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[LOGO]
Annual Report
TAX-FREE FUNDS
June 30, 2000
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
SUPPLEMENT TO THE PROSPECTUS ENCLOSED
<PAGE>
WELLS FARGO FUNDS TRUST
NATIONAL LIMITED TERM TAX-FREE FUND
INSTITUTIONAL CLASS
NATIONAL TAX-FREE FUND
CLASS A, CLASS B, CLASS C AND INSTITUTIONAL CLASS
Supplement dated August 25, 2000 to the
Prospectuses dated November 8, 1999
Effective August 25, 2000, Stephen Galiani is responsible as portfolio manager
for the day-to-day management of the National Tax-Free Fund. Effective
August 1, 2000, Patricia Hovanetz, CFA, is solely responsible as the portfolio
manager for the day-to-day management of the National Limited Term Tax-Free
Fund. Mark Walter no longer assists Ms. Hovanetz in her responsibilities for
this 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......................................................31
MINNESOTA INTERMEDIATE TAX-FREE FUND........................................34
MINNESOTA TAX-FREE FUND.....................................................41
NATIONAL LIMITED TERM TAX-FREE FUND.........................................44
NATIONAL TAX-FREE FUND......................................................48
OREGON TAX-FREE FUND........................................................55
FINANCIAL STATEMENTS
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STATEMENTS OF ASSETS AND LIABILITIES........................................58
STATEMENTS OF OPERATIONS....................................................60
STATEMENTS OF CHANGES IN NET ASSETS.........................................62
FINANCIAL HIGHLIGHTS........................................................68
NOTES TO FINANCIAL HIGHLIGHTS.................................................74
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NOTES TO FINANCIAL STATEMENTS.................................................75
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INDEPENDENT AUDITORS' REPORT..................................................81
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TAX INFORMATION...............................................................82
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LIST OF ABBREVIATIONS.........................................................83
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NOT FDIC INSURED--NO BANK GUARANTEE--MAY LOSE VALUE
<PAGE>
TAX-FREE FUNDS
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DEAR VALUED SHAREHOLDER,
During the past fiscal year, investors experienced both bull and bear markets
in one of the most volatile periods in recent years. Despite a favorable
economic backdrop characterized by a budget surplus, low inflation and
productivity gains, concerns over rising interest rates created a challenging
environment for tax-free income funds over the year.
Although inflation remains at historic lows, the Federal Reserve Board (the
Fed) gave notice that the nation's fast-growing economy could trigger an
inflationary spike when it raised short-term rates twice during the summer of
1999. The Fed reinforced its position with four successive interest rate
hikes, including a half-percent increase on May 16, 2000.
All in all, short-term interest rates rose from 4.75% to 6.50% over the
period. Rising interest rates translated into higher yields on short-term
bonds, which in turn sent bond prices downward (bond yields move inversely to
prices). As a result, municipal bonds posted negative returns at the end of
1999. Credit quality concerns among health care-related bonds, plus relatively
longer bond durations, also affected fund performance.
The scenario improved during the first and second quarters of 2000, as a
decline in longer-term interest rates created a tailwind for various municipal
bonds, particularly AAA- and AA-rated bonds. This rally reflected growing
optimism over the inflation outlook, the U.S. Treasury Department's repurchase
of intermediate- and longer-term U.S. Treasury securities and the flight of
capital from stocks to bonds. As is the case when interest rates decline,
high-quality investment-grade bonds, which comprise the majority of the
tax-free funds' holdings, outperformed lower-tier investment-grade issues.
Tax-exempt securities further benefited from broadening demand beyond retail
investors to institutional investors.
Whatever transpires in the bond market over the ensuing months, it's
important to keep in mind that municipal bonds often provide higher
taxable-equivalent yields than taxable bonds. And in fast-changing markets,
the emphasis on diversification among securities within Wells Fargo Funds'
tax-free income funds may help moderate risk -- and provide investors the
potential to earn more balanced returns.
In closing, we wish to thank you for choosing Wells Fargo Funds. We value
your business and will continue to offer an expanding array of quality
investments designed to help you achieve your personal financial goals.
We also encourage you to maintain a balanced portfolio to help weather
rapidly changing conditions. If you have any questions about your investments
or need further information, please contact your investment professional, or
call us at 1-800-222-8222.
Sincerely,
/S/ MICHAEL J. HOGAN
MICHAEL J. HOGAN
PRESIDENT,
WELLS FARGO FUNDS
1
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
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ARIZONA TAX-FREE FUND
INVESTMENT OBJECTIVE
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The Arizona Tax-Free Fund (the Fund) seeks current income exempt from federal
income tax and Arizona personal income tax.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
Stephen Galiani
INCEPTION DATE
03/02/92
PERFORMANCE HIGHLIGHTS
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The Fund's Class A shares returned 0.52%(1) for the 12-month period ended
June 30, 2000, excluding sales charges. The Fund underperformed its benchmark,
the Lehman Brothers Municipal Bond Index(2) (the Index), which returned 3.25%
during the period. The Fund's Class A shares distributed $0.47 per share in
dividend income and $0.02 in capital gains during the period. Please keep in
mind that past performance is no guarantee of future results.
During the first six months of the period, a time of rising interest rates,
the Fund underperformed the Index due to the portfolio's longer duration and
average maturity. The portfolio's structure boosted performance over the
second half of the period during a period of generally falling interest rates.
The Fund also benefited from its concentration of higher-yielding bonds, which
boosted income.
The Fund's AAA-insured bonds with coupons of 5% and higher were outstanding
performers during the period. These bonds held their value when interest rates
rose, and then they outperformed when rates declined. In contrast, the Fund's
health-care related bonds, which represented 23% of the portfolio for most of
the period, underperformed against other sectors of the municipal market due
to problems related to managed care and government reimbursements.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
The Fund is well-positioned within the current market environment. The Fund
will continue to pursue opportunities to enhance its distribution yield (the
income component of total return) by adding higher-yielding securities on a
selective basis.
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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 Advisor has committed through October 31, 2001
to waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower.
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 share 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 (CDSC) for Class B shares is 5.00%. Class B share
performance including sales charge assumes the maximum CDSC for the
corresponding time period. Institutional Class shares are sold without sales
charges.
(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) 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.
2
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
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AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
------------------------------------- ---------------------------
Since Since
6-Month* 1-Year 5-Year Inception 1-Year 5-Year Inception
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A 4.94 0.52 4.03 5.12 (3.99) 3.08 4.54
CLASS B 4.41 (0.29) 3.04 4.09 (5.06) 2.71 4.09
INSTITUTIONAL CLASS 4.92 0.57 4.19 5.21
BENCHMARK
LEHMAN BROTHERS
MUNICIPAL BOND INDEX 4.48 3.25 5.88
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS (AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(4) AA
WEIGHTED AVERAGE COUPON 5.61%
ESTIMATED DURATION 10.38 YEARS
NAV (A, B, INST.) $9.76, $9.41, $9.76
PORTFOLIO TURNOVER 32%
NUMBER OF HOLDINGS 40
SEC YIELD(5) (A, B, INST.) 5.36%, 4.86%, 5.78%
DISTRIBUTION RATE(6)
(A, B, INST.) 5.06%, 4.55%, 5.47%
TAXABLE EQUIVALENT YIELD(7)
(A, B, INST.) 9.34%, 8.47%, 10.08%
ALTERNATIVE MINIMUM TAX(7) 15.54%
</TABLE>
GROWTH OF $10,000 INVESTMENT(3)
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO LEHMAN BROTHERS WELLS FARGO ARIZONA
ARIZONA TAX-FREE MUNICIPAL BOND TAX-FREE FUND -
FUND - CLASS A INDEX INSTITUTIONAL CLASS
<S> <C> <C> <C>
3/92 $9,524 $10,004 $9,971
4/92 $9,604 $10,093 $10,056
5/92 $9,718 $10,212 $10,175
6/92 $9,858 $10,384 $10,322
7/92 $9,897 $10,695 $10,362
8/92 $10,002 $10,590 $10,472
9/92 $10,111 $10,659 $10,586
10/92 $9,998 $10,555 $10,467
11/92 $10,194 $10,744 $10,673
12/92 $10,292 $10,853 $10,776
1/93 $10,457 $10,979 $10,949
2/93 $10,770 $11,377 $11,276
3/93 $10,602 $11,256 $11,100
4/93 $10,694 $11,370 $11,196
5/93 $10,738 $11,433 $11,243
6/93 $10,903 $11,624 $11,416
7/93 $10,870 $11,639 $11,381
8/93 $11,096 $11,882 $11,618
9/93 $11,254 $12,017 $11,783
10/93 $11,276 $12,040 $11,806
11/93 $11,196 $11,934 $11,722
12/93 $11,378 $12,186 $11,913
1/94 $11,508 $12,325 $12,049
2/94 $11,209 $12,005 $11,736
3/94 $10,956 $11,517 $11,470
4/94 $11,017 $11,615 $11,535
5/94 $11,090 $11,716 $11,612
6/94 $11,049 $11,644 $11,568
7/94 $11,208 $11,857 $11,734
8/94 $11,261 $11,899 $11,790
9/94 $11,149 $11,724 $11,673
10/94 $10,965 $11,515 $11,480
11/94 $10,801 $11,307 $11,309
12/94 $11,002 $11,556 $11,519
1/95 $11,248 $11,886 $11,777
2/95 $11,515 $12,231 $12,057
3/95 $11,608 $12,372 $12,154
4/95 $11,657 $12,387 $12,205
5/95 $11,905 $12,782 $12,465
6/95 $11,880 $12,670 $12,439
7/95 $11,999 $12,790 $12,563
8/95 $12,117 $12,952 $12,686
9/95 $12,161 $13,034 $12,732
10/95 $12,274 $13,224 $12,854
11/95 $12,410 $13,443 $13,000
12/95 $12,509 $13,573 $13,106
1/96 $12,604 $13,676 $13,208
2/96 $12,534 $13,583 $13,138
3/96 $12,328 $13,409 $12,924
4/96 $12,335 $13,371 $12,922
5/96 $12,285 $13,366 $12,885
6/96 $12,401 $13,512 $13,007
7/96 $12,554 $13,633 $13,171
8/96 $12,508 $13,630 $13,113
9/96 $12,612 $13,821 $13,224
10/96 $12,747 $13,977 $13,380
11/96 $12,990 $14,233 $13,638
12/96 $12,939 $14,174 $13,587
1/97 $12,980 $14,200 $13,632
2/97 $13,062 $14,331 $13,720
3/97 $12,888 $14,140 $13,539
4/97 $12,986 $14,259 $13,631
5/97 $13,161 $14,475 $13,818
6/97 $13,307 $14,629 $13,987
7/97 $13,706 $15,035 $14,396
8/97 $13,532 $14,893 $14,215
9/97 $13,705 $15,071 $14,412
10/97 $13,758 $15,167 $14,483
11/97 $13,840 $15,257 $14,572
12/97 $14,065 $15,479 $14,799
1/98 $14,182 $15,639 $14,926
2/98 $14,162 $15,643 $14,906
3/98 $14,134 $15,657 $14,891
4/98 $14,014 $15,587 $14,765
5/98 $14,263 $15,833 $15,028
6/98 $14,313 $15,895 $15,068
7/98 $14,329 $15,935 $15,085
8/98 $14,604 $16,182 $15,375
9/98 $14,788 $16,384 $15,584
10/98 $14,722 $16,384 $15,500
11/98 $14,771 $16,441 $15,552
12/98 $14,772 $16,492 $15,569
1/99 $14,964 $16,689 $15,772
2/99 $14,819 $16,615 $15,619
3/99 $14,873 $16,638 $15,662
4/99 $14,873 $16,680 $15,678
5/99 $14,729 $16,818 $15,512
6/99 $14,403 $16,576 $15,185
7/99 $14,432 $16,636 $15,216
8/99 $14,188 $16,503 $14,960
9/99 $14,129 $16,509 $14,883
10/99 $13,815 $16,331 $14,554
11/99 $13,970 $16,504 $14,735
12/99 $13,797 $16,381 $14,555
1/00 $13,682 $16,308 $14,421
2/00 $13,896 $16,498 $14,649
3/00 $14,262 $16,857 $15,036
4/00 $14,189 $16,758 $14,961
5/00 $14,061 $16,671 $14,829
6/00 $14,478 $17,112 $15,271
</TABLE>
CREDIT QUALITY
(AS OF JUNE 30, 2000)
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA/Treasuries/Agencies 40%
AA 30%
A 14%
BBB 14%
Cash 1%
SP1 1%
</TABLE>
MATURITY DISTRIBUTION(8)
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
20-30 Years 48%
10-20 Years 34%
5-10 Years 10%
1-5 Years 5%
0-1 Year 3%
</TABLE>
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(4) The average credit rating is compiled from ratings from Standard & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard and
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.
(5) 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.
(6) 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.
(7) 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. The value of the
securities subject to the AMT is represented as a percentage of net assets.
(8) Portfolio holdings are subject to change.
3
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
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CALIFORNIA LIMITED TERM TAX-FREE FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The 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.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
Mary Gail Walton, CFA
INCEPTION DATE
11/18/92
PERFORMANCE HIGHLIGHTS
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The Fund's Class A shares returned 3.67%(1) for the 12-month period ended
June 30, 2000, excluding sales charges, underperforming the Lehman Brothers
3-Year Municipal Bond Index(2) (the Index), which returned 3.73%. The Fund's
Class A shares distributed $0.40 per share in dividend income and $0.05 in
capital gains during the period. Please keep in mind that past performance is
no guarantee of future results.
During the period, the Federal Reserve Board raised interest rates on six
separate occasions in an effort to slow the nation's fast-growing economy and
contain inflationary pressures. In all, short-term rates increased from 4.75%
to 6.50% over the past year.
The last half of 1999 was a difficult period for long-term U.S. Treasury
securities. However, long-term U.S. Treasuries rallied early in 2000, nearly
recouping their previous losses. In all, returns on longer-term bond issues
have generally eclipsed bonds with shorter maturities. More importantly, the
intermediate portion of the yield curve, the portion where the Fund is
positioned, has generated positive returns over the entire reporting period.
The Fund maintains a high average coupon as a defensive measure in periods of
rising interest rates. Furthermore, the Fund's buy/sell strategy has helped to
enhance performance and yield without sacrificing a commitment to quality.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
Rising interest rates have slowed the economy, and concerns over inflation
are beginning to subside. Although the Fund ultimately expects yields to
decline, it will continue to seek attractive opportunities along the yield
curve, extending maturities on a value-oriented basis.
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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 Advisor has committed through October 31, 2001
to waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower.
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.
(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.
4
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
----------------------------------- ---------------------------
Since Since
6-Month* 1-Year 5-Year Inception 1-Year 5-Year Inception
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A 2.95 3.67 4.25 4.34 (0.97) 3.29 3.71
INSTITUTIONAL CLASS 3.03 3.79 4.30 4.38
BENCHMARK
LEHMAN BROTHERS 3-YEAR
MUNICIPAL BOND INDEX 2.41 3.73 4.65
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS (AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(4) AA
WEIGHTED AVERAGE COUPON 6.21%
ESTIMATED DURATION 3.46 YEARS
NAV (A, INST.) $10.14, $9.98
PORTFOLIO TURNOVER 60%
NUMBER OF HOLDINGS 36
SEC YIELD(5) (A, INST.) 3.55%, 3.87%
DISTRIBUTION RATE(6) (A,
INST.) 4.28%, 4.63%
TAXABLE EQUIVALENT YIELD(7)
(A, INST.) 6.48%, 7.06%
ALTERNATIVE MINIMUM TAX(7) 7.33%
</TABLE>
GROWTH OF $10,000 INVESTMENT(3)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO WELLS FARGO
CALIFORNIA LIMITED LEHMAN BROTHERS CALIFORNIA LIMITED
TERM TAX-FREE 3-YEAR MUNICIPAL TERM TAX-FREE FUND -
FUND - CLASS A BOND INDEX INSTITUTIONAL CLASS
<S> <C> <C> <C>
12/92 $9,632 $10,130 $10,084
1/93 $9,719 $10,206 $10,176
2/93 $9,922 $10,367 $10,389
3/93 $9,841 $10,336 $10,303
4/93 $9,893 $10,395 $10,358
5/93 $9,908 $10,424 $10,373
6/93 $9,997 $10,490 $10,467
7/93 $9,972 $10,496 $10,441
8/93 $10,112 $10,593 $10,587
9/93 $10,192 $10,640 $10,671
10/93 $10,213 $10,662 $10,693
11/93 $10,184 $10,648 $10,663
12/93 $10,316 $10,760 $10,801
1/94 $10,389 $10,847 $10,877
2/94 $10,241 $10,746 $10,722
3/94 $10,125 $10,616 $10,601
4/94 $10,159 $10,679 $10,636
5/94 $10,194 $10,729 $10,674
6/94 $10,178 $10,732 $10,657
7/94 $10,275 $10,821 $10,758
8/94 $10,291 $10,860 $10,774
9/94 $10,254 $10,833 $10,736
10/94 $10,218 $10,807 $10,698
11/94 $10,149 $10,788 $10,627
12/94 $10,202 $10,834 $10,681
1/95 $10,317 $10,924 $10,802
2/95 $10,461 $11,039 $10,953
3/95 $10,549 $11,138 $11,045
4/95 $10,569 $11,176 $11,066
5/95 $10,719 $11,347 $11,223
6/95 $10,722 $11,374 $11,226
7/95 $10,816 $11,494 $11,324
8/95 $10,892 $11,584 $11,404
9/95 $10,937 $11,617 $11,451
10/95 $11,001 $11,673 $11,518
11/95 $11,078 $11,747 $11,599
12/95 $11,134 $11,796 $11,658
1/96 $11,224 $11,888 $11,752
2/96 $11,214 $11,890 $11,741
3/96 $11,141 $11,861 $11,665
4/96 $11,144 $11,876 $11,668
5/96 $11,141 $11,886 $11,665
6/96 $11,197 $11,957 $11,723
7/96 $11,276 $12,023 $11,806
8/96 $11,284 $12,042 $11,815
9/96 $11,358 $12,115 $11,893
10/96 $11,447 $12,200 $11,975
11/96 $11,572 $12,314 $12,121
12/96 $11,563 $12,321 $12,111
1/97 $11,614 $12,375 $12,154
2/97 $11,670 $12,435 $12,213
3/97 $11,582 $12,371 $12,131
4/97 $11,630 $12,424 $12,170
5/97 $11,737 $12,526 $12,296
6/97 $11,806 $12,600 $12,369
7/97 $11,969 $12,750 $12,531
8/97 $11,940 $12,724 $12,500
9/97 $12,011 $12,815 $12,575
10/97 $12,052 $12,872 $12,619
11/97 $12,076 $12,910 $12,644
12/97 $12,155 $12,997 $12,728
1/98 $12,265 $13,083 $12,846
2/98 $12,277 $13,111 $12,858
3/98 $12,268 $13,132 $12,848
4/98 $12,235 $13,113 $12,813
5/98 $12,344 $13,235 $12,929
6/98 $12,382 $13,280 $12,969
7/98 $12,435 $13,328 $13,025
8/98 $12,602 $13,457 $13,204
9/98 $12,748 $13,543 $13,346
10/98 $12,765 $13,608 $13,377
11/98 $12,802 $13,641 $13,416
12/98 $12,818 $13,674 $13,431
1/99 $12,945 $13,798 $13,565
2/99 $12,908 $13,813 $13,526
3/99 $12,936 $13,826 $13,569
4/99 $12,941 $13,869 $13,561
5/99 $12,893 $13,849 $13,509
6/99 $12,733 $13,766 $13,352
7/99 $12,811 $13,835 $13,423
8/99 $12,788 $13,852 $13,398
9/99 $12,840 $13,904 $13,466
10/99 $12,805 $13,906 $13,430
11/99 $12,870 $13,967 $13,487
12/99 $12,823 $13,944 $13,451
1/00 $12,864 $13,970 $13,495
2/00 $12,918 $14,014 $13,554
3/00 $13,016 $14,087 $13,659
4/00 $12,986 $14,089 $13,628
5/00 $13,010 $14,103 $13,654
6/00 $13,201 $14,282 $13,859
</TABLE>
CREDIT QUALITY
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA/Treasuries/Agencies 54%
A 23%
AA 18%
SP1 5%
</TABLE>
MATURITY DISTRIBUTION(8)
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
10-20 Years 6%
5-10 Years 27%
1-5 Years 51%
0-1 Year 16%
</TABLE>
--------------------------------------------------------------------------------
(3) 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.
(4) The average credit rating is compiled from ratings from Standard & 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.
(5) 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.
(6) 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.
(7) 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. The value of the
securities subject to the AMT is represented as a percentage of net assets.
(8) Portfolio holdings are subject to change.
5
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The 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 municipal securities.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
Stephen Galiani
INCEPTION DATE
10/06/88
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund's Class A shares returned 3.10%(1) for the 12-month period ended
June 30, 2000, excluding sales charges. The Fund underperformed its benchmark,
the Lehman Brothers Municipal Bond Index(2) (the Index), which returned 3.25%
during the period. The Fund's Class A shares distributed $0.52 per share in
dividend income and $0.03 in capital gains during the period. Please keep in
mind that past performance is no guarantee of future results.
During the last half of 1999 -- a period of rising interest rates -- the Fund
underperformed its Index due to a longer duration and average maturity
structure. However, since the Fund is positioned to benefit from declining
interest rates, its longer duration and average maturity helped it outperform
the Index during the first half of 2000, a period of generally falling
interest rates. And over the past six months, the Fund also benefited from its
high-quality portfolio, whose high-quality bonds rallied when interest rates
began to decline.
The Fund's intermediate- and long-term AAA-insured bonds -- those with higher
coupons -- were outstanding performers over the period. These securities held
their value when interest rates were rising, and performed well when rates
declined. In contrast, various health-care related bonds underperformed
against other sectors of the municipal market due to problems related to
managed care and government reimbursements. Fortunately, the health care
sector represented only 10% of portfolio assets throughout most of the period.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
The Fund is well-positioned within the current market environment. The Fund
will continue to pursue opportunities to enhance its distribution yield (the
income component of total return) by adding higher-yielding securities on a
selective basis.
--------------------------------------------------------------------------------
(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 Advisor has committed through October 31, 2001
to waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower.
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 C 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
maximum contingent deferred sales charge (CDSC) for Class B shares is 5.00%. The
maximum CDSC for Class C shares is 1.00%. Class B and Class C share performance
including sales charge assumes the maximum CDSC for the corresponding time
period. Institutional Class shares are sold without sales charges.
(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.
6
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
--------------------------------- ------------------------
6-Month* 1-Year 5-Year 10-Year 1-Year 5-Year 10-Year
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A 5.47 3.10 5.82 6.91 (1.55) 4.85 6.43
CLASS B 5.02 2.21 5.02 6.16 (2.68) 4.70 6.16
CLASS C 4.92 2.21 5.02 6.16 1.23 5.02 6.16
INSTITUTIONAL CLASS 5.45 3.16 5.85 6.93
BENCHMARK
LEHMAN BROTHERS
MUNICIPAL BOND INDEX 4.48 3.25 5.88 7.06
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS (AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(4) AA
WEIGHTED AVERAGE COUPON 5.11%
ESTIMATED DURATION 8.71 YEARS
NAV $10.77, $10.97, $10.97,
(A, B, C, INST.) $10.79
PORTFOLIO TURNOVER 35%
NUMBER OF HOLDINGS 280
SEC YIELD(5)
(A, B, C, INST.) 4.80%, 4.17%, 4.17%, 5.18%
DISTRIBUTION RATE(6)
(A, B, C, INST.) 4.74%, 4.22%, 4.21%, 5.13%
TAXABLE EQUIVALENT YIELD(7)
(A, B, C, INST.) 8.76%, 7.61%, 7.61%, 9.46%
ALTERNATIVE MINIMUM TAX(7) 11.20%
</TABLE>
GROWTH OF $10,000 INVESTMENT(3)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO CALIFORNIA LEHMAN BROTHERS WELLS FARGO CALIFORNIA
TAX-FREE FUND - CLASS A MUNICIPAL BOND INDEX TAX-FREE FUND - INSTITUTIONAL CLASS
<S> <C> <C> <C>
6/90 $9,550 $10,000 $10,000
7/90 $9,721 $10,147 $10,175
8/90 $9,440 $10,000 $9,881
9/90 $9,431 $10,006 $9,872
10/90 $9,592 $10,187 $10,040
11/90 $9,820 $10,392 $10,279
12/90 $9,897 $10,437 $10,360
1/91 $10,061 $10,577 $10,531
2/91 $10,119 $10,669 $10,592
3/91 $10,139 $10,674 $10,612
4/91 $10,295 $10,816 $10,777
5/91 $10,414 $10,912 $10,900
6/91 $10,381 $10,901 $10,866
7/91 $10,528 $11,034 $11,020
8/91 $10,655 $11,180 $11,153
9/91 $10,803 $11,325 $11,308
10/91 $10,891 $11,427 $11,400
11/91 $10,887 $11,459 $11,396
12/91 $11,048 $11,705 $11,564
1/92 $11,034 $11,732 $11,549
2/92 $11,102 $11,736 $11,621
3/92 $11,140 $11,740 $11,661
4/92 $11,241 $11,845 $11,767
5/92 $11,364 $11,985 $11,895
6/92 $11,572 $12,186 $12,112
7/92 $11,950 $12,551 $12,509
8/92 $11,786 $12,428 $12,337
9/92 $11,847 $12,509 $12,401
10/92 $11,617 $12,387 $12,160
11/92 $11,906 $12,608 $12,462
12/92 $12,043 $12,737 $12,606
1/93 $12,182 $12,885 $12,752
2/93 $12,633 $13,351 $13,223
3/93 $12,535 $13,210 $13,121
4/93 $12,681 $13,343 $13,274
5/93 $12,771 $13,418 $13,368
6/93 $13,011 $13,642 $13,619
7/93 $13,003 $13,660 $13,611
8/93 $13,326 $13,944 $13,949
9/93 $13,513 $14,103 $14,144
10/93 $13,539 $14,129 $14,172
11/93 $13,404 $14,005 $14,030
12/93 $13,606 $14,301 $14,242
1/94 $13,776 $14,464 $14,420
2/94 $13,506 $14,089 $14,137
3/94 $13,054 $13,516 $13,664
4/94 $13,034 $13,631 $13,643
5/94 $13,170 $13,749 $13,786
6/94 $13,138 $13,665 $13,751
7/94 $13,361 $13,915 $13,985
8/94 $13,414 $13,964 $14,041
9/94 $13,257 $13,759 $13,877
10/94 $13,063 $13,514 $13,673
11/94 $12,830 $13,269 $13,429
12/94 $13,018 $13,561 $13,626
1/95 $13,379 $13,949 $14,004
2/95 $13,704 $14,354 $14,344
3/95 $13,824 $14,519 $14,470
4/95 $13,828 $14,536 $14,474
5/95 $14,246 $15,000 $14,912
6/95 $14,052 $14,869 $14,708
7/95 $14,138 $15,010 $14,798
8/95 $14,321 $15,200 $14,990
9/95 $14,439 $15,297 $15,114
10/95 $14,701 $15,519 $15,388
11/95 $14,978 $15,777 $15,678
12/95 $15,151 $15,928 $15,859
1/96 $15,229 $16,049 $15,940
2/96 $15,092 $15,940 $15,798
3/96 $14,860 $15,736 $15,555
4/96 $14,795 $15,692 $15,487
5/96 $14,807 $15,686 $15,499
6/96 $14,980 $15,857 $15,680
7/96 $15,145 $15,999 $15,853
8/96 $15,156 $15,996 $15,864
9/96 $15,389 $16,220 $16,108
10/96 $15,555 $16,403 $16,282
11/96 $15,856 $16,704 $16,597
12/96 $15,762 $16,633 $16,499
1/97 $15,790 $16,665 $16,527
2/97 $15,942 $16,818 $16,687
3/97 $15,718 $16,595 $16,453
4/97 $15,859 $16,734 $16,600
5/97 $16,097 $16,987 $16,850
6/97 $16,238 $17,169 $16,996
7/97 $16,767 $17,644 $17,551
8/97 $16,574 $17,478 $17,349
9/97 $16,762 $17,686 $17,545
10/97 $16,865 $17,799 $17,653
11/97 $16,942 $17,904 $17,734
12/97 $17,175 $18,166 $17,978
1/98 $17,397 $18,353 $18,212
2/98 $17,398 $18,358 $18,198
3/98 $17,388 $18,375 $18,204
4/98 $17,316 $18,292 $18,130
5/98 $17,600 $18,581 $18,412
6/98 $17,666 $18,654 $18,482
7/98 $17,692 $18,700 $18,526
8/98 $17,989 $18,990 $18,837
9/98 $18,274 $19,228 $19,136
10/98 $18,266 $19,228 $19,128
11/98 $18,330 $19,295 $19,196
12/98 $18,345 $19,355 $19,214
1/99 $18,574 $19,585 $19,437
2/99 $18,475 $19,499 $19,351
3/99 $18,544 $19,526 $19,408
4/99 $18,551 $19,575 $19,433
5/99 $18,388 $19,738 $19,264
6/99 $18,080 $19,453 $18,943
7/99 $18,137 $19,523 $19,003
8/99 $17,925 $19,367 $18,783
9/99 $17,945 $19,375 $18,788
10/99 $17,686 $19,166 $18,519
11/99 $17,890 $19,369 $18,754
12/99 $17,675 $19,224 $18,532
1/00 $17,581 $19,139 $18,437
2/00 $17,890 $19,361 $18,744
3/00 $18,341 $19,783 $19,236
4/00 $18,177 $19,666 $19,050
5/00 $18,100 $19,564 $18,991
6/00 $18,641 $20,082 $19,541
</TABLE>
CREDIT QUALITY
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA/Treasuries/Agencies 60%
AA 13%
A 13%
BBB 12%
Cash 1%
Unrated 1%
</TABLE>
MATURITY DISTRIBUTION(8)
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
20+ Years 33%
10-20 Years 48%
5-10 Years 13%
1-5 Years 4%
0-1 Year 2%
</TABLE>
--------------------------------------------------------------------------------
(3) The chart compares the performance of the Wells Fargo California Tax-Free
Fund Class A and Institutional Class shares for the most recent ten years 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.
(4) The average credit rating is compiled from ratings from Standard & 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.
(5) 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.
(6) 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.
(7) 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. The value of the
securities subject to the AMT is represented as a percentage of net assets.
(8) Portfolio holdings are subject to change.
7
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Colorado Tax-Free Fund (the Fund) seeks a high level of current income
exempt from federal income tax and Colorado personal income tax consistent
with the preservation of capital.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGERS
William T. Jackson, CFA
Mark Walter
INCEPTION DATE
06/01/93
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund's Class A shares returned 0.87%(1) during the 12-month period ended
June 30, 2000, excluding sales charges, underperforming the Lehman Brothers
Municipal Bond Index(2) (the Index), which returned 3.25%. The Fund's Class A
shares distributed $0.54 per share in dividend income and $0.01 in capital
gains during the period. Please keep in mind that past performance is no
guarantee of future results.
The Fund is normally more aggressive than the Index both in terms of duration
and credit exposure. While this strategy usually produces a high rate of
tax-free income, it hurt Fund performance during the first eight months of the
reporting period -- a period characterized by rising interest rates and
widening credit spreads. The Fund, and the entire municipal sector, was also
negatively affected by shareholder withdrawals, which resulted in the sale of
certain investments during periods of market weakness. Losses incurred by the
Fund will ultimately be used to reduce or eliminate future capital gains
distributions.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
The Fund expects municipal bond yields to decline in the coming months, and
is well-positioned to potentially capitalize on this development. And unless
the municipal bond market experiences another dramatic sell-off, the Fund is
positioned for the potential to continue generating attractive dividends.
--------------------------------------------------------------------------------
(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 Advisor has committed through October 31, 2001
to waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower.
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 (CDSC) for Class B shares is 5.00%.
Class B share performance including sales charge assumes the maximum CDSC for
the corresponding time period. Institutional Class shares are sold without sales
charges.
(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) 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.
8
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
------------------------------------ ---------------------------
Since Since
6-Month* 1-Year 5-Year Inception 1-Year 5-Year Inception
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A 4.41 0.87 5.48 5.08 (3.67) 4.51 4.40
CLASS B 4.02 0.22 4.72 4.33 (4.56) 4.38 4.33
INSTITUTIONAL CLASS 4.41 0.97 5.50 5.10
BENCHMARK
LEHMAN BROTHERS
MUNICIPAL BOND INDEX 4.48 3.25 5.88
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS (AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(4) AA
WEIGHTED AVERAGE COUPON 4.55%
ESTIMATED DURATION 10.46 YEARS
NAV (A, B, INST.) $9.83, $9.85, $9.84
PORTFOLIO TURNOVER 106%
NUMBER OF HOLDINGS 85
SEC YIELD(5) (A, B, INST.) 5.32%, 4.82%, 5.57%
DISTRIBUTION RATE(6)
(A, B, INST.) 5.23%, 4.73%, 5.47%
TAXABLE EQUIVALENT YIELD(7)
(A, B, INST.) 9.25%, 8.38%, 9.68%
</TABLE>
GROWTH OF $10,000 INVESTMENT(3)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO WELLS FARGO
COLORADO LEHMAN BROTHERS COLORADO
TAX-FREE FUND - 10-YEAR MUNICIPAL TAX-FREE FUND -
CLASS A BOND INDEX INSTITUTIONAL CLASS
<S> <C> <C> <C>
5/93 $9,550 $10,000 $10,000
6/93 $9,685 $10,197 $10,142
7/93 $9,671 $10,222 $10,127
8/93 $9,923 $10,434 $10,391
9/93 $10,061 $10,562 $10,535
10/93 $10,056 $10,579 $10,530
11/93 $9,933 $10,493 $10,401
12/93 $10,176 $10,716 $10,655
1/94 $10,335 $10,848 $10,822
2/94 $10,027 $10,551 $10,500
3/94 $9,617 $10,146 $10,081
4/94 $9,645 $10,273 $10,099
5/94 $9,743 $10,339 $10,202
6/94 $9,671 $10,295 $10,127
7/94 $9,833 $10,468 $10,297
8/94 $9,864 $10,508 $10,329
9/94 $9,714 $10,367 $10,171
10/94 $9,558 $10,215 $10,009
11/94 $9,383 $10,022 $9,825
12/94 $9,573 $10,203 $10,024
1/95 $9,767 $10,467 $10,227
2/95 $10,024 $10,763 $10,507
3/95 $10,112 $10,908 $10,600
4/95 $10,142 $10,921 $10,619
5/95 $10,471 $11,268 $10,964
6/95 $10,391 $11,198 $10,881
7/95 $10,508 $11,362 $11,003
8/95 $10,661 $11,517 $11,164
9/95 $10,720 $11,591 $11,225
10/95 $10,874 $11,724 $11,386
11/95 $11,061 $11,881 $11,593
12/95 $11,200 $11,953 $11,727
1/96 $11,280 $12,074 $11,812
2/96 $11,195 $12,025 $11,734
3/96 $11,058 $11,876 $11,590
4/96 $10,998 $11,834 $11,527
5/96 $11,032 $11,801 $11,551
6/96 $11,169 $11,913 $11,694
7/96 $11,300 $12,027 $11,832
8/96 $11,279 $12,027 $11,810
9/96 $11,463 $12,151 $12,002
10/96 $11,596 $12,304 $12,142
11/96 $11,751 $12,553 $12,304
12/96 $11,746 $12,496 $12,299
1/97 $11,811 $12,545 $12,368
2/97 $11,893 $12,663 $12,453
3/97 $11,733 $12,493 $12,285
4/97 $11,842 $12,586 $12,400
5/97 $12,024 $12,765 $12,590
6/97 $12,145 $12,905 $12,718
7/97 $12,541 $13,268 $13,132
8/97 $12,345 $13,139 $12,927
9/97 $12,516 $13,306 $13,118
10/97 $12,641 $13,376 $13,237
11/97 $12,718 $13,438 $13,330
12/97 $12,955 $13,650 $13,565
1/98 $13,071 $13,802 $13,699
2/98 $13,071 $13,800 $13,687
3/98 $13,076 $13,791 $13,692
4/98 $12,958 $13,715 $13,581
5/98 $13,222 $13,948 $13,844
6/98 $13,274 $13,999 $13,899
7/98 $13,292 $14,022 $13,918
8/98 $13,521 $14,266 $14,158
9/98 $13,723 $14,478 $14,370
10/98 $13,612 $14,484 $14,254
11/98 $13,714 $14,528 $14,360
12/98 $13,750 $14,573 $14,398
1/99 $13,894 $14,796 $14,549
2/99 $13,777 $14,662 $14,426
3/99 $13,768 $14,655 $14,417
4/99 $13,810 $14,695 $14,474
5/99 $13,723 $14,592 $14,369
6/99 $13,452 $14,320 $14,086
7/99 $13,470 $14,416 $14,105
8/99 $13,306 $14,363 $13,933
9/99 $13,206 $14,412 $13,828
10/99 $13,028 $14,311 $13,641
11/99 $13,165 $14,467 $13,786
12/99 $12,996 $14,392 $13,622
1/00 $12,857 $14,333 $13,462
2/00 $13,104 $14,446 $13,721
3/00 $13,423 $14,728 $14,070
4/00 $13,335 $14,654 $13,963
5/00 $13,192 $14,568 $13,814
6/00 $13,569 $14,964 $14,223
</TABLE>
CREDIT QUALITY
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA/Treasuries/Agencies 37%
AA 27%
Cash 17%
A 9%
BBB 6%
SP1 4%
</TABLE>
MATURITY DISTRIBUTION(8)
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
20+ Years 45%
10-20 Years 34%
5-10 Years 4%
1-5 Years 4%
0-1 Year 13%
</TABLE>
--------------------------------------------------------------------------------
(4) The average credit rating is compiled from ratings from Standard & 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.
(5) 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.
(6) 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.
(7) 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.
(8) Portfolio holdings are subject to change.
9
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Minnesota Intermediate Tax-Free Fund (the Fund) seeks a high level of
current income exempt from federal income tax and Minnesota personal income
tax, without assuming undue risk.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
Patricia Hovanetz, CFA
INCEPTION DATE
09/30/76
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund's Institutional Class shares returned 2.17%(1) for the 12-month
period ended June 30, 2000. The Fund underperformed its benchmark, the Lehman
Brothers 10-Year Municipal Bond Index(2) (the Index), which returned 4.47%.
The Fund's Institutional Class shares distributed $0.48 per share in dividend
income and no capital gains during the period. Although the Fund
underperformed its benchmark, its dividend yield ranked second out of 76
similar funds. Please keep in mind that past performance is no guarantee of
future results.
During the second half of 1999, the Fund's holdings of non-callable,
deep-discount bonds and Southern Minnesota Power zero-coupon bonds were
battered by rising interest rates. As rates declined over the first half of
2000, those bonds nearly recovered their losses, and should perform well over
the coming months. The Fund's health-care related bonds and other
lower-quality issues also hurt performance, as political events created
uncertainty over future reimbursements to health care providers. In addition,
widening credit spreads negatively affected the performance of municipal
bonds, with investors demanding higher yield premiums for lower quality bonds.
In April, the Fund purchased several new issues that represented an excellent
opportunity to capture attractive yields in the 10-year maturity range,
including bonds issued by Fairview Hospital and St. Cloud Hospital.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
As the economy begins to slow, interest rates should move lower. The Fund
should outperform amid stable or declining rates, and will seek to maintain
its above-market dividend yield.
--------------------------------------------------------------------------------
(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 Advisor has committed through October 31, 2001
to waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower.
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 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 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. Institutional Class shares are sold without
sales charges.
10
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6-Month* 1-Year 5-Year 10-Year
<S> <C> <C> <C> <C>
INSTITUTIONAL CLASS 3.12 2.17 4.72 5.68
BENCHMARK
LEHMAN BROTHERS 10-YEAR
MUNICIPAL BOND INDEX 3.96 4.47 5.97 7.23
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS (AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(4) AA+
WEIGHTED AVERAGE COUPON 5.00%
ESTIMATED DURATION 5.72 YEARS
NAV (INST.) $9.47
PORTFOLIO TURNOVER 29%
NUMBER OF HOLDINGS 208
SEC YIELD(5) (INST.) 5.05%
DISTRIBUTION RATE(6) (INST.) 5.09%
TAXABLE EQUIVALENT YIELD(7) (INST.) 9.09%
</TABLE>
GROWTH OF $10,000 INVESTMENT(3)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO MINNESOTA LEHMAN BROTHERS 10-YEAR
INTERMEDIATE TERM TAX-FREE FUND - INSTITUTIONAL CLASS MUNICIPAL BOND INDEX
<S> <C> <C>
6/90 $10,000 $10,000
7/90 $10,114 $10,147
8/90 $10,046 $10,000
9/90 $10,070 $10,006
10/90 $10,197 $10,187
11/90 $10,352 $10,392
12/90 $10,397 $10,437
1/91 $10,511 $10,577
2/91 $10,600 $10,669
3/91 $10,609 $10,674
4/91 $10,698 $10,816
5/91 $10,785 $10,912
6/91 $10,787 $10,901
7/91 $10,872 $11,034
8/91 $10,972 $11,180
9/91 $11,064 $11,325
10/91 $11,127 $11,427
11/91 $11,180 $11,459
12/91 $11,312 $11,705
1/92 $11,366 $11,732
2/92 $11,391 $11,736
3/92 $11,395 $11,740
4/92 $11,471 $11,845
5/92 $11,566 $11,985
6/92 $11,688 $12,186
7/92 $11,932 $12,551
8/92 $11,868 $12,428
9/92 $11,940 $12,509
10/92 $11,880 $12,387
11/92 $12,043 $12,608
12/92 $12,139 $12,737
1/93 $12,247 $12,885
2/93 $12,515 $13,351
3/93 $12,404 $13,210
4/93 $12,488 $13,343
5/93 $12,541 $13,418
6/93 $12,694 $13,642
7/93 $12,700 $13,660
8/93 $12,969 $13,944
9/93 $13,100 $14,103
10/93 $13,119 $14,129
11/93 $13,055 $14,005
12/93 $13,239 $14,301
1/94 $13,377 $14,464
2/94 $13,114 $14,089
3/94 $12,822 $13,516
4/94 $12,861 $13,631
5/94 $12,924 $13,749
6/94 $12,891 $13,665
7/94 $13,011 $13,915
8/94 $13,082 $13,964
9/94 $12,960 $13,759
10/94 $12,784 $13,514
11/94 $12,534 $13,269
12/94 $12,830 $13,561
1/95 $13,077 $13,949
2/95 $13,398 $14,354
3/95 $13,496 $14,519
4/95 $13,535 $14,536
5/95 $13,846 $15,000
6/95 $13,800 $14,869
7/95 $13,929 $15,010
8/95 $14,069 $15,200
9/95 $14,121 $15,297
10/95 $14,277 $15,519
11/95 $14,428 $15,777
12/95 $14,542 $15,928
1/96 $14,649 $16,049
2/96 $14,608 $15,940
3/96 $14,461 $15,736
4/96 $14,441 $15,692
5/96 $14,436 $15,686
6/96 $14,525 $15,857
7/96 $14,655 $15,999
8/96 $14,661 $15,996
9/96 $14,798 $16,220
10/96 $14,926 $16,403
11/96 $15,132 $16,704
12/96 $15,095 $16,633
1/97 $15,124 $16,665
2/97 $15,240 $16,818
3/97 $15,082 $16,595
4/97 $15,184 $16,734
5/97 $15,355 $16,987
6/97 $15,497 $17,169
7/97 $15,856 $17,644
8/97 $15,715 $17,478
9/97 $15,887 $17,686
10/97 $15,986 $17,799
11/97 $16,037 $17,904
12/97 $16,242 $18,166
1/98 $16,376 $18,353
2/98 $16,390 $18,358
3/98 $16,393 $18,375
4/98 $16,313 $18,292
5/98 $16,564 $18,581
6/98 $16,614 $18,654
7/98 $16,651 $18,700
8/98 $16,903 $18,990
9/98 $17,070 $19,228
10/98 $17,055 $19,228
11/98 $17,105 $19,295
12/98 $17,149 $19,355
1/99 $17,322 $19,585
2/99 $17,249 $19,499
3/99 $17,251 $19,526
4/99 $17,302 $19,575
5/99 $17,218 $19,738
6/99 $17,009 $19,453
7/99 $17,063 $19,523
8/99 $16,960 $19,367
9/99 $16,924 $19,375
10/99 $16,801 $19,166
11/99 $16,924 $19,369
12/99 $16,853 $19,224
1/00 $16,765 $19,139
2/00 $16,941 $19,361
3/00 $17,195 $19,783
4/00 $17,121 $19,666
5/00 $17,032 $19,564
6/00 $17,379 $20,082
</TABLE>
CREDIT QUALITY
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA/Treasuries/Agencies 48%
AA 27%
A 10%
Unrated 8%
BBB 6%
SP1 1%
</TABLE>
MATURITY DISTRIBUTION(8)
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
20+ Years 11%
10-20 Years 34%
5-10 Years 21%
1-5 Years 28%
0-1 Year 6%
</TABLE>
--------------------------------------------------------------------------------
(2) The Lehman Brothers 10-Year Municipal Bond Index is an unmanaged index
composed of municipal bonds with average maturities of ten 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) The chart compares the performance of the Wells Fargo Minnesota
Intermediate Tax-Free Fund Institutional Class shares for the most recent ten
years 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.
(4) The average credit rating is compiled from ratings from Standard & 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.
(5) 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.
(6) 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.
(7) 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.
(8) Portfolio holdings are subject to change.
11
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Minnesota Tax-Free Fund (the Fund) seeks a high level of current income
exempt from federal income tax and Minnesota personal income tax, without
assuming undue risk.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
Patricia Hovanetz, CFA
INCEPTION DATE
01/12/88
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund's Class A shares returned (0.02)%(1) for the 12-month period ended
June 30, 2000, excluding sales charges. The Fund underperformed its benchmark,
the Lehman Brothers Municipal Bond Index(2) (the Index), which returned 3.25%.
The Fund's Class A shares distributed $0.53 per share in dividend income and
$0.01 in capital gains during the period. Please keep in mind that past
performance is no guarantee of future results.
Rising interest rates contributed to the Fund's underperformance during the
first six months of the reporting period. Rather than shorten bond maturities
to offset the impact of rising rates, the Fund stayed its course. This
strategy benefited the Fund when rates began to decline in 2000.
The past year was a challenging period for specific revenue bond sectors and
lower quality bonds. The Fund's health-care related bonds were hardest hit,
reflecting changes in health-care reimbursement policies. Investors also
demanded yield premiums for lower quality bonds. The Fund took advantage of
bargains in the marketplace by adding several attractively priced, high-yield
issues, including bonds issued by Fairview Hospital, St. Cloud Hospital and
Austin housing bonds.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
As the economy continues to slow, interest rates should ultimately decrease.
The Fund is structured for the potential to perform well in an environment of
decreasing rates, because when interest rates decrease, bond prices increase.
--------------------------------------------------------------------------------
(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 Advisor has committed through October 31, 2001
to waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower.
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 (CDSC) for Class B shares is 5.00%. Class B
share performance including sales charge assumes the maximum CDSC for the
corresponding time period. Institutional Class shares are sold without sales
charges.
(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.
12
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
----------------------------------- ------------------------
6-Month* 1-Year 5-Year 10-Year 1-Year 5-Year 10-Year
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A 4.75 (0.02) 4.92 5.81 (4.51) 3.96 5.33
CLASS B 4.37 (0.76) 4.14 5.00 (5.50) 3.80 5.00
INSTITUTIONAL CLASS 4.75 (0.02) 4.92 5.81
BENCHMARK
LEHMAN BROTHERS
MUNICIPAL BOND INDEX 4.48 3.25 5.88 7.06
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS (AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(4) A1
WEIGHTED AVERAGE COUPON 4.96%
ESTIMATED DURATION 9.34 YEARS
NAV (A, B, INST.) $10.18, $10.18, $10.18
PORTFOLIO TURNOVER 69%
NUMBER OF HOLDINGS 78
SEC YIELD(5) (A, B, INST.) 5.42%, 4.92%, 5.67%
DISTRIBUTION RATE(6)
(A, B, INST.) 5.10%, 4.59%, 5.34%
TAXABLE EQUIVALENT YIELD(7)
(A, B, INST.) 9.75%, 8.85%, 10.20%
</TABLE>
GROWTH OF $10,000 INVESTMENT(3)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO LEHMAN BROTHERS WELLS FARGO
MINNESOTA TAX-FREE FUND - CLASS A MUNICIPAL BOND INDEX MINNESOTA TAX-FREE FUND - INSTITUTIONAL CLASS
<S> <C> <C> <C>
6/90 $9,550 $10,000 $10,000
7/90 $9,655 $10,139 $10,110
8/90 $9,568 $9,993 $10,019
9/90 $9,574 $9,995 $10,025
10/90 $9,731 $10,215 $10,189
11/90 $9,868 $10,423 $10,332
12/90 $9,906 $10,448 $10,373
1/91 $10,006 $10,621 $10,477
2/91 $10,082 $10,712 $10,557
3/91 $10,086 $10,707 $10,561
4/91 $10,177 $10,854 $10,656
5/91 $10,253 $10,936 $10,736
6/91 $10,279 $10,923 $10,764
7/91 $10,330 $11,037 $10,817
8/91 $10,426 $11,186 $10,918
9/91 $10,504 $11,358 $10,999
10/91 $10,567 $11,450 $11,065
11/91 $10,598 $11,469 $11,097
12/91 $10,752 $11,713 $11,258
1/92 $10,786 $11,738 $11,294
2/92 $10,814 $11,720 $11,324
3/92 $10,866 $11,703 $11,378
4/92 $10,930 $11,814 $11,445
5/92 $11,026 $11,952 $11,545
6/92 $11,143 $12,159 $11,668
7/92 $11,373 $12,558 $11,909
8/92 $11,293 $12,410 $11,825
9/92 $11,366 $12,513 $11,902
10/92 $11,297 $12,385 $11,830
11/92 $11,456 $12,612 $11,996
12/92 $11,563 $12,758 $12,108
1/93 $11,675 $12,972 $12,225
2/93 $11,996 $13,447 $12,562
3/93 $11,867 $13,251 $12,426
4/93 $11,987 $13,376 $12,551
5/93 $12,056 $13,423 $12,625
6/93 $12,242 $13,688 $12,819
7/93 $12,262 $13,722 $12,840
8/93 $12,529 $14,006 $13,132
9/93 $12,729 $14,178 $13,329
10/93 $12,723 $14,201 $13,323
11/93 $12,594 $14,085 $13,199
12/93 $12,862 $14,385 $13,468
1/94 $12,995 $14,561 $13,619
2/94 $12,649 $14,162 $13,245
3/94 $12,145 $13,619 $12,730
4/94 $12,193 $13,790 $12,779
5/94 $12,291 $13,878 $12,882
6/94 $12,207 $13,819 $12,794
7/94 $12,343 $14,051 $12,924
8/94 $12,418 $14,106 $13,003
9/94 $12,214 $13,915 $12,789
10/94 $12,028 $13,712 $12,595
11/94 $11,793 $13,453 $12,349
12/94 $12,090 $13,695 $12,672
1/95 $12,444 $14,050 $13,030
2/95 $12,813 $14,447 $13,416
3/95 $12,917 $14,643 $13,525
4/95 $12,924 $14,660 $13,532
5/95 $13,342 $15,125 $13,970
6/95 $13,215 $15,031 $13,838
7/95 $13,288 $15,252 $13,914
8/95 $13,442 $15,459 $14,075
9/95 $13,518 $15,558 $14,155
10/95 $13,747 $15,737 $14,395
11/95 $14,004 $15,948 $14,664
12/95 $14,171 $16,045 $14,838
1/96 $14,255 $16,208 $14,927
2/96 $14,127 $16,141 $14,806
3/96 $13,922 $15,941 $14,577
4/96 $13,874 $15,885 $14,527
5/96 $13,872 $15,841 $14,525
6/96 $14,048 $15,991 $14,710
7/96 $14,163 $16,145 $14,830
8/96 $14,121 $16,145 $14,786
9/96 $14,354 $16,311 $15,030
10/96 $14,512 $16,516 $15,195
11/96 $14,768 $16,850 $15,463
12/96 $14,707 $16,774 $15,399
1/97 $14,703 $16,840 $15,396
2/97 $14,818 $16,998 $15,515
3/97 $14,613 $16,770 $15,301
4/97 $14,773 $16,894 $15,469
5/97 $14,979 $17,134 $15,684
6/97 $15,125 $17,323 $15,837
7/97 $15,587 $17,809 $16,321
8/97 $15,379 $17,637 $16,119
9/97 $15,585 $17,861 $16,319
10/97 $15,707 $17,955 $16,447
11/97 $15,799 $18,038 $16,543
12/97 $16,054 $18,323 $16,810
1/98 $16,221 $18,526 $16,986
2/98 $16,222 $18,524 $16,986
3/98 $16,228 $18,511 $16,993
4/98 $16,115 $18,410 $16,874
5/98 $16,433 $18,723 $17,208
6/98 $16,497 $18,792 $17,275
7/98 $16,519 $18,822 $17,297
8/98 $16,810 $19,149 $17,617
9/98 $17,055 $19,435 $17,858
10/98 $16,939 $19,443 $17,737
11/98 $17,018 $19,501 $17,819
12/98 $17,053 $19,561 $17,856
1/99 $17,211 $19,861 $18,022
2/99 $17,133 $19,682 $17,940
3/99 $17,138 $19,672 $17,946
4/99 $17,188 $19,725 $17,997
5/99 $17,084 $19,587 $17,889
6/99 $16,806 $19,223 $17,598
7/99 $16,796 $19,352 $17,588
8/99 $16,521 $19,280 $17,299
9/99 $16,369 $19,346 $17,140
10/99 $16,076 $19,210 $16,833
11/99 $16,225 $19,419 $16,989
12/99 $16,041 $19,319 $16,797
1/00 $15,905 $19,239 $16,654
2/00 $16,232 $19,391 $16,997
3/00 $16,663 $19,769 $17,448
4/00 $16,523 $19,671 $17,301
5/00 $16,385 $19,555 $17,157
6/00 $16,803 $20,086 $17,595
</TABLE>
CREDIT QUALITY
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA/Treasuries/Agencies 38%
AA 30%
Unrated 15%
A 9%
BBB 5%
Cash 2%
SP1 1%
</TABLE>
MATURITY DISTRIBUTION(8)
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
20+ Years 43%
10-20 Years 38%
5-10 Years 6%
1-5 Years 9%
0-1 Year 4%
</TABLE>
--------------------------------------------------------------------------------
(3) The chart compares the performance of the Wells Fargo Minnesota Tax-Free
Fund Class A and Institutional Class shares for the most recent ten years 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.
(4) The average credit rating is compiled from ratings from Standard & 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.
(5) 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.
(6) 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.
(7) 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.
(8) Portfolio holdings are subject to change.
13
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The National Limited Term Tax-Free Fund (the Fund) seeks current income exempt
from federal income taxes.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
Patricia Hovanetz, CFA
Mark Walter
INCEPTION DATE
10/01/96
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund's Institutional Class shares returned 2.64%(1) for the 12-month
period ended June 30, 2000. The Fund underperformed its benchmark, the Lehman
Brothers 3-Year Municipal Bond Index(2) (the Index), which returned 3.73%. The
Fund's Institutional Class shares distributed $0.47 per share in dividend
income and no capital gains during the period. Please keep in mind that past
performance is no guarantee of future results.
Throughout most of the reporting period, interest rates rose among short- to
intermediate-term bonds, then began to move lower amid signs of an economic
slowdown. When rates rose, the Fund's best performing bonds were those that
supported its emphasis on high dividend yield, including high-coupon bonds
escrowed to maturity with shorter sinking fund payments. In contrast, low
coupon bonds fared poorly amid rising rates.
Two specific bond holdings hurt the Fund's performance. A Hayward, CA
hospital issue had more bonds called at par than anticipated, so the Fund's
managers decided to sell the issue. In addition, a Newcastle, PA hospital
issue was downgraded to below investment-grade based on the issuer's
diminishing credit rating. These bonds were sold to avoid further losses.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
The Fund expects municipal yields to decline in the coming months, and is
well-positioned to potentially capitalize on this development. The Fund will
also continue to strike a balance between bonds with above-average income and
those that provide market price return.
--------------------------------------------------------------------------------
(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 Advisor has committed through October 31, 2001
to waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower.
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 Stagecoach and Norwest Advantage Funds were
reorganized into the Wells Fargo Funds. Institutional Class shares are sold
without sales charges.
14
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6-Month* 1-Year Since Inception
<S> <C> <C> <C>
INSTITUTIONAL CLASS 2.04 2.64 5.10
BENCHMARK
LEHMAN BROTHERS 3-YEAR MUNICIPAL
BOND INDEX 2.41 3.73
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS (AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(4) AA-
WEIGHTED AVERAGE COUPON 4.77%
ESTIMATED DURATION 3.71 YEARS
NAV (INST.) $10.19
PORTFOLIO TURNOVER 48%
NUMBER OF HOLDINGS 94
SEC YIELD(5) (INST.) 5.20%
DISTRIBUTION RATE(6) (INST.) 4.62%
TAXABLE EQUIVALENT YIELD(7)
(INST.) 8.61%
ALTERNATIVE MINIMUM TAX(7) 6.27%
</TABLE>
GROWTH OF $10,000 INVESTMENT(3)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO LEHMAN BROTHERS
NATIONAL LIMITED TERM TAX-FREE FUND - INSTITUTIONAL CLASS 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
Jan-00 $11,785 $11,531
Feb-00 $11,841 $11,568
Mar-00 $11,922 $11,628
Apr-00 $11,909 $11,629
May-00 $11,898 $11,641
Jun-00 $12,049 $11,788
</TABLE>
CREDIT QUALITY
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA/Treasuries/Agencies 55%
A 15%
BBB 13%
Unrated 9%
AA 6%
SP1 1%
Cash 1%
</TABLE>
MATURITY DISTRIBUTION(8)
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
20-30 Years 3%
10-20 Years 6%
5-10 Years 49%
1-5 Years 35%
0-1 Year 7%
</TABLE>
--------------------------------------------------------------------------------
(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.
(3) 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.
(4) The average credit rating is compiled from ratings from Standard & 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.
(5) 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.
(6) 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.
(7) 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. The value of the securities subject to the
AMT is represented as a percentage of net assets.
(8) Portfolio holdings are subject to change.
15
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The National Tax-Free Fund (the Fund) seeks current income exempt from federal
income taxes.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
William T. Jackson, CFA
INCEPTION DATE
08/01/89
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund's Class A shares returned 0.50%(1) during the 12-month period ended
June 30, 2000, excluding sales charges, underperforming the Lehman Brothers
Municipal Bond Index(2) (the Index), which returned 3.25%. The Fund's Class A
shares distributed $0.53 per share in dividend income and $0.01 in capital
gains during the period. Please keep in mind that past performance is no
guarantee of future results.
The Fund is normally more aggressive than the Index both in terms of duration
and credit exposure. While this strategy has the potential to produce a high
rate of tax-free income, it also hurt Fund performance during the first eight
months of the reporting period -- a period characterized by rising interest
rates and widening credit spreads. The Fund, and the entire municipal sector,
were also negatively affected by shareholder redemptions, which resulted in
the sale of certain investments during periods of market weakness. Losses
incurred by the Fund will ultimately be used to reduce or eliminate future
capital gains distributions.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
The Fund expects municipal yields to decline in the coming months, and is
well-positioned for the potential to capitalize on this development. And
unless the municipal bond market experiences another dramatic sell-off, the
Fund is potentially positioned to continue generating attractive dividends.
--------------------------------------------------------------------------------
(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 Advisor has committed through October 31, 2001
to waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower.
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 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 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
(CDSC) for Class B shares is 5.00%. The maximum CDSC for Class C shares is
1.00%. Class B and Class C share performance assumes the maximum CDSC for the
corresponding time period. Institutional Class shares are sold without sales
charges.
(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) The chart compares the performance of the Wells Fargo National Tax-Free
Fund Class A and Institutional Class shares for the most recent ten years 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.
16
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
----------------------------------- ------------------------
6-Month* 1-Year 5-Year 10-Year 1-Year 5-Year 10-Year
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A 4.31 0.50 5.50 6.01 (4.02) 4.53 5.52
CLASS B 3.92 (0.24) 4.72 5.24 (4.99) 4.38 5.24
CLASS C 4.03 (0.13) 4.74 5.25 (1.09) 4.74 5.25
INSTITUTIONAL CLASS 4.52 0.73 5.55 6.04
BENCHMARK
LEHMAN BROTHERS
MUNICIPAL BOND INDEX 4.48 3.25 5.88 7.06
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS (AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(4) AA
WEIGHTED AVERAGE COUPON 4.78%
ESTIMATED DURATION 9.75 YEARS
NAV (A, B, C, INST.) $9.72, $9.72, $9.73, $9.73
PORTFOLIO TURNOVER 79%
NUMBER OF HOLDINGS 152
SEC YIELD(5)
(A, B, C, INST.) 5.47%, 4.98%, 4.98%, 5.92%
DISTRIBUTION RATE(6)
(A, B, C, INST.) 5.23%, 4.73%, 4.73%, 5.67%
TAXABLE EQUIVALENT YIELD(7)
(A, B, C, INST.) 9.06%, 8.25%, 8.25%, 9.80%
ALTERNATIVE MINIMUM TAX(7) 7.60%
</TABLE>
GROWTH OF $10,000 INVESTMENT(3)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO LEHMAN BROTHERS WELLS FARGO
NATIONAL TAX-FREE FUND - CLASS A MUNICIPAL BOND INDEX NATIONAL TAX-FREE FUND - INSTITUTIONAL CLASS
<S> <C> <C> <C>
6/90 $9,550 $10,000 $10,000
7/90 $9,694 $10,147 $10,151
8/90 $9,526 $10,000 $9,975
9/90 $9,580 $10,006 $10,032
10/90 $9,707 $10,187 $10,165
11/90 $9,863 $10,392 $10,327
12/90 $9,872 $10,437 $10,337
1/91 $10,012 $10,577 $10,483
2/91 $10,147 $10,669 $10,625
3/91 $10,098 $10,674 $10,573
4/91 $10,219 $10,816 $10,701
5/91 $10,323 $10,912 $10,809
6/91 $10,299 $10,901 $10,785
7/91 $10,404 $11,034 $10,894
8/91 $10,499 $11,180 $10,994
9/91 $10,603 $11,325 $11,103
10/91 $10,658 $11,427 $11,160
11/91 $10,668 $11,459 $11,170
12/91 $10,801 $11,705 $11,310
1/92 $10,847 $11,732 $11,358
2/92 $10,893 $11,736 $11,406
3/92 $10,921 $11,740 $11,436
4/92 $11,016 $11,845 $11,535
5/92 $11,113 $11,985 $11,637
6/92 $11,242 $12,186 $11,772
7/92 $11,434 $12,551 $11,972
8/92 $11,392 $12,428 $11,929
9/92 $11,466 $12,509 $12,006
10/92 $11,294 $12,387 $11,826
11/92 $11,458 $12,608 $11,998
12/92 $11,593 $12,737 $12,139
1/93 $11,663 $12,885 $12,213
2/93 $11,922 $13,351 $12,484
3/93 $11,843 $13,210 $12,401
4/93 $11,942 $13,343 $12,504
5/93 $11,987 $13,418 $12,552
6/93 $12,190 $13,642 $12,765
7/93 $12,206 $13,660 $12,781
8/93 $12,457 $13,944 $13,056
9/93 $12,562 $14,103 $13,154
10/93 $12,584 $14,129 $13,177
11/93 $12,405 $14,005 $13,003
12/93 $12,692 $14,301 $13,303
1/94 $12,873 $14,464 $13,480
2/94 $12,504 $14,089 $13,093
3/94 $11,994 $13,516 $12,560
4/94 $12,112 $13,631 $12,683
5/94 $12,195 $13,749 $12,770
6/94 $12,152 $13,665 $12,725
7/94 $12,327 $13,915 $12,908
8/94 $12,374 $13,964 $12,957
9/94 $12,206 $13,759 $12,795
10/94 $12,043 $13,514 $12,610
11/94 $11,814 $13,269 $12,384
12/94 $12,075 $13,561 $12,657
1/95 $12,396 $13,949 $12,980
2/95 $12,702 $14,354 $13,315
3/95 $12,781 $14,519 $13,398
4/95 $12,811 $14,536 $13,415
5/95 $13,223 $15,000 $13,846
6/95 $13,099 $14,869 $13,716
7/95 $13,212 $15,010 $13,834
8/95 $13,355 $15,200 $13,998
9/95 $13,431 $15,297 $14,078
10/95 $13,615 $15,519 $14,271
11/95 $13,935 $15,777 $14,592
12/95 $14,111 $15,928 $14,776
1/96 $14,231 $16,049 $14,916
2/96 $14,127 $15,940 $14,792
3/96 $13,942 $15,736 $14,599
4/96 $13,909 $15,692 $14,579
5/96 $13,922 $15,686 $14,578
6/96 $14,039 $15,857 $14,715
7/96 $14,220 $15,999 $14,905
8/96 $14,189 $15,996 $14,858
9/96 $14,379 $16,220 $15,071
10/96 $14,576 $16,403 $15,278
11/96 $14,817 $16,704 $15,515
12/96 $14,780 $16,633 $15,477
1/97 $14,806 $16,665 $15,519
2/97 $14,940 $16,818 $15,644
3/97 $14,721 $16,595 $15,415
4/97 $14,878 $16,734 $15,579
5/97 $15,096 $16,987 $15,824
6/97 $15,252 $17,169 $15,986
7/97 $15,726 $17,644 $16,483
8/97 $15,536 $17,478 $16,268
9/97 $15,739 $17,686 $16,496
10/97 $15,853 $17,799 $16,600
11/97 $15,981 $17,904 $16,750
12/97 $16,297 $18,166 $17,065
1/98 $16,429 $18,353 $17,220
2/98 $16,415 $18,358 $17,204
3/98 $16,438 $18,375 $17,229
4/98 $16,287 $18,292 $17,071
5/98 $16,656 $18,581 $17,441
6/98 $16,724 $18,654 $17,513
7/98 $16,748 $18,700 $17,537
8/98 $17,057 $18,990 $17,878
9/98 $17,317 $19,228 $18,150
10/98 $17,225 $19,228 $18,054
11/98 $17,340 $19,295 $18,158
12/98 $17,346 $19,355 $18,181
1/99 $17,529 $19,585 $18,356
2/99 $17,413 $19,499 $18,234
3/99 $17,403 $19,526 $18,240
4/99 $17,472 $19,575 $18,312
5/99 $17,329 $19,738 $18,146
6/99 $17,035 $19,453 $17,838
7/31/99 $17,027 $19,523 $17,830
8/31/99 $16,786 $19,367 $17,595
9/30/99 $16,692 $19,375 $17,497
10/31/99 $16,432 $19,166 $17,225
11/30/99 $16,628 $19,369 $17,414
12/31/99 $16,413 $19,224 $17,192
1/00 $16,199 $19,139 $16,988
2/00 $16,477 $19,361 $17,265
3/00 $16,919 $19,783 $17,748
4/00 $16,824 $19,666 $17,634
5/00 $16,676 $19,564 $17,500
6/00 $17,121 $20,082 $17,969
</TABLE>
CREDIT QUALITY
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AAA/Treasuries/Agencies 41%
AA 22%
Unrated 13%
BBB 12%
A 9%
Cash 3%
</TABLE>
MATURITY DISTRIBUTION(8)
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
20-30 Years 47%
10-20 Years 32%
5-10 Years 7%
1-5 Years 9%
0-1 Year 5%
</TABLE>
--------------------------------------------------------------------------------
(4) The average credit rating is compiled from ratings from Standard & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard and
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.
(5) 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.
(6) 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.
(7) 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. The value of the securities subject to the
AMT is represented as a percentage of net assets.
(8) Portfolio holdings are subject to change.
17
<PAGE>
TAX-FREE FUNDS PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
OREGON TAX-FREE FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Oregon Tax-Free Fund (the Fund) seeks a high level of current income
exempt from federal income tax and Oregon personal income tax.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
Stephen Galiani
INCEPTION DATE
06/01/88
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund's Class A shares returned (0.45)%(1) for the 12-month period ended
June 30, 2000, 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) (the Index), which returned 3.25% during the
period. The Fund's Class A shares distributed $0.77 per share in dividend
income and $0.02 in capital gains during the period. Please keep in mind that
past performance is no guarantee of future results.
Over the course of the reporting period, the Fund was positioned to benefit
from declining interest rates. However, with rising interest rates in the last
half of 1999, the Fund's longer duration and average maturity contributed to
its underperformance. While Fund performance improved over the first half of
2000 due to falling interest rates, holdings of lower-quality bonds further
hampered performance. Despite this period of relative underperformance, the
Fund's distribution yield was near the top of its peer group.
The Fund was helped most by its high-quality, AAA-insured bonds, which held
their value amid rising interest rates, and performed exceptionally well as
rates fell. In contrast, the Fund's health care-related bonds -- which
represented 23% of portfolio holdings -- underperformed against other sectors
of the municipal market due to issues related to managed care and government
reimbursements.
STRATEGIC OUTLOOK
--------------------------------------------------------------------------------
The Fund's manager anticipates that interest rates will decline gradually
going forward and that the economy will enter into a "soft landing" lasting
into the fourth quarter. The manager believes that municipal bonds are
relatively undervalued and expects them to perform well compared to U.S.
Treasury securities during the rest of the year. The Fund is well-positioned
for the current market environment, and continues to seek opportunities to
improve its distribution yield.
--------------------------------------------------------------------------------
(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 Advisor has committed through October 31, 2001
to waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower.
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
September 6, 1996 and October 1, 1995, reflects performance of the Investor
Class shares of the Pacifica Oregon Tax-Exempt Fund adjusted for expenses of the
respective class, 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 adjusted for expenses of the respective class. For Class A
shares, the maximum front-end sales charge is 4.50%. The maximum contingent
deferred sales charge (CDSC) for Class B shares is 5.00%. Class B share
performance including sales charge assumes the maximum CDSC for the
corresponding time period. Institutional Class shares are sold without sales
charges.
(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.
18
<PAGE>
PERFORMANCE HIGHLIGHTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1) (%) (AS OF JUNE 30, 2000)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Excluding Sales Charge Including Sales Charge
------------------------------------ --------------------------
6-Month* 1-Year 5-Year 10-Year 1-Year 5-Year 10-Year
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A 3.83 (0.45) 4.18 5.71 (4.93) 3.22 5.23
CLASS B 3.45 (1.13) 3.31 4.90 (5.86) 2.99 4.90
INSTITUTIONAL CLASS 3.92 (0.32) 4.30 5.77
BENCHMARK
LEHMAN BROTHERS
MUNICIPAL BOND INDEX 4.48 3.25 5.88 7.06
</TABLE>
* RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CHARACTERISTICS (AS OF JUNE 30, 2000)
----------------------------------------------
<TABLE>
<S> <C>
AVERAGE CREDIT QUALITY(4) AA-
WEIGHTED AVERAGE COUPON 4.86%
ESTIMATED DURATION 9.80 YEARS
NAV (A, B, INST.) $15.22, $9.33, $15.22
PORTFOLIO TURNOVER 51%
NUMBER OF HOLDINGS 47
SEC YIELD(5) (A, B, INST.) 5.24%, 4.74%, 5.66%
DISTRIBUTION RATE(6)
(A, B, INST.) 4.93%, 4.42%, 5.33%
TAXABLE EQUIVALENT YIELD(7)
(A, B, INST.) 9.53%, 8.62%, 10.30%
ALTERNATIVE MINIMUM TAX(7) 16.35%
</TABLE>
GROWTH OF $10,000 INVESTMENT(3)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WELLS FARGO LEHMAN BROTHERS WELLS FARGO
OREGON TAX-FREE FUND - CLASS A MUNICIPAL BOND INDEX OREGON TAX-FREE FUND - INSTITUTIONAL CLASS
<S> <C> <C> <C>
6/90 $9,550 $10,000 $10,000
7/90 $9,700 $10,147 $10,156
8/90 $9,528 $10,000 $9,976
9/90 $9,570 $10,006 $10,019
10/90 $9,690 $10,187 $10,145
11/90 $9,849 $10,392 $10,312
12/90 $9,915 $10,437 $10,381
1/91 $10,029 $10,577 $10,500
2/91 $10,136 $10,669 $10,612
3/91 $10,172 $10,674 $10,650
4/91 $10,267 $10,816 $10,749
5/91 $10,366 $10,912 $10,853
6/91 $10,341 $10,901 $10,827
7/91 $10,498 $11,034 $10,991
8/91 $10,603 $11,180 $11,101
9/91 $10,710 $11,325 $11,213
10/91 $10,787 $11,427 $11,294
11/91 $10,759 $11,459 $11,264
12/91 $10,963 $11,705 $11,477
1/92 $10,975 $11,732 $11,490
2/92 $11,011 $11,736 $11,528
3/92 $11,020 $11,740 $11,538
4/92 $11,115 $11,845 $11,637
5/92 $11,241 $11,985 $11,769
6/92 $11,411 $12,186 $11,947
7/92 $11,781 $12,551 $12,334
8/92 $11,625 $12,428 $12,171
9/92 $11,648 $12,509 $12,195
10/92 $11,471 $12,387 $12,010
11/92 $11,721 $12,608 $12,272
12/92 $11,843 $12,737 $12,399
1/93 $11,940 $12,885 $12,501
2/93 $12,318 $13,351 $12,896
3/93 $12,176 $13,210 $12,747
4/93 $12,309 $13,343 $12,887
5/93 $12,406 $13,418 $12,988
6/93 $12,623 $13,642 $13,216
7/93 $12,641 $13,660 $13,235
8/93 $12,938 $13,944 $13,546
9/93 $13,112 $14,103 $13,727
10/93 $13,108 $14,129 $13,724
11/93 $13,070 $14,005 $13,684
12/93 $13,309 $14,301 $13,934
1/94 $13,458 $14,464 $14,090
2/94 $13,148 $14,089 $13,765
3/94 $12,602 $13,516 $13,194
4/94 $12,541 $13,631 $13,131
5/94 $12,694 $13,749 $13,291
6/94 $12,563 $13,665 $13,153
7/94 $12,796 $13,915 $13,397
8/94 $12,840 $13,964 $13,444
9/94 $12,611 $13,759 $13,203
10/94 $12,310 $13,514 $12,888
11/94 $12,061 $13,269 $12,627
12/94 $12,446 $13,561 $13,030
1/95 $12,854 $13,949 $13,458
2/95 $13,215 $14,354 $13,835
3/95 $13,304 $14,519 $13,929
4/95 $13,311 $14,536 $13,936
5/95 $13,700 $15,000 $14,344
6/95 $13,562 $14,869 $14,199
7/95 $13,647 $15,010 $14,288
8/95 $13,769 $15,200 $14,415
9/95 $13,866 $15,297 $14,518
10/95 $14,058 $15,519 $14,718
11/95 $14,291 $15,777 $14,961
12/95 $14,417 $15,928 $15,095
1/96 $14,459 $16,049 $15,139
2/96 $14,384 $15,940 $15,062
3/96 $14,193 $15,736 $14,863
4/96 $14,136 $15,692 $14,805
5/96 $14,150 $15,686 $14,821
6/96 $14,285 $15,857 $14,955
7/96 $14,420 $15,999 $15,108
8/96 $14,415 $15,996 $15,095
9/96 $14,579 $16,220 $15,278
10/96 $14,711 $16,403 $15,419
11/96 $14,995 $16,704 $15,710
12/96 $14,894 $16,633 $15,616
1/97 $14,926 $16,665 $15,652
2/97 $15,046 $16,818 $15,781
3/97 $14,820 $16,595 $15,536
4/97 $14,941 $16,734 $15,666
5/97 $15,131 $16,987 $15,868
6/97 $15,270 $17,169 $16,016
7/97 $15,735 $17,644 $16,517
8/97 $15,584 $17,478 $16,352
9/97 $15,761 $17,686 $16,549
10/97 $15,853 $17,799 $16,639
11/97 $15,927 $17,904 $16,729
12/97 $16,174 $18,166 $16,992
1/98 $16,343 $18,353 $17,163
2/98 $16,301 $18,358 $17,120
3/98 $16,273 $18,375 $17,102
4/98 $16,178 $18,292 $16,992
5/98 $16,413 $18,581 $17,240
6/98 $16,463 $18,654 $17,303
7/98 $16,500 $18,700 $17,343
8/98 $16,774 $18,990 $17,622
9/98 $16,992 $19,228 $17,851
10/98 $16,938 $19,228 $17,795
11/98 $17,007 $19,295 $17,879
12/98 $17,054 $19,355 $17,918
1/99 $17,281 $19,585 $18,157
2/99 $17,135 $19,499 $18,015
3/99 $17,148 $19,526 $18,030
4/99 $17,195 $19,575 $18,080
5/99 $17,061 $19,738 $17,929
6/99 $16,722 $19,453 $17,584
7/99 $16,791 $19,523 $17,658
8/99 $16,554 $19,367 $17,409
9/99 $16,505 $19,375 $17,358
10/99 $16,185 $19,166 $17,012
11/99 $16,283 $19,369 $17,128
12/99 $16,032 $19,224 $16,867
1/00 $15,888 $19,139 $16,717
2/00 $16,147 $19,361 $16,992
3/00 $16,465 $19,783 $17,329
4/00 $16,362 $19,666 $17,223
5/00 $16,207 $19,564 $17,062
6/00 $16,647 $20,082 $17,528
</TABLE>
CREDIT QUALITY
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
AA 32%
AAA/Treasuries/Agencies 30%
Unrated 17%
A 9%
BB/Ba 6%
BBB 5%
Cash 1%
</TABLE>
MATURITY DISTRIBUTION(8)
(AS OF JUNE 30, 2000)
----------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
20+ Years 50%
10-20 Years 34%
5-10 Years 12%
1-5 Years 3%
0-1 Year 1%
</TABLE>
--------------------------------------------------------------------------------
(3) The chart compares the performance of the Wells Fargo Oregon Tax-Free Fund
Class A and Institutional Class shares for the most recent ten years 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.
(4) The average credit rating is compiled from ratings from Standard & 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.
(5) 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.
(6) 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.
(7) 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. The value of the
securities subject to the AMT is represented as a percentage of net assets.
(8) Portfolio holdings are subject to change.
19
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
ARIZONA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 96.94%
ARIZONA - 92.69%
$ 350,000 ARIZONA HEALTH FACILITIES
AUTHORITY REVENUE CATHOLIC
HEALTHCARE WEST SERIES A 6.63% 07/01/20 $ 342,234
1,000,000 ARIZONA HEALTH FACILITIES
AUTHORITY HOSPITAL SYSTEMS
REVENUE NORTHERN ARIZONA
HEALTHCARE SYSTEMS AMBAC
INSURED 4.75 10/01/30 828,820
170,000 BULLHEAD CITY AZ SPECIAL
ASSESSMENT BULLHEAD PARKWAY
IMPROVEMENT DISTRICT 6.10 01/01/03 173,628
500,000 CHANDLER AZ STREET & HIGHWAY
USER REVENUE 6.00 07/01/11 535,360
110,000 GLENDALE AZ IMPROVEMENT
DISTRICT NO 59 SPECIAL
ASSESSMENT 6.00 01/01/01 110,773
175,000 GLENDALE AZ IMPROVEMENT
DISTRICT NO 59 SPECIAL
ASSESSMENT 6.00 01/01/02 177,858
500,000 MARICOPA COUNTY AZ HOSPITAL
REVENUE SUN HEALTH CORPORATION 5.30 04/01/29 376,085
500,000 MARICOPA COUNTY AZ IDA
EDUCATIONAL REVENUE ARIZONA
CHARTER SCHOOLS PROJECT
SERIES A 6.75 07/01/29 486,685
500,000 MARICOPA COUNTY AZ IDA HEALTH
FACILITIES REVENUE CATHOLIC
HEALTHCARE WEST PROJECT
SERIES A 5.00 07/01/16 403,735
250,000 MARICOPA COUNTY AZ IDA
HOSPITAL FACILITIES REVENUE
MAYO CLINIC HOSPITAL 5.25 11/15/37 220,520
250,000 MARICOPA COUNTY AZ IDA MFHR
BONDS STANFORD COURT
APARTMENTS PROJECT SERIES A
MBIA INSURED 5.30 07/01/28 223,923
500,000 MARICOPA COUNTY AZ IDA MFHR
METRO GARDENS MESA RIDGE
PROJECT SERIES A MBIA INSURED 5.15 07/01/29 440,675
570,000 MARICOPA COUNTY AZ IDA MFHR
VILLAS DE MERCED APARTMENTS
PROJECT COLLATERALIZED BY GNMA 5.50 12/20/37 505,430
750,000 MARICOPA COUNTY AZ IDA MFHR
WHISPERING PALMS APARTMENTS
SERIES A MBIA INSURED 5.85 07/01/19 741,533
585,000 MARICOPA COUNTY AZ POLLUTION
CONTROL CORPORATION PCR
ARIZONA PUBLIC SERVICE COMPANY 5.75 11/01/22 517,947
500,000 MOHAVE COUNTY AZ IDA HOSPITAL
SYSTEM REVENUE BAPTIST
HOSPITAL MBIA INSURED 5.70 09/01/15 528,455
700,000 NAVAJO COUNTY AZ MUNICIPAL
PROPERTY CORPORATION JAIL
FACILITIES REVENUE ACA INSURED 6.25 07/01/20 699,209
750,000 NAVAJO COUNTY AZ PCR ARIZONA
PUBLIC SERVICE COMPANY
SERIES A 5.88 08/15/28 693,833
500,000 PHOENIX AZ CIVIC IMPROVEMENT
CORPORATION REVENUE SENIOR
LIEN 5.00 07/01/14 469,300
1,000,000 PHOENIX AZ GO SERIES A 6.25 07/01/16 1,098,220
500,000 PHOENIX AZ GO SERIES B 4.50 07/01/20 421,025
900,000 PHOENIX AZ IDA HOSPITAL
REVENUE JOHN C. LINCOLN HEALTH
SERIES B CONNIE LEE INSURED 5.65 12/01/12 927,252
100,000 PHOENIX AZ IDA MFHR DEL MAR
TERRACE PROJECT SERIES A+ 4.80 10/01/29 100,000
1,440,000 PIMA COUNTY AZ IDA MFHR
WILLOWICK APARTMENTS PROJECT
ASSET GUARANTY LOC 5.50 03/01/28 1,316,146
500,000 PIMA COUNTY AZ IDA SFMR
SERIES A-1 COLLATERALIZED BY
GNMA/FNMA/FHLMC 5.20 05/01/31 436,510
550,000 TEMPE AZ GO SERIES A 4.00 07/01/18 436,101
500,000 TUCSON AZ STREET & HIGHWAY
USER REVENUE SENIOR LIEN
SERIES 1994-C FGIC INSURED 7.00 07/01/11 581,535
500,000 TUCSON AZ STREET & HIGHWAY
USER REVENUE SENIOR LIEN
SERIES 1994-C FGIC INSURED 7.00 07/01/12 583,520
500,000 YAVAPAI COUNTY AZ IDA CITIZENS
UTILITIES COMPANY PROJECT 5.45 06/01/33 459,347
14,835,659
-----------
GUAM - 4.25%
700,000 GUAM HOUSING CORPORATION SFMR
MORTGAGE GUARANTEED SERIES A
COLLATERALIZED BY FHLMC 5.75 09/01/31 679,413
-----------
15,515,072
TOTAL MUNICIPAL BONDS (COST $16,394,816)
-----------
</TABLE>
20
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
ARIZONA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
CLOSED END MUTUAL FUNDS - 2.57%
5,720 DREYFUS MUNICIPAL INCOME FUND $ 43,257
4,636 DREYFUS STRATEGIC MUNICIPAL
BOND FUND 37,378
8,383 DREYFUS STRATEGIC MUNICIPALS
FUND 67,064
1,608 MUNICIPAL ADVANTAGE FUND
INCORPORATED 17,889
5,250 MUNICIPAL PARTNERS FUND 62,016
4,833 NUVEEN INSURED MUNICIPAL
OPPORTUNITY FUND 62,829
4,772 NUVEEN PREMIUM INCOME
MUNICIPAL FUND 56,966
1,048 VAN KAMPEN ADVANTAGE MUNICIPAL
INCOME TRUST II 11,987
3,850 VAN KAMPEN TRUST FOR
INVESTMENT GRADE MUNICIPALS 51,734
411,120
TOTAL CLOSED END MUTUAL FUNDS (COST
$405,360)
-----------
SHORT-TERM INVESTMENTS - 0.68%
109,411 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET TRUST FUND+X+
(COST $109,411) 109,411
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $16,909,587)* 100.19% $16,035,603
OTHER ASSETS AND LIABILITIES NET (0.19) (30,580)
------- -----------
TOTAL NET ASSETS 100.00% $16,005,023
------- -----------
</TABLE>
+ VARIABLE RATE SECURITY.
+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 $ 124,422
GROSS UNREALIZED DEPRECIATION (998,406)
----------
NET UNREALIZED DEPRECIATION $ (873,984)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Development 21%
Tax-Free Money Market Fund 1%
Other Investments 3%
General 3%
Facilities 4%
Single Family Housing 7%
Pollution 8%
Multifamily Housing 8%
Transportation 11%
Medical 19%
General Obligation 15%
</TABLE>
INVESTMENT CATEGORIES REFLECT PERCENTAGES OF INVESTMENTS IN SECURITIES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
21
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 103.61%
CALIFORNIA - 98.21%
$1,100,000 ABAG FINANCIAL AUTHORITY FOR
NONPROFIT CORPORATION CA COP
EPISCOPAL HOMES FOUNDATION 5.00% 07/01/07 $ 1,066,526
1,105,000 ABAG FINANCIAL AUTHORITY FOR
NONPROFIT CORPORATION CA COP
EPISCOPAL HOMES FOUNDATION 5.00 07/01/08 1,057,209
1,000,000 CALIFORNIA STATE GO VETERANS
BONDS SERIES BL 4.95 12/01/07 1,011,720
1,250,000 CALIFORNIA STATE PUBLIC WORKS
BOARD LEASE REVENUE DEPARTMENT
OF CORRECTIONS SERIES C 5.25 11/01/08 1,293,400
1,250,000 CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT
AUTHORITY COP HEALTH
FACILITIES LOS ANGELES AIDS
PROJECT 6.20 08/01/12 1,301,400
2,060,000 CALIFORNIA STATEWIDE
COMMUNITIES DEVELOPMENT
AUTHORITY REVENUE COP
HUNTINGTON MEMORIAL HOSPITAL
CONNIE LEE INSURED 5.25 07/01/05 2,133,192
400,000 CALIFORNIA HEALTH FACILITIES
FINANCING AUTHORITY HEALTH
CARE REVENUE ST. JOSEPH HEALTH
SYSTEM SERIES B U.S. BANK
TRUST N.A. LOC+ 4.25 07/01/09 400,000
1,000,000 CENTRAL VALLEY FINANCE
AUTHORITY COGENERATION PROJECT
REVENUE CARSON ICE GENERAL
PROJECT MBIA INSURED 5.25 07/01/10 1,037,020
1,000,000 CONTRA COSTA COUNTY CA COP
MERRITHEW MEMORIAL HOSPITAL
PROJECT MBIA INSURED 5.25 11/01/10 1,031,950
1,000,000 EAST BAY-DELTA CA HFA PASS
THROUGH OBLIGATION LEASE
PURCHASE PROJECT SERIES A MBIA
INSURED 4.75 06/01/05 998,660
685,000 FOSTER CITY CA PUBLIC FINANCE
AUTHORITY REVENUE FOSTER CITY
COMMUNITY DEVELOPMENT PROJECT
LN-A 5.40 09/01/01 691,254
1,000,000 IRVINE RANCH CA WATER DISTRICT
REVENUE SERIES A BANK OF
AMERICA LOC+ 4.30 05/01/09 1,000,000
1,000,000 LOS ANGELES CA AIRPORT REVENUE
SERIES A FGIC INSURED 6.00 05/15/05 1,069,460
1,000,000 LOS ANGELES CA UNIFIED SCHOOL
DISTRICT GO TAX REVENUE
ANTICIPATION NOTES SERIES A 5.25 10/03/01 1,009,800
1,460,000 LOS ANGELES CA WATER & POWER
DEPARTMENT ELECTRIC PLANT
REVENUE 9.00 10/15/03 1,658,764
2,000,000 LOS ANGELES CA WATER & POWER
DEPARTMENT ELECTRIC PLANT
REVENUE 6.10 02/01/09 2,081,260
1,000,000 LOS ANGELES CA WASTEWATER
SYSTEM REVENUE SERIES D FGIC
INSURED 8.70 11/01/03 1,132,470
1,300,000 LOS ANGELES CA WASTEWATER
SYSTEMS RV SERIES A MBIA
INSURED 8.50 06/01/03 1,445,405
2,000,000 NORTHERN CALIFORNIA POWER
AGENCY MULTIPLE CAPITAL
FACILITIES REVENUE UNREFUNDED
BALANCE CROSSOVER REFUNDING
9/3/02 @ 102 6.54 08/01/25 2,104,760
1,000,000 ORANGE COUNTY CA RECOVERY COP
SERIES A 5.60 07/01/09 1,058,770
1,545,000 SACRAMENTO COUNTY CA AIRPORT
SYSTEMS REVENUE SERIES A
PREREFUNDED 7/1/02 @ 101 6.00 07/01/20 1,610,292
1,000,000 SACRAMENTO COUNTY CA TAX &
REVENUE ANTICIPATION NOTES TAX
REVENUE 5.25 10/04/01 1,010,310
300,000 SACRAMENTO CA COP LIGHT RAIL
TRANSPORTATION PROJECT 6.30 07/01/00 300,012
630,000 SACRAMENTO CA SCHOOL INSURANCE
AUTHORITY REVENUE WORKERS
COMPENSATION SERIES C 5.75 06/01/03 640,105
650,000 SAN FRANCISCO CA CITY & COUNTY
INTERNATIONAL AIRPORT REVENUE
2ND SERIES ISSUE 14A MBIA
INSURED 8.00 05/01/05 745,700
1,090,000 SAN FRANCISCO CA CITY & COUNTY
INTERNATIONAL AIRPORT REVENUE
2ND SERIES ISSUE 13B MBIA
INSURED 8.00 05/01/05 1,250,481
500,000 SANTA MONICA CA WASTEWATER
ENTERPRISE REVENUE HYPERION
PROJECT AMBAC INSURED 12.00 01/01/01 518,795
1,000,000 SOLANO COUNTY CA COP JUSTICE
FACILITIES & PUBLIC BUILDING
PROJECT 5.88 10/01/05 1,022,870
925,000 SOUTH ORANGE COUNTY CA PFA
SPECIAL TAX REVENUE FOOTHILL
AREA PROJECT SERIES C PAINE
WEBBER INCORPORATED LOC 6.50 08/15/10 1,053,057
1,100,000 SOUTHERN CALIFORNIA PUBLIC
POWER AUTHORITY POWER PROJECT
REVENUE 6.75 07/01/00 1,100,066
800,000 SOUTHERN CALIFORNIA PUBLIC
POWER AUTHORITY MULTI PROJECTS 6.88 07/01/03 817,408
2,000,000 SOUTHERN CALIFORNIA RAPID
TRANSIT DISTRICT COP WORKERS
COMPENSATION REMARKETED 2/1/91
MBIA INSURED 7.50 07/01/05 2,081,460
1,000,000 UNIVERSITY OF CALIFORNIA
EDUCATIONAL FACILITIES REVENUE
SERIES B 6.50 09/01/03 1,064,770
37,798,346
-----------
</TABLE>
22
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
CALIFORNIA LIMITED TERM TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
GUAM - 2.75%
$1,000,000 GUAM POWER AUTHORITY REVENUE
SERIES A 6.30% 10/01/22 $ 1,059,710
-----------
PUERTO RICO - 2.65%
1,000,000 COMMONWEALTH OF PUERTO RICO
MUNICIPAL FINANCE AGENCY
SERIES B FSA INSURED 5.00 08/01/05 1,020,640
-----------
39,878,696
TOTAL MUNICIPAL BONDS (COST $39,941,081)
-----------
<CAPTION>
SHARES
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 0.23%
88,915 WELLS FARGO CALIFORNIA
TAX-FREE MONEY MARKET TRUST
FUND+X+ (COST $88,915) 88,915
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $40,029,996)* 103.84% $39,967,611
OTHER ASSETS AND LIABILITIES, NET (3.84) (1,478,999)
------- -----------
TOTAL NET ASSETS 100.00% $38,488,612
------- -----------
</TABLE>
+ VARIABLE RATE SECURITY.
+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 $ 279,664
GROSS UNREALIZED DEPRECIATION (342,049)
------------
NET UNREALIZED DEPRECIATION $ (62,385)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Development 2%
Utilities 10%
General Obligation 2%
Higher Education 3%
Tax Incremental 3%
Transportation 6%
Airport 12%
Power 22%
Housing 2%
Other Muni Demand Notes 4%
General 5%
Education 4%
Facilities 6%
Other 8%
Medical 11%
</TABLE>
INVESTMENT CATEGORIES REFLECT PERCENTAGES OF INVESTMENTS IN SECURITIES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
23
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 95.82%
$ 1,000,000 ABAG FINANCE AUTHORITY FOR
NONPROFIT CORPORATIONS CA COP
CHANNING HOUSE 5.38% 02/15/19 $ 851,610
6,200,000 ABAG FINANCE AUTHORITY FOR
NONPROFIT CORPORATIONS CA COP
CHANNING HOUSE 5.50 02/15/29 5,128,578
2,000,000 ABAG FINANCE AUTHORITY FOR
NONPROFIT CORPORATIONS CA
STANFORD UNIVERSITY HOSPITAL 5.50 11/01/13 2,100,580
1,000,000 ABAG FINANCE AUTHORITY FOR
NONPROFIT CORPORATIONS CA COP
EPISCOPAL HOMES FOUNDATION 5.13 07/01/13 898,390
2,000,000 ALAMEDA CORRIDOR CA COP
MEDICAL CENTER PROJECT 5.00 06/01/23 1,819,640
1,265,000 ALTA LOMA CA SCHOOL DISTRICT
CAPITAL APPRECIATION SERIES A
FGIC INSURED 5.59[::] 08/01/16 514,627
2,450,000 ALTA LOMA CA SCHOOL DISTRICT
CAPITAL APPRECIATION SERIES A
FGIC INSURED 5.66[::] 08/01/20 761,975
3,620,000 ANTIOCH CA PFA WATER REVENUE
WATER TREATMENT PLANT PROJECT
MBIA INSURED 5.63 07/01/14 3,678,861
1,330,000 ARCADIA CA USD CAPITAL
APPRECIATION SERIES A MBIA
INSURED 5.30[::] 09/01/06 997,367
2,545,000 BONITA CA USD COP MBIA INSURED 5.63 05/01/10 2,655,860
1,485,000 BREA CA PFA LEASE REVENUE FGIC
INSURED 4.75 07/01/18 1,330,560
1,000,000 BREA CA PFA LEASE REVENUE MBIA
INSURED 4.75 07/01/18 893,930
1,300,000 BURBANK GLENDALE PASADENA
AIRPORT AUTHORITY CA AIRPORT
REVENUE AMBAC INSURED 6.40 06/01/10 1,341,496
1,250,000 CABRILLO CA COMMUNITY COLLEGE
DISTRICT SERIES A FSA INSURED 4.75 08/01/23 1,088,400
3,310,000 CALIFORNIA CDA REVENUE COP
HOSPITAL CEDARS SINAI MEDICAL
CENTER 6.50 08/01/12 3,569,305
2,035,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE A
COLLEGE CHIROPRACTIC 5.60 11/01/17 1,891,105
425,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
CHAPMAN COLLEGE PROJECT 7.30 01/01/02 437,759
2,895,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
CLAREMONT UNIVERSITY CENTER
SERIES A 5.00 03/01/17 2,649,417
1,000,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
CLAREMONT COLLEGES POOLED
FACILITIES 6.38 05/01/22 1,055,960
2,000,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
KECK GRADUATE INSTITUTE 6.75 06/01/30 2,029,300
240,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
LOYOLA MARYMOUNT UNIVERSITY 6.00 10/01/14 243,650
110,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
LOYOLA MARYMOUNT UNIVERSITY
PREREFUNDED 10/01/01 @100 6.00 10/01/14 112,397
50,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
POMONA COLLEGE INSURED 6.13 02/15/08 52,115
1,000,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
SANTA CLARA UNIVERSITY 5.00 09/01/23 909,320
1,000,000 CALIFORNIA EDUCATIONAL
FACILITIES AUTHORITY REVENUE
UNIVERSITY OF SAN DIEGO AMBAC
INSURED 4.75 10/01/15 931,970
7,675,000 CALIFORNIA STATE BONDS FGIC
INSURED 4.50 12/01/24 6,362,805
5,000,000 CALIFORNIA STATE DWR CENTRAL
VALLEY PROJECT REVENUE
SERIES J-2 6.00 12/01/07 5,455,250
3,235,000 CALIFORNIA STATE DWR CENTRAL
VALLEY PROJECT REVENUE
SERIES O 4.75 12/01/17 2,914,767
2,000,000 CALIFORNIA STATE GO 4.75 12/01/28 1,706,680
6,545,000 CALIFORNIA STATE GO 5.00 02/01/20 6,029,974
10,000,000 CALIFORNIA STATE GO 4.75 04/01/22 8,733,100
2,000,000 CALIFORNIA STATE GO 5.00 08/01/24 1,817,720
1,910,000 CALIFORNIA STATE GO EAGLES II
SERIES 6 10.00[::] 04/01/10 1,175,452
3,000,000 CALIFORNIA STATE GO MBIA
INSURED 6.00 10/01/10 3,303,900
165,000 CALIFORNIA STATE GO UNREFUNDED
BALANCE AMBAC INSURED 5.75 03/01/15 169,579
1,380,000 CALIFORNIA STATE HFA HOME
MORTGAGE REVENUE SERIES A
MULTIPLE CREDIT ENHANCEMENTS 7.35 08/01/11 1,424,643
355,000 CALIFORNIA STATE HFA HOME
MORTGAGE REVENUE SERIES B
MULTIPLE CREDIT ENHANCEMENTS 7.25 08/01/10 360,087
480,000 CALIFORNIA STATE HFA HOME
MORTGAGE REVENUE SERIES D
MULTIPLE CREDIT ENHANCEMENTS 7.75 08/01/10 490,037
140,000 CALIFORNIA STATE HFA INSURED
HOUSING REVENUE AMT SERIES C
MBIA INSURED 7.00 08/01/23 144,493
500,000 CALIFORNIA STATE HFA
MULTI-UNIT HOME RENTAL
MORTGAGE REVENUE SERIES B-II 6.70 08/01/15 519,435
500,000 CALIFORNIA STATE HFA
MULTI-UNIT HOME RENTAL
MORTGAGE REVENUE SERIES C-II 6.85 08/01/15 517,355
2,825,000 CALIFORNIA STATE HFA
MULTI-UNIT RENTAL HOUSING
REVENUE SERIES A AMT 5.50 08/01/15 2,669,851
7,200,000 CALIFORNIA STATE HFA REVENUE
SFHR HOME MORTGAGE SERIES N 5.25 08/01/29 6,379,920
4,000,000 CALIFORNIA STATE HFA SFMR
SERIES B 6.40 08/01/27 4,078,000
3,000,000 CALIFORNIA STATE HFA SFMR
SERIES B AMBAC INSURED 5.15 02/01/18 2,762,430
</TABLE>
24
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS (continued)
$ 4,600,000 CALIFORNIA STATE HFA SFMR
SERIES M MBIA INSURED 5.60% 08/01/29 $ 4,310,844
985,000 CALIFORNIA STATE HFA SINGLE
FAMILY MORTGAGE SACRAMENTO
SERIES A2 CLASS III 4.80 08/01/12 929,150
6,000,000 CALIFORNIA STATE HFFA HEALTH
CARE REVENUE SUTTER HEALTH
PROJECT SERIES A 6.25 08/15/31 6,161,160
2,000,000 CALIFORNIA STATE HFFA REVENUE
CATHOLIC HEALTHCARE WEST AMBAC
INSURED 5.75 07/01/15 2,050,900
1,500,000 CALIFORNIA STATE HFFA REVENUE
KAISER PERMANENTE SERIES A 6.25 03/01/21 1,511,175
3,500,000 CALIFORNIA STATE HFFA REVENUE
SAN DIEGO HOSPITAL ASSOCIATION
SERIES A MBIA INSURED 6.20 08/01/12 3,660,895
2,000,000 CALIFORNIA STATE HFFA REVENUE
SCRIPPS MEMORIAL HOSPITAL
SERIES A MBIA INSURED 6.40 10/01/12 2,103,900
1,795,000 CALIFORNIA STATE HFFA REVENUE
SCRIPPS MEMORIAL HOSPITAL 6.25 10/01/13 1,864,413
2,000,000 CALIFORNIA STATE HFFA REVENUE
SCRIPPS RESEARCH INSTITUTE 6.63 07/01/14 2,111,680
1,750,000 CALIFORNIA STATE HFFA REVENUE
SMALL INSURED HEALTH
FACILITIES SERIES A CALIFORNIA
MORTGAGE INSURANCE LOC 6.75 03/01/20 1,824,217
3,500,000 CALIFORNIA STATE HFFA REVENUE
SUTTER HEALTH PROJECT
SERIES A 5.00 08/15/37 3,042,515
2,750,000 CALIFORNIA STATE HFFA REVENUE
SUTTER HEALTH PROJECT
SERIES C 5.13 08/15/22 2,529,725
1,000,000 CALIFORNIA STATE HFFA REVENUE
VALLEYCARE HEALTH FACILITIES
CALIFORNIA MORTGAGE INSURANCE
LOC 6.50 05/01/05 1,048,870
1,275,000 CALIFORNIA STATE
INFRASTRUCTURE & ECONOMIC
DEVELOPMENT BANK REVENUE
SERIES A 5.75 07/01/30 1,264,188
1,000,000 CALIFORNIA STATE MARITIME
INFRASTRUCTURE AUTHORITY
REVENUE PORT OF SAN DIEGO
PROJECT AMBAC INSURED 5.25 11/01/15 976,270
2,500,000 CALIFORNIA STATE PCFA PACIFIC
GAS & ELECTRIC COMPANY AMT 6.35 06/01/09 2,620,250
1,445,000 CALIFORNIA STATE PCFA PACIFIC
GAS & ELECTRIC COMPANY AMT 6.63 06/01/09 1,515,718
1,000,000 CALIFORNIA STATE PCFA SAN
DIEGO GAS & ELECTRIC COMPANY
AMT 6.80 06/01/15 1,147,230
1,000,000 CALIFORNIA STATE PUBLIC WORKS
BOARD LEASE REVENUE COMMUNITY
COLLEGES 6.63 09/01/07 1,046,450
4,535,000 CALIFORNIA STATE RURAL HOME
MORTGAGE FINANCE AUTHORITY
SFMR 6.35 12/01/29 4,725,833
2,500,000 CALIFORNIA STATE RURAL HOME
MORTGAGE FINANCE AUTHORITY
SFMR SERIES B 6.25 12/01/31 2,539,975
5,000,000 CALIFORNIA STATE
UNIVERSITIES & COLLEGES HSG
SYSTEM FGIC INSURED 5.80 11/01/17 5,116,350
6,000,000 CALIFORNIA STATEWIDE CDA COP
THE INTERNEXT GROUP 5.38 04/01/17 5,192,580
2,750,000 CALIFORNIA STATEWIDE CDA LEASE
REVENUE OAKLAND CONVENTION
CENTERS PROJECT AMBAC INSURED 6.00 10/01/10 2,881,505
500,000 CALIFORNIA STATEWIDE CDA
REVENUE COP HEALTH FACILITIES
BARTON MEMORIAL HOSPITAL LOC
BANQUE NATIONALE DE PARIS 6.40 12/01/05 528,235
2,000,000 CALIFORNIA STATEWIDE CDA
REVENUE CHILDRENS HOSPITAL
MBIA INSURED 5.25 08/15/29 1,872,680
9,330,000 CALIFORNIA STATEWIDE CDA
REVENUE COP CATHOLIC
HEALTHCARE WEST 6.50 07/01/20 9,237,353
2,700,000 CALIFORNIA STATEWIDE CDA
REVENUE COP CHILDRENS HOSPITAL
LOS ANGELES 5.25 08/15/29 2,495,772
1,500,000 CALIFORNIA STATEWIDE CDA
REVENUE COP SUTTER HEALTH
OBLIGATED GROUP AMBAC INSURED 6.00 08/15/09 1,567,950
5,000,000 CALIFORNIA STATEWIDE CDA
SHERMAN OAKS PROJECT SERIES A
AMBAC INSURED 5.00 08/01/18 4,618,550
1,935,000 CALIFORNIA STATEWIDE CDA WATER
REVENUE SERIES A 6.00 07/01/10 2,036,336
200,000 CAPITOL AREA DEVELOPMENT
AUTHORITY CA LEASE REVENUE
SERIES A MBIA INSURED 6.50 04/01/12 209,790
2,730,000 CARLSBAD CA UNIFIED SCHOOL
DISTRICT GO FGIC INSURED 5.45[::] 05/01/22 762,052
1,800,000 CHINO BASIN CA REGIONAL
FINANCIAL AUTHORITY REVENUE
MUNICIPAL WATER DISTRICT SEWER
SYSTEMS PROJECT AMBAC INSURED 6.00 08/01/16 1,863,774
400,000 CHULA VISTA CA COP TOWN CENTRE
II PARKING PROJECT RDA 6.00 09/01/07 419,240
735,000 CHULA VISTA CA COP TOWN CENTRE
II PARKING PROJECT RDA 6.00 09/01/08 767,722
820,000 CHULA VISTA CA COP TOWN CENTRE
II PARKING PROJECT RDA 6.00 09/01/10 851,964
570,000 CHULA VISTA CA COP TOWN CENTRE
II PARKING PROJECT RDA 6.00 09/01/11 591,176
2,000,000 COACHELLA CA WATER REVENUE COP
FSA INSURED 6.10 03/01/22 2,035,080
2,500,000 COLTON CA PFA TAX ALLOCATION
SERIES A MBIA INSURED 5.00 08/01/18 2,336,050
270,000 CONTRA COSTA COUNTY CA HOME
MORTGAGE REVENUE AMT ESCROWED
TO MATURITY 7.75 05/01/22 330,170
3,500,000 CONTRA COSTA COUNTY CA PFA TAX
ALLOCATION REVENUE 5.25 08/01/28 2,994,215
</TABLE>
25
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS (continued)
$ 4,000,000 CONTRA COSTA COUNTY CA
TRANSPORTATION AUTHORITY SALES
TAX REVENUE SERIES A FGIC
INSURED 5.50% 03/01/08 $ 4,144,360
2,755,000 CONTRA COSTA COUNTY CA
TRANSPORTATION AUTHORITY SALES
TAX REVENUE SERIES A ESCROWED
TO MATURITY 6.50 03/01/09 2,868,010
1,045,000 CONTRA COSTA COUNTY CALIFORNIA
PFA LEASE REVENUE REFUNDED
VARIOUS CAPITAL FACILITY
SERIES A MBIA INSURED 5.13 08/01/17 1,004,130
4,000,000 CORONA CA COMMUNITY FACILITY
DISTRICT MBIA INSURED 4.70 09/01/20 3,506,400
1,505,000 CORONA CA PFA WATER REVENUE
FGIC INSURED 4.75 09/01/18 1,347,532
1,250,000 CUCAMONGA CA COUNTY WATER
DISTRICT COP REFINANCING
FACILITIES FGIC INSURED 6.30 09/01/12 1,299,275
2,025,000 CULVER CITY CA RDFA REVENUE
AMBAC INSURED 5.50 11/01/14 2,112,804
1,000,000 CUPERTINO CA COP SERIES B 6.25 07/01/10 1,046,740
1,355,000 DUARTE CA COP CITY OF HOPE
NATIONAL MEDICAL CENTER 6.13 04/01/13 1,441,828
2,000,000 DUARTE CA COP SERIES A 5.25 04/01/19 1,823,920
4,000,000 DUARTE CA COP SERIES A 5.25 04/01/24 3,352,200
4,000,000 DUARTE CA REDEVELOPMENT AGENCY
TAX ALLOCATION 6.60[::] 12/01/16 1,410,520
5,000,000 EAST BAY CA MUD WASTEWATER
TREATMENT SYSTEMS REVENUE FGIC
INSURED 5.00 06/01/16 4,762,350
1,500,000 EAST BAY CA MUD WASTEWATER
TREATMENT SYSTEMS REVENUE
AMBAC INSURED 6.00 06/01/09 1,568,700
2,000,000 EAST BAY CA MUD WASTEWATER
TREATMENT SYSTEMS REVENUE MBIA
INSURED 4.75 06/01/28 1,716,120
3,300,000 EAST PALO ALTO CA
REDEVELOPMENT AGENCY TAX
UNIVERSITY CIRCLE GATEWAY 6.63 10/01/29 3,346,068
2,785,000 ELK GROVE CA USD SPECIAL TAX
MBIA INSURED 5.10[::] 12/01/15 1,160,259
1,000,000 ELSINORE VALLEY CA MUNICIPAL
WATER DISTRICT COP SERIES A
FGIC INSURED 6.00 07/01/12 1,101,800
1,215,000 EMERYVILLE CA PFA LEASE
REVENUE SERIES A 5.00 05/01/18 1,133,340
500,000 EMERYVILLE CA PFA REVENUE 5.75 09/02/14 486,275
1,750,000 EMERYVILLE CA PFA REVENUE 5.90 09/02/21 1,637,983
2,475,000 EMERYVILLE CA PFA REVENUE MBIA
INSURED 5.00 09/01/19 2,293,384
2,455,000 EMERYVILLE CA PFA REVENUE
SERIES A 6.35 05/01/10 2,566,359
2,000,000 ESCONDIDO CA PFA LEASE REVENUE
ESCONDIDO CIVIC CENTER PROJECT
SERIES B AMBAC INSURED 6.13 09/01/11 2,149,280
2,000,000 ESCONDIDO CA PFA LEASE REVENUE
CENTER FOR THE ARTS AMBAC
INSURED 6.00 09/01/18 2,063,180
1,000,000 FOLSOM CORDOVA CA USD COP 1998
FSA INSURED 5.13 03/01/18 949,210
1,285,000 FONTANA CA RDA TAX ALLOCATION
JURUPA HILLS REDEVELOPMENT
PROJECT SERIES A 5.50 10/01/17 1,189,100
4,040,000 FONTANA CA RDA TAX ALLOCATION
JURUPA HILLS REDEVELOPMENT
PROJECT SERIES A 5.50 10/01/27 3,564,088
1,600,000 FONTANA CA RDA TAX ALLOCATION
JURUPA HILLS REDEVELOPMENT
PROJECT SERIES A 5.60 10/01/27 1,434,992
3,000,000 FONTANA CA USD SERIES C FGIC
INSURED 6.15 05/01/20 3,127,080
1,000,000 FRESNO CA COP STREET
IMPROVEMENT PROJECT 6.63 12/01/11 1,041,790
2,000,000 FRESNO CA JOINT POWERS
FINANCING AUTHORITY STREET
LIGHT ACQUISITION PROJECT
SERIES A 5.50 08/01/12 2,014,420
2,000,000 FRESNO CA USD SERIES A MBIA
INSURED 5.70 08/01/15 2,028,040
3,000,000 FRESNO CA WATER SYSTEMS
REVENUE SERIES A FGIC INSURED 5.00 06/01/24 2,727,480
1,250,000 FRESNO COUNTY CA SOLID WASTE
REVENUE AMERICAN AVENUE
LANDFILL PROJECT MBIA INSURED 5.75 05/15/14 1,292,150
1,000,000 GLENDALE CA RDFA TAX
ALLOCATION REVENUE AMBAC
INSURED 5.50 12/01/11 1,025,820
1,000,000 GLENDALE CA USD SERIES A FGIC
INSURED 5.75 09/01/17 1,024,970
2,500,000 HAWAIIAN GARDENS CA
REDEVELOPMENT AGENCY 6.00 12/01/13 2,524,550
575,000 HUNTINGTON BEACH CA PFA
REVENUE BOND 6.55 08/01/01 583,953
2,800,000 HUNTINGTON BEACH CA PFA
REVENUE BOND 7.00 08/01/10 2,891,756
1,000,000 INDIAN WELLS CA RDFA TAX
ALLOCATION WHITEWATER PROJECT
MBIA INSURED 6.00 12/01/14 1,047,330
500,000 INDUSTRY CA URBAN DEVELOPMENT
AGENCY 6.70 11/01/03 520,625
1,280,000 INDUSTRY CA URBAN DEVELOPMENT
AGENCY 6.85 11/01/04 1,337,498
1,555,000 INGLEWOOD CA REDEVELOPMENT
AGENCY TAX ALLOCATION
SERIES A AMBAC INSURED 5.25 05/01/17 1,537,771
1,350,000 JACKSON CA COP WATER SYSTEM
ACQUISITION PROJECT 6.80 09/01/23 1,415,826
</TABLE>
26
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS (continued)
$ 270,000 JAMUL-DULZUR CA USD SERIES C 6.40% 08/01/16 $ 280,166
2,000,000 JURUPA CA COMMUNITY SERVICES
SPECIAL TAX FSA INSURED 4.75 09/01/18 1,790,740
2,000,000 KERN CA HIGH SCHOOL DISTRICT
SERIES D MBIA INSURED 5.60 08/01/12 2,094,820
1,240,000 LA HABRA CA COP SERIES A FSA
INSURED 4.80 09/01/19 1,107,593
1,185,000 LA VERNE CA COP CAPITAL
IMPROVEMENTS PROJECTS 5.70 06/01/15 1,189,302
4,000,000 LAKE ELSINORE CA PFA TAX
ALLOCATION REVENUE SERIES A 5.50 09/01/30 3,502,000
1,000,000 LONG BEACH CA FINANCING
AUTHORITY REVENUE AMBAC
INSURED 6.00 11/01/17 1,078,660
3,000,000 LONG BEACH CA FINANCING
AUTHORITY REVENUE AMBAC
INSURED 6.00 11/01/08 3,283,500
2,900,000 LOS ANGELES CA AIRPORT REVENUE
SERIES A FGIC INSURED 5.50 05/15/08 3,029,427
4,695,000 LOS ANGELES CA DW&P ELECTRIC
PLANT REVENUE 5.70 09/01/11 4,850,498
200,000 LOS ANGELES CA DW&P ELECTRIC
PLANT REVEUE 6.38 02/01/20 208,236
2,000,000 LOS ANGELES CA DW&P ELECTRIC
PLANT REVENUE SECOND ISSUE 5.75 08/15/11 2,051,700
3,000,000 LOS ANGELES CA DW&P WATERWORKS
REVENUE 5.70 04/15/09 3,111,510
4,745,000 LOS ANGELES CA HARBOR
DEPARTMENT REVENUE SERIES B 5.38 11/01/15 4,707,942
2,465,000 LOS ANGELES CA HARBOR
DEPARTMENT REVENUE SERIES B 5.38 11/01/23 2,316,755
2,775,000 LOS ANGELES CA HARBOR
DEPARTMENT REVENUE SERIES B 6.50 08/01/13 2,907,589
340,000 LOS ANGELES CA MUNICIPAL
IMPROVEMENT CORPORATION LEASE
REVENUE CENTRAL LIBRARY
PROJECT SERIES A 6.30 06/01/16 349,670
60,000 LOS ANGELES CA SFMR SERIES A
AMT MULTIPLE CREDIT
ENHANCEMENTS 7.55 12/01/23 61,030
2,200,000 LOS ANGELES CA USD COP
MULTIPLE PROPERTIES PROJECT
SERIES A FSA INSURED 5.50 10/01/10 2,309,868
1,000,000 LOS ANGELES CA WASTEWATER
SYSTEM REVENUE SERIES A FGIC
INSURED 4.75 06/01/18 894,170
1,300,000 LOS ANGELES CA WASTEWATER
SYSTEM REVENUE SERIES A MBIA
INSURED 5.70 06/01/13 1,335,542
4,370,000 LOS ANGELES COUNTY CA
METROPOLITAN TRANSPORTATION
AUTHORITY SALES TAX REVENUE
SERIES C FSA INSURED 4.75 07/01/16 4,015,462
1,000,000 LOS ANGELES COUNTY CA
METROPOLITAN TRANSPORTATION
AUTHORITY SALES TAX REVENUE
SERIES B 4.75 07/01/19 888,490
1,160,000 LOS ANGELES COUNTY CA
REGIONALIZED BUSINESS SERVICES
COP SERIES A AMBAC INSURED 5.97[::] 08/01/26 249,412
480,000 LOS ANGELES COUNTY CA
TRANSPORTATION COMMISSION
SALES TAX REVENUE SERIES B
FGIC INSURED 6.50 07/01/15 497,770
1,370,000 MADERA CA RDFA TAX ALLOCATION
REVENUE FGIC INSURED 5.75 09/01/11 1,426,951
1,000,000 MANTECA CA FINANCING AUTHORITY
TAX ALLOCATION REVENUE MBIA
INSURED 5.05 10/01/18 938,410
1,000,000 MARIN CA EMERGENCY RADIO
AUTHORITY AMBAC INSURED 4.75 08/15/18 893,450
2,235,000 MERCED CA USD SERIES A FGIC
INSURED 5.70[::] 08/01/18 791,883
805,000 MERCED COUNTY CA COP FSA
INSURED 6.00 10/01/12 831,863
2,000,000 METROPOLITAN WATER DISTRICT
SOUTHERN CA WATER WORKS
REVENUE SERIES A MBIA INSURED 5.75 07/01/15 2,057,960
1,000,000 METROPOLITAN WATER DISTRICT
SOUTHERN CA WATER WORKS
REVENUE SERIES A 5.75 07/01/13 1,032,830
2,000,000 MID PENINSULA CA REGIONAL OPEN
SPACE DISTRICT PROMISSORY
NOTES 7.00 09/01/14 2,160,780
2,370,000 MID PENINSULA REGULATION OPEN
SPACE DISTRICT AMBAC INSURED 5.30[::] 09/01/17 858,888
2,490,000 MID PENINSULA REGULATION OPEN
SPACE DISTRICT AMBAC INSURED 5.30[::] 09/01/18 840,126
2,780,000 MODESTO CA PFA LEASE REVENUE
AMBAC INSURED 5.00 09/01/16 2,657,986
3,545,000 MONROVIA CA REDEVELOPMENT
AGENCY TAX ALLOCATION PROJECT
AREA I B AMBAC INSURED 5.13 05/01/17 3,399,974
2,835,000 MOUNTAIN VIEW CA SHORELINE
REGIONAL PARK COMMUNITY TAX
ALLOCATION SERIES A MBIA
INSURED 5.50 08/01/13 2,897,937
1,260,000 MOUNTAIN VIEW LOS ALTOS CA USD
SERIES D FSA INSURED 5.91[::] 08/01/19 419,983
1,200,000 MOUNTAIN VIEW LOS ALTOS CA USD
SERIES D FSA INSURED 5.95[::] 08/01/21 351,408
1,230,000 NATIONAL CITY CA CDA TAX
ALLOACTION DOWNTOWN
REDEVELOPMENT PROJECT
SERIES B AMBAC INSURED 6.63 08/01/12 1,309,950
720,000 NATOMAS CA USD SERIES A MBIA
INSURED 5.75 09/01/12 740,318
2,200,000 NEVADA COUNTY CA SOLID WASTE
REVENUE 6.50 10/01/06 2,307,074
</TABLE>
27
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS (continued)
$ 570,000 NORTHERN CALIFORNIA POWER
AGENCY MULTIPLE CAPITAL
FACILITIES REVENUE SERIES A
MBIA INSURED 6.50% 08/01/12 $ 605,996
9,250,000 NORTHERN CALIFORNIA POWER
AGENCY MULTIPLE CAPITAL
FACILITIES REVENUE SERIES A
AMBAC INSURED 5.00 08/01/25 8,379,482
1,000,000 NUVIEW CA USD 7.25 02/01/16 1,035,090
1,465,000 OAKLAND CA FGIC INSURED 6.00 06/15/12 1,527,702
1,500,000 ONTARIO CA RDFA REVENUE
PROJECT ONE MBIA INSURED 6.00 08/01/15 1,544,175
4,400,000 ORANGE COUNTY CA LOCAL
TRANSPORTATION AUTHORITY SALES
TAX REVENUE MBIA INSURED 6.00 02/15/08 4,786,232
2,800,000 ORANGE COUNTY CA RECOVERY
REVENUE SERIES A MBIA INSURED 6.00 06/01/10 3,069,528
1,000,000 PALMDALE CA WATER DISTRICT
REVENUE COP FGIC INSURED 5.00 10/01/18 931,870
165,000 PARLIER CA REDEVELOPMENT
AGENCY TAX ALLOCATION
SERIES A 6.95 08/01/23 173,248
1,075,000 PARLIER CA REDEVELOPMENT
AGENCY TAX ALLOCATION
SERIES A 6.95 08/01/23 1,151,594
5,000,000 PICO RIVERA CA WATER SYSTEMS
PROJECT SERIES A 5.50 05/01/29 4,872,650
1,795,000 PINOLE CA REDEVELOPMENT AGENCY
TAX ALLOCATION REFUNDED
SERIES A MBIA INSURED 5.00 08/01/17 1,692,506
2,200,000 PLACER COUNTY CA COP JUVENILE
DETENTION FACILITY MBIA
INSURED 5.00 07/01/18 2,051,500
6,000,000 POMONA CA PFA REVENUE POMONA
REDEVELOPMENT PROJECT
SERIES W MBIA INSURED 5.00 02/01/30 5,379,000
2,680,000 PONOMA CA USD SERIES A MBIA
INSURED 6.55 08/01/29 3,025,640
1,000,000 PORT OAKLAND CA SPECIAL
FACILITIES REVENUE MITSUI OSK
LINES LIMITED SERIES A AMT
LOC-IMPERIAL BANK OF JAPAN
LIMITED 6.70 01/01/07 1,047,200
3,380,000 PORT OAKLAND CA SPECIAL
FACILITIES REVENUE MITSUI OSK
LINES LIMITED SERIES A AMT
LOC-IMPERIAL BANK OF JAPAN
LIMITED 6.80 01/01/19 3,395,210
1,325,000 REDDING CA JOINT POWERS
FINANCE AUTHORITY WASTEWATER
REVENUE SERIES A FGIC INSURED 6.00 12/01/11 1,386,334
1,100,000 RICHMOND CA JOINT POWERS
FINANCE AUTHORITY LEASE AND
GAS TAX REVENUE SERIES A 5.25 05/15/13 1,089,792
2,000,000 RICHMOND CA REDEVELOPMENT
AGENCY HARBOUR PROJECT
SERIES A MBIA INSURED 4.75 07/01/23 1,741,980
2,975,000 RIVERSIDE CA REDEVELOPMENT
AGENCY TAX ALLOCATION CASA
BLANCA SERIES A AMBAC INSURED 4.75 08/01/21 2,617,345
1,000,000 RIVERSIDE CA REDEVELOPMENT
AGENCY TAX CASA BLANCA PROJECT
SERIES A AMBAC INSURED 4.75 08/01/17 906,220
5,750,000 RIVERSIDE COUNTY CA ASSET
LEASING CORP REVENUE RIVERSIDE
COUNTY HOSPITAL PROJECT
SERIES A 6.38 06/01/09 6,069,585
1,500,000 RIVERSIDE COUNTY CA ASSET
LEASING CORP REVENUE RIVERSIDE
COUNTY HOSPITAL PROJECT
SERIES B MBIA INSURED 5.00 06/01/19 1,387,500
2,710,000 RIVERSIDE COUNTY CA PFA TAX
ALLOCATION REDEVELOPMENT
PROJECTS SERIES A 5.50 10/01/22 2,416,534
170,000 RIVERSIDE COUNTY CA SFMR
PROJECT A AMT GNMA
COLLATERALIZED 6.85 10/01/16 174,175
1,335,000 ROSEVILLE CA JOINT USD CAPITAL
APPRECIATION SERIES A 6.30[::] 08/01/06 993,147
1,200,000 SACRAMENTO CA AIRPORT REVENUE
SERIES A FGIC INSURED 6.00 07/01/12 1,250,712
800,000 SACRAMENTO CA AIRPORT REVENUE
SERIES A FGIC INSURED 6.00 07/01/12 821,240
5,000 SACRAMENTO CA FINANCING
AUTHORITY REVENUE 6.70 11/01/11 5,206
1,900,000 SACRAMENTO CA LIGHT RAIL
TRANSPORTATION PROJECT 6.75 07/01/07 1,974,556
1,000,000 SACRAMENTO CA LIGHT RAIL
TRANSPORTATION PROJECT 6.00 07/01/12 1,025,600
2,500,000 SACRAMENTO CA MUD ELECTRIC
REVENUE SERIES A MBIA INSURED 6.25 08/15/10 2,792,100
300,000 SACRAMENTO CA MUD ELECTRIC
REVENUE SERIES C FGIC INSURED 5.75 11/15/08 310,032
2,400,000 SACRAMENTO CA MUD ELECTRIC
REVENUE SERIES E MBIA-IBC
INSURED 5.70 05/15/12 2,476,968
50,000 SACRAMENTO CA MUD ELECTRIC
REVENUE SERIES Z FGIC INSURED 6.45 07/01/10 51,967
115,000 SACRAMENTO CA REDEVELOPMENT
AGENCY TAX ALLOCATION
SERIES A MBIA INSURED 6.50 11/01/13 118,099
1,000,000 SACRAMENTO COUNTY CA TAX &
REVENUE ANTICIPATION NOTES 5.25 10/04/01 1,010,310
2,000,000 SACRAMENTO COUNTY MAIN
DETENTION FACILITY MBIA
INSURED 5.75 06/01/15 2,044,500
380,000 SAN BERNARDINO COUNTY CA WEST
VALLEY DETENTION CENTER MBIA
INSURED 6.50 11/01/12 401,823
4,000,000 SAN BUENAVENTURA CA COP AMBAC
INSURED 6.00 01/01/12 4,174,280
</TABLE>
28
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS (continued)
$ 4,230,000 SAN DIEGO CA CONVENTION CENTER
EXPANSION FINANCE AUTHORITY
LEASE REVENUE SERIES A AMBAC
INSURED 4.75% 04/01/28 $ 3,630,905
2,700,000 SAN DIEGO CA MFHR SERIES A 5.45 08/20/40 2,404,944
1,000,000 SAN DIEGO CA PFA SEWER REVENUE
FGIC INSURED 4.75 05/15/17 906,900
1,000,000 SAN DIEGO CA REDEVELOPMENT
AGENCY ABMAC INSURED 4.75 09/01/24 867,850
2,500,000 SAN DIEGO CA USD SERIES A FGIC
INSURED 5.17[::] 07/01/16 1,024,975
3,200,000 SAN DIEGO COUNTY CA COP
BURNHAM INSTITUTE 6.25 09/01/29 3,157,408
2,095,000 SAN DIEGO COUNTY CA COP
DOWNTOWN COURTHOUSE AMBAC
INSURED 4.50 05/01/23 1,745,575
4,500,000 SAN DIEGO COUNTY CA REGIONAL
TRANSPORTATION COMMUNITY SALES
TAX REVENUE SERIES A ESCROWED
TO MATURITY 6.00 04/01/08 4,634,370
3,750,000 SAN JOAQUIN COUNTY CA GENERAL
HOSPITAL PROJECT COP MBIA
INSURED 5.00 09/01/17 3,535,162
4,000,000 SAN JOAQUIN HILLS CA
TRANSPORTATION CORRIDOR AGENCY
TOLL ROAD 7.55[::] 01/01/10 4,250,720
5,000,000 SAN JOAQUIN HILLS CA
TRANSPORTATION CORRIDOR AGENCY
TOLL ROAD SERIES A MBIA
INSURED 4.70[::] 01/15/05 4,052,500
7,500,000 SAN JOSE CA RDA TAX ALLOCATION
MERGED AREA REDEVELOPMENT
PROJECT AMBAC INSURED 4.75 08/01/23 6,530,400
2,000,000 SAN MATEO COUNTY CA JOINT
POWERS AUTHORITY LEASE
SERIES A FSA INSURED 4.75 07/15/18 1,791,700
1,500,000 SAN MATEO COUNTY CA JOINT
POWERS SERIES A FSA INSURED 5.00 07/15/18 1,401,810
4,010,000 SANTA CLARA CA RDFA TAX
ALLOCATION BAYSHORE NORTH
PROJECT AMBAC INSURED 5.75 07/01/14 4,097,498
2,305,000 SANTA CRUZ COUNTY CA MFHR GNMA
NORTHGATE APARTMENTS SERIES A 5.50 07/20/40 2,048,753
3,000,000 SANTA FE SPRINGS CA COMMUNITY
DEVELOPMENT COMMON TAX
ALLOCATION SERIES A MBIA
INSURED 5.00 09/01/17 2,828,130
1,195,000 SANTA ROSA CA HIGH SCHOOL
DISTRICT FGIC INSURED 5.90 05/01/13 1,247,174
3,450,000 SANTA ROSA CA WASTEWATER
TREATMENT PLANT SERIES A FGIC
INSURED 4.75 09/01/16 3,161,097
1,000,000 SHASTA CA JOINT POWERS
FINANCING AUTHORITY REVENUE
COURTHOUSE IMPROVEMENT PROJECT
SERIES A MBIA INSURED 5.00 06/01/18 934,780
1,550,000 SIMI VALLEY CA USD COP AMBAC
INSURED 5.25 08/01/22 1,489,240
1,000,000 SONOMA VALLEY CA USD FSA
INSURED 6.00 07/15/21 1,025,900
1,100,000 SOUTH COUNTY CA REGIONAL
WASTEWATER 4.75 08/01/18 985,248
5,720,000 SOUTH COUNTY CA REGIONAL
WASTEWATER AUTHORITY REVENUE
CAPITAL IMPROVEMENT SERIES B
FGIC INSURED 5.75 08/01/10 5,923,460
1,000,000 SOUTHERN CA PUBLIC POWER
PROJECT REVENUE 6.75 07/01/11 1,137,630
400,000 SOUTHERN CA STATE SFMR
SERIES A AMT GNMA/FNMA
COLLATERALIZED 7.35 09/01/24 409,040
445,000 SOUTHERN CALIFORNIA HFA SFMR
SERIES A AMT GNMA
COLLATERALIZED 7.63 10/01/22 451,506
235,000 SOUTHERN CALIFORNIA HFA SFMR
SERIES A AMT GNMA
COLLATERALIZED 7.63 10/01/23 239,592
475,000 SOUTHERN CALIFORNIA STATE HFA
SFMR SERIES A AMT GNMA/ FNMA
COLLATERALIZED 6.75 09/01/22 481,384
20,000 STOCKTON CA SFMR GOVERNMENT
AGENCY COLLATERALIZED
SERIES A 7.50 02/01/23 20,236
2,000,000 STOCKTON CA WATER DISTRICT COP
SERIES A AMBAC INSURED 4.75 04/01/17 1,810,540
5,690,000 SULPHUR SPRINGS CA USD
SERIES A MBIA INSURED 7.00[::] 09/01/13 2,835,213
1,000,000 SUNNYVALE CA FINANCING
AUTHORITY UTILITIES REVENUE
SOLID WASTE MATERIALS
SERIES B AMT MBIA INSURED 6.00 10/01/08 1,042,350
1,000,000 TEMECULA CA COMMUNITY SERVICES
RECREATIONAL CENTER PROJECT 7.13 10/01/12 1,058,420
1,000,000 TEMECULA VALLEY CA USD
SERIES D FGIC INSURED 6.00 09/01/14 1,044,880
1,640,000 TEMPLE CITY CA USD SERIES A
FGIC INSURED 5.10 08/01/19 1,544,158
2,705,000 TORRANCE CA COP AMBAC INSURED 5.75 04/01/16 2,770,001
5,000,000 TUSTIN CA USD SPECIAL TAX FSA
INSURED 4.38 09/01/19 4,161,450
2,250,000 TWENTYNINE PALMS CA WATER
DISTRICT COP 7.00 08/01/17 2,318,017
3,465,000 UKIAH CA USD GO FGIC INSURED 5.75[::] 08/01/16 1,414,032
1,000,000 UNION CITY CA COMMUNITY RDFA
TAX ALLOCATION REVENUE
COMMUNITY REDEVELOPMENT
PROJECT AMBAC INSURED 5.65 10/01/14 1,022,760
</TABLE>
29
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
CALIFORNIA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS (continued)
$ 1,000,000 UNIVERSITY OF CALIFORNIA
REVENUE MULTIPLE PURPOSE
PROJECTS ABMAC INSURED 4.75% 09/01/15 $ 928,300
3,200,000 UNIVERSITY OF CALIFORNIA
REVENUE SEISMIC SAFETY PROJECT
MBIA INSURED 5.50 11/01/10 3,307,168
1,000,000 UPLAND CA REDEVELOPMENT AGENCY
TAX ALLOCATION 4.85 09/01/23 884,090
1,000,000 VACAVILLE CA PFA TAX
ALLOCATION REDEVELOPMENT
PROJECT MBIA INSURED 6.35 09/01/22 1,022,530
3,275,000 VALLEJO CA REVENUE WATER
IMPROVEMENT PROJECT FSA
INSURED 5.70 05/01/16 3,356,154
2,000,000 VENTURA CA COP PUBLIC
FACILITIES CORPORATION IV 5.75 12/01/06 2,095,460
2,000,000 VENTURA CA COP PUBLIC
FACILITIES CORPORATION IV 5.75 12/01/07 2,086,720
1,305,000 VISTA CA COMMUNITY
REDEVELOPMENT PROJECT AREA B
TAX ALLOCATION 5.10 09/01/18 1,233,369
1,135,000 WALNUT VALLEY CA USD SERIES C
FGIC INSURED 5.75 08/01/15 1,153,410
1,125,000 WEST HOLLYWOOD CA COP MBIA
INSURED 5.10 02/01/17 1,075,927
1,740,000 WESTLAND CA WATER DISTRICT 4.88 03/01/21 1,559,057
1,200,000 WESTMINSTER CA RDFA AMT 6.50 08/01/10 1,203,492
1,000,000 YOLO COUNTY CA HFA MORTGAGE
REVENUE FHA COLLATERALIZED 7.20 08/01/33 1,047,830
1,040,000 YOLO COUNTY CA LIBRARY SPECIAL
TAX COMMUNITY FACILITIES 6.25 12/01/22 1,059,603
542,663,887
TOTAL MUNICIPAL BONDS (COST $531,757,246)
------------
<CAPTION>
SHARES
<C> <S> <C> <C> <C>
CLOSED END MUTUAL FUNDS -- 2.16%
62,000 BLACK ROCK CALIFORNIA INSURED
MUNICIPAL 2008 TERM TRUST 899,000
237,300 MUNIYIELD CALIFORNIA FUND 3,114,562
232,600 MUNIYIELD CALIFORNIA INSURED
FUND 3,009,263
182,500 MUNIYIELD CALIFORNIA INSURED
FUND II 2,418,125
30,000 PUTNAM CALIFORNIA INVESTMENT
GRADE MUNICIPAL TRUST 412,500
45,000 VAN KAMPEN CALIFORNIA
MUNICIPAL INCOME TRUST 376,875
77,300 VAN KAMPEN CALIFORNIA QUALITY
MUNICIPAL TRUST 1,178,825
60,100 VAN KAMPEN CALIFORNIA VALUE
MUNICIPAL INCOME TRUST 845,156
12,254,306
TOTAL CLOSED END MUTUAL FUNDS
(COST $11,788,995)
------------
SHORT-TERM INVESTMENTS -- 0.61%
3,435,904 WELLS FARGO CALIFORNIA
TAX-FREE MONEY MARKET TRUST
FUND +X+ (COST $3,435,904) 3,435,904
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $546,982,145)* 98.59% $558,354,097
OTHER ASSETS AND LIABILITIES, NET 1.41 7,989,742
------- ------------
TOTAL NET ASSETS 100.00% $566,343,839
------- ------------
</TABLE>
[::] ZERO COUPON BOND. THE RATE DISCLOSED REPRESENTS YIELD TO MATURITY AS
DETERMINED AT DATE OF PURCHASE.
+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 $547,336,504 AND NET UNREALIZED
APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $19,066,469
GROSS UNREALIZED DEPRECIATION (8,048,876)
-----------
NET UNREALIZED APPRECIATION $11,017,593
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Education 2%
Other Investments 2%
Power 3%
Airport 2%
School District 6%
Single Family Housing 5%
Facilities 7%
Higher Education 3%
Water 6%
Utilities 7%
Development 18%
Other 1%
Multifamily Housing 2%
Pollution 1%
Transportation 8%
General Obligation 8%
Tax-Free Money Market Fund 1%
Medical 10%
General 8%
</TABLE>
INVESTMENT CATEGORIES REFLECT PERCENTAGES OF INVESTMENTS IN SECURITIES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
30
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 92.13%
COLORADO - 91.15%
$ 370,000 ADAMS COUNTY CO SFMR
SERIES A2 8.70% 06/01/12 $ 380,371
1,250,000 ARAPAHOE COUNTY CO UTILITIES
REVENUE WATER & WASTEWATER
AUTHORITY REVENUE 6.25 12/01/20 1,224,538
500,000 ASPEN VALLEY HOSPITAL DISTRICT
CO HOSPITAL REVENUE 6.80 10/15/24 504,480
300,000 AURORA CO HOUSING AUTHORITY
FINANCE CORPORATION MFHR
MOUNTAINVIEW PLACE FHA INSURED 7.13 09/01/22 309,276
1,080,000 BLACK HAWK CO BUSINESS
IMPROVEMENT DISTRICT SPECIAL
ASSESSMENT REVENUE SERIES #97
I 6.00 12/01/09 1,081,631
970,000 BLACK HAWK CO BUSINESS
IMPROVEMENTS DISTRICT SPECIAL
ASSESSMENT REVENUE
SERIES #98 I 7.00 12/01/11 998,479
140,000 BLACKHAWK CO DEVICE TAX
REVENUE 5.60 12/01/04 140,231
145,000 BLACKHAWK CO DEVICE TAX
REVENUE 5.70 12/01/05 145,421
1,080,000 BOULDER CO STORM WATER & FLOOD
MANAGEMENT REVENUE
REFUNDING & IMPROVEMENTS 5.10 12/01/18 1,008,158
100,000 BOULDER COUNTY CO MFHR THISTLE
COMMUNITY HOUSING 6.00 06/01/11 94,559
1,000,000 BOULDER COUNTY CO MFHR THISTLE
COMMUNITY HOUSING 6.38 06/01/29 913,660
500,000 CENTENNIAL 25 METROPOLITAN
DISTRICT CO GO ARAPAHOE COUNTY 6.38 12/01/16 501,895
3,750,000 COLORADO EDUCATIONAL &
CULTURAL FACILITIES REVENUE
ALEXANDER DAWSON SCHOOL 5.30 02/15/29 3,385,200
500,000 COLORADO EDUCATIONAL &
CULTURAL FACILITIES REVENUE
CHARTER SCHOOL CORE KNOWLEDGE
PROJECT 7.00 11/01/29 501,565
600,000 COLORADO EDUCATIONAL &
CULTURAL FACILITIES REVENUE
CHARTER SCHOOL RENAISSANCE
SCHOOL PROJECT 6.75 06/01/29 583,992
415,000 COLORADO HEALTH FACILITIES
AUTHORITY REVENUE NATIONAL
JEWISH MEDICAL & RESEARCH
CENTER 5.00 01/01/08 384,468
1,250,000 COLORADO HEALTH FACILITIES
AUTHORITY REVENUE NATIONAL
JEWISH MEDICAL & RESEARCH
CENTER 5.38 01/01/28 1,071,188
530,000 COLORADO HFFA REVENUE PARKVIEW
MEDICAL CENTER INCORPORATED
PROJECT 5.00 09/01/11 464,900
1,000,000 COLORADO HFFA REVENUE SISTERS
OF CHARITY LEAVENWORTH MBIA
INSURED 5.00 12/01/25 878,630
1,250,000 COLORADO HFFA REVENUE SISTERS
OF CHARITY SERIES A AMBAC
INSURED 6.25 05/15/11 1,362,225
2,500,000 COLORADO HFFA REVENUE
STEAMBOAT SPRINGS HEALTH
PROJECT 5.70 09/15/23 2,024,650
7,870,000 COLORADO HFA SERIES 120 7.90 04/01/11 8,404,529
215,000 COLORADO HFA SFMR SERIES B2 7.50 12/01/16 226,040
1,575,000 COLORADO HFA SFMR SERIES C2 7.45 06/01/17 1,674,619
560,000 COLORADO HFA SMR SERIES D1
REMARKETED 7/15/94 8.00 12/01/24 595,997
1,045,000 COLORADO HFA SFMR SERIES D2 7.10 06/01/14 1,107,198
850,000 COLORADO HFA SMR SERIES D2
REMARKETED 11/15/94 8.13 06/01/25 907,401
2,000,000 COLORADO HFA MFHR WINDRIDGE
APARTMENTS PROJECT FNMA
COLLATERAL INSURED 4.50 02/15/28 2,000,000
1,385,000 COLORADO SCHOOL OF MINES
AUXILIARY FACILITIES REVENUE
CAPITAL
APPRECIATION-ENTERPRISE MBIA
INSURED 5.31[::] 12/01/20 411,733
1,250,000 COLORADO SPRINGS CO UTILITIES
REVENUE SERIES A 5.38 11/15/26 1,170,600
1,000,000 COLORADO SPRINGS CO UTILITIES
REVENUE REFERENDUM SYSTEM
SERIES A 5.25 11/15/22 923,250
700,000 COLORADO STUDENT OBLIGATION
BOARD AUTHORITY STUDENT LOAN
REVENUE SERIES SUB-I-B
GUARANTEED BY STUDENT LOANS 5.70 12/01/06 714,182
1,000,000 COLORADO WATER RESERVE POWER
DEVELOPMENT AUTHORITY CLEAN
WATER REVENUE SERIES B 5.00 09/01/19 915,660
1,810,000 COLORADO WATER RESERVE & POWER
DEVELOPMENT AUTHORITY DRINKING
WATER REVENUE SERIES A 4.88 09/01/17 1,647,697
1,000,000 COLORADO WATER RESERVE & POWER
DEVELOPMENT AUTHORITY DRINKING
WATER REVENUE SERIES A 5.00 09/01/19 920,020
20,000,000 DAWSON RIDGE METROPOLITAN
DISTRICT NO.1 CO GO SERIES B
ESCROWED TO MATURITY 6.10[::] 10/01/22 4,298,400
2,750,000 DENVER CO CITY & COUNTY
AIRPORT REVENUE SERIES A 5.00 11/15/25 2,390,520
1,000,000 DENVER CO CITY & COUNTY
AIRPORT REVENUE SERIES A MBIA
INSURED 5.50 11/15/25 956,490
</TABLE>
31
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
COLORADO (continued)
$ 2,500,000 DENVER CO CITY & COUNTY
REVENUE HELEN G. BONFILS
FOUNDATION PROJECT SERIES B 5.13% 12/01/17 $ 2,358,775
1,500,000 DENVER CO CITY & COUNTY SCHOOL
DISTRICT #1 GO FGIC INSURED 5.25 12/01/17 1,440,390
1,000,000 DENVER CO GATEWAY CENTER
METROPOLITIAN DISTRICT UTGO 6.40 12/01/18 953,740
300,000 DENVER CO HEALTH & HOSPITAL
REVENUE SERIES A 5.20 12/01/12 265,713
2,000,000 DENVER CO HEALTH & HOSPITAL
REVENUE SERIES A 5.38 12/01/18 1,651,040
390,000 DENVER WEST METROPOLITAN
DISTRICT CO GO SERIES B 5.60 12/01/12 376,292
1,475,000 DOUGLAS COUNTY CO MFHR FHA
PARKER HILLTOP PROJECT FHA
INSURED 5.35 08/01/18 1,351,720
2,500,000 E-470 PUBLIC HIGHWAY AUTHORITY
CO REVENUE SERIES A MBIA
INSURED 4.75 09/01/23 2,136,375
3,000,000 E-470 PUBLIC HIGHWAY AUTHORITY
CO TRANSPORTATION REVENUE
CAPITAL APPRECIATION SERIES B
MBIA INSURED 6.32[::] 09/01/30 476,850
1,000,000 E-470 PUBLIC HIGHWAY AUTHORITY
CO TRANSPORTATION REVENUE
SERIES A MBIA INSURED 5.75 09/01/35 985,500
2,500,000 EL PASO COUNTY CO GO BONDS
SCHOOL DISTRICT #11 COLORADO
SPRINGS 7.10 12/01/17 2,950,075
1,165,000 GREEN VALLEY CO METROPOLITAN
DISTRICT UTGO AMBAC INSURED 5.75 12/01/19 1,172,514
1,000,000 HIGHLANDS RANCH CO
METROPOLITAN DISTRICT #2 UTGO
FSA INSURED 6.50 06/15/11 1,112,840
1,100,000 HIGHLANDS RANCH CO
METROPOLITAN DISTRICT #2 UTGO
FSA INSURED 6.50 06/15/12 1,227,160
250,000 HIGHLANDS RANCH CO
METROPOLITAN DISTRICT #3
GENERAL OBLIGATION ACA INSURED 5.00 12/01/09 241,428
1,750,000 HIGHLANDS RANCH CO
METROPOLITAN DISTRICT #3
GENERAL OBLIGATIONS ACA
INSURED 5.25 12/01/14 1,666,578
350,000 HIGHLANDS RANCH CO
METROPOLITAN DISTRICT #4 UTGO
SERIES A 6.10 12/01/11 348,131
800,000 HIGHLANDS RANCH CO
METROPOLITAN DISTRICT #4 UTGO
SERIES A 6.30 12/01/17 787,912
3,000,000 JEFFERSON COUNTY CO SCHOOL
DISTRICT #R001 GO MBIA INSURED 6.50 12/15/11 3,366,540
1,000,000 JEFFERSON COUNTY CO SCHOOL
DISTRICT #R001 GO SERIES A
FGIC INSURED 5.00 12/15/17 926,330
500,000 LA JUNTA CO HOSPITAL CO
REVENUE ARK VALLEY REGIONAL
MEDICAL CENTER PROJECT 6.00 04/01/19 438,345
500,000 LA JUNTA CO HOSPITAL CO
REVENUE ARK VALLEY REGIONAL
MEDICAL CENTER PROJECT 6.10 04/01/24 433,865
1,990,000 LARIMER COUNTY CO SFM REVENUE
CAPITAL ACCUMULATOR A
REMARKETED 2/15/94 5.50[::] 08/01/15 838,725
745,000 LITTLE THOMPSON WATER DISTRICT
CO WATER REVENUE FIRST LIEN JR
MBIA INSURED 5.75 12/01/17 753,694
2,000,000 METEX METROPOLITAN DISTRICT CO
GO SERIES A 5.80 12/01/16 2,046,800
1,210,000 MONTROSE COUNTY CO COP
SERIES A 6.40 12/01/12 1,275,243
955,000 NORTHERN METROPOLITAN DISTRICT
CO ADAMS COUNTY CO 6.50 12/01/16 936,549
325,000 PUEBLO CO COP PUBLIC
PARKING-LEASE PURCHASE &
SUBLEASE 6.90 07/01/15 345,456
1,500,000 SAN MIGUEL COUNTY CO HOUSING
AUTHORITY MFHR TELLURIDE
VILLAGE APARTMENTS PROJECT 6.40 07/01/23 1,544,115
600,000 SUMMIT COUNTY CO SPORTS
FACILITIES REVENUE KEYSTONE
RESORTS MANAGEMENT PROJECT
GUARANTEED BY RALSTON PURINA
CORPORATION 7.38 09/01/10 661,092
82,293,640
-----------
PUERTO RICO - 0.98%
1,000,000 COMMONWEALTH OF PUERTO RICO
PUBLIC FINANCE CORPORATION
APPROPRIATION SERIES A 5.00 06/01/26 884,820
-----------
83,178,460
TOTAL MUNICIPAL BONDS (COST $83,635,886)
-----------
<CAPTION>
SHARES
<C> <S> <C> <C> <C>
CLOSED END MUTUAL FUNDS - 3.00%
8,248 BLACKROCK STRATEGIC MUNICIPAL
TRUST 103,616
50,096 DREYFUS MUNICIPAL INCOME FUND 378,850
27,791 DREYFUS STRATEGIC MUNICIPAL
BOND FUND 224,065
49,351 DREYFUS STRATEGIC MUNICIPALS
FUND 394,807
1,170 EATON VANCE MUNICIPAL INCOME
TRUST 12,724
17,748 MUNICIPAL ADVANTAGE FUND
INCORPORATED 197,447
15,188 MUNICIPAL PARTNERS FUND 179,408
</TABLE>
32
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
CLOSED END MUTUAL FUNDS (continued)
15,692 NUVEEN DIVIDEND ADVANTAGE
MUNICIPAL FUND $ 192,227
25,652 NUVEEN INSURED MUNICIPAL
OPPORTUNITY FUND 333,476
18,339 NUVEEN PREMIUM INCOME
MUNICIPAL FUND 218,922
12,492 SELIGMAN SELECT MUNICIPAL FUND 117,113
7,778 VAN KAMPEN ADVANTAGE MUNICIPAL
INCOME TRUST 98,683
8,528 VAN KAMPEN ADVANTAGE MUNICIPAL
INCOME TRUST II 97,539
12,032 VAN KAMPEN TRUST FOR
INVESTMENT GRADE 161,680
2,710,557
TOTAL CLOSED END MUTUAL FUNDS (COST
$2,685,260)
-----------
SHORT-TERM INVESTMENTS - 4.31%
776,384 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET TRUST FUND+X+ 776,384
3,111,198 WELLS FARGO NATIONAL TAX-FREE
INSTITUTIONAL MONEY MARKET
FUND+X+ 3,111,198
3,887,582
TOTAL SHORT-TERM INVESTMENTS (COST
$3,887,582)
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $90,208,728)* 99.44% $89,776,599
OTHER ASSETS AND LIABILITIES, NET 0.56 505,828
------- -----------
TOTAL NET ASSETS 100.00% $90,282,427
------- -----------
</TABLE>
[::] ZERO COUPON BOND. THE RATE DISCLOSED REPRESENTS YIELD TO MATURITY AS
DETERMINED AT DATE OF PURCHASE.
+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 $90,714,084 AND NET UNREALIZED
DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $1,684,156
GROSS UNREALIZED DEPRECIATION (2,621,641)
----------
NET UNREALIZED DEPRECIATION $ (937,485)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Student Loan 1%
Water 4%
Transportation 4%
School District 10%
Medical 10%
Tax-Free Money Market Fund 4%
Education 5%
Facilities 11%
Airport 4%
Utilities 6%
Single Family Housing 6%
Housing 9%
Multifamily Housing 7%
Other Investments 3%
General Obligation 8%
General 8%
</TABLE>
INVESTMENT CATEGORIES REFLECT PERCENTAGES OF INVESTMENTS IN SECURITIES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
33
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 96.95%
MINNESOTA - 96.67%
$ 500,000 ALBERT LEA MN INDEPENDENT
SCHOOL DISTRICT #241 GO SCHOOL
DISTRICT CREDIT PROGRAM MBIA
INSURED 4.80% 02/01/16 $ 456,125
500,000 ALEXANDRIA MN INDEPENDENT
SCHOOL DISTRICT #206 GO BONDS
SERIES A CROSSOVER REFUNDING 6.00 02/01/04 514,040
250,000 ALEXANDRIA MN INDEPENDENT
SCHOOL DISTRICT #206 GO BONDS
SERIES A CROSSOVER REFUNDING 6.15 02/01/06 257,920
250,000 ALEXANDRIA MN INDEPENDENT
SCHOOL DISTRICT #206 GO BONDS
SERIES A CROSSOVER REFUNDING 6.20 02/01/07 258,220
2,365,000 ANOKA COUNTY MN RESOURCE
RECOVERY REVENUE NORTHERN
STATE POWER COMPANY PROJECT 5.00 12/01/06 2,385,576
600,000 ANOKA COUNTY MN RESOURCE
RECOVERY REVENUE NORTHERN
STATE POWER COMPANY MBIA-IBC
INSURED 4.60 12/01/08 575,130
650,000 AUSTIN MN HOUSING &
REDEVELOPMENT AUTHORITY
GOVERNMENTAL HOUSING GROSS
REVENUE COURTYARD RESIDENCE PJ
SERIES A 7.15 01/01/20 653,556
1,500,000 BEMIDJI MN HOSPITAL FACILITIES
FIRST MORTGAGE REVENUE NORTH
COUNTRY HEALTH SERVICES
PROJECT SERIES 1991 A
PREREFUNDED 9/1/01 @ 102 7.00 09/01/11 1,572,195
2,000,000 BEMIDJI MN INDEPENDENT SCHOOL
DISTRICT #31 GO FSA INSURED
SCHOOL DISTRICT CREDIT PROGRAM
LOC 5.00 04/01/19 1,831,200
160,000 BLAINE MN IDR BALL CORPORATION
PROJECT 7.13 12/01/04 173,984
3,000,000 BLOOMINGTON MN INDEPENDENT
SCHOOL DISTRICT #271 GO
SERIES B SCHOOL DISTRICT
CREDIT PROGRAM SUPPORT 5.00 02/01/16 2,814,330
4,025,000 BLOOMINGTON MN PORT AUTHORITY
SPECIAL TAX REVENUE MALL OF
AMERICA PROJECT SERIES A FSA
INSURED 5.35 02/01/13 4,052,048
1,000,000 BLOOMINGTON MN PORT AUTHORITY
SPECIAL TAX REVENUE MALL OF
AMERICA PROJECT SERIES A FSA
INSURED 5.00 02/01/13 966,420
2,000,000 BLOOMINGTON MN PORT AUTHORITY
TAX REVENUE MALL OF AMERICA
PROJECT SERIES A FSA INSURED 5.25 02/01/03 2,025,440
960,000 BLOOMINGTON MN PORT AUTHORITY
TAX REVENUE MALL OF AMERICA
PROJECT SERIES A FSA INSURED 5.45 02/01/09 963,820
290,000 BLOOMINGTON MN TAX INCREMENT
GO PREREFUNDED 2/1/05 @ 100 9.75 02/01/08 347,939
2,195,000 BRECKENRIDGE MN HFFA REVENUE
CATHOLIC HEALTH CORPORATION
MBIA INSURED 5.00 11/15/05 2,214,426
1,000,000 CENTENNIAL MN INDEPENDENT
SCHOOL DISTRICT #12 GO
SERIES A 5.63 02/01/16 1,008,230
400,000 CHASKA MN GO TAX INCREMENT
AMBAC INSURED 4.15 12/01/09 361,300
1,250,000 CHASKA MN INDEPENDENT SCHOOL
DISTRICT #112 GO SERIES B
CROSSOVER REFUNDING 2/1/00 @
100 5.75 02/01/07 1,301,313
1,000,000 CHASKA MN INDEPENDENT SCHOOL
DISTRICT #112 GO SERIES B
CROSSOVER REFUNDING 2/1/00 @
100 5.75 02/01/09 1,041,050
1,000,000 CHASKA MN INDEPENDENT SCHOOL
DISTRICT #112 GO STATE CREDIT
ENHANCEMENT PROGRAM SERIES B 5.75 02/01/05 1,039,060
255,000 COON RAPIDS MN GO SPECIAL
ASSESSMENT SERIES B 5.80 02/01/04 261,306
410,000 COON RAPIDS MN SFMR 6.15 09/01/09 410,790
1,000,000 CUYUNA RANGE HOSPITAL DISTRICT
MN HEALTH FACILITIES GROSS
REVENUE SERIES A 5.75 06/01/14 881,390
1,190,000 DETROIT LAKES MN HFFA REVENUE
BENEDICTINE HEALTH SYSTEMS ST.
MARY SERIES G CONNIE LEE
INSURED 6.00 02/15/12 1,245,466
635,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE
BENEDICTINE HEALTH SYSTEM ST.
MARY SERIES A MBIA INSURED 5.55 02/15/04 648,938
690,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE
BENEDICTINE HEALTH SYSTEM ST.
MARY SERIES A MBIA INSURED 5.65 02/15/05 710,279
</TABLE>
34
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA (continued)
$ 465,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE
BENEDICTINE HEALTH SYSTEM ST.
MARY SERIES A MBIA INSURED 5.75% 02/15/06 $ 479,406
450,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE ST.
LUKE'S HOSPITAL OF DULUTH
SERIES B CONNIE LEE INSURED 6.20 05/01/01 456,053
500,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE ST.
LUKE'S HOSPITAL OF DULUTH
SERIES B CONNIE LEE INSURED 6.45 05/01/05 521,730
500,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE ST.
LUKE'S HOSPITAL OF DULUTH
SERIES B CONNIE LEE INSURED 6.40 05/01/18 515,395
205,000 DULUTH MN GO COLLATERALIZED BY
USG PREREFUNDED 8/1/00 @ 100 6.10 08/01/02 205,295
210,000 DULUTH MN GO COLLATERALIZED BY
USG PREREFUNDED 8/1/00 @100 6.20 08/01/03 210,320
215,000 DULUTH MN GO COLLATERALIZED BY
USG PREREFUNDED 8/1/00 @ 100 6.30 08/01/04 215,346
300,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA 6.15 02/01/01 302,262
300,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA 6.30 02/01/02 302,070
400,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA 6.50 02/01/04 402,848
425,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA 6.60 02/01/05 428,060
455,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA 6.70 02/01/06 458,385
165,000 EDEN PRAIRIE MN HOUSING &
REDEVELOPMENT AUTHORITY
LEASING REVENUE COMMUNITY
CENTER PROJECT SERIES A 6.15 08/01/08 167,660
1,000,000 FERGUS FALLS MN HFFA REVENUE
LAKE REGION HOSPITAL
CORPORATION PROJECT SERIES A 6.50 09/01/18 949,400
700,000 GLENCOE MN HOSPITAL REVENUE 6.63 04/01/11 693,819
205,000 HASTINGS MN HFFA REVENUE
REGINA MEDICAL CENTER ACA
INSURED 4.80 09/15/10 183,539
400,000 HASTINGS MN HFFA REVENUE
REGINA MEDICAL CENTER ACA
INSURED 5.25 09/15/18 352,476
1,000,000 HENNEPIN COUNTY MN LEASE
REVENUE COP 5.38 11/15/12 1,010,340
260,000 HENNEPIN COUNTY MN LEASE
REVENUE COP SERIES A
PREREFUNDED 11/15/01 @ 100 6.15 05/15/02 265,645
310,000 HENNEPIN COUNTY MN LEASE
REVENUE COP SERIES A
PREREFUNDED 11/15/01 @ 100 6.25 11/15/03 317,139
135,000 HENNEPIN COUNTY MN LEASE
REVENUE COP SERIES A
PREREFUNDED 11/15/01 @ 100 6.45 05/15/05 138,465
300,000 HENNEPIN COUNTY MN LEASE
REVENUE COP SERIES A
PREREFUNDED 11/15/01 @ 100 6.45 11/15/05 307,701
145,000 HENNEPIN COUNTY MN LEASE
REVENUE COP SERIES A
PREREFUNDED 11/15/01 @ 100 6.55 05/15/06 148,912
285,000 HINCKLEY-FINLAYSON MN
INDEPENDENT SCHOOL DISTRICT
#2165 5.25 02/01/10 290,506
1,080,000 LINO LAKES MN ECONOMIC
DEVELOPMENT AUTHORITY LEASING
REVENUE SERIES A 5.25 02/01/16 975,348
50,000 MANKATO MN HFFA REVENUE FIRST
MORTGAGE-IMMANUEL ST. JOSEPH'S
PROJECT SERIES C PREREFUNDED
8/1/02 @ 102 6.10 08/01/05 52,270
315,000 MANKATO MN HFFA REVENUE FIRST
MORTGAGE-IMMANUEL ST. JOSEPH'S
PROJECT SERIES C PREREFUNDED
8/1/02 @ 102 6.10 08/01/05 327,247
390,000 MANKATO MN HFFA REVENUE FIRST
MORTGAGE-IMMANUEL ST. JOSEPH'S
PROJECT SERIES C PREREFUNDED
8/1/02 @ 102 6.15 08/01/06 405,027
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 62,783
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 1,785,272
1,100,000 MANKATO MN INDEPENDENT SCHOOL
DISTRICT #77 GO SERIES A FSA
INSURED CROSSOVER REFUNDING
2/1/02 @ 100 6.35 02/01/13 1,127,709
300,000 MANKATO MN NURSING HOME
REVENUE MANKATO LUTHERAN HOME
PROJECT SERIES A
COLLATERALIZED BY USG
PREREFUNDED 10/1/01 @ 102 8.00 10/01/11 317,724
3,250,000 METROPOLITAN COUNCIL MN GO
MINNEAPOLIS-ST. PAUL
METROPOLITAN AREA SERIES A 6.00 12/01/02 3,311,685
550,000 MINNEAPOLIS & ST. PAUL MN
HOUSING & REDEVELOPMENT
AUTHORITY HEALTH CARE SYSTEM
HEALTHONE OBLIGATED GROUP
PROJECT SERIES A MBIA INSURED 7.38 08/15/02 564,185
3,000,000 MINNEAPOLIS & ST. PAUL MN
METROPOLITAN AIRPORTS
COMMUNITY AIRPORT REVENUE
SERIES B FGIC INSURED 5.50 01/01/11 3,050,250
</TABLE>
35
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA (continued)
$ 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 7.13[::] 09/01/04 4,064,550
2,815,000 MINNEAPOLIS MN GO SALES TAX
REVENUE 6.05 04/01/04 2,931,344
1,750,000 MINNEAPOLIS MN GO SPORTS ARENA
PROJECT 5.13 10/01/20 1,630,265
505,000 MINNEAPOLIS MN HFFA REVENUE
ABBOTT NORTHWESTERN HOSPITAL
INCORPORATED COLLATERALIZED BY
USG 6.50 12/01/06 527,437
450,000 MINNEAPOLIS MN HOSPITAL
REVENUE MINNEAPOLIS CHILDREN'S
MEDICAL CENTER PROJECT
SERIES C COLLATERALIZED BY USG
PREREFUNDED 6/1/01 @ 102 7.00 12/01/01 469,179
575,000 MINNEAPOLIS MN HOSPITAL
REVENUE MINNEAPOLIS CHILDREN'S
MEDICAL CENTER PROJECT
SERIES C COLLATERALIZED BY USG
PREREFUNDED 6/1/01 @ 102 7.10 12/01/02 600,018
1,225,000 MINNEAPOLIS MN MFHR CHURCHILL
PROJECT FHA INSURED 6.95 10/01/05 1,269,578
1,010,000 MINNEAPOLIS MN SPECIAL SCHOOL
DISTRICT #1 UNLIMITED GENERAL
OBLIGATION PREREFUNDED 2/1/03
@ 100 5.75 02/01/09 1,034,018
960,000 MINNEAPOLIS MN SPECIAL SCHOOL
DISTRICT COP SERIES A MBIA
INSURED 5.38 02/01/17 941,885
2,000,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT BOARD
HEALTH CARE REVENUE FAIRVIEW
HOSPITAL SERIES A MBIA INSURED 5.50 11/15/17 1,958,260
2,750,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT REVENUE
BENEDICTINE HEALTH SERIES A
MBIA INSURED 5.00 02/15/19 2,475,220
2,025,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT BOARD
REVENUE HEALTH CARE SYSTEMS
SERIES A 5.88 11/15/10 2,024,838
1,000,000 MINNESOTA HEFA COLLEGE AT ST.
BENEDICT SERIES 4T 5.13 03/01/13 929,750
1,765,000 MINNESOTA IRON RANGE
RESOURCES & REHABILITATION
GROSS REVENUE GIANTS RIDGE
RECREATIONAL AREA 7.25 10/01/11 1,827,128
1,960,000 MINNESOTA PUBLIC FACILITIES
AUTHORITY WATER PCR SERIES A
PREREFUNDED 3/1/02 @ 100 6.50 03/01/14 2,054,060
750,000 MINNESOTA PUBLIC FACILITIES
AUTHORITY WATER PCR SERIES A
PREREFUNDED 3/1/05 @ 100 6.25 03/01/15 794,948
1,000,000 MINNESOTA PUBLIC FACILITIES
AUTHORITY WATER PCR 5.00 03/01/16 944,850
480,000 MINNESOTA STATE HFA HOUSING
DEVELOPMENT REVENUE 6.25 02/01/20 483,648
1,425,000 MINNESOTA STATE HFA RENTAL
HOUSING REVENUE SERIES D MBIA
INSURED 5.80 08/01/11 1,441,217
605,000 MINNESOTA STATE HFA RENTAL
HOUSING REVENUE SERIES D MBIA
INSURED 5.90 08/01/15 608,563
165,000 MINNESOTA STATE HFA SFMR
SERIES D2 REMARKETED 3/24/93 5.60 01/01/06 167,006
500,000 MINNESOTA STATE HFA SFMR
SERIES B 5.00 07/01/13 468,600
1,000,000 MINNESOTA STATE HEFA REVENUE
CARLETON COLLEGE SERIES 4N 5.00 11/01/18 922,000
190,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3A
COLLATERALIZED BY USG
PREREFUNDED 10/1/00 @ 100 7.00 10/01/04 191,208
205,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3A
COLLATERALIZED BY USG
PREREFUNDED 10/1/00 @ 100 7.00 10/01/05 206,304
220,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3A
COLLATERALIZED BY USG
PREREFUNDED 10/1/00 @ 100 7.00 10/01/06 221,399
235,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3A
COLLATERALIZED BY USG
PREREFUNDED 10/1/00 @ 100 7.00 10/01/07 236,495
135,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3K
COLLATERALIZED BY USG 6.20 06/01/01 137,160
130,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3K
COLLATERALIZED BY USG 6.30 06/01/02 133,745
270,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3K
COLLATERALIZED BY USG
PREREFUNDED 6/1/02 @ 100 6.40 06/01/03 278,068
240,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3K
COLLATERALIZED BY USG
PREREFUNDED 6/1/02 @ 100 6.50 06/01/04 247,606
250,000 MINNESOTA STATE HEFA REVENUE
HAMLINE UNIVERSITY SERIES 3K
COLLATERALIZED BY USG
PREREFUNDED 6/1/02 @ 100 6.60 06/01/07 258,378
</TABLE>
36
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA (continued)
$ 430,000 MINNESOTA STATE HEFA REVENUE
MACALESTER COLLEGE SERIES 3J 6.10% 03/01/05 $ 439,730
365,000 MINNESOTA STATE HEFA REVENUE
NORTHWEST COLLEGE SERIES 4Z 4.50 10/01/05 344,221
420,000 MINNESOTA STATE HEFA REVENUE
NORTHWEST COLLEGE SERIES 4Z 4.75 10/01/08 390,188
400,000 MINNESOTA STATE HEFA REVENUE
NORTHWEST COLLEGE SERIES 4Z 4.63 10/01/07 371,632
150,000 MINNESOTA STATE HEFA REVENUE
ST. MARY'S COLLEGE SERIES 3Q 5.70 10/01/03 152,789
280,000 MINNESOTA STATE HEFA REVENUE
ST. MARY'S COLLEGE SERIES 3Q 5.80 10/01/04 286,740
295,000 MINNESOTA STATE HEFA REVENUE
ST. MARY'S COLLEGE SERIES 3Q 5.90 10/01/05 303,219
340,000 MINNESOTA STATE HEFA REVENUE
ST. MARY'S COLLEGE SERIES 3-Q 6.00 10/01/08 348,327
1,580,000 MINNETONKA MN INDEPENDENT
SCHOOL DISTRICT #276 GO
SERIES A 6.10 02/01/02 1,615,945
1,000,000 MINNETONKA MN INDEPENDENT
SCHOOL DISTRICT #276 GO
SERIES A PREREFUNDED 2/1/02 @
100 6.30 02/01/04 1,024,590
1,000,000 MINNETONKA MN INDEPENDENT
SCHOOL DISTRICT #276 GO
SERIES B 5.65 02/01/10 1,036,740
500,000 MONTICELLO-BIG LAKE MN
COMMUNITY HOSPITAL DISTRICT
GROSS REVENUE HEALTH CARE
REVENUE SERIES A 5.30 12/01/10 451,095
505,000 MONTICELLO-BIG LAKE MN
COMMUNITY HOSPITAL DISTRICT
GROSS REVENUE HEALTH CARE
REVENUE SERIES A 5.20 12/01/09 459,429
725,000 MONTICELLO-BIG LAKE MN
COMMUNITY HOSPITAL DISTRICT
GROSS REVENUE HEALTH CARE
REVENUE SERIES A 5.40 12/01/11 650,296
250,000 MOORHEAD MN ECONOMIC
DEVELOPMENT AUTHORITY MFHR
EVENTIDE LUTHERAN HOME PROJECT
SERIES A PREREFUNDED 9/1/00 @
102 8.00 09/01/11 256,415
500,000 MOORHEAD MN PUBLIC UTILITIES
REVENUE SERIES A MBIA INSURED
CROSSOVER REFUNDING 11/1/02 @
100 5.75 11/01/03 511,675
1,865,000 MOORHEAD MN RESIDENTIAL
MORTGAGE REVENUE 7.10 08/01/11 2,048,535
825,000 NEW HOPE MN HOUSING & HEALTH
CARE FACILITIES REVENUE
MINNESOTA MASONIC HOME NORTH
RIDGE 5.55 03/01/11 728,945
670,000 NEW HOPE MN HOUSING & HEALTH
CARE FACILITIES REVENUE
MINNESOTA MASONIC HOME NORTH
RIDGE 5.60 03/01/12 586,210
1,200,000 NORTH ST. PAUL MAPLEWOOD MN
INDEPENDENT SCHOOL DISTRICTS
#622 GO 5.13 02/01/25 1,097,748
3,000,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE FSA INSURED 5.50 01/01/08 3,096,660
1,000,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE FSA INSURED 5.40 01/01/15 996,020
1,000,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE FSA INSURED 5.30 01/01/21 943,920
1,500,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE SERIES B AMBAC
INSURED 5.50 01/01/18 1,465,425
400,000 NORTHFIELD MN EDUCATIONAL
FACILITIES REVENUE ST. OLAF
COLLEGE PROJECT 6.05 10/01/04 413,400
105,000 OLMSTEAD COUNTY MN HOUSING &
REDEVELOPMENT AUTHORITY
REVENUE COLLATERALIZED BY USG
PREREFUNDED 2/1/01 @ 100 7.00 02/01/06 106,630
290,000 OLMSTEAD COUNTY MN HOUSING &
REDEVELOPMENT AUTHORITY
REVENUE COLLATERALIZED BY USG
PREREFUNDED 2/1/01 @ 100 7.00 02/01/07 294,504
300,000 OLMSTEAD COUNTY MN HOUSING &
REDEVELOPMENT AUTHORITY
REVENUE COLLATERALIZED BY USG
PREREFUNDED 2/1/01 @ 100 7.00 02/01/08 304,659
500,000 PINE RIVER MN HFFA REVENUE
EVAN LUTHERAN GOOD SAMARITAN
PROJECT 6.40 08/01/15 500,360
1,000,000 RAMSEY COUNTY MN GO BONDS
CAPITAL IMPROVEMENTS SERIES C 5.50 12/01/04 1,030,340
1,010,000 RED WING MN PCR NORTHERN
STATES POWER COMPANY MBIA-IBC
INSURED 5.70 05/01/03 1,013,090
1,095,000 ROBBINSDALE MN INDEPENDENT
SCHOOL DISTRICT #281 GO 5.60 02/01/18 1,096,413
1,185,000 ROCHESTER MN HFFA REVENUE MAYO
FOUNDATION/ MAYO MEDICAL
CENTER SERIES I 5.88 11/15/08 1,252,675
2,285,000 ROCHESTER MN HFFA REVENUE MAYO
FOUNDATION/ MAYO MEDICAL
CENTER SERIES I 5.80 11/15/07 2,399,319
1,650,000 ROCHESTER MN HFFA REVENUE MAYO
FOUNDATION/ MAYO MEDICAL
CENTER SERIES I 5.90 11/15/09 1,749,809
1,500,000 ROCHESTER MN HFFA REVENUE MAYO
FOUNDATION/ MAYO MEDICAL
CENTER SERIES I 5.90 11/15/10 1,591,920
2,000,000 ROSEMOUNT MN INDEPENDENT
SCHOOL DISTRICT #196 GO
CAPITAL APPRECIATION SERIES A 5.55[::] 04/01/09 1,259,900
</TABLE>
37
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA (continued)
$ 3,000,000 ROSEMOUNT MN INDEPENDENT
SCHOOL DISTRICT #196 GO
CAPITAL APPRECIATION SERIES A 5.60%[::] 04/01/10 $ 1,785,840
2,000,000 ROSEMOUNT MN INDEPENDENT
SCHOOL DISTRICT #196 GO
CAPITAL APPRECIATION SERIES A 5.50[::] 04/01/11 1,121,840
2,100,000 SEAWAY PORT AUTHORITY DULUTH
MN INDUSTRIAL DEVELOPMENT
DOCK & WHARF CARGIL
INCORPORATED REVENUE SERIES B 6.80 05/01/12 2,189,754
1,000,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES B 5.80 01/01/07 1,023,810
4,790,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE CAPITAL
APPRECIATION SERIES A MBIA
INSURED 6.66[::] 01/01/20 1,523,699
545,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES A 5.50 01/01/03 554,794
1,000,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES A 5.00 01/01/12 956,150
1,905,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES A
AMBAC-TCRS INSURED 5.00 01/01/09 1,888,103
10,000,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES A MBIA
INSURED 6.70[::] 01/01/24 2,486,500
955,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES A 5.50 01/01/03 966,995
1,000,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES B 5.80 01/01/07 1,031,900
115,000 SPRING PARK MN HFFA REVENUE
TWIN BIRCH HEALTH CARE CENTER
PROJECT 8.00 08/01/00 115,338
125,000 SPRING PARK MN HFFA REVENUE
TWIN BIRCH HEALTH CARE CENTER
PROJECT 8.00 08/01/01 129,503
135,000 SPRING PARK MN HFFA REVENUE
TWIN BIRCH HEALTH CARE CENTER
PROJECT 8.10 08/01/02 142,660
145,000 SPRING PARK MN HFFA REVENUE
TWIN BIRCH HEALTH CARE CENTER
PROJECT 8.10 08/01/03 153,229
160,000 ST. ANTHONY MN MFHR AUTUMN
WOODS PROJECT ASSET GUARANTY
INSURANCE COMPANY LOC 6.10 07/01/00 160,005
170,000 ST. ANTHONY MN MFHR AUTUMN
WOODS PROJECT ASSET GUARANTY
INSURANCE COMPANY LOC 6.25 07/01/01 172,219
180,000 ST. ANTHONY MN MFHR AUTUMN
WOODS PROJECT ASSET GUARANTY
INSURANCE COMPANY LOC 6.40 07/01/02 184,401
190,000 ST. ANTHONY MN MFHR AUTUMN
WOODS PROJECT ASSET GUARANTY
INSURANCE COMPANY LOC 6.50 07/01/03 196,625
175,000 ST. ANTHONY MN MFHR AUTUMN
WOODS PROJECT ASSET GUARANTY
INSURANCE COMPANY LOC 6.60 07/01/04 182,488
180,000 ST. CLOUD MN COP MUNICIPAL
ATHLETIC COMPLEX 5.20 12/01/05 176,665
185,000 ST. CLOUD MN COP MUNICIPAL
ATHLETIC COMPLEX 5.30 12/01/06 181,700
100,000 ST. CLOUD MN COP MUNICIPAL
ATHLETIC COMPLEX 5.38 12/01/07 98,199
2,000,000 ST. CLOUD MN GO BONDS INVERSE
FLOATERS CROSSOVER REFUNDING
2/1/02 @ 100+ 7.90 08/01/13 2,060,000
1,335,000 ST. CLOUD MN HEALTH CARE
REVENUE ST. CLOUD HOSPITAL
OBLIGATION GROUP A 5.75 05/01/10 1,385,663
1,725,000 ST. CLOUD MN HEALTH CARE
REVENUE ST. CLOUD HOSPITAL
OBLIGATION GROUP A 5.38 05/01/11 1,749,633
1,000,000 ST. CLOUD MN LAW ENFORCEMENT
CENTER REVENUE 6.20 02/01/05 1,008,930
465,000 ST. LOUIS PARK MN COMMERCIAL
DEVELOPMENT REVENUE G & N LP
PROJECT 7.00 06/01/06 468,227
500,000 ST. LOUIS PARK MN HOSPITAL
REVENUE METHODIST HOSPITAL
SERIES A AMBAC INSURED 7.00 07/01/00 500,035
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 1,008,890
2,025,000 ST. LOUIS PARK MN INDEPENDENT
SCHOOL DISTRICT #283 GO SCHOOL
DISTRICT CREDIT PROGRAM LOC 5.45 02/01/13 2,045,635
2,565,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY
DISTRICT COOLING REVENUE
SERIES C CROSSOVER REFUNDING
9/1/01 @ 102 8.00 03/01/12 2,711,154
400,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY
DISTRICT HEATING REVENUE
COGENERATION FACILITIES
PROJECT 8.30 11/01/04 405,268
610,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY HEALTH
CARE REVENUE REGIONS HOSPITAL
PROJECT 5.00 05/15/11 534,757
1,000,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY HEALTH
CARE REVENUE REGIONS HOSPITAL
PROJECT 5.25 05/15/18 800,860
</TABLE>
38
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA (continued)
$ 2,000,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY HEALTH
CARE REVENUE REGIONS HOSPITAL
PROJECT 5.30% 05/15/28 $ 1,527,100
50,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY
REVENUE AMHERST H. WILDER
FOUNDATION 6.50 06/01/01 50,376
460,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY SFMR
FNMA MORTGAGE BACKED
SECURITIES PROGRAM FNMA
INSURED MANDATORY REDEMPTION
3/1/07 @ 100 6.25 09/01/14 472,549
170,000 ST. PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 5.70 02/01/02 172,424
600,000 ST. PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B
PREFUNDED 2/1/01 @ 100 6.10 02/01/03 606,120
195,000 ST. PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 5.90 02/01/04 199,579
625,000 ST. PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 GO SERIES B
PREFUNDED 2/1/01 @ 100 6.20 02/01/04 631,738
215,000 ST. PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 6.10 02/01/06 220,031
260,000 ST. PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 6.30 02/01/09 267,647
245,000 ST. PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 6.25 02/01/08 251,911
230,000 ST. PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 COP SERIES B 6.20 02/01/07 235,934
1,050,000 ST. PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 GO SERIES B 5.70 02/01/09 1,079,306
580,000 ST. PAUL MN INDEPENDENT SCHOOL
DISTRICT #625 GO SERIES B 5.80 02/01/11 597,771
2,000,000 ST. PAUL MN SEWER REVENUE
AMBAC INSURED 5.60 12/01/08 2,033,220
1,000,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.75 07/01/11 1,051,640
1,795,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.75 07/01/17 1,856,210
1,000,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.75 07/01/18 1,029,490
3,750,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.50 07/01/21 3,699,450
225,000 VADNAIS HEIGHTS MN SFMR 5.25 11/01/02 225,668
235,000 WACONIA MN GO BONDS 6.00 06/01/06 239,893
1,000,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY JAIL FACILITIES
REVENUE PREREFUNDED 2/1/02 @
100 7.00 02/01/06 1,035,480
940,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY JAIL FACILITIES
REVENUE PREREFUNDED 2/1/02 @
100 7.00 02/01/07 973,351
360,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY LEASE REVENUE
INDEPENDENT SCHOOL DISTRICT
#833 SOUTHERN WASHINGTON
PREREFUNDED 12/1/02 @ 100 6.60 12/01/02 375,368
380,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY LEASE REVENUE
INDEPENDENT SCHOOL DISTRICT
#833 SOUTHERN WASHINGTON
PREREFUNDED 12/1/02 @ 100 6.75 12/01/03 397,510
410,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY LEASE REVENUE
INDEPENDENT SCHOOL DISTRICT
#833 SOUTHERN WASHINGTON
PREREFUNDED 12/1/02 @ 100 6.90 12/01/03 430,229
435,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY LEASE REVENUE
INDEPENDENT SCHOOL DISTRICT
#833 SOUTHERN WASHINGTON
PREREFUNDED 12/1/02 @ 100 7.00 12/01/05 457,403
465,000 WASHINGTON COUNTY MN
HOUSING & REDEVELOPMENT
AUTHORITY LEASE REVENUE
INDEPENDENT SCHOOL DISTRICT
#833 SOUTHERN WASHINGTON
PREREFUNDED 12/1/02 @ 100 7.00 12/01/06 488,948
1,000,000 WAYZATA MN INDEPENDENT SCHOOL
DISTRICT #284 GO SERIES B 5.85 02/01/10 1,033,500
1,000,000 WEST ST. PAUL MN INDEPENDENT
SCHOOL DISTRICT #197 GO
CAPITAL APPRECIATION SCHOOL
BUILDING PROJECT MBIA INSURED 5.60[::] 02/01/06 749,770
825,000 WEST ST. PAUL MN INDEPENDENT
SCHOOL DISTRICT #197 GO
CAPITAL APPRECIATION SCHOOL
BUILDING PROJECT MBIA INSURED 5.40[::] 02/01/04 691,581
1,000,000 WEST ST. PAUL MN INDEPENDENT
SCHOOL DISTRICT #197 GO BONDS
FAS INSURED 4.75 02/01/12 942,860
1,430,000 WESTERN MINNESOTA MUNICIPAL
POWER AGENCY POWER REVENUE
SERIES A 6.13 01/01/16 1,430,300
2,660,000 WESTERN MINNESOTA MUNICIPAL
POWER AGENCY REVENUE
SERIES 1977A ESCROWED TO
MATURITY 6.38 01/01/16 2,867,507
100,000 WRIGHT COUNTY MN GO SERIES B 5.90 02/01/05 102,616
225,000 WRIGHT COUNTY MN GO SERIES B 5.80 02/01/04 230,564
178,143,536
------------
</TABLE>
39
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
MINNESOTA INTERMEDIATE TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
PUERTO RICO - 0.28%
$ 500,000 COMMONWEALTH OF PUERTO RICO GO
FGIC INSURED PREREFUNDED
7/1/01 @ 102 7.10% 07/01/02 $ 510,040
------------
178,653,576
TOTAL MUNICIPAL BONDS (COST $177,945,997)
------------
MINNESOTA MUNICIPAL DEMAND NOTES - 1.52%
1,300,000 COHASSET MN IDR MINNESOTA
POWER & LIGHT COMPANY PROJECT
SERIES A AMN AMRO BANK
N.V. LOC+ 4.60 06/01/20 1,300,000
1,000,000 COHASSET MN POWER REVENUE
MINNESOTA POWER & LIGHT
COMPANY PROJECT SERIES B ABN
AMRO BANK N.V. LOC+ 4.60 06/01/13 1,000,000
500,000 COTTAGE GROVE MN ENVIRONMENTAL
CONTROL REVENUE MINNESOTA
MINING & MANUFACTURING LOC+ 4.86 08/01/12 500,000
2,800,000
TOTAL MINNESOTA MUNICIPAL DEMAND NOTES (COST
$2,800,000)
------------
<CAPTION>
SHARES
<C> <S> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 0.38%
701,776 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET FUND+X+ (COST
$701,776) 701,776
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $181,447,773)* 98.85% $182,155,352
OTHER ASSETS AND LIABILITIES, NET 1.15 2,123,290
------- ------------
TOTAL NET ASSETS 100.00% $184,278,642
------- ------------
</TABLE>
[::] ZERO COUPON BOND. THE RATE DISCLOSED REPRESENTS YIELD TO MATURITY AS
DETEMINED AT DATE OF PURCHASE.
+ VARIABLE RATE SECURITY.
+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 $181,670,450 AND NET UNREALIZED
APPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 3,017,975
GROSS UNREALIZED DEPRECIATION (2,533,073)
------------
NET UNREALIZED APPRECIATION $ 484,902
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Pollution 1%
General 1%
Leasing 1%
Development 1%
Airport 2%
Higher Education 8%
Other Muni Demand Notes 1%
Power 12%
Medical 23%
Multifamily Housing 2%
Other 2%
School District 14%
General Obligation 12%
Transportation 6%
Education 2%
Single Family Housing 2%
Housing 1%
Utilities 4%
Facilities 5%
</TABLE>
INVESTMENT CATEGORIES REFLECT PERCENTAGES OF INVESTMENTS IN SECURITIES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
40
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA MUNICIPAL BONDS - 96.12%
$ 500,000 ALBERT LEA MN INDEPENDENT
SCHOOL DISTRICT #241 GO SCHOOL
DISTRICT CREDIT PROGRAM MBIA
INSURED 4.80% 02/01/16 $ 456,125
1,500,000 AUSTIN MN STATE HOUSING
AUTHORITY 7.25 01/01/32 1,508,160
1,000,000 BEMIDJI MN HOSPITAL FACILITIES
FIRST MORTGAGE REVENUE NORTH
COUNTRY HEALTH SERVICES
PROJECT 5.63 09/01/21 901,100
200,000 BEMIDJI MN HOSPITAL FACILITIES
FIRST MORTGAGE REVENUE NORTH
COUNTRY HEALTH SERVICES
PROJECT SERIES 1991 A
PREREFUNDED 9/1/01 @ 102 7.00 09/01/11 209,626
2,000,000 BLOOMINGTON MN INDEPENDENT
SCHOOL DISTRICT #271 GO
SERIES B SCHOOL DISTRICT
CREDIT PROGRAM SUPPORT 5.00 02/01/20 1,824,980
100,000 BLOOMINGTON MN TAX INCREMENT
GO 9.70 02/01/04 116,078
210,000 BLOOMINGTON MN TAX INCREMENT
GO PREREFUNDED 2/1/05 @ 100 9.75 02/01/07 251,956
2,530,000 BURNSVILLE MN HOSPITAL SYSTEM
REVENUE FAIRVIEW COMMUNITY
HOSPITALS ESCROWED TO MATURITY 6.51[::] 05/01/12 1,198,208
340,000 CENTENNIAL MN INDEPENDENT
SCHOOL DISTRICT #12 GO
SERIES A 5.63 02/01/16 342,798
750,000 CHASKA MN INDEPENDENT SCHOOL
DISTRICT #112 GO SERIES A 5.70 02/01/17 762,473
500,000 CHASKA MN INDEPENDENT SCHOOL
DISTRICT #112 GO STATE CREDIT
ENHANCEMENT PROGRAM SERIES B
CROSSOVER REFUNDING 6.00 02/01/13 526,570
500,000 COHASSET MN POWER REVENUE
MINNESOTA POWER & LIGHT
COMPANY PROJECT SERIES B ABN
AMRO BANK N.V. LOC 4.60 06/01/13 500,000
600,000 COTTAGE GROVE MN ENVIRONMENTAL
CONTROL REVENUE MINNESOTA
MINING & MANUFACTURING LOC 4.86 08/01/12 600,000
1,000,000 CUYUNA RANGE HOSPITAL DISTRICT
MN HEALTH FACILITIES GROSS
REVENUE SERIES A 6.00 06/01/19 844,700
1,395,000 DAKOTA COUNTY MN HOUSING &
REDEVELOPMENT AUTHORITY MFHR
GNMA COLLATERALIZED CREDIT
SUPPORT 7.38 12/01/29 1,482,062
250,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HFFA REVENUE BSM
PROPERTIES INCORPORATED
PROJECT SERIES A 5.63 12/01/18 201,775
975,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HEALTH CARE REVENUE
BSM PROPERTIES INCORPORATED
PROJECT SERIES A 5.88 12/01/28 782,564
500,000 DULUTH MN ECONOMIC DEVELOPMENT
AUTHORITY HOSPITAL FACILITIES
REVENUE ST. LUKE'S HOSPITAL OF
DULUTH SERIES B CONNIE LEE
INSURED 6.40 05/01/18 515,395
250,000 DULUTH MN GROSS REVENUE SPIRIT
MOUNTAIN RECREATION AREA
SERIES 1992 6.40 02/01/03 251,725
500,000 GLENCOE MN HEALTH CARE REVENUE 6.40 12/01/15 455,070
690,000 GLENCOE MN HOSPITAL REVENUE 6.63 04/01/11 683,907
100,000 HASTINGS MN HFFA REVENUE
REGINA MEDICAL CENTER ACA
INSURED 5.25 09/15/18 88,119
1,000,000 HIBBING MN HFFA REVENUE DULUTH
CLINIC LIMITED FSA INSURED
PREREFUNDED 11/1/13@100 5.50 11/01/16 1,016,960
500,000 LINO LAKES MN ECONOMIC
DEVELOPMENT AUTHORITY LEASING
REVENUE SERIES A 5.35 02/01/19 446,570
800,000 MANKATO MN HOSPITAL FACILITIES
REVENUE FIRST
MORTGAGE-IMMANUEL ST. JOSEPH'S
PROJECT SERIES A PREREFUNDED
8/1/02 @ 102 6.30 08/01/22 840,128
1,210,000 MAPLE GROVE MN HOUSING &
REDEVELOPMENT AUTHORITY
MUNICIPAL FACILITY LEASE
REVENUE AMBAC INSURED 5.55 02/01/17 1,208,633
500,000 MINNEAPOLIS & ST. PAUL MN
HOUSING & REDEVELOPMENT
AUTHORITY HEALTH CARE SYSTEM
GROUP HEALTH PLAN INCORPORATED
PROJECT 6.75 12/01/13 494,585
2,400,000 MINNEAPOLIS & ST. PAUL MN
METROPOLITAN AIRPORTS
COMMUNITY AIRPORT REVENUE
SERIES A AMBAC INSURED 5.00 01/01/22 2,163,048
500,000 MINNEAPOLIS MN WALKER
METHODIST SENIOR SERVICES
REVENUE SERIES A 6.00 11/15/28 412,830
1,000,000 MINNEAPOLIS MN GO SPORTS ARENA
PROJECT 5.13 10/01/20 931,580
500,000 MINNEAPOLIS MN HFFA REVENUE
EBENEZER SOCIETY PROJECT
SERIES A 7.20 07/01/23 483,145
750,000 MINNEAPOLIS MN WALKER
METHODIST SERVICES REVENUE
SERIES A 5.88 11/15/18 636,698
1,000,000 MINNEAPOLIS MN SPECIAL SCHOOL
DISTRICT COP SERIES A MBIA
INSURED 5.38 02/01/17 981,130
</TABLE>
41
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA MUNICIPAL BONDS (continued)
$2,500,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT BOARD
HEALTH CARE REVENUE FAIRVIEW
HOSPITAL SERIES A MBIA INSURED 5.50% 11/15/17 $ 2,447,825
500,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT BOARD
HEALTH CARE REVENUE FAIRVIEW
HOSPITAL SERIES A MBIA INSURED 5.75 11/15/26 489,340
150,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT REVENUE
BENEDICITNE HEALTH SERIES A
MBIA INSURED 5.00 02/15/19 135,012
2,000,000 MINNESOTA AGRICULTURE &
ECONOMIC DEVELOPMENT BOARD
REVENUE HEALTH CARE SYSTEM
SERIES A 6.38 11/15/22 1,984,520
365,000 MINNESOTA HEFA REVENUE COLLEGE
OF ST. BENEDICT SERIES 3-W
PREREFUNDED 3/1/04 @ 100 6.00 03/01/07 378,428
135,000 MINNESOTA HEFA REVENUE COLLEGE
OF ST. BENEDICT SERIES 3-W 6.00 03/01/07 138,147
1,500,000 MINNESOTA HFA SFMR 5.85 07/01/20 1,478,790
1,135,000 MINNESOTA IRON RANGE
RESOURCES & REHABILITATION
GROSS REVENUE GIANTS RIDGE
RECREATIONAL AREA 7.25 10/01/11 1,174,952
1,000,000 MINNESOTA STATE HEFA REVENUE
COLLEGE OF ST. BENEDICT
SERIES 4T 5.35 03/01/20 901,540
600,000 MINNESOTA STATE HEFA REVENUE
NORTHWEST COLLEGE SERIES 4Z 5.20 10/01/13 555,762
1,000,000 MINNESOTA STATE HOUSING
FINANCE AGENCY SFMR SERIES B
GO LOC 5.25 01/01/20 912,320
550,000 MINNESOTA STATE HOUSING
FINANCE AGENCY HOUSING
DEVELOPMENT REVENUE SERIES A 6.85 02/01/07 565,972
320,000 MINNESOTA STATE HOUSING
FINANCE AGENCY HOUSING
DEVELOPMENT REVENUE 6.25 02/01/20 322,432
470,000 MINNESOTA STATE HOUSING
FINANCE AGENCY RENTAL HOUSING
REVENUE SERIES B 6.25 08/01/22 470,639
965,000 MINNESOTA STATE HOUSING
FINANCE AGENCY RENTAL HOUSING
REVENUE SERIES D MBIA INSURED 5.80 08/01/11 975,982
400,000 MINNESOTA STATE HOUSING
FINANCE AGENCY RENTAL HOUSING
REVENUE SERIES D MBIA INSURED 5.90 08/01/15 402,356
250,000 MINNESOTA STATE HOUSING
FINANCE AGENCY SFMR SERIES A 5.75 07/01/18 245,875
910,000 MINNESOTA STATE HOUSING
FINANCE AGENCY SFMR REMARKETED
8/12/92 6.25 01/01/15 926,744
1,000,000 MINNESOTA STATE HOUSING
FINANCE AGENCY SFMR SERIES D
AMBAC GO LOC 5.80 07/01/21 957,220
895,000 MINNESOTA STATE HIGHER
EDUCATION FACILITIES AUTHORITY
REVENUE ST. MARY'S UNIVERSITY
SERIES 5E 6.75 03/01/19 915,925
1,650,000 MINNETONKA MN INDEPENDENT
SCHOOL DISTRICT #276 GO STATE
CREDIT ENHANCEMENT PROGRAM
SERIES B 5.75 02/01/22 1,653,927
825,000 MONTICELLO-BIG LAKE MN
COMMUNITY HOSPITAL DISTRICT
GROSS REVENUE HEALTH CARE
REVENUE SERIES A 5.45 12/01/12 732,864
750,000 MOORHEAD MN ECONOMIC
DEVELOPMENT AGENCY MFHR
EVENTIDE LUTHERAN HOME PROJECT
SERIES A PREREFUNDED 9/1/00 @
102 8.00 09/01/11 769,245
560,000 MOUNTAIN IRON MN HOUSING &
REDEVELOPMENT AUTHORITY LEASE
REVENUE NORTHEAST SERVICE
COOPERATIVE PROJECT SERIES A 6.25 10/01/19 518,100
1,000,000 NEW HOPE MN HOUSING & HEALTH
CARE FACILITIES REVENUE
MINNESOTA MASONIC HOME NORTH
RIDGE 5.90 03/01/19 838,310
1,200,000 NORTH ST. PAUL MAPLEWOOD MN
INDEPENDENT SCHOOL DISTRICT
#622 GO 5.13 02/01/25 1,097,748
1,000,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE 5.40 01/01/15 996,020
1,020,000 NORTHERN MINNESOTA MUNICIPAL
POWER AGENCY ELECTRIC SYSTEM
REVENUE SERIES B AMBAC INSURED 4.75 01/01/20 888,359
500,000 PARK RAPIDS MN INDEPENDENT
SCHOOL DISTRICT #309 GO 4.75 02/01/17 445,995
115,000 RED WING MN HFFA REVENUE RIVER
REGION OBLIGATED GROUP
SERIES 1993 B 6.35 09/01/07 122,093
300,000 ROBBINSDALE MN ECONOMIC
DEVELOPMENT AUTHORITY HOUSING
DEVELOPMENT GROSS REVENUE
SENIOR HOUSING PROJECT
SERIES A 6.63 01/01/19 291,147
1,100,000 ROBBINSDALE MN INDEPENDENT
SCHOOL DISTRICT #281 GO BONDS 5.60 02/01/18 1,101,419
1,000,000 ROCHESTER MN HFFA REVENUE MAYO
MEDICAL CENTER SERIES F 6.25 11/15/21 1,015,930
2,000,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE MBIA INSURED 6.67[::] 01/01/21 597,540
</TABLE>
42
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
MINNESOTA TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MINNESOTA MUNICIPAL BONDS (continued)
$6,690,000 SOUTHERN MINNESOTA MUNICIPAL
POWER AGENCY POWER SUPPLY
SYSTEM REVENUE SERIES A MBIA
INSURED 6.70%[::] 01/01/24 $ 1,663,469
2,500,000 ST. CLOUD MN HFFA REVENUE ST.
CLOUD HOSPITAL OBLIGATION
GROUP A 5.75 05/01/26 2,456,875
400,000 ST. CLOUD MN COP 5.90 12/01/17 392,812
2,500,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY
COMMERCIAL DEVELOPMENT REVENUE
ST. PAUL ACADEMY & SUMMIT
SCHOOL PROJECT 5.50 10/01/24 2,332,025
440,000 ST. PAUL MN HOUSING &
REDEVELOPMENT AUTHORITY SFMR
FNMA MORTGAGE BACKED MANDATORY
REDEMPTION 3/1/07 @ 100
SECURITIES PROGRAM 6.25 09/01/14 452,003
1,000,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.75 07/01/17 1,034,100
5,500,000 UNIVERSITY OF MINNESOTA
EDUCATIONAL FACILITIES REVENUE
SERIES A 5.50 07/01/21 5,425,860
225,000 VADNAIS HEIGHTS MN SFMR 6.00 11/01/09 226,834
245,000 WACONIA MN GO BONDS 6.00 06/01/07 250,101
500,000 WACONIA MN HOUSING &
REDEVELOPMENT AUTHORITY
REVENUE THE EVANGELICAL
LUTHERAN PROJECT SERIES A 5.85 06/01/06 498,735
66,299,990
TOTAL MINNESOTA MUNICIPAL BONDS (COST
$67,320,428)
-----------
<CAPTION>
SHARES
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 1.63%
1,124,396 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET FUND+X+ (COST
$1,124,396) 4.15 1,124,396
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $68,444,824)* 97.75% $67,424,386
OTHER ASSETS AND LIABILITIES, NET 2.25 1,551,936
------- -----------
TOTAL NET ASSETS 100.00% $68,976,322
------- -----------
</TABLE>
[::] ZERO COUPON BOND. THE RATE DISCLOSED REPRESENTS YIELD TO MATURITY AS
DETERMINED AT DATE OF PURCHASE.
+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 $68,711,163 AND NET UNREALIZED
DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 747,803
GROSS UNREALIZED DEPRECIATION (2,034,580)
-----------
NET UNREALIZED DEPRECIATION $(1,286,777)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Environment 1%
Airport 3%
Housing 4%
Higher Education 12%
Multifamily Housing 5%
Facilities 2%
TF MM 2%
Pollution 1%
Medical 28%
General Obligation 8%
Power 6%
Single Family Housing 8%
Education 6%
Development 3%
Nursing Homes 2%
General 2%
School District 7%
</TABLE>
INVESTMENT CATEGORIES REFLECT PERCENTAGES OF INVESTMENTS IN SECURITIES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
43
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 97.59%
ALABAMA - 1.60%
$1,000,000 BIRMINGHAM JEFFERSON AL CIVIC
CENTER AUTHORITY SPECIAL TAX
SERIES B 7.10% 01/01/01 $ 1,001,410
-----------
ALASKA - 4.49%
2,000,000 NORTH SLOPE BORO AK GO CAPITAL
APPRECIATION SERIES A MBIA
INSURED 4.50[::] 06/30/07 1,383,940
1,750,000 NORTH SLOPE BORO AK GO CAPITAL
APPRECIATION SERIES B MBIA
INSURED 4.80[::] 06/30/04 1,427,370
2,811,310
-----------
ARIZONA - 2.65%
980,000 MARICOPA COUNTY AZ IDA HFFA
REVENUE SAMARITAN HEALTH
SERVICES SERIES B MBIA INSURED 7.15 12/01/05 1,049,511
610,000 MARICOPA COUNTY AZ IDA MFHR
ADVANTAGE POINT PROJECTS
SERIES A 5.75 07/01/01 613,806
1,663,317
-----------
COLORADO - 10.16%
200,000 ARAPAHOE COUNTY CO CAPITAL
IMPROVEMENT TRUST FUND LAW
ENFORCEMENT REVENUE 4.13 12/01/05 189,680
400,000 AURORA CENTRETECH METROPOLITAN
DISTRICT CO GO SERIES C BANQUE
NATIONALE DE PARIS LOC 4.88 12/01/28 386,448
200,000 BOULDER COUNTY CO HOSPITAL
REVENUE LONGMONT UNITED
HOSPITAL PROJECT 4.80 12/01/03 191,120
385,000 BOULDER COUNTY CO HOSPITAL
REVENUE LONGMONT UNITED
HOSPITAL PROJECT 5.00 12/01/05 359,386
740,000 BOWLES METROPOLITAN DISTRICT
COLORADO GO 7.75 12/01/15 828,430
500,000 CENTRAL PLATTE VALLEY CO
METROPOLITAN DISTRICT GO ACA
INSURED 4.45 12/01/06 469,995
250,000 CENTRAL PLATTE VALLEY CO
METROPOLITAN DISTRICT GO ACA
INSURED 4.55 12/01/07 233,970
500,000 COLORADO HEALTH FACILITIES
AUTHORITY REVENUE
HOSPITAL-STEAMBOAT SPRINGS
HEALTH PROJECT 5.30 09/15/09 468,070
585,000 COLORADO HEALTH FACILITIES
AUTHORITY REVENUE NATIONAL
JEWISH MEDICAL & RESEARCH
CENTER 4.80 01/01/05 559,120
205,000 COLORADO HFA SFMR SERIES C 5.00 05/01/05 201,279
10,000 COLORADO HFA SFMR SERIES DI
REMARKETED 7/15/94 6.25 12/01/01 10,059
10,000 COLORADO HFA SFMR SERIES DII
REMARKETED 11/15/97 6.38 12/01/01 10,045
300,000 COLORADO SPRINGS CO IDR DAYTON
HUDSON CORPORATION PROJECT 6.88 04/01/01 304,584
220,000 DENVER WEST METROPOLITAN
DISTRICT CO GO SERIES B 4.90 12/01/03 216,047
205,000 DENVER WEST METROPOLITAN
DISTRICT CO GO SERIES B 5.00 12/01/04 200,861
290,000 DENVER WEST METROPOLITAN
DISTRICT CO GO SERIES B 5.20 12/01/06 283,040
355,000 DENVER CO CITY & COUNTY
REVENUE HELEN G. BONFILS
FOUNDATION PROJECT SERIES B 9.50 12/01/01 378,806
1,070,000 TELLER COUNTY CO COP 5.50 12/01/09 1,075,767
6,366,707
-----------
FLORIDA - 1.34%
220,000 BRADFORD COUNTY FL HEALTH
FACILITIES AUTHORITY HFFA
REVENUE SANTA FE HEALTHCARE
FACILITES PROJECT 6.00 11/15/09 228,644
710,000 PLANTATION FL WATER & SEWER
REVENUE CAPITAL APPRECIATION
MBIA INSURED 5.68[::] 03/01/03 608,030
836,674
-----------
IDAHO - 0.75%
465,000 POCATELLO ID IDA REVENUE
ALLOCATION TAX INCREMENT 7.25 12/01/08 469,794
-----------
ILLINOIS - 9.30%
1,000,000 ADAMS COUNTY IL SCHOOL
DISTRICT #172 GO MBIA INSURED 5.70 02/01/09 1,038,140
1,050,000 GRUNDY COUNTY IL INDEPENDENT
SCHOOL DISTRICT #5 GO AMBAC
INSURED 7.13 12/01/05 1,161,489
1,130,000 GRUNDY COUNTY IL INDEPENDENT
SCHOOL DISTRICT #5 GO AMBAC
INSURED 7.13 12/01/06 1,265,611
275,000 ILLINOIS HEALTH FACILITIES
AUTHORITY REVENUE ALEXIAN
BROTHERS MEDICAL CENTER
PROJECT 7.00 01/01/03 281,311
740,000 ILLINOIS HEALTH FACILITIES
AUTHORITY REVENUE MERCY
HOSPITAL PROJECT 7.10 06/01/09 800,791
</TABLE>
44
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
ILLINOIS (continued)
$1,000,000 KANE COOK & DU PAGE COUNTIES
IL GO SCHOOL DISTRICT #46 FSA
INSURED 7.90% 01/01/04 $ 1,097,210
85,000 WAUKEGAN IL BOARD LIBRARY
TRUSTEES ECONOMIC DEVELOPMENT
REVENUE LIBRARY BUILDING NOTES 8.00 01/01/01 86,204
95,000 WAUKEGAN IL BOARD LIBRARY
TRUSTEES ECONOMIC DEVELOPMENT
REVENUE LIBRARY BUILDING NOTES 7.50 01/01/02 97,939
5,828,695
-----------
KANSAS - 0.29%
185,000 LAWRENCE KS HOSPITAL REVENUE
LAWRENCE MEMORIAL HOSPITAL 5.00 07/01/04 180,166
-----------
KENTUCKY - 0.98%
610,000 JEFFERSON COUNTY KY GO
SERIES C 5.38 05/15/01 614,368
-----------
LOUISIANA - 0.45%
280,000 LOUISIANA PUBLIC FACILITIES
AUTHORITY MFHR EDGEWOOD
APARTMENTS FNMA INSURED 5.70 06/01/05 282,820
MAINE - 0.39%
240,000 STATE STREET HOUSING
PRESERVATION CORPORATION ME
MFHR PROJECT ACQUISITION 100
STATE STREET SERIES A HUD
SECTION 8 LOC 7.20 01/01/02 245,981
MICHIGAN - 10.22%
500,000 BATTLE CREEK MI ECONOMIC
DEVELOPMENT REVENUE KELLOGG
COMPANY PROJECT REMARKETED
8/1/97 5.13 02/01/09 502,180
1,190,000 DETROIT MI SEWER DISPOSAL
REVENUE ESCROWED TO MATURITY 7.10 12/15/09 1,293,066
300,000 LAKEVIEW MI COMMUNITY SCHOOLS
GO FGIC INSURED 6.50 05/01/05 321,219
305,000 LAKEVIEW MI COMMUNITY SCHOOLS
GO FGIC INSURED 6.50 05/01/06 329,647
395,000 MERRILL MI COMMUNITY SCHOOL
DISTRICT GO FGIC INSURED 6.50 05/01/05 422,938
415,000 MICHIGAN STATE HOSPITAL
FINANCE AUTHORITY REVENUE OSF
HEALTHCARE SYSTEM 5.25 11/15/06 403,164
435,000 MICHIGAN STATE HOSPITAL
FINANCE AUTHORITY REVENUE OSF
HEALTHCARE SYSTEM 5.38 11/15/07 423,116
935,000 MICHIGAN STATE HOSPITAL
FINANCE AUTHORITY REVENUE
CHARITY OBLIGATIONS SERIES D 4.80 11/01/17 933,205
650,000 MICHIGAN STATE HOSPITAL
FINANCE AUTHORITY REVENUE
HENRY FORD HOSPITAL 9.00 05/01/04 707,636
2,305,000 ROMULUS MI GO COMMUNITY
SCHOOLS CAPITAL APPRECIATION
SERIES II FGIC INSURED 4.95[::] 05/01/22 595,105
450,000 SCHOOLCRAFT MI COMMUNITY
SCHOOL DISTRICT GO FGIC
INSURED 6.50 05/01/04 476,478
6,407,754
-----------
MISSOURI - 0.37%
230,000 ST. LOUIS MO REGIONAL
CONVENTION & SPORTS COMPLEX
AUTHORITY REVENUE SERIES C 7.75 08/15/01 234,066
-----------
NEBRASKA - 0.66%
415,000 NEBRASKA INVESTMENT FINANCE
AUTHORITY HOSPITAL REVENUE
GREAT PLAINS REGIONAL MEDICAL
CENTER PROJECT 4.80 11/15/04 410,630
-----------
NEW YORK - 3.77%
490,000 COUNTY OF WESTCHESTER NY IDR
REVENUE AGR REALTY COMPANY
PROJECT 5.75 01/01/02 493,357
1,500,000 NEW YORK NY GO SERIES F 5.00 08/01/06 1,503,840
485,000 NEW YORK STATE DORM AUTHORITY
REVENUE CAPITAL APPRECIATION
SERIES A FSA INSURED 5.29[::] 07/01/05 363,555
2,360,752
-----------
NORTH CAROLINA - 1.61%
1,000,000 NORTH CAROLINA MUNICIPAL POWER
AGENCY #1 CATAWBA ELECTRIC
REVENUE 5.75 01/01/02 1,006,270
-----------
OHIO - 6.33%
1,285,000 AKRON OH COP SPORTS FACILITIES
REVENUE MUNICIPAL BASEBALL
STADIUM PROJECT 5.32[::] 12/01/01 1,193,225
230,000 AKRON OH COP SPORTS FACILITIES
REVENUE MUNICIPAL BASEBALL
STADIUM PROJECT 6.50[::] 12/01/07 218,535
415,000 OHIO STATE BUILDING AUTHORITY
REVENUE TOLEDO GOVERNMENT
OFFICE BUILDING 10.13 10/01/06 460,845
</TABLE>
45
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
OHIO (continued)
$2,000,000 OHIO STATE TURNPIKE COMMISSION
TURNPIKE REVENUE SERIES A 5.50% 02/15/26 $ 2,093,760
3,966,365
-----------
OREGON - 1.63%
1,000,000 MULTNOMAH COUNTY OR SERIES A 5.25 04/01/06 1,024,330
-----------
PENNSYLVANIA - 6.58%
295,000 DELAWARE COUNTY PA UNIVERSITY
REVENUE VILLANOVA UNIVERSITY 9.63 08/01/02 310,853
1,000,000 MONTGOMERY COUNTY PA IDA PCR
PECO ENERGY COMPANY SERIES B 5.30 10/01/34 987,210
1,250,000 PENNSYLVANIA PA EDA REVENUE
NORTHWESTERN HUMAN SERVICES
SERIES A ACA INSURED 4.88 06/01/08 1,177,925
265,000 PHILADELPHIA PA GAS WORKS
REVENUE THIRTEENTH SERIES 7.50 06/15/01 271,591
300,000 PHILADELPHIA PA IDR GALLERY II
GARAGE PROJECT 6.13 02/15/03 298,116
1,000,000 WINDBER PA AREA AUTHORITY
HOSPITAL REVENUE WINDBER
HOSPITAL PROJECT FHA INSURED
PREREFUNDED 8/1/05 @ 102 6.50 02/01/30 1,077,250
4,122,945
-----------
RHODE ISLAND - 0.52%
320,000 RHODE ISLAND STATE STUDENT
LOAN AUTHORITY STUDENT LOAN
REVENUE RI SERIES B
GUARANTEED STUDENT LOANS
CREDIT SUPPORT 6.75 12/01/01 327,226
-----------
SOUTH CAROLINA - 4.21%
1,000,000 MEDICAL UNIVERSITY OF SOUTH
CAROLINA HOSPITAL FACILITIES
REVENUE COP HARBORVIEW OFFICE
TOWER PROJECT 7.38 01/01/04 1,035,700
500,000 SOUTH CAROLINA EDUCATIONAL
TELEVISION COMMUNITY COP
REVENUE ETV ENDOWMENT OF SOUTH
CAROLINA INCORPORATED FSA
INSURED 6.40 09/01/02 517,925
1,075,000 SOUTH CAROLINA HOUSING
FINANCE & DEVELOPMENT
AUTHORITY MORTGAGE REVENUE
SERIES A-2 FSA INSURED 5.50 07/01/04 1,084,202
2,637,827
-----------
TEXAS - 14.90%
1,485,000 AUSTIN TX INDEPENDENT SCHOOL
DISTRICT PREREFUNDED 8/1/06 @
100 5.60 08/01/09 1,542,232
305,000 DE SOTO TX HOUSING FINANCE
CORPORATION MFHR WINDSOR
FOUNDATION PROJECT SERIES A 6.13 02/01/05 318,893
1,580,000 FORT BEND TX LEVEE IMPROVEMENT
DISTRICT #2 GO MBIA INSURED 4.50[::] 02/15/03 1,386,118
370,000 GRAPE CREEK-PULLIAM TX
INDEPENDENT SCHOOL DISTRICT
EDUCATIONAL FACILITIES REVENUE
PUBLIC FACILITIES CORPORATION 6.20 05/15/02 372,860
250,000 HARLANDALE TX INDEPENDENT
SCHOOL DISTRICT PUBLIC
FACILITIES CORPORATION LEASE
REVENUE EDUCATIONAL FACILITIES
REVENUE 5.20 10/15/06 244,995
285,000 HOUSTON TX HOUSING FINANCE
CORPORATION SFMR SERIES A-1 8.00 06/01/14 303,323
95,000 HOUSTON TX HOUSING FINANCE
CORPORATION SFMR SERIES B-1 8.00 06/01/14 102,095
730,000 LUFKIN TX HEALTH FACILITIES
DEVELOPMENT CORPORATION HEALTH
SYSTEM REVENUE MEMORIAL HEALTH
SYSTEM OF EAST TEXAS 6.50 02/15/06 717,999
1,160,000 LYFORD TX CONSOLIDATED
INDEPENDENT SCHOOL DISTRICT
EDUCATIONAL FACILITIES REVENUE 5.00 08/15/07 1,120,815
3,100,000 MIDLAND COUNTY TX HOSPITAL
DISTRICT REVENUE CAPITAL
APPRECIATION AMBAC INSURED 5.73[::] 06/01/07 2,073,404
350,000 SAN ANTONIO TX CERTIFICATE OF
OBLIGATION SERIES 2000 4.50 02/01/07 337,984
370,000 SAN ANTONIO TX CERTIFICATE OF
OBLIGATION SERIES 2000 4.50 02/01/08 353,472
455,000 SAN ANTONIO TX HIGHER
EDUCATION FACILITIES AUTHORITY
REVENUE UNIVERSITY OF TEXAS AT
SAN ANTONIO PHASE I 6.50 11/01/01 462,967
9,337,157
-----------
WASHINGTON - 7.48%
125,000 LONGVIEW WA HOUSING AUTHORITY
REVENUE MFHR POOLED PROJECT
FINANCING 4.60 10/01/03 121,356
125,000 LONGVIEW WA HOUSING AUTHORITY
REVENUE MFHR POOLED PROJECT
FINANCING 4.70 10/01/04 120,373
125,000 LONGVIEW WA HOUSING AUTHORITY
REVENUE MFHR POOLED PROJECT
FINANCING 4.75 10/01/05 119,555
</TABLE>
46
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
WASHINGTON (continued)
$ 125,000 LONGVIEW WA HOUSING AUTHORITY
REVENUE MFHR POOLED PROJECT
FINANCING 4.75% 10/01/06 $ 118,376
700,000 SEATTLE WA MFHR MARKET HOUSE
ELDERLY HOUSING SERIES A 6.20 02/01/04 703,493
2,000,000 WASHINGTON STATE HOUSING
FINANCE COMMISSION NONPROFIT
HOUSING REVENUE OCEAN RIDGE
APARTMENTS PROJECT SERIES A 5.25 07/01/02 1,995,120
1,500,000 WASHINGTON STATE PUBLIC POWER
SUPPLY SYSTEM NUCLEAR PROJECT
#2 REVENUE SERIES A FSA
INSURED PREREFUNDED 6/1/04 @
102 5.25 07/01/08 1,511,505
4,689,778
-----------
WASHINGTON D.C. - 6.91%
4,080,000 DISTRICT OF COLUMBIA GO
SERIES B MBIA INSURED 6.10 06/01/11 4,330,512
-----------
61,156,854
TOTAL MUNICIPAL BONDS (COST $61,740,562)
-----------
MUNICIPAL DEMAND NOTES - 0.50%
MISSOURI - 0.02%
15,000 MISSOURI STATE HEFA REVENUE
ST. FRANCIS MEDICAL CENTER
SERIES A DEXIA CREDIT LOCAL
LOC+ 4.60 06/01/26 15,000
-----------
PENNSYLVANIA - 0.48%
300,000 ALLEGHENY COUNTY PA IDA
REVENUE LONGWOOD AT OAKMONT
INCORPORATED PROJECT SERIES A
DRESDNER BANK AG LOC+ 4.60 07/01/27 300,000
-----------
315,000
TOTAL MUNICIPAL DEMAND NOTES (COST
$315,000)
-----------
<CAPTION>
SHARES
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 0.90%
564,501 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET FUND+X+ (COST
$564,501) 564,501
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $62,620,063)* 98.99% $62,036,355
OTHER ASSETS AND LIABILITIES, NET 1.01 633,065
------- -----------
TOTAL NET ASSETS 100.00% $62,669,420
------- -----------
</TABLE>
[::] ZERO COUPON BOND. THE RATE DISCLOSED REPRESENTS YIELD TO MATURITY AS
DETERMINED AT DATE OF PURCHASE.
+ VARIABLE RATE SECURITY.
+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 $62,711,596 AND NET UNREALIZED
DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 147,651
GROSS UNREALIZED DEPRECIATION (822,892)
-----------
NET UNREALIZED DEPRECIATION $ (675,241)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
General Obligation 22%
Other 1%
Power 2%
Multifamily Housing 4%
Education 3%
General 2%
Student Loan 1%
Utilities 6%
Medical 18%
Higher Education 4%
Tax-Free Money Market Fund 1%
Municipal Utility District 2%
Housing 3%
Development 7%
School District 11%
Facilities 7%
Transportation 3%
Single Family Housing 3%
</TABLE>
INVESTMENT CATEGORIES REFLECT PERCENTAGES OF INVESTMENTS IN SECURITIES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
47
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 92.85%
ALABAMA - 0.90%
$ 3,680,000 ALABAMA STATE PUBLIC SCHOOL &
COLLEGE AUTHORITY CAPITAL
IMPROVEMENT REVENUE 4.25% 11/01/18 $ 3,001,371
------------
ARIZONA - 1.43%
1,250,000 MARICOPA COUNTY AZ IDA
EDUCATIONAL REVENUE ARIZONA
CHARTER SCHOOLS PROJECT
SERIES A 6.75 07/01/29 1,216,713
3,000,000 MARICOPA COUNTY AZ UNION
SCHOOL DISTRICT #48 GO SCHOOL
IMPROVEMENTS 9.00 07/01/05 3,557,430
4,774,143
------------
ARKANSAS - 0.40%
1,545,000 MATANUSKA-SUSITNA BORO AK 4.50 03/01/17 1,314,424
------------
CALIFORNIA - 2.92%
1,525,000 LOS ANGELES CA COMMUNITY
REDEVELOPMENT AGENCY HOUSING
REVENUE MONTEREY HILLS
REDEVELOPMENT PROJECT
SERIES A 8.20 12/01/13 1,632,650
6,900,000 METROPOLITAN WATER DISTRICT
SOUTHERN CALIFORNIA WATERWORKS
REVENUE SERIES PROJECT+ 6.54 08/10/18 7,210,500
1,000,000 STUDENT EDUCATION LOAN
MARKETING CORPORATION CA
STUDENT LOAN REVENUE JUNIOR
SUBORDINATES SERIES IV-D1
GUARANTEED BY STUDENT LOANS 5.88 01/01/18 891,180
9,734,330
------------
COLORADO - 7.74%
1,420,000 ADAMS COUNTY CO SFMR
SERIES A2 8.70 06/01/12 1,459,803
1,750,000 ARAPAHOE COUNTY CO UTILITIES
REVENUE WATER & WASTEWATER
AUTHORITY REVENUE 6.25 12/01/20 1,714,353
1,950,000 BLACK HAWK CO BUSINESS
IMPROVEMENTS DISTRICT SPECIAL
ASSESSMENT SERIES H981 7.00 12/01/11 2,007,252
1,000,000 COLORADO HFA GO SERIES A 7.40 05/01/11 1,043,390
1,120,000 COLORADO HFA SFMR SERIES A2 7.15 11/01/14 1,196,082
1,330,000 COLORADO HFA SFMR SERIES B2 7.50 12/01/16 1,398,296
1,470,000 COLORADO HFA SFMR SERIES C 7.90 12/01/24 1,560,743
1,210,000 COLORADO HFA SFMR SERIES D1
REMARKETED 7/15/94 8.00 12/01/24 1,287,779
805,000 COLORADO HFA SFMR SERIES D2
REMARKETED 11/15/94 8.13 06/01/25 859,362
1,000,000 COLORADO HFFA REVENUE HOSPITAL
STEAMBOAT SPRINGS HEALTH 5.75 09/15/22 818,500
1,000,000 COLORADO HFFA REVENUE
STEAMBOAT SPRINGS HEALTH
PROJECT 5.70 09/15/23 809,860
5,200,000 DENVER CO URBAN RENEWAL
AUTHORITY TAX INCREMENT
REVENUE REMARKETED 6/15/94 9.13 09/01/17 5,932,573
3,500,000 EL PASO COUNTY CO GO SCHOOL
DISTRICT #11 COLORADO SPRINGS 7.10 12/01/17 4,130,105
195,000 LOGAN COUNTY CO SFMR SERIES A 8.50 11/01/11 203,169
960,000 NORTHERN METROPOLITAN DISTRICT
CO ADAMS COUNTY 6.50 12/01/16 941,453
410,000 VAIL CO SFMR SERIES 1992 A 8.13 06/01/10 437,675
25,800,395
------------
CONNECTICUT - 0.01%
40,000 CONNECTICUT STATE HFA HOUSING
MORTGAGE FINANCE PROGRAM
SERIES B4 7.30 11/15/03 40,262
------------
FLORIDA - 0.03%
85,000 BREVARD COUNTY FL HFA SFMR
SERIES B 7.00 03/01/13 87,465
------------
GEORGIA - 1.43%
3,500,000 ATLANTA GA WATER & WASTEWATER
REVENUE SERIES A FGIC INSURED 5.50 11/01/22 3,442,285
1,500,000 HOUSTON COUNTY GA DEVELOPMENT
AUTHORITY MFHR EMERALD COAST
HOUSING SERIES A 7.00 08/01/28 1,306,230
4,748,515
------------
</TABLE>
48
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
HAWAII - 1.91%
$ 6,950,000 HAWAII STATE DEPARTMENT OF
BUDGET & FINANCE SPECIAL
PURPOSE REVENUE THE QUEENS
HEALTH SYSTEMS SERIES A 5.75% 07/01/26 $ 6,348,617
------------
IDAHO - 0.67%
900,000 IDAHO HOUSING AGENCY SFMR
SERIES C2 PREREFUNDED 1/1/05
@102 6.35 07/01/15 918,549
1,000,000 IDAHO STATE BUILDING AUTHORITY
BUILDING REVENUE SERIESA MBIA
INSURED 4.75 09/01/25 854,770
470,000 POCATELLO ID IDA REVENUE
ALLOCATION TAX INCREMENT
SERIES B 7.25 12/01/08 474,846
2,248,165
------------
ILLINOIS - 9.06%
35,000,000 ILLINOIS DEVELOPMENT FINANCE
AUTHORITY RETIREMENT HOUSING
REVENUE REGENCY PARK SERIES A 5.92[::] 07/15/23 7,615,300
1,000,000 ILLINOIS DEVELOPMENT FINANCE
AUTHORITY REVENUE COMMUNITY
REHABILITATION PROVIDERS
SERIES A 5.70 07/01/19 838,730
950,000 ILLINOIS DEVELOPMENT FINANCIAL
AUTHORITY REVENUE COMMUNITY
REHABILITATION PROVIDERS
SERIES A 7.88 07/01/20 849,975
1,735,000 ILLINOIS DEVELOPMENT FINANCIAL
AUTHORITY REVENUE COMMUNITY
REHABILITATION PROVIDERS
SERIES A 7.88 07/01/20 1,975,107
1,120,000 ILLINOIS DEVELOPMENT FINANCE
AUTHORITY REVENUE COMMUNITY
REHABILITATION PROVIDERS
SERIES C 5.65 07/01/19 933,666
4,940,000 ILLINOIS EDUCATIONAL
FACILITIES AUTHORITY REVENUE
CAPITAL APPRECIATION REFUNDED 5.99[::] 07/01/14 2,066,303
1,120,000 ILLINOIS HFFA REVENUE
EDGEWATER MEDICAL CENTER
SERIES A 9.25 07/01/24 1,293,611
4,500,000 ILLINOIS HFFA REVENUE
HEALTHCARE SYSTEM 6.25 11/15/29 4,240,935
1,025,000 LAKE COUNTY IL COMMUNITY UNIT
SCHOOL DISTRICT #116
EDUCATIONAL FACILITIES REVENUE
RUND LAKE 7.60 02/01/13 1,234,203
7,350,000 REGIONAL TRANSPORTATION
AUTHORITY IL SALES TAX REVENUE
SERIES D FGIC INSURED 7.75 06/01/19 9,144,134
30,191,964
------------
IOWA - 0.44%
1,225,000 IOWA FINANCE AUTHORITY SFMR
MORTGAGE BACKED SECURITIES
PROGRAM SERIES B 6.95 07/01/24 1,275,152
185,000 IOWA FINANCE AUTHORITY SFMR
SERIES B 7.45 07/01/23 190,979
1,466,131
------------
KANSAS - 2.32%
3,175,000 KANSAS STATE DOT HIGHWAY
REVENUE SERIES A 7.25 09/01/08 3,648,996
3,755,000 SEDGWICK & SHAWNEE COUNTIES KS
SFMR MORTGAGE BACKED
SECURITIES SERIES A2
COLLATERALIZED BY GNMA 6.70 06/01/29 4,086,191
7,735,187
------------
LOUISIANA - 1.46%
235,000 LOUISIANA PUBLIC FACILITIES
AUTHORITY REVENUE STUDENT LOAN
LA OPPORTUNITY LOANS SERIES A 6.85 01/01/09 243,965
2,000,000 LOUISIANA STADIUM & EXPOSITION
DISTRICT HOTEL OCCUPANCY
TAX & STADIUM REVENUE 4.75 07/01/21 1,716,500
5,000,000 RAPIDES PARISH LA HOUSING &
MORTGAGE FINANCE AUTHORITY
CAPITAL APPRECIATION REVENUE
SERIES C 7.45[::] 07/10/14 1,882,350
2,900,000 ST. BERNARD PARISH LA HOUSING
MORTGAGE AUTHORITY SFMR
SERIES 1992 C 7.65[::] 07/10/14 1,025,643
4,868,458
------------
</TABLE>
49
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MASSACHUSETTS - 8.23%
$ 5,325,000 MASSACHUSETTS BAY
TRANSPORTATION AUTHORITY
GENERAL TRANSPORTATION SYSTEM
REVENUE SERIES B 6.20% 03/01/16 $ 5,765,218
4,490,000 MASSACHUSETTS EDFA REVENUE
SERIES C MBIA INSURED 4.80 12/01/10 4,232,813
2,500,000 MASSACHUSETTS STATE COLLEGE
BUILDING AUTHORITY EDUCATIONAL
FACILITIES REVENUE SERIES A 7.50 05/01/14 3,005,975
2,235,000 MASSACHUSETTS STATE
DEVELOPMENT FINANCE AGENCY
RESOURCE RECOVERY REVENUE
OGDEN HAVERHILL PROJECT
SERIES B 5.30 12/01/14 1,939,086
2,500,000 MASSACHUSETTS STATE HEALTH &
EDUCATIONAL FACILITIES
AUTHORITY REVENUE CARITAS
CHRISTI OBLIGATIONS GROUP A 5.70 07/01/15 2,106,750
1,000,000 MASSACHUSETTS STATE HFA
RESIDENTIAL DEVELOPMENT FNMA
COLLATERALIZED 6.90 11/15/21 1,047,350
750,000 MASSACHUSETTS STATE HFA SFMR
SERIES 26 5.60 06/01/25 695,910
10,000,000 MASSACHUSETTS STATE TURNPIKE
AUTHORITY METROPOLITAN HIGHWAY
SYSTEM REVENUE SERIES A 4.75 01/01/34 8,266,000
380,000 NEW BEDFORD MA IDA REVENUE
AEROVOX INCORPORATED PROJECT
SERIES 1982 7.42 07/01/02 382,139
27,441,241
------------
MICHIGAN - 1.89%
2,990,000 MICHIGAN STATE HFFA REVENUE
HENRY FORD HEALTH SYSTEM
SERIES A 6.00 11/15/19 2,916,267
2,760,000 WAYLAND MI USD GO FGIC INSURED 8.00 05/01/10 3,372,775
6,289,042
------------
MINNESOTA - 0.24%
500,000 AUSTIN MN HOUSING &
REDEVELOPMENT AUTHORITY
GOVERNMENTAL HOUSING GROSS
REVENUE COURTYARD RESIDENCE
PROJECT SERIES A 7.25 01/01/32 502,720
290,000 MINNEAPOLIS ST. PAUL MN
HOUSING FINANCE BOARD SFMR
PHASE IX 7.30 08/01/31 295,884
798,604
------------
NEVADA - 0.52%
2,000,000 CLARK COUNTY NV IDR NEVADA
POWER COMPANY PROJECT
SERIES A 5.90 11/01/32 1,717,200
------------
NEW JERSEY - 0.85%
1,570,000 NEW JERSEY HEALTH CARE
FACILITIES FINANCING AUTHORITY
REVENUE ENGLEWOOD HOSPITAL &
MEDICAL CENTER 6.50 07/01/09 1,545,900
1,250,000 NEW JERSEY STATE HOUSING &
MORTGAGE FINANCE AGENCY MFHR
PRESIDENTIAL PLAZA FHA INSURED 7.00 05/01/30 1,300,588
2,846,488
------------
NEW MEXICO - 5.17%
3,040,000 BERNALILLO COUNTY NM GROSS
RECEIPTS TAX REVENUE BONDS 5.20 04/01/21 2,875,931
1,475,000 BERNALILLO COUNTY NM GROSS
RECEIPTS TAX REVENUE BONDS 5.25 04/01/27 1,389,701
3,500,000 BERNALILLO COUNTY NM GROSS
RECEIPTS TAX REVENUE BONDS
SERIES B 5.70 04/01/27 3,508,260
2,000,000 FARMINGTON NM PCR PUBLIC
SERVICE COMPANY SAN JUAN
PROJECT SERIES D 6.38 04/01/22 1,890,940
690,000 HOBBS NM SFMR 8.75 07/01/11 747,719
6,585,000 SANTA FE COUNTY NM
CORRECTIONAL SYSTEMS REVENUE
FSA INSURED 6.00 02/01/27 6,836,151
17,248,702
------------
NEW YORK - 1.55%
2,400,000 NEW YORK NY CITY TRANSITIONAL
FINANCE AUTHORITY REVENUE 4.75 05/01/23 2,053,320
1,480,000 NEW YORK NY GO SERIES B1
PREREFUNDED 8/15/04 @ 101 7.30 08/15/10 1,634,882
</TABLE>
50
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
NEW YORK (continued)
$ 1,340,000 NEW YORK NY GO SERIES B1
PREREFUNDED 8/15/04 @ 101 7.38% 08/15/13 $ 1,483,956
5,172,158
------------
NORTH CAROLINA - 1.11%
4,000,000 NORTH CAROLINA EASTERN
MUNICIPAL POWER REVENUE
SERIES B 5.70 01/01/17 3,704,920
------------
OHIO - 0.55%
2,000,000 PIKE COUNTY OH HOSPITAL
FACILITIES REVENUE PIKE HEALTH
SERVICES INCORPORATED PROJECT 7.00 07/01/22 1,835,900
------------
OKLAHOMA - 0.69%
200,000 PRYOR CREEK OK, EDA MORTGAGE
REVENUE SERIES A 7.13 07/01/21 202,178
365,000 TULSA COUNTY OK HFA MORTGAGE
REVENUE GNMA COLLATERALIZED
SERIES B 7.55 05/01/23 373,023
405,000 TULSA COUNTY OK HFA MORTGAGE
REVENUE GNMA COLLATERALIZED
SERIES C 7.10 06/01/22 414,177
1,245,000 TULSA OK IDA REVENUE
UNIVERSITY OF TULSA SERIES A
MBIA INSURED 6.00 10/01/16 1,320,858
2,310,236
------------
OREGON - 3.42%
1,500,000 KLAMATH FALLS OR ELECTRIC
REVENUE LIEN-KLAMATH COGEN
PROJECT 5.88 01/01/16 1,343,190
8,500,000 KLAMATH FALLS OR ELECTRIC
REVENUE LIEN-KLAMATH COGEN
PROJECT 6.00 01/01/25 7,474,730
1,000,000 OREGON STATE HEALTH HOUSING
EDUCATIONAL & CULTURAL
FACILITIES AUTHORITY 5.25 10/01/16 781,100
2,000,000 WASHINGTON COUNTY OR HOUSING
AUTHORITY REVENUE AFFORDABLE
HOUSING POOL SERIES A 6.13 07/01/29 1,811,380
11,410,400
------------
PENNSYLVANIA - 5.83%
2,000,000 CARBON COUNTY PA INDUSTRIAL
DEVELOPMENT AUTHORITY REVENUE
PANTHER CREEK PARTNERS PROJECT 6.70 05/01/12 2,001,540
2,250,000 CHESTER COUNTY PA HEALTH &
EDUCATION FACILITIES AUTHORITY
REVENUE JEFFERSON HEALTH
SYSTEM SERIES B 5.38 05/15/27 1,884,690
4,230,000 CUMBERLAND COUNTY PA MUNICIPAL
AUTHORITY REVENUE CARLISLE
HOSPITAL & HEALTH 6.80 11/15/23 3,853,572
1,375,000 MONTGOMERY COUNTY PA HIGHER
EDUCATION & HEALTH AUTHORITY
REVENUE MONTGOMERY HOSPITAL
MEDICAL CENTER PROJECT
SERIES B 6.60 07/01/10 1,350,883
500,000 PENNSYLVANIA STATE HIGHER
EDUCATION ASSISTANCE AGENCY
STUDENT LOAN REVENUE SERIES A
AMBAC INSURED 7.05 10/01/16 536,050
6,000,000 PENNSYLVANIA STATE HIGHER
EDUCATION ASSISTANCE AGENCY
STUDENT LOAN REVENUE SERIES A
AMBAC INSURED+ 7.60 03/01/22 6,120,000
4,500,000 PHILADELPHIA PA SCHOOL
DISTRICT GO SERIES A MBIA
INSURED 4.50 04/01/23 3,701,565
19,448,300
------------
SOUTH CAROLINA - 2.36%
8,800,000 CONNECTOR 2000 ASSOCIATION
INCORPORATED SC TOLL ROAD
REVENUE SOUTHERN CONNECTOR
PROJECT SERIES B 5.73[::] 01/01/17 2,465,672
9,100,000 CONNECTOR 2000 ASSOCIATION
INCORPORATED SC TOLL ROAD
REVENUE SOUTHERN CONNECTOR
PROJECT SERIES B 5.75[::] 01/01/18 2,348,710
9,400,000 CONNECTOR 2000 ASSOCIATION
INCORPORATED SC TOLL ROAD
REVENUE SOUTHERN CONNECTOR
PROJECT SERIES B 5.75[::] 01/01/19 2,245,472
1,000,000 LORIS SC COMMUNITY HOSPITAL
DISTRICT HOSPITAL REVENUE
SERIES B 5.63 01/01/29 804,800
7,864,654
------------
SOUTH DAKOTA - 1.06%
3,500,000 SOUTH DAKOTA STATE HEFA
REVENUE HURON REGIONAL MEDICAL
CENTER 7.30 04/01/16 3,544,625
------------
</TABLE>
51
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
TENNESSEE - 1.04%
$14,250,000 METROPOLITAN GOVERNMENTS OF
NASHVILLE & DAVIDSON COUNTY TN
HEALTH & EDUCATIONAL
FACILITIES REVENUE VOLUNTEER
HEALTH CARE 5.72%[::] 06/01/21 $ 3,468,450
------------
TEXAS - 11.04%
320,000 BAYTOWN TX HOUSING FINANCE
CORPORATION SFMR SERIES 1992 A 8.50 09/01/11 354,118
1,535,000 BEAUMONT TX HOUSING FINANCE
CORPORATION REVENUE 9.20 03/01/12 1,728,794
2,900,000 BRAZOS RIVER AUTHORITY TX
UTILITIES REVENUE HOUSTON
INDUSTRIES INCORPORATED
PROJECT SERIES A 5.13 05/01/19 2,665,390
2,000,000 COLUMBIA & BRAZORIA TX
INDEPENDENT SCHOOL DISTRICT GO
PSFG INSURED 4.75 02/01/25 1,696,520
1,145,000 CORPUS CHRISTI TX HFA HOUSING
REVENUE SERIES A MBIA INSURED 7.70 07/01/11 1,209,693
2,150,000 CYPRESS FAIRBANKS TX
INDEPENDENT SCHOOL DISTRICT
PSFG INSURED 4.75 02/15/22 1,842,937
2,395,000 DESOTO TX HOUSING FINANCE
CORPORATION MFHR WINDSOR
FOUNDATION PROJECT SERIES A 7.00 02/01/25 2,633,422
180,000 EL PASO TX HOUSING FINANCE
CORPORATION SFMR SERIES A 8.75 10/01/11 197,257
2,000,000 FORT BEND TX INDEPENDENT
SCHOOL DISTRICT PUBLIC SCHOOL
FINANCED INSURED 5.38 02/15/24 1,891,260
220,000 GALVESTON COUNTY TX PROPERTY
FINANCE AUTHORITY INCORPORATED
SFMR SERIES A 8.50 09/01/11 236,971
1,300,000 GRAPE CREEK-PULLIAM TX
INDEPENDENT SCHOOL DISTRICT
PUBLIC FACILITIES CORPORATION
GO 7.25 05/15/21 1,374,464
1,115,000 HARLANDALE TX INDEPENDENT
SCHOOL DISTRICT PUBLIC
FACILITIES CORPORATION LEASE
REVENUE EDUCATIONAL FACILITIES
REVENUE 5.50 10/15/12 1,068,772
3,690,000 HOUSTON TX HOUSING FINANCE
CORPORATION SFMR SERIES A-1 8.00 06/01/14 3,927,230
2,250,000 HOUSTON TX HOUSING FINANCE
CORPORATION SFMR SERIES B-1 8.00 06/01/14 2,418,030
1,000,000 LA PORTE TX GO INDEPENDENT
SCHOOL DISTRICT PSFG INSURED 4.25 02/15/18 819,690
1,000,000 LA PORTE TX GO INDEPENDENT
SCHOOL DISTRICT PSFG INSURED 4.25 02/15/19 810,090
3,075,000 LUFKIN TX HEALTH FACILITIES
DEVELOPMENT CORPORATION HEALTH
SYSTEM REVENUE MEMORIAL HEALTH
SYSTEM OF EAST TEXAS 6.88 02/15/26 2,842,499
1,005,000 PORT ARTHUR TX HOUSING FINANCE
CORPORATION SFMR 8.70 03/01/12 1,101,148
4,180,000 SAN ANTONIO TX HIGHER
EDUCATION AUTHORITY
INCORPORATED EDUCATIONAL
FACILITIES REVENUE 7.13 11/01/15 4,398,363
2,200,000 TEXAS STATE DEPARTMENT OF
HOUSING & COMMUNITY AFFAIRS
SFMR SERIES A 8.10 09/01/15 2,391,994
1,040,000 TEXAS STATE PFA BUILDING
REVENUE STATE PRESERVATION
BOARD SERIES A AMBAC INSURED 4.50 02/01/17 886,257
295,000 TRAVIS COUNTY TX HOUSING
FINANCE CORPORATION
RESIDENTIAL MORTGAGE REVENUE
GNMA/FNMA MORTGAGE BACKED
SECURITIES SERIES A 7.00 12/01/11 303,065
36,797,964
------------
UTAH - 3.84%
1,450,000 SALT LAKE COUNTY UT EDFA
REVENUE WESTMINSTER COLLEGE
PROJECT 5.75 10/01/27 1,313,497
1,100,000 UTAH STATE BOARD REGENTS
STUDENT LOAN REVENUE AMORTIZED
SERIES H 6.70 11/01/15 1,140,260
500,000 UTAH STATE BOARD REGENTS
STUDENT LOAN REVENUE SERIES F 7.45 11/01/08 514,610
5,000 UTAH STATE HFA SFMR SERIES D2 6.45 01/01/11 5,074
11,500,000 WEBER COUNTY UT HOSPITAL
REVENUE IHC HEALTH SERVICE
INCORPORATED AMBAC INSURED 5.00 08/15/30 9,834,685
12,808,126
------------
VIRGINIA - 0.93%
3,000,000 FAIRFAX COUNTY VA
REDEVELOPMENT & HOUSING
AUTHORITY MFHR BURKE SHIRE
COMMONS 7.60 10/01/36 3,105,210
------------
WASHINGTON - 7.87%
1,748,000 KITSAP COUNTY WA HOUSING
AUTHORITY REVENUE MFHR BONDS
LOW INCOME HOUSING
COLLATERIZED BY GNMA 7.10 08/20/16 1,947,255
6,205,000 PORT LONGVIEW WA REVENUE
SERIES A 5.00 12/01/14 5,567,188
</TABLE>
52
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
WASHINGTON (continued)
$ 1,100,000 VANCOUVER WA HOUSING AUTHORITY
REVENUE SPRINGBROOK SQUARE 5.65% 03/01/31 $ 930,380
2,750,000 WASHINGTON PUBLIC POWER SUPPLY
SYSTEM POWER REVENUE NUCLEAR
PROJECT #2 SERIES A 6.00 07/01/07 2,894,210
4,000,000 WASHINGTON STATE HOUSING
FINANCE COMMISSION NONPROFIT
HOUSING REVENUE OCEAN RIDGE
APARTMENTS PROJECT SERIES A 5.25 07/01/02 3,990,240
1,145,000 WASHINGTON STATE HOUSING
FINANCE COMMISSION SFMR
GNMA/FNMA COLLATERALIZED
SERIES E 7.10 07/01/22 1,168,553
2,000,000 WASHINGTON STATE PUBLIC POWER
SUPPLY SYSTEM POWER REVENUE
NUCLEAR PROJECT #2 SERIES A 5.13 07/01/18 1,829,520
4,980,000 WASHINGTON STATE UNIVERSITY
WASHINGTON EDUCATION LEASE
REVENUE 4225 ROOSEVELT PROJECT
SERIES A 5.38 06/01/29 4,625,573
3,000,000 YAKIMA COUNTY WA SCHOOL
DISTRICT #007 GO MBIA INSURED 6.75 12/01/06 3,300,660
26,253,579
------------
WASHINGTON D.C. - 2.05%
8,300,000 WASHINGTON DC CONVENTION
CENTER AUTHORITY DEDICATED TAX
REVENUE 4.75 10/01/28 6,850,737
------------
WISCONSIN - 1.89%
1,750,000 WISCONSIN CENTER DISTRICT TAX
REVENUE JR DEDICATED FSA
INSURED 5.25 12/15/23 1,655,238
4,950,000 WISCONSIN CENTER DISTRICT TAX
REVENUE JR DEDICATED FSA
INSURED 5.25 12/15/27 4,642,553
6,297,791
------------
309,573,754
TOTAL MUNICIPAL BONDS (COST $307,642,524)
------------
<CAPTION>
SHARES
<C> <S> <C> <C> <C>
CLOSED END MUTUAL FUNDS - 4.78%
60,485 BLACK ROCK STRATEGIC MUNICIPAL
TRUST 759,843
357,724 DREYFUS MUNICIPAL INCOME FUND 2,705,286
75,530 DREYFUS STRATEGIC MUNICIPAL
BOND FUND 608,961
261,246 DREYFUS STRATEGIC MUNICIPALS
FUND 2,089,968
8,585 EATON VANCE MUNICIPAL INCOME
TRUST 93,362
100,136 MUNICIPAL ADVANTAGE FUND
INCORPORATED 1,114,013
24,112 MUNICIPAL PARTNERS FUND 284,823
115,082 NUVEEN DIVIDEND ADVANTAGE
MUNICIPAL FUND 1,409,755
189,766 NUVEEN INSURED MUNICIPAL
OPPORTUNITY FUND 2,466,958
105,143 NUVEEN PREMIUM INCOME
MUNICIPAL FUND 1,255,145
91,608 SELIGMAN SELECT MUNICIPAL FUND 858,825
57,005 VAN KAMPEN ADVANTAGE MUNICIPAL
INCOME TRUST 723,251
42,976 VAN KAMPEN ADVANTAGE MUNICIPAL
INCOME TRUST II 491,538
80,979 VAN KAMPEN TRUST FOR
INVESTMENT GRADE MUNICIPALS 1,088,155
15,949,883
TOTAL CLOSED END MUTUAL FUNDS (COST
$15,864,855)
------------
</TABLE>
53
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
NATIONAL TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME VALUE
<C> <S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 1.87%
6,223,900 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET FUND+X+ (COST
$6,223,900) $ 6,223,900
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $329,731,279)* 99.50% $331,747,537
OTHER ASSETS AND LIABILITIES, NET 0.50 1,675,346
------- ------------
TOTAL NET ASSETS 100.00% $333,422,883
------- ------------
</TABLE>
+ VARIABLE RATE SECURITY.
[::] ZERO COUPON BOND. THE RATE DISCLOSED REPRESENTS YIELD TO MATURITY AS
DETERMINED AT DATE OF PURCHASE.
+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 $332,588,976 AND NET UNREALIZED
DEPRECIATION CONSISTS OF:
<TABLE>
<CAPTION>
<S> <C>
GROSS UNREALIZED APPRECIATION $ 6,898,363
GROSS UNREALIZED DEPRECIATION (7,739,802)
-----------
NET UNREALIZED DEPRECIATION $ (841,439)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Development 5%
Single Family Housing 11%
Power 3%
Student Loan 3%
Other Investments 5%
Nursing Homes 3%
Housing 2%
Tax-Free Money Market Fund 2%
Higher Education 3%
Airport 2%
Tax Incremental 3%
School District 5%
Multifamily Housing 4%
Transportation 10%
Facilities 4%
Medical 14%
General 4%
Other 3%
Education 4%
General Obigation 4%
Water 1%
Utilities 4%
Pollution 1%
</TABLE>
INVESTMENT CATEGORIES REFLECT PERCENTAGES OF INVESTMENTS IN SECURITIES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
54
<PAGE>
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000 TAX-FREE FUNDS
--------------------------------------------------------------------------------
OREGON TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS - 95.49%
OREGON - 93.79%
$1,000,000 BENTON COUNTY OR HOSPITAL
FACILITIES AUTHORITY REVENUE
SAMARITAN HEALTH SERVICES
PROJECT 5.13% 10/01/28 $ 815,480
250,000 CHEMEKETA OR COMMUNITY COLLEGE
DISTRICT EDUCATIONAL FACILITES
REVENUE MBIA INSURED 6.50 07/01/07 268,130
1,100,000 CHEMEKETA OR COMMUNITY COLLEGE
DISTRICT GO FGIC INSURED 6.00 06/01/06 1,166,682
1,000,000 CHEMEKETA OR COMMUNITY COLLEGE
DISTRICT GO SERIES B FSA
INSURED 5.60 06/01/14 1,019,150
495,000 CLACKAMAS COUNTY OR HOSPITAL
FACILITIES AUTHORITY REVENUE
JENNINGS LODGE PROJECT
COLLATERALIZED BY GNMA 7.50 10/20/31 505,806
1,800,000 CLACKAMAS COUNTY OR HOSPITAL
FACILITIES AUTHORITY REVENUE
LEGACY HEALTH SYSTEMS 5.25 02/15/17 1,676,988
1,000,000 CLACKAMAS COUNTY OR HOSPITAL
FACILITIES AUTHORITY REVENUE
ODD FELLOWS HOME SERIES A 5.88 09/15/21 837,450
300,000 CLACKAMAS COUNTY OR HOSPITAL
FACILITIES AUTHORITY REVENUE
SISTERS PROVIDENCE SERIES A 6.38 10/01/05 310,824
2,070,000 COLUMBIA COUNTY OR SCHOOL
DISTRICT #502 GO FGIC INSURED 4.95[::] 06/01/15 902,789
1,000,000 EMERALD PEOPLES OR UTILITIES
DISTRICT UTILITIES REVENUE
FGIC INSURED 7.35 11/01/07 1,150,030
100,000 HILLSBORO OR EDUCATION
FACILITIES REVENUE OREGON
GRADUATE INSTITUTE PROJECT
COMERICA BANK LOC+ 4.85 08/01/11 100,000
2,000,000 KLAMATH FALLS OR ELECTRIC
REVENUE LIEN-KLAMATH COGEN 6.00 01/01/25 1,758,760
500,000 MULTNOMAN COUNTY OR
EDUCATIONAL FACILITIES REVENUE
UNIVERSITY OF PORTLAND PROJECT
SEATTLE-NORTHWEST SECURITIES
LOC 6.00 04/01/25 479,450
1,000,000 OREGON HEALTH SCIENCES
UNIVERSITY REVENUE CAPITAL
APPRECIATION SERIES A MBIA
INSURED 5.75[::] 07/01/21 293,660
175,000 OREGON STATE GO 9.00 10/01/05 208,836
480,000 OREGON STATE GO 7.25 07/01/07 546,706
1,000,000 OREGON STATE GO BOARD OF
HIGHER EDUCATION BACCALAUREATE
SERIES A 5.00 08/01/22 906,810
1,000,000 OREGON STATE GO STATE BOARD OF
HIGHER EDUCATION SERIES D 5.75 08/01/29 1,000,750
2,650,000 OREGON STATE HEALTH HOUSING
EDUCATIONAL & CULTURAL
FACILITIES AUTHORITY REVENUE 5.25 10/01/16 2,069,915
1,500,000 OREGON STATE HEALTH HOUSING
EDUCATIONAL & CULTURAL
FACILITIES AUTHORITY REVENUE
SENIOR LIEN ASPEN FOUNDATION
II SERIES A 6.13 04/15/29 1,248,690
2,530,000 OREGON STATE HOUSING &
COMMUNITY SERVICES DEPARTMENT
SFMR PROJECT SERIES B 5.45 07/01/29 2,284,185
1,000,000 OREGON STATE GO VETERANS
WELFARE SERIES 77 5.30 10/01/29 924,610
1,250,000 OREGON STATE HEALTH HOUSING
EDUCATIONAL & CULTURAL
FACILITIES AUTHORITY HEALTH
CARE REVENUE LINFIELD COLLEGE
PROJECT SERIES A 6.50 10/01/15 1,260,350
1,000,000 OREGON STATE DEPARTMENT
ADMINISTRATIVE SERVICES COP
SERIES A AMBAC INSURED 6.25 05/01/17 1,063,890
1,715,000 OREGON STATE HEALTH HOUSING
EDUCATIONAL & CULTURAL
FACILITIES AUTHORITY REVENUE
CEDARWEST HOUSING PROJECT
SERIES A U.S. BANK N.A. LOC
MANDATORY TENDER 1/2/08 @ 100 4.75 01/01/30 1,614,621
1,000,000 PORT ST. HELENS OR PCR
PORTLAND GENERAL ELECTRIC
COMPANY PROJECT SERIES A 5.25 08/01/14 903,700
785,000 PORTLAND OR GO SERIES A 4.88 06/01/18 714,491
1,000,000 PORTLAND OR HOUSING AUTHORITY
REVENUE POOLED HOUSING
SERIES A 5.10 01/01/27 853,150
1,000,000 PORTLAND OR HOUSING AUTHORITY
MFHR LA TOURELLE APARTMENTS
SERIES A 6.25 01/01/30 912,700
2,500,000 PORTLAND OR SEWER SYSTEMS
REVENUE SERIES A MBIA INSURED 4.50 06/01/18 2,143,175
2,575,000 WASHINGTON & CLACKAMAS
COUNTIES OR GO SCHOOL DISTRICT
#23 6.19[::] 06/15/24 623,948
1,000,000 WASHINGTON COUNTY OR HOUSING
AUTHORITY REVENUE AFFORDABLE
HOUSING POOL SERIES A 6.13 07/01/29 905,690
1,000,000 WASHINGTON COUNTY OR HOUSING
AUTHORITY MFHR TUALATIN
MEADOWS PROJECT COLLATERALIZED
BY FNMA 6.00 05/01/32 973,610
550,000 WESTERN LANE OR HOSPITAL
DISTRICT HOSPITAL FACILITIES
AUTHORITY REVENUE SISTERS ST.
JOSEPH PEACE MBIA INSURED 5.63 08/01/07 570,450
33,015,476
-----------
PUERTO RICO - 1.70%
40,000 COMMONWEALTH OF PUERTO RICO
AQUEDUCT & SEWER AUTHORITY
REVENUE 10.25 07/01/09 49,811
</TABLE>
55
<PAGE>
TAX-FREE FUNDS PORTFOLIO OF INVESTMENTS -- JUNE 30, 2000
--------------------------------------------------------------------------------
OREGON TAX-FREE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME INTEREST RATE MATURITY DATE VALUE
<C> <S> <C> <C> <C>
PUERTO RICO (continued)
$ 285,000 COMMONWEALTH OF PUERTO RICO
MFHR LOC GOVERNMENT
DEVELOPMENT BANK OF PUERTO
RICO 7.50% 04/01/22 $ 291,233
250,000 COMMONWEALTH OF PUERTO RICO
SFMR SERIES B GNMA INSURED 7.50 10/15/12 255,584
596,628
-----------
33,612,104
TOTAL MUNICIPAL BONDS (COST $35,538,461)
-----------
<CAPTION>
SHARES
<C> <S> <C> <C> <C>
CLOSED END MUTUAL FUNDS - 2.01%
16,556 DREYFUS MUNICIPAL INCOME FUND 125,205
11,636 DREYFUS STRATEGIC MUNICIPAL
BOND FUND 93,815
18,350 DREYFUS STRATEGIC MUNICIPALS
FUND 146,800
1,608 MUNICIPAL ADVANTAGE FUND
INCORPORATED 17,889
1,250 MUNICIPAL PARTNERS FUND 14,766
10,263 NUVEEN INSURED MUNICIPAL
OPPORTUNITY FUND 133,419
6,122 NUVEEN PREMIUM INCOME
MUNICIPAL FUND 73,081
1,048 VAN KAMPEN ADVANTAGE MUNICIPAL
INCOME TRUST II 11,987
6,808 VAN KAMPEN TRUST FOR
INVESTMENT GRADE MUNICIPALS 91,483
708,444
TOTAL CLOSED END MUTUAL FUNDS (COST
$699,198)
-----------
SHORT-TERM INVESTMENTS - 1.14%
400,877 WELLS FARGO NATIONAL TAX-FREE
MONEY MARKET TRUST+X+ (COST
$400,877) 400,877
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(COST $36,638,536)* 98.64% $34,721,425
OTHER ASSETS AND LIABILITIES, NET 1.36 479,787
------- -----------
TOTAL NET ASSETS 100.00% $35,201,212
------- -----------
</TABLE>
+ VARIABLE RATE SECURITY.
[::] ZERO COUPON BOND. THE RATE DISCLOSED REPRESENTS YIELD TO MATURITY AS
DETERMINED AT DATE OF PURCHASE.
+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 $ 332,403
GROSS UNREALIZED DEPRECIATION (2,249,514)
-----------
NET UNREALIZED DEPRECIATION $(1,917,111)
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Medical 21%
School District 3%
Power 5%
Pollution 3%
Utilities 10%
Other 3%
Single Family Housing 7%
Facilities 6%
Higher Education 1%
General Obligation 19%
Education 3%
Multifamily Housing 16%
Other Investments 2%
Tax-Free Money Market Fund 1%
</TABLE>
INVESTMENT CATEGORIES REFLECT PERCENTAGES OF INVESTMENTS IN SECURITIES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
56
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
57
<PAGE>
TAX-FREE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES -- JUNE 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA
ARIZONA LIMITED TERM CALIFORNIA
TAX-FREE TAX-FREE TAX-FREE
<S> <C> <C> <C>
-------------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET
VALUE (SEE COST BELOW)... $16,035,603 $ 39,967,611 $558,354,097
CASH........................ 6,347 5,211 5,404
RECEIVABLE FOR DIVIDENDS,
INTEREST AND OTHER
RECEIVABLES............... 342,052 725,141 9,256,101
RECEIVABLE FOR INVESTMENTS
SOLD...................... 0 0 4,976,244
RECEIVABLE FOR FUND SHARES
ISSUED.................... 413,419 0 233,976
PREPAID EXPENSES AND OTHER
ASSETS.................... 58,982 13,782 19,024
----------- ------------ ------------
TOTAL ASSETS.................. 16,856,403 40,711,745 572,844,846
----------- ------------ ------------
LIABILITIES
PAYABLE FOR INVESTMENTS
PURCHASED................. 0 2,017,120 3,424,608
DIVIDENDS PAYABLE........... 52,253 33,803 984,192
PAYABLE FOR FUND SHARES
REDEEMED.................. 695,923 1,372 1,072,312
PAYABLE TO INVESTMENT
ADVISOR AND AFFILIATES.... 1,972 9,367 311,158
PAYABLE TO OTHER RELATED
PARTIES................... 1,679 0 343,468
BANK OVERDRAFT.............. 0 0 0
ACCRUED EXPENSES AND OTHER
LIABILITIES............... 99,553 161,471 365,269
----------- ------------ ------------
TOTAL LIABILITIES............. 851,380 2,223,133 6,501,007
----------- ------------ ------------
TOTAL NET ASSETS.............. $16,005,023 $ 38,488,612 $566,343,839
----------- ------------ ------------
NET ASSETS CONSIST OF:
-------------------------------------------------------------------------
PAID-IN CAPITAL............. $16,915,941 $ 38,657,559 $559,734,112
UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME......... (1,406) 0 (36,600)
UNDISTRIBUTED NET REALIZED
GAIN (LOSS) ON
INVESTMENTS............... (35,528) (106,562) (4,725,625)
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF
INVESTMENTS............... (873,984) (62,385) 11,371,952
----------- ------------ ------------
TOTAL NET ASSETS.............. $16,005,023 $ 38,488,612 $566,343,839
----------- ------------ ------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE
-------------------------------------------------------------------------
NET ASSETS - CLASS A.......... $ 3,939,372 $ 34,014,592 $385,746,167
SHARES OUTSTANDING -
CLASS A..................... 403,650 3,354,162 35,830,702
NET ASSET VALUE PER SHARE -
CLASS A..................... $ 9.76 $ 10.14 $ 10.77
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A (1)......... $ 10.22 $ 10.62 $ 11.28
NET ASSETS - CLASS B.......... $ 2,592,398 N/A $116,375,683
SHARES OUTSTANDING -
CLASS B..................... 275,410 N/A 10,605,432
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -
CLASS B..................... $ 9.41 N/A $ 10.97
NET ASSETS - CLASS C.......... N/A N/A $ 16,959,335
SHARES OUTSTANDING -
CLASS C..................... N/A N/A 1,545,286
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -
CLASS C..................... N/A N/A $ 10.97
NET ASSETS - INSTITUTIONAL
CLASS....................... $ 9,473,253 $ 4,474,020 $ 47,262,654
SHARES OUTSTANDING -
INSTITUTIONAL CLASS......... 970,278 448,276 4,379,377
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -
INSTITUTIONAL CLASS......... $ 9.76 $ 9.98 $ 10.79
INVESTMENTS AT COST........... $16,909,587 $ 40,029,996 $546,982,145
----------- ------------ ------------
</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.
58
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES -- JUNE 30, 2000
TAX-FREE FUNDS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MINNESOTA NATIONAL
COLORADO INTERMEDIATE MINNESOTA LIMITED TERM NATIONAL
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET
VALUE (SEE COST BELOW)... $ 89,776,599 $ 182,155,352 $ 67,424,386 $ 62,036,355 $ 331,747,537
CASH........................ 0 0 0 0 1,039
RECEIVABLE FOR DIVIDENDS,
INTEREST AND OTHER
RECEIVABLES............... 895,731 3,201,901 1,213,465 932,738 5,214,497
RECEIVABLE FOR INVESTMENTS
SOLD...................... 0 0 1,004,892 0 0
RECEIVABLE FOR FUND SHARES
ISSUED.................... 20,700 0 114,843 0 426,196
PREPAID EXPENSES AND OTHER
ASSETS.................... 8,779 2,721 18,159 7,224 22,675
-------------- --------------- --------------- --------------- ---------------
TOTAL ASSETS.................. 90,701,809 185,359,974 69,775,745 62,976,317 337,411,944
-------------- --------------- --------------- --------------- ---------------
LIABILITIES
PAYABLE FOR INVESTMENTS
PURCHASED................. 0 0 494,371 0 2,000,000
DIVIDENDS PAYABLE........... 263,115 770,511 155,864 174,876 1,251,120
PAYABLE FOR FUND SHARES
REDEEMED.................. 0 144,497 11,520 43,791 237,924
PAYABLE TO INVESTMENT
ADVISOR AND AFFILIATES.... 27,868 79,117 17,806 22,559 156,107
PAYABLE TO OTHER RELATED
PARTIES................... 4,326 10,421 11,653 1,693 15,242
BANK OVERDRAFT.............. 42,102 0 0 0 0
ACCRUED EXPENSES AND OTHER
LIABILITIES............... 81,971 76,786 108,209 63,978 328,668
-------------- --------------- --------------- --------------- ---------------
TOTAL LIABILITIES............. 419,382 1,081,332 799,423 306,897 3,989,061
-------------- --------------- --------------- --------------- ---------------
TOTAL NET ASSETS.............. $ 90,282,427 $ 184,278,642 $ 68,976,322 $ 62,669,420 $ 333,422,883
-------------- --------------- --------------- --------------- ---------------
NET ASSETS CONSIST OF:
----------------------------------------------------------------------------------------------------------------------------
PAID-IN CAPITAL............. $ 94,863,291 $ 185,425,245 $ 73,165,299 $ 65,039,585 $ 354,182,247
UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME......... (10,619) (205) (43,265) (61,237) (62,137)
UNDISTRIBUTED NET REALIZED
GAIN (LOSS) ON
INVESTMENTS............... (4,138,116) (1,853,977) (3,125,274) (1,725,220) (22,713,485)
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF
INVESTMENTS............... (432,129) 707,579 (1,020,438) (583,708) 2,016,258
-------------- --------------- --------------- --------------- ---------------
TOTAL NET ASSETS.............. $ 90,282,427 $ 184,278,642 $ 68,976,322 $ 62,669,420 $ 333,422,883
-------------- --------------- --------------- --------------- ---------------
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE
----------------------------------------------------------------------------------------------------------------------------
NET ASSETS - CLASS A.......... $ 39,279,721 N/A $ 29,551,134 N/A $ 64,858,654
SHARES OUTSTANDING -
CLASS A..................... 3,994,269 N/A 2,902,861 N/A 6,669,992
NET ASSET VALUE PER SHARE -
CLASS A..................... $ 9.83 N/A $ 10.18 N/A $ 9.72
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A (1)......... $ 10.29 N/A $ 10.66 N/A $ 10.18
NET ASSETS - CLASS B.......... $ 6,841,862 N/A $ 16,974,107 N/A $ 18,366,568
SHARES OUTSTANDING -
CLASS B..................... 694,852 N/A 1,667,698 N/A 1,888,663
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -
CLASS B..................... $ 9.85 N/A $ 10.18 N/A $ 9.72
NET ASSETS - CLASS C.......... N/A N/A N/A N/A $ 5,572,080
SHARES OUTSTANDING -
CLASS C..................... N/A N/A N/A N/A 572,947
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -
CLASS C..................... N/A N/A N/A N/A $ 9.73
NET ASSETS - INSTITUTIONAL
CLASS....................... $ 44,160,844 $ 184,278,642 $ 22,451,081 $ 62,669,420 $ 244,625,581
SHARES OUTSTANDING -
INSTITUTIONAL CLASS......... 4,489,624 19,461,334 2,205,278 6,147,081 25,144,150
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -
INSTITUTIONAL CLASS......... $ 9.84 $ 9.47 $ 10.18 $ 10.19 $ 9.73
INVESTMENTS AT COST........... $ 90,208,728 $ 181,447,773 $ 68,444,824 $ 62,620,063 $ 329,731,279
-------------- --------------- --------------- --------------- ---------------
<CAPTION>
OREGON
TAX-FREE
<S> <C>
------------------------------
ASSETS
INVESTMENTS:
IN SECURITIES, AT MARKET
VALUE (SEE COST BELOW)... $ 34,721,425
CASH........................ 6,186
RECEIVABLE FOR DIVIDENDS,
INTEREST AND OTHER
RECEIVABLES............... 611,290
RECEIVABLE FOR INVESTMENTS
SOLD...................... 0
RECEIVABLE FOR FUND SHARES
ISSUED.................... 191
PREPAID EXPENSES AND OTHER
ASSETS.................... 11,083
---------------
TOTAL ASSETS.................. 35,350,175
---------------
LIABILITIES
PAYABLE FOR INVESTMENTS
PURCHASED................. 0
DIVIDENDS PAYABLE........... 51,316
PAYABLE FOR FUND SHARES
REDEEMED.................. 0
PAYABLE TO INVESTMENT
ADVISOR AND AFFILIATES.... 11,200
PAYABLE TO OTHER RELATED
PARTIES................... 6,494
BANK OVERDRAFT.............. 0
ACCRUED EXPENSES AND OTHER
LIABILITIES............... 79,953
---------------
TOTAL LIABILITIES............. 148,963
---------------
TOTAL NET ASSETS.............. $ 35,201,212
---------------
NET ASSETS CONSIST OF:
------------------------------
PAID-IN CAPITAL............. $ 37,634,797
UNDISTRIBUTED
(OVERDISTRIBUTED) NET
INVESTMENT INCOME......... (2,576)
UNDISTRIBUTED NET REALIZED
GAIN (LOSS) ON
INVESTMENTS............... (513,898)
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF
INVESTMENTS............... (1,917,111)
---------------
TOTAL NET ASSETS.............. $ 35,201,212
---------------
COMPUTATION OF NET ASSET VALUE
------------------------------
NET ASSETS - CLASS A.......... $ 21,424,285
SHARES OUTSTANDING -
CLASS A..................... 1,407,414
NET ASSET VALUE PER SHARE -
CLASS A..................... $ 15.22
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A (1)......... $ 15.94
NET ASSETS - CLASS B.......... $ 9,656,761
SHARES OUTSTANDING -
CLASS B..................... 1,035,526
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -
CLASS B..................... $ 9.33
NET ASSETS - CLASS C.......... N/A
SHARES OUTSTANDING -
CLASS C..................... N/A
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -
CLASS C..................... N/A
NET ASSETS - INSTITUTIONAL
CLASS....................... $ 4,120,166
SHARES OUTSTANDING -
INSTITUTIONAL CLASS......... 270,710
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -
INSTITUTIONAL CLASS......... $ 15.22
INVESTMENTS AT COST........... $ 36,638,536
---------------
</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.
59
<PAGE>
TAX-FREE FUNDS STATEMENTS OF OPERATIONS -- FOR THE YEAR ENDED JUNE 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA
ARIZONA LIMITED TERM CALIFORNIA
TAX-FREE TAX-FREE TAX-FREE
<S> <C> <C> <C>
---------------------------------------------------------------
INVESTMENT INCOME
INTEREST............... $920,113 $ 2,042,965 $ 34,226,743
-------- ------------ ------------
TOTAL INVESTMENT
INCOME................. 920,113 2,042,965 34,226,743
-------- ------------ ------------
EXPENSES
ADVISORY FEES.......... 69,565 184,022 2,632,771
ADMINISTRATION FEES.... 24,516 64,811 906,326
SHAREHOLDER SERVICING
FEES................. 25,243 105,127 1,527,155
PORTFOLIO ACCOUNTING
FEES................. 13,126 59,833 133,424
CUSTODY................ 3,078 8,440 114,065
TRANSFER AGENT
CLASS A.............. 4,215 48,830 231,733
CLASS B.............. 1,845 N/A 77,943
CLASS C.............. N/A N/A 10,132
INSTITUTIONAL
CLASS............... 654 548 3,611
DISTRIBUTION FEES
CLASS B.............. 15,413 N/A 885,019
CLASS C.............. N/A N/A 148,204
LEGAL AND AUDIT FEES... 12,646 31,649 70,747
REGISTRATION FEES...... 7,949 4,437 130,925
DIRECTORS' FEES........ 3,916 4,673 3,803
SHAREHOLDER REPORTS.... 5,884 27,233 97,475
OTHER.................. 770 15,244 72,677
-------- ------------ ------------
TOTAL EXPENSES........... 188,820 554,847 7,046,010
LESS:
WAIVED FEES AND
REIMBURSED
EXPENSES............. (67,161) (237,093) (1,429,866)
-------- ------------ ------------
NET EXPENSES........... 121,659 317,754 5,616,144
-------- ------------ ------------
NET INVESTMENT INCOME.... 798,454 1,725,211 28,610,599
-------- ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
---------------------------------------------------------------
NET REALIZED GAIN
(LOSS) FROM
INVESTMENTS.......... (156,394) (213,755) (5,068,802)
NET CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS.......... (590,462) (7,989) (9,101,836)
-------- ------------ ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS......... (746,856) (221,744) (14,170,638)
-------- ------------ ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ $ 51,598 $ 1,503,467 $ 14,439,961
-------- ------------ ------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
60
<PAGE>
STATEMENTS OF OPERATIONS -- FOR THE YEAR ENDED JUNE 30, 2000 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............... $ 5,592,290 $11,423,104 $ 4,466,645 $ 3,751,909 $ 21,940,137 $ 2,194,773
------------ ----------- ----------- ------------ ------------ -----------
TOTAL INVESTMENT
INCOME................. 5,592,290 11,423,104 4,466,645 3,751,909 21,940,137 2,194,773
------------ ----------- ----------- ------------ ------------ -----------
EXPENSES
ADVISORY FEES.......... 397,866 690,332 333,585 315,591 1,525,347 164,283
ADMINISTRATION FEES.... 121,758 264,723 100,144 94,960 467,608 57,171
SHAREHOLDER SERVICING
FEES................. 69,046 0 78,649 0 148,080 86,404
PORTFOLIO ACCOUNTING
FEES................. 75,882 58,048 71,530 51,727 91,246 68,295
CUSTODY................ 18,526 38,090 15,310 14,560 63,508 7,150
TRANSFER AGENT
CLASS A.............. 41,018 N/A 40,241 N/A 58,648 15,593
CLASS B.............. 12,026 N/A 25,497 N/A 23,072 6,840
CLASS C.............. N/A N/A N/A N/A 1,567 N/A
INSTITUTIONAL
CLASS............... 43,945 215,222 27,821 78,305 277,051 414
DISTRIBUTION FEES
CLASS B.............. 63,683 N/A 138,099 N/A 139,372 73,816
CLASS C.............. N/A N/A N/A N/A 28,949 N/A
LEGAL AND AUDIT FEES... 20,859 24,912 21,006 16,979 31,599 17,681
REGISTRATION FEES...... 12,798 26,397 11,428 23,130 72,955 7,422
DIRECTORS' FEES........ 4,203 4,851 4,130 4,125 5,631 4,094
SHAREHOLDER REPORTS.... 32,664 10,208 28,995 4,035 51,003 11,593
OTHER.................. 37,185 41,700 42,904 24,445 62,231 5,035
------------ ----------- ----------- ------------ ------------ -----------
TOTAL EXPENSES........... 951,459 1,374,483 939,339 627,857 3,047,867 525,791
LESS:
WAIVED FEES AND
REIMBURSED
EXPENSES............. (330,518) (163,315) (340,798) (182,094) (636,537) (174,577)
------------ ----------- ----------- ------------ ------------ -----------
NET EXPENSES........... 620,941 1,211,168 598,541 445,763 2,411,330 351,214
------------ ----------- ----------- ------------ ------------ -----------
NET INVESTMENT INCOME.... 4,971,349 10,211,936 3,868,104 3,306,146 19,528,807 1,843,559
------------ ----------- ----------- ------------ ------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
-----------------------------------------------------------------------------------------------------------
NET REALIZED GAIN
(LOSS) FROM
INVESTMENTS.......... (3,367,850) (1,711,790) (2,829,880) (1,078,958) (19,915,513) (496,513)
NET CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION) OF
INVESTMENTS.......... (1,070,508) (4,615,348) (1,771,399) (388,630) 1,543,307 (1,760,899)
------------ ----------- ----------- ------------ ------------ -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS......... (4,438,358) (6,327,138) (4,601,279) (1,467,588) (18,372,206) (2,257,412)
------------ ----------- ----------- ------------ ------------ -----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ $ 532,991 $ 3,884,798 $ (733,175) $ 1,838,558 $ 1,156,601 $ (413,853)
------------ ----------- ----------- ------------ ------------ -----------
</TABLE>
61
<PAGE>
TAX-FREE FUNDS STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ARIZONA CALIFORNIA LIMITED TERM
TAX-FREE TAX-FREE
-------------------------------- -----------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 2000 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............ 798,454 754,972 1,725,211 2,085,362
NET REALIZED GAIN (LOSS) ON SALE
OF INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS.......... (156,394) 165,623 (213,755) 622,402
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) OF
INVESTMENTS AND TRANSLATION OF
ASSETS IN FOREIGN CURRENCY..... (590,462) (777,937) (7,989) (878,441)
--------------- --------------- ------------------ ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS....................... 51,598 142,658 1,503,467 1,829,323
--------------- --------------- ------------------ ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A........................ (238,732) (233,455) (1,514,803) (1,776,173)
CLASS B........................ (87,605) (59,487) N/A N/A
CLASS C........................ N/A N/A N/A N/A
INSTITUTIONAL CLASS............ (473,523) (462,030) (210,408) (309,189)
NET REALIZED GAIN ON SALE OF
INVESTMENTS
CLASS A........................ (11,159) (97,543) (186,687) (542,011)
CLASS B........................ (4,699) (29,680) N/A N/A
CLASS C........................ N/A N/A N/A N/A
INSTITUTIONAL CLASS ........... (19,999) (191,837) (17,677) (97,377)
CAPITAL SHARE TRANSACTIONS:
PROCEEDS FROM SHARES SOLD -
CLASS A........................ 1,222,356 647,835 2,844,494 4,881,920
REINVESTMENT OF DIVIDENDS -
CLASS A........................ 177,854 293,582 1,418,375 2,120,491
COST OF SHARES REDEEMED -
CLASS A........................ (2,437,282) (811,959) (11,163,082) (19,138,662)
--------------- --------------- ------------------ ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS A..... (1,037,072) 129,458 (6,900,213) (12,136,251)
--------------- --------------- ------------------ ---------------
PROCEEDS FROM SHARES SOLD -
CLASS B........................ 1,339,582 144,233 N/A N/A
REINVESTMENT OF DIVIDENDS -
CLASS B........................ 59,608 73,077 N/A N/A
COST OF SHARES REDEEMED -
CLASS B........................ (312,036) (231,481) N/A N/A
--------------- --------------- ------------------ ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS B..... 1,087,154 (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 -
INSTITUTIONAL CLASS............ 3,948,920 1,304,525 977,068 1,894,102
REINVESTMENT OF DIVIDENDS -
INSTITUTIONAL CLASS............ 45,604 16,058 98,733 159,068
COST OF SHARES REDEEMED -
INSTITUTIONAL CLASS............ (3,612,918) (2,208,523) (4,192,099) (1,818,652)
--------------- --------------- ------------------ ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS -
INSTITUTIONAL CLASS.............. 381,606 (887,940) (3,116,298) 234,518
--------------- --------------- ------------------ ---------------
NET INCREASE (DECREASE) IN NET
ASSETS........................... (352,431) (1,704,027) (10,442,619) (12,797,160)
--------------- --------------- ------------------ ---------------
NET ASSETS:
ENDING NET ASSETS.................. $ 16,005,023 $ 16,357,454 $ 38,488,612 $ 48,931,231
--------------- --------------- ------------------ ---------------
SHARE ISSUED AND REDEEMED:
SHARES SOLD - CLASS A............ 125,952 60,592 279,911 464,420
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS A............ 18,318 27,319 140,097 201,790
SHARES REDEEMED - CLASS A........ (251,307) (76,307) (1,101,833) (1,820,898)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS A............ (107,037) 11,604 (681,825) (1,154,688)
SHARES SOLD - CLASS B............ 142,069 14,067 N/A N/A
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS B............ 6,380 7,044 N/A N/A
SHARES REDEEMED - CLASS B........ (33,539) (22,372) N/A N/A
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS B............ 114,910 (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 - INSTITUTIONAL
CLASS.......................... 402,144 121,329 98,584 183,590
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - INSTITUTIONAL
CLASS.......................... 4,718 1,497 9,916 15,379
SHARES REDEEMED - INSTITUTIONAL
CLASS.......................... (371,110) (207,137) (418,270) (177,118)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - INSTITUTIONAL
CLASS............................ 35,752 (84,311) (309,770) 21,851
ENDING BALANCE OF UNDISTRIBUTED
(OVERDISTRIBUTED) NET INVESTMENT
INCOME........................... $ (1,406) $ 0 $ 0 $ 0
--------------- --------------- ------------------ ---------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
62
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS TAX-FREE FUNDS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALIFORNIA COLORADO
TAX-FREE TAX-FREE
-------------------------------- ---------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED ONE MONTH ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 2000 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............ 28,610,599 30,366,138 4,971,349 393,016 4,092,169
NET REALIZED GAIN (LOSS) ON SALE
OF INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS.......... (5,068,802) 2,704,577 (3,367,850) (344,710) 501,049
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) OF
INVESTMENTS AND TRANSLATION OF
ASSETS IN FOREIGN CURRENCY..... (9,101,836) (17,269,155) (1,070,508) (2,033,191) (1,664,572)
--------------- --------------- --------------- ----------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS....................... 14,439,961 15,801,560 532,991 (1,984,885) 2,928,646
--------------- --------------- --------------- ----------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A........................ (20,193,858) (21,777,566) (2,014,595) (159,400) (1,824,431)
CLASS B........................ (5,077,557) (4,443,330) (403,907) (37,423) (386,596)
CLASS C........................ (826,698) (542,049) N/A N/A N/A
INSTITUTIONAL CLASS............ (2,549,086) (3,603,193) (2,563,466) (196,193) (1,881,142)
NET REALIZED GAIN ON SALE OF
INVESTMENTS
CLASS A........................ (1,043,080) (6,286,449) (29,339) 0 (131,438)
CLASS B........................ (317,133) (1,503,850) (6,797) 0 (32,338)
CLASS C........................ (54,401) (163,585) N/A 0 N/A
INSTITUTIONAL CLASS ........... (123,720) (1,005,446) (37,763) 0 (135,528)
CAPITAL SHARE TRANSACTIONS:
PROCEEDS FROM SHARES SOLD -
CLASS A........................ 29,716,825 47,645,429 7,919,860 543,289 8,062,435
REINVESTMENT OF DIVIDENDS -
CLASS A........................ 12,893,267 19,237,556 1,602,625 122,356 1,484,203
COST OF SHARES REDEEMED -
CLASS A........................ (107,853,710) (89,510,989) (7,593,801) (607,233) (3,272,343)
--------------- --------------- --------------- ----------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS A..... (65,243,618) (22,628,004) 1,928,684 58,412 6,274,295
--------------- --------------- --------------- ----------------- ---------------
PROCEEDS FROM SHARES SOLD -
CLASS B........................ 16,738,083 43,726,476 1,341,272 342,246 2,711,082
REINVESTMENT OF DIVIDENDS -
CLASS B........................ 3,963,189 4,875,202 295,101 27,302 283,211
COST OF SHARES REDEEMED -
CLASS B........................ (30,877,699) (14,057,410) (5,245,472) (56,299) (1,091,277)
--------------- --------------- --------------- ----------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS B..... (10,176,427) 34,544,268 (3,609,099) 313,249 1,903,016
--------------- --------------- --------------- ----------------- ---------------
PROCEEDS FROM SHARES SOLD -
CLASS C........................ 5,194,638 16,190,204 N/A N/A N/A
REINVESTMENT OF DIVIDENDS -
CLASS C........................ 671,234 530,761 N/A N/A N/A
COST OF SHARES REDEEMED -
CLASS C........................ (10,536,693) (1,948,559) N/A N/A N/A
--------------- --------------- --------------- ----------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS C..... (4,670,821) 14,772,406 N/A N/A N/A
--------------- --------------- --------------- ----------------- ---------------
PROCEEDS FROM SHARES SOLD -
INSTITUTIONAL CLASS............ 9,326,399 14,893,157 15,430,263 2,077,373 25,981,176
REINVESTMENT OF DIVIDENDS -
INSTITUTIONAL CLASS............ 395,938 1,797,154 72,703 20,222 99,412
COST OF SHARES REDEEMED -
INSTITUTIONAL CLASS............ (34,690,508) (23,036,974) (18,143,071) (759,344) (8,752,873)
--------------- --------------- --------------- ----------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS -
INSTITUTIONAL CLASS.............. (24,968,171) (6,346,663) (2,640,105) 1,338,251 17,327,715
--------------- --------------- --------------- ----------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS........................... (120,804,609) (3,181,901) (8,843,396) (667,989) 24,042,199
--------------- --------------- --------------- ----------------- ---------------
NET ASSETS:
ENDING NET ASSETS.................. $ 566,343,839 $ 687,148,448 $ 90,282,427 $ 99,125,823 $ 99,793,812
--------------- --------------- --------------- ----------------- ---------------
SHARE ISSUED AND REDEEMED:
SHARES SOLD - CLASS A............ 2,807,310 4,192,958 810,589 52,172 766,228
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS A............ 1,211,162 1,682,888 163,224 11,879 116,262
SHARES REDEEMED - CLASS A........ (10,133,260) (7,857,450) (772,230) (58,698) (298,588)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS A............ (6,114,788) (1,981,604) 201,583 5,353 583,902
SHARES SOLD - CLASS B............ 1,531,909 3,748,414 135,087 32,731 258,066
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS B............ 365,380 418,683 29,951 2,648 20,601
SHARES REDEEMED - CLASS B........ (2,855,083) (1,209,247) (532,919) (5,424) (101,120)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS B............ (957,794) 2,957,850 (367,881) 29,955 177,547
SHARES SOLD - CLASS C............ 474,555 1,394,343 N/A N/A N/A
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS C............ 61,853 45,685 N/A N/A N/A
SHARES REDEEMED - CLASS C........ (974,568) (167,903) N/A N/A N/A
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS C............ (438,160) 1,272,125 N/A N/A N/A
SHARES SOLD - INSTITUTIONAL
CLASS.......................... 870,131 1,297,153 1,565,646 200,981 2,654,052
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - INSTITUTIONAL
CLASS.......................... 37,114 156,818 7,296 1,963 7,663
SHARES REDEEMED - INSTITUTIONAL
CLASS.......................... (3,202,309) (2,020,715) (1,849,426) (73,332) (1,049,402)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - INSTITUTIONAL
CLASS............................ (2,295,064) (566,744) (276,484) 129,612 1,612,313
ENDING BALANCE OF UNDISTRIBUTED
(OVERDISTRIBUTED) NET INVESTMENT
INCOME........................... $ (36,600) $ 0 $ (10,619) $ 0 $ 0
--------------- --------------- --------------- ----------------- ---------------
<CAPTION>
MINNESOTA INTERMEDIATE
TAX-FREE
---------------------------------------------------
FOR THE FOR THE FOR THE
YEAR ENDED ONE MONTH ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999 MAY 31, 1999
<S> <C> <C> <C>
-----------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS............... $ 219,258,472 $ 222,953,296 $ 209,685,097
--------------- ----------------- ---------------
OPERATIONS:
NET INVESTMENT INCOME............ 10,211,936 895,343 10,472,818
NET REALIZED GAIN (LOSS) ON SALE
OF INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS.......... (1,711,790) (47,325) 210,070
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) OF
INVESTMENTS AND TRANSLATION OF
ASSETS IN FOREIGN CURRENCY..... (4,615,348) (3,578,156) (2,375,879)
--------------- ----------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS....................... 3,884,798 (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
INSTITUTIONAL CLASS............ (10,212,136) (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
INSTITUTIONAL CLASS ........... (5,117) 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 -
INSTITUTIONAL CLASS............ 15,935,496 2,116,402 35,117,941
REINVESTMENT OF DIVIDENDS -
INSTITUTIONAL CLASS............ 599,470 51,123 908,892
COST OF SHARES REDEEMED -
INSTITUTIONAL CLASS............ (45,182,341) (2,236,868) (20,054,275)
--------------- ----------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS -
INSTITUTIONAL CLASS.............. (28,647,375) (69,343) 15,972,558
--------------- ----------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS........................... (34,979,830) (3,694,824) 13,268,199
--------------- ----------------- ---------------
NET ASSETS:
ENDING NET ASSETS.................. $ 184,278,642 $ 219,258,472 $ 222,953,296
--------------- ----------------- ---------------
SHARE ISSUED AND REDEEMED:
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 - INSTITUTIONAL
CLASS.......................... 1,670,636 215,513 3,498,378
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - INSTITUTIONAL
CLASS.......................... 63,216 5,243 82,447
SHARES REDEEMED - INSTITUTIONAL
CLASS.......................... (4,764,112) (228,040) (1,992,667)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - INSTITUTIONAL
CLASS............................ (3,030,260) (7,284) 1,588,158
ENDING BALANCE OF UNDISTRIBUTED
(OVERDISTRIBUTED) NET INVESTMENT
INCOME........................... $ (205) $ (5) $ (5)
--------------- ----------------- ---------------
</TABLE>
63
<PAGE>
TAX-FREE FUNDS STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MINNESOTA
TAX-FREE
------------------------------------------------------
FOR THE FOR THE FOR THE
YEAR ENDED ONE MONTH ENDED YEAR ENDED
JUNE 30, 2000 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............ 3,868,104 319,580 3,491,338
NET REALIZED GAIN (LOSS) ON SALE
OF INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS.......... (2,829,880) (162,826) 216,836
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) OF
INVESTMENTS AND TRANSLATION OF
ASSETS IN FOREIGN CURRENCY..... (1,771,399) (1,579,990) (920,274)
--------------- -------------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS....................... (733,175) (1,423,236) 2,787,900
--------------- -------------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A........................ (1,737,424) (145,466) (1,672,985)
CLASS B........................ (830,543) (69,305) (758,676)
CLASS C........................ N/A N/A N/A
INSTITUTIONAL CLASS............ (1,300,042) (104,809) (1,061,276)
NET REALIZED GAIN ON SALE OF
INVESTMENTS
CLASS A........................ (32,911) 0 (32,277)
CLASS B........................ (17,746) 0 (17,801)
CLASS C........................ N/A N/A N/A
INSTITUTIONAL CLASS ........... (24,116) 0 (20,012)
CAPITAL SHARE TRANSACTIONS:
PROCEEDS FROM SHARES SOLD -
CLASS A........................ 3,934,438 431,418 9,934,681
REINVESTMENT OF DIVIDENDS -
CLASS A........................ 1,192,042 102,632 1,117,394
COST OF SHARES REDEEMED -
CLASS A........................ (10,666,114) (887,055) (6,075,592)
--------------- -------------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS A..... (5,539,634) (353,005) 4,976,483
--------------- -------------------- ---------------
PROCEEDS FROM SHARES SOLD -
CLASS B........................ 1,641,458 744,032 7,870,849
REINVESTMENT OF DIVIDENDS -
CLASS B........................ 652,262 52,334 531,439
COST OF SHARES REDEEMED -
CLASS B........................ (5,557,420) (491,100) (3,243,082)
--------------- -------------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS B..... (3,263,700) 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 -
INSTITUTIONAL CLASS............ 5,562,227 929,145 10,924,972
REINVESTMENT OF DIVIDENDS -
INSTITUTIONAL CLASS............ 285,989 31,248 290,837
COST OF SHARES REDEEMED -
INSTITUTIONAL CLASS............ (9,094,371) (476,933) (4,449,364)
--------------- -------------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS -
INSTITUTIONAL CLASS.............. (3,246,155) 483,460 6,766,445
--------------- -------------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS........................... (16,725,446) (1,307,095) 16,127,007
--------------- -------------------- ---------------
NET ASSETS:
ENDING NET ASSETS.................. $ 68,976,322 $ 85,701,768 $ 87,008,863
--------------- -------------------- ---------------
SHARE ISSUED AND REDEEMED:
SHARES SOLD - CLASS A............ 385,492 39,870 922,167
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS A............ 117,165 9,556 83,650
SHARES REDEEMED - CLASS A........ (1,057,167) (82,316) (556,377)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS A............ (554,510) (32,890) 449,440
SHARES SOLD - CLASS B............ 160,485 68,928 719,314
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS B............ 64,148 4,869 36,310
SHARES REDEEMED - CLASS B........ (546,300) (45,705) (292,516)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS B............ (321,667) 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 - INSTITUTIONAL
CLASS.......................... 545,794 85,769 987,346
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - INSTITUTIONAL
CLASS.......................... 28,069 2,910 21,678
SHARES REDEEMED - INSTITUTIONAL
CLASS.......................... (900,276) (44,102) (398,588)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - INSTITUTIONAL
CLASS............................ (326,413) 44,577 610,436
ENDING BALANCE OF UNDISTRIBUTED
(OVERDISTRIBUTED) NET INVESTMENT
INCOME........................... $ (43,265) $ (43,360) $ (43,360)
--------------- -------------------- ---------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
64
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS TAX-FREE FUNDS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NATIONAL LIMITED TERM NATIONAL
TAX-FREE TAX-FREE(1)
------------------------------------------------------ ----------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED ONE MONTH ENDED YEAR ENDED YEAR ENDED ONE MONTH ENDED
JUNE 30, 2000 JUNE 30, 1999 MAY 31, 1999 JUNE 30, 2000 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............ 3,306,146 300,819 2,934,614 19,528,807 1,526,222
NET REALIZED GAIN (LOSS) ON SALE
OF INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS.......... (1,078,958) (363,274) (145,267) (19,915,513) (1,458,879)
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) OF
INVESTMENTS AND TRANSLATION OF
ASSETS IN FOREIGN CURRENCY..... (388,630) (875,731) (415,646) 1,543,307 (6,408,070)
--------------- ----------------- ------------------ --------------- -----------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS....................... 1,838,558 (938,186) 2,373,701 1,156,601 (6,340,727)
--------------- ----------------- ------------------ --------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A........................ N/A N/A N/A (3,181,160) (176,731)
CLASS B........................ N/A N/A N/A (876,865) (63,322)
CLASS C........................ N/A N/A N/A (187,671) N/A
INSTITUTIONAL CLASS............ (3,306,146) (300,819) (2,995,851) (15,039,374) (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
INSTITUTIONAL CLASS ........... 0 0 0 (301,508) 0
CAPITAL SHARE TRANSACTIONS:
PROCEEDS FROM SHARES SOLD -
CLASS A........................ N/A N/A N/A 43,355,427 685,836
REINVESTMENT OF DIVIDENDS -
CLASS A........................ N/A N/A N/A 2,051,190 128,450
COST OF SHARES REDEEMED -
CLASS A........................ N/A N/A N/A (20,100,726) (1,410,303)
--------------- ----------------- ------------------ --------------- -----------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS A..... N/A N/A N/A 25,305,891 (596,017)
--------------- ----------------- ------------------ --------------- -----------------
PROCEEDS FROM SHARES SOLD -
CLASS B........................ N/A N/A N/A 7,761,458 372,744
REINVESTMENT OF DIVIDENDS -
CLASS B........................ N/A N/A N/A 663,859 48,648
COST OF SHARES REDEEMED -
CLASS B........................ N/A N/A N/A (7,012,725) (137,275)
--------------- ----------------- ------------------ --------------- -----------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS B..... N/A N/A N/A 1,412,592 284,117
--------------- ----------------- ------------------ --------------- -----------------
PROCEEDS FROM SHARES SOLD -
CLASS C........................ N/A N/A N/A 9,189,050 N/A
REINVESTMENT OF DIVIDENDS -
CLASS C........................ N/A N/A N/A 96,394 N/A
COST OF SHARES REDEEMED -
CLASS C........................ N/A N/A N/A (3,651,063) N/A
--------------- ----------------- ------------------ --------------- -----------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS C..... N/A N/A N/A 5,634,381 N/A
--------------- ----------------- ------------------ --------------- -----------------
PROCEEDS FROM SHARES SOLD -
INSTITUTIONAL CLASS............ 23,539,664 1,429,530 54,231,330 39,468,399 4,618,493
REINVESTMENT OF DIVIDENDS -
INSTITUTIONAL CLASS............ 996,167 98,855 707,065 1,398,797 125,372
COST OF SHARES REDEEMED -
INSTITUTIONAL CLASS............ (44,817,894) (4,093,207) (20,695,755) (85,234,513) (5,754,330)
--------------- ----------------- ------------------ --------------- -----------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS -
INSTITUTIONAL CLASS.............. (20,282,063) (2,564,822) 34,242,640 (44,367,317) (1,010,465)
--------------- ----------------- ------------------ --------------- -----------------
NET INCREASE (DECREASE) IN NET
ASSETS........................... (21,749,651) (3,803,827) 33,620,490 (30,505,875) (9,189,314)
--------------- ----------------- ------------------ --------------- -----------------
NET ASSETS:
ENDING NET ASSETS.................. $ 62,669,420 $ 84,419,071 $ 88,222,898 $ 333,422,883 $ 363,928,758
--------------- ----------------- ------------------ --------------- -----------------
SHARE ISSUED AND REDEEMED:
SHARES SOLD - CLASS A............ N/A N/A N/A 4,440,086 71,172
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS A............ N/A N/A N/A 211,575 12,666
SHARES REDEEMED - CLASS A........ N/A N/A N/A (2,081,131) (141,758)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS A............ N/A N/A N/A 2,570,530 (57,920)
SHARES SOLD - CLASS B............ N/A N/A N/A 793,763 36,374
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS B............ N/A N/A N/A 68,407 4,760
SHARES REDEEMED - CLASS B........ N/A N/A N/A (723,093) (13,371)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS B............ N/A N/A N/A 139,077 27,763
SHARES SOLD - CLASS C............ N/A N/A N/A 944,940 N/A
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS C............ N/A N/A N/A 10,033 N/A
SHARES REDEEMED - CLASS C........ N/A N/A N/A (382,026) N/A
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS C............ N/A N/A N/A 572,947 N/A
SHARES SOLD - INSTITUTIONAL
CLASS.......................... 2,304,194 137,084 5,104,840 4,057,715 448,826
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - INSTITUTIONAL
CLASS.......................... 97,246 9,515 56,578 145,658 10,575
SHARES REDEEMED - INSTITUTIONAL
CLASS.......................... (4,382,417) (391,925) (1,944,631) (8,813,155) (560,492)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - INSTITUTIONAL
CLASS............................ (1,980,977) (245,326) 3,216,787 (4,609,782) (101,091)
ENDING BALANCE OF UNDISTRIBUTED
(OVERDISTRIBUTED) NET INVESTMENT
INCOME........................... $ (61,237) $ (61,237) $ (61,237) $ (62,137) $ (510,093)
--------------- ----------------- ------------------ --------------- -----------------
<CAPTION>
NATIONAL OREGON
TAX-FREE(1) TAX-FREE
--------------- --------------------------------
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 1999 JUNE 30, 2000 JUNE 30, 1999
<S> <C> <C> <C>
-----------------------------------
INCREASE (DECREASE) IN NET ASSETS
BEGINNING NET ASSETS............... $ 332,924,833 $ 40,922,108 $ 40,934,691
--------------- --------------- ---------------
OPERATIONS:
NET INVESTMENT INCOME............ 17,369,474 1,843,559 1,805,891
NET REALIZED GAIN (LOSS) ON SALE
OF INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS.......... 3,445,224 (496,513) 189,904
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) OF
INVESTMENTS AND TRANSLATION OF
ASSETS IN FOREIGN CURRENCY..... (7,184,375) (1,760,899) (1,393,782)
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS....................... 13,630,323 (413,853) 602,013
--------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME
CLASS A........................ (2,067,331) (1,160,627) (1,197,210)
CLASS B........................ (551,723) (424,871) (301,568)
CLASS C........................ N/A N/A N/A
INSTITUTIONAL CLASS............ (14,750,632) (260,637) (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
INSTITUTIONAL CLASS ........... (278,688) (6,545) (109,685)
CAPITAL SHARE TRANSACTIONS:
PROCEEDS FROM SHARES SOLD -
CLASS A........................ 26,792,072 2,180,440 1,368,772
REINVESTMENT OF DIVIDENDS -
CLASS A........................ 1,475,236 861,846 1,298,287
COST OF SHARES REDEEMED -
CLASS A........................ (19,489,915) (5,160,612) (4,274,901)
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS A..... 8,777,393 (2,118,326) (1,607,842)
--------------- --------------- ---------------
PROCEEDS FROM SHARES SOLD -
CLASS B........................ 7,878,776 2,202,051 4,533,417
REINVESTMENT OF DIVIDENDS -
CLASS B........................ 398,550 308,303 351,827
COST OF SHARES REDEEMED -
CLASS B........................ (1,152,002) (2,350,772) (300,137)
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS B..... 7,125,324 159,582 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 -
INSTITUTIONAL CLASS............ 69,131,581 722,410 862,300
REINVESTMENT OF DIVIDENDS -
INSTITUTIONAL CLASS............ 1,553,614 53,545 146,566
COST OF SHARES REDEEMED -
INSTITUTIONAL CLASS............ (42,320,576) (2,230,377) (2,145,612)
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM CAPITAL
SHARE TRANSACTIONS -
INSTITUTIONAL CLASS.............. 28,364,619 (1,454,422) (1,136,746)
--------------- --------------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS........................... 40,193,239 (5,720,896) (12,583)
--------------- --------------- ---------------
NET ASSETS:
ENDING NET ASSETS.................. $ 373,118,072 $ 35,201,212 $ 40,922,108
--------------- --------------- ---------------
SHARE ISSUED AND REDEEMED:
SHARES SOLD - CLASS A............ 2,543,283 141,282 81,285
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS A............ 113,579 56,353 77,202
SHARES REDEEMED - CLASS A........ (1,832,413) (338,071) (254,935)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS A............ 824,449 (140,436) (96,448)
SHARES SOLD - CLASS B............ 747,909 231,190 440,990
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - CLASS B............ 31,924 32,908 34,192
SHARES REDEEMED - CLASS B........ (108,363) (252,015) (29,617)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - CLASS B............ 671,470 12,083 (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 - INSTITUTIONAL
CLASS.......................... 6,519,161 46,405 51,084
SHARES ISSUED IN REINVESTMENT OF
DIVIDENDS - INSTITUTIONAL
CLASS.......................... 124,119 3,489 8,705
SHARES REDEEMED - INSTITUTIONAL
CLASS.......................... (3,983,394) (145,876) (127,946)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING - INSTITUTIONAL
CLASS............................ 2,659,886 (95,982) (68,157)
ENDING BALANCE OF UNDISTRIBUTED
(OVERDISTRIBUTED) NET INVESTMENT
INCOME........................... $ (510,093) $ (2,576) $ 0
--------------- --------------- ---------------
</TABLE>
65
<PAGE>
TAX-FREE FUNDS NOTES TO STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
NOTES TO 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 Class, and "Shares sold" includes 483,117 for
Institutional Class as a result of the consolidation of the Stagecoach
National Tax-Free Fund.
66
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
67
<PAGE>
TAX-FREE FUNDS FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING AND DIVIDENDS DISTRIBUTIONS
NET ASSET NET UNREALIZED FROM NET FROM NET
VALUE PER INVESTMENT GAIN (LOSS) ON INVESTMENT REALIZED
SHARE INCOME INVESTMENTS INCOME GAINS
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
ARIZONA TAX-FREE FUND
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.22 0.47 (0.44) (0.47) (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(3) ........... $ 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(4) ........ $ 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(5) ....... $ 10.68 0.17 0.06 (0.20) 0.00
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.86 0.39 (0.43) (0.39) (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(3) ........... $ 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(4) ........ $ 10.07 0.11 0.00 (0.11) 0.00
SEPTEMBER 6, 1996(6) TO SEPTEMBER 30, 1996... $ 10.00 0.01 0.07 (0.01) 0.00
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.23 0.49 (0.45) (0.49) (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(3) ........... $ 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(4) ........ $ 10.44 0.25 0.00 (0.25) 0.00
OCTOBER 1, 1995(6) TO SEPTEMBER 30, 1996..... $ 10.71 0.49 (0.10) (0.49) (0.17)
CALIFORNIA LIMITED TERM TAX-FREE FUND
---------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.23 0.40 (0.04) (0.40) (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(3) ........... $ 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(4) ........ $ 10.26 0.19 0.01 (0.19) 0.00
JANUARY 1, 1996 TO SEPTEMBER 30, 1996(7) .... $ 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
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.07 0.41 (0.04) (0.41) (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(3) ........... $ 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(4) ........ $ 10.10 0.19 0.01 (0.19) 0.00
SEPTEMBER 6, 1996(6) TO SEPTEMBER 30, 1996... $ 10.06 0.02 0.04 (0.02) 0.00
CALIFORNIA TAX-FREE FUND
---------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 11.00 0.52 (0.20) (0.52) (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(8) ......... $ 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)
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 11.22 0.45 (0.22) (0.45) (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(8) ......... $ 11.54 0.23 0.06 (0.23) 0.00
DECEMBER 15, 1997(6) TO DECEMBER 31, 1997.... $ 11.51 0.02 0.03 (0.02) 0.00
CLASS C(9)
JULY 1, 1999 TO JUNE 30, 2000................ $ 11.22 0.45 (0.22) (0.45) (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(8) ......... $ 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)
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 11.03 0.54 (0.21) (0.54) (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(8) ......... $ 11.35 0.26 0.05 (0.26) 0.00
DECEMBER 15, 1997(6) TO DECEMBER 31, 1997.... $ 11.32 0.03 0.03 (0.03) 0.00
</TABLE>
68
<PAGE>
FINANCIAL HIGHLIGHTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ENDING RATIO TO AVERAGE NET ASSETS (ANNUALIZED)
NET ASSET ---------------------------------------------
VALUE PER NET INVESTMENT NET GROSS
SHARE INCOME EXPENSES EXPENSES(1)
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
ARIZONA TAX-FREE FUND
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.76 4.89% 0.73% 1.21%
JULY 1, 1998 TO JUNE 30, 1999................ $ 10.22 4.28% 0.77% 1.61%
APRIL 1, 1998 TO JUNE 30, 1998(3) ........... $ 10.79 4.31% 0.73% 1.68%
APRIL 1, 1997 TO MARCH 31, 1998.............. $ 10.77 4.32% 0.64% 1.77%
OCTOBER 1, 1996 TO MARCH 31, 1997(4) ........ $ 10.44 4.54% 0.60% 1.58%
OCTOBER 1, 1995 TO SEPTEMBER 30, 1996........ $ 10.45 4.45% 0.78% 1.46%
JUNE 1, 1995 TO SEPTEMBER 30, 1995(5) ....... $ 10.71 4.73% 0.45% 1.35%
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.41 4.15% 1.46% 1.99%
JULY 1, 1998 TO JUNE 30, 1999................ $ 9.86 3.57% 1.49% 2.95%
APRIL 1, 1998 TO JUNE 30, 1998(3) ........... $ 10.40 3.59% 1.45% 2.62%
APRIL 1, 1997 TO MARCH 31, 1998.............. $ 10.39 3.49% 1.37% 3.26%
OCTOBER 1, 1996 TO MARCH 31, 1997(4) ........ $ 10.07 3.83% 1.30% 2.96%
SEPTEMBER 6, 1996(6) TO SEPTEMBER 30, 1996... $ 10.07 3.59% 1.16% 1.81%
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.76 5.04% 0.59% 0.94%
JULY 1, 1998 TO JUNE 30, 1999................ $ 10.23 4.33% 0.72% 1.46%
APRIL 1, 1998 TO JUNE 30, 1998(3) ........... $ 10.79 4.36% 0.68% 1.55%
APRIL 1, 1997 TO MARCH 31, 1998.............. $ 10.78 4.52% 0.44% 1.55%
OCTOBER 1, 1996 TO MARCH 31, 1997(4) ........ $ 10.44 4.73% 0.40% 1.50%
OCTOBER 1, 1995(6) TO SEPTEMBER 30, 1996..... $ 10.44 4.63% 0.48% 1.20%
CALIFORNIA LIMITED TERM TAX-FREE FUND
-------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.14 3.98% 0.75% 1.31%
JULY 1, 1998 TO JUNE 30, 1999................ $ 10.23 3.70% 0.75% 1.42%
APRIL 1, 1998 TO JUNE 30, 1998(3) ........... $ 10.44 3.72% 0.75% 1.44%
APRIL 1, 1997 TO MARCH 31, 1998.............. $ 10.44 3.78% 0.68% 1.29%
OCTOBER 1, 1996 TO MARCH 31, 1997(4) ........ $ 10.27 3.73% 0.65% 1.18%
JANUARY 1, 1996 TO SEPTEMBER 30, 1996(7) .... $ 10.26 3.83% 0.65% 1.14%
JANUARY 1, 1995 TO DECEMBER 31, 1995......... $ 10.35 3.70% 0.65% 1.22%
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.98 4.07% 0.63% 1.07%
JULY 1, 1998 TO JUNE 30, 1999................ $ 10.07 3.75% 0.70% 1.30%
APRIL 1, 1998 TO JUNE 30, 1998(3) ........... $ 10.27 3.77% 0.70% 1.40%
APRIL 1, 1997 TO MARCH 31, 1998.............. $ 10.27 3.84% 0.62% 1.17%
OCTOBER 1, 1996 TO MARCH 31, 1997(4) ........ $ 10.11 3.73% 0.60% 1.05%
SEPTEMBER 6, 1996(6) TO SEPTEMBER 30, 1996... $ 10.10 3.06% 0.55% 0.92%
CALIFORNIA TAX-FREE FUND
-------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.77 4.89% 0.77% 1.01%
JULY 1, 1998 TO JUNE 30, 1999................ $ 11.00 4.45% 0.77% 1.10%
JANUARY 1, 1998 TO JUNE 30, 1998(8) ......... $ 11.38 4.63% 0.75% 1.11%
JANUARY 1, 1997 TO DECEMBER 31, 1997......... $ 11.32 4.84% 0.74% 0.89%
JANUARY 1, 1996 TO DECEMBER 31, 1996......... $ 10.97 5.08% 0.71% 0.82%
JANUARY 1, 1995 TO DECEMBER 31, 1995......... $ 11.34 5.59% 0.58% 0.78%
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.97 4.16% 1.50% 1.74%
JULY 1, 1998 TO JUNE 30, 1999................ $ 11.22 3.74% 1.47% 1.84%
JANUARY 1, 1998 TO JUNE 30, 1998(8) ......... $ 11.60 3.90% 1.45% 1.82%
DECEMBER 15, 1997(6) TO DECEMBER 31, 1997.... $ 11.54 3.95% 1.44% 1.76%
CLASS C(9)
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.97 4.15% 1.50% 1.73%
JULY 1, 1998 TO JUNE 30, 1999................ $ 11.22 3.71% 1.47% 1.81%
JANUARY 1, 1998 TO JUNE 30, 1998(8) ......... $ 11.60 3.90% 1.45% 1.78%
JANUARY 1, 1997 TO DECEMBER 31, 1997......... $ 11.54 4.19% 1.48% 1.63%
JANUARY 1, 1996 TO DECEMBER 31, 1996......... $ 11.19 4.33% 1.46% 1.59%
JANUARY 1, 1995 TO DECEMBER 31, 1995......... $ 11.57 4.87% 1.30% 1.57%
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.79 5.02% 0.63% 0.80%
JULY 1, 1998 TO JUNE 30, 1999................ $ 11.03 4.50% 0.72% 1.01%
JANUARY 1, 1998 TO JUNE 30, 1998(8) ......... $ 11.40 4.69% 0.69% 0.98%
DECEMBER 15, 1997(6) TO DECEMBER 31, 1997.... $ 11.35 4.79% 0.63% 0.92%
<CAPTION>
PORTFOLIO NET ASSETS AT
TOTAL TURNOVER END OF PERIOD
RETURN(2) RATE (000'S OMITTED)
<S> <C> <C> <C>
---------------------------------------------
ARIZONA TAX-FREE FUND
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ 0.52% 32% $ 3,939
JULY 1, 1998 TO JUNE 30, 1999................ 0.66% 56% $ 5,219
APRIL 1, 1998 TO JUNE 30, 1998(3) ........... 1.27% 14% $ 5,383
APRIL 1, 1997 TO MARCH 31, 1998.............. 9.67% 127% $ 5,467
OCTOBER 1, 1996 TO MARCH 31, 1997(4) ........ 2.18% 77% $ 5,744
OCTOBER 1, 1995 TO SEPTEMBER 30, 1996........ 3.60% 42% $ 7,331
JUNE 1, 1995 TO SEPTEMBER 30, 1995(5) ....... 2.15% 62% $ 24,622
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ (0.29)% 32% $ 2,592
JULY 1, 1998 TO JUNE 30, 1999................ 0.00% 56% $ 1,582
APRIL 1, 1998 TO JUNE 30, 1998(3) ........... 1.00% 14% $ 1,683
APRIL 1, 1997 TO MARCH 31, 1998.............. 8.90% 127% $ 1,546
OCTOBER 1, 1996 TO MARCH 31, 1997(4) ........ 1.90% 77% $ 182
SEPTEMBER 6, 1996(6) TO SEPTEMBER 30, 1996... 0.76% 42% $ 20
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ 0.57% 32% $ 9,473
JULY 1, 1998 TO JUNE 30, 1999................ 0.76% 56% $ 9,556
APRIL 1, 1998 TO JUNE 30, 1998(3) ........... 1.19% 14% $ 10,995
APRIL 1, 1997 TO MARCH 31, 1998.............. 9.99% 127% $ 12,029
OCTOBER 1, 1996 TO MARCH 31, 1997(4) ........ 2.38% 77% $ 14,349
OCTOBER 1, 1995(6) TO SEPTEMBER 30, 1996..... 3.74% 42% $ 15,577
CALIFORNIA LIMITED TERM TAX-FREE FUND
---------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ 3.67% 60% $ 34,015
JULY 1, 1998 TO JUNE 30, 1999................ 2.84% 68% $ 41,299
APRIL 1, 1998 TO JUNE 30, 1998(3) ........... 0.93% 2% $ 54,169
APRIL 1, 1997 TO MARCH 31, 1998.............. 5.92% 88% $ 59,011
OCTOBER 1, 1996 TO MARCH 31, 1997(4) ........ 1.97% 14% $ 67,647
JANUARY 1, 1996 TO SEPTEMBER 30, 1996(7) .... 2.01% 48% $ 82,359
JANUARY 1, 1995 TO DECEMBER 31, 1995......... 9.14% 31% $ 77,965
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ 3.79% 60% $ 4,474
JULY 1, 1998 TO JUNE 30, 1999................ 2.96% 68% $ 7,633
APRIL 1, 1998 TO JUNE 30, 1998(3) ........... 0.94% 2% $ 7,559
APRIL 1, 1997 TO MARCH 31, 1998.............. 5.91% 88% $ 7,069
OCTOBER 1, 1996 TO MARCH 31, 1997(4) ........ 2.00% 14% $ 7,061
SEPTEMBER 6, 1996(6) TO SEPTEMBER 30, 1996... 0.60% 48% $ 10,066
CALIFORNIA TAX-FREE FUND
---------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ 3.10% 35% $ 385,746
JULY 1, 1998 TO JUNE 30, 1999................ 2.38% 17% $ 461,574
JANUARY 1, 1998 TO JUNE 30, 1998(8) ......... 2.86% 15% $ 499,720
JANUARY 1, 1997 TO DECEMBER 31, 1997......... 9.16% 12% $ 509,844
JANUARY 1, 1996 TO DECEMBER 31, 1996......... 4.03% 19% $ 239,703
JANUARY 1, 1995 TO DECEMBER 31, 1995......... 16.38% 38% $ 268,352
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ 2.21% 35% $ 116,376
JULY 1, 1998 TO JUNE 30, 1999................ 1.69% 17% $ 129,699
JANUARY 1, 1998 TO JUNE 30, 1998(8) ......... 2.49% 15% $ 99,784
DECEMBER 15, 1997(6) TO DECEMBER 31, 1997.... 0.45% 12% $ 77,792
CLASS C(9)
JULY 1, 1999 TO JUNE 30, 2000................ 2.21% 35% $ 16,959
JULY 1, 1998 TO JUNE 30, 1999................ 1.69% 17% $ 22,251
JANUARY 1, 1998 TO JUNE 30, 1998(8) ......... 2.49% 15% $ 8,249
JANUARY 1, 1997 TO DECEMBER 31, 1997......... 8.11% 12% $ 5,860
JANUARY 1, 1996 TO DECEMBER 31, 1996......... 3.24% 19% $ 6,506
JANUARY 1, 1995 TO DECEMBER 31, 1995......... 15.58% 38% $ 7,063
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ 3.16% 35% $ 47,263
JULY 1, 1998 TO JUNE 30, 1999................ 2.46% 17% $ 73,625
JANUARY 1, 1998 TO JUNE 30, 1998(8) ......... 2.80% 15% $ 82,577
DECEMBER 15, 1997(6) TO DECEMBER 31, 1997.... 0.49% 12% $ 84,113
</TABLE>
69
<PAGE>
TAX-FREE FUNDS FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING AND DIVIDENDS DISTRIBUTIONS
NET ASSET NET UNREALIZED FROM NET FROM NET
VALUE PER INVESTMENT GAIN (LOSS) ON INVESTMENT REALIZED
SHARE INCOME INVESTMENTS INCOME GAINS
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.30 0.54 (0.46) (0.54) (0.01)
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 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
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.31 0.46 (0.45) (0.46) (0.01)
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 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
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.30 0.54 (0.45) (0.54) (0.01)
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 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
---------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.75 0.48 (0.28) (0.48) 0.00
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 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(6) TO MAY 31, 1998........... $ 10.00 0.33 0.03 (0.33) 0.00
MINNESOTA TAX-FREE FUND
---------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.74 0.53 (0.55) (0.53) (0.01)
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 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
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.74 0.46 (0.55) (0.46) (0.01)
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 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
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.74 0.53 (0.55) (0.53) (0.01)
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 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>
70
<PAGE>
FINANCIAL HIGHLIGHTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ENDING RATIO TO AVERAGE NET ASSETS (ANNUALIZED)
NET ASSET ---------------------------------------------
VALUE PER NET INVESTMENT NET GROSS
SHARE INCOME EXPENSES EXPENSES(1)
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
COLORADO TAX-FREE FUND
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.83 5.43% 0.60% 1.03%
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 10.30 4.94% 0.60% 1.08%
JUNE 1, 1998 TO MAY 31, 1999................. $ 10.55 4.71% 0.60% 1.02%
JUNE 1, 1997 TO MAY 31, 1998................. $ 10.69 5.00% 0.60% 1.04%
JUNE 1, 1996 TO MAY 31, 1997................. $ 10.22 5.36% 0.45% 1.14%
JUNE 1, 1995 TO MAY 31, 1996................. $ 9.89 5.30% 0.30% 1.13%
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.85 4.65% 1.35% 1.89%
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 10.31 4.17% 1.35% 2.08%
JUNE 1, 1998 TO MAY 31, 1999................. $ 10.56 3.96% 1.35% 2.03%
JUNE 1, 1997 TO MAY 31, 1998................. $ 10.71 4.24% 1.35% 2.04%
JUNE 1, 1996 TO MAY 31, 1997................. $ 10.23 4.60% 1.20% 2.15%
JUNE 1, 1995 TO MAY 31, 1996................. $ 9.90 4.64% 1.05% 2.16%
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.84 5.42% 0.60% 0.86%
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 10.30 4.93% 0.60% 1.08%
JUNE 1, 1998 TO MAY 31, 1999................. $ 10.55 4.71% 0.60% 0.99%
JUNE 1, 1997 TO MAY 31, 1998................. $ 10.69 5.01% 0.60% 1.01%
JUNE 1, 1996 TO MAY 31, 1997................. $ 10.22 5.35% 0.45% 1.13%
JUNE 1, 1995 TO MAY 31, 1996................. $ 9.89 5.30% 0.30% 1.13%
MINNESOTA INTERMEDIATE TAX-FREE FUND
-------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.47 5.05% 0.60% 0.68%
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 9.75 4.94% 0.60% 0.72%
JUNE 1, 1998 TO MAY 31, 1999................. $ 9.91 4.84% 0.60% 0.68%
OCTOBER 1, 1997(6) TO MAY 31, 1998........... $ 10.03 5.02% 0.60% 0.72%
MINNESOTA TAX-FREE FUND
-------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.18 5.23% 0.60% 1.07%
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 10.74 4.71% 0.60% 1.11%
JUNE 1, 1998 TO MAY 31, 1999................. $ 10.96 4.61% 0.60% 1.03%
JUNE 1, 1997 TO MAY 31, 1998................. $ 11.05 4.83% 0.60% 1.07%
JUNE 1, 1996 TO MAY 31, 1997................. $ 10.57 5.11% 0.60% 1.21%
JUNE 1, 1995 TO MAY 31, 1996................. $ 10.30 5.26% 0.48% 1.26%
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.18 4.47% 1.35% 1.93%
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 10.74 3.93% 1.35% 2.11%
JUNE 1, 1998 TO MAY 31, 1999................. $ 10.96 3.85% 1.35% 2.04%
JUNE 1, 1997 TO MAY 31, 1998................. $ 11.05 4.07% 1.35% 2.08%
JUNE 1, 1996 TO MAY 31, 1997................. $ 10.57 4.35% 1.34% 2.21%
JUNE 1, 1995 TO MAY 31, 1996................. $ 10.30 4.51% 1.23% 2.29%
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.18 5.22% 0.60% 0.91%
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 10.74 4.69% 0.60% 1.11%
JUNE 1, 1998 TO MAY 31, 1999................. $ 10.96 4.62% 0.60% 1.00%
JUNE 1, 1997 TO MAY 31, 1998................. $ 11.05 4.84% 0.60% 1.04%
JUNE 1, 1996 TO MAY 31, 1997................. $ 10.57 5.12% 0.60% 1.23%
JUNE 1, 1995 TO MAY 31, 1996................. $ 10.30 5.24% 0.51% 1.30%
<CAPTION>
PORTFOLIO NET ASSETS AT
TOTAL TURNOVER END OF PERIOD
RETURN(2) RATE (000'S OMITTED)
<S> <C> <C> <C>
---------------------------------------------
COLORADO TAX-FREE FUND
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ 0.87% 106% $ 39,280
JUNE 1, 1999 TO JUNE 30, 1999(10)............ (1.97)% 11% $ 39,066
JUNE 1, 1998 TO MAY 31, 1999................. 3.79% 77% $ 39,958
JUNE 1, 1997 TO MAY 31, 1998................. 9.96% 70% $ 34,254
JUNE 1, 1996 TO MAY 31, 1997................. 9.00% 129% $ 27,806
JUNE 1, 1995 TO MAY 31, 1996................. 5.35% 171% $ 26,991
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ 0.22% 106% $ 6,842
JUNE 1, 1999 TO JUNE 30, 1999(10)............ (2.03)% 11% $ 10,959
JUNE 1, 1998 TO MAY 31, 1999................. 2.92% 77% $ 10,909
JUNE 1, 1997 TO MAY 31, 1998................. 9.25% 70% $ 9,156
JUNE 1, 1996 TO MAY 31, 1997................. 8.19% 129% $ 7,218
JUNE 1, 1995 TO MAY 31, 1996................. 4.56% 171% $ 6,400
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ 0.97% 106% $ 44,161
JUNE 1, 1999 TO JUNE 30, 1999(10)............ (1.97)% 11% $ 49,101
JUNE 1, 1998 TO MAY 31, 1999................. 3.79% 77% $ 48,926
JUNE 1, 1997 TO MAY 31, 1998................. 9.97% 70% $ 32,342
JUNE 1, 1996 TO MAY 31, 1997................. 9.00% 129% $ 25,917
JUNE 1, 1995 TO MAY 31, 1996................. 5.35% 171% $ 24,074
MINNESOTA INTERMEDIATE TAX-FREE FUND
---------------------------------------------
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ 2.17% 29% $ 184,279
JUNE 1, 1999 TO JUNE 30, 1999(10)............ (1.21)% 1% $ 219,258
JUNE 1, 1998 TO MAY 31, 1999................. 3.95% 20% $ 222,953
OCTOBER 1, 1997(6) TO MAY 31, 1998........... 3.61% 15% $ 209,685
MINNESOTA TAX-FREE FUND
---------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ (0.02)% 69% $ 29,551
JUNE 1, 1999 TO JUNE 30, 1999(10)............ (1.63)% 2% $ 37,139
JUNE 1, 1998 TO MAY 31, 1999................. 3.96% 25% $ 38,255
JUNE 1, 1997 TO MAY 31, 1998................. 9.71% 68% $ 33,597
JUNE 1, 1996 TO MAY 31, 1997................. 7.98% 97% $ 25,739
JUNE 1, 1995 TO MAY 31, 1996................. 3.97% 77% $ 26,610
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ (0.76)% 69% $ 16,974
JUNE 1, 1999 TO JUNE 30, 1999(10)............ (1.69)% 2% $ 21,366
JUNE 1, 1998 TO MAY 31, 1999................. 3.18% 25% $ 21,493
JUNE 1, 1997 TO MAY 31, 1998................. 8.89% 68% $ 16,549
JUNE 1, 1996 TO MAY 31, 1997................. 7.18% 97% $ 11,128
JUNE 1, 1995 TO MAY 31, 1996................. 3.28% 77% $ 8,825
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ (0.02)% 69% $ 22,451
JUNE 1, 1999 TO JUNE 30, 1999(10)............ (1.63)% 2% $ 27,197
JUNE 1, 1998 TO MAY 31, 1999................. 3.96% 25% $ 27,261
JUNE 1, 1997 TO MAY 31, 1998................. 9.71% 68% $ 20,736
JUNE 1, 1996 TO MAY 31, 1997................. 7.98% 97% $ 11,135
JUNE 1, 1995 TO MAY 31, 1996................. 3.97% 77% $ 3,988
</TABLE>
71
<PAGE>
TAX-FREE FUNDS FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED
BEGINNING AND DIVIDENDS DISTRIBUTIONS
NET ASSET NET UNREALIZED FROM NET FROM NET
VALUE PER INVESTMENT GAIN (LOSS) ON INVESTMENT REALIZED
SHARE INCOME INVESTMENTS INCOME GAINS
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.39 0.47 (0.20) (0.47) 0.00
JUNE ]1, 1999 TO JUNE 30, 1999(10)........... $ 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(6) TO MAY 31, 1997........... $ 10.00 0.31 0.39 (0.31) 0.00
NATIONAL TAX-FREE FUND
---------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.22 0.54 (0.50) (0.53) (0.01)
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 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
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.22 0.46 (0.50) (0.45) (0.01)
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 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
CLASS C
NOVEMBER 8, 1999(6) TO JUNE 30, 2000......... $ 9.79 0.30 (0.06) (0.30) 0.00
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.22 0.55 (0.49) (0.54) (0.01)
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 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
---------------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 16.10 0.77 (0.86) (0.77) (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(3)............ $ 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(4)......... $ 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(5)........ $ 16.47 0.28 (0.08) (0.29) 0.00
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.86 0.40 (0.52) (0.40) (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(3)............ $ 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(4)......... $ 10.07 0.17 (0.05) (0.17) (0.02)
SEPTEMBER 6, 1996(6) TO SEPTEMBER 30, 1996... $ 10.00 0.00 0.07 0.00 0.00
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 16.10 0.79 (0.86) (0.79) (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(3)............ $ 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(4)......... $ 16.42 0.39 (0.11) (0.39) (0.03)
OCTOBER 1, 1995(6) TO SEPTEMBER 30, 1996..... $ 16.38 0.72 0.04 (0.72) 0.00
</TABLE>
72
<PAGE>
FINANCIAL HIGHLIGHTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ENDING RATIO TO AVERAGE NET ASSETS (ANNUALIZED)
NET ASSET ---------------------------------------------
VALUE PER NET INVESTMENT NET GROSS
SHARE INCOME EXPENSES EXPENSES(1)
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 10.19 4.53% 0.61% 0.86%
JUNE ]1, 1999 TO JUNE 30, 1999(10)........... $ 10.39 4.25% 0.65% 1.12%
JUNE 1, 1998 TO MAY 31, 1999................. $ 10.54 4.26% 0.65% 1.04%
JUNE 1, 1997 TO MAY 31, 1998................. $ 10.59 4.47% 0.65% 1.03%
OCTOBER 1, 1996(6) TO MAY 31, 1997........... $ 10.39 4.45% 0.65% 1.27%
NATIONAL TAX-FREE FUND
-------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.72 5.48% 0.75% 0.95%
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 10.22 5.10% 0.60% 1.02%
JUNE 1, 1998 TO MAY 31, 1999................. $ 10.44 4.81% 0.60% 0.98%
JUNE 1, 1997 TO MAY 31, 1998................. $ 10.54 5.09% 0.60% 0.99%
JUNE 1, 1996 TO MAY 31, 1997................. $ 10.05 5.41% 0.50% 1.06%
JUNE 1, 1995 TO MAY 31, 1996................. $ 9.78 5.54% 0.40% 1.06%
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.72 4.72% 1.48% 1.78%
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 10.22 4.34% 1.35% 2.11%
JUNE 1, 1998 TO MAY 31, 1999................. $ 10.44 4.05% 1.35% 2.01%
JUNE 1, 1997 TO MAY 31, 1998................. $ 10.54 4.31% 1.35% 2.05%
JUNE 1, 1996 TO MAY 31, 1997................. $ 10.05 4.64% 1.26% 2.15%
JUNE 1, 1995 TO MAY 31, 1996................. $ 9.78 4.77% 1.14% 2.21%
CLASS C
NOVEMBER 8, 1999(6) TO JUNE 30, 2000......... $ 9.73 4.75% 1.55% 1.68%
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.73 5.58% 0.60% 0.77%
JUNE 1, 1999 TO JUNE 30, 1999(10)............ $ 10.22 5.09% 0.60% 0.95%
JUNE 1, 1998 TO MAY 31, 1999................. $ 10.44 4.83% 0.60% 0.91%
JUNE 1, 1997 TO MAY 31, 1998................. $ 10.54 5.09% 0.60% 0.92%
JUNE 1, 1996 TO MAY 31, 1997................. $ 10.06 5.40% 0.50% 1.03%
JUNE 1, 1995 TO MAY 31, 1996................. $ 9.78 5.57% 0.32% 1.06%
OREGON TAX-FREE FUND
-------------------------------------------------------------------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ $ 15.22 5.02% 0.73% 1.21%
JULY 1, 1998 TO JUNE 30, 1999................ $ 16.10 4.44% 0.67% 1.32%
APRIL 1, 1998 TO JUNE 30, 1998(3)............ $ 16.82 4.41% 0.67% 1.29%
APRIL 1, 1997 TO MARCH 31, 1998.............. $ 16.81 4.54% 0.62% 1.36%
OCTOBER 1, 1996 TO MARCH 31, 1997(4)......... $ 16.29 4.52% 0.60% 1.31%
OCTOBER 1, 1995 TO SEPTEMBER 30, 1996........ $ 16.42 4.87% 0.85% 1.15%
JUNE 1, 1995 TO SEPTEMBER 30, 1995(5)........ $ 16.38 5.01% 0.70% 1.01%
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ $ 9.33 4.24% 1.51% 1.96%
JULY 1, 1998 TO JUNE 30, 1999................ $ 9.86 3.59% 1.51% 2.14%
APRIL 1, 1998 TO JUNE 30, 1998(3)............ $ 10.31 3.48% 1.51% 2.10%
APRIL 1, 1997 TO MARCH 31, 1998.............. $ 10.30 3.56% 1.43% 2.39%
OCTOBER 1, 1996 TO MARCH 31, 1997(4)......... $ 10.00 3.23% 1.30% 2.15%
SEPTEMBER 6, 1996(6) TO SEPTEMBER 30, 1996... $ 10.07 1.83% 0.00% 0.00%
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ $ 15.22 5.14% 0.61% 1.02%
JULY 1, 1998 TO JUNE 30, 1999................ $ 16.10 4.49% 0.62% 1.32%
APRIL 1, 1998 TO JUNE 30, 1998(3)............ $ 16.82 4.46% 0.62% 1.26%
APRIL 1, 1997 TO MARCH 31, 1998.............. $ 16.81 4.72% 0.43% 1.27%
OCTOBER 1, 1996 TO MARCH 31, 1997(4)......... $ 16.28 4.72% 0.40% 1.24%
OCTOBER 1, 1995(6) TO SEPTEMBER 30, 1996..... $ 16.42 4.41% 0.63% 0.93%
<CAPTION>
PORTFOLIO NET ASSETS AT
TOTAL TURNOVER END OF PERIOD
RETURN(2) RATE (000'S OMITTED)
<S> <C> <C> <C>
---------------------------------------------
NATIONAL LIMITED TERM TAX-FREE FUND
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ 2.64% 48% $ 62,669
JUNE ]1, 1999 TO JUNE 30, 1999(10)........... (1.08)% 24% $ 84,419
JUNE 1, 1998 TO MAY 31, 1999................. 3.97% 41% $ 88,223
JUNE 1, 1997 TO MAY 31, 1998................. 6.70% 46% $ 54,602
OCTOBER 1, 1996(6) TO MAY 31, 1997........... 6.99% 16% $ 40,990
NATIONAL TAX-FREE FUND
---------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ 0.50% 79% $ 64,859
JUNE 1, 1999 TO JUNE 30, 1999(10)............ (1.69)% 18% $ 41,881
JUNE 1, 1998 TO MAY 31, 1999................. 4.04% 106% $ 43,388
JUNE 1, 1997 TO MAY 31, 1998................. 10.33% 143% $ 35,121
JUNE 1, 1996 TO MAY 31, 1997................. 8.43% 152% $ 29,217
JUNE 1, 1995 TO MAY 31, 1996................. 5.29% 126% $ 33,914
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ (0.24)% 79% $ 18,367
JUNE 1, 1999 TO JUNE 30, 1999(10)............ (1.76)% 18% $ 17,878
JUNE 1, 1998 TO MAY 31, 1999................. 3.26% 106% $ 17,973
JUNE 1, 1997 TO MAY 31, 1998................. 9.52% 143% $ 11,070
JUNE 1, 1996 TO MAY 31, 1997................. 7.63% 152% $ 7,329
JUNE 1, 1995 TO MAY 31, 1996................. 4.50% 126% $ 5,897
CLASS C
NOVEMBER 8, 1999(6) TO JUNE 30, 2000......... 2.50% 79% $ 5,572
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ 0.73% 79% $ 244,626
JUNE 1, 1999 TO JUNE 30, 1999(10)............ (1.69)% 18% $ 304,170
JUNE 1, 1998 TO MAY 31, 1999................. 4.04% 106% $ 311,757
JUNE 1, 1997 TO MAY 31, 1998................. 10.22% 143% $ 286,734
JUNE 1, 1996 TO MAY 31, 1997................. 8.54% 152% $ 259,861
JUNE 1, 1995 TO MAY 31, 1996................. 5.29% 126% $ 276,159
OREGON TAX-FREE FUND
---------------------------------------------
CLASS A
JULY 1, 1999 TO JUNE 30, 2000................ (0.45)% 51% $ 21,424
JULY 1, 1998 TO JUNE 30, 1999................ 1.57% 54% $ 24,924
APRIL 1, 1998 TO JUNE 30, 1998(3)............ 1.16% 24% $ 27,665
APRIL 1, 1997 TO MARCH 31, 1998.............. 9.81% 82% $ 27,837
OCTOBER 1, 1996 TO MARCH 31, 1997(4)......... 1.65% 90% $ 30,635
OCTOBER 1, 1995 TO SEPTEMBER 30, 1996........ 5.03% 27% $ 33,676
JUNE 1, 1995 TO SEPTEMBER 30, 1995(5)........ 3.67% 57% $ 50,077
CLASS B
JULY 1, 1999 TO JUNE 30, 2000................ (1.13)% 51% $ 9,657
JULY 1, 1998 TO JUNE 30, 1999................ 0.63% 54% $ 10,095
APRIL 1, 1998 TO JUNE 30, 1998(3)............ 0.98% 24% $ 5,956
APRIL 1, 1997 TO MARCH 31, 1998.............. 8.77% 82% $ 3,762
OCTOBER 1, 1996 TO MARCH 31, 1997(4)......... 1.17% 90% $ 287
SEPTEMBER 6, 1996(6) TO SEPTEMBER 30, 1996... 0.70% 27% $ 0
INSTITUTIONAL CLASS
JULY 1, 1999 TO JUNE 30, 2000................ (0.32)% 51% $ 4,120
JULY 1, 1998 TO JUNE 30, 1999................ 1.62% 54% $ 5,903
APRIL 1, 1998 TO JUNE 30, 1998(3)............ 1.18% 24% $ 7,314
APRIL 1, 1997 TO MARCH 31, 1998.............. 10.08% 82% $ 7,635
OCTOBER 1, 1996 TO MARCH 31, 1997(4)......... 1.69% 90% $ 8,175
OCTOBER 1, 1995(6) TO SEPTEMBER 30, 1996..... 5.13% 27% $ 8,512
</TABLE>
73
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--------------------------------------------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
(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 changed its fiscal year-end from March 31 to June 30.
(4) The Fund changed its fiscal year-end from September 30 to March 31.
(5) The Fund changed its fiscal year-end from May 31 to September 30.
(6) Commencement of operations.
(7) The Fund changed its fiscal year-end from December 31 to September 30.
(8) The Fund changed its fiscal year-end from December 31 to June 30.
(9) 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.
(10) The Fund changed its fiscal year-end from May 31 to June 30.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
74
<PAGE>
NOTES TO FINANCIAL STATEMENTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
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 comprised of 61 separate series as of the end of the reporting
period. These financial statements present 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 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 at the close of
business November 5, 1999, the Stagecoach and/or Norwest Advantage Funds were
consolidated into the respective Funds of 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 MINNESOTA INTERMEDIATE TAX-FREE FUND
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>
* ACCOUNTING SURVIVOR
In the consolidation, 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) for 5,010,601 shares of the Wells
Fargo National Tax-Free Fund. The net assets of the Stagecoach National
Tax-Free Fund included unrealized depreciation of $(4,130,301).
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. Shareholders of each class may 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
realized. 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 agent
fees.
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.
75
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TAX-FREE FUNDS NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
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 each business day as of the close of
regular trading on the New York Stock Exchange which is usually 1:00 p.m.
(Pacific Time) 3:00 p.m. (Central Time). 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 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. 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 and premiums are accreted
or amortized under provisions of the Internal Revenue Code of 1986, as amended
(the "Code"). Dividend income is recognized on the ex-dividend date.
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.
RECLASSIFICATION OF CAPITAL ACCOUNTS
On the Statement of Assets and Liabilities, as a result of permanent
book-to-tax 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 1,890 (206,109)
</TABLE>
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 June 30,
2000.
76
<PAGE>
NOTES TO FINANCIAL STATEMENTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
The following Funds had estimated net capital loss carryforwards at June 30,
2000, which are available to offset future net realized capital gains:
<TABLE>
<CAPTION>
Capital Loss
Fund Year Expires Carryforwards
<S> <C> <C>
ARIZONA TAX-FREE FUND 2008 $ 35,528
CALIFORNIA LIMITED TERM TAX-FREE FUND 2008 106,562
CALIFORNIA TAX-FREE FUND 2007 938,315
2008 3,432,951
COLORADO TAX-FREE FUND 2007 220,354
2008 2,006,901
MINNESOTA INTERMEDIATE TAX-FREE FUND 2007 129,158
2008 203,509
MINNESOTA TAX-FREE FUND 2007 185,017
2008 719,612
NATIONAL LIMITED TERM TAX-FREE FUND 2006 29,179
2007 210,768
2008 381,929
NATIONAL TAX-FREE FUND 2003 232,665
2007 5,435,134
2008 14,187,989
OREGON TAX-FREE FUND 2007 101,326
2008 412,572
</TABLE>
For tax purposes, the Colorado Tax-Free, Minnesota Intermediate Tax-Free,
Minnesota Tax-Free, and National Limited Term Tax-Free Funds have current
year post-October capital losses of $1,405,505, $1,298,633, $1,951,414, and
$1,011,806, respectively. These losses will be recognized for tax purposes on
the first day of the succeeding year.
In addition, the National Tax-Free Fund may only utilize up to $2,707,768 of
its capital loss carryforwards in each subsequent year to offset net realized
capital gains.
3. ADVISORY FEES
The Trust has entered into an advisory contract on behalf of the Funds with
Wells Fargo Bank, N.A. ("WFB"). Pursuant to the contract, WFB has agreed to
provide the Funds with daily portfolio management, for which, WFB is entitled
to be paid a monthly advisory fee at the annual rate of 0.40% of each Fund's
average daily net assets.
Wells Capital Management Incorporated ("WCM"), a wholly-owned subsidiary of
WFB, acts as investment sub-advisor to the 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 advisor 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. ("Advisor"), a wholly owned subsidiary of Norwest
Bank Minnesota, N.A. ("Norwest"), and now known as Wells Fargo Bank Minnesota,
N.A., 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 Advisor 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
77
<PAGE>
TAX-FREE FUNDS NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
Minnesota Intermediate Tax-Free Fund, the Advisor 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 year ended June 30, 2000 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 Fund's Class A shares and up to the
greater of $100,000 or 0.05% of the California Tax-Free Fund'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 Distribution Plan pursuant to Rule 12b-1 under
the Act with respect to the Class B shares of the Colorado Tax-Free, Minnesota
Tax-Free, and National Tax-Free Funds authorized payment of a maintenance fee
at an annual rate of 0.25% of the average daily net assets attributable to
each Fund's Class 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 FEES
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, WFB
served as Administrator for the Arizona Tax-Free, California Limited Term
Tax-Free, California Tax-Free and Oregon Tax-Free Funds at the rate, and
pursuant to the substantially same terms, as apply under the existing
agreement.
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.
6. TRANSFER AGENT FEES
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 November 8, 1999, BFDS provided transfer agency services at the same
rates pursuant to a substantially similar agreement, and prior to July 17,
1999, WFB provided transfer agency services directly for the Arizona Tax-Free,
California Limited Term Tax-Free, California Tax-Free, and Oregon Tax-Free
Funds at an annual rate of 0.14% of the average daily net assets of each Fund.
7. SHAREHOLDER SERVICING FEES
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 Class C shares for
these services. No fee is currently 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
78
<PAGE>
NOTES TO FINANCIAL STATEMENTS TAX-FREE FUNDS
--------------------------------------------------------------------------------
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. The Class C shares of the California
Tax-Free and Institutional Class shares of the Arizona Tax-Free, California
Limited Term Tax-Free, California Tax-Free, and Oregon Tax-Free Funds 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 June 30, 2000 were as follows:
<TABLE>
<CAPTION>
Institutional
Fund Class A Class B Class C Class
<S> <C> <C> <C> <C>
ARIZONA TAX-FREE FUND $ 11,910 $ 5,137 N/A $ 8,196
CALIFORNIA LIMITED TERM
TAX-FREE FUND 99,163 N/A N/A 5,964
CALIFORNIA TAX-FREE FUND 1,101,847 325,245 $49,400 50,663
COLORADO TAX-FREE FUND 57,143 11,903 N/A 0
MINNESOTA INTERMEDIATE
TAX-FREE FUND N/A N/A N/A 0
MINNESOTA TAX-FREE FUND 50,485 28,164 N/A 0
NATIONAL LIMITED TERM TAX-FREE
FUND N/A N/A N/A 0
NATIONAL TAX-FREE FUND 107,514 30,916 9,650 0
OREGON TAX-FREE FUND 56,755 24,606 N/A 5,043
</TABLE>
8. OTHER FEES AND TRANSACTIONS WITH AFFILIATES
Forum Accounting Services, LLC ("Forum") provides portfolio accounting
services to the Funds. For these services, Forum is entitled to receive a
fixed monthly per fund fee, a basis point fee of 0.0025% of the average daily
net assets of each Fund, and will be reimbursed for all out-of-pocket expenses
reasonably incurred in providing these services. 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. For the Colorado Tax-Free, Minnesota Intermediate Tax-Free,
Minnesota Tax-Free, National Limited Term Tax-Free and National Tax-Free
Funds, portfolio accounting services were provided by Forum.
The Trust has entered into a contract on behalf of each Fund with Wells Fargo
Bank Minnesota, N.A. ("WFB MN"), formerly Norwest Bank Minnesota, N.A.,
whereby WFB MN is responsible for providing custody services for the Funds.
Pursuant to the contract, WFB MN 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 such custody services performed by WFB MN 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 such custody services performed by WFB MN for 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 were also officers of Stephens for a portion of
the period. As of June 30, 2000, Stephens owned 8 shares of the Arizona
Tax-Free Fund, 13,629 shares of the California Limited Term Tax-Free Fund,
10,128 shares of the California Tax-Free Fund, 17,013 shares of the National
Tax-Free Fund, and 6 shares of the Oregon Tax-Free Fund.
Stephens has retained $3,959,051 as sales charges from the proceeds of
Class A shares sold and $123,417 from the proceeds of Class C shares redeemed
by the Trust for the year ended June 30, 2000. A third party financing agent
has retained approximately $5,594,474 from the proceeds of Class B shares
redeemed by the Trust for the year ended June 30, 2000. Wells Fargo Securities
Inc., a subsidiary of WFB, received $2,532,791 as sales charges from the
proceeds of Class A shares sold and $391,390 from the proceeds of Class B
shares redeemed by the Trust for the year ended June 30, 2000. Norwest
received $69,190 as sales
79
<PAGE>
TAX-FREE FUNDS NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
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 year ended June 30, 2000.
9. WAIVED FEES AND REIMBURSED EXPENSES
All amounts shown as waived fees or reimbursed expenses on the Statement of
Operations, for the period ended June 30, 2000, were waived by WFB, FAdS, or
reimbursed by Stephens. Fee waivers are contractual and apply for a minimum of
one year from the November 5, 1999 closing date of the reorganization.
Thereafter, the contract remains in effect until such time as the Board acts
to 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 $ 67,161 $ 67,161
CALIFORNIA LIMITED TERM
TAX-FREE FUND 0 0 237,093 237,093
CALIFORNIA TAX-FREE FUND 0 203 1,429,663 1,429,866
COLORADO TAX-FREE FUND 143,746 0 186,772 330,518
MINNESOTA INTERMEDIATE TAX-
FREE FUND 64,345 0 98,970 163,315
MINNESOTA TAX-FREE FUND 135,397 0 205,401 340,798
NATIONAL LIMITED TERM TAX-FREE
FUND 115,290 0 66,804 182,094
NATIONAL TAX-FREE FUND 425,370 0 211,167 636,537
OREGON TAX-FREE FUND 0 0 174,577 174,577
</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), for each
Fund for the year ended June 30, 2000, were as follows:
<TABLE>
<CAPTION>
AGGREGATE PURCHASES AND SALES
Fund Purchases at Cost Sales Proceeds
<S> <C> <C>
ARIZONA TAX-FREE FUND $ 5,322,808 $ 4,953,808
CALIFORNIA LIMITED TERM TAX-FREE FUND 23,347,992 27,841,861
CALIFORNIA TAX-FREE FUND 198,776,870 308,600,956
COLORADO TAX-FREE FUND 93,133,559 100,623,498
MINNESOTA INTERMEDIATE TAX-FREE FUND 55,678,886 85,233,113
MINNESOTA TAX-FREE FUND 51,327,489 65,947,033
NATIONAL LIMITED TERM TAX-FREE FUND 34,403,772 58,102,492
NATIONAL TAX-FREE FUND 268,456,076 332,381,111
OREGON TAX-FREE FUND 18,051,862 22,166,871
</TABLE>
80
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INDEPENDENT AUDITORS' REPORT TAX-FREE FUNDS
--------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS
WELLS FARGO FUNDS TRUST:
We have audited the accompanying statements of assets and liabilities of
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, and Oregon Tax-Free Fund, nine funds of Wells Fargo Funds Trust
(collectively the "Funds") including the portfolios of investments as of
June 30, 2000, and the related statements of operations, statements of changes
in net assets and financial highlights for the periods presented on pages 60
through 74. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of the securities owned as of June 30, 2000,
by correspondence with the custodian. As to securities purchased but not yet
received, we performed other appropriate auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds of Wells Fargo Funds Trust as of June 30, 2000,
the results of their operations, changes in their net assets and their
financial highlights for the periods presented on pages 60 through 74 in
conformity with accounting principles generally accepted in the United States
of America.
/s/ KPMG LLP
San Francisco, California
August 7, 2000
81
<PAGE>
TAX-FREE FUNDS TAX INFORMATION (UNAUDITED)
--------------------------------------------------------------------------------
For the tax year ended June 30, 2000, the Colorado Tax-Free Fund designates
100% of its distributions paid during the year from net realized gains as
long-term capital gain distributions, pursuant to Section 852(b)(3) of the
Internal Revenue Code.
For federal income tax purposes, the following funds designate 100% of their
distributions paid from net investment income as exempt-interest dividends
under Section 852(b)(5) of the Internal Revenue Code for the periods as
indicated:
<TABLE>
<CAPTION>
FUND PERIODS
<S> <C>
ARIZONA TAX-FREE FUND JANUARY 1, 2000 TO JUNE 30, 2000
CALIFORNIA LIMITED TERM TAX-FREE FUND JANUARY 1, 2000 TO JUNE 30, 2000
CALIFORNIA TAX-FREE FUND JANUARY 1, 2000 TO JUNE 30, 2000
COLORADO TAX-FREE FUND JULY 1, 1999 TO JUNE 30, 2000
MINNESOTA INTERMEDIATE TAX-FREE FUND JULY 1, 1999 TO JUNE 30, 2000
MINNESOTA TAX-FREE FUND JULY 1, 1999 TO JUNE 30, 2000
NATIONAL LIMITED TERM TAX-FREE FUND JULY 1, 1999 TO JUNE 30, 2000
NOVEMBER 8, 1999 TO JUNE 30,
NATIONAL TAX-FREE FUND 2000
OREGON TAX-FREE FUND JANUARY 1, 2000 TO JUNE 30, 2000
</TABLE>
For California income tax purposes, the California Limited Term Tax-Free Fund
and the California Tax-Free Fund designate 100% of their distributions paid
from net investment income as exempt-interest dividends under Section 17145 of
the California Revenue and Taxation Code for the period January 1, 2000 to
June 30, 2000.
82
<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.
ABAG -- ASSOCIATION OF BAY AREA GOVERNMENTS
ACA -- AMERICAN CAPITAL ACCESS (CORPORATION)
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
EDA -- ECONOMIC DEVELOPMENT AUTHORITY
EDFA -- EDUCATION FINANCE AUTHORITY
ETV -- EDUCATIONAL TELEVISION
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
HUD -- HOUSING & URBAN DEVELOPMENT
IBC -- INSURED BOND CERTIFICATES
IDA -- INDUSTRIAL DEVELOPMENT AUTHORITY
IDR -- INDUSTRIAL DEVELOPMENT REVENUE
JR -- JUNIOR
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
SFM -- SINGLE FAMILY MORTGAGE
SFMR -- SINGLE FAMILY MORTGAGE REVENUE
SMR -- SINGLE MORTGAGE REVIEW
TBA -- TO BE ANNOUNCED
TCRS -- TRANSFERRABLE CUSTODIAL RECEIPTS
TRAN -- TAX REVENUE ANTICIPATION NOTES
USD -- UNIFIED SCHOOL DISTRICT
USG -- U.S. GOVERNMENT SECURITIES
UTGO -- UNLIMITED-TAX GENERAL OBLIGATION
V/R -- VARIABLE RATE
WEBS -- WORLD EQUITY BENCHMARK SHARES
83
<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.
DATED MATERIAL
PLEASE EXPEDITE
[LOGO]
P.O. Box 8266
Boston, MA 02266-8266
AR 015 (8/00)
