478,535
TOTAL SHORT-TERM INSTRUMENTS
(COST $478,535)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $17,895,131) (NOTES 1 AND 3) 98.65% $16,653,931
OTHER ASSETS AND LIABILITIES, NET 1.35 227,168
------- -----------
TOTAL NET ASSETS 100.00% $16,881,099
------- -----------
</TABLE>
+X+ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND IS NOT CHARGED ANY
INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE WELLS FARGO MONEY
MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 30,995
GROSS UNREALIZED DEPRECIATION (1,272,195)
------------
NET UNREALIZED DEPRECIATION $ (1,241,200)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Development 21%
Money Market 3%
Transportation 10%
Single Family Housing 7%
School District 3%
Pollution 4%
Multifamily Housing 8%
General Obligation 23%
Higher Education 3%
Medical 18%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
21
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS - 97.45%
$1,100,000 ABAG FINANCE AUTHORITY FOR
NONPROFIT CORPORATION 5.00% 07/01/07 $ 1,065,625
1,105,000 ABAG FINANCE AUTHORITY FOR
NONPROFIT CORPORATION 5.00 07/01/08 1,059,418
1,000,000 CALIFORNIA STATE AMT VETERANS
BONDS SERIES B 4.95 12/01/07 987,790
1,250,000 CALIFORNIA STATE PUBLIC WORKS
BOARD LEASE REVENUE 5.25 11/01/08 1,259,763
2,060,000 CALIFORNIA STATEWIDE COMMUNITY
DEVELOPMENT AUTHORITY REVENUE
CONNIE LEE INSURED 5.25 07/01/05 2,097,698
1,000,000 CENTRAL VALLEY FINANCE
AUTHORITY REVENUE MBIA INSURED 5.25 07/01/10 1,005,960
2,000,000 CONTRA COSTA COUNTY CA COP
MBIA INSURED 5.25 11/01/10 2,002,500
1,000,000 FOOTHILL/EASTERN CORRIDOR
AGENCY CALIFORNIA TOLL ROAD
REVENUE MBIA INSURED 5.00 01/15/06 1,007,530
1,000,000 FOOTHILL/EASTERN CORRIDOR
AGENCY TOLL ROAD REVENUE 4.38 01/15/07 965,000
685,000 FOSTER CITY CA PFA COMMUNITY
DEVELOPMENT PROJECT 5.40 09/01/01 693,377
1,000,000 INDUSTRY CA URBAN DEVELOPMENT
AGENCY FSA INSURED 4.70 05/01/04 1,001,010
1,000,000 LOS ANGELES CA AIRPORT REVENUE
SERIES A FGIC INSURED 6.00 05/15/05 1,057,500
2,000,000 LOS ANGELES CA DW&P 6.10 02/01/09 2,078,020
1,460,000 LOS ANGELES CA DW&P 9.00 10/15/03 1,675,905
2,500,000 LOS ANGELES CA HARBOR
DEPARTMENT REVENUE AMT SERIES
B 5.00 08/01/02 2,519,700
1,300,000 LOS ANGELES CA WASTE WATER
SYSTEM REVENUE SERIES A MBIA
INSURED 8.50 06/01/03 1,454,570
1,000,000 LOS ANGELES CA WASTE WATER
SYSTEM REVENUE SERIES D FGIC
INSURED 8.70 11/01/03 1,139,100
500,000 MORGAN HILL CA RDFA TAX
ALLOCATION OJO DE AGUA
COMMUNITY DEVELOPMENT PROJECT 5.60 03/01/00 503,095
2,000,000 NORTHERN CALIFORNIA POWER
AGENCY FACILITIES REVENUE
SERIES A MBIA INSURED 6.54 08/01/25 2,125,000
2,500,000 RANCHO CA WATER DISTRICT
FINANCING AUTHORITY REVENUE 4.70 08/15/21 2,495,400
300,000 SACRAMENTO CA LIGHT RAIL
TRANSPORTATION PROJECT 6.30 07/01/00 303,363
735,000 SACRAMENTO CA WORKERS
COMPENSATION PROGRAM 5.75 06/01/03 742,865
500,000 SAN DIEGO CA TRANSPORTATION
AUTHORITY COP BUS ACQUISTION
PROJECT 6.60 12/01/01 509,565
1,090,000 SAN FRANCISCO CA CITY & COUNTY
INTERNATIONAL AIRPORT REVENUE
MBIA INSURED 8.00 05/01/05 1,238,044
1,150,000 SAN FRANCISCO CA CITY & COUNTY
INTERNATIONAL REVENUE AMT MBIA
INSURED 8.00 05/01/05 1,306,193
500,000 SANTA MONICA CA WASTEWATER
ENTERPRISE REVENUE HYPERION
PROJECT 12.00 01/01/01 537,185
1,000,000 SOLANO COUNTY CA COP PUBLIC
BUILDING PROJECT 5.88 10/01/05 1,020,000
2,000,000 SOUTHERN CALIFORNIA RAPID
TRANSIT DISTRICT CERTIFICATES
PARTICIPATION MBIA INSURED 7.50 07/01/05 2,103,440
1,100,000 SOUTHERN CALIFORNIA STATE
PUBLIC POWER AUTHORITY 6.75 07/01/00 1,114,432
2,000,000 SOUTHERN CALIFORNIA STATE
PUBLIC POWER AUTHORITY PROJECT 6.88 07/01/03 2,059,560
1,000,000 UNIVERSITY OF CALIFORNIA
RESEARCH FACILITY SERIES B 6.50 09/01/03 1,055,270
40,183,878
TOTAL CALIFORNIA MUNICIPAL BONDS
(COST $40,670,723)
-----------
</TABLE>
22
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 1.13%
467,119 WELLS FARGO CALIFORNIA TAX-FREE MONEY MARKET TRUST FUND+X+ $ 467,119
-----------
467,119
TOTAL SHORT-TERM INSTRUMENTS (COST
$467,119)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $41,137,842)* (NOTES 1 AND 3) 98.58% $40,650,997
OTHER ASSETS AND LIABILITIES, NET 1.42 586,623
------- -----------
TOTAL NET ASSETS 100.00% $41,237,620
------- -----------
</TABLE>
+X+ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND IS NOT CHARGED ANY
INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE WELLS FARGO MONEY
MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 258,055
GROSS UNREALIZED DEPRECIATION (744,900)
----------
NET UNREALIZED DEPRECIATION $ (486,845)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Utilities 14%
Airport 9%
Development 5%
Education 2%
Transportation 18%
Facilities 6%
General Obligation 8%
Higher Education 3%
Power 25%
Medical 10%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
23
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS - 98.51%
$2,000,000 ABAG FINANCE AUTHORITY FOR
NONPROFIT CORP CA STANFORD
UNIVERSITY HOSPITAL 5.50% 11/01/13 $ 2,073,320
1,000,000 ABAG FINANCIAL AUTHORITY FOR
NONPROFIT CORPORATION 5.38 02/15/19 871,250
1,000,000 ABAG FINANCING AUTHORITY FOR
NONPROFIT CORPORATIONS COP 5.13 07/01/13 913,750
7,500,000 ALAMEDA CORRIDOR
TRANSPORTATION AUTHORITY
REVENUE SERIES A 5.00 10/01/29 6,375,000
2,000,000 ALAMEDA COUNTY CA COP MEDICAL
CENTER PROJECT 5.00 06/01/23 1,722,880
1,265,000 ALTA LOMA CA SCHOOL DISTRICT
CAPITAL APPRECIATION SERIES A
(ZERO COUPON) 6.05{::} 08/01/16 471,035
2,450,000 ALTA LOMA CA SCHOOL DISTRICT
CAPITAL APPRECIATION SERIES A
(ZERO COUPON) 6.27{::} 08/01/20 687,666
2,500,000 ANAHEIM CA PFA TAX ALLOCATION
REVENUE REDEVELOPMENT PROJECT
SERIES A MBIA INSURED 5.25 02/01/18 2,312,400
3,620,000 ANTIOCH CA PFA WATER REVENUE
WATER TREATMENT PLANT PROJECT
MBIA INSURED 5.63 07/01/14 3,620,398
1,330,000 ARCADIA CA USD CAPITAL
APPRECIATION SERIES A MBIA
INSURED (ZERO COUPON) 5.30{::} 09/01/06 950,804
1,000,000 BELLEVUE CA USD COP MBIA
INSURED (ZERO COUPON) 5.66{::} 09/01/19 815,360
2,545,000 BONITA CA USD COP MBIA INSURED 5.63 05/01/10 2,604,757
1,000,000 BREA CA PFA LEASE REVENUE MBIA
INSURED 4.75 07/01/18 852,270
1,485,000 BREA CA PFA WATER REVENUE FGIC
INSURED 4.75 07/01/18 1,265,621
1,300,000 BURBANK GLENDALE PASADENA
AIRPORT AUTHORITY CA AIRPORT
REVENUE AMBAC INSURED 6.40 06/01/10 1,346,358
1,250,000 CABRILLO CA COMMUNITY COLLEGE
DISTRICT SERIES A FSA INSURED 4.75 08/01/23 1,025,350
7,500,000 CALIFORNIA EDUCATIONAL
FACILITIES 4.50 10/01/27 5,812,500
110,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY LOYOLA
MARYMOUNT UNIVERSITY
PREREFUNDED 6.00 10/01/14 112,906
240,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY LOYOLA
MARYMOUNT UNIVERSITY
UNREFUNDED 6.00 10/01/14 240,994
2,035,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE A
COLLEGE CHIROPRACTIC 5.60 11/01/17 1,856,612
2,895,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
CLAREMONT UNIVERSITY CENTER
SERIES A 5.00 03/01/17 2,532,951
1,000,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
REFUNDED UNIVERSITY OF SAN
DIEGO AMBAC INSURED 4.75 10/01/15 882,740
1,000,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
SANTA CLARA UNIVERSITY 5.00 09/01/23 865,240
3,500,000 CALIFORNIA HFFA REVENUE SUTTER
HEALTH SERIES A 5.00 08/15/37 2,903,600
2,750,000 CALIFORNIA HFFA REVENUE SUTTER
HEALTH SERIES C 5.13 08/15/22 2,419,808
1,000,000 CALIFORNIA HOUSING FINANCE
AGENCY SFMR SERIES A 4.80 08/01/12 909,070
4,535,000 CALIFORNIA RURAL HOME MORTGAGE
FINANCING AUTHORITY 6.35 12/01/29 4,547,562
5,000,000 CALIFORNIA STATE DWR CENTRAL
VALLEY PROJECT REVENUE SERIES
J 6.00 12/01/07 5,350,400
1,830,000 CALIFORNIA STATE DWR CENTRAL
VALLEY PROJECT REVENUE SERIES
L 5.75 12/01/13 1,849,563
3,235,000 CALIFORNIA STATE DWR CENTRAL
VALLEY PROJECT SERIES O 4.75 12/01/17 2,781,097
820,000 CALIFORNIA STATE EDFA REVENUE
CHAPMAN COLLEGE REFUNDING
PENDING 7.30 01/01/02 853,103
1,000,000 CALIFORNIA STATE EDFA REVENUE
CLAREMONT COLLEGES POOLED
FACILITIES 6.38 05/01/22 1,057,720
50,000 CALIFORNIA STATE EDFA REVENUE
POMONA COLLEGE 6.13 02/15/08 52,196
1,000,000 CALIFORNIA STATE EDFA REVENUE
POMONA COLLEGE GO 5.60 12/01/14 992,500
5,000,000 CALIFORNIA STATE GO 4.50 12/01/21 3,993,750
4,000,000 CALIFORNIA STATE GO 5.00 02/01/20 3,518,920
2,000,000 CALIFORNIA STATE GO 5.00 08/01/24 1,725,960
1,910,000 CALIFORNIA STATE GO EAGLES II
SERIES 6 (ZERO COUPON) 5.47{::} 04/01/10 1,097,887
3,000,000 CALIFORNIA STATE GO MBIA
INSURED 6.00 10/01/10 3,201,750
1,000,000 CALIFORNIA STATE GO UNLIMITED 4.75 09/01/11 948,810
480,000 CALIFORNIA STATE HFA HOME
MORTGAGE REVENUE AMT SERIES D
MULTIPLE CREDIT ENHANCEMENTS 7.75 08/01/10 491,443
1,380,000 CALIFORNIA STATE HFA HOME
MORTGAGE REVENUE SERIES A
MULTIPLE CREDIT ENHANCEMENTS 7.35 08/01/11 1,421,980
355,000 CALIFORNIA STATE HFA HOME
MORTGAGE REVENUE SERIES B
MULTIPLE CREDIT ENHANCEMENTS 7.25 08/01/10 364,542
140,000 CALIFORNIA STATE HFA INSURED
HOUSING REVENUE AMT SERIES C
MBIA INSURED 7.00 08/01/23 143,618
</TABLE>
24
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (continued)
$ 500,000 CALIFORNIA STATE HFA
MULTI-UNIT HOME RENTAL
MORTGAGE REVENUE SERIES B-II 6.70% 08/01/15 $ 523,495
500,000 CALIFORNIA STATE HFA
MULTI-UNIT HOMERENTAL MORTGAGE
REVENUE SERIES C-II AMT 6.85 08/01/15 517,775
2,825,000 CALIFORNIA STATE HFA
MULTI-UNIT RENTAL HOUSING
REVENUE SERIES A AMT 5.50 08/01/15 2,651,630
1,000,000 CALIFORNIA STATE HFFA GOULD
MEDICAL FOUNDATION ESCROWED TO
MATURITY 7.25 04/01/10 1,026,630
1,250,000 CALIFORNIA STATE HFFA GOULD
MEDICAL FOUNDATION ESCROWED TO
MATURITY 7.30 04/01/20 1,283,275
2,000,000 CALIFORNIA STATE HFFA REVENUE
CATHOLIC HEALTHCARE WEST AMBAC
INSURED 5.75 07/01/15 2,002,300
1,000,000 CALIFORNIA STATE HFFA REVENUE
INSURED VALLEYCARE HEALTH
FACILITIES STATE INSURED 6.50 05/01/05 1,048,220
1,500,000 CALIFORNIA STATE HFFA REVENUE
KAISER PERMANENTE SERIES A 6.25 03/01/21 1,465,290
2,000,000 CALIFORNIA STATE HFFA REVENUE
SCRIPPS MEMORIAL HOSPITAL MBIA
INSURED 6.40 10/01/12 2,111,920
2,000,000 CALIFORNIA STATE HFFA REVENUE
SCRIPPS RESEARCH INSTITUTE 6.63 07/01/14 2,094,460
1,750,000 CALIFORNIA STATE HFFA REVENUE
SMALL INSURED HEALTH
FACILITIES SERIES A 6.75 03/01/20 1,791,405
3,500,000 CALIFORNIA STATE HFFA SAN
DIEGO HOSPITAL ASSOCIATION
MBIA INSURED 6.20 08/01/12 3,672,095
1,795,000 CALIFORNIA STATE HFFA SCRIPPS
MEMORIAL HOSPITAL SERIES A
MBIA INSURED 6.25 10/01/13 1,866,531
1,000,000 CALIFORNIA STATE MARITIME
INFRASTRUCTURE AUTHORITY
REVENUE PORT OF SAN DIEGO
PROJECT AMBAC INSURED 5.25 11/01/15 937,290
1,445,000 CALIFORNIA STATE PCFA PACIFIC
GAS & ELECTRIC COMPANY AMT
SERIES A 6.63 06/01/09 1,510,762
2,500,000 CALIFORNIA STATE PCFA PACIFIC
GAS & ELECTRIC COMPANY AMT
SERIES B 6.35 06/01/09 2,628,525
1,000,000 CALIFORNIA STATE PCFA SAN
DIEGO GAS & ELECTRIC COMPANY
AMT 6.80 06/01/15 1,105,030
1,000,000 CALIFORNIA STATE PUBLIC WORKS
BOARD LEASE REVENUE COMMUNITY
COLLEGES 6.63 09/01/07 1,053,690
1,000,000 CALIFORNIA STATE PUBLIC WORKS
BOARD LEASE REVENUE DEPARTMENT
OF CORRECTIONS AMBAC INSURED 5.25 01/01/21 905,460
3,000,000 CALIFORNIA STATE PUBLIC WORKS
BOARD LEASE REVENUE DEPARTMENT
OF CORRECTIONS AMBAC INSURED 6.40 11/01/10 3,269,580
2,000,000 CALIFORNIA STATE PUBLIC WORKS
BOARD LEASE REVENUE DEPARTMENT
OF CORRECTIONS SERIES A AMBAC
INSURED 5.50 01/01/15 1,965,440
5,000,000 CALIFORNIA STATE UNIVERSITIES
& COLLEGES REVENUE HSG SYSTEM
FGIC INSURED 5.80 11/01/17 4,999,500
165,000 CALIFORNIA STATE UNREFUNDED
BALANCE 5.75 03/01/15 165,644
1,500,000 CALIFORNIA STATEWIDE CDA LEASE
REVENUE OAKLAND CONVENTION
CENTERS PROJECT AMBAC INSURED 5.50 10/01/14 1,491,990
2,750,000 CALIFORNIA STATEWIDE CDA LEASE
REVENUE OAKLAND CONVENTION
CENTERS PROJECT AMBAC INSURED 6.00 10/01/10 2,881,093
5,000,000 CALIFORNIA STATEWIDE CDA
REVENUE 5.00 08/01/18 4,422,800
500,000 CALIFORNIA STATEWIDE CDA
REVENUE COP HEALTH FACILITIES
BARTON MEMORIAL HOSPITAL LOC -
BANQUE NATIONALE DE PARIS 6.40 12/01/05 518,460
3,310,000 CALIFORNIA STATEWIDE CDA
REVENUE COP HOSPITAL CEDARS
SINAI MEDICAL CENTER 6.50 08/01/12 3,495,327
1,500,000 CALIFORNIA STATEWIDE CDA
REVENUE COP SUTTER HEALTH
OBLIGATED GROUP AMBAC INSURED 6.00 08/15/09 1,565,580
1,935,000 CALIFORNIA STATEWIDE CDA WATER
REVENUE SERIES A 6.00 07/01/10 1,989,025
6,890,000 CALIFORNIA STATEWIDE COMMUNITY
DEVELOPMENT AUTHORITY CATHOLIC
HEALTHCARE WEST COP 6.50 07/01/20 6,581,397
6,000,000 CALIFORNIA STATEWIDE COMMUNITY
DEVELOPMENT COP 5.38 04/01/17 5,080,800
200,000 CAPITOL AREA DEVELOPMENT
AUTHORITY SACRAMENTO CA LEASE
REVENUE SERIES A MBIA INSURED 6.50 04/01/12 211,240
3,840,000 CATHEDRAL CITY CA PFA
REVENUETAX ALLOCATION
REDEVELOPMENT PROJECTS SERIES
A MBIA INSURED 5.25 08/01/13 3,765,658
1,800,000 CHINO BASIN CA REGIONAL
FINANCIAL AUTHORITY REVENUE
MUNICIPAL WATER DISTRICT SEWER
SYSTEMS PROJECT AMBAC INSURED 6.00 08/01/16 1,828,890
7,500,000 CHINO CA ELECTRIC WATER
FACILITY AUTHORITY
CERTIFICATES SERIES A 5.20 10/01/15 7,096,200
400,000 CHULA VISTA CA COP TOWN CENTRE
II PACKAGE PROJECT RDA 6.00 09/01/07 412,012
735,000 CHULA VISTA CA COP TOWN CENTRE
II PACKAGE PROJECT RDA 6.00 09/01/08 753,471
</TABLE>
25
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (continued)
$ 820,000 CHULA VISTA CA COP TOWN CENTRE
II PACKAGE PROJECT RDA 6.00% 09/01/10 $ 834,219
570,000 CHULA VISTA CA COP TOWN CENTRE
II PACKAGE PROJECT RDA 6.00 09/01/11 577,404
2,000,000 COACHELLA CA WATER REVENUE COP
FSA INSURED 6.10 03/01/22 2,009,680
2,500,000 COLTON CA PFA TAX ALLOCATION
SERIES A MBIA INSURED 5.00 08/01/18 2,224,225
270,000 CONTRA COSTA COUNTY CA HOME
MORTGAGE REVENUE AMT ESCROWED
TO MATURITY 7.75 05/01/22 325,061
2,755,000 CONTRA COSTA COUNTY CA
TRANSPORTATION AUTHORITY SALES
TAX REVENUE SERIES A ESCROWED
TO MATURITY 6.50 03/01/09 2,872,088
4,000,000 CONTRA COSTA COUNTY CA
TRANSPORTATION AUTHORITY SALES
TAX REVENUE SERIES A FGIC
INSURED 5.50 03/01/08 4,084,640
3,655,000 CONTRA COSTA COUNTY CA WATER
DISTRICT REVENUE SERIES G MBIA
INSURED 5.75 10/01/14 3,691,550
1,045,000 CONTRA COSTA COUNTY CALIFORNIA
PFA LEASE REVENUE REFUNDED
VARIOUS CAPITAL FACILITY
SERIES A MBIA INSURED 5.13 08/01/17 964,389
4,000,000 CORONA CA COMMUNITY FACILITY
DISTRICT MBIA INSURED 4.70 09/01/20 3,313,320
1,505,000 CORONA CA PFA WATER REVENUE
FGIC INSURED 4.75 09/01/18 1,281,492
1,075,000 COTATI CA FACILITIES FINANCING
AUTHORITY TAX ALLOCATION
SERIES A 5.60 09/01/12 1,059,208
1,250,000 CUCAMONGA COUNTY CA WATER
DISTRICT COP REFINANCING
FACILITIES FGIC INSURED 6.30 09/01/12 1,303,938
1,000,000 CUPERTINO CA COP SERIES B 6.25 07/01/10 1,044,680
1,355,000 DUARTE CA COP CITY OF HOPE
NATIONAL MEDICAL CENTER 6.13 04/01/13 1,439,796
2,000,000 DUARTE CA COP SERIES A 5.25 04/01/19 1,652,400
4,000,000 DUARTE CA COP SERIES A 5.25 04/01/24 3,210,840
4,000,000 DUARTE CA REDEVELOPMENT AGENCY
TAX ALLOCATION (ZERO COUPON) 6.92{::} 12/01/16 1,290,000
1,500,000 EAST BAY CA MUD WASTEWATER
TREATMENT SYSTEM REVENUE AMBAC
INSURED 6.00 06/01/09 1,566,420
7,480,000 EAST BAY CA MUD WASTEWATER
TREATMENT SYSTEM REVENUE FGIC
INSURED 5.00 06/01/16 6,783,388
3,300,000 EAST PALO ALTO CA
REDEVELOPMENT AGENCY
UNIVERSITY CIRCLE GATEWAY 6.63 10/01/29 3,246,969
2,000,000 EAST STOCKTON CALIFORNIA WATER
DISTRICT COP SERIES A AMBAC
INSURED 4.75 04/01/17 1,715,620
2,785,000 ELK GROVE CA USD SPECIAL TAX
MBIA INSURED (ZERO COUPON) 6.17{::} 12/01/15 1,074,063
5,000,000 ELSINORE VALLEY CA MUNICIPAL
WATER DISTRICT COP SERIES A
FGIC INSURED 5.75 07/01/19 4,918,900
1,000,000 ELSINORE VALLEY CA MUNICIPAL
WATER DISTRICT COP SERIES A
FGIC INSURED 6.00 07/01/12 1,062,090
1,215,000 EMERYVILLE CA PFA LEASE
REVENUE SERIES A 5.00 05/01/18 1,081,909
500,000 EMERYVILLE CA PFA REVENUE 5.75 09/02/14 475,095
1,750,000 EMERYVILLE CA PFA REVENUE 5.90 09/02/21 1,570,433
2,455,000 EMERYVILLE CA PFA REVENUE 6.35 05/01/10 2,537,758
2,475,000 EMERYVILLE CA PFA REVENUE MBIA
INSURED 5.00 09/01/19 2,188,271
1,725,000 ESCONDIDO CA PFA LEASE REVENUE
CENTER FOR THE ARTS AMBAC
INSURED 5.80 09/01/09 1,801,797
2,000,000 ESCONDIDO CA PFA LEASE REVENUE
CENTER FOR THE ARTS AMBAC
INSURED 6.00 09/01/18 2,018,080
2,000,000 ESCONDIDO CA PFA LEASE REVENUE
ESCONDIDO CIVIC CENTER PROJECT
SERIES B AMBAC INSURED 6.13 09/01/11 2,102,080
4,330,000 ESCONDIDO CA USD SERIES A FGIC
INSURED 5.13 09/01/15 4,051,624
1,000,000 FOLSOM CORDOVA CA USD COP 1998
FSA INSURED 5.13 03/01/18 908,870
1,285,000 FONTANA CA RDA TAX ALLOCATION
JURUPA HILLS REDEVELOPMENT
PROJECT 5.50 10/01/17 1,164,184
3,040,000 FONTANA CA RDA TAX ALLOCATION
JURUPA HILLS REDEVELOPMENT
PROJECT 5.50 10/01/27 2,557,400
1,600,000 FONTANA CA RDA TAX ALLOCATION
JURUPA HILLS REDEVELOPMENT
PROJECT 5.60 10/01/27 1,373,776
3,000,000 FONTANA CA USD CONVERTIBLE
SERIES C FGIC INSURED 6.15 05/01/20 3,046,980
1,270,000 FREMONT CA USD ALAMEDA COUNTY
SERIES E FGIC INSURED 5.90 09/01/15 1,359,764
1,000,000 FRESNO CA COP STREET
IMPROVEMENT PROJECT 6.63 12/01/11 1,051,630
2,000,000 FRESNO CA JOINT POWERS
FINANCING AUTHORITY STREET
LIGHT ACQUISITION PROJECT
SERIES A 5.50 08/01/12 1,983,080
2,000,000 FRESNO CA USD SERIES A MBIA
INSURED 5.70 08/01/15 1,979,100
3,000,000 FRESNO CA WATER SYSTEM REVENUE
FGIC INSURED 6.00 06/01/16 3,181,560
</TABLE>
26
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (continued)
$1,250,000 FRESNO COUNTY CA SOLID WASTE
REVENUE AMERICAN AVENUE
LANDFILL PROJECT MBIA INSURED 5.75% 05/15/14 $ 1,267,800
1,000,000 GLENDALE CA RDFA TAX
ALLOCATION REVENUE AMBAC
INSURED 5.50 12/01/11 1,011,250
1,000,000 GLENDALE CA USD SERIES A 5.75 09/01/17 995,370
2,500,000 HAWAIIAN GARDENS CA
REDEVELOPMENT AGENCY 6.00 12/01/13 2,466,575
1,650,000 HAYWARD CA COP CIVIC CENTER
PROJECT MBIA INSURED 5.50 08/01/17 1,597,299
575,000 HUNTINGTON BEACH CA PFA
REVENUE BOND 6.55 08/01/01 584,637
2,800,000 HUNTINGTON BEACH CA PFA
REVENUE BOND 7.00 08/01/10 2,914,884
1,000,000 INDIAN WELLS CA RDFA TAX
ALLOCATION WHITEWATER PROJECT
MBIA INSURED 6.00 12/01/14 1,031,190
500,000 INDUSTRY CA URBAN DEVELOPMENT
AGENCY 6.70 11/01/03 523,550
1,280,000 INDUSTRY CA URBAN DEVELOPMENT
AGENCY 6.85 11/01/04 1,342,899
1,555,000 INGLEWOOD CA REDEVELOPMENT
AGENCY TAX ALLOCATION SERIES A
AMBAC INSURED 5.25 05/01/17 1,473,254
1,350,000 JACKSON CA COP WATER SYSTEM
ACQUISITION PROJECT 6.80 09/01/23 1,425,087
270,000 JAMUL-DULZURA CA USD 6.40 08/01/16 282,093
2,000,000 JURUPA CA COMMUNITY SERVICES
SPECIAL TAX 4.75 09/01/18 1,702,500
2,000,000 KERN CA HIGH SCHOOL DISTRICT
MBIA INSURED 5.60 08/01/12 2,041,500
1,240,000 LA HABRA CA COP SERIES B 4.80 09/01/19 1,050,168
1,185,000 LA VERNE CA COP CAPITAL
IMPROVEMENTS PROJECTS 5.70 06/01/15 1,121,804
3,000,000 LONG BEACH CA FINANCE
AUTHORITY REVENUE 6.00 11/01/08 3,207,900
1,000,000 LONG BEACH CA FINANCE
AUTHORITY REVENUE AMBAC
INSURED 6.00 11/01/17 1,035,370
1,000,000 LONG BEACH CA WATER REVENUE 6.13 05/01/19 1,070,620
2,900,000 LOS ANGELES CA AIRPORT REVENUE
SERIES A FGIC INSURED 5.50 05/15/08 2,983,375
1,000,000 LOS ANGELES CA COMMUNITY
COLLEGE DISTRICT COP SERIES A
FGIC INSURED 6.00 08/15/08 1,044,220
4,695,000 LOS ANGELES CA DW&P ELECTRIC
PLANT REVENUE 5.70 09/01/11 4,802,516
200,000 LOS ANGELES CA DW&P ELECTRIC
PLANT REVENUE 6.38 02/01/20 206,708
2,000,000 LOS ANGELES CA DW&P ELECTRIC
PLANT REVENUE SECOND ISSUE 5.75 08/15/11 2,041,960
3,000,000 LOS ANGELES CA DW&P WATERWORKS
REVENUE 5.70 04/15/09 3,082,560
4,745,000 LOS ANGELES CA HARBOR
DEPARTMENT REVENUE 5.38 11/01/15 4,508,082
2,775,000 LOS ANGELES CA HARBOR REVENUE
SERIES B AMT 6.50 08/01/13 2,920,993
340,000 LOS ANGELES CA MUNICIPAL
IMPROVEMENT CORP LEASE REVENUE
CENTRAL LIBRARY PROJECT SERIES
A 6.30 06/01/16 352,893
60,000 LOS ANGELES CA SFMR SERIES A
AMT MULTIPLE CREDIT
ENHANCEMENTS 7.55 12/01/23 61,390
2,000,000 LOS ANGELES CA USD COP DR.
FRANCISCO BRAVO MEDICAL
HOSPITAL 6.60 06/01/05 2,107,560
2,800,000 LOS ANGELES CA USD COP
MULTIPLE PROPERTIES PROJECT
SERIES A FSA INSURED 5.40 10/01/09 2,860,844
2,200,000 LOS ANGELES CA USD COP
MULTIPLE PROPERTIES PROJECT
SERIES A FSA INSURED 5.50 10/01/10 2,249,148
1,950,000 LOS ANGELES CA USD COP
MULTIPLE PROPERTIES PROJECT
SERIES A FSA INSURED 5.50 10/01/16 1,899,495
5,000,000 LOS ANGELES CA USD SERIES A 5.00 07/01/21 4,410,800
2,675,000 LOS ANGELES CA USD SERIES A 6.00 07/01/13 2,826,646
1,000,000 LOS ANGELES CA WASTEWATER
SYSTEM 4.75 06/01/18 852,500
1,300,000 LOS ANGELES CA WASTEWATER
SYSTEM REVENUE SERIES A MBIA
INSURED 5.70 06/01/13 1,313,949
2,465,000 LOS ANGELES CALIF HBR
DEPARTMENT REV 5.38 11/01/23 2,215,912
1,975,000 LOS ANGELES COUNTY CA
METROPOLITAN TRANSPORTATION
AUTHORITY SALES TAX REVENUE
SERIES A 5.50 07/01/13 1,961,373
1,000,000 LOS ANGELES COUNTY CA
METROPOLITAN TRANSPORTATION
AUTHORITY SALES TAX REVENUE
SERIES B 4.75 07/01/19 842,500
4,370,000 LOS ANGELES COUNTY CA
METROPOLITAN TRANSPORTATION
AUTHORITY SALES TAX REVENUE
SERIES C 4.75 07/01/16 3,805,877
1,160,000 LOS ANGELES COUNTY CA
REGIONALIZED BUSINESS SERVICES
COP (ZERO COUPON) 6.31{::} 08/01/26 222,302
</TABLE>
27
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (continued)
$ 480,000 LOS ANGELES COUNTY CA
TRANSPORTATION COMMISSION
SALES TAX REVENUE SERIES B
FGIC INSURED 6.50% 07/01/15 $ 499,406
1,370,000 MADERA CA RDFA TAX ALLOCATION
REVENUE FGIC INSURED 5.75 09/01/11 1,404,688
1,000,000 MANTECA CA FINANCING AUTHORITY
TAX ALLOCATION REVENUE MBIA
INSURED 5.05 10/01/18 898,860
1,000,000 MARIN CA EMERGENCY RADIO
AUTHORITY 4.75 08/15/18 851,690
2,235,000 MERCED CA USD SERIES A (ZERO
COUPON) 6.12{::} 08/01/18 729,392
805,000 MERCED COUNTY CA COP REVENUE 6.00 10/01/12 846,892
1,000,000 METROPOLITAN WATER DISTRICT
SOUTHERN CA WATER WORKS
REVENUE 5.75 07/01/13 1,013,280
2,000,000 METROPOLITAN WATER DISTRICT
SOUTHERN CA WATER WORKS
REVENUE MBIA INSURED 5.75 07/01/15 2,008,340
2,000,000 MID PENINSULA CA REGIONAL OPEN
SPACE DISTRICT PROMISSORY
NOTES 7.00 09/01/14 2,140,420
2,370,000 MID PENINSULA REGULATION OPEN
SPACE DISTRICT (ZERO COUPON) 6.22{::} 09/01/17 803,477
2,490,000 MID PENINSULA REGULATION OPEN
SPACE DISTRICT (ZERO COUPON) 6.27{::} 09/01/18 786,790
1,000,000 MODESTO CA IRRIGATION DISTRICT
FINANCING AUTHORITY REVENUE
REFUNDED DOMESTIC WATER
PROJECT SERIES D AMBAC INSURED 5.00 09/01/16 906,020
2,780,000 MODESTO CA PFA LEASE REVENUE
AMBAC INSURED 5.00 09/01/16 2,518,736
3,545,000 MONROVIA CA REDEVELOPMENT
AGENCY TAX ALLOCATION PROJECT
AREA 1B AMBAC INSURED 5.13 05/01/17 3,255,515
2,835,000 MOUNTAIN VIEW CA SHORELINE
REGIONAL PARK COMMUNITY TAX
ALLOCATION MBIA INSURED 5.50 08/01/13 2,842,853
1,260,000 MOUNTAIN VIEW LOS ALTOS CA USD
SERIES D (ZERO COUPON) 6.17{::} 08/01/19 383,455
1,230,000 NATIONAL CITY CA CDA TAX
ALLOCATION DOWNTOWN
REDEVELOPMENT PROJECT SERIES B
AMT AMBAC INSURED 6.63 08/01/12 1,310,060
720,000 NATOMAS CA USD SERIES A MBIA
INSURED 5.75 09/01/12 735,400
2,200,000 NEVADA COUNTY CA SOLID WASTE
REVENUE 6.50 10/01/06 2,313,520
1,000,000 NORTH CITY WEST CA SCHOOL
FACILITY AUTHORITY SPECIAL TAX
REFUNDED SERIES B FSA INSURED 5.75 09/01/15 1,005,000
9,250,000 NORTHERN CALIFORNIA POWER
AGENCY MULTIPLE CAPITAL
FACILITIES REVENUE SERIES A 5.00 08/01/25 7,918,185
570,000 NORTHERN CALIFORNIA POWER
AGENCY MULTIPLE CAPITAL
FACILITIES REVENUE SERIES A
MBIA INSURED 6.50 08/01/12 603,533
7,000,000 NORTHERN CALIFORNIA
TRANSMISSION REVENUE PROJECT A
MBIA INSURED 5.50 05/01/14 6,942,740
1,000,000 NUVIEW CA USD COP 7.25 02/01/16 1,028,730
1,465,000 OAKLAND CA FGIC INSURED 6.00 06/15/12 1,528,713
1,500,000 ONTARIO CA RDFA REVENUE
PROJECT ONE MBIA INSURED 6.00 08/01/15 1,570,230
800,000 ORANGE COUNTY CA LOCAL
TRANSPORTATION AUTHORITY SALES
TAX REVENUE FIRST SERIES
MEASURE M 6.00 02/15/09 852,704
4,400,000 ORANGE COUNTY CA LOCAL
TRANSPORTATION AUTHORITY SALES
TAX REVENUE MBIA INSURED 6.00 02/15/08 4,684,680
1,000,000 ORANGE COUNTY CA WATER
DISTRICT SERIES A 5.50 08/15/10 1,015,070
1,250,000 PALM DESERT CA FINANCING
AUTHORITY TAX ALLOCATION MBIA
INSURED 5.00 10/01/16 1,132,163
1,000,000 PALM SPRINGS CA COP REFUNDED
MULTIPLE CAPITAL FACILITIES
PROJECT AMBAC INSURED 5.75 04/01/17 995,400
1,000,000 PALMDALE CA WATER DISTRICT
REVENUE COP FGIC INSURED 5.00 10/01/18 889,100
165,000 PARLIER CA REDEVELOPMENT
AGENCY TAX ALLOCATION 6.95 08/01/23 168,525
1,075,000 PARLIER CA REDEVELOPMENT
AGENCY TAX ALLOCATION SERIES A 6.95 08/01/23 1,156,065
5,000,000 PICO RIVERA CA WATER SYSTEMS
PROJECT SERIES A 5.50 05/01/29 4,715,950
1,795,000 PINOLE CA REDEVELOPMENT AGENCY
TAX ALLOCATION REFUNDED 5.00 08/01/17 1,611,982
2,200,000 PLACER COUNTY CA COP JUVENILE
DETENTION FACILITY MBIA
INSURED 5.00 07/01/18 1,957,978
3,000,000 POMONA CA PFA REVENUE WATER
FACILITIES PROJECT SERIES A 5.00 05/01/29 2,551,500
1,000,000 PORT OF OAKLAND CA SPECIAL
FACILITIES REVENUE MITSUI OSK
LINES LIMITED SERIES A AMT LOC
-INDUSTRIAL BANK OF JAPAN LTD 6.70 01/01/07 1,036,660
3,380,000 PORT OF OAKLAND CA SPECIAL
FACILITIES REVENUE MITSUI OSK
LINES LIMITED SERIES A AMT LOC
-INDUSTRIAL BANK OF JAPAN LTD 6.80 01/01/19 3,515,944
1,325,000 REDDING CA JOINT POWERS
FINANCING AUTHORITY WASTEWATER
REVENUE SERIES A FGIC INSURED 6.00 12/01/11 1,388,825
</TABLE>
28
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (continued)
$1,100,000 RICHMOND CA JOINT POWERS
FINANCING AUTHORITY LEASE AND
GAS TAX REVENUE SERIES A 5.25% 05/15/13 $ 1,046,749
2,000,000 RICHMOND CA REDEVELOPMENT
AGENCY HARBOUR PROJECT SERIES
A 4.75 07/01/23 1,641,200
1,500,000 RIVERSIDE CA ASSET LEASING
REVENUE HOSPITAL PROJECT
SERIES B 5.00 06/01/19 1,320,000
2,975,000 RIVERSIDE CA REDEVELOPMENT
AGENCY TAX ALLOCATION CASA
BLANCA SERIES A 4.75 08/01/21 2,467,941
1,000,000 RIVERSIDE CA REDEVELOPMENT
AGENCY TAX CASA BLANCA PROJECT
SERIES A 4.75 08/01/17 861,170
5,750,000 RIVERSIDE COUNTY CA ASSET
LEASING CORP REVENUE RIVERSIDE
COUNTY HOSPITAL PROJECT A 6.38 06/01/09 5,980,000
2,710,000 RIVERSIDE COUNTY CA PFA TAX
ALLOCATION REDEVELOPMENT
PROJECTS SERIES A 5.50 10/01/22 2,380,925
170,000 RIVERSIDE COUNTY CA SFMR
PROJECT A AMT GNMA
COLLATERALIZED 6.85 10/01/16 176,098
1,335,000 ROSEVILLE CA JOINT USD CAPITAL
APPRECIATION SERIES A (ZERO
COUPON) 5.25{::} 08/01/06 949,198
800,000 SACRAMENTO CA AIRPORT REVENUE
SERIES A FGIC INSURED- 6.00 07/01/12 823,304
1,200,000 SACRAMENTO CA AIRPORT REVENUE
SERIES A FGIC INSURED. 6.00 07/01/12 1,248,360
1,000,000 SACRAMENTO CA AREA FLOOD
CONTROL AUTHORITY SPECIAL
ASSESSMENT FGIC INSURED 5.38 10/01/15 969,220
5,000 SACRAMENTO CA FINANCING
AUTHORITY REVENUE PREREFUNDED 6.70 11/01/11 5,237
1,000,000 SACRAMENTO CA LIGHT RAIL
TRANSPORTATION PROJECT 6.00 07/01/12 1,019,480
1,900,000 SACRAMENTO CA LIGHT RAIL
TRANSPORTATION PROJECT 6.75 07/01/07 1,983,125
2,500,000 SACRAMENTO CA MUD ELECTRIC
REVENUE MBIA INSURED 6.25 08/15/10 2,706,600
2,400,000 SACRAMENTO CA MUD ELECTRIC
REVENUE SERIES E MBIA-IBC
INSURED 5.70 05/15/12 2,448,960
50,000 SACRAMENTO CA MUD ELECTRIC
REVENUE SERIES Z FGIC INSURED 6.45 07/01/10 52,170
300,000 SACRAMENTO CA MUD SERIES C
FGIC INSURED 5.75 11/15/08 308,625
115,000 SACRAMENTO CA REDEVELOPMENT
AGENCY TAX ALLOCATION MBIA
INSURED 6.50 11/01/13 118,910
2,000,000 SACRAMENTO COUNTY CA MAIN
DETENTION FACILITY MBIA
INSURED 5.75 06/01/15 2,005,660
380,000 SAN BERNARDINO COUNTY CA WEST
VALLEY DETENTION CENTER MBIA
INSURED 6.50 11/01/12 403,685
200,000 SAN BERNARDINO COUNTY CA
TRANSPORTATION AUTHORITY SALES
TAX REVENUE FGIC INSURED 6.00 03/01/10 209,592
4,000,000 SAN BUENAVENTURA CA COP AMBAC
INSURED 6.00 01/01/12 4,180,000
2,095,000 SAN DIEGO CA COP DOWNTOWN
COURTHOUSE 4.50 05/01/23 1,656,077
2,700,000 SAN DIEGO CA MFHR SERIES A 5.45 08//1940 2,393,766
1,000,000 SAN DIEGO CA PFA 4.75 05/15/17 862,080
7,000,000 SAN DIEGO CA PFA SEWER REVENUE
FGIC INSURED 5.00 05/15/15 6,426,420
1,000,000 SAN DIEGO CA REDEVELOPMENT
AGENCY 4.75 09/01/24 815,620
2,500,000 SAN DIEGO CA USD SERIES A
(ZERO COUPON) 6.08{::} 07/01/16 943,750
3,200,000 SAN DIEGO COUNTY CA COP
BURNHAM INSTITUTE 6.25 09/01/29 3,042,720
4,500,000 SAN DIEGO COUNTY CA REGIONAL
TRANSPORTATION COMMUNITY SALES
TAX REVENUE SERIES A ESCROWED
TO MATURITY 6.00 04/01/08 4,644,675
3,950,000 SAN ELIJO JOINT POWERS
AUTHORITY SAN DIEGO COUNTY CA
WATER PCR FACILITY FGIC
INSURED 5.38 03/01/13 3,920,849
2,250,000 SAN FRANCISCO CA BART SALES
TAX REVENUE FGIC INSURED 5.50 07/01/15 2,210,355
3,750,000 SAN JOAQUIN COUNTY CA GENERAL
HOSPITAL PROJECT COP 5.00 09/01/17 3,366,488
6,000,000 SAN JOAQUIN HILLS CA
TRANSPORTATION CORRIDOR AGENCY
TOLL ROAD (ZERO COUPON) 5.01{::} 01/15/05 4,675,560
4,000,000 SAN JOAQUIN HILLS CA
TRANSPORTATION CORRIDOR AGENCY
TOLL ROAD 7.55 01/01/10 4,060,000
13,080,000 SAN JOSE CA RDA TAX ALLOCATION
MERGED AREA REDEVELOPMENT
PROJECT 4.75 08/01/30 10,402,132
7,500,000 SAN JOSE CA RDA TAX ALLOCATION
MERGED AREA REDEVELOPMENT
PROJECT 4.75 08/01/23 6,152,100
2,000,000 SAN MATEO COUNTY CA JOINT
POWERS AUTHORITY LEASE 4.75 07/15/18 1,704,180
1,500,000 SAN MATEO COUNTY CA JOINT
POWERS SERIES A FSA INSURED 5.00 07/15/18 1,334,790
4,010,000 SANTA CLARA CA RDFA TAX
ALLOCATION BAYSHORE NORTH
PROJECT AMBAC INSURED 5.75 07/01/14 4,030,130
2,305,000 SANTA CRUZ COUNTY CA MFHR GNMA
NORTHGATE APARTMENTS SERIES A 5.50 07//1940 2,048,454
3,000,000 SANTA FE SPRINGS CA COMMUNITY
DEVELOPMENT COMMON TAX
ALLOCATION SERIES A MBIA
INSURED 5.00 09/01/17 2,693,190
1,575,000 SANTA FE SPRINGS CA COMMUNITY
DEVELOPMENT COMMON TAX
ALLOCATION SERIES A MBIA
INSURED 5.13 09/01/16 1,458,749
</TABLE>
29
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (continued)
$1,195,000 SANTA ROSA CA HIGH SCHOOL
DISTRICT FGIC INSURED 5.90% 05/01/13 $ 1,229,559
3,450,000 SANTA ROSA CA WASTEWATER
TREATMENT PLANT FGIC INSURED 4.75 09/01/16 3,001,776
1,000,000 SHASTA CA JOINT POWERS
FINANCING AUTHORITY LEASE
REVENUE COURTHOUSE IMPROVEMENT
PROJECT MBIA INSURED 5.00 06/01/18 890,220
1,000,000 SONOMA VALLEY CA USD FSA
INSURED 6.00 07/15/21 1,003,530
5,720,000 SOUTH COUNTY CA REGIONAL
WASTEWATER AUTHORITY REVENUE
CAPITAL IMPROVEMENT FGIC
INSURED 5.75 08/01/10 5,871,923
1,100,000 SOUTH COUNTY CA REGL
WASTEWATER 4.75 08/01/18 937,068
1,000,000 SOUTHERN CA PUBLIC POWER
PROJECT REVENUE 6.75 07/01/11 1,110,480
490,000 SOUTHERN CALIFORNIA STATE SFMR
SERIES A AMT GNMA
COLLATERALIZED 7.63 10/01/22 499,815
265,000 SOUTHERN CALIFORNIA STATE SFMR
SERIES A AMT GNMA
COLLATERALIZED 7.63 10/01/23 272,539
510,000 SOUTHERN CALIFORNIA STATE SFMR
SERIES A AMT GNMA/FNMA
COLLATERALIZED 6.75 09/01/22 517,502
465,000 SOUTHERN CALIFORNIA STATE SFMR
SERIES A AMT GNMA/FNMA
COLLATERALIZED 7.35 09/01/24 476,732
2,000,000 STANISLAUS COUNTY CA CAPITAL
IMPROVEMENT PROGRAM SERIES A
MBIA INSURED 5.25 05/01/14 1,934,740
1,600,000 STANISLAUS COUNTY CA COP
CAPITAL IMPROVEMENT PROJECT
AMBAC INSURED 5.25 05/01/18 1,470,560
20,000 STOCKTON CA SFMR GOVERNMENT
AGENCY COLLATERALIZED 7.50 02/01/23 21,348
5,690,000 SULPHUR SPRINGS CA USD SERIES
A MBIA INSURED (ZERO COUPON) 5.64{::} 09/01/13 2,637,600
1,465,000 SUNNYVALE CA ELEMENTARY SCHOOL
DISTRICT SERIES A 5.70 09/01/20 1,393,083
1,000,000 SUNNYVALE CA FINANCING
AUTHORITY UTILITIES REVENUE
SOLID WASTE MATERIALS SERIES B
AMT MBIA INSURED 6.00 10/01/08 1,038,680
1,000,000 TEMECULA CA COMMUNITY SERVICES
RECREATIONAL CENTER PROJECT 7.13 10/01/12 1,061,860
1,000,000 TEMECULA VALLEY CA USD SERIES
D FGIC INSURED 6.00 09/01/14 1,025,560
1,640,000 TEMPLE CITY CA USD SERIES A
FGIC INSURED 5.10 08/01/19 1,469,210
1,000,000 THREE VALLEYS CA MUNICIPAL
WATER DISTRICT REVENUE COP
FGIC INSURED 5.25 11/01/10 1,003,150
1,000,000 TORRANCE CA COP AMBAC INSURED 5.50 04/01/11 1,016,780
1,900,000 TORRANCE CA COP AMBAC INSURED 5.50 04/01/12 1,920,786
2,705,000 TORRANCE CA COP AMBAC INSURED 5.75 04/01/16 2,705,189
2,250,000 TWENTYNINE PALMS CA WATER
DISTRICT COP 7.00 08/01/17 2,320,470
1,000,000 UNION CITY CA COMMUNITY RDFA
TAX ALLOCATION REVENUE
COMMUNITY REDEVELOPMENT
PROJECT AMBAC INSURED 5.65 10/01/14 1,004,000
1,645,000 UNIVERSITY OF CALIFORNIA
REVENUE HOUSING SYSTEM SERIES
A AMBAC INSURED 5.50 11/01/11 1,663,210
3,400,000 UNIVERSITY OF CALIFORNIA
REVENUE MULTIPLE PURPOSE
PROJECT C AMBAC INSURED 5.25 09/01/11 3,395,512
1,000,000 UNIVERSITY OF CALIFORNIA
REVENUE MULTIPLE PURPOSE
PROJECTS AMBAC INSURED 4.75 09/01/15 883,130
3,200,000 UNIVERSITY OF CALIFORNIA
REVENUE SEISMIC SAFETY PROJECT
MBIA INSURED 5.50 11/01/10 3,249,856
990,000 UPLAND CA HFA REVENUE ISSUE A 7.85 07/01/20 997,019
1,000,000 UPLAND CA REDEVELOPMENT AGENCY
TAX ALLOCATION 4.85 09/01/23 832,290
1,000,000 VACAVILLE CA PFA TAX
ALLOCATION REDEVELOPMENT
PROJECT MBIA INSURED 6.35 09/01/22 1,023,620
3,275,000 VALLEJO CA REVENUE WATER
IMPROVEMENT PROJECT FSA
INSURED 5.70 05/01/16 3,260,263
2,000,000 VENTURA CA COP PUBLIC
FACILITIES 5.75 12/01/06 2,083,660
2,000,000 VENTURA CA COP PUBLIC
FACILITIES CORPORATION IV 5.75 12/01/07 2,076,380
1,305,000 VISTA CA COMMUNITY
REDEVELOPMENT PROJECT AREA B
TAX ALLOCATION 5.10 09/01/18 1,180,647
1,135,000 WALNUT VALLEY CA USD SERIES C
FGIC INSURED 5.75 08/01/15 1,138,348
1,125,000 WEST HOLLYWOOD CA COP MBIA
INSURED 5.10 02/01/17 1,030,928
1,740,000 WESTLAND CALIFORNIA WATER
DISTRICT 4.88 03/01/21 1,471,640
1,200,000 WESTMINSTER CA RDFA AMT 6.50 08/01/10 1,216,188
1,000,000 WHITTIER CA EDUCATIONAL
FACILITIES REVENUE WHITTIER
COLLEGE CONNIE LEE INSURED 5.40 12/01/18 944,350
1,000,000 YOLO COUNTY CA HFA MORTGAGE
REVENUE AMT FHA COLLATERALIZED 7.20 08/01/33 1,052,440
1,040,000 YOLO COUNTY CA LIBRARY SPECIAL
TAX COMMUNITY FACILITIES 6.25 12/01/22 1,049,537
576,276,398
TOTAL CALIFORNIA MUNICIPAL BONDS
(COST $583,679,173)
------------
</TABLE>
30
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 0.24%
1,406,904 WELLS FARGO CALIFORNIA
TAX-FREE MONEY MARKET TRUST
FUND+X+ $ 1,406,904
------------
1,406,904
TOTAL SHORT-TERM INSTRUMENTS (COST
$1,406,904)
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $585,086,077)* (NOTES 1 AND 3) 98.75% $577,683,302
OTHER ASSETS AND LIABILITIES, NET 1.25 7,331,961
------- ------------
TOTAL NET ASSETS 100.00% $585,015,263
------- ------------
</TABLE>
{::} YIELD TO MATURITY.
+X+ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND IS NOT CHARGED ANY
INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE WELLS FARGO MONEY
MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $13,386,340
GROSS UNREALIZED DEPRECIATION (20,789,115)
-----------
NET UNREALIZED DEPRECIATION $(7,402,775)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Education 1%
Airport 1%
Facilities 8%
Development 16%
General Obligation 10%
Finance 4%
Higher Education 5%
Water 12%
Medical 8%
Utilities 8%
Multifamily Housing 2%
Power 3%
Transportation 10%
Single Family Housing 2%
Pollution 1%
School District 9%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
31
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 94.77%
COLORADO - 93.82%
$ 505,000 ADAMS COUNTY CO SFMR
SERIES A2 8.70% 06/01/12 $ 536,845
1,490,000 ARAPAHOE COUNTY CO CAPITAL
IMPROVEMENTS & TRANSPORTATION
HIGHWAY REVENUE SERIES E470
MBIA INSURED REMARKETED
8/31/95 6.15 08/31/26 1,489,851
1,250,000 ARAPAHOE COUNTY CO UTILITIES
REVENUE WATER & WASTEWATER
AUTHORITY REVENUE 6.25 12/01/20 1,197,938
500,000 ASPEN VALLEY HOSPITAL DISTRICT
CO HOSPITAL REVENUE 6.80 10/15/24 493,040
300,000 AURORA CO HOUSING AUTHORITY
FINANCE CORPORATION MFHR
MOUNTAINVIEW PLACE FHA INSURED 7.13 09/01/22 311,661
1,120,000 BLACKHAWK CO BUSINESS
IMPROVEMENTS DISTRICT SPECIAL
ASSESSMENT REVENUE
SERIES # 97 1 6.00 12/01/09 1,125,533
1,000,000 BLACKHAWK CO BUSINESS
IMPROVEMENTS DISTRICT SPECIAL
ASSESSMENT REVENUE
SERIES # 98 1 7.00 12/01/11 1,007,820
140,000 BLACKHAWK CO DEVICE TAX
REVENUE 5.60 12/01/04 140,853
145,000 BLACKHAWK CO DEVICE TAX
REVENUE 5.70 12/01/05 145,989
1,080,000 BOULDER CO STORM WATER & FLOOD
MANAGEMENT REVENUE
REFUNDING & IMPROVEMENTS 5.10 12/01/18 967,291
100,000 BOULDER COUNTY CO MFHR THISTLE
COMMUNITY HOUSING 6.00 06/01/11 94,393
1,000,000 BOULDER COUNTY CO MFHR THISTLE
COMMUNITY HOUSING 6.38 06/01/29 913,210
500,000 CENTENNIAL 25 METROPOLITAN
DISTRICT CO GO ARAPAHOE COUNTY 6.38 12/01/16 510,945
3,750,000 COLORADO EDUCATIONAL &
CULTURAL FACILITIES REVENUE
ALEXANDER DAWSON SCHOOL 5.30 02/15/29 3,213,338
500,000 COLORADO EDUCATIONAL &
CULTURAL FACILITIES REVENUE
CHARTER SCHOOL CORE KNOWLEDGE
PROJECT 7.00 11/01/29 502,150
600,000 COLORADO EDUCATIONAL &
CULTURAL FACILITIES REVENUE
CHARTER SCHOOL RENAISSANCE
SCHOOL PROJECT 6.75 06/01/29 585,882
415,000 COLORADO HEALTH FACILITIES
AUTHORITY REVENUE NATIONAL
JEWISH MEDICAL & RESEARCH
CENTER 5.00 01/01/08 389,137
1,250,000 COLORADO HEALTH FACILITIES
AUTHORITY REVENUE NATIONAL
JEWISH MEDICAL & RESEARCH
CENTER 5.38 01/01/28 1,072,588
530,000 COLORADO HFFA REVENUE PARKVIEW
MEDICAL CENTER INCORPORATED
PROJECT 5.00 09/01/11 469,251
1,000,000 COLORADO HFFA REVENUE SISTERS
OF CHARITY LEAVENWORTH MBIA
INSURED 5.00 12/01/25 837,170
1,250,000 COLORADO HFFA REVENUE SISTERS
OF CHARITY SERIES A AMBAC
INSURED 6.25 05/15/11 1,352,588
2,500,000 COLORADO HFFA REVENUE
STEAMBOAT SPRINGS HEALTH
PROJECT 5.70 09/15/23 2,078,699
6,500,000 COLORADO HFA SERIES 120 5.17 04/01/11 6,602,700
240,000 COLORADO HFA SFMR SERIES B2 7.50 12/01/16 252,091
4,460,000 COLORADO HFA SFMR SERIES B2 7.45 11/01/27 4,852,256
1,755,000 COLORADO HFA SFMR SERIES C2 7.45 06/01/17 1,861,072
610,000 COLORADO HFA SFMR SERIES D1
REMARKETED 7/15/94 8.00 12/01/24 646,191
1,160,000 COLORADO HFA SFMR SERIES D2 7.10 06/01/14 1,223,069
1,065,000 COLORADO HFA SFMR SERIES D2
REMARKETED 11/15/94 8.13 06/01/25 1,115,886
1,385,000 COLORADO SCHOOL OF MINES
AUXILIARY FACILITIES REVENUE
CAPITAL
APPRECIATION-ENTERPRISE MBIA
INSURED (ZERO COUPON) 5.31{::} 12/01/20 376,138
1,250,000 COLORADO SPRINGS CO UTILITIES
REVENUE SERIES A 5.38 11/15/26 1,129,375
1,000,000 COLORADO SPRINGS CO UTILITIES
REVENUE REFERENDUM SYSTEM
SERIES A 5.25 11/15/22 896,970
700,000 COLORADO STUDENT OBLIGATION
BOARD AUTHORITY STUDENT LOAN
REVENUE SERIES SUB-I-B
GUARANTEED BY STUDENT LOANS 5.70 12/01/06 718,886
2,000,000 COLORADO WATER RESOURCES &
POWER DEVELOPMENT AUTHORITY
CLEAN WATER REVENUE SERIES B 5.00 09/01/19 1,751,880
1,810,000 COLORADO WATER RESOURCES &
POWER DEVELOPMENT AUTHORITY
DRINKING WATER REVENUE
SERIES A 4.88 09/01/17 1,572,112
</TABLE>
32
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
COLORADO (continued)
$ 1,000,000 COLORADO WATER RESOURCES &
POWER DEVELOPMENT AUTHORITY
DRINKING WATER REVENUE
SERIES A 5.00% 09/01/19 $ 884,310
20,000,000 DAWSON RIDGE METROPOLITAN
DISTRICT NO.1 CO GO SERIES B
ESCROWED TO MATURITY
(ZERO COUPON) 6.10{::} 10/01/22 4,330,400
5,500,000 DENVER CO CITY & COUNTY
AIRPORT REVENUE SERIES A 5.00 11/15/25 4,532,220
1,500,000 DENVER CO CITY & COUNTY
AIRPORT REVENUE SERIES A MBIA
INSURED 5.50 11/15/25 1,369,005
3,000,000 DENVER CO CITY & COUNTY
REVENUE HELEN G. BONFILS
FOUNDATION PROJECT SERIES B 5.13 12/01/17 2,714,640
1,500,000 DENVER CO CITY & COUNTY SCHOOL
DISTRICT #1 GO FGIC INSURED 5.25 12/01/17 1,391,400
1,500,000 DENVER CO CITY & COUNTY SCHOOL
DISTRICT #1 GO SERIES A 6.50 06/01/10 1,650,165
1,000,000 DENVER CO GATEWAY CENTER
METROPOLITIAN DISTRICT UTGO 6.40 12/01/18 961,500
300,000 DENVER CO HEALTH & HOSPITAL
REVENUE SERIES A 5.20 12/01/12 264,735
2,000,000 DENVER CO HEALTH & HOSPITAL
REVENUE SERIES A 5.38 12/01/18 1,653,720
390,000 DENVER WEST METROPOLITAN
DISTRICT CO GO SERIES B 5.60 12/01/12 379,919
1,475,000 DOUGLAS COUNTY CO MFHR FHA
PARKER HILLTOP PROJECT FHA
INSURED 5.35 08/01/18 1,343,769
2,500,000 EL PASO COUNTY CO GO SCHOOL
DISTRICT #11 COLORADO SPRINGS 7.10 12/01/17 2,859,000
1,165,000 GREEN VALLEY CO METROPOLITAN
DISTRICT UTGO AMBAC INSURED 5.75 12/01/19 1,136,632
1,000,000 HIGHLANDS RANCH CO
METROPOLITAN DISTRICT #2 UTGO
FSA INSURED 6.50 06/15/11 1,102,030
1,100,000 HIGHLANDS RANCH CO
METROPOLITAN DISTRICT #2 UTGO
FSA INSURED 6.50 06/15/12 1,210,748
250,000 HIGHLANDS RANCH CO
METROPOLITAN DISTRICT #3
GENERAL OBLIGATION ACA INSURED 5.00 12/01/09 238,345
350,000 HIGHLANDS RANCH CO
METROPOLITAN DISTRICT #4 UTGO
SERIES A 6.10 12/01/11 351,351
800,000 HIGHLANDS RANCH CO
METROPOLITAN DISTRICT #4 UTGO
SERIES A 6.30 12/01/17 800,584
1,000,000 JEFFERSON COUNTY CO SCHOOL
DISTRICT #R001 UTGO MBIA
INSURED 6.50 12/15/11 1,100,580
1,000,000 JEFFERSON COUNTY CO SCHOOL
DISTRICT #R001 UTGO SERIES A
FGIC INSURED 5.00 12/15/17 889,950
500,000 LA JUNTA CO HOSPITAL CO
REVENUE ARK VALLEY REGIONAL
MEDICAL CENTER PROJECT 6.00 04/01/19 441,025
500,000 LA JUNTA CO HOSPITAL CO
REVENUE ARK VALLEY REGIONAL
MEDICAL CENTER PROJECT 6.10 04/01/24 439,145
1,990,000 LARIMER COUNTY CO SFM REVENUE
CAPITAL ACCUMULATOR A
REMARKETED 2/15/94 ESCROWED TO
MATURITY (ZERO COUPON) 5.50{::} 08/01/15 781,354
2,500,000 METEX METROPOLITAN DISTRICT CO
GO SERIES A 5.80 12/01/16 2,499,850
1,210,000 MONTROSE COUNTY CO COP
SERIES A 6.40 12/01/12 1,268,153
955,000 NORTHERN METROPOLITAN DISTRICT
CO REVENUE ADAMS COUNTY 6.50 12/01/16 951,247
325,000 PUEBLO CO COP PUBLIC
PARKING-LEASE PURCHASE &
SUBLEASE 6.90 07/01/15 345,823
1,500,000 SAN MIGUEL COUNTY CO HOUSING
AUTHORITY MFHR TELLURIDE
VILLAGE APARTMENTS PROJECT 6.40 07/01/23 1,551,975
600,000 SUMMIT COUNTY CO SPORTS
FACILITIES REVENUE KEYSTONE
RESORTS MANAGEMENT PROJECT
GUARANTEED BY RALSTON PURINA
CORPORATION 7.38 09/01/10 661,998
82,540,371
-----------
PUERTO RICO - 0.95%
1,000,000 PUERTO RICO PUBLIC FINANCE
CORPORATION COMMONWEALTH
APPROPRIATION SERIES A 5.00 06/01/26 837,050
-----------
83,377,421
TOTAL MUNICIPAL BONDS (COST $86,210,595)
-----------
</TABLE>
33
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 5.99%
$ 5,273,120 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET FUND+X+ $ 5,273,120
-----------
5,273,120
TOTAL SHORT-TERM INSTRUMENTS (COST
$5,273,120)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $91,483,715)* 100.76% $88,650,541
OTHER ASSETS AND LIABILITIES, NET (0.76) (669,379)
------- -----------
TOTAL NET ASSETS 100.00% $87,981,162
------- -----------
</TABLE>
{::} YIELD TO MATURITY.
+X+ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND.
THE FUND IS NOT CHARGED ANY INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN
THE WELLS FARGO MONEY MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 542,728
GROSS UNREALIZED DEPRECIATION (3,375,902)
------------
NET UNREALIZED DEPRECIATION $ (2,833,174)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Medical 11%
Housing 25%
Utilities 9%
Tax-Free Money Market Fund 6%
General Obligation 13%
Transportation 2%
Facilities 13%
Airport 6%
Student Loan 1%
Education 14%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
34
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 94.40%
MINNESOTA - 92.50%
$ 500,000 ALEXANDRIA MN INDEPENDENT
SCHOOL DISTRICT #206 GO BONDS
SERIES A CROSSOVER REFUNDING 6.00% 02/01/04 $ 517,315
250,000 ALEXANDRIA MN INDEPENDENT
SCHOOL DISTRICT #206 GO BONDS
SERIES A CROSSOVER REFUNDING 6.15 02/01/06 259,720
250,000 ALEXANDRIA MN INDEPENDENT
SCHOOL DISTRICT #206 GO BONDS
SERIES A CROSSOVER REFUNDING 6.20 02/01/07 260,075
2,365,000 ANOKA COUNTY MN RESOURCE
RECOVERY REVENUE NORTHERN
STATE POWER COMPANY PROJECT 5.00 12/01/06 2,346,104
110,000 BECKER MN PCR NORTHERN STATES
POWER COMPANY PROJECT 7.25 12/01/05 110,216
1,500,000 BEMIDJI MN HOSPITAL FACILITIES
FIRST MORTGAGE REVENUE NORTH
COUNTRY HEALTH SERVICES
PROJECT SERIES 1991 A GOLDMAN
SACHS & COMPANY LOC
PREREFUNDED 9/1/01 @ 102 7.00 09/01/11 1,582,815
160,000 BLAINE MN INDUSTRIAL
DEVELOPMENT REVENUE BALL
CORPORATION PROJECT ESCROWED
TO MATURITY USG 7.13 12/01/04 175,232
3,000,000 BLOOMINGTON MN INDEPENDENT
SCHOOL DISTRICT #271 SERIES B
SCHOOL DISTRICT CREDIT PROGRAM
SUPPORT 5.00 02/01/16 2,724,750
1,000,000 BLOOMINGTON MN PORT AUTHORITY
SPECIAL TAX REVENUE MALL OF
AMERICA PROJECT SERIES A FSA
INSURED 5.00 02/01/13 938,650
3,000,000 BLOOMINGTON MN PORT AUTHORITY
SPECIAL TAX REVENUE MALL OF
AMERICA PROJECT SERIES A FSA
INSURED 5.35 02/01/13 3,025,080
2,000,000 BLOOMINGTON MN PORT AUTHORITY
TAX REVENUE MALL OF AMERICA
PROJECT SERIES A FSA INSURED 5.25 02/01/03 2,033,620
1,385,000 BLOOMINGTON MN PORT AUTHORITY
TAX REVENUE MALL OF AMERICA
PROJECT SERIES A FSA INSURED 5.45 02/01/09 1,396,246
290,000 BLOOMINGTON MN TAX INCREMENT
GO PREREFUNDED 2/1/05 @ 100 9.75 02/01/08 352,489
2,195,000 BRECKENRIDGE MN HFFA REVENUE
CATHOLIC HEALTH CORPORATION
MBIA INSURED 5.00 11/15/05 2,204,856
640,000 CENTENNIAL MN INDEPENDENT
SCHOOL DISTRICT #12 GO
SERIES A FSA INSURED
PREREFUNDED 2/1/00 @ 100 7.15 02/01/10 641,606
440,000 CHASKA MN ECONOMIC DEVELOPMENT
AUTHORITY SCHOOL FACILITIES
LEASE GO INDEPENDENT SCHOOL
DISTRICT #112 SERIES A 5.13 12/01/09 423,302
450,000 CHASKA MN ECONOMIC DEVELOPMENT
AUTHORITY SCHOOL FACILITIES
LEASE GO INDEPENDENT SCHOOL
DISTRICT #112 SERIES A 5.13 12/01/10 428,494
520,000 CHASKA MN ECONOMIC DEVELOPMENT
AUTHORITY SCHOOL FACILITIES
LEASE REVENUE 5.30 12/01/13 486,606
1,000,000 CHASKA MN GO TAX INCREMENT
AMBAC INSURED 4.15 12/01/09 887,890
1,250,000 CHASKA MN INDEPENDENT SCHOOL
DISTRICT #112 GO SERIES B
CROSSOVER REFUNDING 2/1/00 5.75 02/01/07 1,299,187
1,000,000 CHASKA MN INDEPENDENT SCHOOL
DISTRICT #112 GO SERIES B
CROSSOVER REFUNDING 2/1/00 5.75 02/01/09 1,039,350
255,000 COON RAPIDS MN GO SPECIAL
ASSESSMENT SERIES B 5.80 02/01/04 262,341
455,000 COON RAPIDS MN SFMR 6.15 09/01/09 455,937
1,000,000 CUYUNA RANGE HOSPITAL DISTRICT
MN HEALTH FACILITIES GROSS
REVENUE SERIES A 5.75 06/01/14 899,740
2,325,000 DAKOTA COUNTY MN GO SERIES B
AMBAC INSURED 6.00 02/01/02 2,328,697
400,000 DAKOTA COUNTY MN GO SERIES B
AMBAC INSURED 6.20 02/01/04 400,700
1,190,000 DETROIT LAKES MN HFFA REVENUE
BENEDICTINE HEALTH SYSTEMS ST
MARY SERIES SERIES G CONNIE
LEE INSURED 6.00 02/15/12 1,252,285
635,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE
BENEDICTINE HEALTH SYSTEM ST
MARY SERIES A MBIA INSURED 5.55 02/15/04 650,202
690,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE
BENEDICTINE HEALTH SYSTEM
HEALTH SYSTEM ST MARY
SERIES A MBIA INSURED 5.65 02/15/05 709,844
465,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE
BENEDICTINE HEALTH SYSTEM ST
MARY SERIES A MBIA INSURED 5.75 02/15/06 478,611
425,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE ST
LUKE'S HOSPITAL OF DULUTH
SERIES B CONNIE LEE INSURED 6.10 05/01/00 427,567
</TABLE>
35
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA (continued)
$ 450,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE ST
LUKE'S HOSPITAL OF DULUTH
SERIES B CONNIE LEE INSURED 6.20% 05/01/01 $ 459,526
500,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE ST
LUKE'S HOSPITAL OF DULUTH
SERIES B CONNIE LEE INSURED 6.45 05/01/05 524,275
500,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA ST LUKE'S
HOSPITAL OF DULUTH SERIES B
CONNIE LEE INSURED 6.40 05/01/18 514,690
205,000 DULUTH MN GO COLLATERALIZED BY
USG PREREFUNDED 8/1/00 @ 100 6.10 08/01/02 207,435
210,000 DULUTH MN GO COLLATERALIZED BY
USG PREREFUNDED 8/1/00 @ 100 6.20 08/01/03 212,614
215,000 DULUTH MN GO COLLATERALIZED BY
USG PREREFUNDED 8/1/00 @ 100 6.30 08/01/04 217,799
285,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA 6.00 02/01/00 285,325
300,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA 6.15 02/01/01 303,285
300,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA 6.30 02/01/02 303,270
400,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA 6.50 02/01/04 404,348
425,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA 6.60 02/01/05 429,615
455,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA 6.70 02/01/06 459,932
165,000 EDEN PRAIRIE MN HOUSING &
REDEVELOPMENT AUTHORITY
LEASING REVENUE COMMUNITY
CENTER PROJECT SERIES A 6.15 08/01/08 167,652
1,000,000 FERGUS FALLS MN HFFA REVENUE
LAKE REGION HOSPITAL
CORPORATION PROJECT SERIES A 6.50 09/01/18 1,006,130
700,000 GLENCOE MN HOSPITAL REVENUE 6.63 04/01/11 701,792
205,000 HASTINGS MN HFFA REVENUE
REGINA MEDICAL CENTER ACA
INSURED 4.80 09/15/10 183,897
400,000 HASTINGS MN HFFA REVENUE
REGINA MEDICAL CENTER ACA
INSURED 5.25 09/15/18 348,632
260,000 HENNEPIN COUNTY MN LEASE
REVENUE COP SERIES A
PREREFUNDED 11/15/01 @ 100 6.15 05/15/02 267,509
310,000 HENNEPIN COUNTY MN LEASE
REVENUE COP SERIES A
PREREFUNDED 11/15/01 @ 100 6.25 11/15/03 319,505
135,000 HENNEPIN COUNTY MN LEASE
REVENUE COP SERIES A
PREREFUNDED 11/15/01 @ 100 6.45 05/15/05 139,618
300,000 HENNEPIN COUNTY MN LEASE
REVENUE COP SERIES A
PREREFUNDED 11/15/01 @ 100 6.45 11/15/05 310,263
145,000 HENNEPIN COUNTY MN LEASE
REVENUE COP SERIES A
PREREFUNDED 11/15/01 @ 100 6.55 05/15/06 150,217
1,000,000 HOPKINS MN EDUCATIONAL
FACILITIES REVENUE BLAKE
SCHOOL PROJECT 5.35 09/01/17 934,240
1,000,000 LAKEVILLE MN INDEPENDENT
SCHOOL DISTRICT #194 GO
SERIES A SCHOOL DISTRICT
CREDIT PROGRAM INSURED 5.13 02/01/22 888,160
1,080,000 LINO LAKES MN ECONOMIC
DEVELOPMENT AUTHORITY LEASING
REVENUE SERIES A 5.25 02/01/16 956,329
50,000 MANKATO MN HOSPITAL FACILITIES
REVENUE FIRST
MORTGAGE-IMMANUEL ST JOSEPH'S
PROJECT SERIES C PREREFUNDED
8/1/02 @ 102 6.10 08/01/05 52,569
315,000 MANKATO MN HFFA REVENUE FIRST
MORTGAGE-IMMANUEL ST JOSEPH'S
PROJECT SERIES C PREREFUNDED
8/1/02 @ 102 6.10 08/01/05 328,690
390,000 MANKATO MN HFFA REVENUE FIRST
MORTGAGE-IMMANUEL ST JOSEPH'S
PROJECT SERIES C PREREFUNDED
8/1/02 @ 102 6.15 08/01/06 406,497
60,000 MANKATO MN HFFA REVENUE FIRST
MORTGAGE-IMMANUEL ST JOSEPH'S
PROJECT SERIES C PREREFUNDED
8/1/02 @ 102 6.15 08/01/06 63,155
1,700,000 MANKATO MN HFFA REVENUE FIRST
MORTGAGE-IMMANUEL ST JOSEPH'S
PROJECT SERIES A PREREFUNDED
8/1/02 @ 102 6.30 08/01/22 1,796,798
1,100,000 MANKATO MN INDEPENDENT SCHOOL
DISTRICT #77 GO BONDS
SERIES A FSA INSURED CROSSOVER
REFUNDING 2/1/02 @ 100 6.35 02/01/13 1,136,740
300,000 MANKATO MN NURSING HOME
REVENUE MANKATO LUTHERAN HOME
PROJECT SERIES A
COLLATERALIZED BY USG
PREREFUNDED 10/1/01 @ 102 8.00 10/01/11 321,681
3,250,000 METROPOLITAN COUNCIL MN GO
MINNEAPOLIS-ST PAUL
METROPOLITAN AREA SERIES A 6.00 12/01/02 3,335,410
550,000 MINNEAPOLIS & ST PAUL MN
HOUSING & REDEVELOPMENT
AUTHORITY HEALTH CARE SYSTEM
HEALTHONE OBLIGATED GROUP
PROJECT SERIES A MBIA INSURED 7.38 08/15/02 571,741
805,000 MINNEAPOLIS & ST PAUL MN
HOUSING & REDEVELOPMENT
AUTHORITY HEALTH CARE SYSTEM
MBIA INSURED PREREFUNDED
8/15/00 @ 102 7.40 08/15/11 836,942
</TABLE>
36
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA (continued)
$2,075,000 MINNEAPOLIS & ST PAUL MN
METROPOLITAN AIRPORTS
COMMUNITY AIRPORT REVENUE
SERIES A AMBAC INSURED 5.00% 01/01/19 $ 1,830,918
1,500,000 MINNEAPOLIS & ST PAUL MN
METROPOLITAN AIRPORTS
COMMUNITY AIRPORT REVENUE
SERIES A FGIC INSURED 5.13 01/01/25 1,298,310
15,000 MINNEAPOLIS MN COMMUNITY
DEVELOPMENT AGENCY & ST PAUL
HOUSING &REDEVELOPMENT
AUTHORITY REVENUE JOINT
HOUSING PROGRAM 9.50 12/01/00 15,022
5,000,000 MINNEAPOLIS MN COMMUNITY
DEVELOPMENT AGENCY TAX
INCREMENT REVENUE CAPITAL
APPRECIATION MBIA INSURED
(ZERO COUPON) 5.00{::} 09/01/04 3,969,000
2,815,000 MINNEAPOLIS MN GO SALES TAX
REVENUE 6.05 04/01/04 2,944,715
1,750,000 MINNEAPOLIS MN GO SPORTS ARENA
PROJECT 5.13 10/01/20 1,567,755
500,000 MINNEAPOLIS MN HFFA REVENUE
EBENEZER SOCIETY PROJECT
SERIES A 7.20 07/01/23 490,845
475,000 MINNEAPOLIS MN HFFA REVENUE
ABBOTT NORTHWESTERN HOSPITAL
INCORPORATED COLLATERALIZED BY
USG ESCROWED TO MATURITY 6.50 12/01/06 498,878
10,000 MINNEAPOLIS MN HFFA REVENUE
METROPOLITAN MEDICAL CENTER
COLLATERALIZED BY USG ESCROWED
TO MATURITY 8.88 04/01/00 10,117
450,000 MINNEAPOLIS MN HOSPITAL
REVENUE MINNEAPOLIS CHILDREN'S
MEDICAL CENTER PROJECT
SERIES C COLLATERALIZED BY USG
PREREFUNDED 6/1/01 @ 102 7.00 12/01/01 473,701
575,000 MINNEAPOLIS MN HOSPITAL
REVENUE MINNEAPOLIS CHILDREN'S
MEDICAL CENTER PROJECT
SERIES C COLLATERALIZED BY USG
PREREFUNDED 6/1/01 @ 102 7.10 12/01/02 606,033
1,225,000 MINNEAPOLIS MN MFHR BONDS
CHURCHILL PROJECT FHA INSURED 6.95 10/01/05 1,277,222
1,000,000 MINNEAPOLIS MN SPECIAL SCHOOL
DISTRICT COP 5.60 02/01/02 1,001,210
400,000 MINNEAPOLIS MN SPECIAL SCHOOL
DISTRICT COP 5.80 02/01/04 400,548
1,010,000 MINNEAPOLIS MN SPECIAL SCHOOL
DISTRICT #1 UNLIMITED GENERAL
OBLIGATION PREREFUNDED
2/1/03 @ 100 5.75 02/01/09 1,039,866
2,000,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT BOARD
HEALTH CARE REVENUE FAIRVIEW
HOSPITAL SERIES A MBIA INSURED 5.50 11/15/17 1,910,100
1,000,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT BOARD
HEALTH CARE REVENUE FAIRVIEW
HOSPITAL SERIES A MBIA INSURED 5.75 11/15/26 955,230
3,250,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT REVENUE
BENEDICTINE HEALTH SERIES A
MBIA INSURED 5.00 02/15/19 2,842,807
1,000,000 MINNESOTA HEFA COLLEGE OF ST
BENEDICT SERIES 4T 5.13 03/01/13 923,610
1,765,000 MINNESOTA IRON RANGE
RESOURCES &REHABILITATION
GROSS REVENUE GIANTS RIDGE
RECREATIONAL AREA 7.25 10/01/11 1,822,821
1,000,000 MINNESOTA PUBLIC FACILITIES
AUTHORITY DRINKING PCR
SERIES B 5.13 03/01/15 934,540
1,000,000 MINNESOTA PUBLIC FACILITIES
AUTHORITY WATER PCR 5.00 03/01/16 911,820
1,960,000 MINNESOTA PUBLIC FACILITIES
AUTHORITY WATER PCR SERIES A
PREREFUNDED 3/1/02 @ 100 6.50 03/01/14 2,071,210
750,000 MINNESOTA PUBLIC FACILITIES
AUTHORITY WATER PCR SERIES A
PREREFUNDED 3/1/05 @ 100 6.25 03/01/15 796,965
500,000 MINNESOTA PUBLIC FACILITIES
AUTHORITY WATER REVENUE
SERIES A 4.75 03/01/16 436,320
1,000,000 MINNESOTA STATE GO BONDS 5.25 08/01/15 950,910
500,000 MINNESOTA STATE HFA SFMR
SERIES B 5.00 07/01/13 460,265
170,000 MINNESOTA STATE HFA SFMR
SERIES D2 REMARKETED 3/24/93 5.60 01/01/06 171,953
610,000 MINNESOTA STATE HFA RENTAL
HOUSING REVENUE SERIES D MBIA
INSURED 5.90 08/01/15 600,209
490,000 MINNESOTA STATE HFA HOUSING
DEVELOPMENT REVENUE 6.25 02/01/20 495,375
1,440,000 MINNESOTA STATE HFA RENTAL
HOUSING REVENUE SERIES D MBIA
INSURED 5.80 08/01/11 1,448,208
645,000 MINNESOTA STATE HFA SFMR
SERIES A 5.95 01/01/17 640,911
1,000,000 MINNESOTA STATE HEFA REVENUE
CARLETON COLLEGE SERIES 4N 5.00 11/01/18 890,060
190,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3A
COLLATERALIZED BY USG
PREREFUNDED 10/1/00 @ 100 7.00 10/01/04 194,005
205,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3A
COLLATERALIZED BY USG
PREREFUNDED 10/1/00 @ 100 7.00 10/01/05 209,321
</TABLE>
37
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA (continued)
$ 220,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3A
COLLATERALIZED BY USG
PREREFUNDED 10/1/00 @ 100 7.00% 10/01/06 $ 224,638
235,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3A
COLLATERALIZED BY USG
PREREFUNDED 10/1/00 @ 100 7.00 10/01/07 239,954
110,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3K
COLLATERALIZED BY USG ESCROWED
TO MATURITY 6.10 06/01/00 110,915
135,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3K
COLLATERALIZED BY USG ESCROWED
TO MATURITY 6.20 06/01/01 138,073
130,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3K
COLLATERALIZED BY USG ESCROWED
TO MATURITY 6.30 06/01/02 134,714
270,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3K
COLLATERALIZED BY USG
PREREFUNDED 6/1/02 @ 100 6.40 06/01/03 280,090
240,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3K
COLLATERALIZED BY USG
PREREFUNDED 6/1/02 @ 100 6.50 06/01/04 249,509
250,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3K
COLLATERALIZED BY USG
PREREFUNDED 6/1/02 @ 100 6.60 06/01/07 260,470
430,000 MINNESOTA STATE HEFA REVENUE
MACALESTER COLLEGE SERIES 3J 6.10 03/01/05 442,741
365,000 MINNESOTA STATE HEFA REVENUE
NORTHWESTERN COLLEGE OF CHIRO
SERIES 4Z 4.50 10/01/05 349,440
400,000 MINNESOTA STATE HEFA REVENUE
NORTHWESTERN COLLEGE OF CHIRO
SERIES 4Z 4.63 10/01/07 376,724
420,000 MINNESOTA STATE HEFA REVENUE
NORTHWEST COLLEGE SERIES 4Z 4.75 10/01/08 394,015
150,000 MINNESOTA STATE HEFA REVENUE
ST MARY'S COLLEGE SERIES 3Q 5.70 10/01/03 153,280
280,000 MINNESOTA STATE HEFA REVENUE
ST MARY'S COLLEGE SERIES 3Q 5.80 10/01/04 287,557
295,000 MINNESOTA STATE HEFA REVENUE
ST MARY'S COLLEGE SERIES 3Q 5.90 10/01/05 303,832
340,000 MINNESOTA STATE HEFA REVENUE
ST MARY'S COLLEGE SERIES 3Q 6.00 10/01/08 347,327
1,580,000 MINNETONKA MN INDEPENDENT
SCHOOL DISTRICT #276 GO
SERIES A 6.10 02/01/02 1,629,343
1,000,000 MINNETONKA MN INDEPENDENT
SCHOOL DISTRICT #276 GO
SERIES A PREREFUNDED
2/1/02 @ 100 6.30 02/01/04 1,032,620
1,400,000 MINNETONKA MN INDEPENDENT
SCHOOL DISTRICT #276 GO
SERIES B 5.65 02/01/10 1,439,130
505,000 MONTICELLO-BIG LAKE MN
COMMUNITY HOSPITAL DISTRICT
GROSS REVENUE HEALTH CARE
REVENUE SERIES A 5.20 12/01/09 468,544
500,000 MONTICELLO-BIG LAKE MN
COMMUNITY HOSPITAL DISTRICT
GROSS REVENUE HEALTH CARE
REVENUE SERIES A 5.30 12/01/10 459,485
725,000 MONTICELLO-BIG LAKE MN
COMMUNITY HOSPITAL DISTRICT
GROSS REVENUE HEALTH CARE
REVENUE SERIES A 5.40 12/01/11 662,664
250,000 MOORHEAD MN ECONOMIC
DEVELOPMENT AUTHORITY MFHR
EVENTIDE LUTHERAN HOME PROJECT
SERIES A PREREFUNDED
9/1/00 @ 102 8.00 09/01/11 261,060
500,000 MOORHEAD MN PUBLIC UTILITIES
REVENUE SERIES A MBIA INSURED
CROSSOVER REFUNDING
11/1/02 @ 100 5.75 11/01/03 514,140
1,865,000 MOORHEAD MN RESIDENTIAL
MORTGAGE REVENUE 7.10 08/01/11 2,044,805
825,000 NEW HOPE MN HOUSING & HEALTH
CARE FACILITIES REVENUE
MINNESOTA MASONIC HOME NORTH
RIDGE 5.55 03/01/11 741,312
670,000 NEW HOPE MN HOUSING & HEALTH
CARE FACILITIES REVENUE
MINNESOTA MASONIC HOME NORTH
RIDGE 5.60 03/01/12 595,911
3,000,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE FSA INSURED 5.50 01/01/08 3,076,050
1,000,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE FSA INSURED 5.40 01/01/15 966,110
1,000,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE FSA INSURED 5.30 01/01/21 913,490
2,000,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE SERIES B AMBAC INSURED 5.50 01/01/18 1,895,040
400,000 NORTHFIELD MN EDUCATIONAL
FACILITIES REVENUE ST OLAF
COLLEGE PROJECT 6.05 10/01/04 414,620
</TABLE>
38
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA (continued)
$ 105,000 OLMSTEAD COUNTY MN HOUSING &
REDEVELOPMENT AUTHORITY
REVENUE COLLATERALIZED BY USG
PREREFUNDED 2/1/01 @ 100 7.00% 02/01/06 $ 108,040
290,000 OLMSTEAD COUNTY MN
HOUSING &REDEVELOPMENT
AUTHORITY REVENUE
COLLATERALIZED BY USG
PREREFUNDED 2/1/01 @ 100 7.00 02/01/07 298,396
300,000 OLMSTEAD COUNTY MN
HOUSING &REDEVELOPMENT
AUTHORITY REVENUE
COLLATERALIZED BY USG
PREREFUNDED 2/1/01 @ 100 7.00 02/01/08 308,685
500,000 PINE RIVER MN HFFA REVENUE
EVAN LUTHERAN GOOD SAMARITAN
PROJECT 6.40 08/01/15 500,495
1,000,000 RAMSEY COUNTY MN GO BONDS
CAPITAL IMPROVEMENTS SERIES A 6.25 02/01/06 1,070,120
1,030,000 RED WING MN PCR NORTHERN
STATES POWER COMPANY MBIA-IBC
INSURED 5.70 05/01/03 1,034,872
2,285,000 ROCHESTER MN HFFA REVENUE MAYO
MEDICAL CENTER SERIES I 5.80 11/15/07 2,400,027
1,185,000 ROCHESTER MN HFFA REVENUE MAYO
MEDICAL CENTER SERIES I 5.88 11/15/08 1,250,933
1,650,000 ROCHESTER MN HFFA REVENUE MAYO
MEDICAL CENTER SERIES I 5.90 11/15/09 1,743,539
2,000,000 ROCHESTER MN HFFA REVENUE MAYO
MEDICAL CENTER SERIES I 5.90 11/15/10 2,104,820
575,000 ROSEAU MN AREA HOSPITAL
DISTRICT HEALTH FACILITIES
GROSS REVENUE 5.50 10/01/18 468,096
385,000 ROSEAU MN AREA HOSPITAL
DISTRICT HEALTH FACILITIES
GROSS REVENUE 5.75 10/01/23 314,757
2,000,000 ROSEMOUNT MN INDEPENDENT
SCHOOL DISTRICT #196 GO
CAPITAL APPRECIATION SERIES A
(ZERO COUPON) 5.50{::} 04/01/09 1,215,160
3,000,000 ROSEMOUNT MN INDEPENDENT
SCHOOL DISTRICT #196 GO
CAPITAL APPRECIATION SERIES A
(ZERO COUPON) 5.55{::} 04/01/10 1,715,130
2,000,000 ROSEMOUNT MN INDEPENDENT
SCHOOL DISTRICT #196 GO
CAPITAL APPRECIATION SERIES A
(ZERO COUPON) 5.60{::} 04/01/11 1,074,440
1,000,000 SAINT CLOUD MN LAW ENFORCEMENT
CENTER REVENUE 6.20 02/01/05 1,016,650
185,000 SAVAGE MN ECONOMIC DEVELOPMENT
AUTHORITY REVENUE LEASE
REVENUE 5.30 02/01/12 175,924
195,000 SAVAGE MN ECONOMIC DEVELOPMENT
AUTHORITY REVENUE LEASE
REVENUE 5.35 02/01/13 184,322
2,100,000 SEAWAY PORT AUTHORITY DULUTH
MN INDUSTRIAL DEVELOPMENT
DOCK & WHARF CARGILL
INCORPORATED REVENUE SERIES B 6.80 05/01/12 2,202,417
4,790,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE CAPITAL
APPRECIATION SERIES A MBIA
INSURED (ZERO COUPON) 5.57{::} 01/01/20 1,407,015
2,000,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE MBIA INSURED
(ZERO COUPON) 5.04{::} 01/01/21 550,340
545,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE REFUNDED
BALANCE SERIES A 5.50 01/01/03 557,835
1,000,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES A 5.00 01/01/12 937,280
2,155,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES A
AMBAC-TCRS INSURED 5.00 01/01/09 2,113,732
10,000,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES A MBIA
INSURED (ZERO COUPON) 5.86{::} 01/01/24 2,267,200
2,830,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES B
AMBAC-TCRS INSURED 5.00 01/01/10 2,745,525
455,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES C
MBIA-IBC INSURED 5.00 01/01/17 402,493
955,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE UNREFUNDED
BALANCE SERIES A 5.50 01/01/03 970,270
1,000,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE UNREFUNDED
BALANCE SERIES B 5.80 01/01/07 1,030,110
1,000,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE UNREFUNDED
BALANCE SERIES B 5.80 01/01/07 1,020,830
115,000 SPRING PARK MN HFFA REVENUE
TWIN BIRCH HEALTH CARE CENTER
PROJECT 8.00 08/01/00 117,504
125,000 SPRING PARK MN HFFA REVENUE
TWIN BIRCH HEALTH CARE CENTER
PROJECT 8.00 08/01/01 131,216
135,000 SPRING PARK MN HFFA REVENUE
TWIN BIRCH HEALTH CARE CENTER
PROJECT 8.10 08/01/02 144,574
</TABLE>
39
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA (continued)
$ 145,000 SPRING PARK MN HFFA REVENUE
TWIN BIRCH HEALTH CARE CENTER
PROJECT 8.10% 08/01/03 $ 155,283
160,000 ST ANTHONY MN MFHR AUTUMN
WOODS PROJECT ASSET GUARANTY
INSURANCE COMPANY LOC 6.10 07/01/00 161,094
170,000 ST ANTHONY MN MFHR AUTUMN
WOODS PROJECT ASSET GUARANTY
INSURANCE COMPANY LOC 6.25 07/01/01 173,281
180,000 ST ANTHONY MN MFHR AUTUMN
WOODS PROJECT ASSET GUARANTY
INSURANCE COMPANY LOC 6.40 07/01/02 185,427
190,000 ST ANTHONY MN MFHR AUTUMN
WOODS PROJECT ASSET GUARANTY
INSURANCE COMPANY LOC 6.50 07/01/03 197,627
175,000 ST ANTHONY MN MFHR AUTUMN
WOODS PROJECT ASSET GUARANTY
INSURANCE COMPANY LOC 6.60 07/01/04 183,418
180,000 ST CLOUD MN COP MUNICIPAL
ATHLETIC COMPLEX 5.20 12/01/05 178,117
185,000 ST CLOUD MN COP MUNICIPAL
ATHLETIC COMPLEX 5.30 12/01/06 182,760
100,000 ST CLOUD MN COP MUNICIPAL
ATHLETIC COMPLEX 5.38 12/01/07 98,603
2,000,000 ST CLOUD MN GO BONDS INVERSE
FLOATERS CROSSOVER REFUNDING
2/1/02 @ 100+ 8.25 08/01/13 2,057,500
520,000 ST LOUIS PARK MN COMMERCIAL
DEVELOPMENT REVENUE G &N LP
PROJECT 7.00 06/01/06 525,689
500,000 ST LOUIS PARK MN HOSPITAL
REVENUE METHODIST HOSPITAL
SERIES A AMBAC INSURED 7.00 07/01/00 506,730
1,000,000 ST LOUIS PARK MN INDEPENDENT
SCHOOL DISTRICT #283 GO
SERIES B CROSSOVER REFUNDING
2/1/01 @ 100 5.90 02/01/03 1,017,000
2,595,000 ST PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY
DISTRICT COOLING REVENUE
SERIES C CROSSOVER REFUNDING
9/1/01 @ 102 8.00 03/01/12 2,778,830
400,000 ST PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY
DISTRICT HEATING REVENUE
COGENERATION FACILITIES
PROJECT 8.30 11/01/04 408,328
610,000 ST PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY HEALTH
CARE REVENUE REGIONS HOSPITAL
PROJECT 5.00 05/15/11 544,016
1,000,000 ST PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY HEALTH
CARE REVENUE REGIONS HOSPITAL
PROJECT 5.25 05/15/18 825,030
2,000,000 ST PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY HEALTH
CARE REVENUE REGIONS HOSPITAL
PROJECT 5.30 05/15/28 1,572,900
50,000 ST PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY
REVENUE AMHERST H WILDER
FOUNDATION 6.50 06/01/01 50,374
595,000 ST PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY SFMR
FNMA MORTGAGE BACKED
SECURITIES PROGRAM FNMA
INSURED MANDATORY REDEMPTION
3/1/07 @ 100 6.25 09/01/14 608,013
170,000 ST PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 5.70 02/01/02 173,329
195,000 ST PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 5.90 02/01/04 200,413
215,000 ST PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 6.10 02/01/06 221,059
230,000 ST PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 6.20 02/01/07 237,183
245,000 ST PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 6.25 02/01/08 253,377
260,000 ST PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 6.30 02/01/09 269,256
600,000 ST PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 GO SERIES B
PREREFUNDED 2/1/01 @ 100 6.10 02/01/03 611,586
625,000 ST PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 GO SERIES B
PREREFUNDED 2/1/01 @ 100 6.20 02/01/04 637,725
1,050,000 ST PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 GO SERIES B 5.70 02/01/09 1,075,442
580,000 ST PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 GO SERIES B 5.80 02/01/11 595,469
2,000,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.50 07/01/08 2,061,580
1,000,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.75 07/01/11 1,037,510
2,795,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.75 07/01/17 2,795,000
1,000,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.75 07/01/18 995,490
3,750,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.50 07/01/21 3,564,225
245,000 VADNAIS HEIGHTS MN SFMR 5.25 11/01/02 246,005
</TABLE>
40
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA (continued)
$ 235,000 WACONIA MN GO BONDS 6.00% 06/01/06 $ 240,656
1,000,000 WASHINGTON COUNTY MN
HOUSING &REDEVELOPMENT
AUTHORITY JAIL FACILITIES
REVENUE PREREFUNDED
2/1/02 @ 100 7.00 02/01/06 1,046,760
940,000 WASHINGTON COUNTY MN
HOUSING &REDEVELOPMENT
AUTHORITY JAIL FACILITIES
REVENUE PREREFUNDED
2/1/02 @ 100 7.00 02/01/07 983,954
360,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY LEASE REVENUE
INDEPENDENT SCHOOL DISTRICT
#833 SOUTHERN WASHINGTON
PREREFUNDED 12/1/02 @ 100 6.60 12/01/02 378,421
380,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY LEASE REVENUE
INDEPENDENT SCHOOL DISTRICT
#833 SOUTHERN WASHINGTON
PREREFUNDED 12/1/02 @ 100 6.75 12/01/03 400,984
410,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY LEASE REVENUE
INDEPENDENT SCHOOL DISTRICT
#833 SOUTHERN WASHINGTON
PREREFUNDED 12/1/02 @ 100 6.90 12/01/04 434,157
435,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY LEASE REVENUE
INDEPENDENT SCHOOL DISTRICT
#833 SOUTHERN WASHINGTON
PREREFUNDED 12/1/02 @ 100 7.00 12/01/05 461,709
465,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY LEASE REVENUE
INDEPENDENT SCHOOL DISTRICT
#833 SOUTHERN WASHINGTON
PREREFUNDED 12/1/02 @ 100 7.00 12/01/06 493,551
1,000,000 WAYZATA MN INDEPENDENT SCHOOL
DISTRICT #284 GO SERIES B 5.85 02/01/10 1,037,830
1,000,000 WEST ST PAUL MN INDEPENDENT
SCHOOL DISTRICT #197 GO BONDS
FAS INSURED 4.75 02/01/12 917,800
825,000 WEST ST PAUL MN INDEPENDENT
SCHOOL DISTRICT #197 GO
CAPITAL APPRECIATION SCHOOL
BUILDING PROJECT MBIA INSURED
(ZERO COUPON) 5.40{::} 02/01/04 675,758
1,000,000 WEST ST PAUL MN INDEPENDENT
SCHOOL DISTRICT #197 GO
CAPITAL APPRECIATION SCHOOL
BUILDING PROJECT MBIA INSURED
(ZERO COUPON) 5.60{::} 02/01/06 730,470
1,430,000 WESTERN MINNESOTA MUNICIPAL
POWER AGENCY POWER REVENUE
SERIES A 6.13 01/01/16 1,429,929
2,755,000 WESTERN MINNESOTA MUNICIPAL
POWER AGENCY REVENUE
SERIES 1977A ESCROWED TO
MATURITY 6.38 01/01/16 2,949,723
1,500,000 WHITE BEAR LAKE MN FIRST
MORTGAGE NURSING HOME REVENUE
WHITE BEAR LAKE CARE CENTER 8.25 11/01/12 1,584,135
225,000 WRIGHT COUNTY MN GO SERIES B 5.80 02/01/04 231,478
184,008,922
------------
PUERTO RICO - 1.90%
2,000,000 COMMONWEALTH OF PUERTO RICO GO
MBIA INSURED 6.25 07/01/11 2,180,060
500,000 PUERTO RICO COMMONWEALTH GO
FGIC INSURED PREREFUNDED
7/1/01 @ 102 7.10 07/01/02 517,670
1,000,000 PUERTO RICO ELECTRIC POWER
AUTHORITY REVENUE SERIES S 6.13 07/01/08 1,079,650
3,777,380
------------
187,786,302
TOTAL MUNICIPAL BONDS (COST $189,199,200)
------------
MINNESOTA MUNICIPAL DEMAND NOTES - 3.60%
1,100,000 COTTAGE GROVE MN ENVIRONMENTAL
CONTROL REVENUE MINNESOTA
MINING & MANUFACTURING, LOC+ 4.43 08/01/12 1,100,000
1,500,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE MILLER
DWAN MEDICAL CENTER PROJECT
CREDIT LOCAL DE FRANCE LOC+ 4.70 06/01/19 1,500,000
2,765,000 MANKATO MN GO BONDS SERIES E
FIRST BANK LOC+ 5.40 02/01/18 2,765,000
100,000 ST LOUIS PARK MN INDUSTRIAL
DEVELOPMENT REVENUE UNICARE
HOMES INCORPORATED PROJECT
BANK OF AMERICA LOC+ 3.85 08/01/14 100,000
1,700,000 ST PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY
UTILITIES REVENUE REMARKETED
1/3/94 CREDIT LOCAL DE FRANCE
LOC+ 5.45 12/01/12 1,700,000
7,165,000
TOTAL MINNESOTA MUNICIPAL DEMAND NOTES
(COST $7,165,000)
------------
</TABLE>
41
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 0.55%
1,092,793 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET FUND+X+ $ 1,092,793
------------
1,092,793
TOTAL SHORT-TERM INSTRUMENTS (COST
$1,092,793)
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $197,456,993)* 98.55% $196,044,095
OTHER ASSETS AND LIABILITIES, NET 1.45 2,885,763
------- ------------
TOTAL NET ASSETS 100.00% $198,929,858
------- ------------
</TABLE>
{::} YIELD TO MATURITY
+ THESE VARIABLE RATE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH
REDUCES THE REMAINING MATURITY.
+X+ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND IS NOT CHARGED ANY
INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE WELLS FARGO MONEY
MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 3,041,525
GROSS UNREALIZED DEPRECIATION (4,454,423)
------------
NET UNREALIZED DEPRECIATION $ (1,412,898)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Development 3%
Education 25%
Facilities 5%
Industrial 1%
Housing 5%
Medical 22%
Pollution 2%
Utilities 17%
Airport 2%
General Obligation 13%
Transportation 5%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
42
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA MUNICIPAL BONDS - 95.33%
$1,000,000 BEMIDJI MN HOSPITAL FACILITIES
FIRST MORTGAGE REVENUE NORTH
COUNTRY HEALTH SERVICES
PROJECT 5.63% 09/01/21 $ 894,690
200,000 BEMIDJI MN HOSPITAL FACILITIES
FIRST MORTGAGE REVENUE NORTH
COUNTRY HEALTH SERVICES
PROJECT SERIES 1991 A GOLDMAN
SACHS & COMPANY LOC
PREREFUNDED 9/1/01 @ 102 7.00 09/01/11 211,042
2,000,000 BLOOMINGTON MN INDEPENDENT
SCHOOL DISTRICT #271 GO
SERIES B SCHOOL DISTRICT
CREDIT PROGRAM SUPPORT 5.00 02/01/20 1,757,640
100,000 BLOOMINGTON MN TAX INCREMENT
GO 9.70 02/01/04 117,882
210,000 BLOOMINGTON MN TAX INCREMENT
GO PREREFUNDED 2/01/05 @ 100 9.75 02/01/07 255,251
1,000,000 BRAINERD MN HFFA REVENUE
BENEDICTINE HEALTH-ST.
JOSEPH'S HEALTH CENTER
SERIES 1993 E CONNIE LEE
INSURED 6.00 02/15/20 981,600
2,530,000 BURNSVILLE MN HOSPITAL SYSTEM
REVENUE FAIRVIEW COMMUNITY
HOSPITALS ESCROWED TO MATURITY
(ZERO COUPON) 5.58{::} 05/01/12 1,150,720
500,000 CHASKA MN INDEPENDENT SCHOOL
DISTRICT #112 GO STATE CREDIT
ENHANCEMENT PROGRAM SERIES B
CROSSOVER REFUNDING 6.00 02/01/13 526,165
1,000,000 CUYUNA RANGE HOSPITAL DISTRICT
MN HEALTH FACILITIES GROSS
REVENUE SERIES A 6.00 06/01/19 857,800
1,395,000 DAKOTA COUNTY MN HOUSING &
REDEVELOPMENT AUTHORITY MFHR
GNMA COLLATERALIZED CREDIT
SUPPORT 7.38 12/01/29 1,487,781
250,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE BSM
PROPERTIES INCORPORATED
PROJECT SERIES A 5.63 12/01/18 206,508
750,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HEALTH CARE REVENUE
BSM PROPERTIES INCORPORATED
PROJECT SERIES A 5.88 12/01/28 615,810
500,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HOSPITAL FACILITIES
REVENUE ST. LUKE'S HOSPITAL OF
DULUTH SERIES B CONNIE LEE
INSURED 6.40 05/01/18 514,690
250,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA
SERIES 1992 6.40 02/01/03 252,723
460,000 EAGAN MN ICE ARENA GROSS
REVENUE SERIES B 5.50 04/01/19 416,861
500,000 GLENCOE MN HEALTH CARE REVENUE 6.40 12/01/15 461,540
690,000 GLENCOE MN HOSPITAL REVENUE 6.63 04/01/11 691,767
1,000,000 HIBBING MN HFFA REVENUE DULUTH
CLINIC LIMITED FSA INSURED
PREREFUNDED 11/1/13 @ 100 5.50 11/01/16 998,960
1,400,000 LAKEVILLE MN INDEPENDENT
SCHOOL DISTRICT #194 GO
SERIES A SCHOOL DISTRICT
CREDIT PROGRAM INSURED 5.13 02/01/22 1,243,424
1,000,000 LINO LAKES MN ECONOMIC
DEVELOPMENT AUTHORITY LEASING
REVENUE SERIES A 5.35 02/01/19 877,590
800,000 MANKATO MN HOSPITAL FACILITIES
REVENUE FIRST
MORTGAGE-IMMANUEL ST. JOSEPH'S
PROJECT SERIES A PREREFUNDED
8/1/02 @ 102 6.30 08/01/22 845,552
1,000,000 MINNEAPOLIS & ST. PAUL MN
HOUSING & REDEVELOPMENT
AUTHORITY HEALTH CARE SYSTEM
CHILDRENS HEALTH CARE REVENUE
SERIES A FSA INSURED 5.70 08/15/16 973,350
500,000 MINNEAPOLIS & ST. PAUL MN
HOUSING & REDEVELOPMENT
AUTHORITY HEALTH CARE SYSTEM
GROUP HEALTH PLAN INCORPORATED
PROJECT 6.75 12/01/13 501,015
1,000,000 MINNEAPOLIS & ST. PAUL MN
HOUSING & REDEVELOPMENT
AUTHORITY HEALTH CARE SYSTEM
GROUP HEALTH PLAN INCORPORATED
PROJECT 6.90 10/15/22 1,000,000
600,000 MINNEAPOLIS & ST. PAUL MN
HOUSING & REDEVELOPMENT
AUTHORITY HEALTH CARE SYSTEM
HEALTHONE OBLIGATED GROUP
PROJECT SERIES A MBIA INSURED
PREREFUNDED 8/15/00 @ 102 7.40 08/15/11 623,808
4,500,000 MINNEAPOLIS & ST. PAUL MN
METROPOLITAN AIRPORTS
COMMUNITY AIRPORT REVENUE
SERIES A AMBAC INSURED 5.00 01/01/22 3,865,995
1,000,000 MINNEAPOLIS & ST. PAUL MN
METROPOLITAN AIRPORTS
COMMUNITY AIRPORT REVENUE
SERIES A AMBAC INSURED 5.00 01/01/30 833,910
1,500,000 MINNEAPOLIS & ST. PAUL MN
METROPOLITAN AIRPORTS
COMMUNITY AIRPORT REVENUE
SERIES A FGIC INSURED 5.13 01/01/31 1,277,460
1,900,000 MINNEAPOLIS MN GO SERIES D 5.00 12/01/15 1,748,893
1,000,000 MINNEAPOLIS MN GO SPORTS ARENA
PROJECT 5.13 10/01/20 895,860
</TABLE>
43
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA MUNICIPAL BONDS (continued)
$ 500,000 MINNEAPOLIS MN HFFA REVENUE
EBENEZER SOCIETY PROJECT
SERIES A 7.20% 07/01/23 $ 490,845
1,000,000 MINNEAPOLIS MN WALKER
METHODIST SERVICES REVENUE
SERIES A 5.88 11/15/18 839,880
2,500,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT BOARD
HEALTH CARE REVENUE FAIRVIEW
HOSPITAL SERIES A MBIA INSURED 5.50 11/15/17 2,387,625
2,300,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT BOARD
HEALTH CARE REVENUE FAIRVIEW
HOSPITAL SERIES A MBIA INSURED 5.75 11/15/26 2,197,029
365,000 MINNESOTA HEFA REVENUE COLLEGE
OF ST. BENEDICT SERIES 3W
PREREFUNDED 3/1/04 @ 100 6.00 03/01/07 380,034
135,000 MINNESOTA HEFA REVENUE COLLEGE
OF ST. BENEDICT SERIES 3W
UNREFUNDED BALANCE 6.00 03/01/07 137,959
1,135,000 MINNESOTA IRON RANGE
RESOURCES & REHABILITATION
GROSS REVENUE GIANTS RIDGE
RECREATIONAL AREA 7.25 10/01/11 1,172,183
500,000 MINNESOTA PUBLIC FACILITIES
AUTHORITY WATER PCR SERIES A 4.75 03/01/16 436,320
500,000 MINNESOTA STATE GO 5.25 08/01/15 475,455
1,345,000 MINNESOTA STATE HEFA REVENUE
COLLEGE OF ST. BENEDICT
SERIES 4T 5.35 03/01/20 1,192,262
600,000 MINNESOTA STATE HEFA REVENUE
NORTHWEST COLLEGE SERIES 4Z 5.20 10/01/13 557,022
330,000 MINNESOTA STATE HOUSING
FINANCE AGENCY HOUSING
DEVELOPMENT REVENUE 6.25 02/01/20 333,620
550,000 MINNESOTA STATE HOUSING
FINANCE AGENCY HOUSING
DEVELOPMENT REVENUE SERIES A 6.85 02/01/07 570,108
470,000 MINNESOTA STATE HOUSING
FINANCE AGENCY RENTAL HOUSING
REVENUE SERIES B 6.25 08/01/22 470,639
970,000 MINNESOTA STATE HOUSING
FINANCE AGENCY RENTAL HOUSING
REVENUE SERIES D MBIA INSURED 5.80 08/01/11 975,529
400,000 MINNESOTA STATE HOUSING
FINANCE AGENCY RENTAL HOUSING
REVENUE SERIES D MBIA INSURED 5.90 08/01/15 393,580
750,000 MINNESOTA STATE HOUSING
FINANCE AGENCY RENTAL HOUSING
REVENUE SERIES D MBIA INSURED 6.00 02/01/22 734,685
915,000 MINNESOTA STATE HOUSING
FINANCE AGENCY SFMR REMARKETED
8/12/92 6.25 01/01/15 920,060
1,000,000 MINNESOTA STATE HOUSING
FINANCE AGENCY SFMR RENTAL
HOUSING SERIES A 5.38 08/01/28 890,110
550,000 MINNESOTA STATE HOUSING
FINANCE AGENCY SFMR SERIES A 5.95 01/01/17 546,513
2,000,000 MINNESOTA STATE HOUSING
FINANCE AGENCY SFMR SERIES I 6.05 07/01/27 1,922,440
1,650,000 MINNETONKA MN INDEPENDENT
SCHOOL DISTRICT #276 GO STATE
CREDIT ENHANCEMENT PROGRAM
SERIES B 5.75 02/01/22 1,605,681
825,000 MONTICELLO-BIG LAKE MN
COMMUNITY HOSPITAL DISTRICT
GROSS REVENUE HEALTH CARE
REVENUE SERIES A 5.45 12/01/12 747,137
750,000 MOORHEAD MN ECONOMIC
DEVELOPMENT AGENCY MFHR
EVENTIDE LUTHERAN HOME PROJECT
SERIES A PREREFUNDED 9/1/00 @
102 8.00 09/01/11 783,180
560,000 MOUNTAIN IRON MN HOUSING &
REDEVELOPMENT AUTHORITY LEASE
REVENUE NORTHEAST SERVICE
COOPERATIVE PROJECT SERIES A 6.25 10/01/19 529,570
1,000,000 NEW HOPE MN HOUSING & HEALTH
CARE FACILITIES REVENUE
MINNESOTA MASONIC HOME NORTH
RIDGE 5.90 03/01/19 852,970
500,000 NORTH BRANCH MN ELECTRIC
SYSTEMS REVENUE 5.40 05/01/18 450,030
1,000,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE 5.40 01/01/15 966,110
1,135,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE SERIES B AMBAC INSURED 5.50 01/01/18 1,075,435
2,020,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE SERIES B AMBAC INSURED 4.75 01/01/20 1,672,762
500,000 PARK RAPIDS MN INDEPENDENT
SCHOOL DISTRICT #309 GO 4.75 02/01/17 429,915
115,000 RED WING MN HFFA REVENUE RIVER
REGION OBLIGATED GROUP
SERIES 1993 B 6.35 09/01/07 115,992
300,000 ROBBINSDALE MN ECONOMIC
DEVELOPMENT AUTHORITY HOUSING
DEVELOPMENT GROSS REVENUE
SENIOR HOUSING PROJECT
SERIES A 6.63 01/01/19 294,291
1,000,000 ROCHESTER MN HFFA REVENUE MAYO
MEDICAL CENTER SERIES F 6.25 11/15/21 1,009,080
1,260,000 ROSEAU MN AREA HOSPITAL
DISTRICT HEALTH FACILITIES
GROSS REVENUE 5.75 10/01/23 1,030,113
205,000 SAVAGE MN ECONOMIC DEVELOPMENT
AUTHORITY REVENUE LEASE
REVENUE 5.40 02/01/14 192,589
</TABLE>
44
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA MUNICIPAL BONDS (continued)
$ 220,000 SAVAGE MN ECONOMIC DEVELOPMENT
AUTHORITY REVENUE LEASE
REVENUE 5.45% 02/01/15 $ 205,440
210,000 SAVAGE MN ECONOMIC DEVELOPMENT
AUTHORITY REVENUE LEASE
REVENUE 5.50 02/01/16 195,361
3,000,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE MBIA INSURED
(ZERO COUPON) 5.04{::} 01/01/21 825,510
6,690,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES A MBIA
INSURED (ZERO COUPON) 5.57{::} 01/01/24 1,516,757
500,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES C
MBIA-IBC INSURED 5.00 01/01/17 442,300
115,000 ST. CLOUD MN COP 5.40 12/01/08 112,718
120,000 ST. CLOUD MN COP 5.50 12/01/09 117,661
400,000 ST. CLOUD MN COP 5.90 12/01/17 384,180
2,500,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY
COMMERCIAL DEVELOPMENT REVENUE
ST. PAUL ACADEMY & SUMMIT
SCHOOL PROJECT 5.50 10/01/24 2,247,775
575,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY SFMR
FNMA MORTGAGE BACKED MANDATORY
REDEMPTION 3/1/07 @ 100
SECURITIES PROGRAM 6.25 09/01/14 587,575
2,000,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.75 07/01/17 2,000,000
5,500,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.50 07/01/21 5,227,530
240,000 VADNAIS HEIGHTS MN SFMR 6.00 11/01/09 237,348
245,000 WACONIA MN GO BONDS 6.00 06/01/07 250,897
500,000 WACONIA MN HOUSING &
REDEVELOPMENT AUTHORITY
REVENUE THE EVANGELICAL
LUTHERAN PROJECT SERIES A 5.85 06/01/06 505,746
71,721,838
TOTAL MINNESOTA MUNICIPAL BONDS
(COST $75,561,123)
-----------
MINNESOTA MUNICIPAL DEMAND NOTES - 1.99%
500,000 MANKATO MN GO BONDS SERIES E
FIRST BANK LOC+ 5.40 02/01/18 500,000
1,000,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY
HOUSING REVENUE SCIENCE MUSEUM
OF MINNESOTA SERIES B+ 5.45 05/01/27 1,000,000
1,500,000
TOTAL MINNESOTA MUNICIPAL DEMAND NOTES
(COST $1,500,000)
-----------
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 0.19%
140,622 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET FUND+X+ 140,622
-----------
140,622
TOTAL SHORT-TERM INSTRUMENTS
(COST $140,622)
-----------
</TABLE>
45
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $77,201,745)* 97.51% $73,362,460
OTHER ASSETS AND LIABILITIES, NET 2.49 1,876,306
------- -----------
TOTAL NET ASSETS 100.00% $75,238,766
------- -----------
</TABLE>
{::} YIELD TO MATURITY
+ THESE VARIABLE RATE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH
REDUCES THE REMAINING MATURITY.
+X+ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND IS NOT CHARGED ANY
INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE WELLS FARGO MONEY
MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 296,243
GROSS UNREALIZED DEPRECIATION (4,135,528)
------------
NET UNREALIZED DEPRECIATION $ (3,839,285)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Airport 8%
Education 24%
Facilities 3%
Housing 14%
Development 2%
Medical 30%
Pollution 1%
Utilities 10%
General Obligation 8%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
46
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 99.59%
ALABAMA - 1.39%
$1,000,000 BIRMINGHAM JEFFERSON AL CIVIC
CENTER AUTHORITY SPECIAL TAX
SERIES B 7.10% 01/01/01 $ 1,001,270
-----------
ALASKA - 5.25%
1,000,000 ALASKA STATE HOUSING FINANCE
CORPORATION HOUSING REVENUE
SERIES A GO OF CORPORATION LOC 6.38 12/01/12 1,055,830
2,000,000 NORTH SLOPE BORO AK GO CAPITAL
APPRECIATION SERIES A MBIA
INSURED (ZERO COUPON) 4.50{::} 06/30/07 1,343,100
1,750,000 NORTH SLOPE BORO AK GO CAPITAL
APPRECIATION SERIES B MBIA
INSURED (ZERO COUPON) 4.80{::} 06/30/04 1,394,523
3,793,453
-----------
ARIZONA - 2.32%
980,000 MARICOPA COUNTY AZ IDA HFFA
REVENUE SAMARITAN HEALTH
SERVICES SERIES B MBIA INSURED 7.15 12/01/05 1,058,155
610,000 MARICOPA COUNTY AZ IDA MFHR
ADVANTAGE POINT PROJECTS
SERIES A 5.75 07/01/01 618,156
1,676,311
-----------
CALIFORNIA - 1.77%
1,125,000 HAYWARD CA HOSPITAL REVENUE
ST. ROSE HOSPITAL 10.00 10/01/04 1,274,940
-----------
COLORADO - 8.88%
200,000 ARAPAHOE COUNTY CO CAPITAL
IMPROVEMENT TRUST FUND LAW
ENFORCEMENT REVENUE 4.13 12/01/05 190,288
400,000 AURORA CENTRETECH METROPOLITAN
DISTRICT CO GO SERIES C BANQUE
NATIONALE DE PARIS LOC 4.88 12/01/28 383,812
200,000 BOULDER COUNTY CO HOSPITAL
REVENUE LONGMONT UNITED
HOSPITAL PROJECT 4.80 12/01/03 195,118
385,000 BOULDER COUNTY CO HOSPITAL
REVENUE LONGMONT UNITED
HOSPITAL PROJECT 5.00 12/01/05 372,168
740,000 BOWLES METROPOLITAN DISTRICT
COLORADO GO 7.75 12/01/15 832,388
500,000 CENTRAL PLATTE VALLEY CO
METROPOLITAN DISTRICT GO ACA
INSURED 4.45 12/01/06 467,485
250,000 CENTRAL PLATTE VALLEY CO
METROPOLITAN DISTRICT GO ACA
INSURED 4.55 12/01/07 231,995
585,000 COLORADO HEALTH FACILITIES
AUTHORITY REVENUE NATIONAL
JEWISH MEDICAL & RESEARCH
CENTER 4.80 01/01/05 562,618
500,000 COLORADO HEALTH FACILITIES
AUTHORITY REVENUE
HOSPITAL-STEAMBOAT SPRINGS
HEALTH 5.30 09/15/09 462,580
220,000 COLORADO HFA SFMR SERIES C 5.00 05/01/05 215,653
15,000 COLORADO HFA SFMR SERIES DI
REMARKETED 7/15/94 6.25 12/01/01 15,119
15,000 COLORADO HFA SFMR SERIES DII
REMARKETED 11/15/97 6.38 12/01/01 15,090
300,000 COLORADO SPRINGS CO IDR DAYTON
HUDSON CORPORATION PROJECT 6.88 04/01/01 305,955
290,000 DENVER WEST METROPOLITAN
DISTRICT CO GO SERIES B 5.20 12/01/06 284,905
220,000 DENVER WEST METROPOLITAN
DISTRICT CO GO SERIES B 4.90 12/01/03 217,802
205,000 DENVER WEST METROPOLITAN
DISTRICT CO GO SERIES B 5.00 12/01/04 202,360
355,000 DENVER CO CITY & COUNTY
REVENUE HELEN G. BONFILS
FOUNDATION PROJECT SERIES B 9.50 12/01/01 387,120
1,070,000 TELLER COUNTY CO COP 5.50 12/01/09 1,069,219
6,411,675
-----------
FLORIDA - 2.04%
220,000 BRADFORD COUNTY FL HEALTH
FACILITES AUTHORITY HEALTH
FACILITIES REVENUE SANTA FE
HEALTHCARE FACILITES PROJECT 6.00 11/15/09 228,265
415,000 BROWARD COUNTY FL RESOURCE
RECOVERY REVENUE SES BROWARD
COMPANY LP SOUTH PROJECT 7.95 12/01/08 428,380
985,000 PLANTATION FL WATER & SEWER
REVENUE CAPITAL APPRECIATION
MBIA INSURED (ZERO COUPON) 5.68{::} 03/01/03 813,383
1,470,028
-----------
</TABLE>
47
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
IDAHO - 0.64%
$ 465,000 POCATELLO ID IDA REVENUE
ALLOCATION TAX INCREMENT 7.25% 12/01/08 $ 462,405
-----------
ILLINOIS - 11.13%
1,100,000 CHICACO IL TAX INCREMENT
ALLOCATION REVENUE CENTRAL
LOOP REDEVELOPMENT PROJECT
SERIES A AMBAC INSURED 5.25 06/01/07 1,107,469
865,000 DES PLAINES IL HOSPITAL
FACILITIES REVENUE HOLY FAMILY
HOSPITAL MBIA INSURED
PREREFUNDED 7/1/02 @ 100 10.63 01/01/03 929,806
1,050,000 GRUNDY COUNTY IL INDEPENDENT
SCHOOL DISTRICT NO. 5 GO AMBAC
INSURED 7.13 12/01/05 1,163,852
1,130,000 GRUNDY COUNTY IL INDEPENDENT
SCHOOL DISTRICT NO. 5 GO AMBAC
INSURED 7.13 12/01/06 1,263,079
425,000 ILLINOIS EDUCATIONAL
FACILITIES REVENUE CHICAGO
COLLEGE OF OSTEOPATHIC
ESCROWED TO MATURITY 8.75 07/01/05 471,491
355,000 ILLINOIS HEALTH FACILITIES
AUTHORITY REVENUE ALEXIAN
BROTHERS MEDICAL CENTER
PROJECT 7.00 01/01/03 367,375
795,000 ILLINOIS HEALTH FACILITIES
AUTHORITY REVENUE MERCY
HOSPITAL PROJECT 7.10 06/01/09 859,117
1,000,000 KANE COOK & DU PAGE COUNTIES
IL GO SCHOOL DISTRICT #46 FSA
INSURED 7.90 01/01/04 1,107,510
500,000 METROPOLITAN PIER & EXPOSITION
AUTHORITY IL DEDICATED STATE
TAX REVENUE MCCORMICK PLACE
EXPANSION PROJECT SERIES A
AMBAC INSURED 4.90 12/15/03 502,665
80,000 WAUKEGAN IL BOARD LIBRARY
TRUSTEES ECONOMIC DEVELOPMENT
REVENUE LIBRARY BUILDING NOTES 9.00 01/01/00 80,000
85,000 WAUKEGAN IL BOARD LIBRARY
TRUSTEES ECONOMIC DEVELOPMENT
REVENUE LIBRARY BUILDING NOTES 8.00 01/01/01 87,399
95,000 WAUKEGAN IL BOARD LIBRARY
TRUSTEES ECONOMIC DEVELOPMENT
REVENUE LIBRARY BUILDING NOTES 7.50 01/01/02 99,063
8,038,826
-----------
KANSAS - 2.63%
1,700,000 KANSAS CITY KS WATER &
ELECTRIC REVENUE 5.50 09/01/07 1,718,666
185,000 LAWRENCE KS HOSPITAL REVENUE
LAWRENCE MEMORIAL HOSPITAL 5.00 07/01/04 182,007
1,900,673
-----------
KENTUCKY - 1.75%
610,000 JEFFERSON COUNTY KY GO
SERIES C 5.38 05/15/01 615,423
640,000 JEFFERSON COUNTY KY GO
SERIES C 5.38 05/15/02 647,834
1,263,257
-----------
LOUISIANA - 0.43%
305,000 LOUISIANA PUBLIC FACILITIES
AUTHORITY MFHR EDGEWOOD
APARTMENTS FNMA INSURED 5.70 06/01/05 308,419
-----------
MAINE - 0.49%
345,000 STATE STREET HOUSING
PRESERVATION CORPORATION ME
MFHR PROJECT ACQUISITION 100
STATE STREET SERIES A HUD
SECTION 8 LOC 7.20 01/01/02 356,295
-----------
MARYLAND - 3.20%
2,000,000 CALVERT COUNTY MD EDA REVENUE
ASBURY-SOLOMONS ISLAND
FACILITIES PROJECT 8.38 01/01/15 2,314,960
-----------
MICHIGAN - 13.06%
535,000 BATTLE CREEK MI ECONOMIC
DEVELOPMENT REVENUE KELLOGG
COMPANY PROJECT REMARKETED
8/1/97 5.13 02/01/09 529,013
1,190,000 DETROIT MI SEWER DISPOSAL
REVENUE ESCROWED TO MATURITY 7.10 12/15/09 1,295,767
300,000 LAKEVIEW MI COMMUNITY SCHOOLS
GO FGIC INSURED 6.50 05/01/05 322,221
305,000 LAKEVIEW MI COMMUNITY SCHOOLS
GO FGIC INSURED 6.50 05/01/06 329,772
395,000 MERRILL MI COMMUNITY SCHOOL
DISTRICT GO FGIC INSURED 6.50 05/01/05 424,258
</TABLE>
48
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MICHIGAN (continued)
$ 415,000 MICHIGAN STATE HOSPITAL
FINANCE AUTHORITY REVENUE OSF
HEALTHCARE SYSTEM 5.25% 11/15/06 $ 408,634
435,000 MICHIGAN STATE HOSPITAL
FINANCE AUTHORITY REVENUE OSF
HEALTHCARE SYSTEM 5.38 11/15/07 428,262
935,000 MICHIGAN STATE HOSPITAL
FINANCE AUTHORITY REVENUE
CHARITY OBLIGATIONS SERIES D 4.80 11/01/17 936,935
270,000 MICHIGAN STATE HOUSING
DEVELOPMENT AUTHORITY RENTAL
HOUSING REVENUE SERIES A MBIA
CREDIT SUPPORT 5.35 10/01/02 272,130
2,500,000 MICHIGAN STATE HOSPITAL
FINANCE AUTHORITY REVENUE
HARPER-GRACE HOSPITALS 7.13 05/01/09 2,711,551
650,000 MICHIGAN STATE HOSPITAL
FINANCE AUTHORITY REVENUE
HENRY FORD HOSPITAL 9.00 05/01/04 718,465
2,305,000 ROMULUS MI GO COMMUNITY
SCHOOLS CAPITAL APPRECIATION
SERIES II FGIC INSURED
(ZERO COUPON) 4.95{::} 05/01/22 575,535
450,000 SCHOOLCRAFT MI COMMUNITY
SCHOOL DISTRICT GO FGIC
INSURED 6.50 05/01/04 479,574
9,432,117
-----------
MINNESOTA - 0.45%
160,000 ST. CLOUD MN COP MUNICIPAL
ATHLETIC COMPLEX 5.00 12/01/03 158,928
170,000 ST. CLOUD MN COP MUNICIPAL
ATHLETIC COMPLEX 5.10 12/01/04 168,509
327,437
-----------
MISSOURI - 0.32%
230,000 ST. LOUIS MO REGIONAL
CONVENTION & SPORTS COMPLEX
AUTHORITY REVENUE SERIES C 7.75 08/15/01 233,126
-----------
NEBRASKA - 1.93%
500,000 DOUGLAS COUNTY NE ZOO FACILITY
REVENUE OMAHAS HENRY DOORLY
ZOO PROJECT 5.15 09/01/06 494,720
500,000 DOUGLAS COUNTY NE ZOO FACILITY
REVENUE OMAHAS HENRY DOORLY
ZOO PROJECT 5.25 09/01/07 494,285
415,000 NEBRASKA INVESTMENT FINANCE
AUTHORITY HOSPITAL REVENUE
GREAT PLAINS REGIONAL MEDICAL
CENTER PROJECT 4.80 11/15/04 405,924
1,394,929
-----------
NEW YORK - 7.03%
490,000 COUNTY OF WESTCHESTER NY IDR
REVENUE AGR REALTY COMPANY
PROJECT 5.75 01/01/02 494,317
485,000 NEW YORK STATE DORM AUTHORITY
REVENUE CAPITAL APPRECIATION
SERIES A FSA INSURED (ZERO
COUPON) 5.29{::} 07/01/05 354,550
1,530,000 NEW YORK STATE HOUSING FINANCE
AGENCY EFA REVENUE STATE
UNIVERSITY CONSTRUCTION
ESCROWED TO MATURITY USG 6.50 11/01/06 1,610,279
235,000 NEW YORK NY GO SERIES F 5.00 08/01/03 235,500
2,000,000 NEW YORK NY SERIES F 5.00 08/01/06 1,976,540
405,000 SYRACUSE NY IDR 5.13 10/15/02 406,567
5,077,753
-----------
NORTH CAROLINA - 2.38%
1,000,000 NORTH CAROLINA MUNICIPAL POWER
AGENCY #1 CATAWBA ELECTRIC
REVENUE 5.75 01/01/02 1,007,870
700,000 NORTH CAROLINA MUNICIPAL POWER
AGENCY #1 CATAWBA ELECTRIC
REVENUE 5.90 01/01/03 708,225
1,716,095
-----------
OHIO - 2.56%
1,285,000 AKRON OH COP SPORTS FACILITIES
REVENUE MUNICIPAL BASEBALL
STADIUM PROJECT
(ZERO COUPON) 5.32{::} 12/01/01 1,167,024
230,000 AKRON OH COP SPORTS FACILITIES
REVENUE MUNICIPAL BASEBALL
STADIUM PROJECT
(ZERO COUPON) 6.50{::} 12/01/07 214,190
</TABLE>
49
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
OHIO (continued)
$ 415,000 OHIO STATE BUILDING AUTHORITY
REVENUE TOLEDO GOVERNMENT
OFFICE BUILDING 10.13% 10/01/06 $ 470,324
1,851,538
-----------
PENNSYLVANIA - 7.22%
295,000 DELAWARE COUNTY PA UNIVERSITY
REVENUE VILLANOVA UNIVERSITY 9.63 08/01/02 317,007
1,000,000 MONTGOMERY COUNTY PA IDA PCR
PECO ENERGY COMPANY SERIES B 5.30 10/01/34 989,600
1,000,000 NEW CASTLE PA AREA HOSPITAL
AUTHORITY HOSPITAL REVENUE ST.
FRANCIS HOSPITAL SERIES A 6.50 11/15/09 1,004,960
1,250,000 PENNSYLVANIA PA EDA REVENUE
NORTHWESTERN HUMAN SERVICES
SERIES A ACA INSURED 4.88 06/01/08 1,168,700
265,000 PHILADELPHIA PA GAS WORKS
REVENUE THIRTEENTH SERIES 7.50 06/15/01 274,365
385,000 PHILADELPHIA PA IDR GALLERY II
GARAGE PROJECT 6.13 02/15/03 383,298
1,000,000 WINDBER PA AREA AUTHORITY
HOSPITAL REVENUE WINDBER
HOSPITAL PROJECT FHA INSURED
PREREFUNDED 8/1/05 @ 102 6.50 02/01/30 1,078,660
5,216,590
-----------
RHODE ISLAND - 0.45%
320,000 RHODE ISLAND STATE STUDENT
LOAN AUTHORITY STUDENT LOAN
REVENUE RI SERIES B
GUARANTEED STUDENT LOANS
CREDIT SUPPORT 6.75 12/01/01 328,170
-----------
SOUTH CAROLINA - 2.17%
1,000,000 MEDICAL UNIVERSITY OF SOUTH
CAROLINA HOSPITAL FACILITIES
REVENUE COP HARBORVIEW OFFICE
TOWER PROJECT 7.38 01/01/04 1,046,560
500,000 SOUTH CAROLINA EDUCATIONAL
TELEVISION COMMUNITY COP
REVENUE ETV ENDOWMENT OF SOUTH
CAROLINA INCORPORATED FSA
INSURED 6.40 09/01/02 522,305
1,568,865
-----------
TEXAS - 14.78%
355,000 DE SOTO TX HOUSING FINANCE
CORPORATION MFHR WINDSOR
FOUNDATION PROJECT SERIES A 6.13 02/01/05 371,951
1,580,000 FORT BEND TX LEVEE IMPROVEMENT
DISTRICT #2 GO MBIA INSURED
(ZERO COUPON) 4.50{::} 02/15/03 1,353,823
535,000 GRAPE CREEK-PULLIAM TX
INDEPENDENT SCHOOL DISTRICT
EDUCATIONAL FACILITIES REVENUE
PUBLIC FACILITIES CORPORATION 6.20 05/15/02 539,873
250,000 HARLANDALE TX INDEPENDENT
SCHOOL DISTRICT PUBLIC
FACILITIES CORPORATION LEASE
REVENUE EDUCATIONAL FACILITIES
REVENUE 5.20 10/15/06 243,625
355,000 HEREFORD TX INDEPENDENT SCHOOL
DISTRICT EDUCATIONAL
FACILITIES REVENUE PUBLIC
FACILITIES CORPORATION SCHOOL
LEASE REVENUE 4.60 08/15/03 349,799
375,000 HEREFORD TX INDEPENDENT SCHOOL
DISTRICT EDUCATIONAL
FACILITIES REVENUE PUBLIC
FACILITIES CORPORATION SCHOOL
LEASE REVENUE 4.70 08/15/04 367,935
335,000 HOUSTON TX HOUSING FINANCE
CORPORATION SFMR SERIES A-1 8.00 06/01/14 350,252
110,000 HOUSTON TX HOUSING FINANCE
CORPORATION SFMR SERIES B-1 8.00 06/01/14 115,008
825,000 LUFKIN TX HEALTH FACILITIES
DEVELOPMENT CORPORATION HEALTH
SYSTEM REVENUE MEMORIAL HEALTH
SYSTEM OF EAST TEXAS 6.50 02/15/06 818,367
1,160,000 LYFORD TX CONSOLIDATED
INDEPENDENT SCHOOL DISTRICT
EDUCATIONAL FACILITIES REVENUE 5.00 08/15/07 1,114,307
3,100,000 MIDLAND COUNTY TX HOSPITAL
DISTRICT REVENUE CAPITAL
APPRECIATION AMBAC INSURED
(ZERO COUPON) 5.73{::} 06/01/07 2,016,240
280,000 SAN ANTONIO TX CERTIFICATE OF
OBLIGATION SERIES 2000 4.50 02/01/02 278,872
295,000 SAN ANTONIO TX CERTIFICATE OF
OBLIGATION SERIES 2000 4.50 02/01/03 292,646
305,000 SAN ANTONIO TX CERTIFICATE OF
OBLIGATION SERIES 2000 4.50 02/01/04 300,706
320,000 SAN ANTONIO TX CERTIFICATE OF
OBLIGATION SERIES 2000 4.50 02/01/05 313,453
335,000 SAN ANTONIO TX CERTIFICATE OF
OBLIGATION SERIES 2000 4.50 02/01/06 325,496
350,000 SAN ANTONIO TX CERTIFICATE OF
OBLIGATION SERIES 2000 4.50 02/01/07 337,131
</TABLE>
50
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
TEXAS (continued)
$ 387,000 SAN ANTONIO TX CERTIFICATE OF
OBLIGATION SERIES 2000 4.50% 02/01/08 $ 353,065
385,000 SAN ANTONIO TX CERTIFICATE OF
OBLIGATION SERIES 2000 4.63 02/01/09 367,032
455,000 SAN ANTONIO TX HIGHER
EDUCATION FACILITIES AUTHORITY
REVENUE UNIVERSITY OF TEXAS AT
SAN ANTONIO PHASE I 6.50 11/01/01 465,893
10,675,474
-----------
WASHINGTON - 4.61%
125,000 LONGVIEW WA HOUSING AUTHORITY
REVENUE MFHR POOLED PROJECT
FINANCING 4.60 10/01/03 121,471
125,000 LONGVIEW WA HOUSING AUTHORITY
REVENUE MFHR POOLED PROJECT
FINANCING 4.70 10/01/04 120,658
125,000 LONGVIEW WA HOUSING AUTHORITY
REVENUE MFHR POOLED PROJECT
FINANCING 4.75 10/01/05 120,005
125,000 LONGVIEW WA HOUSING AUTHORITY
REVENUE MFHR POOLED PROJECT
FINANCING 4.75 10/01/06 118,950
850,000 SEATTLE WA MFHR MARKET HOUSE
ELDERLY HOUSING SERIES A 6.20 02/01/04 856,426
2,000,000 WASHINGTON STATE HOUSING
FINANCE COMMISSION NONPROFIT
HOUSING REVENUE OCEAN RIDGE
APARTMENTS PROJECT SERIES A 5.25 07/01/02 1,994,000
3,331,510
WISCONSIN - 0.71%
500,000 WISCONSIN HOUSING & EDA
HOUSING REVENUE SERIES A HUD
INSURED 6.20 11/01/01 508,015
-----------
71,934,131
TOTAL MUNICIPAL BONDS (COST $72,984,704)
-----------
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 3.05%
2,204,530 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET FUND+X+ 2,204,530
-----------
2,204,530
TOTAL SHORT-TERM INSTRUMENTS
(COST $2,204,530)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $75,189,234)* 102.64% $74,138,661
OTHER ASSETS AND LIABILITIES, NET (2.64) (1,911,220)
------- -----------
TOTAL NET ASSETS 100.00% $72,227,441
------- -----------
</TABLE>
{::} YIELD TO MATURITY.
+X+ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND IS NOT CHARGED ANY
INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE WELLS FARGO MONEY
MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 101,791
GROSS UNREALIZED DEPRECIATION (1,152,364)
------------
NET UNREALIZED DEPRECIATION $ (1,050,573)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Development 9%
Education 17%
Facilities 8%
Housing 10%
Medical 23%
Pollution 1%
Utilities 10%
General Obligation 18%
Tax-Free Money Market Fund 3%
Industrial 1%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
51
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 98.25%
ALABAMA - 0.79%
$3,680,000 ALABAMA STATE PUBLIC SCHOOL &
COLLEGE AUTHORITY CAPITAL
IMPROVEMENT REVENUE 4.25% 11/01/18 $ 2,878,496
------------
ALASKA - 0.37%
1,545,000 MATANUSKA-SUSITNA BORO AK FGIC
INSURED 4.50 03/01/17 1,259,870
100,000 VALDEZ AK MARINE TERMINAL
REVENUE BP PIPELINES
INCORPORATED PROJECT SERIES A 5.85 08/01/25 93,830
1,353,700
------------
ARIZONA - 0.99%
3,000,000 MARICOPA COUNTY AZ UNION
SCHOOL DISTRICT #48 GO SCHOOL
IMPROVEMENTS 9.00 07/01/05 3,583,590
------------
CALIFORNIA - 3.11%
20,000 CALIFORNIA STATE GO 6.00 02/01/01 20,386
1,800,000 DUARTE CA COP HEALTH CARE
REVENUE SERIES A 5.00 04/01/10 1,636,488
1,750,000 LOS ANGELES CA COMMUNITY
REDEVELOPMENT AGENCY HOUSING
REVENUE MONTEREY HILLS
REDEVELOPMENT PROJECT
SERIES A 8.20 12/01/13 1,876,192
7,000,000 METROPOLITAN WATER DISTRICT
SOUTHERN CALIFORNIA,
WATERWORKS REVENUE INVERSE
REGIONAL RESIDUAL INTEREST
BOND SERIES PROJECT+ 6.91 08/10/18 6,868,750
1,000,000 STUDENT EDUCATION LOAN
MARKETING CORPORATION CA
STUDENT LOAN REVENUE
SERIES IV-D1 GUARANTEED BY
STUDENT LOANS 5.88 01/01/18 887,920
11,289,736
------------
COLORADO - 8.22%
1,930,000 ADAMS COUNTY CO SFMR
SERIES A2 8.70 06/01/12 2,051,705
1,750,000 ARAPAHOE COUNTY CO UTILITIES
REVENUE WATER & WASTEWATER
AUTHORITY 6.25 12/01/20 1,677,113
2,000,000 BLACK HAWK CO BUSINESS
IMPROVEMENTS DISTRICT SPECIAL
ASSESSMENT SERIES H981 7.00 12/01/11 2,015,640
1,000,000 COLORADO HFFA REVENUE HOSPITAL
STEAMBOAT SPRINGS HEALTH 5.75 09/15/22 839,880
2,750,000 COLORADO HFFA REVENUE POUDRE
VALLEY HEALTH PROJECT
SERIES A FSA INSURED 5.75 12/01/23 2,599,850
1,000,000 COLORADO HFFA REVENUE
STEAMBOAT SPRINGS HEALTH
PROJECT 5.70 09/15/23 831,480
1,000,000 COLORADO HFA GO SERIES A 7.40 05/01/11 1,032,660
1,190,000 COLORADO HFA SFMR SERIES A2 7.15 11/01/14 1,256,783
1,500,000 COLORADO HFA SFMR SERIES B2 7.50 12/01/16 1,575,570
1,685,000 COLORADO HFA SFMR SERIES C 7.90 12/01/24 1,799,428
1,320,000 COLORADO HFA SFMR SERIES D1
REMARKETED 7/15/94 8.00 12/01/24 1,398,316
1,000,000 COLORADO HFA SFMR SERIES D2
REMARKETED 11/15/94 8.13 06/01/25 1,047,780
5,200,000 DENVER CO URBAN RENEWAL
AUTHORITY TAX INCREMENT
REVENUE REMARKETED 6/15/94 9.13 09/01/17 5,992,376
3,500,000 EL PASO COUNTY CO GO SCHOOL
DISTRICT #11 COLORADO SPRINGS 7.10 12/01/17 4,002,600
250,000 LOGAN COUNTY CO SFMR SERIES A 8.50 11/01/11 256,650
960,000 ADAMS COUNTY CO NORTHERN
METROPOLITAN DISTRICT REVENUE 6.50 12/01/16 956,227
475,000 VAIL CO SFMR SERIES 1992 A 8.13 06/01/10 509,979
29,844,037
------------
CONNECTICUT - 0.01%
40,000 CONNECTICUT STATE HFA HOUSING
MORTGAGE FINANCE PROGRAM
SERIES B4 7.30 11/15/03 40,280
------------
FLORIDA - 0.90%
95,000 BREVARD COUNTY FL HFA SFMR
SERIES B 7.00 03/01/13 97,064
3,000,000 LAKELAND FL ELECTRIC & WATER
REVENUE FIRST LIEN SERIES B
FSA INSURED 6.05 10/01/14 3,155,610
3,252,674
------------
</TABLE>
52
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
GEORGIA - 1.28%
$3,500,000 ATLANTA GA WATER & WASTEWATER
REVENUE SERIES A FGIC INSURED 5.50% 11/01/22 $ 3,316,915
1,500,000 HOUSTON COUNTY GA DEVELOPMENT
AUTHORITY MFHR EMERALD COAST
HOUSING SERIES A 7.00 08/01/28 1,346,085
4,663,000
------------
HAWAII - 1.71%
6,950,000 HAWAII STATE DEPARTMENT OF
BUDGET & FINANCE SPECIAL
PURPOSE REVENUE THE QUEENS
HEALTH SYSTEMS SERIES A 5.75 07/01/26 6,199,193
------------
IDAHO - 0.40%
960,000 IDAHO HOUSING AGENCY SFMR
SERIES C2 PREREFUNDED 1/1/05
@ 102 6.35 07/01/15 972,422
470,000 POCATELLO ID IDA REVENUE
ALLOCATION TAX INCREMENT
SERIES B 7.25 12/01/08 467,377
1,439,799
------------
ILLINOIS - 11.11%
200,000 CHICAGO IL O'HARE
INTERNATIONAL AIRPORT REVENUE
SECOND LIEN SERIES A 6.75 01/01/06 217,090
500,000 CHICAGO IL O'HARE
INTERNATIONAL AIRPORT SPECIAL
FACILITIES REVENUE LUFTHANSA
GERMAN AIRLINES PROJECT 7.13 05/01/18 520,605
35,000,000 ILLINOIS DEVELOPMENT FINANCIAL
AUTHORITY RETIREMENT HOUSING
REVENUE REGENCY PARK SERIES A
(ZERO COUPON) 6.24{::} 07/15/23 7,137,550
1,000,000 ILLINOIS DEVELOPMENT FINANCIAL
AUTHORITY REVENUE COMMUNITY
REHABILITATION PROVIDERS
SERIES A 5.70 07/01/19 848,740
1,120,000 ILLINOIS DEVELOPMENT FINANCIAL
AUTHORITY REVENUE COMMUNITY
REHABILITATION PROVIDERS
SERIES C 5.65 07/01/19 946,826
950,000 ILLINOIS DEVELOPMENT FINANCIAL
AUTHORITY REVENUE COMMUNITY
REHABILITATION PROVIDERS
SERIES A 7.88 07/01/20 968,250
1,735,000 ILLINOIS DEVELOPMENT FINANCIAL
AUTHORITY REVENUE COMMUNITY
REHABILITATION PROVIDERS
SERIES A 7.88 07/01/20 1,984,753
4,940,000 ILLINOIS EDUCATIONAL
FACILITIES AUTHORITY REVENUE
CAPITAL APPRECIATION REFUNDED
(ZERO COUPON) 5.99{::} 07/01/14 1,937,171
4,500,000 ILLINOIS HFFA REVENUE OSF
HEALTHCARE SYSTEM 6.25 11/15/29 4,195,800
1,000,000 ILLINOIS HFFA REVENUE EDWARD
HOSPITAL SERIES A 5.75 02/15/09 996,420
1,120,000 ILLINOIS HFFA REVENUE
EDGEWATER MEDICAL CENTER
SERIES A 9.25 07/01/24 1,309,986
1,025,000 LAKE COUNTY IL COMMUNITY UNIT
SCHOOL DISTRICT #116
EDUCATIONAL FACILITIES REVENUE
RUND LAKE 7.60 02/01/13 1,216,009
7,350,000 REGIONAL TRANSPORTATION
AUTHORITY IL SALES TAX REVENUE
SERIES D FGIC INSURED 7.75 06/01/19 8,817,721
8,000,000 REGIONAL TRANSPORTATION
AUTHORITY IL TRANSPORTATION
REVENUE FGIC INSURED 6.00 06/01/23 7,959,680
1,115,000 WILL COUNTY IL USD #365 GO
AMBAC INSURED 7.10 12/01/10 1,270,732
40,327,333
------------
INDIANA - 0.89%
3,400,000 INDIANA TRANSPORTATION
FINANCIAL AUTHORITY HIGHWAY
REVENUE SERIES A AMBAC INSURED 5.25 06/01/15 3,220,888
------------
IOWA - 0.84%
1,340,000 IOWA FINANCE AUTHORITY SFMR
MORTGAGE BACKED SECURITIES
PROGRAM SERIES B 6.95 07/01/24 1,372,093
200,000 IOWA FINANCE AUTHORITY SFMR
SERIES B 7.45 07/01/23 205,362
1,565,000 IOWA HFFA REVENUE MERCY HEALTH
SYSTEM SERIES V 5.00 08/15/10 1,461,225
3,038,680
------------
KANSAS - 2.07%
3,175,000 KANSAS STATE DOT HIGHWAY
REVENUE SERIES A 7.25 09/01/08 3,649,028
</TABLE>
53
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
KANSAS (continued)
$3,755,000 SEDGWICK & SHAWNEE COUNTIES KS
SFMR MORTGAGE BACKED
SECURITIES SERIES A2
COLLATERALIZED BY GNMA 6.70% 06/01/29 $ 3,846,171
7,495,199
------------
KENTUCKY - 0.03%
120,000 KENTUCKY HOUSING CORPORATION
HOUSING REVENUE SERIES A 6.50 07/01/17 122,021
------------
LOUISIANA - 1.30%
255,000 LOUISIANA PUBLIC FACILITIES
AUTHORITY REVENUE STUDENT LOAN
LA OPPORTUNITY LOANS SERIES A 6.85 01/01/09 266,942
2,000,000 LOUISIANA STADIUM & EXPOSITION
DISTRICT HOTEL OCCUPANCY
TAX & STADIUM REVENUE 4.75 07/01/21 1,635,580
5,000,000 RAPIDES PARISH LA HOUSING &
MORTGAGE FINANCE AUTHORITY
CAPITAL APPRECIATION REVENUE
SERIES C (ZERO COUPON) 7.45{::} 07/10/14 1,826,250
2,900,000 ST BERNARD PARISH LA HOUSING
MORTGAGE AUTHORITY SFMR
SERIES 1992 C (ZERO COUPON) 7.65{::} 07/10/14 989,451
4,718,223
------------
MARYLAND - 0.86%
3,520,000 MARYLAND STATE ECONOMIC
DEVELOPMENT CORPORATION
STUDENT HOUSING REVENUE
COLLEGIATE HOUSING
COURTYARD A PROJECT 5.75 06/01/31 3,131,322
------------
MASSACHUSETTS - 7.14%
5,325,000 MASSACHUSETTS BAY
TRANSPORTATION AUTHORITY
GENERAL TRANSPORTATION SYSTEM
REVENUE SERIES B 6.20 03/01/16 5,574,529
4,490,000 MASSACHUSETTS EDFA REVENUE
SERIES C MBIA INSURED 4.80 12/01/10 4,208,791
2,500,000 MASSACHUSETTS STATE COLLEGE
BUILDING AUTHORITY EDUCATIONAL
FACILITIES REVENUE SERIES A 7.50 05/01/14 2,953,300
2,235,000 MASSACHUSETTS STATE
DEVELOPMENT FINANCE AGENCY
RESOURCE RECOVERY REVENUE
OGDEN HAVERHILL PROJECT
SERIES B 5.30 12/01/14 1,994,514
2,500,000 MASSACHUSETTS STATE HEALTH &
EDUCATIONAL FACILITIES
AUTHORITY REVENUE CARITAS
CHRISTI OBLIGATIONS GROUP A 5.70 07/01/15 2,174,200
1,000,000 MASSACHUSETTS STATE HFA
RESIDENTIAL DEVELOPMENT FNMA
COLLATERALIZED 6.90 11/15/21 1,052,120
1,225,000 MASSACHUSETTS STATE HFA SFMR
SERIES 26 5.60 06/01/25 1,132,966
2,500,000 MASSACHUSETTS STATE INDUSTRIAL
FINANCE AGENCY NURSING HOME
REVENUE FHA-UNIVERSITY COMMONS
NURSING HOME SERIES A FHA
INSURED 6.65 08/01/38 2,547,975
5,000,000 MASSACHUSETTS STATE WATER
RESOURCES AUTHORITY SERIES A
FSA GO 4.75 08/01/37 3,877,500
380,000 NEW BEDFORD MA IDA REVENUE
AEROVOX INCORPORATED PROJECT
SERIES 1982 7.42 07/01/02 382,322
25,898,217
------------
MICHIGAN - 2.61%
2,000,000 MICHIGAN STATE HFFA REVENUE
ASCENSION HEALTH CREDIT
SERIES A 6.13 11/15/26 1,912,440
3,500,000 MICHIGAN STATE HFFA REVENUE
BOND HENRY FORD HEALTH SYSTEM
SERIES A 6.00 11/15/24 3,281,215
1,000,000 MICHIGAN STATE HFFA REVENUE
MERCY MOUNT CLEMENS SERIES A
MBIA INSURED 5.75 05/15/29 936,860
2,760,000 WAYLAND MI USD GO FGIC INSURED 8.00 05/01/10 3,349,260
9,479,775
------------
MINNESOTA - 0.77%
320,000 MINNEAPOLIS ST. PAUL MN
HOUSING FINANCE BOARD SFMR
PHASE IX 7.30 08/01/31 327,734
2,575,000 MINNESOTA STATE HFA SFMR
SERIES I 6.05 07/01/27 2,475,142
2,802,876
------------
</TABLE>
54
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MISSISSIPPI - 0.63%
$1,500,000 MISSISSIPPI DEVELOPMENT BANK
SPECIAL OBLIGATION CAPITAL
PROJECTS & EQUIPMENT
ACQUISITION SERIES A1 5.88% 07/01/24 $ 1,449,975
2,000,000 MISSISSIPPI HOME CORPORATION
RESIDUAL CAPITAL APPRECIATION
REVENUE SERIES 1992 II (ZERO
COUPON) 7.38{::} 04/15/12 828,560
2,278,535
------------
NEBRASKA - 1.09%
1,750,000 DOUGLAS COUNTY NE ZOO FACILITY
REVENUE HENRY DOORLY ZOO
PROJECT 5.88 09/01/14 1,725,342
1,440,000 NEBRASKA EDFA REVENUE
CREIGHTON UNIVERSITY PROJECT
SERIES B 4.30 09/01/08 1,319,717
975,000 NEBRASKA INVESTMENT FINANCE
AUTHORITY SFMR SERIES B 5.85 09/01/28 918,255
3,963,314
------------
NEW HAMPSHIRE - 0.16%
565,000 NEW HAMPSHIRE HIGHER
EDUCATION & HEALTH FACILITIES
AUTHORITY REVENUE NEW LONDON
HOSPITAL ASSOCIATION PROJECT 7.00 06/01/00 568,661
------------
NEW JERSEY - 0.79%
1,570,000 NEW JERSEY HEALTH CARE
FACILITIES FINANCING AUTHORITY
REVENUE ENGLEWOOD HOSPITAL &
MEDICAL CENTER 6.50 07/01/09 1,566,154
1,250,000 NEW JERSEY STATE HOUSING &
MORTGAGE FINANCE AGENCY MFHR
PRESIDENTIAL PLAZA FHA INSURED 7.00 05/01/30 1,309,700
2,875,854
------------
NEW MEXICO - 4.20%
1,500,000 BERNALILLO COUNTY NM GROSS
RECEIPTS TAX REVENUE 5.20 04/01/21 1,358,805
1,475,000 BERNALILLO COUNTY NM GROSS
RECEIPTS TAX REVENUE 5.25 04/01/27 1,319,874
3,500,000 BERNALILLO COUNTY NM GROSS
RECEIPTS TAX REVENUE SERIES B 5.70 04/01/27 3,376,380
2,000,000 FARMINGTON NM PCR PUBLIC
SERVICE REVENUE COMPANY SAN
JUAN PROJECT SERIES D 6.38 04/01/22 1,877,960
725,000 HOBBS NM SFMR 8.75 07/01/11 778,375
6,585,000 SANTA FE COUNTY NM
CORRECTIONAL SYSTEMS REVENUE
FSA INSURED 6.00 02/01/27 6,543,844
15,255,238
------------
NEW YORK - 4.32%
10,000,000 METROPOLITAN TRANSPORTATION
AUTHORITY NY TRANSPORTATION
FACILITIES REVENUE SERIES A
MBIA INSURED 5.63 07/01/25 9,389,500
2,400,000 NEW YORK CITY TRANSITIONAL
FINANCE AUTHORITY REVENUE 4.75 05/01/23 1,963,368
1,480,000 NEW YORK NY GO SERIES B1
PREREFUNDED 8/15/04 @ 101 7.30 08/15/10 1,644,176
1,340,000 NEW YORK NY GO SERIES B1
PREREFUNDED 8/15/04 @ 101 7.38 08/15/13 1,492,773
1,200,000 NEW YORK STATE DORM AUTHORITY
HEALTH CARE REVENUE GOOD
SAMARITAN HOSPITAL SUFFERN 5.50 07/01/10 1,196,220
15,686,037
------------
NORTH CAROLINA - 0.99%
4,000,000 NORTH CAROLINA EASTERN
MUNICIPAL POWER REVENUE
SERIES B 5.70 01/01/17 3,587,240
------------
OHIO - 0.27%
1,000,000 PIKE COUNTY OH HOSPITAL
FACILITIES REVENUE PIKE HEALTH
SERVICES PROJECT INCORPORATED 6.35 07/01/07 987,020
------------
OKLAHOMA - 0.64%
200,000 PRYOR CREEK OK EDA MORTGAGE
REVENUE SERIES A 7.13 07/01/21 203,210
385,000 TULSA COUNTY OK HFA MORTGAGE
REVENUE GNMA COLLATERALIZED
SERIES B 7.55 05/01/23 394,844
435,000 TULSA COUNTY OK HFA MORTGAGE
REVENUE GNMA COLLATERALIZED
SERIES C 7.10 06/01/22 444,618
</TABLE>
55
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
OKLAHOMA (continued)
$1,245,000 TULSA OK IDA REVENUE
UNIVERSITY OF TULSA SERIES A
MBIA INSURED 6.00% 10/01/16 $ 1,276,698
2,319,370
------------
OREGON - 3.17%
10,000,000 KLAMATH FALLS OR ELECTRIC
REVENUE LIEN-KLAMATH COGEN 6.00 01/01/25 8,870,100
1,000,000 OREGON STATE HEALTH HOUSING
EDUCATIONAL & CULTURAL
FACILITIES AUTHORITY 5.25 10/01/16 835,340
2,000,000 WASHINGTON COUNTY OR HFA
REVENUE AFFORDABLE HOUSING
POOL SERIES A 6.13 07/01/29 1,803,420
11,508,860
------------
PENNSYLVANIA - 4.78%
2,250,000 CHESTER COUNTY PA HEALTH &
EDUCATION FACILITIES AUTHORITY
REVENUE JEFFERSON HEALTH
SYSTEM SERIES B 5.38 05/15/27 1,873,957
4,230,000 CUMBERLAND COUNTY PA MUNICIPAL
AUTHORITY REVENUE CARLISLE
HOSPITAL & HEALTH 6.80 11/15/23 4,234,822
1,375,000 MONTGOMERY COUNTY PA HIGHER
EDUCATION & HEALTH AUTHORITY
HOSPITAL REVENUE MONTGOMERY
HOSPITAL MEDICAL CENTER
PROJECT SERIES B 6.60 07/01/10 1,360,164
500,000 PENNSYLVANIA STATE HIGHER
EDUCATION ASSISTANCE AGENCY
STUDENT LOAN REVENUE SERIES A
AMBAC INSURED 7.05 10/01/16 529,775
6,000,000 PENNSYLVANIA STATE HIGHER
EDUCATION ASSISTANCE AGENCY
STUDENT LOAN REVENUE SERIES A
AMBAC INSURED+ 7.70 03/01/22 5,827,500
4,500,000 PHILADELPHIA PA SCHOOL
DISTRICT GO SERIES A MBIA
INSURED 4.50 04/01/23 3,504,150
17,330,368
------------
SOUTH CAROLINA - 4.60%
10,625,000 CONNECTOR 2000 ASSOCIATION
INCORPORATED SC TOLL ROAD
REVENUE SOUTHERN CONNECTOR
PROJECT SERIES A 5.38 01/01/38 8,115,056
3,170,000 PIEDMONT SC MUNICIPAL POWER
AGENCY ELECTRIC REVENUE
SERIES A 6.55 01/01/16 3,067,989
2,000,000 PIEDMONT SC MUNICIPAL POWER
AGENCY ELECTRIC REVENUE
SERIES A 5.25 01/01/21 1,629,200
2,420,000 PIEDMONT SC MUNICIPAL POWER
AGENCY ELECTRIC REVENUE
SERIES A 6.60 01/01/21 2,336,195
1,600,000 PIEDMONT SC MUNICIPAL POWER
AGENCY ELECTRIC REVENUE
SERIES A MBIA INSURED 5.25 01/01/12 1,562,448
16,710,888
------------
SOUTH DAKOTA - 1.00%
3,500,000 SOUTH DAKOTA STATE HEFA
REVENUE HURON REGIONAL MEDICAL
CENTER 7.30 04/01/16 3,643,675
------------
TENNESSEE - 2.26%
4,000,000 METROPOLITAN GOVERNMENTS OF
NASHVILLE & DAVIDSON COUNTIES
TN HEALTH & EDUCATION
FACILITIES REVENUE ASCENSION
HEALTH CREDIT SERIES A 6.00 11/15/30 3,764,960
14,250,000 METROPOLITAN GOVERNMENTS OF
NASHVILLE & DAVIDSON COUNTY TN
HEALTH & EDUCATIONAL
FACILITIES REVENUE VOLUNTEER
HEALTH CARE (ZERO COUPON) 5.72{::} 06/01/21 3,481,418
1,000,000 SHELBY COUNTY TN HEALTH
EDUCATIONAL & HOUSING
FACILITIES BOARD REVENUE MFHR
CAMERON KIRBY 6.00 07/01/28 950,380
8,196,758
------------
TEXAS - 10.63%
370,000 BAYTOWN TX HOUSING FINANCE
CORPORATION SFMR SERIES 1992 A 8.50 09/01/11 398,205
1,670,000 BEAUMONT TX HOUSING FINANCE
CORPORATION REVENUE 9.20 03/01/12 1,813,954
2,900,000 BRAZOS RIVER AUTHORITY TX
UTILITIES REVENUE HOUSTON
INDUSTRIES INCORPORATED
PROJECT SERIES A 5.13 05/01/19 2,546,026
2,000,000 COLUMBIA & BRAZORIA TX
INDEPENDENT SCHOOL DISTRICT GO
BOND PSFG INSURED 4.75 02/01/25 1,613,800
1,295,000 CORPUS CHRISTI TX HFA HOUSING
REVENUE SERIES A MBIA INSURED 7.70 07/01/11 1,346,839
</TABLE>
56
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
TEXAS (continued)
$2,395,000 DESOTO TX HOUSING FINANCE
CORPORATION MFHR WINDSOR
FOUNDATION PROJECT SERIES A 7.00% 02/01/25 $ 2,658,498
195,000 EL PASO TX HOUSING FINANCE
CORPORATION SFMR SERIES A 8.75 10/01/11 209,301
2,000,000 FORT BEND TX INDEPENDENT
SCHOOL DISTRICT PUBLIC SCHOOL
FINANCE INSURED 5.38 02/15/24 1,803,960
240,000 GALVESTON COUNTY TX PROPERTY
FINANCE AUTHORITY INCORPORATED
SFMR SERIES A 8.50 09/01/11 259,339
1,300,000 GRAPE CREEK-PULLIAM TX
INDEPENDENT SCHOOL DISTRICT
PUBLIC FACILITIES CORPORATION
GO 7.25 05/15/21 1,349,569
1,000,000 GULF COAST WASTE DISPOSAL
AUTHORITY TEXAS PREREFUNDED
3/1/08 @ 102 5.50 09/01/17 864,160
1,115,000 HARLANDALE TX INDEPENDENT
SCHOOL DISTRICT PUBLIC
FACILITIES CORPORATION LEASE
REVENUE EDUCATIONAL FACILITIES
REVENUE 5.50 10/15/12 1,056,072
4,385,000 HOUSTON TX HOUSING FINANCE
CORPORATION SFMR SERIES A1 8.00 06/01/14 4,584,649
2,675,000 HOUSTON TX HOUSING FINANCE
CORPORATION SFMR SERIES B1 8.00 06/01/14 2,796,792
1,000,000 LA PORTE TX GO INDEPENDENT
SCHOOL DISTRICT PSFG 4.25 02/15/18 777,560
1,000,000 LA PORTE TX GO INDEPENDENT
SCHOOL DISTRICT PSFG 4.25 02/15/19 766,540
1,595,000 LUFKIN TX HEALTH FACILITIES
DEVELOPMENT CORPORATION HEALTH
SYSTEM REVENUE MEMORIAL HEALTH
SYSTEM OF EAST TEXAS 6.88 02/15/26 1,569,193
125,000 PORT ARTHUR TX GO 8.50 02/15/03 138,348
1,095,000 PORT ARTHUR TX HOUSING FINANCE
CORPORATION SFMR 8.70 03/01/12 1,186,356
4,180,000 SAN ANTONIO TX HIGHER
EDUCATION AUTHORITY
INCORPORATED EDUCATIONAL
FACILITIES REVENUE 7.13 11/01/15 4,335,789
2,220,000 SAN ANTONIO TX TEXAS
ELECTRIC & GAS UTILITIES
REVENUE UNREFUNDED BALANCE 5.80 02/01/06 2,298,233
1,040,000 TEXAS ST PFA BUILDING REVENUE
STATE PRESERVATION BOARD
SERIES A AMBAC INSURED 4.50 02/01/17 853,362
2,200,000 TEXAS STATE DEPARTMENT OF
HOUSING AND COMMUNITY AFFAIRS
SFMR SERIES A 8.10 09/01/15 2,400,376
695,000 TEXOMA HOUSING FINANCE
CORPORATION TX SFMR GNMA/FNMA
MORTGAGED BACKED SECURITIES
PROGRAM 5.80 09/01/28 649,352
300,000 TRAVIS COUNTY TX HOUSING
FINANCE CORPORATION
RESIDENTIAL MORTGAGE REVENUE
GNMA/ FNMA MORTGAGE BACKED
SERIES A 7.00 12/01/11 308,994
38,585,267
------------
UTAH - 3.01%
250,000 SALT LAKE CITY UT
REDEVELOPMENT AGENCY
CERTIFICATES OF BOND DISTRICT
NEIGHBORHOOD REDEVELOPMENT TAX
SERIES A 6.50 10/01/01 257,198
2,450,000 SALT LAKE COUNTY UT EDFA
REVENUE WESTMINSTER COLLEGE
PROJECT 5.75 10/01/27 2,200,516
1,100,000 UTAH STATE BOARD REGENTS
STUDENT LOAN REVENUE AMORTIZED
SERIES H 6.70 11/01/15 1,125,300
500,000 UTAH STATE BOARD REGENTS
STUDENT LOAN REVENUE SERIES F 7.45 11/01/08 522,495
5,000 UTAH STATE HOUSING FINANCE
AGENCY SFMR SERIES D2 6.45 01/01/11 5,079
8,500,000 WEBER COUNTY UT HOSPITAL
REVENUE IHC HEALTH SERVICE
INCORPORATED AMBAC INSURED 5.00 08/15/30 6,805,015
10,915,603
------------
VIRGINIA - 1.31%
3,000,000 FAIRFAX COUNTY VA
REDEVELOPMENT & HOUSING
AUTHORITY MFHR BURKE SHIRE
COMMONS 7.60 10/01/36 3,109,860
2,000,000 POCAHONTAS PARKWAY ASSOCIATION
VA TOLL ROAD REVENUE SERIES A 5.50 08/15/28 1,631,060
4,740,920
------------
WASHINGTON - 6.70%
100,000 ISLAND COUNTY WASHINGTON
CONSOLIDATED SCHOOL DISTRICT
#206 SOUTH WHIDBEY 6.75 12/01/07 110,645
1,748,000 KITSAP COUNTY WA HOUSING
AUTHORITY REVENUE MFHR LOW
INCOME HOUSING COLLATERALIZED
BY GNMA 7.10 08/20/16 1,952,551
6,205,000 PORT LONGVIEW WA REVENUE
SERIES A 5.00 12/01/14 5,520,030
100,000 SOUTH COLUMBIA BASIN
IRRIGATION DISTRICT REVENUE 6.00 12/01/02 103,561
1,100,000 VANCOUVER WA HOUSING AUTHORITY
REVENUE SPRINGBROOK SQUARE 5.65 03/01/31 952,160
</TABLE>
57
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
WASHINGTON (continued)
$2,750,000 WASHINGTON PUBLIC POWER SUPPLY
SYSTEM POWER REVENUE NUCLEAR
PROJECT #2 SERIES A 6.00% 07/01/07 $ 2,883,458
4,000,000 WASHINGTON STATE HOUSING
FINANCE COMMISSION NONPROFIT
HOUSING REVENUE OCEAN RIDGE
APARTMENTS PROJECT SERIES A 5.25 07/01/02 3,988,000
1,230,000 WASHINGTON STATE HOUSING
FINANCE COMMISSION SFMR
GNMA/FNMA COLLATERALIZED
SERIES E 7.10 07/01/22 1,260,898
4,980,000 WASHINGTON STATE UNIVERSITY
WASHINGTON EDUCATION LEASE
REVENUE 4225 ROOSEVELT PROJECT
SERIES A 5.38 06/01/29 4,249,085
3,000,000 YAKIMA COUNTY WA SCHOOL
DISTRICT #007 GO MBIA INSURED 6.75 12/01/06 3,291,150
24,311,538
------------
WASHINGTON D.C. - 1.80%
8,300,000 WASHINGTON DC CONVENTION
CENTER AUTHORITY DEDICATED TAX
REVENUE 4.75 10/01/28 6,518,239
------------
WISCONSIN - 0.50%
2,000,000 WISCONSIN CENTER DISTRICT TAX
REVENUE JR DEDICATED FSA
INSURED 5.25 12/15/23 1,824,940
------------
356,587,364
TOTAL MUNICIPAL BONDS
(COST $366,152,425)
------------
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 0.68%
2,481,815 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET FUND+X+ 2,481,815
------------
2,481,815
TOTAL SHORT-TERM INSTRUMENTS
(COST $2,481,815)
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $368,634,240)* 98.93% $359,069,179
OTHER ASSETS AND LIABILITIES NET 1.07 3,853,489
------- ------------
TOTAL NET ASSETS 100.00% $362,922,668
------- ------------
</TABLE>
{::} YIELD TO MATURITY.
+ THESE VARIABLE RATE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH
REDUCES THE REMAINING MATURITY.
+X+ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND IS NOT CHARGED ANY
INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE WELLS FARGO MONEY
MARKET FUND.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 5,050,198
GROSS UNREALIZED DEPRECIATION (14,615,259)
------------
NET UNREALIZED DEPRECIATION $ (9,565,061)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Development 4%
Education 14%
Facilities 3%
Housing 19%
Pollution 1%
Utilities 13%
Tax-Free Money Market Fund 1%
General Obligation 7%
Transportation 15%
Student Loan 4%
Medical 19%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
58
<PAGE>
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
OREGON TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 97.49%
GUAM - 3.72%
$1,500,000 GUAM HOUSING SINGLE FAMILY
MORTGAGE BACKED SERIES A 5.75% 09/01/31 $ 1,404,960
-----------
OREGON - 92.16%
1,000,000 BENTON COUNTY OR HOSPITAL
FACILITIES AUTHORITY REVENUE
SAMARITAN HEALTH SERVICES
PROJECT 5.13 10/01/28 822,500
1,100,000 CHEMEKETA OR COMMUNITY COLLEGE
DISTRICT FGIC INSURED 6.00 06/01/06 1,161,930
1,000,000 CHEMEKETA OR COMMUNITY COLLEGE
DISTRICT SERIES B 5.60 06/01/14 1,006,020
250,000 CHEMEKETA OR COMMUNITY COLLEGE
MBIA INSURED 6.50 07/01/07 266,260
495,000 CLACKAMAS COUNTY OR HFFA
JENNINGS LODGE PROJECT GNMA
COLLATERALIZED 7.50 10/20/31 507,686
300,000 CLACKAMAS COUNTY OR HFFA
SISTERS OF PROVIDENCE SERIES A 6.38 10/01/05 313,196
1,000,000 CLACKAMAS COUNTY OR HOSPITAL
FACILITIES AUTHORITY REVENUE
ODD FELLOWS HOME SERIES A 5.88 09/15/21 862,820
2,070,000 COLUMBIA COUNTY OR SCHOOL
DISTRICT NO. 502 (ZERO COUPON) 5.95{::} 06/01/15 838,785
1,750,000 EMERALD PEOPLES OR UTILITY
DISTRICT 7.35 11/01/07 1,996,593
500,000 EUGENE OR PUBLIC SAFETY
FACILITIES 6.00 06/01/06 527,585
1,490,000 HILLSBORO OR HOSPITAL
HEALTHCARE FACILITY 5.75 10/01/12 1,424,813
2,000,000 KLAMATH FALLS OR ELECTRIC
REVENUE 6.00 01/01/25 1,722,680
2,500,000 OREGON HEALTH SCIENCES
UNIVERSITY REVENUE (ZERO
COUPON) 6.25{::} 07/01/21 665,625
750,000 OREGON STATE BOARD OF HIGHER
EDUCATION GO SERIES C 5.95 08/01/26 797,258
1,000,000 OREGON STATE BOARD OF HIGHER
EDUCATION SERIES A 5.00 08/01/22 862,630
2,000,000 OREGON STATE BOARD OF HIGHER
EDUCATION SERIES D 5.75 08/01/29 1,909,940
595,000 OREGON STATE ECONOMIC
DEVELOPMENT REVENUE, 6.35 08/01/25 571,705
480,000 OREGON STATE GO 7.25 07/01/07 544,248
175,000 OREGON STATE GO 9.00 10/01/05 210,277
1,500,000 OREGON STATE HEALTH HOUSING
EDUCATIONAL & CULTURAL
FACILITIES AUTHORITY ASPEN
FOUNDATION 6.13 04/15/29 1,275,000
1,715,000 OREGON STATE HEALTH HOUSING
EDUCATIONAL & CULTURAL
FACILITIES CEDARWEST HOUSING
PROJECT SERIES A 4.75 01/01/30 1,616,388
2,650,000 OREGON STATE HEALTH HOUSING
EDUCATIONAL & CUTURAL
FACILITIES AUTHORITY 5.25 10/01/16 2,252,765
2,530,000 OREGON STATE HOUSING &
COMMUNITY SERVICES SERIES B 5.45 07/01/29 2,252,560
1,000,000 OREGON STATE VETERANS WELFARE
SERIES 77 5.30 10/01/29 885,720
1,000,000 PORTLAND OR AIRPORT REVENUE
INTERNATIONAL AIRPORT SERIES B 5.50 07/01/18 938,030
1,000,000 PORTLAND OR MFHR SERIES A 5.10 01/01/27 853,750
1,000,000 PORTLAND OR SEWER SYSTEM
REVENUE SERIES A 4.50 06/01/18 818,750
1,000,000 PORTLAND OR ST. HELENS PCR
GENERAL ELECTRIC COMPANY
PROJECT SERIES A 5.25 08/01/14 921,040
1,000,000 PORTLAND ORE HOUSING AUTHORITY
REVENUE LA TOURELLE APARTMENTS
SERIES A 6.25 01/01/30 903,960
845,000 PORTLAND OREGON GO SERIES A 4.88 06/01/18 727,840
1,000,000 WASHINGTON COUNTY OR MFHR 6.00 05/01/32 957,520
2,000,000 WASHINGTON COUNTY OR UNIFIED
SEWER AGENCY REVENUE FGIC
INSURED 5.50 10/01/13 1,989,680
1,000,000 WASHINGTON COUNTY OR UNIFIED
SEWER AGENCY REVENUE SERIES A 6.13 07/01/29 881,250
550,000 WESTERN LANE OR HFFA REVENUE
SISTERS OF ST. JOSEPH PEACE
SERVICES MBIA INSURED 5.63 08/01/07 567,720
34,854,524
-----------
PUERTO RICO - 1.61%
40,000 COMMONWEALTH OF PUERTO RICO
AQUEDUCT & SEWER REVENUE 10.25 07/01/09 50,352
295,000 COMMONWEALTH OF PUERTO RICO
MFHR LOC - GOVERNMENT
DEVELOPMENT BANK OF PUERTO
RICO 7.50 04/01/22 301,770
</TABLE>
59
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
OREGON TAX-FREE FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY DESCRIPTION INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
PUERTO RICO (continued)
$ 250,000 COMMONWEALTH OF PUERTO RICO
SFMR SERIES B GNMA INSURED 7.50% 10/15/12 $ 257,228
609,350
-----------
36,868,834
TOTAL MUNICIPAL BONDS (COST $39,457,914)
-----------
<CAPTION>
SHARES SECURITY DESCRIPTION VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 1.26%
475,877 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET TRUST FUND+X+ 475,877
-----------
475,877
TOTAL SHORT-TERM INSTRUMENTS (COST
$475,877)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $39,933,791)* (NOTES 1 AND 3) 98.75% $37,344,711
OTHER ASSETS AND LIABILITIES, NET 1.25 474,268
------- -----------
TOTAL NET ASSETS 100.00% $37,818,979
------- -----------
</TABLE>
{::} YIELD TO MATURITY.
+X+ THIS WELLS FARGO FUND INVESTS CASH BALANCES THAT IT RETAINS FOR LIQUIDITY
PURPOSES IN A WELLS FARGO MONEY MARKET FUND. THE FUND IS NOT CHARGED ANY
INVESTMENT ADVISORY FEE FOR AMOUNTS INVESTED IN THE WELLS FARGO MONEY
MARKET FUND.
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 164,398
GROSS UNREALIZED DEPRECIATION (2,753,478)
------------
NET UNREALIZED DEPRECIATION $ (2,589,080)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Airport 3%
General Obligation 24%
Development 2%
Medical 22%
Higher Education 2%
Multifamily Housing 15%
Pollution 2%
Single Family Housing 10%
School District 2%
Power 5%
Utilities 13%
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
60
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
61
<PAGE>
TAX-FREE FUNDS STATEMENTS OF ASSETS AND LIABILITIES -- DECEMBER 31, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA
ARIZONA LIMITED TERM
TAX-FREE TAX-FREE
<S> <C> <C>
- ----------------------------------------------------
ASSETS
INVESTMENTS
IN SECURITIES, AT
MARKET VALUE (SEE
COST BELOW).......... $16,653,931 $40,650,997
CASH................... 243,103 375,796
RECEIVABLE FOR
DIVIDENDS AND
INTEREST AND OTHER
RECEIVABLES.......... 122,271 394,556
RECEIVABLE FOR
INVESTMENTS SOLD..... 25,979 113,145
RECEIVABLE FOR FUND
SHARES ISSUED........ 0 0
ORGANIZATION COST, NET
OF AMORTIZATION...... 0 0
PREPAID EXPENSES AND
OTHER ASSETS......... 8,437 3,621
----------- -----------
TOTAL ASSETS............. 17,053,721 41,538,115
----------- -----------
LIABILITIES
PAYABLE FOR INVESTMENTS
PURCHASED............ 0 0
DIVIDENDS PAYABLE...... 74,188 147,570
PAYABLE FOR FUND SHARES
REDEEMED............. 0 24
PAYABLE FOR INVESTMENT
ADVISER AND
AFFILIATES........... 6,946 10,908
PAYABLE TO OTHER
RELATED PARTIES...... 1,745 10,134
ACCRUED EXPENSES AND
OTHER LIABILITIES.... 89,743 131,859
----------- -----------
TOTAL LIABILITIES........ 172,622 300,495
----------- -----------
TOTAL NET ASSETS......... $16,881,099 $41,237,620
----------- -----------
NET ASSETS CONSIST OF
- ----------------------------------------------------
PAID-IN CAPITAL........ $18,134,087 $41,731,173
UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME.... 0 0
UNDISTRIBUTED NET
REALIZED GAIN (LOSS)
ON INVESTMENTS....... (11,788) (6,708)
NET UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS.......... (1,241,200) (486,845)
----------- -----------
TOTAL NET ASSETS......... $16,881,099 $41,237,620
----------- -----------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
PER SHARE
- ----------------------------------------------------
NET ASSETS - CLASS A..... $ 5,275,663 $37,626,197
SHARES OUTSTANDING -
CLASS A................ 552,832 3,741,539
NET ASSET VALUE PER SHARE
- CLASS A.............. $ 9.54 $ 10.06
MAXIMUM OFFERING PRICE
PER SHARE - CLASS A
(1).................... $ 9.99 $ 10.53
NET ASSETS - CLASS B..... $ 2,217,453 N/A
SHARES OUTSTANDING -
CLASS B................ 240,890 N/A
NET ASSET VALUE AND
OFFERING PRICE PER
SHARE - CLASS B........ $ 9.21 N/A
NET ASSETS - CLASS C..... N/A N/A
SHARES OUTSTANDING -
CLASS C................ N/A N/A
NET ASSET VALUE AND
OFFERING PRICE PER
SHARE - CLASS C........ N/A N/A
NET ASSETS -
INSTITUTIONAL CLASS.... $ 9,387,983 $ 3,611,423
SHARES OUTSTANDING -
INSTITUTIONAL CLASS.... 983,314 364,892
NET ASSET VALUE AND
OFFERING PRICE PER
SHARE - INSTITUTIONAL
CLASS.................. $ 9.55 $ 9.90
----------- -----------
INVESTMENT AT COST
(NOTE 10).............. $17,895,131 $41,137,842
----------- -----------
</TABLE>
(1) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $50,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
62
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES -- DECEMBER 31, 1999 (UNAUDITED) TAX-FREE
FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MINNESOTA NATIONAL
CALIFORNIA COLORADO INTERMEDIATE MINNESOTA LIMITED TERM NATIONAL OREGON
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
ASSETS
INVESTMENTS
IN SECURITIES, AT
MARKET VALUE (SEE
COST BELOW).......... $577,683,302 $88,650,541 $196,044,095 $73,362,460 $74,138,661 $359,069,179 $37,344,711
CASH................... 1,960,014 0 207 0 0 0 365,321
RECEIVABLE FOR
DIVIDENDS AND
INTEREST AND OTHER
RECEIVABLES.......... 7,925,518 935,874 3,622,360 1,407,110 1,055,254 6,705,530 372,562
RECEIVABLE FOR
INVESTMENTS SOLD..... 0 0 0 166,501 0 0 0
RECEIVABLE FOR FUND
SHARES ISSUED........ 1,750,530 433,100 305,752 952,133 1,246,570 544,350 135,347
ORGANIZATION COST, NET
OF AMORTIZATION...... 0 0 1,604 0 0 0 4,220
PREPAID EXPENSES AND
OTHER ASSETS......... 2,759 0 0 0 0 3,021 2,911
------------ ----------- ------------ ----------- ----------- ------------ -----------
TOTAL ASSETS............. 589,322,123 90,019,515 199,974,018 75,888,204 76,440,485 366,322,080 38,225,072
------------ ----------- ------------ ----------- ----------- ------------ -----------
LIABILITIES
PAYABLE FOR INVESTMENTS
PURCHASED............ 0 819,429 0 0 3,893,521 93,363 0
DIVIDENDS PAYABLE...... 2,560,569 282,699 864,711 182,235 204,472 1,460,019 169,079
PAYABLE FOR FUND SHARES
REDEEMED............. 697,893 858,449 38,697 359,472 40,569 1,371,409 136,108
PAYABLE FOR INVESTMENT
ADVISER AND
AFFILIATES........... 365,925 29,280 89,251 20,761 27,308 183,086 13,033
PAYABLE TO OTHER
RELATED PARTIES...... 409,935 14,825 10,893 23,319 5,954 31,142 17,438
ACCRUED EXPENSES AND
OTHER LIABILITIES.... 272,538 33,671 40,608 63,651 41,220 260,393 70,435
------------ ----------- ------------ ----------- ----------- ------------ -----------
TOTAL LIABILITIES........ 4,306,860 2,038,353 1,044,160 649,438 4,213,044 3,399,412 406,093
------------ ----------- ------------ ----------- ----------- ------------ -----------
TOTAL NET ASSETS......... $585,015,263 $87,981,162 $198,929,858 $75,238,766 $72,227,441 $362,922,668 $37,818,979
------------ ----------- ------------ ----------- ----------- ------------ -----------
NET ASSETS CONSIST OF
- ------------------------------------------------------------------------------------------------------------------------
PAID-IN CAPITAL........ $593,929,322 $93,957,695 $201,040,544 $80,757,717 $74,377,571 $388,641,054 $40,646,385
UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME.... 0 0 (5) (43,359) (61,237) 0 0
UNDISTRIBUTED NET
REALIZED GAIN (LOSS)
ON INVESTMENTS....... (1,511,284) (3,143,359) (697,783) (1,636,307) (1,038,320) (16,153,325) (238,326)
NET UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS.......... (7,402,775) (2,833,174) (1,412,898) (3,839,285) (1,050,573) (9,565,061) (2,589,080)
------------ ----------- ------------ ----------- ----------- ------------ -----------
TOTAL NET ASSETS......... $585,015,263 $87,981,162 $198,929,858 $75,238,766 $72,227,441 $362,922,668 $37,818,979
------------ ----------- ------------ ----------- ----------- ------------ -----------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS - CLASS A..... $398,525,341 $34,852,783 N/A $32,041,472 N/A $ 68,933,185 $22,773,513
SHARES OUTSTANDING -
CLASS A................ 38,057,003 3,598,776 N/A 3,210,347 N/A 7,197,568 1,513,799
NET ASSET VALUE PER SHARE
- CLASS A.............. $ 10.47 $ 9.68 N/A $ 9.98 N/A $ 9.58 $ 15.04
MAXIMUM OFFERING PRICE
PER SHARE - CLASS A
(1).................... $ 10.96 $ 10.14 N/A $ 10.45 N/A $ 10.03 $ 15.75
NET ASSETS - CLASS B..... $120,951,436 $ 8,364,198 N/A $18,264,420 N/A $ 19,983,473 $10,193,131
SHARES OUTSTANDING -
CLASS B................ 11,331,836 862,567 N/A 1,830,314 N/A 2,086,458 1,106,029
NET ASSET VALUE AND
OFFERING PRICE PER
SHARE - CLASS B........ $ 10.67 $ 9.70 N/A $ 9.98 N/A $ 9.58 $ 9.22
NET ASSETS - CLASS C..... $ 20,674,297 N/A N/A N/A N/A $ 6,594,773 N/A
SHARES OUTSTANDING -
CLASS C................ 1,936,684 N/A N/A N/A N/A 688,515 N/A
NET ASSET VALUE AND
OFFERING PRICE PER
SHARE - CLASS C........ $ 10.68 N/A N/A N/A N/A $ 9.58 N/A
NET ASSETS -
INSTITUTIONAL CLASS.... $ 44,864,189 $44,764,181 $198,929,858 $24,932,874 $72,227,441 $267,411,237 $ 4,852,334
SHARES OUTSTANDING -
INSTITUTIONAL CLASS.... 4,274,043 4,621,344 21,124,250 2,497,972 7,066,811 27,907,280 322,596
NET ASSET VALUE AND
OFFERING PRICE PER
SHARE - INSTITUTIONAL
CLASS.................. $ 10.50 $ 9.69 $ 9.42 $ 9.98 $ 10.22 $ 9.58 $ 15.04
------------ ----------- ------------ ----------- ----------- ------------ -----------
INVESTMENT AT COST
(NOTE 10).............. $585,086,077 $91,483,715 $197,456,993 $77,201,745 $75,189,234 $368,634,240 $39,933,791
------------ ----------- ------------ ----------- ----------- ------------ -----------
</TABLE>
(1) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $50,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
63
<PAGE>
TAX-FREE FUNDS STATEMENTS OF OPERATIONS -- FOR THE SIX MONTHS ENDED
DECEMBER 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA
ARIZONA LIMITED TERM CALIFORNIA
TAX-FREE TAX-FREE TAX-FREE
<S> <C> <C> <C>
- -----------------------------------------------------------------
INVESTMENT INCOME
INTEREST............... $ 458,058 $ 1,052,853 $ 17,987,378
---------- ------------ ------------
TOTAL INVESTMENT
INCOME................. 458,058 1,052,853 17,987,378
---------- ------------ ------------
EXPENSES
ADVISORY FEES.......... 38,314 108,446 1,522,727
ADMINISTRATION FEES.... 12,584 35,123 486,337
SHAREHOLDER SERVICING
FEES................. 16,858 63,032 890,069
PORTFOLIO ACCOUNTING
FEES................. 12,719 30,145 84,425
CUSTODY................ 1,487 4,482 58,066
TRANSFER AGENT
A SHARES............. 2,317 26,248 132,264
B SHARES............. 841 N/A 43,036
C SHARES............. N/A N/A 6,089
I SHARES............. 473 419 2,924
DISTRIBUTION FEES
B SHARES............. 6,906 N/A 459,635
C SHARES............. N/A N/A 84,257
AMORTIZATION OF
ORGANIZATION COSTS... 0 0 0
LEGAL AND AUDIT FEES... 4,192 17,058 40,780
REGISTRATION FEES...... 5,903 2,090 60,404
DIRECTORS' FEES........ 1,107 1,864 994
SHAREHOLDER REPORTS.... 4,629 16,219 64,373
OTHER.................. 230 8,416 41,838
---------- ------------ ------------
TOTAL EXPENSES........... 108,560 313,542 3,978,218
---------- ------------ ------------
LESS:
WAIVED FEES AND
REIMBURSED
EXPENSES............. (42,693) (140,986) (972,059)
NET EXPENSES........... 65,867 172,556 3,006,159
---------- ------------ ------------
NET INVESTMENT INCOME
(LOSS)................. 392,191 880,297 14,981,219
---------- ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -----------------------------------------------------------------
NET REALIZED GAIN (LOSS)
FROM:
SECURITIES............. (132,654) (113,902) (1,854,461)
---------- ------------ ------------
NET REALIZED GAIN (LOSS)
FROM INVESTMENTS....... (132,654) (113,902) (1,854,461)
---------- ------------ ------------
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF:
SECURITIES............. (957,678) (432,449) (27,876,563)
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS............ (957,678) (432,449) (27,876,563)
---------- ------------ ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS......... (1,090,332) (546,351) (29,731,024)
---------- ------------ ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ $ (698,141) $ 333,946 $(14,749,805)
---------- ------------ ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
64
<PAGE>
STATEMENTS OF OPERATIONS -- FOR THE SIX MONTHS ENDED DECEMBER 31, 1999
(UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MINNESOTA NATIONAL
COLORADO INTERMEDIATE MINNESOTA LIMITED TERM NATIONAL OREGON
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INTEREST............... $ 2,868,419 $ 6,019,156 $ 2,362,316 $ 2,029,351 $ 11,108,584 $ 1,137,749
----------- ------------ ----------- ------------ ------------ -----------
TOTAL INVESTMENT
INCOME................. 2,868,419 6,019,156 2,362,316 2,029,351 11,108,584 1,137,749
----------- ------------ ----------- ------------ ------------ -----------
EXPENSES
ADVISORY FEES.......... 227,425 314,571 194,235 187,197 854,049 94,590
ADMINISTRATION FEES.... 55,631 123,073 47,323 45,779 211,886 30,527
SHAREHOLDER SERVICING
FEES................. 17,066 0 20,025 0 37,021 48,254
PORTFOLIO ACCOUNTING
FEES................. 37,089 28,774 35,612 27,465 46,921 31,169
CUSTODY................ 9,709 19,203 8,267 8,003 29,412 3,597
TRANSFER AGENT
A SHARES............. 35,279 N/A 34,023 N/A 42,240 8,663
B SHARES............. 10,061 N/A 19,777 N/A 17,439 3,719
C SHARES............. N/A N/A N/A N/A 397 N/A
I SHARES............. 43,494 196,335 24,714 73,058 264,515 303
DISTRIBUTION FEES
B SHARES............. 37,775 N/A 74,758 N/A 70,057 39,020
C SHARES............. N/A N/A N/A N/A 7,368 N/A
AMORTIZATION OF
ORGANIZATION COSTS... 0 293 0 0 0 1,291
LEGAL AND AUDIT FEES... 9,966 12,310 10,410 8,813 14,247 7,077
REGISTRATION FEES...... 3,428 7,241 3,201 9,470 26,558 3,773
DIRECTORS' FEES........ 1,394 2,042 1,321 1,316 2,822 1,285
SHAREHOLDER REPORTS.... 8,114 5,786 7,608 2,630 20,909 8,300
OTHER.................. 23,172 23,816 29,660 17,703 39,885 2,805
----------- ------------ ----------- ------------ ------------ -----------
TOTAL EXPENSES........... 519,603 733,444 510,934 381,434 1,685,726 284,373
----------- ------------ ----------- ------------ ------------ -----------
LESS:
WAIVED FEES AND
REIMBURSED
EXPENSES............. (189,883) (88,798) (187,624) (132,389) (479,534) (101,643)
NET EXPENSES........... 329,720 644,646 323,310 249,045 1,206,192 182,730
----------- ------------ ----------- ------------ ------------ -----------
NET INVESTMENT INCOME
(LOSS)................. 2,538,699 5,374,510 2,039,006 1,780,306 9,902,392 955,019
----------- ------------ ----------- ------------ ------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- ----------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS)
FROM:
SECURITIES............. (2,373,083) (555,396) (1,340,844) (392,058) (13,353,463) (220,941)
----------- ------------ ----------- ------------ ------------ -----------
NET REALIZED GAIN (LOSS)
FROM INVESTMENTS....... (2,373,083) (555,396) (1,340,844) (392,058) (13,353,463) (220,941)
----------- ------------ ----------- ------------ ------------ -----------
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF:
SECURITIES............. (3,471,553) (6,735,825) (4,590,246) (855,495) (10,038,012) (2,432,868)
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS............ (3,471,553) (6,735,825) (4,590,246) (855,495) (10,038,012) (2,432,868)
----------- ------------ ----------- ------------ ------------ -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS......... (5,844,636) (7,291,221) (5,931,090) (1,247,553) (23,391,475) (2,653,809)
----------- ------------ ----------- ------------ ------------ -----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ $(3,305,937) $ (1,916,711) $(3,892,084) $ 532,753 $(13,489,083) $(1,698,790)
----------- ------------ ----------- ------------ ------------ -----------
</TABLE>
65
<PAGE>
TAX-FREE FUNDS STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA LIMITED TERM
ARIZONA TAX-FREE TAX-FREE
---------------------------------- ----------------------------------
(UNAUDITED) (UNAUDITED)
FOR THE FOR THE FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999 DECEMBER 31, 1999 JUNE 30, 1999
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS..... $ 16,357,454 $ 18,061,481 $ 48,931,231 $ 61,728,391
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)................. 392,191 754,972 880,297 2,085,362
NET REALIZED GAIN (LOSS)
ON SALE OF INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS........... (132,654) 165,623 (113,902) 622,402
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF ASSETS
IN FOREIGN CURRENCY.... (957,678) (777,937) (432,449) (878,441)
----------------- ------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ (698,141) 142,658 333,946 1,829,323
----------------- ------------- ----------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A.............. (122,345) (233,455) (764,785) (1,776,173)
CLASS B.............. (37,072) (59,487) N/A N/A
CLASS C.............. N/A N/A N/A N/A
CLASS I.............. (232,774) (462,030) (115,512) (309,189)
NET REALIZED GAIN ON
SALE OF INVESTMENTS
CLASS A.............. (11,159) (97,543) (186,686) (542,011)
CLASS B.............. (4,699) (29,680) N/A N/A
CLASS C.............. N/A N/A N/A N/A
CLASS I.............. (19,999) (191,837) (17,677) (97,377)
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD - CLASS A....... 887,668 647,835 2,268,257 4,881,920
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. 99,811 293,582 798,852 2,120,491
COST OF SHARES REDEEMED
- CLASS A............ (592,924) (811,959) (6,067,935) (19,138,662)
----------------- ------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS A................ 394,555 129,458 (3,000,826) (12,136,251)
----------------- ------------- ----------------- -------------
PROCEEDS FROM SHARES
SOLD - CLASS B....... 762,420 144,233 N/A N/A
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. 28,897 73,077 N/A N/A
COST OF SHARES REDEEMED
- CLASS B............ (28,182) (231,481) N/A N/A
----------------- ------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS B................ 763,135 (14,171) N/A N/A
----------------- ------------- ----------------- -------------
PROCEEDS FROM SHARES
SOLD - CLASS C....... N/A N/A N/A N/A
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. N/A N/A N/A N/A
COST OF SHARES REDEEMED
- CLASS C............ N/A N/A N/A N/A
----------------- ------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS C................ N/A N/A N/A N/A
----------------- ------------- ----------------- -------------
PROCEEDS FROM SHARES
SOLD - CLASS I....... 2,038,467 1,304,525 51,262 1,894,102
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 20,011 16,058 51,850 159,068
COST OF SHARES REDEEMED
- CLASS I............ (1,566,334) (2,208,523) (4,045,183) (1,818,652)
----------------- ------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS I................ 492,144 (887,940) (3,942,071) 234,518
----------------- ------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... 523,645 (1,704,027) (7,693,611) (12,797,160)
----------------- ------------- ----------------- -------------
NET ASSETS:
- -------------------------------------------------------------------------------------------------
ENDING NET ASSETS...... $ 16,881,099 $ 16,357,454 $ 41,237,620 $ 48,931,231
SHARES ISSUED AND REDEEMED:
SHARES SOLD -
CLASS A.............. 90,866 60,592 222,779 464,420
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. 10,187 27,319 78,623 201,790
SHARES REDEEMED -
CLASS A.............. (58,908) (76,307) (595,850) (1,820,898)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS A................ 42,145 11,604 (294,448) (1,154,688)
SHARES SOLD -
CLASS B.............. 80,293 14,067 N/A N/A
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. 3,064 7,044 N/A N/A
SHARES REDEEMED -
CLASS B.............. (2,967) (22,372) N/A N/A
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS B................ 80,390 (1,261) N/A N/A
SHARES SOLD -
CLASS C.............. N/A N/A N/A N/A
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. N/A N/A N/A N/A
SHARES REDEEMED -
CLASS C.............. N/A N/A N/A N/A
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS C................ N/A N/A N/A N/A
SHARES SOLD -
CLASS I.............. 203,739 121,329 5,123 183,590
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 2,054 1,497 5,189 15,379
SHARES REDEEMED -
CLASS I.............. (157,005) (207,137) (403,466) (177,118)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS I................ 48,788 (84,311) (393,154) 21,851
ENDING BALANCE OF
UNDISTRIBUTED NET
INVESTMENT INCOME...... $ 0 $ 0 $ 0 $ 0
----------------- ------------- ----------------- -------------
</TABLE>
66
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA COLORADO
TAX-FREE TAX-FREE
---------------------------------- --------------------------------------------------
(UNAUDITED) (UNAUDITED)
FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED ONE MONTH ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999 DECEMBER 31, 1999 JUNE 30, 1999 MAY 31, 1999
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS..... $ 687,148,448 $ 690,330,349 $ 99,125,823 $ 99,793,812 $ 75,751,613
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)................. 14,981,219 30,366,138 2,538,699 393,016 4,092,169
NET REALIZED GAIN (LOSS)
ON SALE OF INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS........... (1,854,461) 2,704,577 (2,373,083) (344,710) 501,049
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF ASSETS
IN FOREIGN CURRENCY.... (27,876,563) (17,269,155) (3,471,553) (2,033,191) (1,664,572)
----------------- -------------- ----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ (14,749,805) 15,801,560 (3,305,937) (1,984,885) 2,928,646
----------------- -------------- ----------------- --------------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A.............. (10,545,323) (21,777,566) (1,010,620) (159,400) (1,824,431)
CLASS B.............. (2,621,401) (4,443,330) (230,338) (37,423) (386,596)
CLASS C.............. (457,195) (542,049) N/A N/A N/A
CLASS I.............. (1,357,300) (3,603,193) (1,297,741) (196,193) (1,881,142)
NET REALIZED GAIN ON
SALE OF INVESTMENTS
CLASS A.............. (1,043,080) (6,286,449) (29,343) 0 (131,438)
CLASS B.............. (317,133) (1,503,850) (6,798) 0 (32,338)
CLASS C.............. (54,401) (163,585) N/A 0 N/A
CLASS I.............. (123,720) (1,005,446) (37,768) 0 (135,528)
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD - CLASS A....... 12,051,603 47,645,429 2,375,448 543,289 8,062,435
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. 7,066,622 19,237,556 794,438 122,356 1,484,203
COST OF SHARES REDEEMED
- CLASS A............ (60,852,667) (89,510,989) (5,075,212) (607,233) (3,272,343)
----------------- -------------- ----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS A................ (41,734,442) (22,628,004) (1,905,326) 58,412 6,274,295
----------------- -------------- ----------------- --------------- ------------
PROCEEDS FROM SHARES
SOLD - CLASS B....... 9,926,067 43,726,476 736,547 342,246 2,711,082
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. 2,179,977 4,875,202 167,186 27,302 283,211
COST OF SHARES REDEEMED
- CLASS B............ (14,576,039) (14,057,410) (2,889,301) (56,299) (1,091,277)
----------------- -------------- ----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS B................ (2,469,995) 34,544,268 (1,985,568) 313,249 1,903,016
----------------- -------------- ----------------- --------------- ------------
PROCEEDS FROM SHARES
SOLD - CLASS C....... 3,569,229 16,190,204 N/A N/A N/A
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. 397,672 530,761 N/A N/A N/A
COST OF SHARES REDEEMED
- CLASS C............ (4,457,431) (1,948,559) N/A N/A N/A
----------------- -------------- ----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS C................ (490,530) 14,772,406 N/A N/A N/A
----------------- -------------- ----------------- --------------- ------------
PROCEEDS FROM SHARES
SOLD - CLASS I....... 2,449,961 14,893,157 9,761,327 2,077,373 25,981,176
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 255,414 1,797,154 50,996 20,222 99,412
COST OF SHARES REDEEMED
- CLASS I............ (28,874,235) (23,036,974) (11,147,545) (759,344) (8,752,873)
----------------- -------------- ----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS I................ (26,168,860) (6,346,663) (1,335,222) 1,338,251 17,327,715
----------------- -------------- ----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... (102,133,185) (3,181,901) (11,144,661) (667,989) 24,042,199
----------------- -------------- ----------------- --------------- ------------
NET ASSETS:
- -----------------------------------------------------------------------------------------------------------------
ENDING NET ASSETS...... $ 585,015,263 $ 687,148,448 $ 87,981,162 $ 99,125,823 $ 99,793,812
SHARES ISSUED AND REDEEMED:
SHARES SOLD -
CLASS A.............. 1,120,776 4,192,958 237,080 52,172 766,228
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. 660,402 1,682,888 79,968 11,879 116,262
SHARES REDEEMED -
CLASS A.............. (5,669,665) (7,857,450) (510,958) (58,698) (298,588)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS A................ (3,888,487) (1,981,604) (193,910) 5,353 583,902
SHARES SOLD -
CLASS B.............. 899,491 3,748,414 72,905 32,731 258,066
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. 199,987 418,683 16,786 2,648 20,601
SHARES REDEEMED -
CLASS B.............. (1,330,868) (1,209,247) (289,857) (5,424) (101,120)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS B................ (231,390) 2,957,850 (200,166) 29,955 177,547
SHARES SOLD -
CLASS C.............. 324,135 1,394,343 N/A N/A N/A
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. 36,471 45,685 N/A N/A N/A
SHARES REDEEMED -
CLASS C.............. (407,368) (167,903) N/A N/A N/A
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS C................ (46,762) 1,272,125 N/A N/A N/A
SHARES SOLD -
CLASS I.............. 227,663 1,297,153 979,805 200,981 2,654,052
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 23,876 156,818 5,062 1,963 7,663
SHARES REDEEMED -
CLASS I.............. (2,651,937) (2,020,715) (1,129,631) (73,332) (1,049,402)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS I................ (2,400,398) (566,744) (144,764) 129,612 1,612,313
ENDING BALANCE OF
UNDISTRIBUTED NET
INVESTMENT INCOME...... $ 0 $ 0 $ 0 $ 0 $ 0
----------------- -------------- ----------------- --------------- ------------
<CAPTION>
MINNESOTA INTERMEDIATE
TAX-FREE
--------------------------------------------------
(UNAUDITED)
FOR THE FOR THE FOR THE
SIX MONTHS ENDED ONE MONTH ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999 MAY 31, 1999
<S> <C> <C> <C>
- -------------------------
INCREASE (DECREASE) IN NE
BEGINNING NET ASSETS..... $ 219,258,472 $ 222,953,296 $ 209,685,097
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)................. 5,374,510 895,343 10,472,818
NET REALIZED GAIN (LOSS)
ON SALE OF INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS........... (555,396) (47,325) 210,070
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF ASSETS
IN FOREIGN CURRENCY.... (6,735,825) (3,578,156) (2,375,879)
----------------- --------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ (1,916,711) (2,730,138) 8,307,009
----------------- --------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A.............. N/A N/A N/A
CLASS B.............. N/A N/A N/A
CLASS C.............. N/A N/A N/A
CLASS I.............. (5,374,510) (895,343) (10,472,823)
NET REALIZED GAIN ON
SALE OF INVESTMENTS
CLASS A.............. N/A N/A N/A
CLASS B.............. N/A N/A N/A
CLASS C.............. N/A N/A N/A
CLASS I.............. (5,317) 0 (538,545)
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD - CLASS A....... N/A N/A N/A
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. N/A N/A N/A
COST OF SHARES REDEEMED
- CLASS A............ N/A N/A N/A
----------------- --------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS A................ N/A N/A N/A
----------------- --------------- -------------
PROCEEDS FROM SHARES
SOLD - CLASS B....... N/A N/A N/A
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. N/A N/A N/A
COST OF SHARES REDEEMED
- CLASS B............ N/A N/A N/A
----------------- --------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS B................ N/A N/A N/A
----------------- --------------- -------------
PROCEEDS FROM SHARES
SOLD - CLASS C....... N/A N/A N/A
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. N/A N/A N/A
COST OF SHARES REDEEMED
- CLASS C............ N/A N/A N/A
----------------- --------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS C................ N/A N/A N/A
----------------- --------------- -------------
PROCEEDS FROM SHARES
SOLD - CLASS I....... 11,206,348 2,116,402 35,117,941
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 305,614 51,123 908,892
COST OF SHARES REDEEMED
- CLASS I............ (24,544,038) (2,236,868) (20,054,275)
----------------- --------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS I................ (13,032,076) (69,343) 15,972,558
----------------- --------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... (20,328,614) (3,694,824) 13,268,199
----------------- --------------- -------------
NET ASSETS:
- -------------------------
ENDING NET ASSETS...... $ 198,929,858 $ 219,258,472 $ 222,953,296
SHARES ISSUED AND REDEEME
SHARES SOLD -
CLASS A.............. N/A N/A N/A
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. N/A N/A N/A
SHARES REDEEMED -
CLASS A.............. N/A N/A N/A
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS A................ N/A N/A N/A
SHARES SOLD -
CLASS B.............. N/A N/A N/A
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. N/A N/A N/A
SHARES REDEEMED -
CLASS B.............. N/A N/A N/A
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS B................ N/A N/A N/A
SHARES SOLD -
CLASS C.............. N/A N/A N/A
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. N/A N/A N/A
SHARES REDEEMED -
CLASS C.............. N/A N/A N/A
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS C................ N/A N/A N/A
SHARES SOLD -
CLASS I.............. 1,167,079 215,513 3,498,378
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 31,962 5,243 82,447
SHARES REDEEMED -
CLASS I.............. (2,566,385) (228,040) (1,992,667)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS I................ (1,367,344) (7,284) 1,588,158
ENDING BALANCE OF
UNDISTRIBUTED NET
INVESTMENT INCOME...... $ (5) $ (5) $ (5)
----------------- --------------- -------------
</TABLE>
67
<PAGE>
TAX-FREE FUNDS STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MINNESOTA
TAX-FREE
--------------------------------------------------
(UNAUDITED)
FOR THE FOR THE FOR THE
SIX MONTHS ENDED ONE MONTH ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999 MAY 31, 1999
<S> <C> <C> <C>
- -----------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS..... $ 85,701,768 $ 87,008,863 $ 70,881,856
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)................. 2,039,006 319,580 3,491,338
NET REALIZED GAIN (LOSS)
ON SALE OF INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS........... (1,340,844) (162,826) 216,836
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF ASSETS
IN FOREIGN CURRENCY.... (4,590,246) (1,579,990) (920,274)
----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ (3,892,084) (1,423,236) 2,787,900
----------------- --------------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A.............. (921,227) (145,466) (1,672,985)
CLASS B.............. (435,810) (69,305) (758,676)
CLASS C.............. N/A N/A N/A
CLASS I.............. (681,968) (104,809) (1,061,276)
NET REALIZED GAIN ON
SALE OF INVESTMENTS
CLASS A.............. (32,942) 0 (32,277)
CLASS B.............. (17,762) 0 (17,801)
CLASS C.............. N/A N/A N/A
CLASS I.............. (24,138) 0 (20,012)
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD - CLASS A....... 2,439,318 431,418 9,934,681
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. 647,835 102,632 1,117,394
COST OF SHARES REDEEMED
- CLASS A............ (5,577,153) (887,055) (6,075,592)
----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS A................ (2,490,000) (353,005) 4,976,483
----------------- --------------- ------------
PROCEEDS FROM SHARES
SOLD - CLASS B....... 801,998 744,032 7,870,849
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. 345,502 52,334 531,439
COST OF SHARES REDEEMED
- CLASS B............ (2,798,163) (491,100) (3,243,082)
----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS B................ (1,650,663) 305,266 5,159,206
----------------- --------------- ------------
PROCEEDS FROM SHARES
SOLD - CLASS C....... N/A N/A N/A
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. N/A N/A N/A
COST OF SHARES REDEEMED
- CLASS C............ N/A N/A N/A
----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS C................ N/A N/A N/A
----------------- --------------- ------------
PROCEEDS FROM SHARES
SOLD - CLASS I....... 3,730,171 929,145 10,924,972
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 159,923 31,248 290,837
COST OF SHARES REDEEMED
- CLASS I............ (4,206,502) (476,933) (4,449,364)
----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS I................ (316,408) 483,460 6,766,445
----------------- --------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... (10,463,002) (1,307,095) 16,127,007
----------------- --------------- ------------
NET ASSETS:
- -----------------------------------------------------------------------------
ENDING NET ASSETS...... $ 75,238,766 $ 85,701,768 $ 87,008,863
SHARES ISSUED AND REDEEMED:
SHARES SOLD -
CLASS A.............. 236,683 39,870 922,167
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. 63,046 9,556 83,650
SHARES REDEEMED -
CLASS A.............. (546,753) (82,316) (556,377)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS A................ (247,024) (32,890) 449,440
SHARES SOLD -
CLASS B.............. 77,083 68,928 719,314
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. 33,642 4,869 36,310
SHARES REDEEMED -
CLASS B.............. (269,776) (45,705) (292,516)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS B................ (159,051) 28,092 463,108
SHARES SOLD -
CLASS C.............. N/A N/A N/A
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. N/A N/A N/A
SHARES REDEEMED -
CLASS C.............. N/A N/A N/A
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS C................ N/A N/A N/A
SHARES SOLD -
CLASS I.............. 362,293 85,769 987,346
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 15,528 2,910 21,678
SHARES REDEEMED -
CLASS I.............. (411,540) (44,102) (398,588)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS I................ (33,719) 44,577 610,436
ENDING BALANCE OF
UNDISTRIBUTED NET
INVESTMENT INCOME...... $ (43,359) $ (43,360) $ (43,360)
----------------- --------------- ------------
</TABLE>
68
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATIONAL LIMITED TERM NATIONAL
TAX-FREE TAX-FREE
-------------------------------------------------- ---------------------------------------
(UNAUDITED) (UNAUDITED)
FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS ENDED ONE MONTH ENDED YEAR ENDED SIX MONTHS ENDED ONE MONTH ENDED
DECEMBER 31, 1999 JUNE 30, 1999 MAY 31, 1999 DECEMBER 31, 1999 (1) JUNE 30, 1999
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS..... $ 84,419,071 $ 88,222,898 $ 54,602,408 $ 363,928,758 $ 373,118,072
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)................. 1,780,306 300,819 2,934,614 9,902,392 1,526,222
NET REALIZED GAIN (LOSS)
ON SALE OF INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS........... (392,058) (363,274) (145,267) (13,353,463) (1,458,879)
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF ASSETS
IN FOREIGN CURRENCY.... (855,495) (875,731) (415,646) (10,038,012) (6,408,070)
----------------- --------------- ------------- --------------------- ---------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ 532,753 (938,186) 2,373,701 (13,489,083) (6,340,727)
----------------- --------------- ------------- --------------------- ---------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A.............. N/A N/A N/A (1,345,727) (176,731)
CLASS B.............. N/A N/A N/A (422,754) (63,322)
CLASS C.............. N/A N/A N/A (45,987) N/A
CLASS I.............. (1,780,306) (300,819) (2,995,851) (7,782,050) (1,286,169)
NET REALIZED GAIN ON
SALE OF INVESTMENTS
CLASS A.............. N/A N/A N/A (43,130) 0
CLASS B.............. N/A N/A N/A (18,315) 0
CLASS C.............. N/A N/A N/A 0 N/A
CLASS I.............. 0 0 0 (301,508) 0
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD - CLASS A....... N/A N/A N/A 35,940,484(1) 685,836
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. N/A N/A N/A 937,937 128,450
COST OF SHARES REDEEMED
- CLASS A............ N/A N/A N/A (6,504,647) (1,410,303)
----------------- --------------- ------------- --------------------- ---------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS A................ N/A N/A N/A 30,373,774 (596,017)
----------------- --------------- ------------- --------------------- ---------------
PROCEEDS FROM SHARES
SOLD - CLASS B....... N/A N/A N/A 5,958,164(1) 372,744
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. N/A N/A N/A 329,152 48,648
COST OF SHARES REDEEMED
- CLASS B............ N/A N/A N/A (2,985,340) (137,275)
----------------- --------------- ------------- --------------------- ---------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS B................ N/A N/A N/A 3,301,976 284,117
----------------- --------------- ------------- --------------------- ---------------
PROCEEDS FROM SHARES
SOLD - CLASS C....... N/A N/A N/A 6,771,134(1) N/A
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. N/A N/A N/A 23,868 N/A
COST OF SHARES REDEEMED
- CLASS C............ N/A N/A N/A (58,413) N/A
----------------- --------------- ------------- --------------------- ---------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS C................ N/A N/A N/A 6,736,589 N/A
----------------- --------------- ------------- --------------------- ---------------
PROCEEDS FROM SHARES
SOLD - CLASS I....... 9,574,897 1,429,530 54,231,330 26,672,102(1) 4,618,493
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 568,870 98,855 707,065 792,401 125,372
COST OF SHARES REDEEMED
- CLASS I............ (21,087,844) (4,093,207) (20,695,755) (45,434,378) (5,754,330)
----------------- --------------- ------------- --------------------- ---------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS I................ (10,944,077) (2,564,822) 34,242,640 (17,969,875) (1,010,465)
----------------- --------------- ------------- --------------------- ---------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... (12,191,630) (3,803,827) 33,620,490 (1,006,090) (9,189,314)
----------------- --------------- ------------- --------------------- ---------------
NET ASSETS:
- ----------------------------------------------------------------------------------------------------------------------
ENDING NET ASSETS...... $ 72,227,441 $ 84,419,071 $ 88,222,898 $ 362,922,668 $ 363,928,758
SHARES ISSUED AND REDEEMED:
SHARES SOLD -
CLASS A.............. N/A N/A N/A 3,664,762(1) 71,172
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. N/A N/A N/A 95,491 12,666
SHARES REDEEMED -
CLASS A.............. N/A N/A N/A (662,147) (141,758)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS A................ N/A N/A N/A 3,098,106 (57,920)
SHARES SOLD -
CLASS B.............. N/A N/A N/A 605,315(1) 36,374
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. N/A N/A N/A 33,505 4,760
SHARES REDEEMED -
CLASS B.............. N/A N/A N/A (301,948) (13,371)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS B................ N/A N/A N/A 336,872 27,763
SHARES SOLD -
CLASS C.............. N/A N/A N/A 692,107(1) N/A
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. N/A N/A N/A 2,473 N/A
SHARES REDEEMED -
CLASS C.............. N/A N/A N/A (6,065) N/A
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS C................ N/A N/A N/A 688,515 N/A
SHARES SOLD -
CLASS I.............. 931,006 137,084 5,104,840 2,720,253(1) 448,826
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 55,193 9,515 56,578 82,472 10,575
SHARES REDEEMED -
CLASS I.............. (2,047,446) (391,925) (1,944,631) (4,649,377) (560,492)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS I................ (1,061,247) (245,326) 3,216,787 (1,846,652) (101,091)
ENDING BALANCE OF
UNDISTRIBUTED NET
INVESTMENT INCOME...... $ (61,237) $ (61,237) $ (61,237) $ 0 $ (510,093)
----------------- --------------- ------------- --------------------- ---------------
<CAPTION>
NATIONAL OREGON
TAX-FREE TAX-FREE
------------- ----------------------------------
(UNAUDITED)
FOR THE FOR THE FOR THE
YEAR ENDED SIX MONTHS ENDED YEAR ENDED
MAY 31, 1999 DECEMBER 31, 1999 JUNE 30, 1999
<S> <C> <C> <C>
- -------------------------
INCREASE (DECREASE) IN NE
BEGINNING NET ASSETS..... $ 332,924,833 $ 40,922,108 $ 40,934,691
OPERATIONS:
NET INVESTMENT INCOME
(LOSS)................. 17,369,474 955,019 1,805,891
NET REALIZED GAIN (LOSS)
ON SALE OF INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS........... 3,445,224 (220,941) 189,904
NET CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS AND
TRANSLATION OF ASSETS
IN FOREIGN CURRENCY.... (7,184,375) (2,432,868) (1,393,782)
------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ 13,630,323 (1,698,790) 602,013
------------- ----------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A.............. (2,067,331) (598,155) (1,197,210)
CLASS B.............. (551,723) (214,553) (301,568)
CLASS C.............. N/A N/A N/A
CLASS I.............. (14,750,632) (142,311) (307,113)
NET REALIZED GAIN ON
SALE OF INVESTMENTS
CLASS A.............. (44,165) (28,470) (413,064)
CLASS B.............. (11,881) (12,727) (126,475)
CLASS C.............. N/A N/A N/A
CLASS I.............. (278,688) (6,545) (109,685)
CAPITAL SHARE
TRANSACTIONS:
PROCEEDS FROM SHARES
SOLD - CLASS A....... 26,792,072 1,373,037 1,368,772
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. 1,475,236 445,673 1,298,287
COST OF SHARES REDEEMED
- CLASS A............ (19,489,915) (2,346,524) (4,274,901)
------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS A................ 8,777,393 (527,814) (1,607,842)
------------- ----------------- -------------
PROCEEDS FROM SHARES
SOLD - CLASS B....... 7,878,776 1,623,635 4,533,417
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. 398,550 161,574 351,827
COST OF SHARES REDEEMED
- CLASS B............ (1,152,002) (986,080) (300,137)
------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS B................ 7,125,324 799,129 4,585,107
------------- ----------------- -------------
PROCEEDS FROM SHARES
SOLD - CLASS C....... N/A N/A N/A
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. N/A N/A N/A
COST OF SHARES REDEEMED
- CLASS C............ N/A N/A N/A
------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS C................ N/A N/A N/A
------------- ----------------- -------------
PROCEEDS FROM SHARES
SOLD - CLASS I....... 69,131,581 698,402 862,300
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 1,553,614 32,546 146,566
COST OF SHARES REDEEMED
- CLASS I............ (42,320,576) (1,403,841) (2,145,612)
------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM CAPITAL SHARE
TRANSACTIONS -
CLASS I................ 28,364,619 (672,893) (1,136,746)
------------- ----------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS.......... 40,193,239 (3,103,129) (12,583)
------------- ----------------- -------------
NET ASSETS:
- -------------------------
ENDING NET ASSETS...... $ 373,118,072 $ 37,818,979 $ 40,922,108
SHARES ISSUED AND REDEEME
SHARES SOLD -
CLASS A.............. 2,543,283 87,428 81,285
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS A.............. 113,579 28,704 77,202
SHARES REDEEMED -
CLASS A.............. (1,832,413) (150,183) (254,935)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS A................ 824,449 (34,051) (96,448)
SHARES SOLD -
CLASS B.............. 747,909 168,507 440,990
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS B.............. 31,924 16,994 34,192
SHARES REDEEMED -
CLASS B.............. (108,363) (102,915) (29,617)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS B................ 671,470 82,586 (445,565)
SHARES SOLD -
CLASS C.............. N/A N/A N/A
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS C.............. N/A N/A N/A
SHARES REDEEMED -
CLASS C.............. N/A N/A N/A
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS C................ N/A N/A N/A
SHARES SOLD -
CLASS I.............. 6,519,161 44,804 51,084
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS -
CLASS I.............. 124,119 2,093 8,705
SHARES REDEEMED -
CLASS I.............. (3,983,394) (90,993) (127,946)
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING -
CLASS I................ 2,659,886 (44,096) (68,157)
ENDING BALANCE OF
UNDISTRIBUTED NET
INVESTMENT INCOME...... $ (510,093) $ 0 $ 0
------------- ----------------- -------------
</TABLE>
69
<PAGE>
TAX-FREE FUNDS STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
(1) "Proceeds from shares sold" includes $31,626,642 for Class A, and "Shares
sold" includes 2,178,156 for Class A as a result of the consolidation of
the Stagecoach National Tax-Free Fund. "Proceeds from shares sold"
includes $4,031,558 for Class B, and "Shares sold" includes 420,942 for
Class B as a result of the consolidation of the Stagecoach National
Tax-Free Fund. "Proceeds from shares sold" includes $6,381,434 for
Class C, and "Shares sold" includes 666,174 for Class C as a result of the
consolidation of the Stagecoach National Tax-Free Fund. "Proceeds from
shares sold" includes $7,014,140 for Institutional shares, and "Shares
sold" includes 483,117 for Institutional shares as a result of the
consolidation of the Stagecoach National Tax-Free Fund.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
70
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
71
<PAGE>
TAX-FREE FUNDS FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTIONS
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED
SHARE (LOSS) INVESTMENTS INCOME GAINS
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------
ARIZONA TAX-FREE FUND(3)
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.22 0.24 (0.66) (0.24) (0.02)
JULY 1, 1998 TO JUNE 30,
1999................... $10.79 0.46 (0.38) (0.46) (0.19)
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.77 0.12 0.02 (0.12) 0.00
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.44 0.46 0.53 (0.46) (0.20)
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.45 0.24 (0.01) (0.24) 0.00
OCTOBER 1, 1995 TO
SEPTEMBER 30, 1996..... $10.71 0.48 (0.09) (0.48) (0.17)
JUNE 1, 1995 TO
SEPTEMBER 30,
1995(6)................ $10.68 0.17 0.06 (0.20) 0.00
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $ 9.86 0.19 (0.63) (0.19) (0.02)
JULY 1, 1998 TO JUNE 30,
1999................... $10.40 0.37 (0.35) (0.37) (0.19)
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.39 0.09 0.01 (0.09) 0.00
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.07 0.37 0.51 (0.37) (0.19)
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.07 0.11 0.00 (0.11) 0.00
SEPTEMBER 6, 1996(7) TO
SEPTEMBER 30, 1996..... $10.00 0.01 0.07 (0.01) 0.00
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.23 0.24 (0.66) (0.24) (0.02)
JULY 1, 1998 TO JUNE 30,
1999................... $10.79 0.47 (0.37) (0.47) (0.19)
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.78 0.12 0.01 (0.12) 0.00
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.44 0.49 0.54 (0.49) (0.20)
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.44 0.25 0.00 (0.25) 0.00
OCTOBER 1, 1995(7) TO
SEPTEMBER 30, 1996..... $10.71 0.49 (0.10) (0.49) (0.17)
CALIFORNIA LIMITED TERM TAX-FREE FUND
- -------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.23 0.20 (0.12) (0.20) (0.05)
JULY 1, 1998 TO JUNE 30,
1999................... $10.44 0.39 (0.09) (0.39) (0.12)
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.44 0.10 0.00 (0.10) 0.00
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.27 0.39 0.20 (0.39) (0.03)
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.26 0.19 0.01 (0.19) 0.00
JANUARY 1, 1996 TO
SEPTEMBER 30,
1996(8)................ $10.35 0.29 (0.09) (0.29) 0.00
JANUARY 1, 1995 TO
DECEMBER 31, 1995...... $ 9.84 0.38 0.51 (0.38) 0.00
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.07 0.20 (0.12) (0.20) (0.05)
JULY 1, 1998 TO JUNE 30,
1999................... $10.27 0.39 (0.08) (0.39) (0.12)
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.27 0.10 0.00 (0.10) 0.00
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.11 0.39 0.19 (0.39) (0.03)
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.10 0.19 0.01 (0.19) 0.00
SEPTEMBER 6, 1996(7) TO
SEPTEMBER 30, 1996..... $10.06 0.02 0.04 (0.02) 0.00
CALIFORNIA TAX-FREE FUND(9)
- -------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $11.00 0.26 (0.50) (0.26) (0.03)
JULY 1, 1998 TO JUNE 30,
1999................... $11.38 0.51 (0.23) (0.51) (0.15)
JANUARY 1, 1998 TO
JUNE 30, 1998(10)...... $11.32 0.26 0.06 (0.26) 0.00
JANUARY 1, 1997 TO
DECEMBER 31, 1997...... $10.97 0.54 0.42 (0.54) (0.07)
JANUARY 1, 1996 TO
DECEMBER 31, 1996...... $11.34 0.57 (0.13) (0.57) (0.24)
JANUARY 1, 1995 TO
DECEMBER 31, 1995...... $10.67 0.63 1.08 (0.63) (0.41)
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $11.22 0.23 (0.52) (0.23) (0.03)
JULY 1, 1998 TO JUNE 30,
1999................... $11.60 0.44 (0.23) (0.44) (0.15)
JANUARY 1, 1998 TO
JUNE 30, 1998(10)...... $11.54 0.23 0.06 (0.23) 0.00
DECEMBER 15, 1997(7) TO
DECEMBER 31, 1997...... $11.51 0.02 0.03 (0.02) 0.00
C SHARES(11)
JULY 1, 1999 TO
DECEMBER 31, 1999...... $11.22 0.23 (0.51) (0.23) (0.03)
JULY 1, 1998 TO JUNE 30,
1999................... $11.60 0.44 (0.23) (0.44) (0.15)
JANUARY 1, 1998 TO
JUNE 30, 1998(10)...... $11.54 0.23 0.06 (0.23) 0.00
JANUARY 1, 1997 TO
DECEMBER 31, 1997...... $11.19 0.47 0.42 (0.47) (0.07)
JANUARY 1, 1996 TO
DECEMBER 31, 1996...... $11.57 0.49 (0.13) (0.49) (0.25)
JANUARY 1, 1995 TO
DECEMBER 31, 1995...... $10.88 0.56 1.10 (0.56) (0.41)
</TABLE>
72
<PAGE>
FINANCIAL HIGHLIGHTS (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ENDING RATIO TO AVERAGE NET ASSETS (ANNUALIZED)
NET ASSET ----------------------------------------- PORTFOLIO NET ASSETS AT
VALUE PER NET INVESTMENT NET GROSS TOTAL TURNOVER END OF PERIOD
SHARE INCOME (LOSS) EXPENSES EXPENSES(1) RETURN(2) RATE (000'S OMITTED)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
ARIZONA TAX-FREE FUND(3)
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.54 4.71% 0.77% 1.43% (4.21)% 14% $ 5,276
JULY 1, 1998 TO JUNE 30,
1999................... $10.22 4.28% 0.77% 1.61% 0.66% 56% $ 5,219
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.79 4.31% 0.73% 1.68% 1.27% 14% $ 5,383
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.77 4.32% 0.64% 1.77% 9.67% 127% $ 5,467
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.44 4.54% 0.60% 1.58% 2.18% 77% $ 5,744
OCTOBER 1, 1995 TO
SEPTEMBER 30, 1996..... $10.45 4.45% 0.78% 1.46% 3.60% 42% $ 7,331
JUNE 1, 1995 TO
SEPTEMBER 30,
1995(6)................ $10.71 4.73% 0.45% 1.35% 6.55% 62% $24,622
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.21 3.95% 1.50% 2.36% (4.51)% 14% $ 2,217
JULY 1, 1998 TO JUNE 30,
1999................... $9.86 3.57% 1.49% 2.95% 0.00% 56% $ 1,582
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.40 3.59% 1.45% 2.62% 1.00% 14% $ 1,683
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.39 3.49% 1.37% 3.26% 8.90% 127% $ 1,546
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.07 3.83% 1.30% 2.96% 1.90% 77% $ 182
SEPTEMBER 6, 1996(7) TO
SEPTEMBER 30, 1996..... $10.07 3.59% 1.16% 1.81% 0.76% 42% $ 20
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.55 4.84% 0.65% 1.24% (4.15)% 14% $ 9,388
JULY 1, 1998 TO JUNE 30,
1999................... $10.23 4.33% 0.72% 1.46% 0.76% 56% $ 9,556
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.79 4.36% 0.68% 1.55% 1.19% 14% $10,995
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.78 4.52% 0.44% 1.55% 9.99% 127% $12,029
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.44 4.73% 0.40% 1.50% 2.38% 77% $14,349
OCTOBER 1, 1995(7) TO
SEPTEMBER 30, 1996..... $10.44 4.63% 0.48% 1.20% 3.74% 42% $15,577
CALIFORNIA LIMITED TERM TAX-FREE FUND
- ----------------------------------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.06 3.77% 0.75% 1.41% 0.71% 14% $37,626
JULY 1, 1998 TO JUNE 30,
1999................... $10.23 3.70% 0.75% 1.42% 2.84% 68% $41,299
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.44 3.72% 0.75% 1.44% 0.93% 2% $54,169
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.44 3.78% 0.68% 1.29% 5.92% 88% $59,011
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.27 3.73% 0.65% 1.18% 1.97% 14% $67,647
JANUARY 1, 1996 TO
SEPTEMBER 30,
1996(8)................ $10.26 3.83% 0.65% 1.14% 2.01% 48% $82,359
JANUARY 1, 1995 TO
DECEMBER 31, 1995...... $10.35 3.70% 0.65% 1.22% 9.14% 31% $77,965
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.90 3.84% 0.65% 1.26% 0.74% 14% $ 3,611
JULY 1, 1998 TO JUNE 30,
1999................... $10.07 3.75% 0.70% 1.30% 2.96% 68% $ 7,633
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.27 3.77% 0.70% 1.40% 0.94% 2% $ 7,559
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.27 3.84% 0.62% 1.17% 5.91% 88% $ 7,069
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.11 3.73% 0.60% 1.05% 2.00% 14% $ 7,061
SEPTEMBER 6, 1996(7) TO
SEPTEMBER 30, 1996..... $10.10 3.06% 0.55% 0.92% 0.60% 48% $10,066
CALIFORNIA TAX-FREE FUND(9)
- ----------------------------------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.47 4.81% 0.77% 1.13% (2.24)% 14% $398,525
JULY 1, 1998 TO JUNE 30,
1999................... $11.00 4.45% 0.77% 1.10% 2.38% 17% $461,574
JANUARY 1, 1998 TO
JUNE 30, 1998(10)...... $11.38 4.63% 0.75% 1.11% 2.86% 15% $499,720
JANUARY 1, 1997 TO
DECEMBER 31, 1997...... $11.32 4.84% 0.74% 0.89% 9.16% 12% $509,844
JANUARY 1, 1996 TO
DECEMBER 31, 1996...... $10.97 5.08% 0.71% 0.82% 4.03% 19% $239,703
JANUARY 1, 1995 TO
DECEMBER 31, 1995...... $11.34 5.59% 0.58% 0.78% 16.38% 38% $268,352
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.67 4.08% 1.48% 1.81% (2.68)% 14% $120,951
JULY 1, 1998 TO JUNE 30,
1999................... $11.22 3.74% 1.47% 1.84% 1.69% 17% $129,699
JANUARY 1, 1998 TO
JUNE 30, 1998(10)...... $11.60 3.90% 1.45% 1.82% 2.49% 15% $99,784
DECEMBER 15, 1997(7) TO
DECEMBER 31, 1997...... $11.54 3.95% 1.44% 1.76% 0.45% 12% $77,792
C SHARES(11)
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.68 4.07% 1.48% 1.80% (2.59)% 14% $20,674
JULY 1, 1998 TO JUNE 30,
1999................... $11.22 3.71% 1.47% 1.81% 1.69% 17% $22,251
JANUARY 1, 1998 TO
JUNE 30, 1998(10)...... $11.60 3.90% 1.45% 1.78% 2.49% 15% $ 8,249
JANUARY 1, 1997 TO
DECEMBER 31, 1997...... $11.54 4.19% 1.48% 1.63% 8.11% 12% $ 5,860
JANUARY 1, 1996 TO
DECEMBER 31, 1996...... $11.19 4.33% 1.46% 1.59% 3.24% 19% $ 6,506
JANUARY 1, 1995 TO
DECEMBER 31, 1995...... $11.57 4.87% 1.30% 1.57% 15.58% 38% $ 7,063
</TABLE>
73
<PAGE>
TAX-FREE FUNDS FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTIONS
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED
SHARE (LOSS) INVESTMENTS INCOME GAINS
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $11.03 0.27 (0.50) (0.27) (0.03)
JULY 1, 1998 TO JUNE 30,
1999................... $11.40 0.52 (0.22) (0.52) (0.15)
JANUARY 1, 1998 TO
JUNE 30, 1998(10)...... $11.35 0.26 0.05 (0.26) 0.00
DECEMBER 15, 1997(7) TO
DECEMBER 31, 1997...... $11.32 0.03 0.03 (0.03) 0.00
COLORADO TAX-FREE FUND
- -------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.30 0.27 (0.61) (0.27) (0.01)
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.55 0.04 (0.25) (0.04) 0.00
JUNE 1, 1998 TO MAY 31,
1999................... $10.69 0.51 (0.10) (0.51) (0.04)
JUNE 1, 1997 TO MAY 31,
1998................... $10.22 0.53 0.47 (0.53) 0.00
JUNE 1, 1996 TO MAY 31,
1997................... $ 9.89 0.54 0.33 (0.54) 0.00
JUNE 1, 1995 TO MAY 31,
1996................... $ 9.90 0.53 (0.01) (0.53) 0.00
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.31 0.23 (0.60) (0.23) (0.01)
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.56 0.04 (0.25) (0.04) 0.00
JUNE 1, 1998 TO MAY 31,
1999................... $10.71 0.43 (0.11) (0.43) (0.04)
JUNE 1, 1997 TO MAY 31,
1998................... $10.23 0.45 0.48 (0.45) 0.00
JUNE 1, 1996 TO MAY 31,
1997................... $ 9.90 0.47 0.33 (0.47) 0.00
JUNE 1, 1995 TO MAY 31,
1996................... $ 9.91 0.46 (0.01) (0.46) 0.00
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.30 0.27 (0.60) (0.27) (0.01)
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.55 0.04 (0.25) (0.04) 0.00
JUNE 1, 1998 TO MAY 31,
1999................... $10.69 0.51 (0.10) (0.51) (0.04)
JUNE 1, 1997 TO MAY 31,
1998................... $10.22 0.53 0.47 (0.53) 0.00
JUNE 1, 1996 TO MAY 31,
1997................... $ 9.89 0.54 0.33 (0.54) 0.00
JUNE 1, 1995 TO MAY 31,
1996................... $ 9.90 0.53 (0.01) (0.53) 0.00
MINNESOTA INTERMEDIATE TAX-FREE FUND
- -------------------------------------------------------------------------------------------
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $ 9.75 0.24 (0.33) (0.24) 0.00
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $ 9.91 0.04 (0.16) (0.04) 0.00
JUNE 1, 1998 TO MAY 31,
1999................... $10.03 0.49 (0.09) (0.49) (0.03)
OCTOBER 1, 1997(7) TO
MAY 31, 1998........... $10.00 0.33 0.03 (0.33) 0.00
MINNESOTA TAX-FREE FUND
- -------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.74 0.27 (0.75) (0.27) (0.01)
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.96 0.04 (0.22) (0.04) 0.00
JUNE 1, 1998 TO MAY 31,
1999................... $11.05 0.51 (0.08) (0.51) (0.01)
JUNE 1, 1997 TO MAY 31,
1998................... $10.57 0.53 0.48 (0.53) 0.00
JUNE 1, 1996 TO MAY 31,
1997................... $10.30 0.54 0.27 (0.54) 0.00
JUNE 1, 1995 TO MAY 31,
1996................... $10.45 0.56 (0.15) (0.56) 0.00
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.74 0.23 (0.75) (0.23) (0.01)
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.96 0.04 (0.22) (0.04) 0.00
JUNE 1, 1998 TO MAY 31,
1999................... $11.05 0.43 (0.08) (0.43) (0.01)
JUNE 1, 1997 TO MAY 31,
1998................... $10.57 0.45 0.48 (0.45) 0.00
JUNE 1, 1996 TO MAY 31,
1997................... $10.30 0.46 0.27 (0.46) 0.00
JUNE 1, 1995 TO MAY 31,
1996................... $10.44 0.48 (0.14) (0.48) 0.00
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.74 0.27 (0.75) (0.27) (0.01)
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.96 0.04 (0.22) (0.04) 0.00
JUNE 1, 1998 TO MAY 31,
1999................... $11.05 0.52 (0.09) (0.51) (0.01)
JUNE 1, 1997 TO MAY 31,
1998................... $10.57 0.53 0.48 (0.53) 0.00
JUNE 1, 1996 TO MAY 31,
1997................... $10.30 0.54 0.27 (0.54) 0.00
JUNE 1, 1995 TO MAY 31,
1996................... $10.45 0.56 (0.15) (0.56) 0.00
</TABLE>
74
<PAGE>
FINANCIAL HIGHLIGHTS (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ENDING RATIO TO AVERAGE NET ASSETS (ANNUALIZED)
NET ASSET ----------------------------------------- PORTFOLIO NET ASSETS AT
VALUE PER NET INVESTMENT NET GROSS TOTAL TURNOVER END OF PERIOD
SHARE INCOME (LOSS) EXPENSES EXPENSES(1) RETURN(2) RATE (000'S OMITTED)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.50 4.90% 0.66% 1.03% (2.17)% 14% $44,864
JULY 1, 1998 TO JUNE 30,
1999................... $11.03 4.50% 0.72% 1.01% 2.46% 17% $73,625
JANUARY 1, 1998 TO
JUNE 30, 1998(10)...... $11.40 4.69% 0.69% 0.98% 2.80% 15% $82,577
DECEMBER 15, 1997(7) TO
DECEMBER 31, 1997...... $11.35 4.79% 0.63% 0.92% 0.49% 12% $84,113
COLORADO TAX-FREE FUND
- ----------------------------------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.68 5.82% 0.59% 1.01% (3.39)% 22% $34,853
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.30 4.94% 0.60% 1.08% (1.97)% 11% $39,066
JUNE 1, 1998 TO MAY 31,
1999................... $10.55 4.71% 0.60% 1.02% 3.79% 77% $39,958
JUNE 1, 1997 TO MAY 31,
1998................... $10.69 5.00% 0.60% 1.04% 9.96% 70% $34,254
JUNE 1, 1996 TO MAY 31,
1997................... $10.22 5.36% 0.45% 1.14% 9.00% 129% $27,806
JUNE 1, 1995 TO MAY 31,
1996................... $9.89 5.30% 0.30% 1.13% 5.35% 171% $26,991
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.70 5.85% 1.33% 1.93% (3.65)% 22% $ 8,364
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.31 4.17% 1.35% 2.08% (2.03)% 11% $10,959
JUNE 1, 1998 TO MAY 31,
1999................... $10.56 3.96% 1.35% 2.03% 2.92% 77% $10,909
JUNE 1, 1997 TO MAY 31,
1998................... $10.71 4.24% 1.35% 2.04% 9.25% 70% $ 9,156
JUNE 1, 1996 TO MAY 31,
1997................... $10.23 4.60% 1.20% 2.15% 8.19% 129% $ 7,218
JUNE 1, 1995 TO MAY 31,
1996................... $9.90 4.64% 1.05% 2.16% 4.56% 171% $ 6,400
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.69 5.86% 0.59% 0.92% (3.29)% 22% $44,764
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.30 4.93% 0.60% 1.08% (1.97)% 11% $49,101
JUNE 1, 1998 TO MAY 31,
1999................... $10.55 4.71% 0.60% 0.99% 3.79% 77% $48,926
JUNE 1, 1997 TO MAY 31,
1998................... $10.69 5.01% 0.60% 1.01% 9.97% 70% $32,342
JUNE 1, 1996 TO MAY 31,
1997................... $10.22 5.35% 0.45% 1.13% 9.00% 129% $25,917
JUNE 1, 1995 TO MAY 31,
1996................... $9.89 5.30% 0.30% 1.13% 5.35% 171% $24,074
MINNESOTA INTERMEDIATE TAX-FREE FUND
- ----------------------------------------------------------------------------------------------------------------------
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.42 5.57% 0.59% 0.67% (0.92)% 3% $198,930
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $9.75 4.94% 0.60% 0.72% (1.21)% 1% $219,258
JUNE 1, 1998 TO MAY 31,
1999................... $9.91 4.84% 0.60% 0.68% 3.95% 20% $222,953
OCTOBER 1, 1997(7) TO
MAY 31, 1998........... $10.03 5.02% 0.60% 0.72% 7.90% 15% $209,685
MINNESOTA TAX-FREE FUND
- ----------------------------------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.98 5.63% 0.59% 1.03% (4.55)% 37% $32,041
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.74 4.71% 0.60% 1.11% (1.63)% 2% $37,139
JUNE 1, 1998 TO MAY 31,
1999................... $10.96 4.61% 0.60% 1.03% 3.96% 25% $38,255
JUNE 1, 1997 TO MAY 31,
1998................... $11.05 4.83% 0.60% 1.07% 9.71% 68% $33,597
JUNE 1, 1996 TO MAY 31,
1997................... $10.57 5.11% 0.60% 1.21% 7.98% 97% $25,739
JUNE 1, 1995 TO MAY 31,
1996................... $10.30 5.26% 0.48% 1.26% 3.97% 77% $26,610
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.98 5.63% 1.33% 1.95% (4.91)% 37% $18,264
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.74 3.93% 1.35% 2.11% (1.69)% 2% $21,366
JUNE 1, 1998 TO MAY 31,
1999................... $10.96 3.85% 1.35% 2.04% 3.18% 25% $21,493
JUNE 1, 1997 TO MAY 31,
1998................... $11.05 4.07% 1.35% 2.08% 8.89% 68% $16,549
JUNE 1, 1996 TO MAY 31,
1997................... $10.57 4.35% 1.34% 2.21% 7.18% 97% $11,128
JUNE 1, 1995 TO MAY 31,
1996................... $10.30 4.51% 1.23% 2.29% 3.28% 77% $ 8,825
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.98 5.62% 0.59% 0.95% (4.55)% 37% $24,933
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.74 4.69% 0.60% 1.11% (1.63)% 2% $27,197
JUNE 1, 1998 TO MAY 31,
1999................... $10.96 4.62% 0.60% 1.00% 3.96% 25% $27,261
JUNE 1, 1997 TO MAY 31,
1998................... $11.05 4.84% 0.60% 1.04% 9.71% 68% $20,736
JUNE 1, 1996 TO MAY 31,
1997................... $10.57 5.12% 0.60% 1.23% 7.98% 97% $11,135
JUNE 1, 1995 TO MAY 31,
1996................... $10.30 5.24% 0.51% 1.30% 3.97% 77% $ 3,988
</TABLE>
75
<PAGE>
TAX-FREE FUNDS FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING NET AND DIVIDENDS DISTRIBUTIONS
NET ASSET INVESTMENT UNREALIZED FROM NET FROM NET
VALUE PER INCOME GAIN (LOSS) ON INVESTMENT REALIZED
SHARE (LOSS) INVESTMENTS INCOME GAINS
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- -------------------------------------------------------------------------------------------
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.39 0.24 (0.17) (0.24) 0.00
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.54 0.04 (0.15) (0.04) 0.00
JUNE 1, 1998 TO MAY 31,
1999................... $10.59 0.46 (0.04) (0.47) 0.00
JUNE 1, 1997 TO MAY 31,
1998................... $10.39 0.47 0.21 (0.47) (0.01)
OCTOBER 1, 1996(7) TO
MAY 31, 1997........... $10.00 0.31 0.39 (0.31) 0.00
NATIONAL TAX-FREE FUND
- -------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.22 0.28 (0.64) (0.27) (0.01)
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.44 0.04 (0.22) (0.04) 0.00
JUNE 1, 1998 TO MAY 31,
1999................... $10.54 0.52 (0.10) (0.51) (0.01)
JUNE 1, 1997 TO MAY 31,
1998................... $10.05 0.53 0.49 (0.53) 0.00
JUNE 1, 1996 TO MAY 31,
1997................... $ 9.78 0.54 0.27 (0.54) 0.00
JUNE 1, 1995 TO MAY 31,
1996................... $ 9.82 0.55 (0.04) (0.55) 0.00
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.22 0.24 (0.64) (0.23) (0.01)
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.44 0.04 (0.22) (0.04) 0.00
JUNE 1, 1998 TO MAY 31,
1999................... $10.54 0.44 (0.10) (0.43) (0.01)
JUNE 1, 1997 TO MAY 31,
1998................... $10.05 0.46 0.48 (0.45) 0.00
JUNE 1, 1996 TO MAY 31,
1997................... $ 9.78 0.46 0.27 (0.46) 0.00
JUNE 1, 1995 TO MAY 31,
1996................... $ 9.82 0.48 (0.04) (0.48) 0.00
C SHARES
NOVEMBER 8, 1999(7) TO
DECEMBER 31, 1999...... $ 9.79 0.07 (0.21) (0.07) 0.00
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.22 0.24 (0.64) (0.23) (0.01)
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.44 0.04 (0.22) (0.04) 0.00
JUNE 1, 1998 TO MAY 31,
1999................... $10.54 0.52 (0.10) (0.51) (0.01)
JUNE 1, 1997 TO MAY 31,
1998................... $10.06 0.53 0.48 (0.53) 0.00
JUNE 1, 1996 TO MAY 31,
1997................... $ 9.78 0.54 0.28 (0.54) 0.00
JUNE 1, 1995 TO MAY 31,
1996................... $ 9.82 0.55 (0.04) (0.55) 0.00
OREGON TAX-FREE FUND(13)
- -------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $16.10 0.39 (1.04) (0.39) (0.02)
JULY 1, 1998 TO JUNE 30,
1999................... $16.82 0.75 (0.47) (0.75) (0.25)
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $16.81 0.18 0.01 (0.18) 0.00
APRIL 1, 1997 TO
MARCH 31, 1998......... $16.29 0.76 0.81 (0.76) (0.29)
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $16.42 0.37 (0.10) (0.37) (0.03)
OCTOBER 1, 1995 TO
SEPTEMBER 30, 1996..... $16.38 0.79 0.04 (0.79) 0.00
JUNE 1, 1995 TO
SEPTEMBER 30,
1995(6)................ $16.47 0.28 (0.08) (0.29) 0.00
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $ 9.86 0.20 (0.63) (0.20) (0.01)
JULY 1, 1998 TO JUNE 30,
1999................... $10.31 0.37 (0.29) (0.37) (0.16)
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.30 0.09 0.01 (0.09) 0.00
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.00 0.39 0.47 (0.39) (0.17)
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.07 0.17 (0.05) (0.17) (0.02)
SEPTEMBER 6, 1996(7) TO
SEPTEMBER 30, 1996..... $10.00 0.00 0.07 0.00 0.00
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $16.10 0.40 (1.04) (0.40) (0.02)
JULY 1, 1998 TO JUNE 30,
1999................... $16.82 0.76 (0.47) (0.76) (0.25)
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $16.81 0.19 0.01 (0.19) 0.00
APRIL 1, 1997 TO
MARCH 31, 1998......... $16.28 0.79 0.82 (0.79) (0.29)
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $16.42 0.39 (0.11) (0.39) (0.03)
OCTOBER 1, 1995(7) TO
SEPTEMBER 30, 1996..... $16.38 0.72 0.04 (0.72) 0.00
</TABLE>
76
<PAGE>
FINANCIAL HIGHLIGHTS (UNAUDITED) TAX-FREE FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ENDING RATIO TO AVERAGE NET ASSETS (ANNUALIZED)
NET ASSET ----------------------------------------- PORTFOLIO NET ASSETS AT
VALUE PER NET INVESTMENT NET GROSS TOTAL TURNOVER END OF PERIOD
SHARE INCOME (LOSS) EXPENSES EXPENSES(1) RETURN(2) RATE (000'S OMITTED)
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
- ----------------------------------------------------------------------------------------------------------------------
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $10.22 5.00% 0.61% 0.94% 0.59% 7% $72,227
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.39 4.25% 0.65% 1.12% (1.08)% 24% $84,419
JUNE 1, 1998 TO MAY 31,
1999................... $10.54 4.26% 0.65% 1.04% 3.97% 41% $88,223
JUNE 1, 1997 TO MAY 31,
1998................... $10.59 4.47% 0.65% 1.03% 6.70% 46% $54,602
OCTOBER 1, 1996(7) TO
MAY 31, 1997........... $10.39 4.45% 0.65% 1.27% 6.99% 16% $40,990
NATIONAL TAX-FREE FUND
- ----------------------------------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.58 6.07% 0.67% 0.94% (3.65)% 15% $68,933
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.22 5.10% 0.60% 1.02% (1.69)% 18% $41,881
JUNE 1, 1998 TO MAY 31,
1999................... $10.44 4.81% 0.60% 0.98% 4.04% 106% $43,388
JUNE 1, 1997 TO MAY 31,
1998................... $10.54 5.09% 0.60% 0.99% 10.33% 143% $35,121
JUNE 1, 1996 TO MAY 31,
1997................... $10.05 5.41% 0.50% 1.06% 8.43% 152% $29,217
JUNE 1, 1995 TO MAY 31,
1996................... $9.78 5.54% 0.40% 1.06% 5.29% 126% $33,914
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.58 5.98% 1.40% 1.85% (4.00)% 15% $19,983
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.22 4.34% 1.35% 2.11% (1.76)% 18% $17,878
JUNE 1, 1998 TO MAY 31,
1999................... $10.44 4.05% 1.35% 2.01% 3.26% 106% $17,973
JUNE 1, 1997 TO MAY 31,
1998................... $10.54 4.31% 1.35% 2.05% 9.52% 143% $11,070
JUNE 1, 1996 TO MAY 31,
1997................... $10.05 4.64% 1.26% 2.15% 7.63% 152% $ 7,329
JUNE 1, 1995 TO MAY 31,
1996................... $9.78 4.77% 1.14% 2.21% 4.50% 126% $ 5,897
C SHARES
NOVEMBER 8, 1999(7) TO
DECEMBER 31, 1999...... $9.58 1.79% 1.49% 1.63% (1.47)% 15% $ 6,595
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.58 5.98% 0.59% 0.84% (3.62)% 15% $267,411
JUNE 1, 1999 TO JUNE 30,
1999(12)............... $10.22 5.09% 0.60% 0.95% (1.69)% 18% $304,170
JUNE 1, 1998 TO MAY 31,
1999................... $10.44 4.83% 0.60% 0.91% 4.04% 106% $311,757
JUNE 1, 1997 TO MAY 31,
1998................... $10.54 5.09% 0.60% 0.92% 10.22% 143% $286,734
JUNE 1, 1996 TO MAY 31,
1997................... $10.06 5.40% 0.50% 1.03% 8.54% 152% $259,861
JUNE 1, 1995 TO MAY 31,
1996................... $9.78 5.57% 0.32% 1.06% 5.29% 126% $276,159
OREGON TAX-FREE FUND(13)
- ----------------------------------------------------------------------------------------------------------------------
A SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $15.04 4.92% 0.70% 1.21% (4.12)% 25% $22,774
JULY 1, 1998 TO JUNE 30,
1999................... $16.10 4.44% 0.67% 1.32% 1.57% 54% $24,924
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $16.82 4.41% 0.67% 1.29% 1.16% 24% $27,665
APRIL 1, 1997 TO
MARCH 31, 1998......... $16.81 4.54% 0.62% 1.36% 9.81% 82% $27,837
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $16.29 4.52% 0.60% 1.31% 1.65% 90% $30,635
OCTOBER 1, 1995 TO
SEPTEMBER 30, 1996..... $16.42 4.87% 0.85% 1.15% 5.03% 27% $33,676
JUNE 1, 1995 TO
SEPTEMBER 30,
1995(6)................ $16.38 5.01% 0.70% 1.01% 3.67% 57% $50,077
B SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $9.22 4.09% 1.51% 2.00% (4.42)% 25% $10,193
JULY 1, 1998 TO JUNE 30,
1999................... $9.86 3.59% 1.51% 2.14% 0.63% 54% $10,095
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $10.31 3.48% 1.51% 2.10% 0.98% 24% $ 5,956
APRIL 1, 1997 TO
MARCH 31, 1998......... $10.30 3.56% 1.43% 2.39% 8.77% 82% $ 3,762
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $10.00 3.23% 1.30% 2.15% 1.17% 90% $ 287
SEPTEMBER 6, 1996(7) TO
SEPTEMBER 30, 1996..... $10.07 1.83% 0.00% 0.00% 0.70% 27% $ 0
I SHARES
JULY 1, 1999 TO
DECEMBER 31, 1999...... $15.04 5.00% 0.61% 1.19% (4.08)% 25% $ 4,852
JULY 1, 1998 TO JUNE 30,
1999................... $16.10 4.49% 0.62% 1.32% 1.62% 54% $ 5,903
APRIL 1, 1998 TO
JUNE 30, 1998(4)....... $16.82 4.46% 0.62% 1.26% 1.18% 24% $ 7,314
APRIL 1, 1997 TO
MARCH 31, 1998......... $16.81 4.72% 0.43% 1.27% 10.08% 82% $ 7,635
OCTOBER 1, 1996 TO
MARCH 31, 1997(5)...... $16.28 4.72% 0.40% 1.24% 1.69% 90% $ 8,175
OCTOBER 1, 1995(7) TO
SEPTEMBER 30, 1996..... $16.42 4.41% 0.63% 0.93% 5.13% 27% $ 8,512
</TABLE>
77
<PAGE>
TAX-FREE FUNDS NOTES TO FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
(1) During each period, various fees and expenses were waived and reimbursed.
The ratio of Gross Expenses to Average Net Assets reflects the expense
ratio in the absence of any waivers and reimbursements (Note 9).
(2) Total return calculations do not include any sales charges, and would have
been lower had certain expenses not been waived or reimbursed during the
period shown.
(3) The Fund operated as the Arizona Intermediate Tax-Free Fund of Westcore
Trust and was advised by First Interstate Bank of Oregon, N.A. from its
commencement of operations on March 2, 1992 until it was reorganized as a
series of Pacifica Funds Trust on October 1, 1995, when First Interstate
Capital Management, Inc. (FICM) assumed investment advisory
responsibilities. In connection with the merger of First Interstate
Bancorp into Wells Fargo & Co. on April 1, 1996, FICM was renamed as Wells
Fargo Investment Management, Inc. The Fund operated as a series of
Pacifica Funds Trust until it was reorganized as a series of Stagecoach
Funds, Inc. on September 6, 1996. In conjunction with the September 6,
1996 reorganization, existing Investor shares were converted into Class A
shares of the Fund and WFB assumed investment advisory responsibilities.
(4) The Fund changed its fiscal year-end from March 31 to June 30.
(5) The Fund changed its fiscal year-end from September 30 to March 31.
(6) The Fund changed its fiscal year-end from May 31 to September 30.
(7) Commencement of operations.
(8) The Fund changed its fiscal year-end from December 31 to September 30.
(9) Periods prior to December 31, 1997 have been restated to give effect to
the conversion ratios applied in the consolidation of Overland Express
Funds, Inc. and Stagecoach Funds, Inc. (0.95571302 for Class A shares and
1.22415291 for Class C shares).
(10) The Fund changed its fiscal year-end from December 31 to June 30.
(11) This class of shares commenced operations as Class D and was renamed as
Class C in conjunction with the consolidation of Overland Express
Funds, Inc. and Stagecoach Funds, Inc. on December 15, 1997.
(12) The Fund changed its fiscal year-end from May 31 to June 30.
(13) The Fund operated as the Oregon Tax-Exempt Fund of Westcore Trust and was
advised by First Interstate Bank of Oregon, N.A. from its commencement of
operations until it was reorganized as a series of Pacifica Funds Trust on
October 1, 1995, when First Interstate Capital Management, Inc. (FICM)
assumed investment advisory responsibilities. In connection with the
merger of First Interstate Bancorp into Wells Fargo & Co. on April 1,
1996, FICM was renamed as Wells Fargo Investment Management, Inc. The Fund
operated as a series of Pacifica Funds Trust until it was reorganized as a
series of Stagecoach Funds, Inc. on September 6, 1996. In conjunction with
the September 6, 1996 reorganization, existing Investor shares were
converted into Class A shares of the Fund and WFB assumed investment
advisory responsibilities.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
78
<PAGE>
NOTES TO FINANCIAL STATEMENTS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Wells Fargo Funds Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company. The Trust commenced operations on November 8,
1999, and is currently comprised of 61 separate series. These financial
statements represent the Arizona Tax-Free, California Limited Term Tax-Free,
California Tax-Free, Colorado Tax-Free, Minnesota Intermediate Tax-Free,
Minnesota Tax-Free, National Limited Term Tax-Free, National Tax-Free, and
Oregon Tax-Free Funds (each, a "Fund", collectively, the "Funds"), each a
diversified series of the Trust.
Concurrent with the establishment of the Trust, the Board of Trustees of the
Stagecoach Family of Funds and the Board of Trustees of the Norwest Advantage
Funds approved a consolidation agreement providing for the acquisition of the
assets and assumption of liabilities of certain Stagecoach and Norwest
Advantage Funds into the Wells Fargo Funds Trust. Effective on the close of
business November 5, 1999 the Stagecoach and/or Norwest Advantage Funds were
consolidated into the Wells Fargo Funds Trust through a tax-free exchange of
shares as follows:
<TABLE>
<CAPTION>
Stagecoach Fund Norwest Advantage Fund Wells Fargo Fund
<S> <C> <C>
ARIZONA TAX-FREE FUND ARIZONA TAX-FREE FUND*
CALIFORNIA TAX-FREE INCOME FUND CALIFORNIA LIMITED TERM TAX-FREE FUND*
CALIFORNIA TAX-FREE BOND FUND CALIFORNIA TAX-FREE FUND*
COLORADO TAX-FREE FUND COLORADO TAX-FREE FUND**
MINNESOTA INTERMEDIATE TAX-FREE FUND MINNESOTA INTERMEDIATE TAX-FREE FUND**
MINNESOTA TAX-FREE FUND MINNESOTA TAX-FREE FUND**
LIMITED TERM TAX-FREE FUND NATIONAL LIMITED TERM TAX-FREE FUND**
NATIONAL TAX-FREE FUND TAX-FREE INCOME FUND NATIONAL TAX-FREE FUND**
OREGON TAX-FREE FUND OREGON TAX-FREE FUND*
</TABLE>
* STAGECOACH FUND ACCOUNTING SURVIVOR
** NORWEST ADVANTAGE FUND ACCOUNTING SURVIVOR
Concurrent with the reorganization of the Stagecoach National Tax-Free Fund
and the Norwest Advantage Tax-Free Income Fund into the Wells Fargo National
Tax-Free Fund, the Wells Fargo National Tax-Free Fund acquired all of the net
assets of the Stagecoach National Tax-Free Fund and Norwest Advantage Tax-Free
Income Fund. The Stagecoach National Tax-Free Fund exchanged its 3,748,389
shares (valued at $49,053,774 million, including $(4,130,301) of unrealized
depreciation) for 5,010,601 shares of the Wells Fargo National Tax-Free Fund.
The Norwest Advantage Tax-Free Income Fund, as accounting survivor, exchanged
its shares at a rate of one for one carrying all of its assets and liabilities
(valued at $336,823,981) into the Wells Fargo National Tax-Free Fund.
The Arizona Tax-Free, California Tax-Free, Colorado Tax-Free, Minnesota
Tax-Free, National Tax-Free and Oregon Tax-Free Funds offer Class A, Class B,
and Institutional Class shares. In addition, the California Tax-Free and
National Tax-Free Funds also offer Class C shares. The California Limited Term
Tax-Free Fund offers Class A and Institutional Class shares. The Minnesota
Intermediate Tax-Free and National Limited Term Tax-Free Funds only offer
Institutional Class shares. The separate classes of shares differ principally
in the applicable sales charges (if any), distribution fees, registration and
transfer agency fees. Shareholders of each class may also bear certain
expenses that pertain to that particular class. All shareholders bear the
common expenses of the Fund and earn income from the portfolio pro rata based
on the average daily net assets of each class, without distinction between
share classes. Dividends are determined separately for each class based on
income and expenses allocable to each class. Realized gains are allocated to
each class pro rata based on the net assets of each class on the date of
distribution. No class has preferential dividend rights. Differences in per
share dividend rates generally result from the relative weightings of pro rata
income and realized gain allocations and from differences in separate class
expenses, including distribution, shareholder servicing and transfer agency
fees.
79
<PAGE>
TAX-FREE FUNDS NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies which are consistently followed
by the Trust in the preparation of its financial statements are in conformity
with generally accepted accounting principles ("GAAP") for investment
companies.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
SECURITY VALUATION
Investments in securities are valued at the close of each business day.
Securities which are traded on a national or foreign securities exchange or
the National Association of Securities Dealers Automated Quotation ("NASDAQ")
National Market are valued at the last reported sales price. In the absence of
any sale of such securities, and in the case of other securities, including
U.S. Government obligations, but excluding debt securities maturing in 60 days
or less, the valuations are based on the latest quoted bid prices. Securities
denominated in foreign currencies are translated into U.S. dollars using the
closing rates of exchange in effect on the day of valuation. Securities for
which quotations are not readily available are valued at fair value as
determined by policies set by the Trust's Board of Trustees.
Debt securities maturing in 60 days or less are valued at amortized cost
pursuant to Rule 2a-7. The amortized cost method involves valuing a security
at its cost, plus accretion of discount or minus amortization of premium over
the period until maturity, which approximates market value.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Securities transactions are recorded on a trade date basis. Realized gains or
losses are reported on the basis of identified cost of securities delivered.
Interest income is accrued daily and bond discounts are accreted and premiums
are amortized under provisions of the Internal Revenue Code of 1986, as
amended (the "Code").
Dividend income is recognized on the ex-dividend date [except for certain
dividends from foreign securities which are recorded as soon as the Fund is
informed of the ex-dividend date]. Dividend income from foreign securities is
recorded net of foreign taxes withheld where recovery of such taxes is not
assured.
RECLASSIFICATION OF CAPITAL ACCOUNTS
On the Statement of Assets and Liabilities, as a result of permanent
book-to-tax and merger-related differences, reclassification adjustments were
made as follows:
<TABLE>
<CAPTION>
Undistributed Net Net Realized Paid in
Investment Income Gain/Loss Capital
<S> <C> <C> <C>
NATIONAL TAX-FREE FUND 204,219 (232,667) 28,448
</TABLE>
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income, if any, are declared
daily and distributed monthly. Distributions to shareholders from net realized
capital gains, if any, are declared and distributed at least annually.
Distributions are based on amounts calculated in accordance with the
applicable federal income tax regulations, which may differ from generally
accepted accounting principles. The timing and character of distributions made
during the period from net investment income or net realized gains may also
differ from their ultimate characterization for federal income tax purposes.
The differences between the income or gains distributed on a book versus tax
basis are shown as excess distributions of net investment income and net
realized gain on sales of investments in the accompanying Statements of
Changes in Net Assets. To the extent that these differences are permanent in
nature, such amounts are reclassified within the capital accounts based on
their federal tax-basis treatment; temporary differences do not require
reclassifications.
FEDERAL INCOME TAXES
Each Fund is treated as a separate entity for federal income tax purposes. It
is the policy of each Fund of the Trust to continue to qualify as a regulated
investment company by complying with the provisions applicable to regulated
investment companies, as defined in the Code, and to make distributions of
substantially all of its investment company taxable income and any net
realized capital gains (after reduction for capital loss carryforwards)
sufficient to relieve it from all, or substantially all, federal income taxes.
Accordingly, no provision for federal income taxes was required at
December 31, 1999.
80
<PAGE>
NOTES TO FINANCIAL STATEMENTS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
The following Funds had estimated net capital loss carryforwards, which are
available to offset future net realized capital gains:
<TABLE>
<CAPTION>
Capital
Year Loss
Date Fund Expires Carryforwards
<S> <C> <C> <C>
DECEMBER 31, 1999 CALIFORNIA TAX-FREE 2007 $ 938,315
JUNE 30, 1999 COLORADO TAX-FREE 2007 220,355
JUNE 30, 1999 MINNESOTA INTERMEDIATE TAX-FREE 2007 129,158
JUNE 30, 1999 MINNESOTA TAX-FREE 2007 186,463
JUNE 30, 1999 NATIONAL LIMITED TERM TAX-FREE 2006 29,185
2007 210,768
NOVEMBER 5, 1999 NATIONAL TAX-FREE 2002 33,702
2003 245,237
2007 5,667,800
DECEMBER 31, 1999 OREGON TAX-FREE 2007 101,327
</TABLE>
DEFERRED ORGANIZATION COSTS
Certain costs incurred in connection with the organization of the Funds and
their initial registration with the Securities and Exchange Commission and
with the various states are being amortized on a straight-line basis over 60
months from the date each Fund commenced operations.
3. ADVISORY FEES
The Trust has entered into separate advisory contracts on behalf of the Funds
with WFB. Pursuant to the contracts, WFB has agreed to provide the following
Funds with daily portfolio management, for which, WFB is entitled to be paid a
monthly advisory fee at the following annual rates:
<TABLE>
<CAPTION>
Fund % of Average Daily Net Assets
<S> <C>
ARIZONA TAX-FREE FUND 0.40
CALIFORNIA LIMITED TERM TAX-FREE FUND 0.40
CALIFORNIA TAX-FREE FUND 0.40
COLORADO TAX-FREE FUND 0.40
MINNESOTA INTERMEDIATE TAX-FREE FUND 0.40
MINNESOTA TAX-FREE FUND 0.40
NATIONAL LIMITED TERM TAX-FREE FUND 0.40
NATIONAL TAX-FREE FUND 0.40
OREGON TAX-FREE FUND 0.40
</TABLE>
Wells Capital Management Incorporated ("WCM"), a wholly-owned subsidiary of
WFB, acts as investment sub-advisor to the Arizona Tax-Free, California
Limited Term Tax-Free, California Tax-Free, and Oregon Tax-Free Funds. WCM is
entitled to receive from WFB, as compensation for its sub-advisory services, a
monthly fee at the annual rate of 0.15% of each Fund's average daily net
assets up to $400 million, 0.125% for the next $400 million, and 0.10% of the
Fund's average daily net assets in excess of $800 million.
Prior to November 8, 1999 the Trust had entered into separate advisory
contracts on behalf of the Arizona Tax-Free, California Limited Term Tax-Free,
California Tax-Free, and Oregon Tax-Free Funds with WFB. Pursuant to the
contracts, WFB had agreed to provide the Funds with daily portfolio
management. Under the old contracts with the Funds, WFB was entitled to be
paid a monthly advisory fee at the annual rate of 0.50% of each Fund's average
daily net assets. Prior to November 8, 1999 the investment adviser to the
Colorado Tax-Free, Minnesota Intermediate Tax-Free, Minnesota Tax-Free,
National Limited Term Tax-Free, and National Tax-Free Funds was Norwest
Investment Management, Inc. ("Adviser"), a wholly
81
<PAGE>
TAX-FREE FUNDS NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
owned subsidiary of Norwest Bank Minnesota, N.A. ("Norwest"), which is a
subsidiary of Wells Fargo & Company. For the Colorado Tax-Free, Minnesota
Tax-Free, National Limited Term Tax-Free, and National Tax-Free Funds, the
Adviser was entitled to be paid a monthly advisory fee at the annual rate of
0.50% of each Fund's average daily net assets. For the Minnesota Intermediate
Tax-Free Fund, the Adviser was entitled to be paid a monthly advisory fee at
the annual rate of 0.25% of the Fund's average daily net assets.
4. DISTRIBUTION FEES
The Trust has adopted a Distribution Plan ("Plan") for Class B and C shares
of the Funds pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are
charged to the Class B and C shares and paid to Stephens, Inc. ("Stephens") at
a rate of 0.75% of average daily net assets. There are no distribution fees
for the Funds' Class A shares. The distribution fees paid on behalf of the
Funds for the period ended December 31, 1999 are disclosed in the Statement of
Operations.
Prior to November 8, 1999, the Plan for the Class A shares of the Arizona
Tax-Free and Oregon Tax-Free Funds provided that each such Fund may pay to
Stephens, as compensation for distribution-related services or as
reimbursement for distribution-related expenses, up to 0.05% of the average
daily net assets attributable to its Class A shares.
Prior to November 8, 1999, the Plan for Class A shares of the California
Limited Term Tax-Free and California Tax-Free Funds provided that the Funds
may defray all or part of the cost of preparing, printing and distributing
prospectuses and other promotional materials by paying for costs incurred on
an annual basis of up to 0.05% of the average daily net assets attributable to
the California Limited Term Tax-Free's Class A shares and up to the greater of
$100,000 or 0.05% of the California Tax-Free's Class A shares.
Prior to November 8, 1999, the Plan for Class B shares of the California
Tax-Free Fund provided that the Fund may pay to Stephens, as compensation for
distribution-related services or as reimbursement for distribution-related
expenses, up to 0.70% of the average daily net assets attributable to its
Class B shares.
Prior to November 8, 1999, the Plan for Class B shares of the Colorado
Tax-Free, Minnesota Tax-Free, and National Tax-Free Funds also authorized
payment of a maintenance fee at an annual rate of 0.25% of the average daily
net assets attributable to B shares.
The Plan for Class B shares of the Arizona Tax-Free and Oregon Tax-Free
Funds, and Class C shares of the California Tax-Free Fund remains unchanged.
5. ADMINISTRATION
The Trust has entered into an administration agreement on behalf of the Funds
with WFB whereby WFB is entitled to receive monthly fees at the annual rate of
0.15% of each Fund's average daily net assets.
Prior to November 8, 1999, the Administrator for the Colorado Tax-Free,
Minnesota Intermediate Tax-Free, Minnesota Tax-Free, National Limited Term
Tax-Free, and National Tax-Free Funds was Forum Administrative Services, LLC
("FAdS"). The Funds were charged monthly fees at the annual rate of 0.05% of
each Fund's average daily net assets. Prior to March 25,1999, the Arizona
Tax-Free, California Limited Term Tax-Free, California Tax-Free, and Oregon
Tax-Free Funds retained WFB as administrator and Stephens Inc. as
co-administrator. For these services, WFB and Stephens Inc. were entitled to
receive monthly fees at the annual rates of 0.03% and 0.04%, respectively, of
each Fund's average daily net assets.
6. TRANSFER AGENT
The Trust has entered into a transfer agency agreement on behalf of the Funds
with Boston Financial Data Services ("BFDS"). WFB has been engaged by BFDS to
provide sub-transfer agency services for the Funds. Prior to November 8, 1999,
for the Colorado Tax-Free, Minnesota Intermediate Tax-Free, Minnesota Tax-
Free, National Limited Term Tax-Free, and National Tax-Free Funds, Norwest
served as the Trust's transfer agent. For these services, Norwest received a
fee at an annual rate of 0.25% of the average daily net assets attributable to
each class of each Fund's shares.
Prior to July 17, 1999 the Trust had entered into a contract on behalf of the
Funds with WFB, whereby WFB provided transfer agency services for the Arizona
Tax-Free, California Limited Term Tax-Free, California Tax-Free, and Oregon
Tax-Free Funds, which were charged at an annual rate of 0.14% of the average
daily net assets of each Fund.
7. SHAREHOLDER SERVICING
The Trust has also entered into contracts on behalf of the Funds with
numerous shareholder servicing agents, whereby the Funds are charged 0.25% of
the average daily net assets for Class A, Class B, and
82
<PAGE>
NOTES TO FINANCIAL STATEMENTS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
Class C shares for these services. No fee is charged for Institutional
Class shares. Prior to November 8, 1999 the shareholder servicing fees for the
Class A shares of the California Tax-Free and California Limited Term Tax-Free
Funds, as well as the Class B shares of the California Tax-Free Fund were
charged at the annual rate of 0.30% of the average daily net assets for each
class. All other Funds, including the Class C shares of the California
Tax-Free Fund, were charged at the same 0.25% annual rate listed above.
The shareholder servicing fees paid on behalf of the Funds for the period
ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
Institutional
Fund Class A Class B Class C Class
<S> <C> <C> <C> <C>
ARIZONA TAX-FREE FUND $ 6,361 $ 2,301 N/A $ 8,196
CALIFORNIA LIMITED TERM
TAX-FREE FUND 57,067 N/A N/A 5,965
CALIFORNIA TAX-FREE FUND 627,871 183,450 $28,085 50,663
COLORADO TAX-FREE FUND 13,353 3,160 N/A 0
MINNESOTA INTERMEDIATE
TAX-FREE FUND N/A N/A N/A 0
MINNESOTA TAX-FREE FUND 12,538 6,802 N/A 0
NATIONAL LIMITED TERM TAX-FREE
FUND N/A N/A N/A 0
NATIONAL TAX-FREE FUND 25,822 7,540 2,367 0
OREGON TAX-FREE FUND 30,204 13,007 N/A 5,043
</TABLE>
8. OTHER FEES AND TRANSACTIONS WITH AFFILIATES
Forum Accounting Services, LLC ("Forum") provides portfolio accounting
services to the Funds. WFB provides sub-portfolio accounting services to the
Arizona Tax-Free, California Limited Term Tax-Free, California Tax-Free, and
Oregon Tax-Free Funds. For these services WFB is entitled to a fixed monthly
fee from each Fund plus an annual fee of 0.0025% of the Fund's average daily
net assets. Prior to November 8, 1999, the Trust entered into contracts on
behalf of the Arizona Tax-Free, California Limited Term Tax-Free, California
Tax-Free, and Oregon Tax-Free Funds with WFB, whereby WFB was responsible for
providing portfolio accounting services for the Funds. Pursuant to the
contract, WFB was entitled to a monthly base fee from each Fund of $2,000 plus
an annual fee of 0.07% of the first $50 million of each Fund's average daily
net assets, 0.045% of the next $50 million, and 0.02% of each Fund's average
daily net assets in excess of $100 million.
The Trust has entered into contracts on behalf of each Fund with Norwest Bank
Minnesota, N.A. ("Norwest"), an affiliated party, whereby Norwest is
responsible for providing custody services for the Funds. Pursuant to the
contracts, Norwest is entitled to certain transaction charges plus a monthly
fee for custody services at the annual rate of 0.02% of the average daily net
assets of each Fund. Prior to November 8, 1999 the Arizona Tax-Free,
California Limited Term Tax-Free, California Tax-Free, and Oregon Tax-Free
Funds had the above service performed for a fee at an annual rate of 0.0167%
of the average daily net assets of each Fund. Prior to November 8, 1999 the
Colorado Tax-Free, Minnesota Intermediate Tax-Free, Minnesota Tax-Free,
National Limited Term Tax-Free, and National Tax-Free Funds had Norwest serve
as the custodian. For its custody services, Norwest was entitled to receive a
fee at an annual rate of 0.02% for the first $100 million of average net
assets of each Fund, declining to 0.01% of the average net assets of each Fund
in excess of $200 million.
Certain officers of the Trust are also officers of Stephens. As of December
31, 1999, Stephens owned 8 shares of the Arizona Tax-Free Fund, 13,198 shares
of the California Limited Term Tax-Free Fund, 9,773 shares of the California
Tax-Free Fund, no shares of the Colorado Tax-Free Fund, no shares of the
Minnesota Intermediate Tax-Free Fund, no shares of the Minnesota Tax-Free
Fund, no shares of the National Limited Term Tax-Free Fund, 16,419 shares of
the National Tax-Free Fund, and 6 shares of the Oregon Tax-Free Fund.
Stephens has retained $2,102,812 as sales charges from the proceeds of
Class A shares sold, $0 from the proceeds of Class B shares redeemed and
$48,410 from the proceeds of Class C shares redeemed by the Trust for the
period ended December 31, 1999. A third party financing agent has retained
approximately $2,314,780 from the proceeds of Class B shares redeemed by the
Trust for the year ended December 31, 1999. Wells Fargo Securities Inc., a
subsidiary of WFB, received $1,020,961 as sales charges from the proceeds of
Class A shares sold, $0 from the proceeds of Class B shares redeemed and $0
from the proceeds
83
<PAGE>
TAX-FREE FUNDS NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
of Class C shares redeemed by the Trust for the period ended December 31,
1999. Norwest Bank Minnesota, N.A. received $69,190 as sales charges from the
proceeds of Class A shares sold, $455,371 from the proceeds of Class B shares
redeemed and $2,515 from the proceeds of Class C shares redeemed by the Trust
for the period ended December 31, 1999.
9. WAIVED FEES AND REIMBURSED EXPENSES
All amounts shown as waived fees or reimbursed expenses on the Statement of
Operations, for the period ended December 31, 1999, were waived by WFB. Fee
waivers are contractual and apply for one year from the closing date of the
reorganization. After this time, the Advisor, with Board approval, may reduce
or eliminate such waivers.
<TABLE>
<CAPTION>
Expenses Reimbursed
Fund Fees Waived by FAdS by Stephens Fees Waived by WFB Total Fees Waived
<S> <C> <C> <C> <C>
ARIZONA TAX-FREE FUND $ 0 $ 0 $ 42,693 $ 42,693
CALIFORNIA LIMITED TERM
TAX-FREE FUND 0 0 140,986 140,986
CALIFORNIA TAX-FREE FUND 0 203 971,856 972,059
COLORADO TAX-FREE FUND 22,436 0 167,447 189,883
MINNESOTA INTERMEDIATE TAX-
FREE FUND 64,345 0 24,453 88,798
MINNESOTA TAX-FREE FUND 14,758 0 172,866 187,624
NATIONAL LIMITED TERM TAX-FREE
FUND 28,264 0 104,125 132,389
NATIONAL TAX-FREE FUND 96,910 0 382,624 479,534
OREGON TAX-FREE FUND 0 0 101,643 101,643
</TABLE>
10. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities
(securities with maturities of one year or less at purchase date) and U.S.
Government Securities, for each Fund for the period ended December 31, 1999,
were as follows:
<TABLE>
<CAPTION>
AGGREGATE PURCHASES AND SALES
Fund Purchases at Cost Sales Proceeds
<S> <C> <C>
ARIZONA TAX-FREE FUND $ 3,218,672 $ 2,166,738
CALIFORNIA LIMITED TERM TAX-FREE FUND 6,042,660 10,096,080
CALIFORNIA TAX-FREE FUND 89,627,618 161,719,447
COLORADO TAX-FREE FUND 70,157,392 78,592,541
MINNESOTA INTERMEDIATE TAX-FREE FUND 23,481,103 42,625,505
MINNESOTA TAX-FREE FUND 29,239,265 31,847,521
NATIONAL LIMITED TERM TAX-FREE FUND 18,936,126 32,033,132
NATIONAL TAX-FREE FUND 182,498,909 1,224,102,308
OREGON TAX-FREE FUND 9,649,868 10,692,511
</TABLE>
84
<PAGE>
LIST OF ABBREVIATIONS TAX-FREE FUNDS
- --------------------------------------------------------------------------------
The following is a list of common abbreviations for terms and entities which may
have appeared in this report.
<TABLE>
<S> <C> <C>
ABAG -- ASSOCIATION OF BAY AREA GOVERNMENTS
ADR -- AMERICAN DEPOSITORY RECEIPTS
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION
AMT -- ALTERNATIVE MINIMUM TAX
ARM -- ADJUSTABLE RATE MORTGAGES
BART -- BAY AREA RAPID TRANSIT
CDA -- COMMUNITY DEVELOPMENT AUTHORITY
CDSC -- CONTINGENT DEFERRED SALES CHARGE
CGIC -- CAPITAL GUARANTY INSURANCE COMPANY
CGY -- CAPITAL GUARANTY CORPORATION
CMT -- CONSTANT MATURITY TREASURY
COFI -- COST OF FUNDS INDEX
CONNIE LEE -- CONNIE LEE INSURANCE COMPANY
COP -- CERTIFICATE OF PARTICIPATION
CP -- COMMERCIAL PAPER
CTF -- COMMON TRUST FUND
DOT -- DEPARTMENT OF TRANSPORTATION
DW&P -- DEPARTMENT OF WATER & POWER
DWR -- DEPARTMENT OF WATER RESOURCES
EDFA -- EDUCATION FINANCE AUTHORITY
FGIC -- FINANCIAL GUARANTY INSURANCE CORPORATION
FHA -- FEDERAL HOUSING AUTHORITY
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
FRN -- FLOATING RATE NOTES
FSA -- FINANCIAL SECURITY ASSURANCE, INC
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GO -- GENERAL OBLIGATION
HEFA -- HIGHER EDUCATION FACILITIES AUTHORITY
HFA -- HOUSING FINANCE AUTHORITY
HFFA -- HEALTH FACILITIES FINANCING AUTHORITY
IDA -- INDUSTRIAL DEVELOPMENT AUTHORITY
IDR -- INDUSTRIAL DEVELOPMENT REVENUE
LIBOR -- LONDON INTERBANK OFFERED RATE
LLC -- LIMITED LIABILITY CORPORATION
LOC -- LETTER OF CREDIT
LP -- LIMITED PARTNERSHIP
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
MFHR -- MULTI-FAMILY HOUSING REVENUE
MUD -- MUNICIPAL UTILITY DISTRICT
MTN -- MEDIUM TERM NOTE
PCFA -- POLLUTION CONTROL FINANCE AUTHORITY
PCR -- POLLUTION CONTROL REVENUE
PFA -- PUBLIC FINANCE AUTHORITY
PLC -- PRIVATE PLACEMENT
PSFG -- PUBLIC SCHOOL FUND GUARANTY
RAW -- REVENUE ANTICIPATION WARRANTS
RDA -- REDEVELOPMENT AUTHORITY
RDFA -- REDEVELOPMENT FINANCE AUTHORITY
R&D -- RESEARCH & DEVELOPMENT
SFMR -- SINGLE FAMILY MORTGAGE REVENUE
TBA -- TO BE ANNOUNCED
TRAN -- TAX REVENUE ANTICIPATION NOTES
USD -- UNIFIED SCHOOL DISTRICT
V/R -- VARIABLE RATE
WEBS -- WORLD EQUITY BENCHMARK SHARES
</TABLE>
85
<PAGE>
Wells Fargo Bank, N.A. and certain of its affiliates provide investment
advisory, sub-advisory and/or shareholder services for the Wells Fargo
Funds. The Funds are sponsored and distributed by STEPHENS INC., Member
NYSE/ SIPC. Wells Fargo Bank, N.A. and its affiliates are not affiliated
with Stephens Inc.
This report and the financial statements contained herein are submitted for
the general information of the shareholders of the Wells Fargo Funds. If
this report is used for promotional purposes, distribution of the report
must be accompanied or preceded by a current prospectus. For a prospectus
containing more complete information, including charges and expenses, call
1-800-222-8222. Read the prospectus carefully before you invest or send
money.
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