WELLS FARGO FUNDS TRUST, 485BPOS, 2000-10-02

WELLS FARGO FUNDS TRUST
485BPOS, 2000-10-02

Previous: REDBACK NETWORKS INC, 424B3, 2000-10-02

Next: WELLS FARGO FUNDS TRUST, 485BPOS, EX-99.B(I), 2000-10-02

<PAGE>

As filed with the Securities and Exchange Commission
on October 1, 2000
Registration No. 333-74295; 811-09253

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ______
Pre-Effective Amendment No. ___ ______
Post-Effective Amendment No. 15 x
------

And

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 ______
Amendment No. 16 x
------
________________________

WELLS FARGO FUNDS TRUST
(Exact Name of Registrant as specified in Charter)
525 Market Street
San Francisco, CA 94163
(Address of Principal Executive Offices, including Zip Code)
__________________________

Registrant's Telephone Number, including Area Code: (800) 643-9691
C. David Messman
Wells Fargo Bank, N.A.
633 Folsom Street, 7th Floor
San Francisco, CA 94107-3600
(Name and Address of Agent for Service)
With a copy to:
Robert M. Kurucza, Esq.
Marco E. Adelfio, Esq.
Morrison & Foerster LLP
2000 Pennsylvania Ave., N.W.
Washington, D.C. 20006

It is proposed that this filing will become effective (check appropriate box):

x Immediately upon filing pursuant to Rule 485(b), or
---

___ on _________ pursuant to Rule 485(b)

___ 60 days after filing pursuant to Rule 485(a)(1), or

___ on _________ pursuant to Rule 485(a)(1)

___ 75 days after filing pursuant to Rule 485(a)(2), or
<PAGE>

___ on ___________pursuant to Rule 485(a)(2)

If appropriate, check the following box:

___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>

EXPLANATORY NOTE
----------------

This Post-Effective Amendment No. 15 is being filed to add to the
Registration Statement of Wells Fargo Funds Trust (the "Trust"), the audited
financial statements and certain related financial information for the fiscal
year ended May 31, 2000 for the Income Funds and WealthBuilder Portfolios of the
Trust, and to make certain other non-material changes to the Registration
Statement.

This Post-Effective Amendment does not affect the Registration Statement
for any of the Trust's other funds.
<PAGE>

WELLS FARGO FUNDS TRUST
-----------------------
Cross Reference Sheet
---------------------

Form N-1A Item Number
---------------------

Part A Prospectus Captions
------ -------------------

1 Front and Back Cover Pages
2 Objectives and Principal Strategies
Important Risks
3 Summary of Expenses
Example of Expenses
4 Objectives and Principal Strategies
Important Risks
See Individual Fund Summaries
General Investment Risks
5 Not applicable
6 Organization and Management of the Funds
7 Your Account
How to Buy Shares
How to Sell Shares
Exchanges
Dividends and Distributions
Taxes
8 Distribution Plan
Exchanges
9 See Individual Fund Summaries

Part B Statement of Additional Information Captions
------ --------------------------------------------

10 Cover Page and Table of Contents
11 Historical Fund Information
Cover Page
12 Investment Restrictions
Additional Investment Policies
Risk Factors
13 Management
14 Capital Stock
15 Management
16 Portfolio Transactions
17 Capital Stock
18 Determination of Net Asset Value
Additional Purchase and Redemption Information
19 Federal Income Taxes
20 Management
21 Performance Calculations
22 Financial Information

Part C Other Information
------ -----------------

23-30 Information required to be included in Part C is set forth
under the appropriate Item, so numbered, in Part C of this
Document.
<PAGE>

[LOGO OF WELLS FARGO FUNDS]

WELLS FARGO INCOME FUNDS

PROSPECTUS

Please read this Prospectus and keep it Corporate Bond Fund
for future reference. It is designed to
provide you with important information Income Fund
and to help you decide if a Fund's goals
match your own. Income Plus Fund

These securities have not been approved Intermediate Government Income Fund
or disapproved by the U.S. Securities
and Exchange Commission ("SEC"), nor has Limited Term Government Income Fund
the SEC passed upon the accuracy or
adequacy of this Prospectus. Any Stable Income Fund
representation to the contrary is a
criminal offense. Variable Rate Government Fund

Fund shares are NOT deposits or other Class A, Class B, Class C
obligations of, or issued, endorsed or
guaranteed by Wells Fargo Bank, N.A.
("Wells Fargo Bank") or any of its
affiliates. Fund shares are NOT insured
or guaranteed by the U.S. Government,
the Federal Deposit Insurance
Corporation ("FDIC") or any other
governmental agency. AN INVESTMENT IN A
FUND INVOLVES CERTAIN RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL.

OCTOBER 1, 2000
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------

<PAGE>

Table of Contents Income Funds
--------------------------------------------------------------------------------

Overview Objectives and Principal Strategies 4

This section contains important Summary of Important Risks 6
summary information about the Performance History 10
Funds. Summary of Expenses 18
Key Information 22

--------------------------------------------------------------------------------
The Funds Corporate Bond Fund 24

This section contains important Income Fund 28
information about the individual Income Plus Fund 32
Funds. Intermediate Government Income Fund 36
Limited Term Government Income Fund 40
Stable Income Fund 44
Variable Rate Government Fund 48
General Investment Risks 52
Organization and Management
of the Funds 58

--------------------------------------------------------------------------------
Your Investment A Choice of Share Classes 60

Turn to this section for Reduced Sales Charges 64
information on how to open an Exchanges 67
account and how to buy, sell and Your Account 68
exchange Fund shares. How to Buy Shares 69
How to Sell Shares 72

--------------------------------------------------------------------------------
Reference Additional Services and
Other Information 74
Look here for additional Table of Predecessors 76
information and term Portfolio Managers 78
definitions. Glossary 80

<PAGE>

Corporate Bond Fund Seeks a high level of current income,
consistent with reasonable risk.

Income Fund Seeks current income and total return.

Income Plus Fund Seeks to maximize income while maintaining
prospects for capital appreciation

Intermediate Government
Income Fund Seeks current income, consistent with safety
of principal.

Limited Term Government Seeks current income, while preserving capital.
Income Fund

Stable Income Fund Seeks stability of principal while providing low
volatility total return.

Variable Rate Government Seeks a high level of current income, while
Fund reducing principal volatility, by investing
primarily in adjustable rate mortgage securities.

4 Income Funds Prospectus
<PAGE>

--------------------------------------------------------------------------------
PRINCIPAL STRATEGY
--------------------------------------------------------------------------------
We invest primarily in investment grade corporate debt securities of any
maturity. Under normal market conditions we expect to maintain a dollar weighted
average maturity for portfolios of between 10 and 15 years. We may also invest
in U.S. Government obligations, and up to 25% of our assets in below investment
grade securities.

We invest in a broad spectrum of U.S. issues, including U.S. Government
obligations, mortgage- and other asset-backed securities, and the debt
securities of financial institutions, corporations, and others. We target
average portfolio duration in a range based around the average portfolio
duration of the mutual funds included in the Lipper Corporate A-Rated Debt
Average (which is currently about 5-6 years, but is expected to change
frequently).

We invest in corporate and government debt securities and income-producing
equity securities selected with particular consideration for their potential to
generate current income. We may buy debt securities that are below investment
grade (sometimes referred to as "junk bonds"), as well as debt rated in the
lower investment grade categories. An equity focus will be on securities issued
by companies and industries that tend to pay high ongoing dividends, such as
utilities. We may also buy preferred stock and other convertible securities, as
well as common stock of any size company.

We invest in short- to intermediate-term U.S. Government obligations. We may
invest in securities of any maturity. Under ordinary circumstances, we expect to
maintain a dollar weighted average maturity of between 2 and 5 years. We seek to
preserve capital by shortening average maturity when we expect interest rates to
increase and to increase total return by lengthening maturity when we expect
interest rates to fall.

The Fund is a Gateway fund that invests in short-term investment grade
securities which include mortgage-backed securities and U.S. Government
obligations. We invest in fixed and variable rate U.S. dollar-denominated
fixed-income securities of U.S. and foreign issuers, including U.S. Government
obligations and the debt securities of financial institutions, corporations, and
others.

We invest in adjustable rate mortgage securities issued or guaranteed by the
U.S. Government, its agencies and instrumentalities and we may also invest in
U.S. Treasury securities with remaining maturities of up to 5 years. We invest
in obligations of any maturity, but under ordinary conditions we will maintain a
dollar weighted average maturity of between 10 to 30 years.

Income Funds Prospectus 5
<PAGE>

Summary of Important Risks
--------------------------------------------------------------------------------

This section summarizes important risks that are common to all of the Funds
described in this Prospectus, and important risks that relate specifically to
particular Funds. Both are important to your investment choice. Additional
information about these and other risks is included in:

. the individual Fund Descriptions later in this Prospectus;

. under the "General Investment Risks"section beginning on page 52;and

. in the Fund's Statement of Additional Information.

An investment in a Fund is not a deposit of Wells Fargo Bank and is not insured
or guaranteed by the FDIC or any other government agency. It is possible to lose
money by investing in a Fund.

--------------------------------------------------------------------------------
COMMON RISKS FOR THE FUNDS
--------------------------------------------------------------------------------
Debt Securities
The Funds invest in debt securities, such as notes and bonds, which are
subject to credit risk and interest rate risk. Credit risk is the
possibility that an issuer of an instrument will be unable to make interest
payments or repay principal. Changes in the financial strength of an issuer
or changes in the credit rating of a security may affect its value.
Interest rate risk is the risk that interest rates may increase, which will
reduce the resale value of instruments in a Fund's portfolio, including
U.S. Government obligations. Debt securities with longer maturities are
generally more sensitive to interest rate changes than those with shorter
maturities. Changes in market interest rates do not affect the rate payable
on debt securities held in a Fund, unless the instrument has adjustable or
variable rate features, which can reduce interest rate risk. Changes in
market interest rates may also extend or shorten the duration of certain
types of instruments, such as asset-backed securities, thereby affecting
their value and the return on your investment.

6 Income Funds Prospectus
<PAGE>

--------------------------------------------------------------------------------
FUND SPECIFIC RISKS
--------------------------------------------------------------------------------
We may invest in debt securities that are in low
or below investment grade categories, or are
unrated or in default at the time of purchase.
Such debt securities have a much greater risk of
default (or in the case of bonds currently in
Corporate Bond Fund default, of not returning principal) and are more
volatile than higher-rated securities of similar
maturity. The value of such debt securities will
be affected by overall economic conditions,
interest rates, and the creditworthiness of the
individual issuers. Additionally, these lower
rated debt securities may be less liquid and more
difficult to value than higher rated securities.

Mortgage-backed securities are subject to
Income Fund prepayment risk and to extension risk, either of
which can reduce the rate of return on the
portfolio.

We may invest in debt securities that are in low
or below investment grade categories, or are
unrated or in default at the time of purchase.
Such debt securities have a much greater risk of
default (or in the case of bonds currently in
default, of not returning principal) and are more
volatile than higher-rated securities of similar
maturity. The value of such debt securities will
be affected by overall economic conditions,
interest rates, and the creditworthiness of the
individual issuers. Additionally, these lower
rated debt securities may be less liquid and more
Income Plus Fund difficult to value than higher rated securities.

We may invest in equity securities, which are
subject to equity market risk. This is the risk
that stock prices will fluctuate and can decline
and reduce the value of a Fund's portfolio.
Certain types of stock and certain individual
stocks selected for a Fund's portfolio may
underperform or decline in value more than the
overall market. As of the date of this Prospectus,
the equity markets, as measured by the S&P 500
Index and other commonly used indexes, are trading
at or close to record levels. There can be no
guarantee that these levels will continue.

The U.S. Government does not guarantee the market
Intermediate Government value or current yield of its obligations. Not all
Income Fund and Limited U.S. Government obligations are backed by the full
Term Government Income faith and credit of the U.S. Government.
Fund Mortgage-backed securities are subject to
prepayment risk and to extension risk, either of
which can reduce the rate of return on the
portfolio.

Income Funds Prospectus 7
<PAGE>

Summary of Important Risks
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
FUND SPECIFIC RISKS
--------------------------------------------------------------------------------
The Fund is primarily subject to the debt
Stable Income Fund securities risks described in the "Common Risks"
section above. Investments in foreign obligations
may also present special risks, including
currency, political, diplomatic, regulatory and
liquidity risks.

Adjustable rate mortgages ("ARMs") have interest
rates tied to an index, such as U.S. Treasury bill
rates or the federal funds target rate, so that
payments may be periodically reset according to
changes in the index. Individual ARMs are bundled
Variable Rate Government together and sold as securities. Unlike
Fund conventional debt securities, which typically make
semi-annual interest payments and repay principal
at maturity, ARMs provide a monthly payment of a
pro-rated share of both interest payments and
pre-payments of principal. Since ARMs adjust to
interest rate changes, they may be less sensitive
to interest rate changes than their
weighted-average maturity might suggest. Not all
U.S. Government obligations are backed by the full
faith and credit of the U.S. Government.

8 Income Funds Prospectus
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Performance History
--------------------------------------------------------------------------------
The information on the following pages shows you how each Fund has
performed and illustrates the variability of a Fund's returns over time.
Each Fund's average annual returns from inception, and for one-, five- and
ten-year periods (as applicable) are compared to the performance of an
appropriate broad-based index.

Please remember that past performance is no guarantee of future results.

Corporate Bond Fund Class A Calendar Year Returns (%)*

[GRAPH]

1999 -3.78%

Best Qtr.: Q1 `99 o -0.36% Worst Qtr.: Q2 `99 o -2.00%

* Returns do not reflect sales charges. If they did, returns would be lower.
The Fund's year-to-date performance through June 30, 2000 was 0.78%.

Average annual total return (%)/1/

Since
for the period ended 12/31/99 1 year Inception

Class A (Incept. 4/1/98) -8.12 -0.95
Class B (Incept. 4/1/98) -8.91 -1.10
Class C (Incept. 4/1/98) -5.31 0.91
LB U.S. Credit Index/2/ -1.96 2.82

/1/ Returns reflect applicable sales charges.

/2/ Lehman Brothers U.S. Credit Index.

10 Income Funds Prospectus
<PAGE>

Income Fund Class A Calendar Year Returns (%)*

[GRAPH]
1990 9.20%
1991 18.87%
1992 7.96%
1993 8.90%
1994 -7.00%
1995 17.34%
1996 1.91%
1997 10.26%
1998 8.98%
1999 -3.94%

Best Qtr.: Q3 `91 o 6.21% Worst Qtr.: Q2 `94 o -3.39%

* Returns do not reflect sales charges. If they did, returns would be lower.
The Fund's year-to-date performance through June 30, 2000 was 3.22%.

Average annual total return (%)/1/

for the period ended 12/31/99 1 year 5 years 10 years

Class A (Incept. 6/9/87) -8.26 5.68 6.46
Class B (Incept. 8/5/93)/2/ -9.18 5.55 6.15
LB Aggregate Bond Index/3/ -0.82 7.73 7.70

/1/ Returns reflect applicable sales charges.
/2/ Performance shown for periods prior to the inception of the Class B shares
reflects the performance of the Class A shares adjusted for Class B share
expenses.
/3/ Lehman Brothers Aggregate Bond Index.

Income Funds Prospectus 11
<PAGE>

Performance History
--------------------------------------------------------------------------------

Income Plus Fund Class A Calendar Year Returns (%)*

[GRAPH]

1999 -3.47%

Best Qtr.: Q2 `99 o -0.20% Worst Qtr.: Q3 `99 o -1.44%

* Returns do not reflect sales charges. If they did, returns would be lower.
The Fund's year-to-date performance through June 30, 2000 was -1.09%.

Average annual total return (%)/1/

Since
for the period ended 12/31/99 1 year Inception

Class A (Incept. 7/13/98) -7.80 -3.16
Class B (Incept. 7/13/98) -8.68 -3.24
Class C (Incept. 7/13/98) -5.08 -0.75
LB Aggregate Bond Index/2/ -0.82 2.46

/1/ Returns reflect applicable sales charges.
/2/ Lehman Brothers Aggregate Bond Index.

12 Income Funds Prospectus
<PAGE>

Intermediate Government Income Fund Class A Calendar Year Returns (%)*

[GRAPH]

1990 8.78%
1991 14.00%
1992 6.00%
1993 8.96%
1994 -6.16%
1995 13.75%
1996 3.13%
1997 8.72%
1998 9.65%
1999 -2.21%

Best Qtr.: Q3 `98 o 5.91% Worst Qtr.: Q2 `94 o -3.73%

* Returns do not reflect sales charges. If they did, returns would be lower.
The Fund's year-to-date performance through June 30, 2000 was 3.65%.

Average annual total return (%)/1/

for the period ended 12/31/99 1 year 5 years 10 years

Class A (Incept. 5/2/96)/2/ -6.61 5.49 5.79
Class B (Incept. 5/17/96)/3/ -7.44 5.37 5.49
Class C (Incept. 11/8/99)/3/ -3.86 5.65 5.48
LB Intermediate U.S. Gov't Index4 0.49 6.93 7.10

/1/ Returns reflect applicable sales charges.
/2/ Performance shown for periods prior to May 2, 1996 and after November 11,
1994 reflects the performance of the Institutional Class Shares adjusted to
reflect the fees and expenses of the Class A shares. Performance shown for
periods prior to November 11, 1994 reflects the performance of the
predecessor collective investment fund, adjusted to reflect the fees and
expenses of the Class A shares. The collective investment fund was not a
registered mutual fund and was not subject to certain investment
limitations and other restrictions which, if applicable, may have adversely
affected performance.
/3/ Performance shown prior to inception reflects the performance shown for the
Class A shares adjusted to reflect the fees and expenses of this Class. See
Note 2 above for additional information about Class A share performance.
/4/ Lehman Brothers Intermediate U.S. Government Index.

Income Funds Prospectus 13
<PAGE>

Performance History
--------------------------------------------------------------------------------
Limited Term Government Income Fund Class A Calendar Year Returns (%)*

[GRAPH]

1994 -1.42%
1995 12.67%
1996 3.61%
1997 7.57%
1998 7.61%
1999 -0.27%

Best Qtr.: Q3 '98 o 4.81% Worst Qtr.: Q3 '94 o -0.67%

* Returns do not reflect sales charges. If they did, returns would be lower.
The Fund's year-to-date performance through June 30, 2000 was 2.67%.

Average annual total return (%)/1/
Since
for the period ended 12/31/99 1 year 5 years Inception

Class A (Incept. 10/27/93) -4.79 5.18 4.01
Class B (Incept. 6/15/98)/2/ -5.70 5.17 4.12
LB Intermediate Gov't./Credit Index/3/ 0.39 7.10 5.37

/1/ Returns reflect applicable sales charges.
/2/ Performance shown for periods prior to the inception of this Class reflects
the performance of the Class A shares adjusted to reflect this Class's fees
and expenses.
/3/ Lehman Brothers Intermediate Government/Credit Index.

14 Income Funds Prospectus
<PAGE>

Stable Income Fund Class A Calendar Year Returns (%)*

[GRAPH]

1995 7.93%
1996 5.46%
1997 6.46%
1998 5.87%
1999 3.43%

Best Qtr.: Q2 `95 o 2.24% Worst Qtr.: Q2 `99 o 0.69%

* Returns do not reflect sales charges. If they did, returns would be lower.
The Fund's year-to-date performance through June 30, 2000 was 2.90%.

Average annual total return (%)/1/
Since
for the period ended 12/31/99 1 year Inception4

Class A (Incept. 5/2/96)/2/ 1.88 5.49
Class B (Incept. 5/17/96)/2/ 1.29 5.00
ML Treasury Bill One-Year/3/ 4.03 5.42

/1/ Returns reflect applicable sales charges.
/2/ Performance shown for periods prior to the inception of this Class reflects
the performance of the Institutional Class shares adjusted to reflect this
Class's fees and expenses.
/3/ Merrill Lynch Treasury Bill One-Year Index.
/4/ November 11, 1994.

Income Funds Prospectus 15
<PAGE>

Performance History
--------------------------------------------------------------------------------
Variable Rate Government Fund Class A Calendar Year Returns(%)*

[GRAPH]

1991 8.60%
1992 4.23%
1993 4.87%
1994 -3.81%
1995 7.69%
1996 4.41%
1997 5.43%
1998 3.58%
1999 2.69%

Best Qtr.: Q1 '95 o 2.57% Worst Qtr.: Q4 '94 o -2.09%

* Returns do not reflect sales charges. If they did, returns would be lower.
The Fund's year-to-date performance through June 30, 2000 was 3.28%.

Average annual total return (%)/1/

Since
for the period ended 12/31/99 1 year 5 years Inception

Class A (Incept. 11/1/90) -1.95 3.79 3.84
LB ARMs Index/2/ 4.89 7.27 N/A

/1/ Returns reflect applicable sales charges.
/2/ Lehman Brothers Adjustable Rate Mortgages Index.

16 Income Funds Prospectus
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Income Funds
--------------------------------------------------------------------------------

These tables are intended to help you understand the various costs and expenses
you will pay as a shareholder in a Fund. These tables do not reflect charges
that may be imposed in connection with an account through which you hold Fund
shares. A broker/dealer or financial institution maintaining an account through
which you hold Fund shares may charge separate account, service, or transaction
fees on the purchase or sale of Fund shares that would be in addition to the
fees and expenses shown here.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES
---------------------------------------------------------------------------------------------------------------------
All Funds1
-------------------------------------------
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum sales charge (load) imposed
on purchases (as a percentage of offering price) 4.50% None None
Maximum deferred sales charge (load) (as a percentage of the lower
of the Net Asset Value ("NAV") at purchase or the NAV at redemption) None2 5.00% 1.00%
---------------------------------------------------------------------------------------------------------------------

<CAPTION>
---------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
---------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------
Corporate Bond
Fund
-------------------------------------------
CLASS A CLASS B CLASS C
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
Management Fees 0.50% 0.50% 0.50%
Distribution (12b-1) Fees 0.00% 0.75% 0.75%
Other Expenses3 1.18% 1.25% 1.20%
---------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.68% 2.50% 2.45%
---------------------------------------------------------------------------------------------------------------------
Fee Waivers 0.68% 0.75% 0.70%
---------------------------------------------------------------------------------------------------------------------
NET EXPENSES4 1.00% 1.75% 1.75%
---------------------------------------------------------------------------------------------------------------------

<CAPTION>
---------------------------------------------------------------------------------------------------------------------
Limited Term
Government Income Fund
-------------------------------------------
CLASS A CLASS B
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Management Fees 0.50% 0.50%
Distribution (12b-1) Fees 0.00% 0.75%
Other Expenses3 0.67% 0.69%
---------------------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.17% 1.94%
---------------------------------------------------------------------------------------------------------------------
Fee Waivers 0.21% 0.23%
---------------------------------------------------------------------------------------------------------------------
NET EXPENSES4 0.96% 1.71%
---------------------------------------------------------------------------------------------------------------------
</TABLE>
1 As applicable, the Stable Income Fund imposes a maximum sales charge (load)
on purchases of Class A shares of 1.5%, and a maximum deferred sales charge
(load) on redemptions of Class B shares of 1.5%.
2 Class A shares that are purchased at NAV in amounts of $1,000,000 or more
may be assessed a 1.00% CDSC if they are redeemed within one year from the
date of purchase. See "A Choice of Share Classes" for further information.
All other Class A shares will not have a CDSC.
3 Other expenses are based on estimated amounts for the current fiscal year.
4 The advisor has committed through September 30, 2001 to waive fees and/or
reimburse expenses to the extent necessary to maintain the Fund's net
operating expense ratio shown.
5 Includes expenses allocated from the core portfolio in which the Fund
invests.

18 Income Funds Prospectus
<PAGE>

Summary of Expenses
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
Income Income Plus Intermediate
Fund Fund Government Income Fund
-------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
0.50% 0.50% 0.60% 0.60% 0.60% 0.50% 0.50% 0.50%
0.00% 0.75% 0.00% 0.75% 0.75% 0.00% 0.75% 0.75%
0.60% 0.68% 0.82% 0.85% 0.84% 0.70% 0.62% 0.68%
-------------------------------------------------------------------------------------------------------
1.10% 1.93% 1.42% 2.20% 2.19% 1.20% 1.87% 1.93%
-------------------------------------------------------------------------------------------------------
0.10% 0.18% 0.32% 0.35% 0.34% 0.24% 0.16% 0.22%
-------------------------------------------------------------------------------------------------------
1.00% 1.75% 1.10% 1.85% 1.85% 0.96% 1.71% 1.71%
-------------------------------------------------------------------------------------------------------

<CAPTION>
-----------------------------------------------
Stable Variable Rate
Income Fund5 Government Fund
-----------------------------------------------
CLASS A CLASS B CLASS A
-----------------------------------------------
<S> <C> <C>
0.50% 0.50% 0.50%
0.00% 0.75% 0.00%
0.56% 0.63% 0.57%
-----------------------------------------------
1.06% 1.88% 1.07%
-----------------------------------------------
0.16% 0.23% 0.29%
-----------------------------------------------
0.90% 1.65% 0.78%
-----------------------------------------------
</TABLE>

Income Funds Prospectus 19
<PAGE>

Income Funds
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
EXAMPLE OF EXPENSES
--------------------------------------------------------------------------------
These examples are intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds. The examples assume a fixed
rate of return and that fund operating expenses remain the same. Your actual
costs may be higher or lower than those shown.
You would pay the following expenses on a $10,000 investment assuming a 5%
annual return and that you redeem your shares at the end of each period:

--------------------------------------------------------------------------------
Corporate Bond
Fund
------------------------------------
CLASS A CLASS B CLASS C
--------------------------------------------------------------------------------
1 YEAR $ 547 $ 678 $ 278
3 YEARS $ 892 $1,007 $ 697
5 YEARS $1,260 $1,463 $1,242
10 YEARS $2,293 $2,481 $2,733
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Limited Term Government
Fund
------------------------------------
CLASS A CLASS B
--------------------------------------------------------------------------------
1 YEAR $ 544 $ 674
3 YEARS $ 785 $ 887
5 YEARS $1,045 $1,226
10 YEARS $1,789 $1,952
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
You would pay the following expenses on a $10,000 investment assuming a 5%
annual return and that you do NOT redeem your shares at the end of the periods
shown:
--------------------------------------------------------------------------------
Corporate Bond
Fund
-------------------------------------------
CLASS A CLASS B CLASS C
--------------------------------------------------------------------------------
1 YEAR $ 547 $ 178 $ 178
3 YEARS $ 892 $ 707 $ 697
5 YEARS $1,260 $1,263 $1,242
10 YEARS $2,293 $2,481 $2,733
--------------------------------------------------------------------------------
Limited Term Government
Fund
------------------------------------------
CLASS A CLASS B
--------------------------------------------------------------------------------
1 YEAR $ 544 $ 174
3 YEARS $ 785 $ 587
5 YEARS $1,045 $1,026
10 YEARS $1,789 $1,952

Income Funds Prospectus 20
<PAGE>

Summary of Expenses
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------
Income Income Plus Intermediate Government
Fund Fund Income Fund
-------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 547 $ 678 $ 557 $ 688 $ 288 $ 544 $ 674 $ 274
$ 775 $ 889 $ 849 $ 955 $ 652 $ 791 $ 872 $ 585
$1,020 $1,225 $1,162 $1,348 $1,144 $1,058 $1,196 $1,022
$1,721 $1,922 $2,049 $2,216 $2,497 $1,819 $1,920 $2,236
</TABLE>

-----------------------------------------------------
Stable Income Variable Rate
Fund Government Fund
-----------------------------------------------------
CLASS A CLASS B CLASS A
-----------------------------------------------------
$ 240 $ 318 $ 526
$ 466 $ 569 $ 748
$ 711 $ 995 $ 987
$1,411 $1,867 $1,672
-----------------------------------------------------

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Income Income Plus Intermediate Government
Fund Fund Income Fund
-------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 547 $ 178 $ 557 $ 188 $ 188 $ 544 $ 174 $ 174
$ 775 $ 589 $ 849 $ 655 $ 652 $ 791 $ 572 $ 585
$1,020 $1,025 $1,162 $1,148 $1,144 $1,058 $ 996 $1,022
$1,721 $1,922 $2,049 $2,216 $2,497 $1,819 $1,920 $2,236
-------------------------------------------------------------------------------------------------------------
</TABLE>
-----------------------------------------------------
Stable Income Variable Rate
Fund Government Fund
-----------------------------------------------------
CLASS A CLASS B CLASS A
-----------------------------------------------------
$ 240 $ 168 $ 526
$ 466 $ 569 $ 748
$ 711 $ 995 $ 987
$1,411 $1,867 $1,672
-----------------------------------------------------

Income Funds Prospectus 21
<PAGE>

Key Information
--------------------------------------------------------------------------------

Core and Gateway Structure

Some of the Funds in this Prospectus are "Gateway" funds in a "core and Gateway"
structure. In this structure, a Gateway fund invests substantially all of its
assets in one or more core portfolios whose objectives and investment strategies
are consistent with a Fund's investment objective. Gateway funds can enhance
their investment opportunities and reduce their expenses through sharing the
costs and benefits of managing a large pool of assets. Core portfolios do not
offer shares to the public. Certain administrative and other fees and expenses
are charged to both the Gateway fund and the core portfolio(s). The services
provided and fees charged to a Gateway fund are in addition to and not
duplicative of the services provided and fees charged to the core portfolios.
References to the activities of a Gateway fund are understood to refer to the
investments of the core portfolio(s) in which it invests.

--------------------------------------------------------------------------------
Important information you should look for as you decide to invest in a Fund:

The summary information on the previous pages is designed to provide you with an
overview of each Fund. The sections that follow provide more detailed
information about the investments and management of each Fund.

--------------------------------------------------------------------------------
Investment Objective and Investment Strategies

The investment objective of each Fund in this Prospectus is non-fundamental,
that is, it can be changed by a vote of the Board of Trustees alone. The
objectives and strategies descriptions for each Fund tell you:

. what the Fund is trying to achieve;

. how we intend to invest your money;and

. what makes a Fund different from the other Funds offered in this
Prospectus.

--------------------------------------------------------------------------------
Permitted Investments

A summary of the Fund's key permitted investments and practices.

--------------------------------------------------------------------------------
Important Risk Factors

Describes the key risk factors for the Fund, and includes risks described in the
"Summary of Important Risks" and "General Investment Risks" sections.

Words appearing in italicized print and highlighted in color are defined in the
Glossary.

22 Income Funds Prospectus
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Corporate Bond Fund
--------------------------------------------------------------------------------

Portfolio Manager: Jeffrey L. Weaver, CFA

--------------------------------------------------------------------------------
Investment Objective

The Corporate Bond Fund seeks a high level of current income, consistent with
reasonable risk.

--------------------------------------------------------------------------------
Investment Strategies

We seek a high level of current income by actively managing a diversified
portfolio consisting primarily of corporate debt securities. When purchasing
these securities we consider, among other things, the yield differences for
various corporate sectors, and the current economic cycle's potential effect on
the various types of bonds. We may invest in securities of any maturity. Under
normal market conditions, we expect to maintain a dollar weighted average
maturity for portfolio securities of between 10 and 15 years. We also may invest
in U.S. Government obligations.

--------------------------------------------------------------------------------
Permitted Investments

Under normal market conditions, we invest:

. at least 65% of our total assets in corporate debt securities;

. in U.S.Government obligations;

. up to 25% of our total assets in debt securities that are below investment
grade; and

. up to 25% of our total assets in securities of foreign issuers.

We may temporarily hold assets in cash or in money market instruments, including
U.S. Government obligations, shares of other mutual funds and repurchase
agreements, or make other short-term investments, either to maintain liquidity
or for short-term defensive purposes when we believe it is in the best interests
of shareholders to do so. During these periods, the Fund may not achieve its
objective of a high level of current income.

--------------------------------------------------------------------------------
Important Risk Factors

We may invest in securities regardless of their rating, or in securities that
are unrated or in default at the time of purchase.

You should consider the "Summary of Important Risks" section on page 6; the
"General Investment Risks" section beginning on page 52; and the specific risks
listed here. They are all important to your investment choice.

24 Income Funds Prospectus
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Corporate Bond Fund
--------------------------------------------------------------------------------

This table is intended to help you understand the Fund's financial performance
for the past 5 years (or since inception, if shorter). Total returns represent
the rate you would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). KPMG LLP audited this
information which, along with their report and the Fund's financial statements,
is available upon request in the Fund's annual report.

--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES--COMMENCED
ON APRIL 1, 1998
-------------------------------------------------
May 31, June 30, June 30,
20002 1999 1998
For the period ended: -------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.62 $10.03 $10.00

Income from investment operations:
Net investment income (loss) 0.59 0.62 0.17
Net realized and unrealized gain (loss)
on investments (0.90) (0.37) 0.03

Total from investment operations (0.31) 0.25 0.20

Less distributions:
Dividends from net investment income (0.59) (0.62) (0.17)
Distributions from net realized gain 0.00 (0.04) 0.00

Total from distributions (0.59) (0.66) (0.17)

Net asset value, end of period $8.72 $9.62 $10.03

Total return (not annualized)1 (3.36%) 2.45% 1.98%

Ratios/supplemental data:
Net assets, end of period (000s) $5,062 $5,482 $5,503

Ratios to average net assets (annualized):
Ratio of expenses to average net assets 1.00% 0.93% 0.56%
Ratio of net investment income (loss) to
average net assets 6.95% 6.21% 6.47%

Portfolio turnover 103% 115% 33%

Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses (annualized)3 1.59% 2.10% 3.74%
</TABLE>
1 Total return calculations do not include sales charges, and would have been
lower had certain expenses not been waived or reimbursed during the periods
shown. Total return for the period ended June 30, 1998 represents return
for the three-month period from April 1, 1998 to June 30, 1998.
2 The Fund changed its fiscal year-end from June 30 to May 31.
3 During each period, various fees and/or expenses were waived and/or
reimbursed. The ratio of gross expenses to average net assets reflects the
expense ratio in the absence of any waivers and/or reimbursements.

26 Income Funds Prospectus
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B SHARES--COMMENCED CLASS C SHARES--COMMENCED
ON APRIL 1, 1998 ON APRIL 1, 1998
---------------------------------------------------------------------------------------------
May 31, June 30, June 30, May 31, June 30, June 30,
2000 1999 1998 2000 1999 1998
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$9.62 $10.03 $10.00 $9.62 $10.03 $10.00

0.52 0.55 0.15 0.52 0.55 0.15

(0.90) (0.37) 0.03 (0.90) (0.37) 0.03

(0.38) 0.18 0.18 (0.38) 0.18 0.18

(0.52) (0.55) (0.15) (0.52) (0.55) (0.15)
0.00 (0.04) 0.00 0.00 (0.04) 0.00

(0.52) (0.59) (0.15) (0.52) (0.59) (0.15)

$8.72 $9.62 $10.03 $8.72 $9.62 $10.03

(4.03%) 1.68% 1.81% (4.02%) 1.67% 1.78%

$9,494 $11,311 $4,595 $1,039 $1,994 $299

1.75% 1.68% 1.35% 1.75% 1.70% 1.34%

6.16% 5.43% 5.47% 6.16% 5.39% 5.57%

103% 115% 33% 103% 115% 33%

2.37% 2.65% 4.30% 2.43% 2.94% 8.58%
</TABLE>

Income Funds Prospectus 27
<PAGE>

Income Fund
--------------------------------------------------------------------------------

Portfolio Managers: Marjorie H. Grace, CFA; Mark Walter

--------------------------------------------------------------------------------

Investment Objective

The Income Fund seeks current income and total return.

--------------------------------------------------------------------------------

Investment Strategies

We invest in a diversified portfolio of debt and variable-rate debt securities
issued by domestic and foreign issuers. We invest in a broad spectrum of U.S.
issues, including U.S. Government obligations, mortgage- and other asset-backed
securities, and the debt securities of financial institutions, corporations, and
others. We target average portfolio duration in a range based around the average
portfolio duration of the mutual funds included in the Lipper Corporate A-Rated
Debt Average (which is currently about 5-6 years, but is expected to change
frequently). We attempt to enhance the Fund's performance by adjusting the
average duration within the range to benefit from the effect of various economic
factors, such as inflation, or growth cycles.

--------------------------------------------------------------------------------

Permitted Investments

Under normal market conditions, we invest:

. up to 70% of our total assets in corporate debt securities such as
bonds,debentures and notes, including debt securities that can be converted
into or exchanged for common stocks;

. at least 30% of our total assets in U.S.Government obligations;

. up to 50% of our total assets in mortgage-backed securities and up to 25%
of our assets in asset-backed securities; and

. at least 80% of our total assets in investment grade debt securities.The
Fund may invest up to 20% of its total assets in below investment grade
debt securities rated, at the time of purchase, in the fifth highest
long-term rating category assigned by a nationally recognized ratings
organization ("NRRO").

We may also invest in zero coupon securities and enter into dollar roll
transactions. We invest primarily in securities with maturities (or average life
in the case of mortgage-backed and similar securities) ranging from overnight to
40 years. It is anticipated that the Fund's portfolio will have an average
dollar-weighted maturity of between 3 and 15 years.

--------------------------------------------------------------------------------

Important Risk Factors

Mortgage- and asset-backed securities may not be guaranteed by the U.S.
Treasury. Mortgage- and asset-backed securities are subject to prepayment
acceleration and extension risk, either of which can lower the rate of return on
the portfolio. The Income Fund may invest in lower rated securities, which tend
to be more sensitive to economic conditions and involve greater credit risk than
higher rated securities.

28 Income Funds Prospectus
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Income Fund
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES--COMMENCED
ON JUNE 9, 1987
---------------------------------------------------
May 31, May 31, May 31,
For the period ended: 2000 1999 1998
---------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.48 $9.79 $9.27

Income from investment operations:
Net investment income (loss) 0.59 0.59 0.61
Net realized and unrealized gain (loss)
on investments (0.62) (0.31) 0.52

Total from investment operations (0.03) 0.28 1.13

Less distributions:
Dividends from net investment income (0.59) (0.59) (0.61)
Distributions from net realized gain 0.00 0.00 0.00

Total from distributions (0.59) (0.59) (0.61)
Net asset value, end of period $8.86 $9.48 $9.79
Total return (not annualized)1 (0.23%) 2.81% 12.47%
Ratios/supplemental data:
Net assets, end of period (000s) $16,895 $13,731 $7,661

Ratios to average net assets (annualized):
Ratio of expenses to average net assets 0.90% 0.75% 0.75%
Ratio of net investment income (loss) to average net assets 6.50% 5.98% 6.29%

Portfolio turnover 124% 202% 167%

Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses (annualized)2 1.05% 1.08% 1.14%
</TABLE>

1 Total return calculations do not include any sales charges, and would have
been lower had certain expenses not been waived or reimbursed during the
periods shown.
2 During each period, various fees and/or expenses were waived and/or
reimbursed. The ratio of gross expenses to average net assets reflects the
expense ratio in the absence of any waivers and/or reimbursements.

30 Income Funds Prospectus
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
CLASS B SHARES--COMMENCED
ON AUGUST 5, 1993
--------------------------------------------------------------------------------------------------------------------------------

May 31, May 31, May 31, May 31, May 31, May 31, May 31,
1997 1996 2000 1999 1998 1997 1996
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$9.27 $9.63 $9.46 $9.77 $9.26 $9.26 $9.61

0.62 0.61 0.53 0.52 0.54 0.55 0.54

0.00 (0.36) (0.62) (0.31) 0.51 0.00 (0.35)

0.62 0.25 (0.09) 0.21 1.05 0.55 0.19

(0.62) (0.61) (0.53) (0.52) (0.54) (0.55) (0.54)
0.00 0.00 0.00 0.00 0.00 0.00 0.00

(0.62) (0.61) (0.53) (0.52) (0.54) (0.55) (0.54)

$9.27 $9.27 $8.84 $9.46 $9.77 $9.26 $9.26

6.79% 2.58% (1.00%) 2.03% 11.52% 6.03% 1.92%

$5,142 $5,521 $8,611 $7,726 $4,855 $3,349 $3,292

0.75% 0.75% 1.65% 1.50% 1.50% 1.50% 1.50%

6.59% 6.33% 5.74% 5.22% 5.54% 5.87% 5.57%

231% 270% 124% 202% 167% 231% 270%

1.17% 1.16% 1.93% 2.13% 2.19% 2.25% 2.27%
</TABLE>

Income Funds Prospectus 31
<PAGE>

Income Plus Fund
--------------------------------------------------------------------------------

Portfolio Managers: N. Graham Allen, FCMA; Scott M. Smith, CFA;
Daniel J. Kokoszka, CFA

--------------------------------------------------------------------------------

Investment Objective

The Income Plus Fund seeks to maximize income while maintaining prospects for
capital appreciation.

--------------------------------------------------------------------------------

Investment Strategies

We actively manage a diversified portfolio of debt securities and
income-producing equity securities selected with particular consideration for
their potential to generate current income. We shift assets between such debt
and equity securities based on our assessment of the potential income available.
We may buy debt securities that are below investment grade (sometimes referred
to as "junk bonds"), as well as debt rated in the lower investment grade
categories. Our equity focus will be on securities issued by companies in
industries that tend to pay high ongoing dividends, such as utilities. We may
buy preferred stock and other convertible securities, as well as common stock of
any size company. Any capital appreciation will come primarily from the
income-producing equity portion of the portfolio.

--------------------------------------------------------------------------------

Permitted Investments

Under normal market conditions, we invest:

. at least 25% of our total assets in corporate and government bonds;

. up to 35% of our total assets in a wide range of income-producing equity
securities.;

. up to 50% of our total assets in debt securities that are below investment
grade,including "high risk" securities; and

. up to 25% of our total assets in securities of foreign issuers.

We will generally invest in debt securities that are rated at least "Caa" by
Moody's or "CCC" by S&P, or that are unrated but deemed by the advisor to be of
comparable equity. The average credit quality of this portion of the portfolio
is expected to be "BB" as rated by S&P(TM).

--------------------------------------------------------------------------------

Important Risk Factors

We may invest in debt securities that are in low or below investment grade
categories, or are unrated or in default at the time of purchase. Such debt
securities have a much greater risk of default (or in the case of bonds
currently in default, of not returning principal) and are more volatile than
higher-rated securities of similar maturity. The value of such debt securities
will be affected by overall economic conditions, interest rates, and the
creditworthiness of the individual issuers. Additionally, these lower rated debt
securities may be less liquid and more difficult to value than higher rated
securities.

32 Income Funds Prospectus
<PAGE>

--------------------------------------------------------------------------------

Stocks of the smaller and medium-sized companies in which the Fund may invest
may be more volatile than larger company stocks. Investments in foreign markets
may also present special risks, including currency, political, diplomatic,
regulatory and liquidity risks.

Income Funds Prospectus 33
<PAGE>

Income Plus Fund
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES--COMMENCED
ON JULY 13, 1998
-----------------------------------------
June 30, June 30,
For the period ended: 2000 1999
-----------------------------------------
<S> <C> <C>
Net asset value, beginning of period $12.04 $12.50

Income from investment operations:
Net investment income (loss) 0.79 0.77
Net realized and unrealized gain (loss)
on investments (1.44) (0.46)

Total from investment operations (0.65) 0.31

Less distributions:
Dividends from net investment income (0.79) (0.77)
Distributions from net realized gain 0.00 0.00

Total from distributions (0.79) (0.77)

Net asset value, end of period $10.60 $12.04

Total return (not annualized)1 (5.56%) 2.52%

Ratios/supplemental data:
Net assets, end of period (000s) $8,371 $11,223

Ratios to average net assets (annualized):
Ratio of expenses to average net assets 1.08% 0.66%
Ratio of net investment income (loss) to
to average net assets 7.56% 6.95%

Portfolio turnover 95% 176%

Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses (annualized)2 1.41% 1.62%
</TABLE>

34 Income Funds Prospectus
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B SHARES--COMMENCED CLASS C SHARES--COMMENCED
ON JULY 13, 1998 ON JULY 13, 1998
-------------------------------------------------------------------------------
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
-------------------------------------------------------------------------------
<S> <C> <C> <C>
$12.05 $12.50 $12.05 $12.50

0.72 0.68 0.72 0.68

(1.44) (0.45) (1.44) (0.45)

(0.72) 0.23 (0.72) 0.23

(0.72) (0.68) (0.72) (0.68)
0.00 0.00 0.00 0.00

(0.72) (0.68) (0.72) (0.68)

$10.61 $12.05 $10.61 $12.05

(6.19%) 1.87% (6.19%) 1.87%

$28,336 $36,892 $2,550 $3,037

1.86% 1.50% 1.83% 1.47%

6.77% 6.25% 6.80% 6.23%

95% 176% 95% 176%

2.18% 2.14% 2.27% 2.49%
</TABLE>

Income Funds Prospectus 35
<PAGE>

Intermediate Government Income Fund
--------------------------------------------------------------------------------

Portfolio Manager: Marjorie H. Grace, CFA

--------------------------------------------------------------------------------

Investment Objective

The Intermediate Government Income Fund seeks current income, consistent with
safety of principal.

--------------------------------------------------------------------------------

Investment Strategies

We invest primarily in fixed and variable rate U.S. Government obligations.
Under normal circumstances, we invest at least 65% of our total assets in U.S.
Government obligations and may invest up to 35% of our total assets in debt
securities that are not U.S. Government obligations. We target the average
portfolio duration in a range based on the average duration of 5-year U.S.
Treasury securities. As a result, the dollar weighted average maturity of the
Fund, which was approximately 7.6 years as of July 31, 2000, generally ranges
from four to ten years. We emphasize the use of intermediate maturity securities
to manage interest rate risk and use mortgage-backed securities to enhance
yield.

--------------------------------------------------------------------------------

Permitted Investments

Under normal market conditions, we invest:

. at least 65% of our total assets in U.S.Government obligations;

. up to 50% of our total assets in mortgage-backed securities,and up to 25%
of our total assets in asset-backed securities; and

. up to 10% of our total assets in zero coupon securities.

As part of our mortgage-backed securities investments, we may enter into dollar
rolls. We may not invest more than 25% of our total assets in securities issued
or guaranteed by any single agency or instrumentality of the U.S. Government,
except the U.S. Treasury.

We will purchase only securities that are rated, at the time of purchase, within
the two highest rating categories assigned by an NRRO or, if unrated, are
determined by us to be of comparable quality.

We may use options, swap agreements, interest rate caps, floors and collars, and
futures contracts to manage risk. We also may use options to enhance returns.

36 Income Funds Prospectus
<PAGE>

--------------------------------------------------------------------------------

Important Risk Factors

Mortgage- and asset-backed securities may not be guaranteed by the U.S.
Treasury. Mortgage- and asset-backed securities are subject to prepayment
acceleration and extension risk, either of which can reduce the rate of return
on the portfolio. Asset-backed securities are subject to risk of default on the
underlying assets, particularly during periods of economic downturn. Zero coupon
securities are sensitive to changes in interest rates, and tend to lose value in
a rising interest rate environment. Zero coupon securities also generate
ordinary income, which must be distributed to shareholders, even when they do
not generate funds to pay such distributions.

Income Funds Prospectus 37
<PAGE>

Intermediate Government Income Fund
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES--COMMENCED
ON MAY 2, 1996
--------------------------------------------------------------
May 31, May 31, May 31,
For the period ended: 2000 1999 1998
--------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $11.04 $11.22 $10.84

Income from investment operations:
Net investment income (loss) 0.64 0.64 0.77
Net realized and unrealized gain
(loss) on investments (0.44) (0.17) 0.31

Total from investment operations 0.20 0.47 1.08

Less distributions:
Dividends from net investment income (0.68) (0.65) (0.70)
Distributions from net realized gain 0.00 0.00 0.00

Total from distributions (0.68) (0.65) (0.70)

Net asset value, end of period $10.56 $11.04 $11.22

Total return (not annualized)1 1.92% 4.21% 10.19%

Ratios/supplemental data:
Net assets, end of period (000s) $193,615 $18,594 $14,325

Ratios to average net assets (annualized):
Ratio of expenses to average net assets 0.94% 0.68% 0.68%
Ratio of net investment income (loss) to
average net assets 6.29% 5.76% 6.35%

Portfolio turnover 139% 124% 97%

Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses (annualized)2 1.16% 0.87% 0.86%
</TABLE>

38 Income Funds Prospectus
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
CLASS C
CLASS B SHARES--COMMENCED SHARES--
ON MAY 17, 1996 COMMENCED
ON NOV. 8, 1999
--------------------------------------------------------------------------------------------------------------------------------
May 31, May 31, May 31, May 31, May 31, May 31, May 31, May 31,
1997 1996 2000 1999 1998 1997 1996 2000
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$10.89 $10.89 $11.04 $11.21 $10.83 $10.89 $10.97 $10.86

0.73 0.03 0.62 0.53 0.69 0.64 0.03 0.32

(0.05) 0.00 (0.51) (0.13) 0.31 (0.05) (0.08) (0.31)

0.68 0.03 0.11 0.40 1.00 0.59 (0.05) 0.01

(0.73) (0.03) (0.60) (0.57) (0.62) (0.65) (0.03) (0.32)
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

(0.73) (0.03) (0.60) (0.57) (0.62) (0.65) (0.03) (0.32)

$10.84 $10.89 $10.55 $11.04 $11.21 $10.83 $10.89 $10.55

6.36% 0.26% 1.06% 3.53% 9.38% 5.51% (0.49%) 1.07%

$13,038 $16,562 $51,495 $8,540 $8,277 $8,970 $10,682 $4,348

0.68% 0.75% 1.68% 1.43% 1.43% 1.42% 1.35% 1.71%

6.58% 7.32% 5.55% 5.01% 5.60% 5.80% 5.56% 5.54%

183% 75% 139% 124% 97% 183% 75% 139%

0.80% 1.74% 1.83% 1.91% 1.85% 1.85% 2.65% 1.90%
</TABLE>

Income Funds Prospectus 39
<PAGE>

Limited Term Government Income Fund
--------------------------------------------------------------------------------

Portfolio Manager: Mark Walter

--------------------------------------------------------------------------------

Investment Objective

The Limited Term Government Income Fund seeks current income, while preserving
capital.

--------------------------------------------------------------------------------

Investment Strategies

We seek current income by actively managing a diversified portfolio consisting
primarily of short-to intermediate-term U.S. Government obligations. We may
invest in securities of any maturity. Under ordinary circumstances, we expect to
maintain a dollar weighted average maturity of between 2 and 5 years. We seek to
preserve capital by shortening average maturity when we expect interest rates to
increase and to increase total return by lengthening maturity when we expect
interest rates to fall.

--------------------------------------------------------------------------------

Permitted Investments

Under normal market conditions, we invest:

. at least 65% of our total assets in U.S. Government obligations or
repurchase agreements collateralized by U.S. Government obligations;

. in investment grade corporate debt securities including asset-backed
securities;

. no more than 5% of our total assets in securities downgraded below
investment-grade after we acquired them;

. up to 25% of our total assets in dollar-denominated debt of U.S.branches of
foreign banks or foreign branches of U.S. banks; and

. in stripped treasury securities,adjustable-rate mortgage securities,and
adjustable portions of collateralized mortgage obligations ("CMOs").

--------------------------------------------------------------------------------

Important Risk Factors

Mortgage- and asset-backed securities and CMOs may not be guaranteed by the U.S.
Treasury. Mortgage- and asset-backed securities and CMOs are subject to
prepayment acceleration and extension risk, either of which can reduce the rate
of return on the portfolio. Asset-backed securities are subject to risk of
default on the underlying assets, particularly during periods of economic
downturn. Securities of U.S. branches of foreign banks and foreign branches of
U.S. banks are subject to additional risks, such as political turmoil, the
imposition of foreign withholding taxes, and the establishment of exchange
controls or the adoption of other foreign governmental restrictions that may
affect the payment of principal and/or interest on these securities.

Stripped treasury securities have greater interest rate risk than traditional
government securities with identical credit ratings and like maturities.

40 Income Funds Prospectus
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Limited Term Government Income Fund
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES--COMMENCED
ON OCTOBER 27, 1993
---------------------------------------------------------------
May 31, June 30, Mar. 31, Mar. 31,
For the period ended: 2000 5 1998 1 1998 1998
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $9.74 $9.97 $9.95 $9.64

Income from investment operations:
Net investment income (loss) 0.50 0.57 0.13 0.51
Net realized and unrealized gain (loss)
on investments (0.30) (0.23) 0.02 0.31

Total from investment operations 0.20 0.34 0.15 0.82

Less distributions:
Dividends from net investment income (0.50) (0.57) (0.13) (0.51)
Distributions from net realized gain 0.00 0.00 0.00 0.00

Total from distributions (0.50) (0.57) (0.13) (0.51)

Net asset value, end of period $9.44 $9.74 $9.97 $9.95

Total return (not annualized)4 2.08% 3.37% 1.54% 8.69%

Ratios/supplemental data:
Net assets, end of period (000s) $29,928 $42,956 $38,149 $29,694

Ratios to average net assets (annualized):
Ratio of expenses to average net assets 0.96% 0.96% 0.96% 0.78%
Ratio of net investment income (loss) to average net assets 5.62% 5.66% 5.36% 5.19%

Portfolio turnover 80% 116% 12% 48%

Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses (annualized)6 1.21% 1.21% 1.24% 1.30%
</TABLE>
1 The Fund changed its fiscal year-end from March 31 to June 30.
2 The Fund changed its fiscal year-end from September 30 to March 31.
3 The Fund changed its fiscal year-end from December 31 to September 30.
4 Total return calculations do not include any sales charges, and would have
been lower had certain expenses not been waived or reimbursed during the
periods shown.
5 The Fund changed its fiscal year-end from June 30 to May 31.
6 During each period, various fees and/or expenses were waived and/or
reimbursed. The ratio of gross expenses to average net assets reflects the
expense ratio in the absence of any waivers and/or reimbursements.

42 Income Funds Prospectus
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS B SHARES--COMMENCED
ON JUNE 15, 1998
------------------------------------------------------------------------------------------------------
Mar. 31, Sept. 30, Dec. 31, May 31, June 30, June 30,
1997 2 1996 3 1995 2000 5 1999 1998
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$9.73 $10.00 $9.39 $9.74 $9.97 $10.03

0.34 0.41 0.55 0.43 0.50 0.02

(0.09) (0.27) 0.61 (0.30) (0.23) (0.06)

0.25 0.14 1.16 0.13 0.27 (0.04)

(0.34) (0.41) (0.55) (0.43) (0.50) (0.02)
0.00 0.00 0.00 0.00 0.00 0.00

(0.34) (0.41) (0.55) (0.43) (0.50) (0.02)

$9.64 $9.73 $10.00 $9.44 $9.74 $9.97

2.57% 1.34% 12.67% 1.39% 2.65% (0.38%)

$33,920 $37,465 $39,928 $8,864 $9,643 $7,514

0.71% 0.76% 0.71% 1.69% 1.66% 1.66%
6.96% 5.60% 5.64% 4.89% 4.95% 5.08%

52% 389% 472% 80% 116% 12%

1.12% 1.21% 1.67% 1.96% 1.99% 1.97%
</TABLE>

Income Funds Prospectus 43
<PAGE>

Stable Income Fund
--------------------------------------------------------------------------------

Portfolio Manager: John Huber

--------------------------------------------------------------------------------

Investment Objective

The Stable Income Fund seeks stability of principal while providing low
volatility total return.

--------------------------------------------------------------------------------

Investment Strategies

The Fund is a Gateway fund that invests substantially all of its assets in a
core portfolio with a substantially similar investment objective and investment
strategies.

The Fund invests primarily in short-term investment grade securities. We invest
in a diversified portfolio of fixed and variable rate U.S. dollar-denominated
fixed-income securities of a broad spectrum of U.S. and foreign issuers,
including U.S. Government obligations and the debt securities of financial
institutions, corporations and others.

--------------------------------------------------------------------------------

Permitted Investments

Under normal market conditions, we invest:

. at least 65% of total assets in income-producing debt securities;

. up to 65% of total assets in mortgage-backed securities;

. up to 25% of total assets in other types of asset-backed securities;

. up to 25% of total assets in mortgage-backed securities that are not
U.S.Government obligations; and

. up to 50% of total assets in U.S.Government obligations.

The Fund may not invest more than 30% of its total assets in the securities
issued or guaranteed by any single agency or instrumentality of the U.S.
Government, except the U.S. Treasury, and may not invest more than 10% of its
total assets in the securities of any other issuer. The Fund may invest in
additional core portfolios or invest directly in a portfolio of securities.

The Fund only purchases investment grade securities. The Fund invests in debt
securities with maturities (or average life in the case of mortgage-backed and
similar securities) ranging from overnight to 12 years and seeks to maintain a
dollar weighted average maturity of between 2 and 5 years.

The Fund may use options, swap agreements, interest rate caps, floors, collars,
and futures contracts to manage risk. The Fund also may use options to enhance
return.

--------------------------------------------------------------------------------

Important Risk Factors

44 Income Funds Prospectus
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Stable Income Fund
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A SHARES--COMMENCED
ON MAY 2, 1996
--------------------------------------------------------
May 31, May 31, May 31,
For the period ended: 2000 1999 1998
--------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $10.26 $10.31 $10.24

Income from investment operations:
Net investment income (loss) 0.54 0.54 0.58
Net realized and unrealized gain
(loss) on investments (0.11) (0.06) 0.06

Total from investment operations 0.43 0.48 0.64

Less distributions:
Dividends from net investment income (0.54) (0.53) (0.57)
Distributions from net realized gain 0.00 0.00 0.00

Total from distributions (0.54) (0.53) (0.57)

Net asset value, end of period $10.15 $10.26 $10.31

Total return (not annualized)1 4.28% 4.74% 6.38%

Ratios/supplemental data:
Net assets, end of period (000s) $8,912 $8,559 $8,561

Ratios to average net assets (annualized):
Ratio of expenses to average net assets 0.79%2 0.65%2 0.65%2
Ratio of net investment income (loss) to
average net assets 5.29% 5.11% 5.74%

Portfolio turnover 40%3 29%3 37%3

Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses (annualized)4 0.96%2 0.95%2 0.91%2
</TABLE>
1 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.
2 Includes expenses allocated from the core portfolio(s) in which the Fund
invests.
3 Portfolio turnover rate represents the activity from the Fund's investment
in a core portfolio.
4 During each period, various fees and/or expenses were waived and/or
reimbursed. The ratio of gross expenses to average net assets reflects the
expense ratio in the absence of any waivers and/or reimbursements.

46 Income Funds Prospectus
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

CLASS B SHARES--COMMENCED
ON MAY 17, 1996
---------------------------------------------------------------------------------------------------------------
May 31, May 31, May 31, May 31, May 31, May 31, May 31,
1997 1996 2000 1999 1998 1997 1996
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$10.20 $10.22 $10.26 $10.30 $10.24 $10.20 $10.23

0.58 0.02 0.46 0.44 0.51 0.52 0.02

0.04 0.00 (0.12) (0.04) 0.04 0.02 (0.01)

0.62 0.02 0.34 0.40 0.55 0.54 0.01

(0.58) (0.04) (0.46) (0.44) (0.49) (0.50) (0.04)
0.00 0.00 0.00 0.00 0.00 0.00 0.00

(0.58) (0.04) (0.46) (0.44) (0.49) (0.50) (0.04)

$10.24 $10.20 $10.14 $10.26 $10.30 $10.24 $10.20

6.24% 0.23% 3.40% 4.07% 5.50% 5.43% 0.12%

$12,451 $16,256 $2,449 $2,387 $1,817 $1,056 $867

0.65% 0.70% 1.54%2 1.40%2 1.40%2 1.39% 1.42%

5.69% 5.77% 4.54% 4.34% 4.94% 4.96% 5.02%

41%3 110%3 40%3 29%3 37%3 41%3 110%3

0.87%2 2.22%2 1.95%2 2.15%2 2.31%2 2.89%2 3.07%2
</TABLE>

Income Funds Prospectus 47
<PAGE>

Variable Rate Government Fund
--------------------------------------------------------------------------------

Portfolio Manager: Paul C. Single

--------------------------------------------------------------------------------

Investment Objective

The Variable Rate Government Fund seeks a high level of current income, while
reducing principal volatility, by investing primarily in adjustable rate
mortgage securities.

--------------------------------------------------------------------------------

Investment Strategies

We actively manage a diversified portfolio invested primarily in adjustable rate
mortgage securities issued or guaranteed by the U.S. Government, its agencies
and instrumentalities, also known as "ARMs."We invest in obligations of any
maturity, but under ordinary conditions we will maintain a dollar weighted
average maturity of between 10 to 30 years. In unusual circumstances, the dollar
weighted average maturity may be below 10 years. We also may invest in U.S.
Treasury securities with remaining maturities of up to 5 years.

--------------------------------------------------------------------------------

Permitted Investments

Under normal market conditions, we invest:

. at least 65% of our total assets in ARMs issued or guaranteed by the
U.S.Government,its agencies or instrumentalities;

. in adjustable rate portions of collateralized mortgage obligations ("CMOs")
issued by U.S. Government agencies and CMOs rated "AAA" by S&P, or "Aaa" by
Moody's; and

. up to 5% of our assets in securities purchased on a "when-issued" basis.

We may temporarily hold assets in cash or in money market instruments, including
U.S. Government obligations, shares of other mutual funds and repurchase
agreements, or make other short-term investments, either to maintain liquidity
or for short-term defensive purposes when we believe it is in the best interests
of shareholders to do so. During such periods, the Fund may not achieve its
investment objective of a high level of current income.

--------------------------------------------------------------------------------

Important Risk Factors

The U.S. Government does not directly or indirectly insure or guarantee the
performance of the Fund. Mortgage-backed securities are subject to the risk that
homeowners may refinance existing mortgages to take advantage of lower rates.
Such "prepayments" result in an early return of principal that is then
reinvested at what is likely to be a lower yield.

48 Income Funds Prospectus
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Variable Rate Government Fund
--------------------------------------------------------------------------------

CLASS A SHARES--COMMENCED
ON NOVEMBER 1, 1990
-------------------------------------------------
May 31, June 30,
2000 3 1999
-------------------------------------------------
<S> <C> <C>
For the period ended:

Net asset value, beginning of period $8.96 $9.19

Income from investment operations:
Net investment income (loss) 0.42 0.43
Net realized and unrealized gain (loss)
on investments (0.06) (0.23)

Total from investment operations 0.36 0.20

Less distributions:
Dividends from net investment income (0.42) (0.43)
Distributions from net realized gain 0.00 0.00

Total from distributions (0.42) (0.43)

Net asset value, end of period $8.90 $8.96

Total return (not annualized)2 4.09% 2.17%

Ratios/supplemental data:
Net assets, end of period (000s) $69,799 $108,203

Ratios to average net assets (annualized):
Ratio of expenses to average net assets 0.78% 0.78%
Ratio of net investment income (loss)
to average net assets 5.06% 4.71%

Portfolio turnover 36% 80%

Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses (annualized)4 1.09% 1.13%
</TABLE>
1 The Fund changed its fiscal year-end from December 31 to June 30.
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
periods shown.
3 The Fund changed its fiscal year-end from June 30 to May 31.
4 During each period, various fees and/or expenses were waived and/or
reimbursed. The ratio of gross expenses to average net assets reflects the
expense ratio in the absence of any waivers and/or reimbursements.

50 Income Funds Prospectus
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
June 30, Dec. 31, Dec. 31, Dec. 31,
1998 1 1997 1996 1995
----------------------------------------------------------------------------------
<S> <C> <C> <C>
$9.23 $9.25 $9.35 $9.19

0.24 0.51 0.50 0.53

(0.04) (0.02) (0.10) 0.16

0.20 0.49 0.40 0.69

(0.24) (0.51) (0.46) (0.53)
0.00 0.00 (0.04) 0.00

(0.24) (0.51) (0.50) (0.53)

$9.19 $9.23 $9.25 $9.35

2.16% 5.43% 4.41% 7.69%

$164,994 $227,353 $393,948 $653,897

0.78% 0.81% 0.88% 0.84%

5.21% 5.55% 5.36% 5.71%

45% 92% 277% 317%

1.11% 1.09% 0.98% 0.96%
</TABLE>

Income Funds Prospectus 51
<PAGE>

General Investment Risks
--------------------------------------------------------------------------------

Understanding the risks involved in mutual fund investing will help you make an
informed decision that takes into account your risk tolerance and preferences.
You should carefully consider the risks common to investing in all mutual funds,
including the Wells Fargo Funds. Certain common risks are identified in the
"Summary of Important Risks" section on page 6. Other risks of mutual fund
investing include the following:

. Unlike bank deposits,such as CDs or savings accounts,mutual funds are not
insured by the FDIC.

. We cannot guarantee that we will meet our investment objectives.

. We do not guarantee the performance of a Fund,
nor can we assure you that
the market value of your investment will not decline. We will not "make
good" any investment loss you may suffer, nor can anyone we contract with
to provide certain services, such as selling agents or investment advisors,
offer or promise to make good any such losses.

. Share prices--and therefore the value of your investment--will increase and
decrease with changes in the value of the underlying securities and other
investments. This is referred to as price volatility.

. Investing in any mutual fund, including those deemed conservative, involves
risk, including the possible loss of any money you invest.

. An investment in a single Fund, by itself,does not constitute a complete
investment plan.

. The Funds may also use certain derivative instruments, such as options or
futures contracts. The term "derivatives" covers a wide number of
investments, but in general it refers to any financial instrument whose
value is derived, at least in part, from the price of another security or a
specified index, asset or rate. Some derivatives may be more sensitive to
interest rate changes or market moves, and some may be susceptible to
changes in yields or values due to their structure or contract terms.

. The Funds invest a portion of their assets in U.S.Government
obligations, such as securities issued or guaranteed by the Government
National Mortgage Association ("GNMAs"), the Federal National Mortgage
Association ("FNMAs") and the Federal Home Loan Mortgage Corporation
("FHLMCs"). Each are mortgage-backed securities representing partial
ownership of a pool of residential mortgage loans. A "pool" or group of
such mortgages is assembled and, after being approved by the issuing or
guaranteeing entity, is offered to investors through securities dealers.
Mortgage-backed securities are subject to prepayment and extension risk,
which can alter the maturity of the securities and also reduce the rate of
return on the portfolio. It is important to recognize that the U.S.
Government does not guarantee the market value or current yield of those
obligations. Not all U.S. Government obligations are backed by the full
faith and credit of the U.S. Treasury, and the U.S. Government's guarantee
does not extend to the Funds themselves. Collateralized mortgage
obligations ("CMOs") typically represent principal-only and interest-only
portions of such securities and are subject to increased interest-rate and
credit risk.

. The market value of lower-rated debt securities and unrated securities of
comparable quality that the Corporate Bond, Income and Income Plus Funds
may invest in tends to reflect individual developments affecting the issuer
to a greater extent than the market value of higher-rated securities, which
react primarily to fluctuations in the general level of interest rates.
Lower-rated securities also tend to be more sensitive to economic
conditions than higher-rated securities. These lower-rated debt securities
are considered by the rating agencies, on balance, to be predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal. These securities generally involve more credit risk than
securities in

52 Income Funds Prospectus
<PAGE>
--------------------------------------------------------------------------------

higher-rating categories. Even securities rated "BBB" by S&P or by Moody's
ratings which are considered investment-grade, possess some speculative
characteristics. Investment practices and risk levels are carefully
monitored. Every attempt is made to ensure that the risk exposure for each
Fund remains within the parameters of its objective.

What follows is a general list of the types of risks (some of which are
described previously) that may apply to a given Fund and a table showing some of
the additional investment practices that each Fund may use and the risks
associated with them. Additional information about these practices is available
in the Statement of Additional Information.

Counter-Party Risk--The risk that the other party in a repurchase agreement or
other transaction will not fulfill its contract obligation.

Credit Risk--The risk that the issuer of a debt security will be unable to make
interest payments or repay principal on schedule. If an issuer does default, the
affected security could lose all of its value, or be renegotiated at a lower
interest rate or principal amount. Affected securities might also lose
liquidity. Credit risk also includes the risk that a party in a transaction may
not be able to complete the transaction as agreed.

Currency Risk--The risk that a change in the exchange rate between U.S. dollars
and a foreign currency may reduce the value of an investment made in a security
denominated in that foreign currency.

Diplomatic Risk--The risk that an adverse change in the diplomatic relations
between the United States and another country might reduce the value of
liquidity of investments in either country.

Emerging Market Risk--The risk that the emerging market, as defined in the
glossary, may be more sensitive to certain economic changes. For example,
emerging market countries are often dependent on international trade and are
therefore often vulnerable to recessions in other countries. They may have
obsolete financial systems, have volatile currencies and may be more sensitive
than more mature markets to a variety of economic factors. Emerging market
securities may also be less liquid than securities of more developed countries
and could be difficult to sell, particularly during a market downturn.

Experience Risk--The risk presented by a new or innovative security. The risk is
that insufficient experience exists to forecast how the security's value might
be affected by various economic conditions.

Information Risk--The risk that information about a security is either
unavailable, incomplete or is inaccurate.

Interest Rate Risk--The risk that changes in interest rates can reduce the value
of an existing security. Generally, when interest rates increase, the value of a
debt security decreases. The effect is usually more pronounced for securities
with longer dates to maturity.

Leverage Risk--The risk that a practice, such as lending portfolio securities or
engaging in forward commitment or when-issued securities transactions, may
increase a Fund's exposure to market risk, interest rate risk or other risks by,
in effect, increasing assets available for investment.

Liquidity Risk--The risk that a security cannot be sold at the time desired, or
cannot be sold without adversely affecting the price.

Market Risk--The risk that the value of a stock, bond or other security will be
reduced by market activity. This is a basic risk associated with all securities.

Political Risk--The risk that political actions, events or instability may be
unfavorable for investments made in a particular nation's or region's industry,
government or markets.

Income Funds Prospectus 53
<PAGE>

General Investment Risks
--------------------------------------------------------------------------------

Prepayment Risk--The risk that consumers will accelerate their prepayment of
mortgage loans or other receivables, which can shorten the maturity of
mortgage-backed or other asset-backed securities, and reduce a portfolio's rate
of return.

Regulatory Risk--The risk that changes in government regulations will adversely
affect the value of a security. Also the risk that an insufficiently regulated
market might permit inappropriate trading practices.

In addition to the general risks discussed above, you should carefully consider
and evaluate any special risks that may apply to investing in a particular Fund.
See the "Important Risk Factors" in the summary for each Fund. You should also
see the Statement of Additional Information for additional information about the
investment practices and risks particular to each Fund.

54 Income Funds Prospectus
<PAGE>

Investment Practice/Risk
The following table lists some of the additional investment practices of the
Funds, including some not disclosed in the Investment Objective and Investment
Strategies sections of the Prospectus. The risks indicated after the description
of the practice are NOT the only potential risks associated with that practice,
but are among the more prominent. Market risk is assumed for each. See the
Investment Objective and Investment Strategies for each Fund or the Statement of
Additional Information for more information on these practices.

Investment practices and risk levels are carefully monitored. We attempt to
ensure that the risk exposure for each Fund remains within the parameters of its
objective.

Remember, each Fund is designed to meet different investment needs and
objectives.

LIMITED
INTERMEDIATE TERM VARIABLE
CORPORATE INCOME GOVERNMENT GOVERNMENT STABLE RATE
BOND INCOME PLUS INCOME INCOME INCOME GOVERNMENT

------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICE RISK
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Borrowing Policies
The ability to barrow from banks for Leaverage Risk . . . . . . .
temporary purposes to meet shareholder
redemptions.

Floating and Variable Rate Debt
Instruments with interest rates that Interest Rate and . . . . . . .
are adjusted either on a schedule or Credit Risk
when an index or benchmark changes.

Foreign Securities
Debt of a foreign government or Information, Political, . . . .
corporation or dollar-denominated debt Regulatory,
obligations of foreign branches of U.S. Diplomatic, Liquidity
branches of foreign banks. and Currency Risk

Forward Commitment, When-Issued and
Delayed Delivery Transactions
Securities bought or sold for delivery Interest Rate, . . . . . .
at a later date or bought or sold for Leverage, Credit and
a fixed price at a fixed date. Experience Risk

High Yield Securities
Debt securities of lower quality that Interest Rate and . .
produce generally higher rates of return. Credit Risk
These securities, also known as
"junk bonds," tend to be more sensitive
to economic conditions, more volatile,
and less liquid, and are subject
to greater risk of default.

Illiquid Securities
A security that cannot be readily sold, Liquidity Risk . . . . . .
or cannot be readily sold without
negatively affecting its fair price.
Limited to 15% of total assets.

Loans of Portfolio Securities
The practice of loaning securities to Credit, Counter-Party . . . . . .
brokers, dealers and financial and Leverage Risk
institutions to increase return on those
securities. Loans may be made up to
Investment Company Act of 1940 limits
(currently one-third of total assets
including the value of the collateral
received).
</TABLE>

Income Funds Prospectus 55
<PAGE>

General Investment Risks
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIMITED
TERM
VARIABLE
CORPORATE INCOME INTERMEDIATE GOVERNMENT STABLE RATE
BOND INCOME PLUS GOVERNMENT INCOME INCOME GOVERNMENT

Loan Participations
Debt obligations that represent a portion Credit Risk . . . . .
of a larger loan made by a bank.
Generally sold without guarantee or
recourse, some participations sell at a
discount because of the borrower's credit
problems.

Mortgage- and Asset-Backed Securities
Securities consisting of undivided Interest Rate, Credit, . . . . . . .
fractional interests in pools of consumer Prepayment and
loans, such as mortgage loans, car loans, Experience Risk
credit card debt or receivables held in
trust.

Options
The right or obligation to receive or Credit, Information or . . . .
deliver a security cash payment depending and Liquidity Risk
on the security's price or the
performance of an index or benchmark.
Types of options used may include: options
on securities, options on a stock index,
stock index futures and options on stock
index futures to protect liquidity and
portfolio value.

Other Mutual Funds
A pro rata portion of the other fund's Market Risk . . . . . . .
expenses, in addition to the expenses
paid by the Funds, will be borne by Fund
shareholders.

Privately Issued Securities
Securities that are not publicly traded Liquidity Risk . . .
but which may or may not be resold in
accordance with Rule 144A of the
Securities Act of 1933.

Repurchase Agreements
A transaction in which the seller of a Credit and
security agrees to buy back a security Counter-Party Risk . . . . . . .
at an agreed upon time and price,
usually with interest.

Stripped Obligations
Securities that give ownership to either Interest Rate Risk . . . . . .
future payments of interest or a future
payment of principal, but not both. These
securities tend to have greater interest
rate sensitivity than conventional debt.
</TABLE>

56 Income Funds Prospectus
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Organization and Management of the Funds
--------------------------------------------------------------------------------

A number of different entities provide services to the Funds. This section shows
how the Funds are organized, lists the entities that perform different services,
and explains how these service providers are compensated. Further information is
available in the Statement of Additional Information for the Funds.

About Wells Fargo Funds Trust
Wells Fargo Funds Trust (the "Trust") was organized as a Delaware business trust
on March 10, 1999. The Board of Trustees of the Trust supervises each Fund's
activities, monitors its contractual arrangements with various service providers
and decides upon matters of general policy.

The Trust was created to succeed to the assets and operations of the various
mutual funds in the Stagecoach Family of Funds and the Norwest Advantage Family
of Funds. The holding company of Wells Fargo Bank, the investment advisor to the
Stagecoach Family of Funds, and the holding company of Norwest Investment
Management, Inc., the investment advisor to the Norwest Advantage Family of
Funds, merged in November 1998. Each of the Funds described in this Prospectus
has succeeded to the assets and operations of one or more corresponding Funds of
Stagecoach or Norwest Advantage Funds. The performance and financial statement
history of each Fund's designated predecessor Fund has been assumed by the Wells
Fargo Funds Trust Fund. The succession transactions were approved by the
shareholders of the Stagecoach and Norwest Advantage Funds. The Table on page 76
identifies the Stagecoach or Norwest Advantage Fund predecessors to the Funds.

The Board of Trustees of the Trust supervises the Funds' activities and approves
the selection of various companies hired to manage the Funds' operation. The
major service providers are described in the diagram below. Except for the
advisors, which require shareholder vote to change, if the Board believes that
it is in the best interests of the shareholders it may make a change in one of
these companies.

--------------------------------------------------------------------------------
BOARD OF TRUSTEES
--------------------------------------------------------------------------------
Supervises the Funds' activities
--------------------------------------------------------------------------------
INVESTMENT ADVISOR CUSTODIAN
--------------------------------------------------------------------------------
Wells Fargo Bank, N.A. Wells Fargo Bank Minnesota, N.A.
525 Market St., San Francisco, CA 6th & Marquette, Minneapolis, MN
Manages the Funds' investment activities Provides safekeeping for the
Funds' assets
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
INVESTMENT SUB-ADVISORS
--------------------------------------------------------------------------------
Wells Capital Management Incorporated Galliard Capital Management, Inc.
525 Market St., San Francisco, CA 800 LaSalle Ave., #1850,
Minneapolis, MN
Manages the investment activities of each Manages the Stable Income Fund's
Fund except the Stable Income Fund investment activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHAREHOLDER
TRANSFER SERVICING
DISTRIBUTOR ADMINISTRATOR AGENT AGENTS
--------------------------------------------------------------------------------
Stephens Inc. Wells Fargo Bank, Boston Financial Data Various Agents
111 Center St. N.A. Services, Inc.
Little Rock, AR 525 Market St. Two Heritage Dr.
San Francisco, CA Quincy, MA

Markets the Funds Manages the Maintains records Provide
and distributes Funds' business of shares and services to
Fund shares activities supervises the customers
payment of dividends

--------------------------------------------------------------------------------
FINANCIAL SERVICES FIRMS AND SELLING AGENTS
--------------------------------------------------------------------------------
Advise current and prospective shareholders on their
Fund investments
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHAREHOLDERS
--------------------------------------------------------------------------------

58 Income Funds Prospectus
<PAGE>

In the following sections, the percentages shown are the percentages of the
average daily net assets of each Fund class paid on an annual basis for the
services described.

The Investment Advisor
Wells Fargo Bank provides portfolio management and fundamental security analysis
services as the advisor for each of the Funds. Wells Fargo Bank, founded in
1852, is the oldest bank in the western United States and is one of the largest
banks in the United States. Wells Fargo Bank is a wholly owned subsidiary of
Wells Fargo & Company, a national bank holding company. As of June 30, 2000,
Wells Fargo Bank and its affiliates managed over $161 billion in assets. For
providing these services, Wells Fargo is entitled to receive fees as described
in the "Summary of Expenses" section at the front of this Prospectus.

Dormant Investment Advisory Arrangements
Under the existing investment advisory contract for the Funds, Wells Fargo Bank
has been retained as an investment advisor for Gateway fund assets redeemed from
a core portfolio and invested directly in a portfolio of securities. Wells Fargo
Bank does not receive any compensation under this arrangement as long as a
Gateway fund invests substantially all of its assets in one or more core
portfolios. If a Gateway fund redeems assets from a core portfolio and invests
them directly, Wells Fargo Bank receives an investment advisory fee from the
Gateway fund for the management of those assets.

The Sub-Advisors
Wells Capital Management Incorporated ("WCM"), a wholly owned subsidiary of
Wells Fargo Bank, is the sub-advisor for each of the Funds except the Stable
Income Fund, which invests all of its assets in a core portfolio with a
substantially similar investment objective and policies. As of June 30, 2000 WCM
provided investment advice for assets aggregating in excess of $80 billion.

Galliard Capital Management, Inc. ("Galliard"), an investment advisor subsidiary
of Wells Fargo Bank, Minnesota, N.A. (Wells Fargo Bank, MN) formerly known as
Norwest Bank Minnesota, N.A. , is the investment sub-advisor for the core
portfolio in which the Stable Income Fund invests substantially all of its
assets. As of June 30, 2000, Galliard managed approximately $6.4 billion in
assets.

The Administrator
Wells Fargo Bank provides the Funds with administration services, including
general supervision of each Fund's operation, coordination of the other services
provided to each Fund, compilation of information for reports to the SEC and the
state securities commissions, preparation of proxy statements and shareholder
reports, and general supervision of data compilation in connection with
preparing periodic reports to the Trust's Trustees and officers. Wells Fargo
Bank also furnishes office space and certain facilities to conduct each Fund's
business. For providing these services, Wells Fargo Bank is entitled to receive
a fee of 0.15% of the average annual net assets of each Fund.

Shareholder Servicing Plan
We have a shareholder servicing plan for each Fund. Under this plan, we have
agreements with various shareholder servicing agents to process purchase and
redemption requests, to service shareholder accounts, and to provide other
related services. For these services, each Fund pays 0.25% of its average net
assets.

The Transfer Agent
Boston Financial Data Services, Inc. ("BFDS") provides transfer agency and
dividend disbursing services to the Funds. For providing these services, BFDS
receives an annual fee, certain transaction-related fees, and is reimbursed for
out-of-pocket expenses incurred on behalf of the Funds.

Income Funds Prospectus 59
<PAGE>

A Choice of Share Classes
--------------------------------------------------------------------------------

After choosing a Fund, your next most important choice is which share class to
buy. The following classes of shares are available through this Prospectus:

. Class A Shares--with a front-end sales charge, volume reductions and lower
on-going expenses than Class B and Class C shares.

. Class B Shares--with a contingent deferred sales charge ("CDSC") payable
upon redemption that diminishes over time, and higher on-going expenses
than Class A shares.

. Class C Shares--with a 1.00% CDSC on redemptions made within one year of
purchase, and higher on-going expenses than Class A shares.

The choice between share classes is largely a matter of preference. You should
consider, among other things, the different fees and sales loads assessed on
each share class and the length of time you anticipate holding your investment.
If you prefer to pay sales charges up front, wish to avoid higher on-going
expenses, or, more importantly, you think you may qualify for volume discounts
based on the amount of your investment, then Class A shares may be the choice
for you.

You may prefer to see "every dollar working" from the moment you invest. If so,
then consider Class B or Class C shares. Please note that Class B shares convert
to Class A shares after seven years to avoid the higher on-going expenses
assessed against Class B shares.

Class B shares are available for all the Funds in this Prospectus, except for
the Variable Rate Government Fund. Class C shares are available for the
Corporate Bond, Income Plus and Intermediate Government Income Funds only. They
are similar to Class B shares, with some important differences. Unlike Class B
shares, Class C shares do not convert to Class A shares. The higher on-going
expenses will be assessed as long as you hold the shares. The choice between
Class B and Class C shares may depend on how long you intend to hold Fund shares
before redeeming them.

Orders for Class B shares of $250,000 or more are either treated as orders for
Class A shares or they will be refused. For Class C shares, orders of $1,000,000
or more, including purchases made which because of a right of accumulation or
letter of intent would qualify for the purchase of Class A shares without an
initial sales charge, are also either treated as orders for Class A shares or
they will be refused.

Please see the expenses listed for each Fund and the following sales charge
schedules before making your decision. You should also review the "Reduced Sales
Charges" section of the Prospectus. You may wish to discuss this choice with
your financial consultant.

Class A Share Sales Charge Schedule

If you choose to buy Class A shares, you will pay the Public Offering Price
("POP") which is the NAV plus the applicable sales charge. Since sales charges
are reduced for Class A share purchases above certain dollar amounts, known as
"breakpoint levels," the POP is lower for these purchases.

60 Income Funds Prospectus
<PAGE>

--------------------------------------------------------------------------------
CLASS A SHARES LISTED IN THIS PROSPECTUS, EXCEPT FOR THE STABLE INCOME FUND,
HAVE THE FOLLOWING SALES CHARGE SCHEDULE:
--------------------------------------------------------------------------------

FRONT-END SALES FRONT-END SALES
CHARGE AS % CHARGE AS %
AMOUNT OF PUBLIC OF AMOUNT
OF PURCHASE OFFERING PRICE INVESTED

Less than $50,000 4.50% 4.71%

$50,000 to $99,999 4.00% 4.17%

$100,000 to $249,999 3.50% 3.63%

$250,000 to $499,999 2.50% 2.56%

$500,000 to $999,999 2.00% 2.04%

$1,000,000 and over1 0.00% 0.00%

1 We will assess Class A shares purchases of $1,000,000 or more a 1.00% CDSC if
they are redeemed within one year from the date of purchase, unless the dealer
of record waived its commission with the Fund's approval. Charges are based on
the lower of the NAV on the date of purchase or the date of redemption.

--------------------------------------------------------------------------------
CLASS A SHARES LISTED IN THIS PROSPECTUS FOR THE STABLE INCOME FUND HAVE THE
FOLLOWING SALES CHARGE SCHEDULE:
--------------------------------------------------------------------------------

FRONT-END SALES FRONT-END SALES
CHARGE AS % CHARGE AS %
AMOUNT OF PUBLIC OF AMOUNT
OF PURCHASE OFFERING PRICE INVESTED

Less than $50,000 1.50% 1.52%

$50,000 to $99,999 1.00% 1.01%

$100,000 to $499,999 0.75% 0.76%

$500,000 to $999,999 0.50% 0.50%

$1,000,000 and over* 0.00% 0.00%

* We will assess Class A shares purchases of $1,000,000 or more a 0.50% CDSC if
they are redeemed within one year from the date of purchase, unless the dealer
of record waived its commission with the Fund's approval. Charges are based on
the lower of the NAV on the date of purchase or the date of redemption.

Income Funds Prospectus 61
<PAGE>

A Choice of Share Classes
--------------------------------------------------------------------------------

Class B Share CDSC Schedule

If you choose Class B shares, you buy them at NAV and agree that if you redeem
your shares within six years of the purchase date, two years for the Stable
Income Fund, you will pay a CDSC based on how long you have held your shares.
Certain exceptions apply (see "Class B and Class C Share CDSC Reductions" and
"Waivers for Certain Parties"). The CDSC schedule is as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
CLASS B SHARES LISTED IN THIS PROSPECTUS, EXCEPT FOR THE STABLE INCOME FUND,
HAVE THE FOLLOWING SALES CHARGE SCHEDULE:
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REDEMPTION WITHIN 1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS 6 YEARS 7 YEARS 8 YEARS

CDSC 5.00% 4.00% 3.00% 3.00% 2.00% 1.00% 0.00% A Shares

-----------------------------------------------------------------------------------------------------
CLASS B SHARES LISTED IN THIS PROSPECTUS FOR THE STABLE INCOME FUND HAVE THE
FOLLOWING SALES CHARGE SCHEDULE:
-----------------------------------------------------------------------------------------------------
</TABLE>
REDEMPTION WITHIN 1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS

CDSC 1.50% 0.75% 0.00% 0.00% A Shares

The CDSC percentage you pay is based on the lower of the NAV of the shares on
the date of the original purchase, or the NAV of the shares on the date of
redemption.

We always process partial redemptions so that the least expensive shares are
redeemed first in order to reduce your sales charges. After shares are held for
six years, two years for the Stable Income Fund, the CDSC expires. After shares
are held for seven years, four years for the Stable Income Fund, the Class B
shares are converted to Class A shares to reduce your future on-going expenses.

Class B shares received in the reorganization of the Stagecoach Funds in
exchange for Stagecoach Fund shares purchased after July 17, 1999 are also
subject to the above CDSC schedule.

Class B shares received in the reorganization of the Norwest Advantage Funds in
exchange for Norwest Advantage Fund shares purchased after May 18, 1999 are also
subject to the above applicable CDSC schedule.

Class B shares received in the reorganization of the Stagecoach Funds in
exchange for Stagecoach Fund shares purchased prior to July 17, 1999, but after
March 3, 1997, are subject to the following CDSC schedule, and such shares
convert to Class A shares automatically after six years:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
CLASS B SHARES RECEIVED IN EXCHANGE FOR STAGECOACH FUND SHARES PURCHASED AFTER
MARCH 3, 1997, BUT BEFORE JULY 17, 1999 HAVE THE FOLLOWING SALES CHARGE SCHEDULE:
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
REDEMPTION WITHIN 1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS 6 YEARS 7 YEARS

CDSC 5.00% 4.00% 3.00% 3.00% 2.00% 1.00% A Shares
</TABLE>
62 Income Funds Prospecus
<PAGE>

Class B shares received in the reorganization of the Stagecoach Funds in
exchange for Stagecoach Fund shares that were purchased prior to March 3, 1997
are subject to a CDSC if they are redeemed within four years of the original
purchase. The CDSC schedule for these shares is below:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
CLASS B SHARES RECEIVED IN EXCHANGE FOR STAGECOACH FUND SHARES PURCHASED PRIOR
TO MARCH 3, 1997 HAVE THE FOLLOWING SALES CHARGE SCHEDULE:
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
REDEMPTION WITHIN 1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS 6 YEARS 7 YEARS

CDSC 3.00% 2.00% 1.00% 1.00% 0.00% 0.00% A Shares
</TABLE>
Class B shares received in the reorganization of Norwest Advantage Funds in
exchange for Norwest Advantage Fund shares purchased prior to May 18, 1999 are
subject to the following sales charge schedule on the exchanged shares, except
for the Stable Income Fund, and such shares convert to Class A shares
automatically after seven years:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
CLASS B SHARES RECEIVED IN EXCHANGE FOR NORWEST ADVANTAGE FUND SHARES, EXCEPT FOR
STABLE INCOME FUND, PURCHASED PRIOR TO MAY 18, 1999 HAVE THE FOLLOWING SALES CHARGE SCHEDULE:
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
REDEMPTION WITHIN 1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS 6 YEARS 7 YEARS

CDSC 3.00% 2.00% 2.00% 1.00% 0.00% 0.00% A Shares
</TABLE>
If you exchange the Class B shares received in the reorganization for Class B
shares of another Fund, you will retain the CDSC schedules of your exchanged
shares. Additional shares purchased will age at the currently effective higher
CDSC schedule first shown above.

Class C Share CDSC Schedule
If you choose Class C shares, you buy them at NAV and agree that if you redeem
your shares within one year of the purchase date, you will pay a CDSC of 1.00%.

The CDSC percentage you pay is based on the lower of the NAV on the date of the
original purchase, or the NAV on the date of redemption. The distributor pays
sales commissions of up to 1.00% of the purchase price of Class C shares to
selling agents at the time of the sale, and up to 1.00% annually thereafter.

We always process partial redemptions so that the least expensive shares are
redeemed first in order to reduce your sales charges. Class C shares do not
convert to Class A shares, and therefore continue to pay the higher on-going
expenses.

Income Funds Prospectus 63
<PAGE>

Reduced Sales Charges
--------------------------------------------------------------------------------

Generally, we offer more sales charge reductions for Class A shares than for
Class B and Class C shares, particularly if you intend to invest greater
amounts. You should consider whether you are eligible for any of the potential
reductions when you are deciding which share class to buy.

Class A Share Reductions

. You pay no sales charges on Fund shares you buy with
reinvested distributions.

. You pay a lower sales charge if you are investing an amount over a
breakpoint level. See the "Class A Share Sales Charge Schedule" above.

. By signing a Letter of Intent ("LOI"),you pay a lower sales charge now in
exchange for promising to invest an amount over a specified breakpoint
within the next 13 months. We will hold in escrow shares equal to
approximately 5% of the amount you intend to buy. If you do not invest the
amount specified in the LOI before the expiration date, we will redeem
enough escrowed shares to pay the difference between the reduced sales load
you paid and the sales load you should have paid. Otherwise, we will
release the escrowed shares when you have invested the agreed amount.

. Rights of Accumulation ("ROA") allow you to combine the amount you invest
with the total NAV of shares you own in other Wells Fargo front-end load
Funds, in which you have already paid a front-end load in order to reach
breakpoint levels for a reduced load. We give you a discount on the entire
amount of the investment that puts you over the breakpoint level.

. You pay no sales charges on Fund shares you purchase with the proceeds of a
redemption of either Class A or Class B shares within 120 days of the date
of the redemption.

. You may reinvest into a Wells Fargo Fund with no sales charge a
required distribution from a pension, retirement, benefits or similar plan
for which Wells Fargo Bank acts as trustee provided the distribution
occurred within the 30 days prior to your reinvestment.

If you believe you are eligible for any of these reductions, it is up to you to
ask the selling agent or the shareholder servicing agent for the reduction and
to provide appropriate proof of eligibility.

You, or your fiduciary or trustee, may also tell us to extend volume discounts,
including the reductions offered for rights of accumulation and letters of
intent, to include purchases made by:

. a family unit,including children under the age of twenty-one or single
trust estate;

. a trustee or fiduciary purchasing for a single fiduciary relationship;or

. the members of a "qualified group"which consists of a "company"(as defined
in the Investment Company Act of 1940, as amended), and related parties of
such a "Company," which has been in existence for at least six months and
which has a primary purpose other than acquiring Fund shares at a discount.

How a Letter of Intent Can Save You Money!

If you plan to invest, for example, $100,000 in a Wells Fargo Fund in
installments over the next year, by signing a letter of intent you would
pay only 3.50% sales load on the entire purchase. Otherwise, you might pay
4.50% on the first $49,999, then 4.00% on the next $50,000!

64 Income Funds Prospectus
<PAGE>

--------------------------------------------------------------------------------

Class B and Class C Share CDSC Reductions

. You pay no CDSC on Funds shares you purchase with reinvested distributions.

. We waive the CDSC for all redemptions made because of scheduled(Rule 72T
withdrawal schedule) or mandatory (withdrawals made after age 701/2
according to IRS guidelines) distributions for certain retirement plans.
(See your retirement plan disclosure for details.)

. We waive the CDSC for redemptions made in the event of the shareholder's
death or for a disability suffered after purchasing shares. ("Disability"
is defined by the Internal Revenue Code of 1986.)

. We waive the CDSC for redemptions made at the direction of Wells Fargo Bank
in order to,for example, complete a merger or close an account whose value
has fallen below the minimum balance.

. We waive the Class B share CDSC for withdrawals made by former Norwest
Advantage Fund shareholders in certain qualified accounts up to certain
limits (See the Statement of Additional Information for further details).

. We waive the Class C share CDSC for certain types of accounts.

For Class B shares purchased after May 18,1999 for former Norwest Advantage
Funds shareholders, after July 17, 1999 for former Stagecoach Funds
shareholders, and for all other shareholders, no CDSC is imposed on withdrawals
that meet all the following circumstances:

. withdrawals are made by participating in the Systematic Withdrawal Plan;

. withdrawals may not exceed 10% of your Fund assets (including "free"shares)
annually based on your anniversary date in the Systematic Withdrawal Plan;
and

. you participate in the dividend and capital gain reinvestment program.

Waivers for Certain Parties

If you are eligible for certain waivers, we will sell you Class A shares so you
can avoid higher ongoing expenses. The following people can buy Class A shares
at NAV:

. Current and retired employees,directors/trustees and officers of:

. Wells Fargo Funds and its affiliates;

. Wells Fargo & Company and its affiliates;

. Stephens Inc.and its affiliates;and

. Broker-Dealers who act as selling agents.

. and the families of any of the above.Contact your selling agent for further
information.

You may also buy Class A Fund shares at NAV if they are to be included in
certain retirement, benefits, pension or investment "wrap accounts" with whom
Wells Fargo Funds has reached an agreement, or through an omnibus account
maintained with a Fund by a broker/dealer.

We reserve the right to enter into agreements that reduce or eliminate sales
charges for groups or classes of shareholders, or for Fund shares included in
other investment plans such as "wrap accounts." If you own Fund shares as part
of another account or package such as an IRA or a sweep account, you must read
the directions for that account. These directions may supersede the terms and
conditions discussed here.

Income Funds Prospectus 65
<PAGE>

Reduced Sales Charges
--------------------------------------------------------------------------------

Distribution Plan

We have adopted a Distribution Plan ("Plan") pursuant to Rule 12b-1 under the
Investment Company Act of 1940 for the Class B and Class C shares of the Funds.
The Plan authorizes the payment of all or part of the cost of preparing and
distributing Prospectuses and distribution-related services, including ongoing
compensation to selling agents. The Plan also provides that, if and to the
extent any shareholder servicing payments are recharacterized as payments for
distribution-related services, they are approved and payable under the Plan. The
fees paid under this Plan are as follows:

FUND CLASS B CLASS C

Corporate Bond Fund 0.75% 0.75%

Income Fund 0.75% N/A

Income Plus Fund 0.75% 0.75%

Intermediate Government Income Fund 0.75% 0.75%

Limited Term Government Income Fund 0.75% N/A

Stable Income Fund 0.75% N/A

Variable Rate Government Fund N/A N/A

These fees are paid out of the Funds' assets on an ongoing basis. Over time,
these fees will increase the cost of your investment and may cost you more than
paying other types of sales charges.

66 Income Funds Prospectus
<PAGE>

Exchanges
--------------------------------------------------------------------------------

Exchanges between Wells Fargo Funds are two transactions: a sale of shares of
one Fund and the purchase of shares of another. In general, the same rules and
procedures that apply to sales and purchases apply to exchanges. There are,
however, additional factors you should keep in mind while making or considering
an exchange:

. You should carefully read the Prospectus for the Fund into which you wish
to exchange.

. Every exchange involves selling Fund shares and that sale may produce a
capital gain or loss for federal income tax purposes.

. If you are making an initial investment into a new Fund through an
exchange, you must exchange at least the minimum first purchase amount of
the Fund you are redeeming, unless your balance has fallen below that
amount due to market conditions.

. Any exchange between Funds you already own must meet the minimum redemption
and subsequent purchase amounts for the Funds involved.

. Exchanges between Class B shares and the Wells Fargo Money Market Fund
Class B shares will not trigger the CDSC. The new shares will continue to
age according to their original schedule while in the new Fund and will be
charged the CDSC applicable to the original shares upon redemption.
Exchanges into Money Market Fund Class B shares are subject to certain
restrictions in addition to those described above.

. Exchanges from any share class to a money market fund can only be
re-exchanged for the original share class.

. In order to discourage excessive Fund transaction expenses that must be
borne by other shareholders, we reserve the right to limit or reject
exchange orders.

. You may make exchanges between like share classes. You may also exchange
from any Class C shares into the Money Market Fund Class A shares.
Exchanged shares retain any applicable CDSC upon redemption.

Generally, we will notify you up to 60 days in advance of any changes in your
exchange privileges.

Income Funds Prospectus 67
<PAGE>

Your Account
--------------------------------------------------------------------------------

This section tells you how Fund shares are priced, how to open an account and
how to buy, sell or exchange Fund shares once your account is open.

Pricing Fund Shares

. As with all mutual fund investments,the price you pay to purchase shares or
the price you receive when you redeem shares is not determined until after
a request has been received in proper form.

. We determine the NAV of each class of the Funds' shares each business day
as of the close of regular trading on the New York Stock Exchange ("NYSE").
We determine the NAV by subtracting the Fund class's liabilities from its
total assets, and then dividing the result by the total number of
outstanding shares of that class. Each Fund's assets are generally valued
at current market prices. See the Statement of Additional Information for
further disclosure.

. We process requests to buy or sell shares of the Funds each business day as
of the close of regular trading on the NYSE, which is usually 1:00 p.m.
(Pacific time)/3:00 p.m. (Central time). If the markets close early, the
Funds may close early and may value their shares at earlier times under
these circumstances. Any request we receive in proper form before this time
is processed the same day. Requests we receive after the cutoff time are
processed the next business day.

. The Funds are open for business on each day the NYSE is open for
business.NYSE holidays include New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. When any holiday falls on a weekend,
the NYSE typically is closed on the weekday immediately before or after
such holiday.

You Can Buy Fund Shares

. By opening an account directly with the Fund (simply complete and return a
Wells Fargo Funds Application with proper payment);

. Through a brokerage account with an approved selling agent;or

. Through certain retirement,benefit and pension plans,or through certain
packaged investment products (please see the providers of the plan for
instructions).

Minimum Investments

. $1,000 per Fund minimum initial investment;

. $100 per Fund if you use the Systematic Purchase Program;and

. $100 per Fund for all investments after your investment.

We may waive the minimum for Funds you purchase through certain retirement,
benefit and pension plans, through certain packaged investment products, or for
certain classes of shareholders as permitted by the SEC. Check the specific
disclosure statements and Applications for the program through which you intend
to invest.

68 Income Funds Prospectus
<PAGE>

How to Buy Shares
--------------------------------------------------------------------------------

The following section explains how you can buy shares directly from Wells Fargo
Funds. For Funds held through brokerage and other types of accounts, please
consult your selling agent.

--------------------------------------------------------------------------------
BY MAIL
--------------------------------------------------------------------------------
IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
--------------------------------------------------------------------------------
. Complete a Wells Fargo Funds Application. Be sure to indicate the Fund name
and the share class into which you intend to invest (if no choice is
indicated, Class A shares will be designated). Your account will be
credited on the business day that the transfer agent receives your
application in proper order. Failure to complete an Application properly
may result in a delay in processing your request.

. Enclose a check for at least $1,000 made out in the full name and share
class of the Fund. For example,"Wells Fargo Corporate Bond Fund, Class B."

. All purchases must be made in U.S. dollars and checks must be drawn on U.S.
banks.

. You may start your account with $100 if you elect the Systematic Purchase
plan option on the Application.

. Mail to: Wells Fargo Funds
ATTN: CCSU-Boston Financial
Box 8266
02266-8266

Overnight Mail Only: Wells Fargo Funds
ATTN: CCSU-Boston Financial P.O.
66 Brooks Drive Boston, MA
Braintree, MA 02184

--------------------------------------------------------------------------------
IF YOU ARE BUYING ADDITIONAL SHARES:
--------------------------------------------------------------------------------

. Make a check payable to the full name and share class of your Fund for at
least $100. Be sure to write your account number on the check as well.

. Enclose the payment stub/card from your statement if available.

. Mail to: Wells Fargo Funds
ATTN: CCSU-Boston Financial PO Box
8266 Boston, MA 02266-8266

Income Funds Prospectus 69
<PAGE>

Your Account
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
BY WIRE
--------------------------------------------------------------------------------

IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
--------------------------------------------------------------------------------

. You must first call Investor Services at 1-800-222-8222, option 0, to
notify them of an incoming wire trade.

. If you do not currently have an account, complete a Wells Fargo Funds
Application. You must wire at least $1,000. Be sure to indicate the Fund
name and the share class into which you intend to invest.

. Mail the completed application. Your account will be credited on the
business day that the transfer agent receives your application in proper
order.
<TABLE>
<S> <C> <C>
. Overnight Application to: Wells Fargo Funds
ATTN: CCSU-Boston Financial
66 Brooks Drive
Braintree, MA 02184

. Wire money to: State Street Bank & Trust Attention:
Boston, MA Wells Fargo Funds (Name
of Fund and Share Class)
Bank Routing Number:
ABA 011 000028 Account Name:
(Registration Name
Wire Purchase Account Number: Indicated on Application)
9905-437-1
</TABLE>
IF YOU ARE BUYING ADDITIONAL SHARES:

. Instruct your wiring bank to transmit at least $100 according to the
instructions given below. Be sure to have the wiring bank include your
current account number and the name your account is registered in.
<TABLE>
<S> <C> <C>
. Wire money to: State Street Bank & Trust Attention:
Boston, MA Wells Fargo Funds (Name of
Fund and Share Class)
Bank Routing Number:
ABA 011 000028 Account Name:
(Registration Name
Wire Purchase Account Number: Indicated on Account)
9905-437-1
</TABLE>
70 Income Funds Prospectus
<PAGE>

How to Buy Shares
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
BY PHONE
--------------------------------------------------------------------------------

IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
--------------------------------------------------------------------------------
You can only make your first purchase of a Fund by phone if you already have an
existing Wells Fargo Funds Account.

. Call Investor Services and instruct the representative to either:

. transfer at least $1,000 from a linked settlement account, or

. exchange at least $1,000 worth of shares from an existing Wells Fargo
Fund. Please see the "Exchanges" section for special rules.

. Call: 1-800-222-8222, option 0

--------------------------------------------------------------------------------
IF YOU ARE BUYING ADDITIONAL SHARES:
--------------------------------------------------------------------------------
. Call Investor Services and instruct the representative to either:

. transfer at least $100 from a linked settlement account, or

. exchange at least $100 worth of shares from another Wells Fargo Fund.

. Call: 1-800-222-8222, option 0

Income Funds Prospectus 71
<PAGE>

Your Account
--------------------------------------------------------------------------------

The following section explains how you can sell shares held directly through an
account with Wells Fargo Funds by mail or telephone. For Fund shares held
through brokerage or other types of accounts, please consult your selling agent.

--------------------------------------------------------------------------------
BY MAIL
--------------------------------------------------------------------------------

. Write a "Letter of Instruction" stating your name, your account number, the
Fund you wish to redeem and the dollar amount ($100 or more) of the
redemption you wish to receive (or write "Full Redemption").

. Make sure all the account owners sign the request exactly as their names
appear on the account application.

. You may request that redemption proceeds be sent to you by check, by ACH
transfer into a bank account, or by wire. Please call Shareholder Services
regarding requirements for linking bank accounts or for wiring funds. We
reserve the right to charge a fee for wiring funds although it is not
currently our practice to do so.

. Signature Guarantees are required for mailed redemption requests over
$50,000, or if the address on your account was changed within the last 60
days. You can get a signature guarantee at financial institutions such as a
bank or brokerage house. We do not accept notarized signatures.

. Mail to: Wells Fargo Funds
ATTN: CCSU-Boston Financial
PO Box 8266
Boston, MA 02266-8266

--------------------------------------------------------------------------------
BY PHONE
--------------------------------------------------------------------------------

. Call Investor Services to request a redemption of at least $100. Be
prepared to provide your account number and Taxpayer Identification Number.

. Unless you have instructed us otherwise, only one account owner needs to
call in redemption requests.

. You may request that redemption proceeds be sent to you by check, by
transfer into an ACH-linked bank account, or by wire. Please call Investor
Services regarding requirements for linking bank accounts or for wiring
funds. We reserve the right to charge a fee for wiring funds although it is
not currently our practice to do so.

. Telephone privileges are automatically made available to you unless you
specifically decline them on your Application or subsequently in writing.

. Telephone privileges allow us to accept transaction instructions by anyone
representing themselves as the shareholder and who provides reasonable
confirmation of their identity, such as providing the Taxpayer
Identification Number on the account. We will not be liable for any losses
incurred if we follow telephone instructions we reasonably believe to be
genuine.

. We will not mail the proceeds of a telephone redemption request if the
address on your account was changed in the last 30 days.

. Call: 1-800-222-8222, option 0

72 Income Funds Prospectus
<PAGE>

How to Sell Shares
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
GENERAL NOTES FOR SELLING SHARES
--------------------------------------------------------------------------------

. We will process requests to sell shares at the first NAV calculated after a
request in proper form is received. Requests received before the cutoff
time are processed on the same business day.

. Your redemptions are net of any applicable CDSC.

. If you purchased shares through a packaged investment product or retirement
plan, read the directions for selling shares provided by the product or
plan. There may be special requirements that supersede the directions in
this Prospectus.

. We reserve the right to delay payment of a redemption so that we may be
reasonably certain that investments made by check, through ACH or
Systematic Purchase Plan have been collected. Payments of redemptions also
may be delayed under extraordinary circumstances or as permitted by the SEC
in order to protect remaining shareholders.

. Generally, we pay redemption requests in cash, unless the redemption
request is for more than $250,000 or 1% of the net assets of the Fund by a
single shareholder over any ninety-day period. If a request for a
redemption is over these limits, it may be to the detriment of existing
shareholders to pay such redemption in cash. Therefore, we may pay all or
part of the redemption in securities of equal value.

Income Funds Prospectus 73
<PAGE>

Additional Services and Other Information
--------------------------------------------------------------------------------

Automatic Programs

These programs help you conveniently purchase and/or redeem shares each month.
Once you select a Plan, tell us the day of the month you would like the
transaction to occur. If you do not specify a date, we will process the
transaction on or about the 25th day of the month. Systematic Withdrawals may
only be processed on or about the 25th day of each month. Call Investor Services
at 1-800-222-8222, option 0, for more information.

. Systematic Purchase Plan--With this program,you can regularly purchase
shares of a Wells Fargo Fund with money automatically transferred from a
linked bank account. Simply select the Fund you would like to purchase and
specify an amount of at least $100.

. Systematic Exchange Plan--With this program,you can regularly exchange
shares of a Wells Fargo Fund you own for shares of another Wells Fargo
Fund. The exchange amount must be at least $100. See the "Exchanges"
section of this Prospectus for the conditions that apply to your shares.
This feature may not be available for certain types of accounts.

. Systematic Withdrawal Plan--With this program,you can regularly redeem
shares and receive the proceeds by check or by transfer to a linked bank
account. Simply specify an amount of at least $100. To participate in this
program, you:

. must have a Fund account valued at $10,000 or more;

. must have your distributions reinvested; and

. may not simultaneously participate in the Systematic Purchase Plan.

It generally takes about ten days to establish a Plan once we have received your
instructions. It generally takes about five days to change or cancel
participation in a Plan. We automatically cancel your program if the linked bank
account you specified is closed.

Dividend and Capital Gain Distributions

The Funds in this Prospectus pay any dividends monthly and make any capital
gains distributions annually.

We offer the following distribution options:

. Automatic Reinvestment Option--Lets you buy new shares of the same class of
the Fund that generated the distributions. The new shares are purchased at
NAV generally on the day the income is paid. This option is automatically
assigned to your account unless you specify another option.

. Check Payment Option--Allows you to receive checks for distributions mailed
to your address of record or to another name and address which you have
specified in written, signature guaranteed instructions. If checks remain
uncashed for six months or are undeliverable by the Post Office, we will
reinvest the distributions at the earliest date possible.

. Bank Account Payment Option--Allows you to receive distributions directly
in a checking or savings account through ACH. The bank account must be
linked to your Wells Fargo Fund account. In order to establish a new linked
bank account, you must send a written signature guaranteed instruction
along with a copy of a voided check or deposit slip. Any distribution
returned to us due to an invalid banking instruction will be sent to your
address of record by check at the earliest date possible, and future
distributions will be automatically re-invested.

74 Income Funds Prospectus
<PAGE>

--------------------------------------------------------------------------------

. Directed Distribution Purchase Option--Lets you buy shares of a different
Wells Fargo Fund of the same share class. The new shares are purchased at
NAV generally on the day the income is paid. In order to establish this
option, you need to identify the Fund and account the distributions are
coming from, and the Fund and account to which the distributions are being
directed. You must meet any required minimum purchases in both Funds prior
to establishing this option.

Remember, distributions have the effect of reducing NAV per share by the amount
distributed.

Taxes

This discussion regarding federal income taxes is based on laws that were in
effect as of the date of this Prospectus. The discussion summarizes only some of
the important federal income tax considerations that affect the Funds and you as
a shareholder. It is not intended as a substitute for careful tax planning. You
should consult your tax advisor about your specific tax situation, including the
federal, state, local and foreign tax consequences to you of an investment in a
Fund. Federal income tax considerations are discussed further in the Statement
of Additional Information.

We will pass on to you substantially all of the Funds' income and gains.
Distributions of a Fund's ordinary income, short-term capital gain and certain
other items will be taxable to you as ordinary income. Distributions of a Fund's
net long-term capital gain, if any, will be taxable to you as net capital gain.
Corporate shareholders may be able to deduct a portion of distributions from the
Income Plus Fund but no other Fund when determining their taxable income.

Distributions from a Fund normally will be taxable to you when paid, whether you
take the distribution in cash or automatically reinvest them in additional Fund
shares. However, distributions declared in October, November and December of one
year and distributed in January of the following year will be taxable as if they
were paid on December 31 of the first year. At the end of each year, you will be
notified as to the federal income tax status of your distributions for the year.

If you buy Fund shares shortly before it makes a distribution, your distribution
from the Fund will, in effect, be a taxable return for part of your investment.
Similarly, if you buy shares of a Fund when it holds appreciated securities, you
will receive a taxable return of part of your investment if and when the Fund
sells the appreciated securities and realizes the gain. The Funds have built up,
or have the potential to build up, high levels of unrealized appreciation.

In general, your redemptions (including redemptions in-kind) and exchanges of
Fund shares will result in a taxable capital gain or loss, depending on the
amount you receive for your shares (or are deemed to receive in the case of
exchanges) and the amount you paid (or are deemed to have paid) for them. Such
gain or loss will be long-term capital gain or loss if you have held your
redeemed Fund shares for more than one year at the time of redemption.

Foreign shareholders may be subject to different tax treatment, including
withholding taxes. In certain circumstances, U.S. residents will be subject to
backup withholding at a 31% rate on distributions and redemption proceeds paid
by the Funds.

Income Funds Prospectus 75
<PAGE>

Table of Predecessors
--------------------------------------------------------------------------------

The Funds described in this Prospectus were created as part of the
reorganization of the Stagecoach Family Funds, advised by Wells Fargo Bank,
N.A., and the Norwest Advantage Family of Funds, advised by Norwest Investment
Management, Inc., into a single mutual fund complex. The reorganization followed
the merger of the advisors' parent companies.

Each Fund is an accounting survivor of a former Stagecoach Funds, Inc. or
Norwest Advantage Funds fund, as indicated in the Table of Predecessors below.
The performance histories and financial highlights of each Fund for the periods
prior to November 8, 1999 are the performance histories and financial highlights
of the predecessor fund.

Wells Fargo Funds Trust Predecessor Fund

Corporate Bond Fund Stagecoach Corporate Bond Fund

Income Fund Norwest Advantage Income Fund

Income Plus Fund Stagecoach Strategic Income Fund

Intermediate Government Income Fund Norwest Advantage Intermediate
Government Income Fund

Limited Term Government Income Fund Stagecoach Short-Intermediate U.S.
Government Income Fund

Stable Income Fund Norwest Advantage Stable Income Fund

Variable Rate Government Fund Stagecoach Variable Rate Government Fund

76 Income Funds Prospectus
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------

<PAGE>

Portfolio Managers
--------------------------------------------------------------------------------

N. Graham Allen, FCMA
Income Plus Fund and its predecessor since 1998
Mr. Allen joined WCM in 1998 and is the Firm's Chief Fixed-Income Officer. His
responsibilities include overseeing of non-dollar fixed-income investments in
major developed countries, emerging markets, Yankee bonds and global high yield
investments. Prior to joining WCM, he headed the international bond management
team at Bradford & Marzec, an investment advisor firm, where he was responsible
for managing high yield securities investments from 1988 to 1998. Educated in
England, Mr. Allen is a Fellow Chartered Management Accountant, a recognized
accounting body in the United Kingdom.

Marjorie H. Grace, CFA
Income Fund and its predecessor since 1996
Intermediate Government Income Fund and its predecessor since 1995
Ms. Grace joined WCM in 1998 and is Managing Director for Taxable Fixed-Income.
WCM and NIM combined investment advisory services under the WCM name in 1999.
She currently manages $2 billion in taxable core portfolios for WCM, and a total
of $1 billion in assets for the two funds listed above. At NIM, she was a Vice
President and Director of Taxable Fixed-Income, where she managed a variety of
taxable and tax-exempt mutual and common bond funds, and where she had been
affiliated since 1992. Prior to NIM, she was the portfolio manager of $1.2
billion in U.S. government, corporate, municipal, and money market securities at
United Banks of Colorado. Prior to United Banks, she held positions as liquidity
portfolio manager/assistant treasurer at Columbia Savings and portfolio manager
at Metro National Bank. She began her 19-year investment career as an account
executive at Thomson McKinnon securities. Ms. Grace received her BA in
Mathematics and Computer Science from the University of California at Los
Angeles in 1972 and an MBA from the University of Colorado in 1981. She earned
the designation of Chartered Financial Analyst in 1995.

John Huber
Stable Income Fund and its predecessor since 1998
Mr. Huber joined Galliard at the firm's inception in 1995 as a Portfolio
Manager. Currently, Mr. Huber is highly involved with portfolio management,
strategy, issue selection and trading. Mr. Huber oversees the Strategic Value
Bond Portfolio and specializes in corporate and asset/mortgage-backed
securities. Prior to joining Galliard, Mr. Huber was an Assistant Portfolio
Manager with NIM. In addition, he previously served as a Senior Analyst in
Norwest's Capital Market Credit Group. Mr. Huber received a BA in Communications
from the University of Iowa and a MBA from the University of Minnesota.

Daniel J. Kokoszka, CFA
Income Plus Fund and its predecessor since 1998
Mr. Kokoszka joined WCM in 1998 as a Portfolio Manager and became the Managing
Director of Global Fixed-Income in 1999. Mr. Kokoszka is responsible for
non-dollar fixed-income investments in major developed countries and U.S. dollar
fixed-income investments (Yankee bonds) in emerging markets. He joined the firm
in 1998 from Bradford & Marzec, Inc., an investment advisory firm, where he was
a Portfolio Manager on the International Portfolio Management Team from 1993 to
1998. Mr. Kokoszka received a BS in Astronomy from Villanova University, a MS in
Mechanical Engineering from George Washington University and a MBA from the
University of Rochester. He is a Certified Management Accountant and is
Certified in Financial Management.

78 Income Funds Prospectus
<PAGE>

--------------------------------------------------------------------------------

Paul C. Single
Variable Rate Government Fund and its predecessor since 1990
Mr. Single joined WCM in 1997 and has been managing taxable fixed-Income
portfolios as a member of the Core-Plus Team. He specializes in Treasury, agency
and asset-backed securities. Mr. Single's 19 years of experience in fixed-income
investing includes a portfolio management position for Wells Fargo Bank from
1988 to 1997. Mr. Single received a BS in Physical Education from Springfield
College.

Scott M. Smith, CFA
Income Plus Fund and its predecessor since 1998
Variable Rate Government Fund and its predecessor since 1993
Mr. Smith joined WCM in 1997 and currently manages taxable fixed-income
portfolios as a member of the Core-Plus Team. His emphasis is on the corporate
and mortgage-backed sectors. From 1988 to 1997, while at Wells Fargo Bank, he
was a short duration fixed-income specialist and trust administrator. He has 11
years of experience in the investment industry. Mr. Smith received his BA in
International Relations/Business from the University of San Diego.

Mark Walter
Income Fund since 2000
Limited Term Government Income Fund since 2000
Mr. Walter joined WCM in 1999 as a portfolio manager with the Tax-Exempt
Fixed-Income Team, and simultaneously held the position of assistant portfolio
manager at NIM (since 1997) until WCM and NIM combined investment advisory
services under the WCM name in 1999. As an assistant portfolio manager, Mr.
Walter assisted in the management of both taxable and tax-exempt fixed-income
funds. Prior to WCM, he worked as an Investment Consultant for Kirkpatrick,
Petris, a brokerage firm that is a wholly owned subsidiary of the Mutual of
Omaha. In his capacity as an Investment Consultant, Mr. Walter sold and traded
taxable and tax-exempt fixed-income securities to institutional clients. Mr.
Walter received a BS in Finance from the University of Colorado at Boulder in
1996.

Jeffrey L. Weaver, CFA
Corporate Bond Fund since 2000
Mr. Weaver joined Wells Fargo Bank/WCM in 1994 as a portfolio manager for
taxable short-duration fixed income portfolios. Prior to joining WCM, Mr. Weaver
was a short-term fixed income trader and portfolio manager with Bankers Trust
Company in New York. He has over nine years of investment management experience.
He earned his BA in Economics from the University of Colorado, Boulder, and is a
Chartered Financial Analyst. Mr. Weaver is a member of the Association for
Investment Management and Research (AIMR) and the Security Analysts of San
Francisco.

Income Funds Prospectus 79
<PAGE>

Glossary
--------------------------------------------------------------------------------

We provide the following definitions to assist you in reading this Prospectus.
For a more complete understanding of these terms you should consult your
financial advisor.

ACH
Refers to the "Automated Clearing House" system maintained by the Federal
Reserve Bank which allows banks to process checks, transfer funds and perform
other tasks.

Asset-Backed Securities
Securities consisting of an undivided fractional interest in pools of consumer
loans, such as car loans or credit card debt, or receivables held in trust.

Below Investment Grade
Securities rated BB or lower by S&P or Ba or lower by Moody's Investor Services,
or that may be unrated securities or securities considered to be "high risk."

Business Day
Any day the New York Stock Exchange is open is a business day for the Funds.

Capital Appreciation, Capital Growth
The increase in the value of a security. See also "total return."

Collateralized Mortgage Obligations ("CMOs")
Securities collateralized by portfolios of mortgage pass-through securities.
CMOs are structured into multiple classes, and are paid according to class
maturity, shortest maturities paid first.

Current Income
Earnings in the form of dividends or interest as opposed to capital growth. See
also "total return."

Debt Securities
Generally, a promise to pay interest and repay principal by an individual or
group of individuals sold as a security. The owner of the security is entitled
to receive any such payments. Examples include bonds and mortgage- and other
asset-backed securities and can include securities in which the right to receive
interest and principal repayment have been sold separately.

Derivatives
Securities whose values are derived in part from the value of another security
or index. An example is a stock option.

Distributions
Dividends and/or capitalgains paid by a Fund on its shares.

Diversified
A diversified fund, as defined by the Investment Company Act of 1940, is one
that invests in cash, Government securities, other investment companies and no
more than 5% of its total assets in a single issuer. These policies must apply
to 75% of a Fund's total assets.

Dollar-Denominated
Securities issued by foreign banks, companies or governments in U.S. dollars.

80 Income Funds Prospectus
<PAGE>
--------------------------------------------------------------------------------

Dollar Rolls
Similar to a reverse Repurchase Agreement, dollar rolls are simultaneous
agreements to sell a security held in a portfolio and to purchase a similar
security at a future date at an agreed-upon price.

Duration
A measure of a security`s or portfolio's sensitivity to changes in interest
rates. Duration is usually expressed in years, with longer durations typically
more sensitive to interest rate changes than shorter durations.

Emerging Markets
Markets associated with a country that is considered by international financial
organizations, such as the International Finance Corporation and the
International Bank for Reconstruction and Development, and the international
financial community to have an "emerging" stock market. Such markets may be
under-capitalized, have less-developed legal and financial systems or may have
less stable currencies than markets in the developed world.

FDIC
The Federal Deposit Insurance Corporation. This is the company that provides
federally sponsored insurance covering bank deposits such as savings accounts
and CDs. Mutual funds are not FDIC insured.

FHLMC
FHLMC securities are commonly known as "Freddie Mac" and are issued by the
Federal Home Loan Mortgage Corporation.

FNMA
FNMA securities are known as "Fannie Maes" and are issued by the Federal
National Mortgage Association.

Gateway Fund
A Fund that invests its assets in one or more core portfolios, instead of
directly in securities, to achieve its investment objective. Gateway funds
investing in the same core portfolio can enhance their investment opportunities
and reduce their expense ratios through sharing the costs and benefits of
managing a large pool of assets.

GNMA
GNMA securities are commonly known as "Ginnie Maes" and are issued by the
Government National Mortgage Association.

Investment Grade Securities
A type of bond rated in the top four investment categories by a nationally
recognized ratings organization. Generally these are bonds whose issuers are
considered to have a strong ability to pay interest and repay principal,
although some investment-grade bonds may have some speculative characteristics.

Liquidity
The ability to readily sell a security at a fair price.

Money Market Instruments
High-quality short-term instruments meeting the requirements of Rule 2a-7 under
the Investment Company Act of 1940, such as bankers' acceptances, commercial
paper, repurchase agreements and government obligations. In a money market fund,
average portfolio maturity does not exceed 90 days, and all investments have
maturities of 397 days or less at the time of purchase.

Income Funds Prospectus 81
<PAGE>

Glossary
--------------------------------------------------------------------------------

Moody's
A nationally recognized ratings organization.

Nationally Recognized Ratings Organization ("NRRO")
A company that examines the ability of a bond issuer to meet its obligations and
which rates the bonds accordingly.

Net Asset Value ("NAV")
The value of a single fund share. It is determined by adding together all of a
Fund's assets, subtracting accrued expenses and other liabilities, then dividing
by the total number of shares.

Options
An option is the right to buy or sell a security based on an agreed upon price
at a specified time. For example, an option may give the holder of a stock the
right to sell the stock to another party, allowing the seller to profit if the
price has fallen below the agreed price. Options may also be based on the
movement of an index such as the S&P 500.

Public Offering Price ("POP")
The NAV with the sales load added.

Repurchase Agreement
An agreement between a buyer and seller of a security in which the seller agrees
to repurchase the security at an agreed upon price and time.

Selling Agent
A person who has an agreement with the Funds' distributors that allows them to
sell a Fund's shares.

Shareholder Servicing Agent
Anyone appointed by the Fund to maintain shareholder accounts and records,
assist and provide information to shareholders or perform similar functions.

Signature Guarantee
A guarantee given by a financial institution that has verified the identity of
the maker of the signature.

S&P
Standard and Poor's, a nationally recognized ratings organization. S&P also
publishes various indexes or lists of companies representative of sectors of the
U.S. economy.

Statement of Additional Information
A document that supplements the disclosure made in the Prospectus.

Stripped Treasury Securities
Debt obligations in which the interest payments and the repayment of principal
are separated and sold as securities.

Taxpayer Identification Number
Usually the social security number for an individual or the Employer
Identification Number for a corporation.

Total Return
The annual return on an investment, including any appreciation or decline in
share value, assumes

82 Income Funds Prospectus
<PAGE>
--------------------------------------------------------------------------------
reinvestment of all dividends and capital gains, reflects fee waivers and
excludes sales loads.

U.S. Government Obligations
Obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

Weighted Average Maturity
The average maturity for the debt securities in a portfolio on a dollar-for-
dollar basis.

Zero Coupon Securities
Bonds that make no periodic interest payments and which are usually sold at a
discount of their face value. Zero coupon bonds are subject to interest rate and
credit risk.

Income Funds Prospectus 83
<PAGE>

YOU MAY WISH TO REVIEW THE FOLLOWING DOCUMENTS:

STATEMENT OF ADDITIONAL INFORMATION
supplements the disclosures made by this Prospectus. The Statement of Additional
Information has been filed with the SEC and incorporated by reference into this
Prospectus and is legally part of this Prospectus.

ANNUAL/SEMI-ANNUAL REPORT
provides certain financial and other important information including a
discussion of the market conditions and investment strategies that significantly
affected Fund performance, for the most recent reporting period.

THESE DOCUMENTS ARE AVAILABLE FREE OF CHARGE:

Call: 1-800-222-8222; option 1, option 5

WRITE TO:
Wells Fargo Funds
PO Box 8266
Boston, MA 02266-8266; or

Visit the SEC's website at http://www.sec.gov

REQUEST COPIES FOR A FEE BY WRITING TO:
SEC Public Reference Room
Washington, DC 20549-6009; or
by electronic request at [email protected]
Call:1-800-SEC-0330 for details

ADDITIONAL SERVICES QUESTIONS CAN BE ANSWERED BY CALLING YOUR SPECIFIC PRODUCT
GROUP AT WELLS FARGO BANK:

Wells Fargo Checking and Savings -1-800-869-3557
Next Stage IRA or Stagecoach IRA -1-800-237-8472
Wells Fargo Portfolio Advisor -1-800-689-7882

P005
ICA Reg No.
811-09253
Updated 10/00 NOT FDIC INSURED . NO BANK GUARANTEE . MAY LOSE VALUE [LOGO OF
RECYCLED PAPER]
84 Income Funds Propectus
<PAGE>

[WELLS FARGO FUNDS LOGO]

Institutional Class

WELLS FARGO INCOME FUNDS

Please read this Prospectus and keep it for future reference. It is designed to
provide you with important information and to help you decide if a Fund's goals
match your own.

These securities have not been approved or disapproved by the U.S. Securities
and Exchange Commission ("SEC"), nor has the SEC passed upon the accuracy or
adequacy of this Prospectus. Any representation to the contrary is a criminal
offense.

Fund shares are NOT deposits or other obligations of, or issued, endorsed or
guaranteed by Wells Fargo Bank, N.A. ("Wells Fargo Bank") or any of its
affiliates. Fund shares are NOT insured or guaranteed by the U.S. Government,
the Federal Deposit Insurance Corporation ("FDIC") or any other governmental
agency. AN INVESTMENT IN A FUND INVOLVES CERTAIN RISKS, INCLUDING POSSIBLE LOSS
OF PRINCIPAL.

PROSPECTUS

Diversified Bond Fund

Income Fund

Intermediate Government Income Fund

Limited Term Government Income Fund

Stable Income Fund

October 1 2000
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

<TABLE>
Table of Contents Income Funds
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
Overview Objectives and Principal Strategies 4
This section contains important Summary of Important Risks 6
summary information about the Performance History 8
Funds. Summary of Expenses 14
Key Information 16
--------------------------------------------------------------------------------------------------------
The Funds Diversified Bond Fund 18
This section contains important Income Fund 22
information about the individual Intermediate Government Income Fund 24
Funds. Limited Term Government Income Fund 28
Stable Income Fund 32
General Investment Risks 36
Organization and Management of the Funds 41
--------------------------------------------------------------------------------------------------------
Your Investment Your Account 44
Turn to this section for How to Buy Shares 45
information on how to open an How to Sell Shares 46
account and how to buy, sell and Exchanges 47
exchange Fund shares.
--------------------------------------------------------------------------------------------------------
Reference Other Information 48
Look here for additional Table of Predecessors 49
information and term Description of Core Portfolios 50
definitions. Portfolio Managers 52
Glossary 54
</TABLE>
<PAGE>

Income Funds Overview
--------------------------------------------------------------------------------
See the individual Fund descriptions in this Prospectus for further details.
Words appearing in italicized print and highlighted in color are defined in the
glossary.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
FUND OBJECTIVE
--------------------------------------------------------------------------------------------------------
<S> <C>
Diversified Bond Fund Seeks total return by diversifying its investments among different
fixed-income investment styles.

Income Fund Seeks current income and total return.

Intermediate Government Seeks current income, consistent with safety of principal.
Income Fund

Limited Term Government Seeks current income, while preserving capital.
Income Fund

Stable Income Fund Seeks stability of principal while providing low volatility
total return.
</TABLE>
<PAGE>

--------------------------------------------------------------------------------

PRINCIPAL STRATEGY

We invest in investment grade U.S. and foreign debt securities using a "multi-
style" approach designed to reduce the price and return volatility of the Fund
and to provide more consistent returns.

We invest in short- to intermediate-term U.S. Government obligations. We may
invest in securities of any maturity. Under ordinary circumstances, we expect to
maintain a dollar-weighted average maturity of between 2 and 5 years. We seek to
preserve capital by shortening average maturity when we expect interest rates to
increase and to increase total return by lengthening maturity when we expect
interest rates to fall.

The Fund is a Gateway fund that invests in short-term investment-grade
securities which includes mortgage-backed securities and U.S. Government
obligations. We invest in fixed and variable rate U.S. dollar-denominated fixed-
income securities of U.S. and foreign issuers, including U.S. Government
obligations and the debt securities of financial institutions, corporations and
others.
<PAGE>

Summary of Important Risks
-------------------------------------------------------------------------------

. the individual Fund Descriptions later in this Prospectus;

. under the "General Investment Risks" section beginning on page 36; and

. in the Funds' Statement of Additional Information.

An investment in a Fund is not a deposit of Wells Fargo Bank and is not insured
or guaranteed by the FDIC or any other government agency. It is possible to lose
money by investing in a Fund.

COMMON RISKS FOR THE FUNDS

Debt Securities

The Funds invest in debt securities, such as notes and bonds, which are subject
to credit risk and interest rate risk. Credit risk is the possibility that an
issuer of an instrument will be unable to make interest payments or repay
principal. Changes in the financial strength of an issuer or changes in the
credit rating of a security may affect its value. Interest rate risk is the
risk that interest rates may increase, which will reduce the resale value of
instruments in a Fund's portfolio. Debt securities with longer maturities are
generally more sensitive to interest rate changes than those with shorter
maturities. Changes in market interest rates do not affect the rate payable on
debt securities held in a Fund, unless the instrument has adjustable or
variable rate features, which can reduce interest rate risk. Changes in market
interest rates may also extend or shorten the duration of certain types of
instruments, such as asset-backed securities, thereby affecting their value and
the return on your investment.
<PAGE>

--------------------------------------------------------------------------------

The U.S. Government does not directly or indirectly insure or guarantee the
performance of a Fund. Mortgage-backed securities are subject to the risk that
homeowners may refinance existing mortgages to take advantage of lower rates.
Such "prepayment" results in an early return of principal that is then
reinvested at what is likely to be a lower yield. Investments in foreign markets
may also present special risks, including currency, political, diplomatic,
regulatory and liquidity risks.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
FUND SPECIFIC RISKS
----------------------------------------------------------------------------------------
<S> <C>
The U.S. Government does not guarantee the market value or
current yield of its obligations. Not all U.S. Government obligations
are backed by the full faith and credit of the U.S. Government.
Diversified Bond Fund Mortgage-backed securities are subject to prepayment risk and to
extension risk, either of which can reduce the rate of return on the
portfolio.

The Fund is primarily subject to the debt securities risks described
in the "Common Risks" section above. Mortgage-backed securities
Income Fund are subject to prepayment risk and to extension risk, either of
which can reduce the rate of return on the portfolio.

The U.S. Government does not guarantee the market value or
Intermediate Government current yield of its obligations. Not all U.S. Government obligations
Income Fund and are backed by the full faith and credit of the U.S. Government.
Limited Term Government Mortgage-backed securities are subject to prepayment risk and to
Income Fund extension risk, either of which can reduce the rate of return on the
portfolio.

The Fund is primarily subject to the debt securities risks
described in the "Common Risks" section above. Investments in
Stable Income Fund foreign obligations may also present special risks, including
currency, political, diplomatic, regulatory and liquidity risks.
</TABLE>
<PAGE>

Performance History
-------------------------------------------------------------------------------

The information on the following pages shows you how each Fund has
performed and illustrates the variability of a Fund's returns over time.
Each Fund's average annual returns from inception, and for one-, five- and
ten-year periods (as applicable) are compared to the performance of an
appropriate broad-based index.

Please remember that past performance is no guarantee of future results.

Diversified Bond Fund Institutional Class Calendar Year Returns (%)*

[BAR GRAPH APPEARS HERE]

Best Qtr.: Q3 '98 . 5.30% Worst Qtr.: Q1 '94 . -1.94%

* The Fund's year-to-date performance through June 30, 2000 was 4.93%.
<TABLE>
<CAPTION>
Average annual total return (%)

for the period ended 12/31/99 1 year 5 years 10 years
<S> <C> <C> <C>
Institutional Class (Incept. 11/11/94)/1/ -1.19 6.73 6.47

LB Aggregate Bond Index/2/ -0.82 7.73 7.70
</TABLE>

/1/ Performance shown for periods prior to November 11, 1994 reflects the
performance of the predecessor collective investment fund, adjusted to
reflect the fees and expenses of the Institutional Class. The collective
investment fund was not a registered mutual fund and was not subject to
certain investment limitations and other restrictions which, if applicable,
may have adversely affected performance.

/2/ Lehman Brothers Aggregate Bond Index.
<PAGE>

-------------------------------------------------------------------------------

Income Fund Institutional Class Calendar Year Returns (%)*

Best Qtr.: Q3 '91 . 6.21% Worst Qtr.: Q2 '94 . -3.30%

* The Fund's year-to-date performance through June 30, 2000 was 3.34%.
<TABLE>
<CAPTION>
Average annual total return (%)

for the period ended 12/31/99 1 year 5 years 10 years
<S> <C> <C> <C>
Institutional Class (Incept. 8/2/93)/1/ -3.91 6.67 6.94

LB Aggregate Bond Index/2/ -0.82 7.73 7.70
</TABLE>

/1/ Performance shown for periods prior to the inception of the Institutional
Class shares reflects the performance of the Class A shares, and includes
all fees and expenses applicable to that class.The Class A shares commenced
operations on June 9, 1987.

/2/ Lehman Brothers Aggregate Bond Index.
<PAGE>

Performance History
-------------------------------------------------------------------------------

Intermediate Government Income Fund Institutional Class Calendar Year
Returns (%)*

[BAR GRAPH APPEARS HERE]

Best Qtr.: Q3 '98 . 6.00% Worst Qtr.: Q2 '94 . -3.73%

* The Fund's year-to-date performance through June 30, 2000 was 3.80%.
<TABLE>
<CAPTION>
Average annual total return (%)

for the period ended 12/31/99 1 year 5 years 10 years
<S> <C> <C> <C>
Institutional Class (Incept. 11/11/94)/1/ -2.21 6.46 6.28

LB Intermediate U.S. Gov't. Index/2/ 0.49 6.93 7.10
</TABLE>

/2/ Lehman Brothers Intermediate U.S. Government Index.
<PAGE>

--------------------------------------------------------------------------------

Limited Term Government Income Fund Institutional Class
Calendar Year Returns (%)*

[BAR GRAPH APPEARS HERE]

Best Qtr.: Q3 '98 . 4.89% Worst Qtr.: Q3 '94 . -0.67%

* The Fund's year-to-date performance through June 30, 2000 was 2.81%.
<TABLE>
<CAPTION>
Average annual total return (%)
Since
for the period ended 12/31/99 1 year 5 years Inception
<S> <C> <C> <C>
Institutional Class (Incept. 9/6/96)/1/ -0.17 6.20 4.83

LB Intermediate Gov't./Credit Index/2/ 0.39 7.10 5.37
</TABLE>

/1/ Performance shown for periods prior to the inception of the Institutional
Class shares reflects the performance of the Class A shares, which incepted
on October 27, 1993.

/2/ Lehman Brothers Intermediate Government/Credit Index.
<PAGE>

Performance History
--------------------------------------------------------------------------------

Stable Income Fund Institutional Class Calendar Year Returns (%)*

[BAR GRAPH APPEARS HERE]

Best Qtr.: Q2 '95 . 2.24% Worst Qtr.: Q2 '99 . 0.69%

* The Fund's year-to-date performance through June 30, 2000 was 3.02%.
<TABLE>
<CAPTION>
Average annual total return (%)
Since
for the period ended 12/31/99 1 year 5 years Inception
<S> <C> <C> <C>
Institutional Class (Incept. 11/11/94) 3.57 5.83 5.81

ML Treasury Bill One-Year/1/ 4.03 5.85 5.70
</TABLE>

/1/ Merrill Lynch Treasury Bill One-Year Index.
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Income Funds
--------------------------------------------------------------------------------

SHAREHOLDER FEES
All Funds
----------------------------------------------------------------------------------------------
<S> <C>
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) None

Maximum deferred sales charge (load) (as a percentage of the lower of
the net asset value ("NAV") at purchase or the NAV at redemption) None
----------------------------------------------------------------------------------------------
</TABLE>

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Diversified Income
Bond Fund/3/ Fund
----------------------------------------------------------------------------------------------
<S> <C> <C>
Management Fees 0.75% 0.50%
Distribution (12b-1) Fees 0.00% 0.00%
Other Expenses/1/ 0.27% 0.26%
----------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.02% 0.76%
----------------------------------------------------------------------------------------------
Fee Waivers 0.32% 0.01%
----------------------------------------------------------------------------------------------
NET EXPENSES/2/ 0.70% 0.75%
----------------------------------------------------------------------------------------------
</TABLE>

----------------------------------------------------------------------------------------------------
Intermediate Limited Term
Government Government Stable
Income Fund Income Fund Income Fund/3/
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees 0.50% 0.50% 0.50%
Distribution (12b-1) Fees 0.00% 0.00% 0.00%
Other Expenses/1/ 0.29% 0.33% 0.29%
----------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 0.79% 0.83% 0.79%
----------------------------------------------------------------------------------------------------
Fee Waivers 0.11% 0.15% 0.14%
----------------------------------------------------------------------------------------------------
NET EXPENSES/2/ 0.68% 0.68% 0.65%
----------------------------------------------------------------------------------------------------
</TABLE>

/1/ Other expenses are based on estimated amounts for the current fiscal year.

/2/ The Advisor has committed through September 30, 2001 to waive fees and/or
reimburse expenses to the extent necessary to maintain the Fund's net
operating expense ratio shown.

/3/ Includes expenses from the core portfolio(s) in which the Fund invests.
<PAGE>

Summary of Expenses
--------------------------------------------------------------------------------

EXAMPLE OF EXPENSES

This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. The examples assume a fixed
rate of return and that fund operating expenses remain the same. Your actual
costs may be higher or lower than those shown.

You would pay the following expenses on a $10,000 investment assuming a 5%
annual return and that you redeem your shares at the end of each period:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Diversified Income
Bond Fund Fund
------------------------------------------------------------------------------------
<S> <C> <C>
1 YEAR $ 72 $ 77
3 YEARS $ 293 $242
5 YEARS $ 532 $421
10 YEARS $1,219 $941
------------------------------------------------------------------------------------
</TABLE>

------------------------------------------------------------------------------------
Intermediate Limited Term
Government Government Stable
Income Fund Income Fund Income Fund
------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR $ 69 $ 69 $ 66
3 YEARS $241 $ 250 $238
5 YEARS $428 $ 446 $425
10 YEARS $968 $1,011 $965
------------------------------------------------------------------------------------
</TABLE>
<PAGE>

Key Information
--------------------------------------------------------------------------------

Core and Gateway Structure

Some of the Funds in this Prospectus are "Gateway" funds in a "core and
Gateway" structure. In this structure, a Gateway fund invests substantially
all of its assets in one or more core portfolios whose objectives and
investment strategies are consistent with a Fund's investment objective.
Gateway funds can enhance their investment opportunities and reduce their
expenses through sharing the costs and benefits of managing a large pool of
assets. Core portfolios do not offer shares to the public. Certain
administrative and other fees and expenses are charged to both the Gateway
fund and the core portfolio(s).The services provided and fees charged to a
Gateway fund are in addition to and not duplicative of the services
provided and fees charged to the core portfolios. References to the
activities of a Gateway fund are understood to refer to the investments of
the core portfolio(s) in which it invests.

---------------------------------------------------------------------------

Important information you should look for as you decide to invest in a
Fund:

The summary information on the previous pages is designed to provide you
with an overview of each Fund. The sections that follow provide more
detailed information about the investments and management of each Fund.

---------------------------------------------------------------------------

Investment Objective and Investment Strategies

The investment objective of each Fund in this Prospectus is non-
fundamental, that is, it can be changed by a vote of the Board of Trustees
alone. The objective and strategies descriptions for each Fund tell you:

. what the Fund is trying to achieve;

. how we intend to invest your money; and

. what makes a Fund different from the other Funds offered in this
Prospectus.

---------------------------------------------------------------------------
Permitted Investments

A summary of the Fund's key permitted investments and practices.

---------------------------------------------------------------------------

Important Risk Factors

Describes the key risk factors for the Fund, and includes risks described
in the "Summary of Important Risks" and "General Investment Risks"
sections.

Words appearing in italicized print and highlighted in color are defined in
the Glossary.
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Diversified Bond Fund
--------------------------------------------------------------------------------

Investment Objective

The Diversified Bond Fund seeks total return by diversifying its
investments among different fixed-income investment styles.

---------------------------------------------------------------------------

Investment Strategies

The Fund is a Gateway fund that uses a "multi-style" fixed-income
investment approach designed to reduce the price and return volatility of
the Fund and to provide more consistent returns."Style" means either an
approach to selecting investments, or a type of investment that is selected
for a portfolio. The Fund's portfolio combines the different fixed-income
investment styles of 3 portfolios--Managed Fixed-Income style, Strategic
Value Bond style, and Positive Return style.

---------------------------------------------------------------------------

Permitted Investments

Under normal market conditions, we invest in:

. at least 65% of total assets in debt securities;

. U.S. Government obligations;

. mortgage- or asset-backed securities; and

. dollar-denominated debt of U.S. branches of foreign banks.

The percentage of Fund assets invested in each core portfolio may
temporarily deviate from the current allocations due to changes in market
value. The Advisor will effect transactions daily to reestablish the
current allocations. The Advisor may make changes in the current allocation
at any time in response to market and other conditions. The Fund also may
invest in more or fewer core portfolios or invest directly in a portfolio
of securities.

We may temporarily hold assets in cash or in money market instruments,
including U.S. Government obligations, shares of other mutual funds and
repurchase agreements, or make other short-term investments, either to
maintain liquidity or for short-term defensive purposes when we believe it
is in the best interests of shareholders to do so. During such periods, the
Fund may not achieve its objective of providing total return.

---------------------------------------------------------------------------

Important Risk Factors

To manage its exposure to different types of investments, a Fund may enter
into interest rate, currency and mortgage (or other asset) swap agreements
and may purchase and sell interest rate "caps,""floors" and "collars."

You should consider the "Description of Core Portfolios" section on page 50
for the objective and principal strategies of these portfolios, and the
"Summary of Important Risks" section on page 6; the "General Investment
Risks" section beginning on page 36; and the specific risks listed here.
They are all important to your investment choice.
<PAGE>

-------------------------------------------------------------------------------

Portfolio Allocation

As of May 31, 2000, the core portfolio allocations for the Fund were as follows:
<TABLE>
<CAPTION>
Investment Style/Portfolios Allocation
<S> <C>
Managed Fixed-Income Portfolio 50.0%
Strategic Value Bond Portfolio 16.7%
Positive Return Portfolio 33.3%

TOTAL FUND ASSETS 100.0%
</TABLE>
-------------------------------------------------------------------------------

Portfolio Management

Please see the "Description of Core Portfolios" section on page 50 for the
objective and principal strategies of each portfolio, and the "Portfolio
Managers" section on page 52 for the professional summaries for these managers.
<TABLE>
<CAPTION>

Core Portfolio Sub-Advisor Portfolio Manager(s)
<S> <C> <C>
Managed Fixed-Income Galliard Richard Merriam, CFA; and Ajay Mirza

Strategic Value Bond Galliard Richard Merriam, CFA; John Huber; and Ajay Mirza

Positive Return Bond Peregrine William D. Giese, CFA; and Patricia Burns, CFA
</TABLE>
<PAGE>

Diversified Bond Fund
-------------------------------------------------------------------------------

FOR A SHARE OUTSTANDING
<TABLE>
<CAPTION>

INSTITUTIONAL CLASS SHARES--
COMMENCED ON NOVEMBER 11, 1994
-------------------------------------------------------------------
May 31, May 31,
For the period ended: 2000 1999
-------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $26.11 $27.03

Income from investment operations:
Net investment income (loss) 1.43 1.34
Net realized and unrealized gain (loss)
on investments (0.63) (0.17)

Total from investment operations 0.80 1.17

Less distributions:
Dividends from net investment income (1.16) (1.43)
Distributions from net realized gain (0.53) (0.66)

Total from distributions (1.69) (2.09)

Net asset value, end of period $25.22 $26.11

Total return (not annualized)/4/ 3.22% 4.15%

Ratios/supplemental data:
Net assets, end of period (000s) $190,283 $179,133

Ratios to average net assets (annualized):
Ratio of expenses to average net assets 0.70%/1/ 0.70%/1/
Ratio of net investment income (loss)
to average net assets 5.80% 5.58%

Portfolio turnover 68%/2/ 77%/2/

Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses (annualized)/3/ 0.92%/1/ 1.07%/1/
</TABLE>

/1/ Includes expenses allocated from the core portfolio in which the Fund
invests.

/2/ Portfolio turnover rate represents the activity from the Fund's investment
in the underlying core portfolios.

/3/ During each period, various fees and/or expenses were waived and/or
reimbursed. The ratio of gross expenses to average net assets reflects the
expense ratio in the absence of any waivers and/or reimbursements.

/4/ Total return calculations do not include any sales charges, and would have
been lower had certain expenses not been waived or reimbursed during the
periods shown.

/5/ The Fund changed its fiscal year-end from October 31 to May 31.
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
May 31, May 31, May 31, Oct. 31,
1998 1997 1996/5/ 1995
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$25.60 $26.03 $27.92 $25.08

1.61 1.59 1.07 1.65

1.51 0.01 (0.99) 1.19

3.12 1.60 0.08 2.84

(1.66) (1.69) (1.67) 0.00
(0.03) (0.34) (0.30) 0.00

(1.69) (2.03) (1.97) 0.00

$27.03 $25.60 $26.03 $27.92

12.39% 6.23% 0.22% 11.32%

$134,831 $162,310 $167,159 $171,453

0.70%/1/ 0.70% 0.70% 0.67%

5.98% 6.19% 6.78% 5.87%

91%/2/ 57% 119% 59%

1.02%/1/ 0.77% 0.77% 0.82%
</TABLE>
<PAGE>

Income Fund
-------------------------------------------------------------------------------

Portfolio Managers: Marjorie H. Grace, CFA; Mark Walter

--------------------------------------------------------------------------

Investment Objective

The Income Fund seeks current income and total return.

--------------------------------------------------------------------------
Investment Strategies

We invest in a diversified portfolio of debt and variable-rate debt
securities issued by domestic and foreign issuers. We invest in a broad
spectrum of U.S. issues, including U.S. Government obligations, mortgage-
and other asset-backed securities, and the debt securities of financial
institutions, corporations, and others. We target average portfolio
duration in a range based around the average portfolio duration of the
mutual funds included in the Lipper Corporate A-Rated Debt Average (which
is currently about 5-6 years, but is expected to change frequently). We
attempt to enhance the Fund's performance by adjusting the average duration
within the range to benefit from the effect of various economic factors,
such as inflation, or growth cycles.

--------------------------------------------------------------------------

Permitted Investments

Under normal market conditions, we invest:

. up to 70% of total assets in corporate debt securities such as bonds,
debentures and notes, including debt securities that can be converted
into or exchanged for common stocks;

. at least 30% of total assets in U.S. Government obligations;

. up to 50% of total assets in mortgage-backed securities and up to
25% of total assets in asset-backed securities; and

. at least 80% of our total assets in investment-grade debt securities. The
Fund may invest up to 20% of its total assets in below investment-grade
securities rated, at the time of purchase, in the fifth highest long-term
rating category assigned by a nationally recognized ratings organization
("NRRO").

We may also invest in zero coupon securities and enter into dollar roll
transactions. We invest primarily in securities with maturities (or average
life in the case of mortgage-backed and similar securities) ranging from
overnight to 40 years. It is anticipated that the Fund's portfolio will
have an average dollar-weighted maturity of between 3 and 15 years.

We may temporarily hold assets in cash or in money market instruments,
including U.S. Government obligations, shares of other mutual funds and
repurchase agreements, or make other short-term investments, either to
maintain liquidity or for short-term defensive purposes when we believe it
is in the best interest of shareholders to do so. During these periods, the
Fund may not achieve its objective of current income and total return.

--------------------------------------------------------------------------

Important Risk Factors

Mortgage- and asset-backed securities may not be guaranteed by the U.S.
Treasury. Mortgage- and asset-backed securities are subject to prepayment
acceleration and extension risk, either of which can lower the rate of
return on the portfolio. The Income Fund may invest in lower-rated
securities, which tend to be more sensitive to economic conditions and
involve greater credit risk than higher rated securities.

You should consider the "Summary of Important Risks" section on page 6; the
"General Investment Risks" section beginning on page 36; and the specific
risks listed here. They are all important to your investment choice.
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------

FOR A SHARE OUTSTANDING
<TABLE>
<CAPTION>

INSTITUTIONAL CLASS SHARES--
COMMENCED ON AUGUST 2, 1993
-----------------------------------------------------------------
May 31, May 31, May 31, May 31, May 31,
For the period ended: 2000 1999 1998 1997 1996
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.47 $9.78 $9.27 $9.26 $9.62

Income from investment operations:
Net investment income (loss) 0.61 0.59 0.61 0.62 0.61
Net realized and unrealized gain (loss)
on investments (0.62) (0.31) 0.51 0.01 (0.36)

Total from investment operations (0.01) 0.28 1.12 0.63 0.25

Less distributions:
Dividends from net investment income (0.61) (0.59) (0.61) (0.62) (0.61)
Distributions from net realized gain 0.00 0.00 0.00 0.00 0.00

Total from distributions (0.61) (0.59) (0.61) (0.62) (0.61)

Net asset value, end of period $8.85 $9.47 $9.78 $9.27 $9.26

Total return (not annualized)/2/ (0.10)% 2.81% 12.35% 6.90% 2.58%

Ratios/supplemental data:
Net assets, end of period (000s) $369,719 $348,472 $290,566 $258,207 $271,157

Ratios to average net assets (annualized):
Ratio of expenses to average net asset 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of net investment income (loss)
to average net assets 6.65% 6.00% 6.32% 6.59% 6.30%

Portfolio turnover 124% 202% 167% 231% 270%

Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses (annualized)/1/ 0.82% 0.92% 0.92% 1.02% 1.06%
</TABLE>

/1/ During each period, various fees and/or expenses were waived and/or
reimbursed. The ratio of gross expenses to average net assets reflects the
expense ratio in the absence of any waivers and/or reimbursements.

/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
periods shown.
<PAGE>

Intermediate Government Income Fund
--------------------------------------------------------------------------------

Portfolio Manager: Marjorie H. Grace, CFA

---------------------------------------------------------------------------
Investment Objective
The Intermediate Government Income Fund seeks current income, consistent
with safety of principal.

---------------------------------------------------------------------------

Investment Strategies
We invest primarily in fixed and variable rate U.S. Government obligations.
Under normal circumstances, we invest at least 65% of our total assets in
U.S. Government obligations and may invest up to 35% of our total assets in
debt securities that are not U.S. Government obligations. We target the
average portfolio duration in a range based on the average duration of 5-
year U.S. Treasury securities. As a result, the dollar-weighted average
maturity of the Fund, which was approximately 7.6 years as of July 31,
2000, generally ranges from four to ten years. We emphasize the use of
intermediate maturity securities to manage interest rate risk and use
mortgage-backed securities to enhance yield.

---------------------------------------------------------------------------

Permitted Investments
Under normal market conditions, we invest:

. at least 65% of total assets in U.S. Government obligations;

. up to 50% of total assets in mortgage-backed securities, and up to 25% of
our total assets in asset-backed securities; and

. up to 10% of our total assets in zero coupon securities.

As part of our mortgage-backed securities investments, we may enter into
dollar rolls. We may not invest more than 25% of our total assets in
securities issued or guaranteed by any single agency or instrumentality of
the U.S. Government, except the U.S. Treasury.

We will purchase only securities that are rated, at the time of purchase,
within the two highest rating categories assigned by an NRRO or, if
unrated, are determined by us to be of comparable quality.

We may use options, swap agreements, interest rate caps, floors and
collars, and futures contracts to manage risk. We also may use options to
enhance return.

We may temporarily hold assets in cash or in money market instruments,
including U.S. Government obligations, shares of other mutual funds and
repurchase agreements, or make other short-term investments, either to
maintain liquidity or for short-term defensive purposes when we believe it
is in the best interest of shareholders to do so. During these periods, the
Fund may not achieve its objective of current income consistent with safety
of principal.
<PAGE>

--------------------------------------------------------------------------------

Important Risk Factors
Mortgage- and asset-backed securities may not be guaranteed by the U.S.
Treasury. Mortgage- and asset-backed securities are subject to prepayment
acceleration and extension risk, either of which can reduce the rate of return
on the portfolio. Asset-backed securities are subject to risk of default on the
underlying assets, particularly during periods of economic downturn. Zero coupon
securities are sensitive to changes in interest rates, and tend to lose value in
a rising interest rate environment. Zero coupon securities also generate
ordinary income, which must be distributed to shareholders, even when they do
not generate funds to pay such distributions.

You should consider the "Summary of Important Risks" section on page 6; the
"General Investment Risks" section beginning on page 36; and the specific risks
listed here. They are all important to your investment choice.
<PAGE>

Intermediate Government Income Fund
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING

INSTITUTIONAL CLASS SHARES--
COMMENCED ON NOVEMBER 11, 1994
-----------------------------------------------------
May 31, May 31,
For the period ended: 2000 1999
------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $11.05 $11.22

Income from investment operations:
Net investment income (loss) 0.70 0.66
Net realized and unrealized gain (loss)
on investments (0.50) (0.18)

Total from investment operations 0.20 0.48

Less distributions:
Dividends from net investment income (0.69) (0.65)
Distributions from net realized gain 0.00 0.00

Total from distributions (0.69) (0.65)

Net asset value, end of period $10.56 $11.05

Total return (not annualized)/2/ 1.94% 4.30%

Ratios/supplemental data:
Net assets, end of period (000s) $385,299 $420,305

Ratios to average net assets (annualized):
Ratio of expenses to average net assets 0.68% 0.68%
Ratio of net investment income (loss)
to average net assets 6.43% 5.77%

Portfolio turnover 139% 124%

Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses (annualized)/1/ 0.75% 0.72%
</TABLE>

/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
periods shown.
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
May 31, May 31, May 31, Oct. 31,
1998 1997 1996 1995
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
$10.84 $10.89 $12.40 $11.11

0.71 0.72 0.40 0.93

0.37 (0.04) 0.53 0.36

1.08 0.68 0.93 1.29

(0.70) (0.73) (1.32) 0.00
0.00 0.00 (1.12) 0.00

(0.70) (0.73) (2.44) 0.00

$11.22 $10.84 $10.89 $12.40

10.19% 6.36% 0.60% 11.58%

$400,346 $371,278 $399,324 $50,213

0.68% 0.68% 0.71% 0.68%

6.35% 6.57% 6.71% 7.79%

97% 183% 75% 241%

0.72% 0.72% 1.17% 0.93%
</TABLE>
<PAGE>

Limited Term Government Income Fund
--------------------------------------------------------------------------------

Portfolio Manager: Mark Walter

---------------------------------------------------------------------------

Investment Objective

The Limited Term Government Income Fund seeks current income, while
preserving capital.

---------------------------------------------------------------------------

Investment Strategies

We seek current income by actively managing a diversified portfolio
consisting primarily of short- to intermediate-term U.S. Government
obligations. We may invest in securities of any maturity. Under ordinary
circumstances, we expect to maintain a dollar-weighted average maturity of
between 2 and 5 years. We seek to preserve capital by shortening average
maturity when we expect interest rates to increase and to increase total
return by lengthening maturity when we expect interest rates to fall.

---------------------------------------------------------------------------

Permitted Investments

Under normal market conditions, we invest:

. at least 65% of total assets in U.S. Government obligations or repurchase
agreements collateralized by U.S. Government obligations;

. in investment grade corporate debt securities including asset-backed
securities;

. no more than 5% of our total assets in securities downgraded below
investment-grade after we acquired them;

. up to 25% of total assets in dollar-denominated debt of U.S. branches of
foreign banks or foreign branches of U.S. banks; and

. in stripped treasury securities, adjustable-rate mortgage securities, and
adjustable portions of collateralized mortgage obligations ("CMOs").

We may temporarily hold assets in cash or in money market instruments,
including U.S. Government obligations, shares of other mutual funds and
repurchase agreements, or make other short-term investments, either to
maintain liquidity or for short-term defensive purposes when we believe it
is in the best interests of shareholders to do so. During these periods,
the Fund may not achieve its objective of current income and capital
preservation.

---------------------------------------------------------------------------

Important Risk Factors

Mortgage- and asset-backed securities and CMOs may not be guaranteed by the
U.S. Treasury. Mortgage- and asset-backed securities and CMOs are subject
to prepayment acceleration and extension risk, either of which can reduce
the rate of return on the portfolio. Asset-backed securities are subject to
risk of default on the underlying assets, particularly during periods of
economic downturn. Securities of U.S. branches of foreign banks and foreign
branches of U.S. banks are subject to additional risks, such as political
turmoil, the imposition of foreign withholding taxes, and the establishment
of exchange controls or the adoption of other foreign governmental
restrictions that may affect the payment of principal and/or interest on
these securities.

Stripped treasury securities have greater interest rate risk than
traditional government securities with identical credit ratings and like
maturities.

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Limited Term Government Income Fund
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING

INSTITUTIONAL CLASS SHARES--
COMMENCED ON SEPTEMBER 6, 1996
---------------------------------------------------------
May 31, June 30,
For the period ended: 2000/5/ 1999
---------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $9.55 $9.78

Income from investment operations:
Net investment income (loss) 0.51 0.56
Net realized and unrealized gain (loss)
on investments (0.29) (0.23)

Total from investment operations 0.22 0.33

Less distributions:
Dividends from net investment income (0.51) (0.56)
Distributions from net realized gain 0.00 0.00

Total from distributions (0.51) (0.56)

Net asset value, end of period $9.26 $9.55

Total return (not annualized)/3/ 2.34% 3.38%

Ratios/supplemental data:
Net assets, end of period (000s) $127,344 $79,789

Ratios to average net assets (annualized):
Ratio of expenses to average net assets 0.72% 0.91%
Ratio of net investment income (loss)
to average net assets 5.87% 5.72%

Portfolio turnover 80% 116%

Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses (annualized)/4/ 0.90% 1.08%
</TABLE>

/1/ The Fund changed its fiscal year-end from March 31 to June 30.

/2/ The Fund changed its fiscal year-end from September 30 to March 31.

/3/ Total return calculations do not include any sales charges, and would have
been lower had certain expenses not been waived or reimbursed during the
periods shown.

/4/ During each period, various fees and/or expenses were waived and/or
reimbursed. The ratio of gross expenses to average net assets reflects the
expense ratio in the absence of any waivers and/or reimbursements.

/5/ The Fund changed its fiscal year-end from June 30 to May 31.
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
June 30, March 31, March 31, Sept. 30,
1998/1/ 1998 1997/2/ 1996
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$9.76 $9.45 $9.54 $9.46

0.13 0.51 0.34 0.03

0.02 0.31 (0.09) 0.08

0.15 0.82 0.25 0.11

(0.13) (0.51) (0.34) (0.03)

0.00 0.00 0.00 0.00

(0.13) (0.51) (0.34) (0.03)

$9.78 $9.76 $9.45 $9.54

1.56% 8.85% 2.58% 1.08%

$90,146 $51,973 $60,150 $73,637

0.91% 0.69% 0.65% 0.59%

5.44% 5.28% 7.01% 5.14%

12% 48% 52% 389%

1.08% 1.07% 1.02% 0.84%
</TABLE>
<PAGE>

Stable Income Fund
------------------------------------------------------------------------------

Portfolio Manager: John Huber

-------------------------------------------------------------------------

Investment Objective

The Stable Income Fund seeks stability of principal while providing low
volatility total return.
-------------------------------------------------------------------------

Investment Strategies

The Fund is a Gateway fund that invests substantially all of its assets in
a core portfolio with a substantially similar investment objective and
investment strategies.

We invest primarily in short-term investment-grade securities. We invest in
a diversified portfolio of fixed and variable rate U.S. dollar-denominated
fixed-income securities of a broad spectrum of U.S. and foreign issuers,
including U.S. Government obligations and the debt securities of financial
institutions, corporations and others.

-------------------------------------------------------------------------

Permitted Investments

Under normal market conditions, we invest:

. at least 65% of total assets in income-producing debt securities;

. up to 65% of total assets in mortgage-backed securities;

. up to 25% of total assets in other types of asset-backed securities;

. up to 25% of total assets in mortgage-backed securities that are not U.S.
Government obligations; and

. up to 50% of total assets in U.S. Government obligations.

The Fund may not invest more than 30% of its total assets in the securities
issued or guaranteed by any single agency or instrumentality of the U.S.
Government, except the U.S. Treasury, and may not invest more than 10% of
its total assets in the securities of any other issuer. The Fund may invest
in additional core portfolios or invest directly in a portfolio of
securities.

The Fund only purchases investment grade securities.The Fund invests in
debt securities with maturities (or average life in the case of mortgage-
backed and similar securities) ranging from overnight to 12 years and seeks
to maintain a dollar-weighted average maturity of between 2 and 5 years.

The Fund may use options, swap agreements, interest rate caps, floors,
collars, and futures contracts to manage risk. The Fund also may use
options to enhance return.

We may temporarily hold assets in cash or in money market instruments,
including U.S. Government obligations, shares of other mutual funds and
repurchase agreements, or make other short-term investments, either to
maintain liquidity or for short-term defensive purposes when we believe it
is in the best interests of shareholders to do so. During these periods,
the Fund may not achieve its objective of maintaining stability of
principal while providing low volatility total return.
-------------------------------------------------------------------------

Important Risk Factors

You should consider the "Summary of Important Risks" section on page 6; the
"General Investment Risks" section on page 36; and the specific risks
listed here. They are all important to your investment choice.
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

Stable Income Fund
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING

INSTITUTIONAL CLASS SHARES--
COMMENCED ON NOVEMBER 11, 1994
-----------------------------------------------------
May 31, May 31,
For the period ended: 2000 1999
-----------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period 10.27 $10.30

Income from investment operations:
Net investment income (loss) 0.55 0.52
Net realized and unrealized gain (loss)
on investments (0.12) (0.02)

Total from investment operations 0.43 0.50

Less distributions:
Dividends from net investment income (0.55) (0.53)
Distributions from net realized gain 0.00 0.00

Total from distributions (0.55) (0.53)

Net asset value, end of period $10.15 $10.27

Total return (not annualized)/4/ 4.32% 4.95%

Ratios/supplemental data:
Net assets, end of period (000s) $191,358 $179,201

Ratios to average net assets (annualized):
Ratio of expenses to average net assets 0.65%/1/ 0.65%/1/
Ratio of net investment income (loss)
to average net assets 5.44% 5.10%/1/

Portfolio turnover 40%/2/ 29%/2/

Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses (annualized)/3/ 0.77%/1/ 0.76%/1/
</TABLE>
/1/ Includes expenses allocated from the core portfolio in which the Fund
invests.

/2/ Portfolio turnover rate represents the activity from the Fund's investments
in a core portfolio.

/4/ Total return calculations do not include any sales charges, and would have
been lower had certain expenses not been waived or reimbursed during the
periods shown.

/5/ The Fund changed its fiscal year-end from October 31 to May 31.
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
May 31, May 31, May 31, Oct. 31,
1998 1997 19965 1995
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$10.24 $10.20 $10.72 $10.00

0.58 0.58 0.28 0.50

0.05 0.04 0.03 0.22

0.63 0.62 0.31 0.72

(0.57) (0.58) (0.77) 0.00
0.00 0.00 (0.06) 0.00

(0.57) (0.58) (0.83) 0.00

$10.30 $10.24 $10.20 $10.72

6.28% 6.24% 2.97% 7.20%

$144,215 $111,030 $83,404 $48,087

0.65%/1/ 0.65% 0.65% 0.65%

5.69%/1/ 5.73% 5.74% 5.91%

37%/2/ 41% 110% 116%

0.76%/1/ 0.79% 0.92% 0.98%
</TABLE>
<PAGE>

General Investment Risks
--------------------------------------------------------------------------------

Understanding the risks involved in mutual fund investing will help you
make an informed decision that takes into account your risk tolerance and
preferences. You should carefully consider the risks common to investing in
all mutual funds, including the Wells Fargo Funds. Certain common risks are
identified in the "Summary of Important Risks" section on page 6. Other
risks of mutual fund investing include the following:

. Unlike bank deposits, such as CDs or savings accounts, mutual funds are
not insured by the FDIC.

. We cannot guarantee that we will meet our investment objectives.

. We do not guarantee the performance of a Fund, nor can we assure you
that the market value of your investment will not decline. We will not
"make good" any investment loss you may suffer, nor can anyone we
contract with to provide certain services, such as selling agents or
investment advisors, offer or promise to make good any such losses.

. Share prices--and therefore the value of your investment--will increase
and decrease with changes in the value of the underlying securities and
other investments. This is referred to as price volatility.

. Investing in any mutual fund, including those deemed conservative,
involves risk, including the possible loss of any money you invest.

. An investment in a single Fund, by itself, does not constitute a
complete investment plan.

. The Funds may also use certain derivative instruments, such as options
or futures contracts. The term "derivatives" covers a wide number of
investments, but in general it refers to any financial instrument whose
value is derived, at least in part, from the price of another security
or a specified index, asset or rate. Some derivatives may be more
sensitive to interest rate changes or market moves, and some may be
susceptible to changes in yields or values due to their structure or
contract terms.

. The Funds may invest a portion of their assets in U.S. Government
obligations, such as securities issued or guaranteed by the Government
National Mortgage Association ("GNMAs"), the Federal National Mortgage
Association ("FNMAs") and the Federal Home Loan Mortgage Corporation
("FHLMCs"). Each are mortgage-backed securities representing partial
ownership of a pool of residential mortgage loans. A "pool" or group of
such mortgages is assembled and, after being approved by the issuing or
guaranteeing entity, is offered to investors through securities dealers.
Mortgage-backed securities are subject to prepayment and extensive risk,
which can alter the maturity of the securities and also reduce the rate
of return on the portfolio. It is important to recognize that the U.S.
Government does not guarantee the market value or current yield of those
obligations. Not all U.S. Government obligations are backed by the full
faith and credit of the U.S. Treasury, and the U.S. Government's
guarantee does not extend to the Funds themselves. Collateralized
mortgage obligations ("CMOs") typically represent principal-only and
interest-only portions of such securities and are subject to increased
interest-rate and credit risk.

. The market value of lower-rated debt securities and unrated securities
of comparable quality that the Diversified Bond and Income Funds may
invest in tends to reflect individual developments affecting the issuer
to a greater extent than the market value of higher-rated securities,
which react primarily to fluctuations in the general level of interest
rates. Lower-rated securities also tend to be more sensitive to economic
conditions than higher-rated securities. These lower-rated debt
securities are considered by the rating agencies, on balance, to be
predominantly speculative with respect to the issuer's capacity to pay
interest and repay
<PAGE>

--------------------------------------------------------------------------------

principal. These securities generally involve more credit risk than
securities in higher-rating categories. Even securities rated "BBB" by
S&P or by Moody's ratings which are considered investment-grade, possess
some speculative characteristics.

Investment practices and risk levels are carefully monitored. Every
attempt is made to ensure that the risk exposure for each Fund remains
within the parameters of its objective.

What follows is a general list of the types of risks (some of which are
described previously) that may apply to a given Fund and a table showing
some of the additional investment practices that each Fund may use and
the risks associated with them. Additional information about these
practices is available in the Statement of Additional Information.

Counter-Party Risk--The risk that the other party in a repurchase
agreement or other transaction will not fulfill its contract obligation.

Credit Risk--The risk that the issuer of a debt security will be unable
to make interest payments or repay principal on schedule. If an issuer
does default, the affected security could lose all of its value, or be
renegotiated at a lower interest rate or principal amount. Affected
securities might also lose liquidity. Credit risk also includes the risk
that a party in a transaction may not be able to complete the
transaction as agreed.

Currency Risk--The risk that a change in the exchange rate between U.S.
dollars and a foreign currency may reduce the value of an investment
made in a security denominated in that foreign currency.

Diplomatic Risk--The risk that an adverse change in the diplomatic
relations between the United States and another country might reduce the
value of liquidity of investments in either country.

Emerging Market Risk--The risk that the emerging market, as defined in
the glossary, may be more sensitive to certain economic changes. For
example, emerging market countries are often dependent on international
trade and are therefore often vulnerable to recessions in other
countries. They may have obsolete financial systems, have volatile
currencies and may be more sensitive than more mature markets to a
variety of economic factors. Emerging market securities may also be less
liquid than securities of more developed countries and could be
difficult to sell, particularly during a market downturn.

Experience Risk--The risk presented by a new or innovative security. The
risk is that insufficient experience exists to forecast how the
security's value might be affected by various economic conditions.

Information Risk--The risk that information about a security is either
unavailable, incomplete or is inaccurate.

Interest Rate Risk--The risk that changes in interest rates can reduce
the value of an existing security. Generally, when interest rates
increase, the value of a debt security decreases. The effect is usually
more pronounced for securities with longer dates to maturity.

Leverage Risk--The risk that a practice, such as lending portfolio
securities, or engaging in forward commitment or when-issued
transactions, may increase a Fund's exposure to market risk, interest
rate risk or other risks by, in effect, increasing assets available for
investment.

Liquidity Risk--The risk that a security cannot be sold at the time
desired, or cannot be sold without adversely affecting the price.

Market Risk--The risk that the value of a stock, bond or other security
will be reduced by market activity. This is a basic risk associated with
all securities.
<PAGE>

General Investment Risks
--------------------------------------------------------------------------------

Political Risk--The risk that political actions, events or instability may
be unfavorable for investments made in a particular nation's or region's
industry, government or markets.

Prepayment Risk--The risk that consumers will accelerate their prepayment
of mortgage loans or other receivables, which can shorten the maturity of a
mortgage-backed or other asset-backed security, and reduce the portfolio's
rate of return.

Regulatory Risk--The risk that changes in government regulations will
adversely affect the value of a security. Also the risk that an
insufficiently regulated market might permit inappropriate trading
practices.

In addition to the general risks discussed above, you should carefully
consider and evaluate any special risks that may apply to investing in a
particular Fund. See the "Important Risk Factors" section in the summary
for each Fund. You should also see the Statement of Additional Information
for additional information about the investment practices and risks
particular to each Fund.
<PAGE>

--------------------------------------------------------------------------------

Investment Practice/Risk

The following table lists some of the additional investment practices of the
Funds, including some not disclosed in the Investment Objective and Investment
Strategies sections of the Prospectus. The risks indicated after the description
of the practice are NOT the only potential risks associated with that practice,
but are among the more prominent. Market risk is assumed for each. See the
Investment Objective and Investment Strategies for each Fund or the Statement of
Additional Information for more information on these practices.

Investment practices and risk levels are carefully monitored. We attempt to
ensure that the risk exposure for each Fund remains within the parameters of its
objective.

Remember, each Fund is designed to meet different investment needs and
objectives.

INTERMEDIATE LIMITED TERM
DIVERSIFIED GOVERNMENT GOVERNMENT STABLE
INVESTMENT PRACTICE RISK BOND INCOME INCOME INCOME INCOME
------------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Borrowing Policies
The ability to borrow from banks for Leverage Risk X X X X X
temporary purposes to meet shareholder
redemptions.

Floating and Variable Rate Debt
Instruments with interest rates that are Interest Rate and X X X X X
adjusted either on a schedule or when an index Credit Risk
or benchmark changes.

Foreign Securities
Debt of a foreign government or corporation or dollar- Information, Political,
denominated debt obligations of foreign branches of Regulatory, Diplomatic, X X X X
U.S. banks or U.S. branches of foreign banks. Liquidity and Currency
Risk

Forward Commitment, When-Issued and
Delayed Delivery Transactions Interest Rate,
Securities bought or sold for delivery at a later date or Leverage, Credit and X X X X X
bought or sold for a fixed price at a fixed date. Experience Risk

High Yield Securities
Debt securities of lower quality that produce generally Interest Rate and
higher rates of return. These securities, also known as Credit Risk
"junk bonds" , tend to be more sensitive to economic X X
conditions, more volatile, and less liquid, and are subject
to greater risk of default.

Illiquid Securities
A security that cannot be readily sold, or cannot be Liquidity Risk X X X X X
readily sold without negatively affecting its fair price.
Limited to 15% of total assets.
</TABLE>
<PAGE>

General Investment Risks
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERMEDIATE LIMITED TERM
DIVERSIFIED GOVERNMENT GOVERNMENT STABLE
INVESTMENT PRACTICE RISK BOND INCOME INCOME INCOME INCOME
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Loans of Portfolio Securities
The practice of loaning securities to brokers, dealers and Credit, Counter-Party X X X X X
financial institutions to increase return on those and Leverage Risk
securities. Loans may be made up to Investment
Company Act of 1940 limits (currently one-third of
total assets including the value of the collateral received).

Loan Participations
Debt obligations that represent a portion of a larger Credit Risk X X X X
loan made by a bank. Generally sold without
guarantee or recourse, some participations sell at a
discount because of the borrower's credit problems.

Mortgage- and Asset-Backed Securities
Securities consisting of undivided fractional Interest Rate, Credit,
interests in pools of consumer loans, such as mortgage Prepayment and X X X X X
loans, car loans, credit card debt or receivables held Experience Risk
in trust.

Options
The right or obligation to receive or deliver a security Credit, Information
or cash payment depending on the security's price or the and Liquidity Risk X X X X X
performance of an index or benchmark. Types of
options used may include: options on securities,
options on a stock index, stock index futures and
options on stock index futures to protect liquidity
and portfolio value.

Other Mutual Funds
A pro rata portion of the other fund's expenses, Market Risk
in addition to the expenses paid by the Funds, will be X X X X X
borne by Fund shareholders.

Privately Issued Securities
Securities that are not publicly traded but which may or Liquidity Risk X X
may not be resold in accordance with Rule 144A of the
Securities Act of 1933.

Repurchase Agreements
A transaction in which the seller of a security agrees to Credit and
buy back a security at an agreed upon time and price, Counter-Party Risk X X X X X
usually with interest.

Stripped Obligations
Securities that give ownership to either future Interest Rate Risk X X X X X
payments of interest or a future payment of
principal, but not both. These securities tend to have
greater interest rate sensitivity than conventional debt.
</TABLE>
<PAGE>

Organization and Management of the Funds
-------------------------------------------------------------------------------

About Wells Fargo Funds Trust

Wells Fargo Funds Trust (the "Trust") was organized as a Delaware business trust
on March 10, 1999. The Board of Trustees of the Trust supervises each Fund's
activities, monitors its contractual arrangements with various service providers
and decides upon matters of general policy.

The Trust was created to succeed to the assets and operations of the various
mutual funds in the Stagecoach Family of Funds and the Norwest Advantage Family
of Funds. The holding company of Wells Fargo Bank, the investment advisor to the
Stagecoach Family of Funds, and the holding company of Norwest Investment
Management, Inc., the investment advisor to the Norwest Advantage Family of
Funds, merged in November 1998. Each of the Funds described in this Prospectus
has succeeded to the assets and operations of one or more corresponding Funds of
Stagecoach or Norwest Advantage Funds. The performance and financial statement
history of each Fund's designated predecessor Fund has been assumed by the Wells
Fargo Funds Trust Fund. The succession transactions were approved by the
shareholders of the Stagecoach and Norwest Advantage Funds. The Table on page 49
identifies the Stagecoach or Norwest Advantage Fund predecessors to the Funds.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
BOARD OF TRUSTEES
--------------------------------------------------------------------------------
Supervises the Funds' activities
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
INVESTMENT ADVISOR CUSTODIAN
--------------------------------------------------------------------------------
Wells Fargo Bank, N.A. Wells Fargo Bank
525 Market St., San Francisco, CA Minnesota, N.A.
Manages the Funds'investment activities 6th & Marquette,Minneapolis, MN
Provides safekeeping for the
Funds'assets
--------------------------------------------------------------------------------
INVESTMENT SUB-ADVISOR(S)
--------------------------------------------------------------------------------
Varies by Fund
See Individual Fund Descriptions for Details
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
SHAREHOLDER
TRANSFER SERVICING
DISTRIBUTOR ADMINISTRATOR AGENT AGENTS
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>

Stephens Inc. Wells Fargo Bank, N.A. Boston Financial Data Various Agents
111 Center St. 525 Market St. Services, Inc.
Little Rock, AR San Francisco, CA Two Heritage Dr.
Quincy, MA

Markets the Funds Manages the Maintains records Provide
and distributes Funds'business of shares and services to
Fund shares activities supervises the payment customers
of dividends
-------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES FIRMS AND SELLING AGENTS

Advise current and
prospective
shareholders on their
Fund investments
-------------------------------------------------------------------------------------------------------
SHAREHOLDERS
-------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

Organization and Management of the Funds
--------------------------------------------------------------------------------
In the following sections, the percentages shown are the percentages
of the average daily net assets of each Fund class paid on an annual
basis for the services described.

The Investment Advisor

Wells Fargo Bank provides portfolio management and fundamental
security analysis services as the advisor for each of the Funds. Wells
Fargo Bank, founded in 1852, is the oldest bank in the western United
States and is one of the largest banks in the United States. Wells
Fargo Bank is a wholly owned subsidiary of Wells Fargo & Company, a
national bank holding company. As of June 30, 2000, Wells Fargo Bank
and its affiliates managed over $161 billion in assets. For providing
these services Wells Fargo Bank is entitled to receive fees as
described in the "Summary of Expenses" section at the front of this
Prospectus.

The Diversified Bond Fund is a Gateway fund that invests in various
core portfolios. Wells Fargo Bank is entitled to receive an investment
advisory fee of 0.25% of each Fund's average annual net assets for
investment advisory services, including the determination of the asset
allocation of each Fund's investments in various core portfolios.
Wells Fargo Bank also acts as the Advisor to, and is entitled to
receive a fee from, each core portfolio. The total amount of
investment advisory fees paid to Wells Fargo Bank as a result of a
Fund's investments varies depending on the Fund's allocation of assets
among the various core portfolios.

Dormant Investment Advisory Arrangements

Under the existing investment advisory contract for the Funds, Wells
Fargo Bank has been retained as an investment advisor for Gateway fund
assets redeemed from a core portfolio and invested directly in a
portfolio of securities. Wells Fargo Bank does not receive any
compensation under this arrangement as long as a Gateway fund invests
substantially all of its assets in one or more core portfolios. If a
Gateway fund redeems assets from a core portfolio and invests them
directly, Wells Fargo Bank receives an investment advisory fee from
the Gateway fund for the management of those assets.

The Sub-Advisors

Wells Capital Management Incorporated ("WCM"), a wholly owned
subsidiary of Wells Fargo Bank, is the sub-advisor for each of the
Income, Intermediate Government Income and Limited Term Government
Income Funds. As of June 30, 2000, WCM provided investment advice for
assets aggregating in excess of $80 billion.

WCM, Peregrine Capital Management, Inc. ("Peregrine"), and Galliard
Capital Management, Inc. ("Galliard") each sub-advise various core
portfolios of the Diversified Bond Fund and Galliard sub-advises the
core portfolio in which the Stable Income Fund invests.

Peregrine, which is located at LaSalle Plaza, 800 LaSalle Avenue,
Suite 1850, Minneapolis, Minnesota 55402, is an investment adviser
subsidiary of Wells Fargo Bank Minnesota, N.A. ("Wells Fargo MN"
(formerly known as Norwest Bank Minnesota, N.A.)). Peregrine provides
investment advisory services to corporate and public pension plans,
profit sharing plans, savings investment plans and 401(k) plans. As of
June 30, 2000, Peregrine managed approximately $9.2 billion in assets.

Galliard, which is located at LaSalle Plaza, 800 LaSalle Avenue, Suite
2060, Minneapolis, Minnesota 55479, is also an investment adviser
subsidiary of Wells Fargo Bank MN. Galliard provides investment
advisory services to bank and thrift institutions, pension and profit
sharing plans, trusts and charitable organizations and corporate and
other business entities. As of June 30, 2000, Galliard managed
approximately $6.4 billion in assets.
<PAGE>

--------------------------------------------------------------------------------

The Administrator

Wells Fargo Bank provides the Funds with administration services, including
general supervision of each Fund's operation, coordination of the other services
provided to each Fund, compilation of information for reports to the SEC and the
state securities commissions, preparation of proxy statements and shareholder
reports, and general supervision of data compilation in connection with
preparing periodic reports to the Trust's Trustees and officers. Wells Fargo
Bank also furnishes office space and certain facilities to conduct each Fund's
business. For providing these services, Wells Fargo Bank is entitled to receive
a fee of 0.15% of the average annual net assets of each Fund.

The Transfer Agent

Boston Financial Data Services, Inc. ("BFDS") provides transfer agency and
dividend disbursing services to the Funds. For providing these services, BFDS
receives an annual fee, certain transaction-related fees, and is reimbursed for
out-of-pocket expenses incurred on behalf of the Funds.
<PAGE>

Your Account
-------------------------------------------------------------------------------

This section tells you how Fund shares are priced, how to open an account
and how to buy, sell or exchange Fund shares once your account is open.

Pricing Fund Shares
. As with all mutual fund investments,the price you pay to purchase shares
or the price you receive when you redeem shares is not determined until
after a request has been received in proper form.

. We determine the NAV of each class of the Funds'shares each business day
as of the close of regular trading on the New York Stock Exchange
("NYSE") at 1:00 p.m. (Pacific time). We determine the NAV by
subtracting the Fund class's liabilities from its total assets, and then
dividing the result by the total number of outstanding shares of that
class. Each Fund's assets are generally valued at current market prices.
See the Statement of Additional Information for further disclosure.

. We process requests to buy or sell shares of the Funds each business day
as of the close of regular trading on the NYSE, which is usually 1:00
p.m. (Pacific time)/3:00 p.m. (Central time). If the markets close
early, the Funds may close early and may value their shares at earlier
times under these circumstances. Any request we receive in proper form
before this time is processed the same day. Requests we receive after
the cutoff time are processed the next business day.

. The Funds are open for business on each day the NYSE is open for
business.NYSE holidays include New Year's Day, Martin Luther King, Jr.
Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. When any holiday falls on a
weekend, the NYSE typically is closed on the weekday immediately before
or after such holiday.

Typically, Institutional Class shares are bought and held on your behalf by
the Institution through which you are investing. Check with your customer
account representative or your customer account agreement for the rules
governing your investment.

Minimum Investments

Institutions are required to make a minimum initial investment of
$2,000,000 per Fund. There are no minimum subsequent investment
requirements so long as your Institution maintains account balances at or
above the minimum initial investment amount. Minimum initial investment
requirements may be waived for certain Institutions. All purchases must be
made in U.S. dollars and checks should be drawn on U.S. banks.
<PAGE>

How to Buy Shares
-------------------------------------------------------------------------------

You can open a Fund account and buy Fund shares through an Institution through
which you have established a Customer Account. Investors interested in
purchasing Institutional shares of the Funds should contact an account
representative at their Institution and should understand the following:

. Share purchases are made through a Customer Account at an Institution in
accordance with the terms of the Customer Account involved;

. Institutions are usually the holders of record of Institutional shares held
through Customer Accounts and maintain records reflecting their customers'
beneficial ownership of the shares;

. Institutions are responsible for transmitting their customers'purchase and
redemption orders to the Funds and for delivering required payment on a
timely basis;

. The exercise of voting rights and the delivery of shareholder communications
from the Fund is governed by the terms of the Customer Account involved; and

. Institutions may charge their customers account fees and may receive fees
from us with respect to investments their customers have made with the Funds.
<PAGE>

Your Account How to Sell Shares
-------------------------------------------------------------------------------

Institutional shares must be redeemed in accordance with the account
agreement governing your Customer Account at the Institution. Please read
the Customer Account agreement with your Institution for rules governing
selling shares.

GENERAL NOTES FOR SELLING SHARES

. We process requests we receive from an Institution in proper form
before the close of the NYSE usually 1:00 p.m. (Pacific time)/3:00p.m.
(Central time), at the NAV determined on the same business day.
Requests we receive after this time are processed on the next business
day.

. Redemption proceeds are usually wired to the redeeming Institution the
following business day.

. If you purchased shares through a packaged investment product or
retirement plan,read the directions for selling shares provided by the
product or plan. There may be special requirements that supersede the
directions in this Prospectus.

. We reserve the right to delay payment of a redemption so that we may be
reasonably certain that investments made by check or through ACH have
been collected. Payments of redemptions also may be delayed under
extraordinary circumstances or as permitted by the SEC in order to
protect remaining shareholders. Payments of redemptions also may be
delayed up to seven days under normal circumstances, although it is not
our policy to delay such payments.

. Generally,we pay redemption requests in cash,unless the redemption
request is for more than $250,000 or 1% of the net assets of the Fund
by a single shareholder over a ninety-day period. If a request for a
redemption is over these limits, it may be to the detriment of existing
shareholders. Therefore, we may pay the redemption in part or in whole
in securities of equal value.
<PAGE>

Exchanges
--------------------------------------------------------------------------------
Exchanges between Wells Fargo Funds are two transactions: a sale of shares of
one Fund and the purchase of another. In general, the same rules and procedures
that apply to sales and purchases apply to exchanges. There are, however,
additional factors you should keep in mind while making or considering an
exchange:

. You should carefully read the Prospectus for the Fund into which you wish to
exchange.

. Every exchange involves selling Fund shares and that sale may produce a
capital gain or loss for federal income tax purposes.

. In order to discourage excessive Fund transaction expenses that must be borne
by other shareholders, we reserve the right to limit or reject exchange
orders.

. You may make exchanges only between like share classes of non-money market
Funds and the Service Class shares of money market Funds.

Contact your account representative for further details.

Generally, we will notify you up to 60 days in advance of any changes in your
exchange privileges.
<PAGE>

Other Information
-------------------------------------------------------------------------------

Dividend and Capital Gain Distributions Options
The Funds in this Prospectus pay dividends monthly and make any capital
gains distributions at least annually. Contact your Institution for
distribution options.

Remember, distributions have the effect of reducing NAV per share by the
amount distributed.

Taxes

This discussion regarding federal income taxes is based on laws that were
in effect as of the date of this Prospectus. The discussion summarizes only
some of the important federal income tax considerations that affect the
Funds and you as a shareholder. It is not intended as a substitute for
careful tax planning. You should consult your tax advisor about your
specific tax situation, including the federal, state, local and foreign tax
consequences to you of an investment in a Fund. Federal income tax
considerations are discussed further in the Statement of Additional
Information.

We will pass on to you substantially all of the Funds' income and gains.
Distributions of a Fund's ordinary income, short-term capital gain and
certain other items will be taxable to you as ordinary income.
Distributions of a Fund's net long-term capital gain, if any, will be
taxable to you as net capital gain. It is not expected that corporate
shareholders will be able to deduct a portion of distributions from the
Funds when determining their taxable income.

Distributions from a Fund normally will be taxable to you when paid,
whether you take the distribution in cash or automatically reinvest them in
additional Fund shares. However, distributions declared in October,
November and December of one year and distributed in January of the
following year will be taxable as if they were paid on December 31 of the
first year. At the end of each year, you will be notified as to the federal
income tax status of your distributions for the year.

If you buy Fund shares shortly before it makes a distribution, your
distribution from the Fund will, in effect, be a taxable return for part of
your investment. Similarly, if you buy shares of a Fund when it holds
appreciated securities, you will receive a taxable return of part of your
investment if and when the Fund sells the appreciated securities and
realizes the gain. The Funds have built up, or have the potential to build
up, high levels of unrealized appreciation.

In general, your redemptions (including redemptions in-kind) and exchanges
of Fund shares will result in a taxable capital gain or loss, depending on
the amount you receive for your shares (or are deemed to receive in the
case of exchanges) and the amount you paid (or are deemed to have paid) for
them. Such gain or loss will be long-term capital gain or loss if you have
held your redeemed Fund shares for more than one year at the time of
redemption.

Foreign shareholders may be subject to different tax treatment, including
withholding taxes. In certain circumstances, U.S. residents will be subject
to backup withholding at a 31% rate on distributions and redemption
proceeds paid by the Funds.
<PAGE>

Table of Predecessors
-------------------------------------------------------------------------------

The Funds described in this Prospectus were created as part of the
reorganization of the Stagecoach Family of Funds, advised by Wells Fargo
Bank, N.A., and the Norwest Advantage Family of Funds, advised by NIM, into
a single mutual fund complex. The reorganization followed the merger of the
advisors' parent companies.

Each Fund is an accounting survivor of a former Stagecoach Funds, Inc. or
Norwest Advantage Funds fund, as indicated in the Table of Predecessors
below. The performance histories and financial highlights of each Fund for
the periods prior to November 8, 1999 are the performance histories and
financial highlights of the predecessor fund.
<TABLE>
<S> <C>
Wells Fargo Funds Trust Predecessor Funds

Diversified Bond Fund Norwest Advantage Diversified Bond Fund

Income Fund Norwest Advantage Income Fund

Intermediate Government Income Fund Norwest Advantage Intermediate
Government Income Fund

Limited Term Government Income Fund Stagecoach Short-Intermediate
U.S. Government Income Fund

Stable Income Fund Norwest Advantage Stable Income Fund
</TABLE>
<PAGE>

Description of Core Portfolios
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO OBJECTIVE
<S> <C>
Managed Fixed-Income The Portfolio seeks consistent fixed-income returns by investing primarily
Portfolio in investment grade intermediate-term securities.

Positive Return Bond The Portfolio seeks positive total return each calendar year regardless of
Portfolio general bond market performance by investing in a portfolio of high
quality U.S. Government securities and corporate fixed-income securities.

Strategic Value Bond The Portfolio seeks total return by investing primarily in income-
Portfolio producing securities.
</TABLE>
<PAGE>

PRINCIPAL STRATEGY

The Portfolio invests in a diversified portfolio of fixed- and variable-rate
U.S. dollar-denominated, fixed-income securities of a broad spectrum of U.S. and
foreign issuers including U.S. Government securities and the debt securities of
financial institutions, corporations and others.

The Portfolio's assets are divided into two components,"short" bonds with
maturities (or average life) of two years or less, and "long" bonds with
maturities of 25 years or more.

The Portfolio invests in a broad range of debt securities in order to create a
strategically diversified portfolio of fixed-income investments. These
investments include corporate bonds, mortgage- and other asset-backed
securities, U.S. Government securities, preferred stock, convertible bonds, and
foreign bonds.
<PAGE>

Portfolio Managers
-------------------------------------------------------------------------------

Patricia Burns, CFA
Diversified Bond Fund and its predecessor since 1998

Ms. Burns joined Peregrine over ten years ago and is a Senior Vice
President and Portfolio Manager for taxable fixed-income portfolios. She
has been associated with Wells Fargo Bank, MN and its affiliates since
1983. Ms. Burns has a BA in Child Psychology/Sociology and an MBA from the
University of Minnesota.

William D. Giese, CFA
Diversified Bond Fund and its predecessor since 1994

Mr. Giese joined Peregrine more than 10 years ago as a Senior Vice
President and Portfolio Manager. His responsibilities include overseeing
the Positive Return Bond Portfolio. Mr. Giese has more than 20 years of
experience in fixed-income securities management. Mr. Giese received his BS
in Civil Engineering from the Illinois Institute of Technology and an MBA
from the University of Michigan.

Marjorie H. Grace, CFA
Income Fund and its predecessor since 1996
Intermediate Government Income Fund and its predecessor since 1995

Ms. Grace joined WCM in 1998 and is Managing Director for Taxable Fixed-
Income. WCM and NIM combined investment advisory services under the WCM
name in 1999. She currently manages $2 billion in taxable core portfolios
for WCM, and a total of $1 billion in assets for the two funds listed
above. At NIM, she was a Vice President and Director of Taxable Fixed-
Income. She managed a variety of taxable and tax-exempt mutual and common
bond funds, and where she had been affiliated since 1992. Prior to NIM, she
was the portfolio manager of $1.2 billion in U.S. government, corporate,
municipal, and money market securities at United Banks of Colorado. Prior
to United Banks, she held positions as liquidity portfolio
manager/assistant treasurer at Columbia Savings and portfolio manager at
Metro National Bank. She began her 19-year investment career as an account
executive at Thompson McKinnon securities. Ms. Grace received her BA in
Mathematics and Computer Science from the University of California at Los
Angeles in 1972 and an MBA from the University of Colorado in 1981. She
earned the designation of Chartered Financial Analyst in 1995.

John Huber
Diversified Bond Fund and its predecessor since 1998
Stable Income Fund and its predecessor since 1998
Mr. Huber joined Galliard at the firm's inception in 1995 as a Portfolio
Manager. Currently, Mr. Huber is highly involved with portfolio management,
strategy, issue selection and trading. Mr. Huber oversees the Strategic
Value Bond Portfolio and specializes in corporate and asset/mortgage-backed
securities. Prior to joining Galliard, Mr. Huber was an Assistant Portfolio
Manager with NIM. In addition, he previously served as a Senior Analyst in
Norwest's Capital Market Credit Group. Mr. Huber received a BA in
Communications from the University of Iowa and an MBA from the University
of Minnesota.

Richard Merriam, CFA
Diversified Bond Fund and its predecessor since 1995
Mr. Merriam joined Galliard at the firm's inception in 1995. Currently, Mr.
Merriam is a Managing Partner at Galliard. He is responsible for investment
process and strategy. Mr. Merriam oversees the Strategic Value Bond
Portfolio and Managed Fixed-Income Portfolios. Prior to joining Galliard,
Mr. Merriam was Chief Investment Officer for Insight Management. Mr.
Merriam received a BA in Economics and English from the University of
Michigan and an MBA from the University of Minnesota.
<PAGE>

-------------------------------------------------------------------------------
Ajay Mirza
Diversified Bond Fund and its predecessor since 1998

Mr. Mirza joined Galliard at the firm's inception in 1995 as a Portfolio Manager
and Mortgage Specialist. Prior to joining Peregrine, Mr. Mirza was a research
analyst at Insight Investment Management and at Lehman Brothers. Mr. Mirza holds
a BE in Instrumentation from the Birla Institute of Technology (India), an MA in
Economics from Tulane University, and an MBA from the University of Minnesota.

Mark Walter
Income Fund since 2000
Limited Term Government Income Fund since 2000

Mr. Walter joined WCM in 1999 as a portfolio manager with the Tax-Exempt Fixed-
Income Team, and simultaneously held the position of assistant portfolio manager
at NIM (since 1997) until WCM and NIM combined investment advisory services
under the WCM name in 1999. As an assistant portfolio manager, Mr. Walter
assisted in the management of both taxable and tax-exempt fixed-income funds.
Prior to WCM, he worked as an Investment Consultant for Kirkpatrick, Petris, a
brokerage firm that is a wholly owned subsidiary of the Mutual of Omaha. In his
capacity as an Investment Consultant, Mr. Walter sold and traded taxable and
tax-exempt fixed-income securities to institutional clients. Mr. Walter received
a BS in Finance from the University of Colorado at Boulder in 1996.
<PAGE>

Glossary
-------------------------------------------------------------------------------

We provide the following definitions to assist you in reading this Prospectus.
For a more complete understanding of these terms you should consult your
financial advisor.

ACH
Refers to the "Automated Clearing House" system maintained by the Federal
Reserve Bank which allows banks to process checks, transfer funds and perform
other tasks.

Asset-Backed Securities
Securities consisting of an undivided fractional interest in pools of consumer
loans, such as car loans or credit card debt, or receivables held in trust.

Below Investment Grade
Securities rated BB or lower by S&P or Ba or lower by Moody's Investor Services,
or that may be unrated securities or securities considered to be "high risk."

Business Day
Any day the New York Stock Exchange is open is a business day for the Funds.

Current Income
Earnings in the form of dividends or interest as opposed to capital growth. See
also "total return."

Derivatives
Securities whose values are derived in part from the value of another security
or index. An example is a stock option.

Distributions
Dividends and/or capital gains paid by a Fund on its shares.

Dollar-Denominated
Securities issued by foreign banks, companies or governments in U.S. dollars.

Duration
A measure of a security's or portfolio's sensitivity to changes in interest
rates. Duration is usually expressed in years, with longer durations typically
more sensitive to interest rate changes than shorter durations.
<PAGE>

-------------------------------------------------------------------------------

Emerging Markets

Markets associated with a country that is considered by international financial
organizations, such as the International Finance Corporation and the
International Bank for Reconstruction and Development, and the international
financial community to have an "emerging" stock market. Such markets may be
under-capitalized, have less-developed legal and financial systems or may have
less stable currencies than markets in the developed world.

FHLMC
FHLMC securities are commonly known as "Freddie Mac" and are issued by the
Federal Home Loan Mortgage Corporation.

FNMA
FNMA securities are known as "Fannie Maes" and are issued by the Federal
National Mortgage Association.

GNMA
GNMA securities are commonly known as "Ginnie Maes" and are issued by the
Government National Mortgage Association.

Illiquid Security
A security which cannot be readily sold, or cannot be readily sold without
negatively affecting its fair price.

Institution
An affiliate, franchise or correspondent bank of Wells Fargo & Company and other
institutions.

Investment-Grade Securities
A type of bond rated in the top four investment categories by a nationally
recognized ratings organization. Generally these are bonds whose issuers are
considered to have a strong ability to pay interest and repay principal,
although some investment-grade bonds may have some speculative characteristics.

Liquidity
The ability to readily sell a security at a fair price.

Moody's
A nationally recognized ratings organization.
<PAGE>

Glossary
-------------------------------------------------------------------------------

Net Asset Value ("NAV")

The value of a single fund share. It is determined by adding together all
of a Fund's assets, subtracting accrued expenses and other liabilities,
then dividing by the total number of shares.

Nationally Recognized Ratings Organization ("NRRO")
A company that examines the ability of a bond issuer to meet its
obligations and which rates the bonds accordingly.

Options
An option is the right to buy or sell a security based on an agreed upon
price at a specified time. For example, an option may give the holder of a
stock the right to sell the stock to another party, allowing the seller to
profit if the price has fallen below the agreed price. Options may also be
based on the movement of an index such as the S&P 500.

Repurchase Agreement
An agreement between a buyer and seller of a security in which the seller
agrees to repurchase the security at an agreed upon price and time.

Selling Agent
A person who has an agreement with a Fund's distributor that allows them to
sell the Fund's shares.

S&P
Standard and Poor's, a nationally recognized ratings organization. S&P also
publishes various indexes or lists of companies representative of sectors
of the U.S. economy.

Statement of Additional Information
A document that supplements the disclosures made in the Prospectus.

Stripped Treasury Securities
Debt obligations in which the interest payments and the repayment of
principal are separated and sold as securities.

Total Return
The annual return on an investment, including any appreciation or decline
in share value, assumes reinvestment of all dividends and capital gains,
reflects fee waivers and excludes sales loads.

U.S. Government Obligations
Obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

Weighted Average Maturity
The average maturity for the debt securities in a portfolio on a dollar-
for-dollar basis.

Zero Coupon Securities
Bonds that make no periodic interest payments and which are usually sold at
a discount of their face value. Zero coupon bonds are subject to interest
rate and credit risk.
<PAGE>

This page intentionally left blank
--------------------------------------------------------------------------------
<PAGE>

YOU MAY WISH TO REVIEW THE FOLLOWING DOCUMENTS:

STATEMENTS OF ADDITIONAL INFORMATION
supplements the disclosures made by this Prospectus. The Statement of Additional
Information has been filed with the SEC and incorporated by reference into this
Prospectus and is legally part of this Prospectus.

ANNUAL/SEMI-ANNUAL REPORTS
provide certain financial and other important information, including a
discussion of the market conditions and investment strategies that significantly
affected Fund performance, for the most recent reporting period.

THESE DOCUMENTS ARE AVAILABLE FREE OF CHARGE:
Call: 1-800-222-8222; option 1, option 5

WRITE TO:
Wells Fargo Funds
PO Box 8266
Boston, MA 02266-8266; or

Visit the SEC's website at http://www.sec.gov

REQUEST COPIES FOR A FEE BY WRITING TO:
SEC Public Reference Room
Washington, DC 20549-6009; or
by electronic request at [email protected]
Call: 1-800-SEC-0330 for details

ADDITIONAL SERVICES QUESTIONS CAN BE ANSWERED BY CALLING YOUR SPECIFIC PRODUCT
GROUP AT WELLS FARGO BANK:

Wells Fargo Checking and Savings - 1-800-869-3557
Next Stage IRA or Stagecoach IRA - 1-800-237-8472
Wells Fargo Portfolio Advisor - 1-877-689-7882
<PAGE>

[LOGO OF WELLS FARGO]

Wells Fargo WealthBuilder
Portfolios Prospectus

October 1, 2000

Please read this Prospectus and keep it for future reference. It is designed to
provide you with important information and to help you decide if a Fund's goals
match your own.

Wells Fargo WealthBuilder
Growth Portfolio

Wells Fargo WealthBuilder
Growth Balanced Portfolio

Wells Fargo WealthBuilder
Growth and Income Portfolio
<PAGE>

[INTENTIONALLY LEFT BLANK]
<PAGE>

Table of Contents

<TABLE>
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Overview Objectives and Principal Strategies 4

This section contains important Summary of Important Risks 6
summary information about the Performance History 8
Portfolios. Summary of Expenses 12
Key Information 14

-----------------------------------------------------------------------------------------------------------
The Portfolios Growth Portfolio 16

This section contains important Growth Balanced Portfolio 18
information about the individual Growth and Income Portfolio 22
Portfolios. The Underlying Funds 24
General Investment Risks 26
Organization and Management
of the Portfolios 30

-----------------------------------------------------------------------------------------------------------
Your Investment Your Account 32

Turn to this section for How to Buy Shares 34
information on how to open an How to Sell Shares 36
account and how to buy, sell and Exchanges 38
exchange Portfolio shares.
-----------------------------------------------------------------------------------------------------------

Reference Additional Services and
Other Information 39
Look here for additional
information and term Table of Predecessors 41
definitions. Portfolio Management 42
Glossary 43
</TABLE>
<PAGE>

Wells Fargo WealthBuilder Portfolios Overview
--------------------------------------------------------------------------------
See the individual Portfolio descriptions in this Prospectus for further
details. Words appearing in italicized print and highlighted in color are
defined in the glossary.

<TABLE>
<CAPTION>
PORTFOLIO OBJECTIVE
<S> <C>
The Portfolio seeks long-term capital appreciation with no emphasis on
Growth Portfolio income.

Growth Balanced Portfolio The Portfolio seeks a balance of capital appreciation and current income.

The Portfolio seeks long-term capital appreciation with a secondary
emphasis on income.
Growth and Income Portfolio
</TABLE>

4 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

PRINCIPAL STRATEGY

The Growth Portfolio blends equity mutual funds with diverse investment styles.
Included are: large company growth stocks--for their strong earnings growth
potential; large company value stocks--representing out-of-favor companies with
relatively higher dividends for greater return potential; small company stocks--
for their dramatic growth potential; and international stocks--for increased
diversification and global growth opportunities.

The Portfolio's diversification helps to moderate volatility by limiting the
effect of one style that is under-performing, while increasing the likelihood of
participation when one style is out-performing through the active asset
allocation approach. The Portfolio seeks to achieve its objective by allocating
its assets among equity styles through a number of affiliated and non-affiliated
funds.

The Growth Balanced Portfolio is a highly diversified investment, consisting of
both equity and fixed-income (bond) mutual funds, with an emphasis on stocks.
Stocks offer long-term growth potential, while bonds help to decrease risk and
provide income, making this investment appropriate for long-term investors who
desire less volatility than an all-stock portfolio.

The equity holdings are diversified across many investment styles, including
large company growth, large company value, small company, and international. The
bond holdings are also diversified across a wide range of income producing
securities, including U.S. Government bonds, corporate bonds, below investment
grade bonds and foreign issues. The Portfolio's diversification helps to
moderate volatility by limiting the effect of one asset class that is under-
performing, while increasing the likelihood of participation when one asset
class is out-performing through an active stock/bond asset allocation approach.
The Portfolio seeks to achieve its objective by allocating its assets across
asset classes of stocks and bonds through a number of affiliated and non-
affiliated funds.

The Growth and Income Portfolio is a diversified equity investment. It holds
mutual funds that employ different and complementary investment styles to
provide potential for both growth and income. Included are: large company growth
stocks--for their strong earnings growth potential; large company value stocks--
representing out-of-favor companies with relatively higher dividends for greater
total return potential; small company stocks--for their dramatic growth
potential; and international stocks--for increased diversification and global
growth opportunities.

The Portfolio's emphasis on diversification helps to moderate volatility by
limiting the effect of one style that is under-performing, while also increasing
the likelihood of participation when one style is out-performing. The Portfolio
seeks to achieve its objective by allocating its assets among equity styles
through a number of affiliated and non-affiliated funds.

Wells Fargo WealthBuilder Portfolios Prospectus 5
<PAGE>

Summary of Important Risks
--------------------------------------------------------------------------------

This section summarizes important risks that are common to all of the Portfolios
described in this Prospectus, and important risks that relate specifically to
particular Portfolios. Both are important to your investment choice. Additional
information about these and other risks is included in:

. the individual Portfolio Descriptions later in this Prospectus;

. under the "General Investment Risks"section beginning on page 26;and

. in the Portfolios'Statement of Additional Information.

An investment in a Portfolio is not a deposit of Wells Fargo Bank and is not
insured or guaranteed by the FDIC or any other government agency. It is possible
to lose money by investing in a Portfolio.

The risks associated with each Portfolio is the risk related to each underlying
investment company or fund (the "Underlying Fund") in which the Portfolio
invests. Thus, the indirect risks of the Portfolios are the direct risks for the
Underlying Funds, which will be discussed in this Prospectus. References in this
Prospectus to the investment activities of the Portfolios also refer to the
Underlying Funds in which they invest.

COMMON RISKS FOR THE PORTFOLIOS

The Portfolios seek to reduce the risk of your investment by diversifying among
funds that invest in stocks and bonds and among different fund managers.
Investing in a mutual fund that holds a diversified portfolio of other mutual
funds provides a wider range of investment management talent and investment
diversification than is available in a single mutual fund. The Portfolios are
each designed to provide you with a single investment that offers diverse asset
classes, fund management, and fund categories. You still have, however, the
risks of investing in various asset classes, such as market risks related to
stocks and bonds, as well as the risk of investing in a particular Underlying
Fund, such as risks related to the particular investment management style. There
is also a risk that the Underlying Funds may under-perform other similarly
managed funds and there can be no assurance that any mutual fund will achieve
its objective.

Investments in a Portfolio may result in your incurring greater expenses than
if you were to invest directly in the Underlying Funds in which the Portfolio
invests.

6 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

PORTFOLIO-SPECIFIC RISKS

Equity Securities

The Portfolios invest in certain Underlying Funds which in turn invest in equity
securities, which are subject to equity market risk. This is the risk that stock
prices will fluctuate and can decline and reduce the value of a Portfolio's
investment. Certain types of stock and certain individual stocks selected for an
Underlying Fund's portfolio may underperform or decline in value more than the
overall market. As of the date of this Prospectus, the equity markets, as
measured by the S&P 500 Index and other commonly used indexes, are trading at or
close to record levels. There can be no guarantee that these levels will
continue. The Underlying Funds that invest in smaller companies, in foreign
companies (including investments made through American Depositary Receipts and
similar instruments), and in emerging markets are subject to additional risks,
including less liquidity and greater price volatility. An Underlying Fund's
investments in foreign companies and emerging markets are also subject to
special risks associated with international investing, including currency,
political, regulatory and diplomatic risks.

Debt Securities

The Growth Balanced Portfolio invests in certain Underlying Funds which in turn
invest some of their assets in debt securities, such as notes and bonds, which
are subject to credit risk and interest rate risk. Credit risk is the
possibility that an issuer of an instrument will be unable to make interest
payments or repay principal. Changes in the financial strength of an issuer or
changes in the credit rating of a security may affect its value. Interest rate
risk is the risk that interest rates may increase, which will reduce the resale
value of securities in an Underlying Fund's portfolio, including U.S. Government
obligations. Debt securities with longer maturities are generally more sensitive
to interest rate changes than those with shorter maturities. Changes in market
interest rates do not affect the rate payable on debt securities held in an
Underlying Fund, unless they have adjustable or variable rate features, which
can reduce interest rate risk. Changes in market interest rates may also extend
or shorten the duration of certain types of instruments, such as asset-backed
securities, and affect their value and the return on your investment.

We may invest in debt securities that are in low or below investment grade
categories, or are unrated or in default at the time of purchase. Such debt
securities have a much greater risk of default (or in the case of bonds
currently in default, of not returning principal) and are more volatile than
higher-rated securities of similar maturity. The value of such debt securities
will be affected by overall economic conditions, interest rates, and the
creditworthiness of the individual issuers. Additionally, these lower rated debt
securities may be less liquid and more difficult to value than higher rated
securities.

Wells Fargo WealthBuilder Portfolios Prospectus 7
<PAGE>

Performance History
--------------------------------------------------------------------------------

The information on the following pages shows you how each Portfolio has
performed and illustrates the variability of a Portfolio's returns over
time. Each Portfolio's average annual returns for one year and since
inception are compared to the performance of an appropriate broad-based
index (or indexes).

Please remember that past performance is no guarantee of future results.

Wells Fargo WealthBuilder Growth Portfolio Calendar Year Returns (%)*

98 99
30

25 26.74

20 21.00

Best Qtr.: Q4 `98 . 23.73% Worst Qtr.: Q3 `98 . -13.49%

* Returns do not reflect sales charges. If they did, returns would be lower. The
Portfolio's year-to-date performance through June 30, 2000 was 3.67%.

Average annual total return (%)/1/

Since
for the period ended 12/31/99 1 year Inception

Growth Portfolio (Incept. 10/1/97) 24.84 20.00

S&P 500 Index/2/ 21.04 22.82

/1/ Returns reflect applicable sales charges.
/2/ S&P 500 is a registered trademark of Standard & Poor's.

8 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

--------------------------------------------------------------------------------

Wells Fargo WealthBuilder Growth Balanced Portfolio Calendar Year Returns (%)*

98 99
30

15 15.21

14.45
10

Best Qtr.: Q4 `98 . 17.55% Worst Qtr.: Q3 `98 . -9.73%

* Returns do not reflect sales charges. If they did, returns would be lower. The
Portfolio's year-to-date performance through June 30, 2000 was 3.29%.

Average annual total return (%)/1/

for the period ended 12/31/99 1 year Inception

Growth Balanced Portfolio (Incept. 10/1/97) 12.74 12.64
S&P 500 Index/2/ 21.04 22.82
LB U.S. Gov't./Credit Index/3/ -2.15 4.56

/1/ Returns reflect applicable sales charges.
/2/ S&P 500 is a registered trademark of Standard & Poor's.
/3/ Lehman Brothers U.S. Government/Credit Index. (Formerly known as the Lehman
Brothers Government/Corporate Bond Index.)

Wells Fargo WealthBuilder Portfolios Prospectus 9
<PAGE>

Performance History
--------------------------------------------------------------------------------

Wells Fargo WealthBuilder Growth and Income Portfolio
Calendar Year Returns (%)*

98 99
30
27.28
25

15 14.68

Best Qtr.: Q4 `98 . 20.03% Worst Qtr.: Q3 `98 . -15.12%

* Returns do not reflect sales charges. If they did, returns would be lower. The
Portfolio's year-to-date performance through June 30, 2000 was 4.07%.

Average annual total return (%)/1/
Since
for the period ended 12/31/99 1 year Inception

Growth and Income Portfolio (Incept. 10/1/97) 25.37 16.86

S&P 500 Index/2/ 21.04 22.82

/1/ Returns reflect applicable sales charges.
/2/ S&P 500 is a registered trademark of Standard & Poor's.

10 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

Wells Fargo WealthBuilder Portfolios
--------------------------------------------------------------------------------

These tables are intended to help you understand the various costs and expenses
you will pay as a shareholder in a Portfolio. The tables do not reflect the
investment advisory fees and other operating expenses of the Underlying Funds.
Fees and expenses of the Underlying Funds are reflected in those funds'
performance and thus indirectly in the Portfolio's performance. These tables do
not reflect charges that may be imposed in connection with an account through
which you hold Portfolio shares. A broker/dealer or financial institution
maintaining the account through which you hold Portfolio shares may charge
separate account, service, or transaction fees on the purchase or sale of
Portfolio shares that would be in addition to the fees and expenses shown here.

SHAREHOLDER FEES

--------------------------------------------------------------------------------

All Portfolios
--------------------------------------------------------------------------------
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 1.50%

Maximum deferred sales charge (load)
(as a percentage of the lower of
the Net Asset Value ("NAV") at at redemption) None
purchase or the NAV
--------------------------------------------------------------------------------

ANNUAL PORTFOLIO OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM PORTFOLIO
ASSETS)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Growth Portfolio Growth Balanced Growth and Income
Portfolio Portfolio
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees 0.35% 0.35% 0.35%
--------------------------------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.75% 0.75% 0.75%
--------------------------------------------------------------------------------------------------------
Other Expenses/1/ 1.29% 0.82% 1.46%
--------------------------------------------------------------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 2.39% 1.92% 2.56%
--------------------------------------------------------------------------------------------------------
Fee Waivers 0.77% 0.50% 0.96%
--------------------------------------------------------------------------------------------------------
NET EXPENSES/2/ 1.62% 1.42% 1.60%
--------------------------------------------------------------------------------------------------------
</TABLE>

/1/ Other expenses are based on estimated amounts for the current fiscal year.
/2/ The advisor has committed through September 30, 2001 to waive fees and/or
reimburse expenses to the extent necessary to maintain the Portfolio's net
operating expense ratio shown. Fees and expenses of the Underlying Funds
are not covered by these waiver/reimbursement arrangements.
/3/ These expense ratios do not include expenses from the Underlying Funds.

12 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

Summary of Expenses
--------------------------------------------------------------------------------

EXAMPLE OF EXPENSES

These examples are intended to help you compare the cost of investing in the
Portfolio with the cost of investing in other mutual funds. The examples assume
a fixed rate of return and that Portfolio operating expenses remain the same.
Your actual costs may be higher or lower than those shown.

You would pay the following expenses on a $10,000 investment assuming a 5%
annual return and that you redeem your shares at the end of each period:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
Growth Balanced Growth and Income
Growth Portfolio Portfolio Portfolio
-------------------------------------------------------------------------
<S> <C> <C> <C>
1 YEAR $ 312 $ 292 $ 310
3 YEARS $ 812 $ 696 $ 845
5 YEARS $1,338 $1,126 $1,405
10 YEARS $2,778 $2,320 $2,931
-------------------------------------------------------------------------
</TABLE>

Wells Fargo WealthBuilder Portfolios Prospectus 13
<PAGE>

Key Information
--------------------------------------------------------------------------------

Wells Fargo WealthBuilder Portfolios

Growth Balanced Portfolio, Growth and Income Portfolio, and Growth
Portfolio (each, a "Portfolio" and collectively, the "Portfolios") are
separate investment portfolios designed to offer you access to
professionally managed mutual funds from well-known fund groups. Each
Portfolio seeks to achieve its objective by allocating its assets across
asset classes of stocks and bonds through a number of affiliated and
unaffiliated Underlying Funds. Each Underlying Fund invests its assets
pursuant to a different investment objective and a different investment
style. Each Portfolio holds an investment portfolio of stock funds, for
growth potential, and bond funds, for income production, decreased
volatility and increased price stability. The Portfolios' investment
adviser may select from a wide range of mutual funds based upon changing
markets and risk/return characteristics of the asset classes. Each
Portfolio provides a different level of risk exposure by allocating its
investments in different proportions among equity and bond investment
styles. In addition to its own expenses, each Portfolio bears a pro rata
portion of the expenses of the Underlying Funds in which it invests.
Investments in a Portfolio may result in your incurring greater expenses
than if you were to invest directly in the mutual funds in which the
Portfolio invests. The Portfolios are diversified series of Wells Fargo
Funds Trust (the "Trust"), an open-end, management investment company.

---------------------------------------------------------------------------
Asset Allocation Strategy

The advisor allocates each Portfolio's investments among Underlying Funds
in accordance with its investment objective that represent a broad spectrum
of investment options. As a result of appreciation or depreciation, changes
in market factors or otherwise, the percentage of a Portfolio's assets
invested in various Underlying Funds will vary. The advisor uses various
analytical techniques, including quantitative techniques, valuation
formulas, and optimization procedures to assess the relative attractiveness
of stocks and bonds. The advisor rebalances a Portfolio when the
Portfolio's asset allocation deviates by five percent from the target
allocation.

---------------------------------------------------------------------------
Important information you should look for as you decide to invest in a
Portfolio:

The summary information on the previous pages is designed to provide you
with an overview of each Portfolio. The sections that follow provide more
detailed information about the investments and management of each
Portfolio.

---------------------------------------------------------------------------
Investment Objective and Investment Strategies

The investment objective of each Portfolio in this Prospectus is non-
fundamental, that is, it can be changed by a vote of the Board of Trustees
alone. The objectives and strategies descriptions for each Portfolio tell
you:

. what the Portfolio is trying to achieve;
. how we intend to invest your money; and
. what makes a Portfolio different from the other Portfolios offered in
this Prospectus.

---------------------------------------------------------------------------
Permitted Investments

A summary of the Portfolio's key permitted investments and practices.

14 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

---------------------------------------------------------------------------
Important Risk Factors

Describes the key risk factors for the Portfolio, and includes risks
described in the "Summary of Important Risks" and "General Investment
Risks" sections.

Words appearing in italicized print and highlighted in color are defined in
the Glossary.

Wells Fargo WealthBuilder Portfolios Prospectus 15
<PAGE>

Wells Fargo WealthBuilder Growth Portfolio
--------------------------------------------------------------------------------

Portfolio Manager: Galen Blomster, CFA

---------------------------------------------------------------------------
Investment Objective

Wells Fargo Growth Portfolio seeks long-term capital appreciation with no
emphasis on income.

---------------------------------------------------------------------------
Investment Strategies

The Portfolio seeks to meet its investment objective by allocating its
investments among stock funds. Certain research indicates that the greatest
impact on investment returns may be due to the asset allocation decision
(the mix of stocks, bonds and cash-equivalents) rather than market timing
or the selection of individual stocks and bonds.

The Growth Portfolio blends equity mutual funds with diverse investment
styles. Included are: large company growth stocks--for their strong
earnings growth potential; large company value stocks--representing out-of-
favor companies with relatively higher dividends for greater return
potential; small company stocks--for their dramatic growth potential; and
international stocks--for increased diversification and global growth
opportunities.

The Portfolio's diversification helps to moderate volatility by limiting
the effect of one style that is under-performing, while increasing the
likelihood of participation when one style is outperforming through the
active asset allocation approach. The Portfolio seeks to achieve its
objective by allocating its assets among equity styles through a number of
affiliated and non-affiliated Underlying Funds.

---------------------------------------------------------------------------
Permitted Investments

Under normal market conditions, we invest:

. 100% of our assets in stock funds.

---------------------------------------------------------------------------
Portfolio Asset Allocation

The Portfolio uses a proprietary investment strategy called the Tactical
Equity Allocation Model that seeks to enhance performance by shifting
assets between equity styles according to market conditions.

Potential Asset Allocation Ranges:

Neutral Position Investment Range
Large Company Stocks 49% 20 - 86%
Small Company Stocks 21% 0 - 50%
International Stocks 30% 5 - 55%

Asset Allocation as of May 31, 2000:

Large Company Growth Style 68%
Large Company Value Style 14%
Small Company Style 8%
International Style 10%
TOTAL PORTFOLIO ASSETS 100%

--------------------------------------------------------------------------
Important Risk Factors

You should consider the "Summary of Important Risks" section on page 6 and
the "General Investment Risks" section beginning on page 26. They are all
important to your investment choice.

16 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------

This table is intended to help you understand the Portfolio's financial
performance for the past 5 years (or since inception, if shorter). Total returns
represent the rate that you would have earned (or lost) on an investment in the
Portfolio (assuming reinvestment of all dividends and distributions). KPMG LLP
audited this information which, along with their report and the Portfolio's
financial statements, is available upon request in the Portfolio's annual
report.

<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING

PORTFOLIO COMMENCED
ON OCTOBER 1, 1997
---------------------------------------------
May 31, May 31, May 31,
2000 1999 1998
---------------------------------------------
<S> <C> <C> <C>
For the period ended:

Net asset value, beginning of period $ 12.63 $ 11.01 $10.00

Income from investment operations:
Net investment income (loss) (0.08) (0.07) (0.01)
Net realized and unrealized gain (loss)
on investments 2.42 1.71 1.03

Total from investment operations 2.34 1.64 1.02

Less distributions:
Dividends from net investment income 0.00 0.00 (0.01)
Distributions from net realized gain 0.00 (0.02) 0.00

Total from distributions 0.00 (0.02) (0.01)

Net asset value, end of period $ 14.97 $ 12.63 $11.01

Total return (not annualized)/1/ 18.53% 14.94% 10.17%

Ratios/supplemental data:
Net assets, end of period (000s) $41,496 $12,942 $5,695

Ratios to average net assets (annualized):
Ratio of expenses to average net assets/2/ 1.25% 1.25% 1.25%
Ratio of net investment income (loss) to
average net assets (0.99%) (0.84%) (0.50%)

Portfolio turnover 32% 31% 16%

Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses (annualized)/2/ 1.98% 2.00% 3.32%
</TABLE>

/1/ Total return calculations do not include any sales charges and would have
been lower had certain expenses not been waived/reimbursed during the
periods shown.
/2/ During each period, various fees and/or expenses were waived and/or
reimbursed. The ratio of gross expenses to average net assets reflects the
expense ratio in the absence of any waivers and/or reimbursements. These
ratios do not include expenses from any Underlying Fund.

Wells Fargo WealthBuilder Portfolios Prospectus 17
<PAGE>

Wells Fargo WealthBuilder Growth Balanced Portfolio
--------------------------------------------------------------------------------

Portfolio Manager: Galen Blomster, CFA

---------------------------------------------------------------------------
Investment Objective

Wells Fargo Growth Balanced Portfolio seeks a balance of capital
appreciation and current income.

---------------------------------------------------------------------------
Investment Strategies

The Portfolio seeks to meet its investment objective by allocating among
stock funds and bond funds. Certain research indicates that the greatest
impact on investment returns may be due to the asset allocation decision
(the mix of stocks, bonds and cash-equivalents) rather than market timing
or the selection of individual stocks and bonds.

The Growth Balanced Portfolio is a highly diversified investment,
consisting of both stock and bond mutual funds, with an emphasis on stocks.
Stocks offer long-term growth potential, while bonds help to decrease risk
and provide income, making this investment appropriate for long-term
investors who desire less volatility than an all-stock portfolio.

The stock holdings are diversified across many investment styles, including
large company growth, large company value, small company, and
international. The bond holdings are also diversified across a wide range
of income producing securities, including U.S. Government bonds, corporate
bonds, below investment grade bonds and foreign issues. The Portfolio's
diversification helps to moderate volatility by limiting the effect of one
asset class that is under-performing while increasing the likelihood of
participation when one asset class is out-performing through an active
stock/bond asset allocation approach. The Portfolio seeks to achieve its
objective by allocating its assets across asset classes of stocks and bonds
through a number of affiliated and non-affiliated Underlying Funds.

---------------------------------------------------------------------------
Permitted Investments

Under normal market conditions, we invest:
. at least 50% of our assets in stock funds; and
. at least 25% of our assets in bond funds.

---------------------------------------------------------------------------
Portfolio Asset Allocation

The Portfolio uses a proprietary investment strategy called the Tactical
Asset Allocation Model that seeks to enhance performance by shifting assets
between stocks and bonds when market conditions reveal opportunities.

Potential Asset Allocation Ranges:

Neutral Position Investment Range
Stock Funds 65% 45 - 85%
Bonds Funds 35% 15 - 55%

18 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

---------------------------------------------------------------------------
Asset Allocation as of May 31, 2000:
Stock Fund Styles: 52%
Large Company Growth Style 16%
Large Company Value Style 16%
Small Company Style 10%
International Style 10%

Bond Fund Styles: 48%
U.S. Treasury, Government, Agency and
Mortgage-Related Securities 21%
Investment Grade Corporate Bonds 17%
High-Yield Corporate Bonds 5%
International Obligations 5%

TOTAL FUND ASSETS 100%
---------------------------------------------------------------------------

Important Risk Factors

You should consider the "Summary of Important Risks" section on page 6 and
the "General Investment Risks" section beginning on page 26. They are all
important to your investment choice.

Wells Fargo WealthBuilder Portfolios Prospectus 19
<PAGE>

Wells Fargo WealthBuilder Growth Balanced Portfolio Financial Highlights
--------------------------------------------------------------------------------

FOR A SHARE OUTSTANDING

PORTFOLIO COMMENCED
ON OCTOBER 1, 1997
----------------------------------------------------------
May 31, May 31, May 31,
2000 1999 1998
----------------------------------------------------------
<S> <C> <C> <C>
For the period ended:

Net asset value, beginning of period $ 11.83 $ 10.80 $10.00

Income from investment operations:
Net investment income (loss) 0.21 0.10 0.07
Net realized and unrealized gain (loss)
on investments 1.05 1.01 0.76

Total from investment operations 1.26 1.11 0.83

Less distributions:
Dividends from net investment income (0.14) (0.07) (0.03)
Distributions from net realized gain (0.23) (0.01) 0.00

Total from distributions (0.37) (0.08) (0.03)

Net asset value, end of period $ 12.72 $ 11.83 $10.80

Total return (not annualized)/1/ 10.72% 10.26% 8.35%

Ratios/supplemental data:
Net assets, end of period (000s) $33,749 $23,336 $9,300

Ratios to average net assets (annualized):
Ratio of expenses to average net assets/2/ 1.25% 1.25% 1.25%
Ratio of net investment income (loss) to
average net assets 1.95% 1.28% 0.02%

Portfolio turnover 70% 59% 20%

Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses (annualized)/2/ 1.76% 1.85% 2.64%
</TABLE>

/1/ Total return calculations do not include sales charges, and would have been
lower had certain expenses not been waived/reimbursed during the periods
shown.
/2/ During each period, various fees and/or expenses were waived and/or
reimbursed. The ratio of gross expenses to average net assets reflects the
expense ratio in the absence of any waivers and/or reimbursements. These
ratios do not include expenses from any Underlying Fund.

20 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

[This page intentionally left blank]
--------------------------------------------------------------------------------
<PAGE>

Wells Fargo WealthBuilder Growth and Income Portfolio
--------------------------------------------------------------------------------

Portfolio Manager: Galen Blomster, CFA
---------------------------------------------------------------------------

Investment Objective

Wells Fargo Growth and Income Portfolio seeks long-term capital
appreciation with a secondary emphasis on income.
---------------------------------------------------------------------------
Investment Strategies

The Portfolio seeks to meet its investment objective by allocating among
stock funds. Certain research indicates that the greatest impact on
investment returns may be due to the asset allocation decision (the mix of
stocks, bonds and cash-equivalents) rather than market timing or the
selection of individual stocks and bonds.

The Growth and Income Portfolio is a diversified equity investment. It
holds mutual funds that employ different and complementary investment
styles to provide potential for both growth and income. Included are: large
company growth stocks--for their strong earnings growth potential; large
company value stocks--representing out-of-favor companies with relatively
higher dividends for greater total return potential; small company stocks--
for their dramatic growth potential; and international stocks--for
increased diversification and global growth opportunities.

The Portfolio's emphasis on diversification helps to moderate volatility by
limiting the effect of one style that is under-performing, while also
increasing the likelihood of participation when one style is out-
performing. The Portfolio seeks to achieve its objective by allocating its
assets among equity styles through a number of affiliated and non-
affiliated Underlying Funds.
---------------------------------------------------------------------------

Permitted Investments
Under normal market conditions, we invest:

. 100% of our assets in stock funds.

---------------------------------------------------------------------------

Portfolio Asset Allocation

The portfolio uses a proprietary investment strategy called the Strategic
Asset Allocation Model that seeks to enhance performance with reduced
volatility through broad diversification among different equity investment
styles.

Potential Asset Allocation Ranges:
Neutral Position Investment Range
Large Company Stocks 60% 55 - 65%
Small Company Stocks 20% 15 - 25%
International Stocks 20% 15 - 25%

Asset Allocation as of May 31, 2000:
Large Company Growth Style 30%
Large Company Value Style 30%
Small Company Style 20%
International Style 20%

TOTAL FUND ASSETS 100%

---------------------------------------------------------------------------

Important Risk Factors

You should consider the "Summary of Important Risks" section on page 6 and
the "General Investment Risks" section beginning on page 26. They are all
important to your investment choice.

22 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

Financial Highlights
--------------------------------------------------------------------------------

FOR A SHARE OUTSTANDING

<TABLE>
<CAPTION>
PORTFOLIO COMMENCED
ON OCTOBER 1, 1997
--------------------------------
May 31, May 31, May 31,
2000 1999 1998
--------------------------------
<S> <C> <C> <C>
For the period ended:

Net asset value, beginning of period $ 11.96 $ 10.97 $10.00

Income from investment operations:
Net investment income (loss) (0.06) (0.04) 0.00
Net realized and unrealized gain (loss)
on investments 2.33 1.04 0.97

Total from investment operations 2.27 1.00 0.97

Less distributions:
Dividends from net investment income 0.00 0.00 0.00
Distributions from net realized gain (0.13) (0.01) 0.00

Total from distributions (0.13) (0.01) 0.00

Net asset value, end of period $ 14.10 $ 11.96 $10.97

Total return (not annualized)/1/ 19.02% 9.11% 9.75%

Ratios/supplemental data:
Net assets, end of period (000s) $21,109 $10,657 $8,623

Ratios to average net assets (annualized):
Ratio of expenses to average net assets/2/ 1.25% 1.25% 1.25%
Ratio of net investment income (loss) to
average net assets (0.59%) (0.38%) (0.41%)

Portfolio turnover 63% 32% 7%

Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses (annualized)/2/ 2.12% 1.95% 2.90%
</TABLE>

Wells Fargo WealthBuilder Portfolios Prospectus 23
<PAGE>

The Underlying Funds
--------------------------------------------------------------------------------

The Portfolios normally invest in affiliated and unaffiliated open-end
management investment companies or series thereof with the investment
styles listed below. The Portfolios may also invest in closed-end
management investment companies and/or unit investment trusts. All of these
investments are referred to as the Underlying Funds. Each Portfolio may
hold certain securities directly.

(1) Stock Funds. Stock funds invest primarily in domestic or foreign common
stocks or securities convertible into or exchangeable for common stock.
The Underlying Funds may include stock funds holding large company
stocks, small company stocks, and international stocks.

(2) Bond Funds. Bond funds invest primarily in debt securities issued by
companies, governments, or government agencies. The issuer of a bond is
required to pay the bond holder the amount of the loan (or par value)
at a specified maturity and to make scheduled interest payments. Under
normal circumstances, only the WealthBuilder Growth Balanced Portfolio
invests in bond funds.

The risks associated with each Portfolio are the risks related to each
Underlying Fund in which the Portfolio invests, which passes through to the
Portfolios. Thus, the indirect risks of the Portfolios are the direct risks
for the Underlying Funds, as discussed below.

Important Risk Factors for the Underlying Funds

Foreign obligations may entail additional risks, such as currency,
political, regulatory and diplomatic risks, which are described in more
detail in the General Investment Risks section below. The value of
investments in options on stock indexes and stock index futures is affected
by price movements for the stocks in a particular index, rather than price
movements for an individual security.

The Underlying Funds are primarily subject to the equity securities and
debt securities risks described in the Summary of Important Risks section.

Mortgage- and asset-backed securities may not be guaranteed by the U.S.
Treasury. Mortgage-backed securities are subject to prepayment risk, which
can reduce the rate of return on such securities. Certain Underlying Funds
may invest in lower-rated securities, which tend to be more sensitive to
economic conditions and involve greater credit risk than higher-rated
securities.

Shares of a closed-end investment company may, and typically do, trade at a
discount to net asset value. In addition, there may be no readily available
market for closed-end investment company shares, in which case the shares
are generally considered illiquid.

You should consider the "Summary of Important Risks" section on page 6; the
"General Investment Risks" section beginning on page 26; and the specific
risks listed here. They are all important to your investment choice.

24 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

[This page intentionally left blank]
--------------------------------------------------------------------------------
<PAGE>

General Investment Risks
--------------------------------------------------------------------------------

Understanding the risks involved in mutual fund investing will help you
make an informed decision that takes into account your risk tolerance and
preferences. You should carefully consider the risks common to investing in
all mutual funds, including the Wells Fargo Funds. Certain common risks are
identified in the "Summary of Important Risks" section on page 6. Other
risks of mutual fund investing include the following:

. Unlike bank deposits, such as CDs or savings accounts, mutual funds are
not insured by the FDIC.

. We cannot guarantee that we will meet our investment objectives.

. We do not guarantee the performance of a Portfolio or an Underlying
Fund, nor can we assure you that the market value of your investment
will not decline. We will not "make good" any investment loss you may
suffer, nor can anyone we contract with to provide certain services,
such as selling agents or investment advisors, offer or promise to make
good any such losses.

. Share prices--and therefore the value of your investment--will increase
and decrease with changes in the value of the underlying securities and
other investments. This is referred to as price volatility.

. Investing in any mutual fund, including those deemed conservative,
involves risk, including the possible loss of any money you invest.

. An investment in a single Portfolio, by itself, does not constitute a
complete investment plan.

. Underlying Funds may continue to hold debt instruments that cease to be
rated by a nationally recognized rating organization or whose ratings
fall below the levels generally permitted for such Portfolio, provided
Wells Fargo Bank deems the instrument to be of comparable quality to
rated or higher-rated instruments. Unrated or downgraded instruments may
be more susceptible to credit and interest rate risks than investment
grade bonds.

. The Underlying Funds may invest a portion of their assets in
U.S. Government obligations such as securities issued or guaranteed by
the Government National Mortgage Association ("GNMAs"), the Federal
National Mortgage Association ("FNMAs") and the Federal Home Loan
Mortgage Corporation ("FHLMCs"). Each are mortgage-backed securities
representing partial ownership of a pool of residential mortgage loans.
A "pool" or group of such mortgages is assembled and, after being
approved by the issuing or guaranteeing entity, is offered to investors
through securities dealers. Mortgage-backed securities are subject to
prepayment and extension risk, which can alter the maturity of the
securities and also reduce the rate of return on the portfolio.
Collateralized mortgage obligations ("CMOs") typically represent
principal-only and interest-only portions of such securities and are
subject to increased interest-rate and credit risk. It is important to
recognize that the U.S. Government does not guarantee the market value
or current yield of those obligations. Not all U.S. Government
obligations are backed by the full faith and credit of the U.S.
Treasury, and the U.S. Government's guarantee does not extend to the
Underlying Funds or Portfolios themselves.

. Certain Underlying Funds in each Portfolio may also use certain
derivative instruments, such as options or futures contracts. The term
"derivatives" covers a wide number of investments, but in general it
refers to any financial instrument whose value is derived, at least in
part, from the price of another security or a specified index, asset or
rate. Some derivatives may be more sensitive to interest rate changes or
market moves, and some may be susceptible to changes in yields or values
due to their structure or contract terms.

Investment practices and risk levels are carefully monitored. Every attempt
is made to ensure that the risk exposure for each Portfolio remains within
the parameters of its objective.

26 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

--------------------------------------------------------------------------------

What follows is a general list of the types of risks (some of which are
described previously) that may apply to a given Portfolio (and its Underlying
Funds) and a table showing some of the additional investment practices that each
Portfolio may use and the risks associated with them. Additional information
about these practices is available in the Statement of Additional Information.

Counter-Party Risk--The risk that the other party in a repurchase agreement or
other transaction will not fulfill its contract obligation.

Currency Risk--The risk that a change in the exchange rate between U.S. dollars
and a foreign currency may reduce the value of an investment made in a security
denominated in that foreign currency.

Diplomatic Risk--The risk that an adverse change in the diplomatic relations
between the United States and another country might reduce the value or
liquidity of investments in either country.

Information Risk--The risk that information about a security is either
unavailable, incomplete or is inaccurate.

Leverage Risk--The risk that an investment practice, such as lending portfolio
securities or engaging in forward commitment or when-issued securities
transactions, such as lending portfolio securities, may increase a Fund's
exposure to market risk, interest rate risk or other risks by, in effect,
increasing assets available for investment.

Liquidity Risk--The risk that a security cannot be sold at the time desired, or
cannot be sold without adversely affecting the price.

Market Risk--The risk that the value of a stock, bond or other security will be
reduced by market activity. This is a basic risk associated with all securities.

Political Risk--The risk that political actions, events or instability may be
unfavorable for investments made in a particular nation's or region's industry,
government or markets.

Prepayment Risk--The risk that consumers will pre-pay mortgage loans, which can
alter the maturity of a mortgage-backed security, increase interest-rate risk,
and reduce rates of return.

In addition to the general risks discussed above, you should carefully consider
and evaluate any special risks that may apply to investing in a particular
Portfolio. You should also see the Statement of Additional Information for
additional information about the investment practices and risks particular to
each Portfolio.

Wells Fargo WealthBuilder Portfolios Prospectus 27
<PAGE>

General Investment Risks
--------------------------------------------------------------------------------

Investment Practice/Risk

The following table lists some of the additional investment practices of the
Portfolios, including some not disclosed in the Investment Objective and
Investment Strategies sections of the Prospectus. The risks indicated after the
description of the practice are NOT the only potential risks associated with
that practice, but are among the more prominent. Market risk is assumed for
each. See the Investment Objective and Investment Strategies for each Portfolio
or the Statement of Additional Information for more information on these
practices.

Investment practices and risk levels are carefully monitored. We attempt to
ensure that the risk exposure for each Portfolio remains within the parameters
of its objective.

Remember, each Portfolio is designed to meet different investment needs and
objectives.

<TABLE>
<CAPTION>
GROWTH GROWTH AND
GROWTH BALANCED INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICE RISK
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Borrowing Policies
The ability to borrow from banks for temporary Leverage Risk . . .
purposes to meet shareholder redemptions.

Emerging Markets
Securities of companies located or operating in countries Information, Political,
considered developing or to have "emerging" stock markets. Regulatory, Diplomatic, . . .
Generally, these securities have the same type of risks as Liquidity and Currency
foreign securities, but to a higher degree. Risk

Floating and Variable Rate Debt
Instruments with interest rates that are adjusted either Interest Rate and .
on a schedule or when an index or benchmark changes. Credit Risk

Foreign Securities
Securities issued by a non-U.S. company or debt of a Information, Political,
non-U.S. company or foreign government. Foreign Regulatory, Diplomatic, . . .
securities may also be emerging market securities which Liquidity and Currency
are subject to the same risks, but to a higher degree. Risk.

Forwarding Commitment, When-Issued and
Delayed Delivery Transactions
Securities bought or sold for delivery at a later date or Interest Rate, Leverage . . .
bought or sold for a fixed price at a fixed date. Credit and Experience Risk

High Yield Securities
Debt securities of lower quality that produce generally
higher rates of return. These securities, also known as "junk Interest Rate and .
bonds" tend to be more sensitive to economic conditions, Credit Risk
more volatile, and less liquid, and are subject to greater risk
of default.

Illiquid Securities
A security that cannot be readily sold, or cannot be Liquidity Risk . . .
readily sold without negatively affecting its fair price.
Limited to 15% of total assets.
</TABLE>

28 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

<TABLE>
<CAPTION>
GROWTH GROWTH AND
GROWTH BALANCED INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICE RISK
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Loans of Portfolio Securities
The practice of loaning securities to brokers, dealers and Credit, Counter-Party . . .
financial institutions to increase return on those securities. and Leverage Risk
Loans may be made up to 1940 Act limits
(currently 33 1/3% of total assets).

Mortgage- and Asset-Backed Securities
Securities consisting of an undivided fractional Interest Rate, Credit, .
interests in pools of consumer loans, such Prepayment and
as mortgage loans, car loans, credit card debt, or Experience Risk
receivables held in trust.

Options
The right or obligation to receive or deliver a security Credit, Information . . .
or cash payment depending on the security's price or the and Liquidity Risk
performance of an index or benchmark. Types of options
used may include: options on securities, options on a stock
index, stock index futures and options on stock index
futures to protect liquidity and portfolio value.

Other Mutual Funds
A pro rata portion of the Underlying Fund's expenses, Market Risk
in addition to the expenses paid by the Portfolios,
will be borne by Portfolio shareholders. The mutual funds . . .
selected may under-perform other similarly managed
funds and there can be no assurance that any mutual fund
will achieve its objective.

Privately Issued Securities
Securities that are not publicly traded but which may or Liquidity Risk
may not be resold in accordance with Rule 144A of the . . .
Securities Act of 1933.

Repurchase Agreements
A transaction in which the seller of a security agrees to Credit and
buy back a security at an agreed upon time and price, Counter-Party Risk . . .
usually with interest.
</TABLE>

Wells Fargo WealthBuilder Portfolios Prospectus 29
<PAGE>

Organization and Management of the Portfolios
--------------------------------------------------------------------------------

A number of different entities provide services to the Portfolios. This section
shows how the Portfolios are organized, the entities that perform different
services, and how they are compensated. Further information is available in the
Statement of Additional Information for the Portfolios.

About Wells Fargo Funds Trust

Wells Fargo Funds Trust (the "Trust") was organized as a Delaware business trust
on March 10, 1999. The Board of Trustees of the Trust supervises each
Portfolio's activities, monitors its contractual arrangements with various
service providers and decides upon matters of general policy.

The Trust was created to succeed to the assets and operations of the various
mutual funds in the Stagecoach Family of Funds and the Norwest Advantage Family
of Funds. The holding company of Wells Fargo Bank, the investment advisor to the
Stagecoach Family of Funds, and the holding company of Norwest Investment
Management, Inc., the investment advisor to the Norwest Advantage Family of
Funds, merged in November 1998. Each of the Funds described in this Prospectus
has succeeded to the assets and operations of a corresponding Norwest Advantage
Fund. The performance and financial statement history of each Fund's predecessor
Fund has been assumed by the Wells Fargo Funds Trust Fund. The succession
transactions were approved by the shareholders of the Norwest Advantage Funds.
The Table on page 41 identifies the Norwest Advantage Fund predecessors to the
Funds.

The Board of Trustees of Wells Fargo Funds Trust supervises the Portfolios'
activities and approves the selection of various companies hired to manage the
Portfolios' operation. The major service providers are described in the diagram
below. Except for the advisors, which require shareholder vote to change, if the
Board believes that it is in the best interests of the shareholders, it may make
a change in one of these companies.

BOARD OF TRUSTEES

Supervises the Portfolios' activities
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
INVESTMENT ADVISOR CUSTODIAN
------------------------------------------------------------------------------------------------------------
<S> <C>
Wells Fargo Bank, N.A. Wells Fargo Bank Minnesota, N.A.
525 Market St., San Francisco, CA 6th & Marquette, Minneapolis, MN
Manages the Portfolios' investment activities Provides safekeeping for the Portfolios' assets
------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
SHAREHOLDER
TRANSFER SERVICING
DISTRIBUTOR ADMINISTRATOR AGENT AGENTS
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Stephens Inc. Wells Fargo Bank, N.A. BFDS, Inc. Various Agents
111 Center St. 525 Market St. Two Heritage Drive
Little Rock, AR San Francisco, CA Quincy, MA
Markets the Portfolios Manages the Portfolios' Maintains records of Provide services to
and distributes Portfolio business activities shares and supervises customers
shares the payment of dividends
-----------------------------------------------------------------------------------------------------------------
</TABLE>

FINANCIAL SERVICES FIRMS AND SELLING AGENTS

Advise current and prospective shareholders on their Portfolio investments
--------------------------------------------------------------------------------

SHAREHOLDERS

30 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

--------------------------------------------------------------------------------
In the following sections, the percentages shown are the percentages of the
average daily net assets of each Portfolio class paid on an annual basis for the
service described.

The Investment Advisor

Wells Fargo Bank provides portfolio management and fundamental security analysis
services as the advisor for each of the Portfolios. Wells Fargo Bank also serves
as the advisor and, in most cases, affiliates of Wells Fargo Bank serve as sub-
advisor for each affiliated Underlying Fund. Wells Fargo Bank, founded in 1852,
is the oldest bank in the western United States and is one of the largest banks
in the United States. Wells Fargo Bank is a wholly owned subsidiary of Wells
Fargo & Company, a national bank holding company. As of June 30, 2000, Wells
Fargo Bank and its affiliates managed over $161 billion in assets. For providing
these services, Wells Fargo Bank is entitled to receive 0.35% of the average
daily net assets of each Portfolio.

Fees from Underlying Funds

Wells Fargo Bank and its affiliates may receive fees from the Underlying Funds
for providing various services to the Underlying Funds. For example, Wells Fargo
Bank may receive investment advisory fees from the Underlying Funds or
distribution fees pursuant to a Rule 12b-1 plan or fees for providing
shareholder services or sub-transfer agent services. These fees are separate
from and in addition to fees received by Wells Fargo Bank and its affiliates for
providing services to the Portfolios. These fees may differ among the Underlying
Funds. As investment advisor to each Portfolio, Wells Fargo Bank selects
Underlying Funds and makes allocation decisions in accordance with the
Portfolio's investment objective and consistent with the best interests of the
Portfolio's shareholders.

The Administrator

Wells Fargo Bank provides the Portfolios with administration services, including
general supervision of each Portfolio's operation, coordination of the other
services provided to each Portfolio, compilation of information for reports to
the SEC and the state securities commissions, preparation of proxy statements
and shareholder reports, and general supervision of data compilation in
connection with preparing periodic reports to the Trust's Trustees and officers.
Wells Fargo Bank also furnishes office space and certain facilities to conduct
each Portfolio's business. For providing these services, Wells Fargo Bank is
entitled to receive a fee of up to 0.15% of the average annual net assets of
each Portfolio.

The Transfer Agent

Boston Financial Data Services, Inc. ("BFDS") provides transfer agency and
dividend disbursing services to the Portfolios. For providing these services,
BFDS receives an annual fee, certain transaction-related fees, and is reimbursed
for out-of-pocket expenses incurred on behalf of the Portfolios.

Wells Fargo WealthBuilder Portfolios Prospectus 31
<PAGE>

Your Account
--------------------------------------------------------------------------------

This section tells you how Portfolio shares are priced, how to open an
account and how to buy, sell or exchange Portfolio shares once your account
is open.

Pricing Portfolio Shares

. As with all mutual fund investments, the price you pay to purchase
shares or the price you receive when you redeem shares is not determined
until after a request has been received in proper form.

. We determine the Net Asset Value ("NAV") of each class of the
Portfolios' shares each business day as of the close of regular trading
on the New York Stock Exchange ("NYSE"). We determine the NAV by
subtracting the Portfolio class's liabilities from its total assets, and
then dividing the result by the total number of outstanding shares of
that class. Each Portfolio's assets are generally valued at current
market prices. See the Statement of Additional Information for further
disclosure.

. We process requests to buy or sell shares of the Portfolios each
business day as of the close of regular trading on the NYSE, which is
usually 1:00 p.m. (Pacific time)/3:00 p.m. (Central time). If the
markets close early, the Portfolios may close early and may value their
shares at earlier times under these circumstances. Any request we
receive in proper form before this time is processed the same day.
Requests we receive after the cutoff time are processed the next
business day.

. The Portfolios are open for business on each day the NYSE is open for
business. NYSE holidays include New Year's Day, Martin Luther King, Jr.
Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. When any holiday falls on a
weekend, the NYSE typically is closed on the weekday immediately before
or after such holiday.

You Can Buy Portfolio Shares

. By opening an account directly with the Fund (simply complete and return
a Wells Fargo Funds application with proper payment);

. Through a brokerage account with an approved selling agent; or

. Through certain retirement, benefit and pension plans, or through
certain packaged investment products (please see the providers of the
plan for instructions).

Minimum Investments

. $1,000 per Portfolio minimum initial investment.

. $100 per Portfolio if you use the Systematic Purchase Program; and

. $100 per Portfolio for all investments after your initial investment.

32 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Reduced Initial Sales Charges
FRONT-END SALES CHARGE FRONT-END SALES CHARGE
AS A PERCENTAGE OF AS A PERCENTAGE OF
AMOUNT OF PURCHASE PUBLIC OFFERING PRICE NET AMOUNT INVESTED
<S> <C> <C>
Less than $250,000 1.50% 1.52%

$250,000 to $499,999 1.25% 1.27%

$500,000 to $999,999 1.00% 1.01%

$1,000,000 and up 0.75% 0.76%
</TABLE>

. You pay no sales charges on Portfolio shares you buy with reinvested
distributions.

. You pay a lower sales charge if you are investing an amount over a
breakpoint level. See the schedule above.

. By signing a Letter of Intent ("LOI"),you pay a lower sales charge now in
exchange for promising to invest an amount over a specified breakpoint
within the next 13 months. We will hold in escrow shares equal to
approximately 5% of the amount you intend to buy. If you do not invest
the amount specified in the LOI before the expiration date, we will
redeem enough escrowed shares to pay the difference between the reduced
sales load you paid and the sales load you should have paid. Otherwise,
we will release the escrowed shares when you have invested the agreed
amount.

. Rights of Accumulation ("ROA") allow you to combine the amount you invest
with the total NAV of shares you own in other Wells Fargo WealthBuilder
Portfolios, in which you have already paid a front-end load, in order to
reach breakpoint levels for a reduced load. We give you a discount on the
entire amount of the investment that puts you over the breakpoint level.

. You pay no sales charges on Wells Fargo WealthBuilder Portfolio shares
you purchase with the proceeds of a redemption from a Wells Fargo
WealthBuilder Portfolio within 120 days of the date of the redemption.

If you believe you are eligible for any of these reductions, it is up to
you to ask the selling agent or the shareholder servicing agent for the
reduction and to provide appropriate proof of eligibility.

You, or your fiduciary or trustee, may also tell us to extend volume
discounts, including the reductions offered for rights of accumulation and
letters of intent, to include purchases made by:

. a family unit, including children under the age of twenty-one or single
trust estate;

. a trustee or fiduciary purchasing for a single fiduciary relationship; or

. the members of a "qualified group" which consists of a "company" (as
defined in the Investment Company Act of 1940, as amended), and related
parties of such a "Company," which has been in existence for at least six
months and which has a primary purpose other than acquiring Portfolio
shares at a discount.

How a Letter of Intent Can Save You Money!

If you plan to invest, for example, $500,000 in a Wells Fargo
WealthBuilder Portfolio in installments over the next year, by signing a
letter of intent you would pay only 1.00% sales load on the entire
purchase. Otherwise, you might pay 1.50% on the first $249,999, then
1.25% on the next $250,000!

Wells Fargo WealthBuilder Portfolios Prospectus 33
<PAGE>

Your Account
--------------------------------------------------------------------------------

The following section explains how you can buy shares directly from Wells
Fargo Funds. For Portfolios held through brokerage and other types of
accounts, please consult your Selling Agent.

BY MAIL

IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
--------------------------------------------------------------------------

. Complete a Wells Fargo Funds Application. Be sure to indicate the
Portfolio name into which you intend to invest. Your account will be
credited on the business day that the transfer agent receives your
application in proper order. Failure to complete an Application properly
may result in a delay in processing your request.

. Enclose a check for at least $1,000 made out in the full name of the
Portfolio. For example, "Wells Fargo WealthBuilder Growth Portfolio."

. All purchases must be made in U.S. dollars and checks must be drawn on
U.S. banks.

. You may start your account with $100 if you elect the Systematic
Purchase plan option on the application.

<TABLE>
<S> <C>
. Mail to: Wells Fargo Funds Overnight Mail Only: Wells Fargo Funds
Attn: CCSU-Boston Financial Attn: CCSU-Boston Financial
PO Box 8266 66 Brooks Drive
Boston, MA 02266-8266 Braintree, MA 02184
</TABLE>

--------------------------------------------------------------------------
IF YOU ARE BUYING ADDITIONAL SHARES:
--------------------------------------------------------------------------

. Make a check payable to the full name of your Portfolio for at least
$100. Be sure to write your account number on the check as well.

. Enclose the payment stub/card from your statement if available.

. Mail to: Wells Fargo Funds
Attn: CCSU-Boston Financial
PO Box 8266
Boston, MA 02266-8266

34 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

BY WIRE

IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
-------------------------------------------------------------------------------

. You must first call Investor Services at 1-800-222-8222, option 0, to notify
them of an incoming wire trade.

. If you do not currently have an account, complete a Wells Fargo Funds
Application. You must wire at least $1,000. Be sure to indicate the
Portfolio name into which you intend to invest.

. Mail the completed Application. Your account will be credited on the
business day that the transfer agent receives your application in proper
order.

<TABLE>
<S> <C> <C>
. Overnight Application to: Wells Fargo Funds
Attn: CCSU-Boston Financial
66 Brooks Drive
Braintree, MA 02184

. Wire money to: State Street Bank & Trust Attention:
Boston, MA Wells Fargo Funds (Name
of Portfolio)
Bank Routing Number:
ABA 011-000028 Account Number: (Registration
Indicated on Application)
Wire Purchase Account Number:
9905-437-1
</TABLE>

--------------------------------------------------------------------------------
IF YOU ARE BUYING ADDITIONAL SHARES:
--------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
. Wire money to: State Street Bank & Trust Attention:
Boston, MA Wells Fargo Funds (Name
of Portfolio)
Bank Routing Number:
ABA 011-000028 Account Number: (Registration
Indicated on Application)
Wire Purchase Account Number:
9905-437-1
</TABLE>

BY PHONE

IF YOU ARE BUYING SHARES FOR THE FIRST TIME:
--------------------------------------------------------------------------------
You can only make your first purchase of a Portfolio by phone if you already
have an existing Wells Fargo Funds Trust Account.

. Call Investor Services and instruct the representative to either:

. transfer at least $1,000 from a linked settlement account, or

. exchange at least $1,000 worth of shares from an existing Wells Fargo
Fund. Please see the "Exchanges" section for special rules.

. Call:1-800-222-8222,option 0

--------------------------------------------------------------------------------
IF YOU ARE BUYING ADDITIONAL SHARES:
--------------------------------------------------------------------------------

. Call Investor Services and instruct the representative to either:

. transfer at least $100 from a linked settlement account, or

. exchange at least $100 worth of shares from another Wells Fargo Fund.

. Call:1-800-222-8222, option 0

Wells Fargo WealthBuilder Portfolios Prospectus 35
<PAGE>

Your Account
--------------------------------------------------------------------------------

The following section explains how you can sell shares held directly
through an account with Wells Fargo Funds by mail or telephone. For
Portfolio shares held through brokerage or other types of accounts, please
consult your selling agent.

BY MAIL

IF YOU ARE SELLING SHARES FOR THE FIRST TIME:
--------------------------------------------------------------------------

. Write a "Letter of Instruction"stating your name, your account
number, the Portfolio you wish to redeem and the dollar amount ($100 or
more) of the redemption you wish to receive (or write "Full
Redemption").

. Make sure all the account owners sign the request.

. You may request that redemption proceeds be sent to you by check, by
Automatic Clearing House ACH transfer into a bank account, or by wire.
Please call Investor Services regarding requirements for linking bank
accounts or for wiring funds. We reserve the right to charge a fee for
wiring funds although it is not currently our practice to do so.

. Signature Guarantees are required for mailed redemption requests over
$50,000, or if the address on your account was changed within the last
60 days. You can get a signature guarantee at financial institutions
such as a bank or brokerage house. We do not accept notarized
signatures.

. Mail to: Wells Fargo Funds
Attn: CCSU-Boston Financial
PO Box 8266
Boston, MA 02266 -8266

BY PHONE

. Call Investor Services to request a redemption of at least $100. Be
prepared to provide your account number and Taxpayer Identification
Number.

. Unless you have instructed us otherwise, only one account owner needs
to call in redemption requests.

. You may request that redemption proceeds be sent to you by check, by
transfer into an ACH-linked bank account, or by wire. Please call
Investor Services regarding requirements for linking bank accounts or
for wiring funds. We reserve the right to charge a fee for wiring funds
although it is not currently our practice to do so.

. Telephone privileges are automatically made available to you unless you
specifically decline them on your application or subsequently in
writing.

. Telephone privileges allow us to accept transaction instructions by
anyone representing themselves as the shareholder and who provides
reasonable confirmation of their identity, such as providing the
Taxpayer Identification Number on the account. We will not be liable
for any losses incurred if we follow telephone instructions we
reasonably believe to be genuine.

. We will not mail the proceeds of a telephone redemption request if the
address on your account was changed in the last 30 days.

. Call: 1-800-222-8222, option 0

36 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

How to Sell Shares
--------------------------------------------------------------------------------

GENERAL NOTES FOR SELLING SHARES

. We determine the NAV for the Portfolios at 1:00 p.m. (Pacific time)/3:00
p.m. (Central time).

. We will process requests to sell shares at the first NAV calculated after a
request in proper form is received. Requests received before the cutoff
times are processed on the same business day.

. We reserve the right to delay payment of a redemption so that we may be
reasonably certain that investments made by check, Automatic Clearing House
("ACH") or Systematic Purchase Plan have been collected. Payments of
redemptions also may be delayed under extraordinary circumstances or as
permitted by the SEC in order to protect remaining shareholders.

. Generally, we pay redemption requests in cash, unless the redemption request
is for more than $250,000 or 1% of the net assets of the Portfolio by a
single shareholder over any ninety-day period. If a request for a redemption
is over these limits, it may be to the detriment of existing shareholders to
pay such redemption in cash. Therefore, we may pay all or part of the
redemption in securities of equal value.

Distribution Plan

We have adopted a Distribution Plan ("Plan") pursuant to Rule 12b-1 under the
Investment Company Act of 1940 for Portfolio shares. The Plan authorizes the
payment of all or part of the cost of preparing and distributing Prospectuses
and distribution-related services, including ongoing compensation to selling
agents. The Plan also provides that, if and to the extent any shareholder
servicing payments are recharacterized as payments for distribution-related
services, they are approved and payable under the Plan. The fees paid under this
Plan are 0.75% per Portfolio.

These fees are paid out of the Portfolios' assets on an on-going basis. Over
time, these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.

Wells Fargo WealthBuilder Portfolios Prospectus 37
<PAGE>

Your Account Exchanges
--------------------------------------------------------------------------------

Exchanges between the Wells Fargo WealthBuilder Portfolios are two
transactions: a sale of shares of one Portfolio and the purchase of shares
of another. In general, the same rules and procedures that apply to sales
and purchases apply to exchanges. There are, however, additional factors
you should keep in mind while making or considering an exchange:

. You should carefully read the Prospectus for the Portfolio into which
you wish to exchange.

. Every exchange involves selling Portfolio shares and that sale may
produce a capital gain or loss for federal income tax purposes.

. If you are making an initial investment into a new Portfolio through an
exchange, you must exchange at least the minimum first purchase amount
of the Portfolio you are redeeming, unless your balance has fallen below
that amount due to market conditions.

. Any exchange between Portfolios you already own must meet the minimum
redemption and subsequent purchase amounts for the Portfolios involved.

. In order to discourage excessive Portfolio transaction expenses that
must be borne by other shareholders, we reserve the right to limit or
reject exchange orders.

. You may make exchanges between any of the Wells Fargo WealthBuilder
Portfolios to any Wells Fargo Fund offering Class C shares, or into the
Wells Fargo Money Market Fund Class A shares.

Generally, we will notify you up to 60 days in advance of any changes in
your exchange privileges.

38 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

Additional Services and Other Information
--------------------------------------------------------------------------------

Automatic Programs

These programs help you conveniently purchase and/or redeem shares each
month. Once you select a Plan, tell us the day of the month you would like
the transaction to occur. If you do not specify a date, we will process the
transaction on or about the 25th day of the month. Systematic withdrawals
may only be processed on or about the 25th day of the month. Call Investor
Services at 1-800-222-8222, option 0, for more information.

. Systematic Purchase Plan--With this program, you can regularly purchase
shares of a Wells Fargo Portfolio with money automatically transferred
from a linked bank account. Simply select the Portfolio you would like
to purchase, and specify an amount of at least $100.

. Systematic Exchange Plan--With this program, you can regularly exchange
shares of a Wells Fargo Portfolio you own for shares of another Wells
Fargo Portfolio or Fund. The exchange amount must be at least $100. See
the "Exchanges" section of this Prospectus for the conditions that apply
to your shares. This feature may not be available for certain types of
accounts.

. Systematic Withdrawal Plan--With this program, you can regularly redeem
shares and receive the proceeds by check or by transfer to a linked bank
account. Simply specify an amount of at least $100. To participate in
this program, you:

. must have an account valued at $10,000 or more;

. must have your distributions reinvested; and

. may not simultaneously participate in the Systematic Purchase Plan.

It generally takes about ten days to establish a Plan once we have received
your instructions. It generally takes about five days to change or cancel
participation in a Plan. We automatically cancel your program if the linked
bank account you specified is closed.

Dividend and Capital Gain Distributions Options

The Portfolios in this Prospectus pay any dividends periodically and make
capital gains distributions, if any, annually.

We offer the following distribution options:

. Automatic Reinvestment Option--Lets you buy new shares of the same class
of the Portfolio that generated the distributions. The new shares are
purchased at NAV generally on the day the income is paid. This option is
automatically assigned to your account unless you specify another
option.

. Check Payment Option--Allows you to receive checks for distributions
mailed to your address of record or to another name and address which
you have specified in written, signature guaranteed instructions. If
checks remain uncashed for six months or are undeliverable by the Post
Office, we will reinvest the distributions at the earliest date
possible.

. Bank Account Payment Option--Allows you to receive distributions
directly in a checking or savings account through ACH. The bank account
must be linked to your Wells Fargo Fund account. In order to establish a
new linked bank account, you must send a written signature guaranteed
instruction along with a copy of a voided check or deposit slip. Any
distribution returned to us due to an invalid banking instruction will
be sent to your address of record by check at the earliest date
possible, and future distributions will be automatically re-invested.

Wells Fargo WealthBuilder Portfolios Prospectus 39
<PAGE>

Additional Services and Other Information
--------------------------------------------------------------------------------

. Directed Distribution Purchase Option--Lets you buy shares of a
different Wells Fargo Portfolio of the same share class. The new shares
are purchased at NAV generally on the day the income is paid. In order
to establish this option, you need to identify the Portfolio and account
the distributions are coming from, and the Portfolio and account to
which the distributions are being directed. You must meet any required
minimum purchases in both Portfolios prior to establishing this option.

Remember, distributions have the effect of reducing the NAV per share by
the amount distributed.

Taxes

This discussion regarding federal income taxes is based on laws that were
in effect as of the date of this Prospectus. The discussion summarizes only
some of the important federal income tax considerations that affect the
Portfolios and you as a shareholder. It is not intended as a substitute for
careful tax planning. You should consult your tax advisor about your
specific tax situation, including the federal, state, local and foreign tax
consequences to you of an investment in a Portfolio. Federal income tax
considerations are discussed further in the Statement of Additional
Information.

We will pass on to you substantially all of the Portfolios' income and
gains. Distributions of a Portfolio's ordinary income, short-term capital
gain and certain other items will be taxable to you as ordinary income.
Distributions of a Portfolio's net long-term capital gain, if any, will be
taxable to you as net capital gain. Corporate shareholders may be able to
deduct a portion of distributions when determining their taxable income.

Distributions from a Portfolio normally will be taxable to you when paid,
whether you take the distribution in cash or automatically reinvest them in
additional Portfolio shares. However, distributions declared in October,
November and December of one year and distributed in January of the
following year will be taxable as if they were paid on December 31 of the
first year. At the end of each year, you will be notified as to the federal
income tax status of your distributions for the year.

If you buy Portfolio shares shortly before it makes a distribution, your
distribution from the Portfolio will, in effect, be a taxable return for
part of your investment. Similarly, if you buy shares of a Portfolio when
it holds appreciated securities, you will receive a taxable return of part
of your investment if and when the Portfolio sells the appreciated
securities and realizes the gain. The Portfolios have built up, or have the
potential to build up, high levels of unrealized appreciation.

In general, your redemptions (including redemptions in-kind) and exchanges
of Portfolio shares will result in a taxable capital gain or loss,
depending on the amount you receive for your shares (or are deemed to
receive in the case of exchanges) and the amount you paid (or are deemed to
have paid) for them. Such gain or loss will be long-term capital gain or
loss if you have held your redeemed Portfolio shares for more than one year
at the time of redemption.

Foreign shareholders may be subject to different tax treatment, including
withholding taxes. In certain circumstances, U.S. residents will be subject
to backup withholding at a 31% rate on distributions and redemption
proceeds paid by the Portfolios.

40 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

Table of Predecessors
--------------------------------------------------------------------------------

The Portfolios described in this Prospectus were created as part of the
reorganization of the Stagecoach Family of Funds, advised by Wells Fargo
Bank, N.A., and the Norwest Advantage Family of Funds, advised by Norwest
Investment Management, Inc., into a single mutual fund complex. The
reorganization followed the merger of the advisors' parent companies.

Each Portfolio is an accounting survivor of a former Norwest Advantage
Funds portfolio, as indicated in the Table of Predecessors below. The
performance histories and financial highlights of each Portfolio are the
performance histories and financial highlights of the predecessor
portfolio.

<TABLE>
<S> <C>
Wells Fargo Funds Trust Predecessor Portfolio

Wells Fargo WealthBuilder Growth Portfolio Norwest WealthBuilder II Growth Portfolio

Wells Fargo WealthBuilder Growth Balanced Portfolio Norwest WealthBuilder II Growth
Balanced Portfolio

Wells Fargo WealthBuilder Growth and Income Portfolio Norwest WealthBuilder II Growth and
Income Portfolio
</TABLE>

Wells Fargo WealthBuilder Portfolios Prospectus 41
<PAGE>

Portfolio Management
--------------------------------------------------------------------------------

Galen G. Blomster, CFA
Growth Portfolio and its predecessor since 1997
Growth Balanced Portfolio and its predecessor since 1997 Growth and Income
Portfolio and its predecessor since 1997
Mr. Blomster is associated with WFB and joined WCM in 1998 as a Vice
President and Director of Research and simultaneously held this position at
NIM until WCM and NIM combined investment advisory services under the WCM
name in 1999. Mr. Blomster is primarily responsible for the day-today
management and asset allocation services and has been since the inception
of the Portfolios. As a Portfolio Manager at NIM (since 1983), he also may
perform portfolio management and other services for the Wells Fargo Funds.
Norwest Bank or its affiliates have employed him since 1977. Mr. Blomster
received a BS in Dairy/Food Science and Economics from the University of
Minnesota; and a MS and PhD from Purdue University.

42 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

Glossary

We provide the following definitions to assist you in reading this Prospectus.
For a more complete understanding of these terms you should consult your
financial advisor.

ACH
Refers to the "Automated Clearing House" system maintained by the Federal
Reserve Bank which allows banks to process checks, transfer funds and perform
other tasks.

American Depositary Receipts ("ADRs")
Receipts for non-U.S. company stocks. The stocks underlying ADRs are typically
held in bank vaults. The ADR's owner is entitled to any capital gains or
dividends. ADRs are one way of owning an equity interest in foreign companies.

Asset-Backed Securities
Securities consisting of an undivided fractional interest in pools of consumer
loans, such as car loans or credit card debt, or receivables held in trust.

Below Investment-Grade
Securities rated BB or lower by S&P or Ba or lower by Moody's Investor Services,
or that may be unrated securities or securities considered to be "high risk."

Business Day
Any day the New York Stock Exchange is open is a business day for the
Portfolios.

Capital Appreciation, Capital Growth
The increase in the value of a security. Together with "Current Income" (see
below), constitutes total return.

Current Income
Earnings in the form of dividends or interest as opposed to capital growth.
Together, current income and capital growth constitute total return.

Derivatives
Securities whose values are derived in part from the value of another security
or index. An example is a stock option.

Distributions
Dividends and/or capital gains paid by a Portfolio on its shares.

Emerging Markets
Markets associated with a country that is considered by international financial
organizations, such as the International Finance Corporation and the

Wells Fargo WealthBuilder Portfolios Prospectus 43
<PAGE>

Glossary
--------------------------------------------------------------------------------

International Bank for Reconstruction and Development, and the
international financial community to have an "emerging" stock market. Such
markets may be under-capitalized, have less-developed legal and financial
systems or may have less stable currencies than markets in the developed
world.

FDIC
The Federal Deposit Insurance Corporation. This is the company that
provides federally sponsored insurance covering bank deposits such as
savings accounts and CDs. Mutual funds are not FDIC insured.

FHLMC
FHLMC securities are commonly known as "Freddie Mac," and are issued by the
Federal Home Loan Mortgage Corporation.

FNMA
FNMA securities are known as "Fannie Maes" and are issued by the Federal
National Mortgage Association.

GNMA
GNMA securities are commonly known as "Ginnie Maes" and are issued by the
Government National Mortgage Association.

Liquidity
The ability to readily sell a security at a fair price.

Nationally Recognized Ratings Organization ("NRRO")
A company that examines the ability of a bond issuer to meet its
obligations and which rates the bonds accordingly.

Net Asset Value ("NAV")
The value of a single fund share. It is determined by adding together all
of a Portfolio's assets, subtracting accrued expenses and other
liabilities, then dividing by the total number of shares. The NAV is
calculated separately for each class of the Portfolio, and is determined as
of the close of regular trading on each business day the NYSE is open,
typically 1:00 p.m. (Pacific time).

Options
An option is the right to buy or sell a security based on an agreed upon
price at a specified time. For example, an option may give the holder of a
stock the right to sell the stock to another party, allowing the seller to
profit if the price has fallen below the agreed price. Options may also be
based on the movement of an index such as the S&P 500.

Repurchase Agreement
An agreement between a buyer and seller of a security in which the seller
agrees to repurchase the security at an agreed upon price and time.

Selling Agent
A person who has an agreement with the Portfolios' distributors that allows
them to sell a Portfolio's shares.

Shareholder Servicing Agent
Anyone appointed by the Fund to maintain shareholder accounts and records,
assist and provide information to shareholders or perform similar
functions.

44 Wells Fargo WealthBuilder Portfolios Prospectus
<PAGE>

--------------------------------------------------------------------------------

Signature Guarantee
A guarantee given by a financial institution that has verified the identity of
the maker of the signature.

S&P, S&P 500 Index
Standard and Poor's, a nationally recognized ratings organization. S&P also
publishes various indexes or lists of companies representative of sectors of the
U.S. economy.

Statement of Additional Information
A document that supplements the disclosure made in the Prospectus.

Taxpayer Identification Number
Usually the social security number for an individual or the Employer
Identification Number for a corporation.

U.S. Government Obligations
Obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

Wells Fargo WealthBuilder Portfolios Prospectus 45
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

YOU MAY WISH TO REVIEW THE FOLLOWING DOCUMENTS:

STATEMENT OF ADDITIONAL INFORMATION

supplements the disclosures made by this Prospectus. The Statement of Additional
Information has been filed with the SEC and incorporated by reference into this
Prospectus and is legally part of this Prospectus.

ANNUAL/SEMI-ANNUAL REPORTS

provide certain financial and other important information, including a
discussion of the market conditions and investment strategies that significantly
affected Fund performance, for the most recent reporting period.

THESE DOCUMENTS ARE AVAILABLE FREE OF CHARGE:

Call: 1-800-222-8222; option 1, option 5

WRITE TO:
Wells Fargo Funds
PO Box 8266
Boston, MA 02266-8266; or

Visit the SEC's website at http://www.sec.gov

REQUEST COPIES FOR A FEE BY WRITING TO:
SEC Public Reference Room
Washington, DC 20549-6009; or
by electronic request at [email protected]
Call: 1-800-SEC-0330 for details

ADDITIONAL SERVICES QUESTIONS CAN BE ANSWERED BY CALLING YOUR SPECIFIC PRODUCT
GROUP AT WELLS FARGO BANK:

Wells Fargo Checking and Savings - 1-800-869-3557
Next Stage IRA or Stagecoach IRA - 1-800-237-8472
Wells Fargo Portfolio Advisor - 1-877-689-7882

[LOGO]

(updated 10/00)
P016
ICA Reg. No.
811-09253
<PAGE>

WELLS FARGO FUNDS TRUST
Telephone: 1-800-222-8222

STATEMENT OF ADDITIONAL INFORMATION
Dated October 1, 2000

CORPORATE BOND FUND
DIVERSIFIED BOND FUND
INCOME FUND
INCOME PLUS FUND
INTERMEDIATE GOVERNMENT INCOME FUND
LIMITED TERM GOVERNMENT INCOME FUND
STABLE INCOME FUND
VARIABLE RATE GOVERNMENT FUND

Class A, Class B, Class C and Institutional Class

Wells Fargo Funds Trust (the "Trust") is an open-end, management investment
company. This Statement of Additional Information ("SAI") contains additional
information about eight funds in the Wells Fargo Funds Trust family of funds
(each, a "Fund" and collectively, the "Funds") -- the Corporate Bond,
Diversified Bond, Income, Income Plus, Intermediate Government Income, Limited
Term Government Income, Stable IncomeandVariable Rate Government Funds. Each
Fund is considered diversified under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Corporate Bond, Income Plus and Intermediate
Government Income Funds offer Class A, Class B and Class C shares. The
Intermediate Government Income Fund also offers Institutional Class shares. The
Income, Limited Term Government Income and Stable Income Funds offer Class A,
Class B and Institutional Class shares. The Diversified Bond Fund offers only
Institutional Class shares and the Variable Rate Government Fund only offers
Class A shares. This SAI relates to all such classes of shares.

This SAI is not a prospectus and should be read in conjunction with the
Funds' Prospectuses, dated October 1, 2000. All terms used in this SAI that are
defined in the Prospectuses have the meanings assigned in the Prospectuses.
Copies of the Prospectuses may be obtained free of charge by calling 1-800-222-
8222 or writing to Wells Fargo Funds, P.O. Box 8266, Boston, MA 02266-8266.
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Historical Fund Information.................................................................. 1

Investment Policies.......................................................................... 3

Additional Permitted Investment Activities and Associated Risks.............................. 5

Management................................................................................... 18

Performance Calculations..................................................................... 33

Determination of Net Asset Value............................................................. 40

Additional Purchase and Redemption Information............................................... 40

Portfolio Transactions....................................................................... 42

Fund Expenses................................................................................ 43

Federal Income Taxes......................................................................... 44

Capital Stock................................................................................ 49

Other........................................................................................ 55

Counsel...................................................................................... 55

Independent Auditors......................................................................... 56

Financial Information........................................................................ 56

Appendix..................................................................................... A-1
</TABLE>

i
<PAGE>

HISTORICAL FUND INFORMATION

On March 25, 1999, the Board of Trustees of Norwest Advantage Funds
("Norwest"), the Board of Directors of Stagecoach Funds, Inc. ("Stagecoach") and
the Board of Trustees of Wells Fargo Funds Trust (the "Trust") approved an
Agreement and Plan of Reorganization providing for, among other things, the
transfer of the assets and stated liabilities of various predecessor Norwest and
Stagecoach portfolios into the Funds. Prior to November 5, 1999, the effective
date of the consolidation of the Funds and the predecessor Norwest and
Stagecoach portfolios, the Funds had only nominal assets.

The Funds in this SAI were created as part of the reorganization of the
Stagecoach family of funds advised by Wells Fargo Bank, N.A. ("Wells Fargo Bank"
or "Advisor"), and the Norwest Advantage family of funds advised by Norwest
Investment Management, Inc. ("NIM"), into a single mutual fund complex. The
reorganization followed the merger of the advisors' parent companies.

The chart below indicates the predecessor Stagecoach and Norwest Funds
that are the accounting survivors of the Wells Fargo Funds.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Wells Fargo Funds Predecessor Funds
------------------------------------------------------------------------------------------------------------
<S> <C>
Corporate Bond Fund Stagecoach Corporate Bond Fund
------------------------------------------------------------------------------------------------------------
Diversified Bond Fund Norwest Diversified Bond Fund
------------------------------------------------------------------------------------------------------------
Income Fund Norwest Income Fund
------------------------------------------------------------------------------------------------------------
Income Plus Fund Stagecoach Strategic Income Fund
------------------------------------------------------------------------------------------------------------
Intermediate Government Income Fund Norwest Intermediate Government Income Fund
------------------------------------------------------------------------------------------------------------
Limited Term Government Income Fund Stagecoach Short-Intermediate U.S. Government
Income Fund
------------------------------------------------------------------------------------------------------------
Stable Income Fund Norwest Stable Income Fund
------------------------------------------------------------------------------------------------------------
Variable Rate Government Fund Stagecoach Variable Rate Government Fund
------------------------------------------------------------------------------------------------------------
</TABLE>

The Corporate Bond Fund commenced operations on November 8, 1999, as
successor to the Stagecoach Corporate Bond Fund. The predecessor Stagecoach
Corporate Bond Fund commenced operations on April 1, 1998.

The Diversified Bond Fund commenced operations on November 8, 1999, as
successor to the Norwest Diversified Bond Fund. The predecessor Norwest
Diversified Bond Fund commenced operations on November 11, 1994.

The Income Fund commenced operations on November 8, 1999, as successor
to the Income Fund, Total Return Bond Fund and Performa Strategic Value Bond
Fund of Norwest. The predecessor Norwest Income Fund commenced operations on
June 9, 1987. The predecessor Norwest Total Return Fund commenced operations on
December 31, 1993. The predecessor Norwest Performa Strategic Value Bond Fund
commenced operations on October 1, 1997. For accounting purposes, the Norwest
Income Fund is considered the surviving entity, and the financial highlights
shown for periods prior to November 8, 1999 are the financial highlights of the
Norwest Income Fund.

1
<PAGE>

The Income Plus Fund commenced operations on November 8, 1999, as
successor to the Stagecoach Strategic Income Fund. The predecessor Stagecoach
Strategic Income Fund commenced operations on July 13, 1998.

The Intermediate Government Income Fund commenced operations on
November 8, 1999, as successor to the Norwest Intermediate Government Income
Fund and the U.S. Government Income Fund and U.S. Government Allocation Fund of
Stagecoach. The predecessor Norwest Intermediate Government Income Fund
commenced operations on November 11, 1994. The predecessor Stagecoach U.S.
Government Income Fund commenced operations on January 1, 1992 and the
predecessor Stagecoach U.S. Government Allocation Fund commenced operations on
January 2, 1992 as successor to the Fixed-Income Strategy Fund of the Wells
Fargo Investment Trust ("WFIT"). The predecessor WFIT Fund commenced operations
on March 31, 1987. For accounting purposes, the Norwest Intermediate Government
Income Fund is considered the surviving entity, and the financial highlights
shown for periods prior to November 8, 1999 are the financial highlights of the
Norwest Intermediate Government Income Fund.

The Limited Term Government Income Fund commenced operations on
November 8, 1999, as successor to the Norwest Limited Term Government Income
Fund and the Stagecoach Short-Intermediate U.S. Government Income Fund. The
predecessor Norwest Limited Term Government Income Fund commenced operations on
October 1, 1997 and the predecessor Stagecoach Short-Intermediate U.S.
Government Income Fund commenced operations on October 27, 1993. For accounting
purposes, the Stagecoach Short-Intermediate U.S. Government Income Fund is
considered the surviving entity, and the financial highlights shown for periods
prior to November 8, 1999 are the financial highlights of the Stagecoach Short-
Intermediate U.S. Government Income Fund.

The Stable Income Fund commenced operations on November 8, 1999, as
successor to the Norwest Stable Income Fund. The predecessor Norwest Stable
Income Fund commenced operations on November 11, 1994.

The Variable Rate Government Fund commenced operations on November 8,
1999, as successor to the Variable Rate Government Fund of Stagecoach. The
predecessor Stagecoach Variable Rate Government Fund commenced operations on
December 12, 1997, as successor to the Variable Rate Government Fund of Overland
Express Funds, Inc. ("Overland"). The predecessor Overland Fund commenced
operations on November 1, 1990. On July 23, 1997, the Boards of Directors
approved an Agreement and Plan of Consolidation providing for the transfer of
the Overland Portfolio to the Fund.

2
<PAGE>

INVESTMENT POLICIES

Fundamental Investment Policies
-------------------------------

Each Fund has adopted the following investment policies, all of which
are fundamental policies; that is, they may not be changed without approval by
the holders of a majority (as defined in the 1940 Act) of the outstanding voting
securities of such Fund.

The Funds may not:

(1) purchase the securities of issuers conducting their principal
business activity in the same industry if, immediately after the purchase and as
a result thereof, the value of a Fund's investments in that industry would equal
or exceed 25% of the current value of the Fund's total assets, provided that
this restriction does not limit a Fund's investments in securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities investments
in securities of other investment companies or investments in repurchase
agreements;

(2) purchase securities of any issuer if, as a result, with respect to
75% of a Fund's total assets, more than 5% of the value of its total assets
would be invested in the securities of any one issuer or the Fund's ownership
would be more than 10% of the outstanding voting securities of such issuer,
provided that this restriction does not limit a Fund's investments in securities
issued or guaranteed by the U.S. Government, its agencies and instrumentalities,
or investments in securities of other investment companies;

(3) borrow money, except to the extent permitted under the 1940 Act,
including the rules, regulations and exemptions thereunder;

(4) issue senior securities, except to the extent permitted under the
1940 Act, including the rules, regulations and exemptions thereunder;

(5) make loans to other parties if, as a result, the aggregate value of
such loans would exceed one-third of a Fund's total assets. For the purposes of
this limitation, entering into repurchase agreements, lending securities and
acquiring any debt securities are not deemed to be the making of loans;

(6) underwrite securities of other issuers, except to the extent that
the purchase of permitted investments directly from the issuer thereof or from
an underwriter for an issuer and the later disposition of such securities in
accordance with a Fund's investment program may be deemed to be an underwriting;

(7) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
Fund from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business); nor

(8) purchase or sell commodities, provided that (i) currency will not
be deemed to be a commodity for purposes of this restriction, (ii) this
restriction does not limit the purchase or sale

3
<PAGE>

of futures contracts, forward contracts or options, and (iii) this restriction
does not limit the purchase or sale of securities or other instruments backed by
commodities or the purchase or sale of commodities acquired as a result of
ownership of securities or other instruments.

Non-Fundamental Investment Policies
-----------------------------------

Each Fund has adopted the following non-fundamental policies which may be
changed by the Trustees of the Trust or at any time without approval of such
Fund's shareholders.

(1) Each Fund may invest in shares of other investment companies, to the
extent permitted under the 1940 Act, including the rules, regulations and
exemptions thereunder.

(2) Each Fund may not invest or hold more than 15% of the Fund's net assets
in illiquid securities. For this purpose, illiquid securities include, among
others, (a) securities that are illiquid by virtue of the absence of a readily
available market or legal or contractual restrictions on resale, (b) fixed time
deposits that are subject to withdrawal penalties and that have maturities of
more than seven days, and (c) repurchase agreements not terminable within seven
days.

(3) Each Fund may invest in futures or options contracts regulated by the
CFTC for (i) bona fide hedging purposes within the meaning of the rules of the
CFTC and (ii) for other purposes if, as a result, no more than 5% of the Fund's
net assets would be invested in initial margin and premiums (excluding amounts
"in-the-money") required to establish the contracts.

(4) Each Fund may lend securities from its portfolio to approved brokers,
dealers and financial institutions, to the extent permitted under the 1940 Act,
including the rules, regulations and exemptions thereunder, which currently
limit such activities to one-third of the value of a Fund's total assets
(including the value of the collateral received). Any such loans of portfolio
securities will be fully collateralized based on values that are marked-to-
market daily.

(5) Each Fund may not make investments for the purpose of exercising
control or management, provided that this restriction does not limit a Fund's
investments in securities of other investment companies or investments in
entities created under the laws of foreign countries to facilitate investment in
securities in that country.

(6) Each Fund may not purchase securities on margin (except for short-term
credits necessary for the clearance of transactions).

(7) Each Fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short (short sales "against the box"), and provided that transactions in futures
contracts and options are not deemed to constitute selling securities short.

General
-------

Notwithstanding the foregoing policies, any other investment companies in
which the Funds may invest have adopted their own investment policies, which may
be more or less restrictive than those listed above, thereby allowing a Fund to
participate in certain investment

4
<PAGE>

strategies indirectly that are prohibited under the fundamental and non-
fundamental investment policies listed above.

ADDITIONAL PERMITTED INVESTMENT ACTIVITIES AND ASSOCIATED RISKS

Set forth below are descriptions of certain investments and additional
investment policies for the Funds. For purposes of monitoring the investment
policies and restrictions of the Funds (with the exception of the loans of
portfolio securities policy described below), the amount of any securities
lending collateral held by a Fund will be excluded in calculating total assets.

Asset-Backed Securities
-----------------------

The Funds may invest in various types of asset-backed securities. Asset-
backed securities are securities that represent an interest in an underlying
security. The asset-backed securities in which the Funds invest may consist of
undivided fractional interests in pools of consumer loans or receivables held in
trust. Examples include certificates for automobile receivables (CARS) and
credit card receivables (CARDS). Payments of principal and interest on these
asset-backed securities are "passed through" on a monthly or other periodic
basis to certificate holders and are typically supported by some form of credit
enhancement, such as a surety bond, limited guaranty, or subordination. The
extent of credit enhancement varies, but usually amounts to only a fraction of
the asset-backed security's par value until exhausted. Ultimately, asset-backed
securities are dependent upon payment of the consumer loans or receivables by
individuals, and the certificate holder frequently has no recourse to the entity
that originated the loans or receivables. The actual maturity and realized yield
will vary based upon the prepayment experience of the underlying asset pool and
prevailing interest rates at the time of prepayment. Asset-backed securities are
relatively new instruments and may be subject to greater risk of default during
periods of economic downturn than other instruments. Also, the secondary market
for certain asset-backed securities may not be as liquid as the market for other
types of securities, which could result in a Fund experiencing difficulty in
valuing or liquidating such securities. These Funds may also invest in
securities backed by pools of mortgages. The investments are described under the
heading "Mortgage-Related Securities."

Bank Obligations
----------------

The Funds may invest in bank obligations, including certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations of
domestic banks, foreign subsidiaries of domestic banks, foreign branches of
domestic banks, and domestic and foreign branches of foreign banks, domestic
savings and loan associations and other banking institutions. With respect to
such securities issued by foreign branches of domestic banks, foreign
subsidiaries of domestic banks, and domestic and foreign branches of foreign
banks, a Fund may be subject to additional investment risks that are different
in some respects from those incurred by a Fund which invests only in debt
obligations of domestic issuers. Such risks include possible future political
and economic developments, the possible imposition of foreign withholding taxes
on interest income payable on the securities, the possible establishment of
exchange controls or the adoption of other foreign governmental restrictions
which might adversely affect the payment of principal and interest on these
securities and the possible seizure or nationalization of foreign deposits. In
addition, foreign branches of U.S. banks and foreign banks may be subject to
less

5
<PAGE>

stringent reserve requirements and to different accounting, auditing, reporting
and recordkeeping standards than those applicable to domestic branches of U.S.
banks.

Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.

Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by a Fund will not benefit from insurance from the
Bank Insurance Fund or the Savings Association Insurance Fund administered by
the Federal Deposit Insurance Corporation. Bankers' acceptances are credit
instruments evidencing the obligation of a bank to pay a draft drawn on it by a
customer. These instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity. The other short-
term obligations may include uninsured, direct obligations, bearing fixed,
floating- or variable-interest rates.

Below Investment Grade Investments
----------------------------------

The Corporate Bond, Diversified Bond, Income, Income Plus and Stable Income
Funds may invest in debt securities that are in low or below investment grade
categories, or are unrated or in default at the time of purchase (also known as
high yield securities or "junk bonds"). Such debt securities have a much greater
risk of default (or in the case of bonds currently in default, of not returning
principal) and are more volatile than higher-rated securities of similar
maturity. The value of such debt securities will be affected by overall economic
conditions, interest rates, and the creditworthiness of the individual issuers.
Additionally, these lower rated debt securities may be less liquid and more
difficult to value than higher rated securities.

Stocks of the smaller and medium-sized companies in which the Fund may
invest may be more volatile than larger company stocks. Investments in foreign
markets may also present special risks, including currency, political,
diplomatic, regulatory and liquidity risks.

Bonds
-----

Certain of the debt instruments purchased by the Funds may be bonds. A bond
is an interest-bearing security issued by a company or governmental unit. The
issuer of a bond has a contractual obligation to pay interest at a stated rate
on specific dates and to repay principal (the bond's face value) periodically or
on a specified maturity date. An issuer may have the right to redeem or "call" a
bond before maturity, in which case the investor may have to reinvest the
proceeds at lower market rates. The value of fixed-rate bonds will tend to fall
when interest rates rise and rise when interest rates fall. The value of
"floating-rate" or "variable-rate" bonds, on the other hand, fluctuate much less
in response to market interest rate movements than the value of fixed rate
bonds.

Bonds may be senior or subordinated obligations. Senior obligations
generally have the first claim on a corporation's earnings and assets and, in
the event of liquidation, are paid before subordinated debt. Bonds may be
unsecured (backed only by the issuer's general creditworthiness) or secured
(also backed by specified collateral).

6
<PAGE>

Borrowing
---------

The Funds may borrow money for temporary or emergency purposes, including
the meeting of redemption requests. Borrowing involves special risk
considerations. Interest costs on borrowings may fluctuate with changing market
rates of interest and may partially offset or exceed the return earned on
borrowed funds (or on the assets that were retained rather than sold to meet the
needs for which funds were borrowed). Under adverse market conditions, a Fund
might have to sell portfolio securities to meet interest or principal payments
at a time when investment considerations would not favor such sales. Reverse
repurchase agreements, short sales not against the box, dollar roll transactions
and other similar investments that involve a form of leverage have
characteristics similar to borrowings but are not considered borrowings if the
Fund maintains a segregated account.

Commercial Paper
----------------

The Funds may invest in commercial paper (including variable amount master
demand notes) which refers to short-term, unsecured promissory notes issued by
corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations which permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangements between the issuer and a commercial
bank acting as agent for the payee of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes.
Investments by the Funds in commercial paper (including variable rate demand
notes and variable rate master demand notes issued by domestic and foreign bank
holding companies, corporations and financial institutions, as well as similar
instruments issued by government agencies and instrumentalities) will consist of
issues that are rated in one of the two highest rating categories by a
Nationally Recognized Ratings Organization ("NRRO"). Commercial paper may
include variable- and floating-rate instruments.

Convertible Securities
----------------------

The Funds may invest in convertible securities. A convertible security is
generally a debt obligation or preferred stock that may be converted within a
specified period of time into a certain amount of common stock of the same or a
different user. A convertible security provides a fixed-income stream and the
opportunity, through its conversion feature, to participate in the capital
appreciation resulting from a market price advance in its underlying common
stock. As with a straight fixed-income security, a convertible security tends to
increase in market value when interest rates decline and decrease in value when
interest rates rise. Like a common stock, the value of a convertible security
also tends to increase as the market value of the underlying stock rises, and it
tends to decrease as the market value of the underlying stock declines. Because
its value can be influenced by both interest rate and market movements, a
convertible security is not as sensitive to interest rates as a similar fixed-
income security, nor is it as sensitive to changes in share price as its
underlying stock.

7
<PAGE>

by the issuer, but only after a specified date and under circumstances
established at the time the security is issued.

While the Funds use the same criteria to rate a convertible debt security
that it uses to rate a more conventional debt security, a convertible preferred
stock is treated like a preferred stock for a Funds' financial reporting, credit
rating, and investment limitation purposes. A preferred stock is subordinated to
all debt obligations in the event of insolvency, and an issuer's failure to make
a dividend payment is generally not an event of default entitling the preferred
shareholder to take action. A preferred stock generally has no maturity date, so
that its market value is dependent on the issuer's business prospects for an
indefinite period of time. In addition, distributions from preferred stock are
dividends, rather than interest payments, and are usually treated as such for
corporate tax purposes.

Derivative Securities
---------------------

The Funds may invest in various instruments that may be considered
"derivatives," including structured notes, bonds or other instruments with
interest rates that are determined by reference to changes in the value of other
interest rates, indices or financial indicators ("References") or the relative
change in two or more References. Some derivative securities represent
relatively recent innovations in the bond markets, and the trading market for
these instruments is less developed than the markets for traditional types of
debt instruments. It is uncertain how these instruments will perform under
different economic and interest rate scenarios. Because certain of these
instruments are leveraged, their market values may be more volatile than other
types of bonds and may present greater potential for capital gain or loss.
Derivative securities and their underlying instruments may experience periods of
illiquidity, which could cause a Fund to hold a security it might otherwise sell
or could force the sale of a security at inopportune times or for prices that do
not reflect current market value. The possibility of default by the issuer or
the issuer's credit provider may be greater for these structured and derivative
instruments than for other types of instruments. As new types of derivative
securities are developed and offered to investors, the advisor will, consistent
with the Funds' investment objective, policies and quality standards, consider
making investments in such new types of derivative securities.

Floating- and Variable-Rate Obligations
---------------------------------------

The Funds may purchase floating- and variable-rate obligations such as
demand notes and bonds. Variable-rate demand notes include master demand notes
that are obligations that permit a Fund to invest fluctuating amounts, which may
change daily without penalty, pursuant to direct arrangements between the Fund,
as lender, and the borrower. The interest rate on a floating-rate demand
obligation is based on a known lending rate, such as a bank's prime rate, and is
adjusted automatically each time such rate is adjusted. The interest rate on a
variable-rate demand obligation is adjusted automatically at specified
intervals. The issuer of such obligations ordinarily has a right, after a given
period, to prepay at its discretion the outstanding principal amount of the
obligations plus accrued interest upon a specified number of days' notice to the
holders of such obligations. Frequently, such obligations are secured by letters
of credit or other credit support arrangements provided by banks.

8
<PAGE>

There generally is no established secondary market for these obligations
because they are direct lending arrangements between the lender and borrower.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, a Fund's right to redeem is dependent on the
ability of the borrower to pay principal and interest on demand. Such
obligations frequently are not rated by credit rating agencies and each Fund may
invest in obligations which are not so rated only if the Advisor determines that
at the time of investment the obligations are of comparable quality to the other
obligations in which such Fund may invest. The Advisor, on behalf of each Fund,
considers on an ongoing basis the creditworthiness of the issuers of the
floating- and variable-rate demand obligations in such Fund's portfolio.
Floating- and variable-rate instruments are subject to interest-rate risk and
credit risk.

The floating- and variable-rate instruments that the Funds may purchase
include certificates of participation in such instruments.

Foreign Obligations and Securities
----------------------------------

Each Fund, may invest in high-quality, short-term debt obligations of
foreign branches of U.S. banks, U.S. branches of foreign banks and short-term
debt obligations of foreign governmental agencies that are denominated in and
pay interest in U.S. dollars. Investments in foreign obligations involve certain
considerations that are not typically associated with investing in domestic
obligations. There may be less publicly available information about a foreign
issuer than about a domestic issuer and the available information may be less
reliable. In addition, with respect to certain foreign countries, taxes may be
withheld at the source under foreign tax laws, and there is a possibility of
expropriation or confiscatory taxation, political or social instability or
diplomatic developments that could adversely affect investments in, the
liquidity of, and the ability to enforce contractual obligations with respect
to, securities of issuers located in those countries.

The Funds may also invest in securities denominated in currencies other
than the U.S. dollar and may temporarily hold funds in bank deposits or other
money market investments denominated in foreign currencies. Therefore, the Funds
may be affected favorably or unfavorably by exchange control regulations or
changes in the exchange rate between such currencies and the dollar. Changes in
foreign currency exchange rates influence values within a Fund from the
perspective of U.S. investors. The rate of exchange between the U.S. dollar and
other currencies is determined by the forces of supply and demand in the foreign
exchange markets. These forces are affected by the international balance of
payments and other economic and financial conditions, government intervention,
speculation and other factors.

The Funds may enter into forward currency exchange contracts ("forward
contracts") to attempt to minimize the risk to the Funds from adverse changes in
the relationship between currencies or to enhance income. A forward contract is
an obligation to buy or sell a specific currency for an agreed price at a future
date which is individually negotiated and is privately traded by currency
traders and their customers. The Funds will either cover a position in such a
transaction or maintain, in a segregated account with their custodian bank, cash
or high-grade marketable money market securities having an aggregate value equal
to the amount of any such commitment until payment is made.

9
<PAGE>

Forward Commitment, When-Issued and Delayed-Delivery Transactions
-----------------------------------------------------------------

The Funds may purchase or sell securities on a when-issued or delayed
delivery basis and make contracts to purchase or sell securities for a fixed
price at a future date beyond customary settlement time. Delivery and payment on
such transaction normally take place within 120 days after the date of the
commitment to purchase. Securities purchased or sold on a when-issued, delayed-
delivery or forward commitment basis involve a risk of loss if the value of the
security to be purchased declines, or the value of the security to be sold
increases, before the settlement date. The Funds will establish a segregated
account in which they will maintain cash, U.S. Government obligations or other
high-quality debt instruments in an amount at least equal in value to each such
Fund's commitments to purchase when-issued securities. If the value of these
assets declines, a Fund will place additional liquid assets in the account on a
daily basis so that the value of the assets in the account is equal to the
amount of such commitments.

Illiquid Securities
-------------------

The Funds may invest in securities not registered under the Securities Act
of 1933, as amended (the "1933 Act") and other securities subject to legal or
other restrictions on resale. Because such securities may be less liquid than
other investments, they may be difficult to sell promptly at an acceptable
price. Delay or difficulty in selling securities may result in a loss or be
costly to a Fund.

Interest Rate Protection Transactions
-------------------------------------

To manage its exposure to different types of investments, Funds may enter
into interest rate, currency and mortgage (or other asset) swap agreements and
may purchase and sell interest rate "caps," "floors" and "collars." In a typical
interest rate swap agreement, one party agrees to make regular payments equal to
a floating interest rate on a specific amount in return for payments equal to a
fixed interest rate on the same amount for a specified period. In a cap or
floor, one party agrees, usually in return for a fee, to make payments under
particular circumstances. A collar entitles the purchaser to receive payments to
the extent a specified interest rate falls outside an agreed upon range.

A Fund expects to enter into interest rate protection transactions to
preserve a return or spread on a particular investment or portion of its
portfolio or to protect against any increase in the price of securities it
anticipates purchasing at a later date. The Funds intend to use these
transactions as a hedge and not as a speculative investment.

Loans of Portfolio Securities
-----------------------------

Each Fund may lend its portfolio securities pursuant to guidelines approved
by the Board of Trustees of the Trust to brokers, dealers and financial
institutions, provided: (1) the loan is secured continuously by collateral
consisting of cash, securities of the U.S. Government, its agencies or
instrumentalities, or an irrevocable letter of credit issued by a bank organized
under the laws of the United States, organized under the laws of a State, or a
foreign bank that has filed an agreement with the Federal Reserve Board to
comply with the same rules and regulations applicable to U.S. banks in
securities credit transactions, and such collateral being maintained on a daily
marked-to-market basis in an amount at least equal to the

10
<PAGE>

securities loaned plus any accrued interest or dividends; (2) the Fund may at
any time call the loan and obtain the return of the securities loaned upon
sufficient prior notification; (3) the Fund will receive any interest or
dividends paid on the loaned securities; and (4) the aggregate market value of
securities loaned will not at any time exceed the limits established by the 1940
Act.

A Fund will earn income for lending its securities because cash collateral
pursuant to these loans will be invested subject to the investment objectives,
principal investment strategies and policies of the Fund. In connection with
lending securities, a Fund may pay reasonable finders, administrative and
custodial fees. Loans of securities involve a risk that the borrower may fail to
return the securities or may fail to provide additional collateral. In either
case, a Fund could experience delays in recovering securities or collateral or
could lose all or part of the value of the loaned securities. Although voting
rights, or rights to consent, attendant to securities on loan pass to the
borrower, such loans may be called at any time and will be called so that the
securities may be voted by a Fund if a material event affecting the investment
is to occur. A Fund may pay a portion of the interest or fees earned from
securities lending to a borrower or securities lending agent. Borrowers and
placing brokers may not be affiliated, directly or indirectly, with the Trust,
the Advisor, or the distributor.

Mortgage-Related Securities
---------------------------

The Funds may invest in mortgage-related securities. Mortgage pass-through
securities are securities representing interests in "pools" of mortgages in
which payments of both interest and principal on the securities are made
monthly, in effect "passing through" monthly payments made by the individual
borrowers on the residential mortgage loans which underlie the securities (net
of fees paid to the issuer or guarantor of the securities). Payment of principal
and interest on some mortgage pass-through securities (but not the market value
of the securities themselves) may be guaranteed by the full faith and credit of
the U.S. Government or its agencies or instrumentalities. Mortgage pass-through
securities created by non- government issuers (such as commercial banks, savings
and loan institutions, private mortgage insurance companies, mortgage bankers
and other secondary market issuers) may be supported by various forms of
insurance or guarantees, including individual loan, title, pool and hazard
insurance, and letters of credit, which may be issued by governmental entities,
private insurers or the mortgage poolers.

Prepayment Risk. The stated maturities of mortgage-related securities may
be shortened by unscheduled prepayments of principal on the underlying
mortgages. Therefore, it is not possible to predict accurately the average
maturity of a particular mortgage-related security. Variations in the maturities
of mortgage-related securities will affect the yield of the Fund. Early
repayment of principal on mortgage-related securities may expose a Fund to a
lower rate of return upon reinvestment of principal. Also, if a security subject
to prepayment has been purchased at a premium, in the event of prepayment the
value of the premium would be lost. Like other fixed-income securities, when
interest rates rise, the value of a mortgage-related security generally will
decline; however, when interest rates decline, the value of mortgage-related
securities with prepayment features may not increase as much as other fixed-
income securities.

Collateralized Mortgage Obligations ("CMOs") and Adjustable Rate Mortgages
("ARMs"). The Funds may also invest in investment grade CMOs. CMOs may be
collateralized by whole mortgage loans but are more typically collateralized by
portfolios of mortgage

11
<PAGE>

pass-through securities guaranteed by the Government National Mortgage
Association ("GNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC") or
Federal National Mortgage Association ("FNMA"). CMOs are structured into
multiple classes, with each class bearing a different stated maturity. Payments
of principal, including prepayments, are first returned to investors holding the
shortest maturity class; investors holding the longer maturity classes receive
principal only after the first class has been retired. As new types of mortgage-
related securities are developed and offered to investors, the Advisor will,
consistent with the Fund's investment objective, policies and quality standards,
consider making investments in such new types of mortgage-related securities.

The Funds each may invest in ARMs issued or guaranteed by the GNMA, FNMA or
the FHLMC. The full and timely payment of principal and interest on GNMA ARMs is
guaranteed by GNMA and backed by the full faith and credit of the U.S.
Government. FNMA also guarantees full and timely payment of both interest and
principal, while FHLMC guarantees full and timely payment of interest and
ultimate payment of principal. FNMA and FHLMC ARMs are not backed by the full
faith and credit of the United States. However, because FNMA and FHLMC are
government-sponsored enterprises, these securities are generally considered to
be high quality investments that present minimal credit risks. The yields
provided by these ARMs have historically exceeded the yields on other types of
U.S. Government securities with comparable maturities, although there can be no
assurance that this historical performance will continue.

The mortgages underlying ARMs guaranteed by GNMA are typically insured or
guaranteed by the Federal Housing Administration, the Veterans Administration or
the Farmers Home Administration, while those underlying ARMs issued by FNMA or
FHLMC are typically conventional residential mortgages which are not so insured
or guaranteed, but which conform to specific underwriting, size and maturity
standards.

The interest rates on the mortgages underlying the ARMs and some of the
CMOs in which the Funds may invest generally are readjusted at periodic
intervals ranging from one year or less to several years in response to changes
in a predetermined commonly-recognized interest rate index. The adjustable rate
feature should reduce, but will not eliminate, price fluctuations in such
securities, particularly when market interest rates fluctuate. The net asset
value of a Funds' shares may fluctuate to the extent interest rates on
underlying mortgages differ from prevailing market interest rates during interim
periods between interest rate reset dates. Accordingly, investors could
experience some loss if they redeem their shares of a Fund or if the Fund sells
these portfolio securities before the interest rates on the underlying mortgages
are adjusted to reflect prevailing market interest rates. The holder of ARMs and
CMOs are also subject to repayment risk.

The Funds will not invest in CMOs that, at the time of purchase, are "high-
risk mortgage securities" as defined in the then current Federal Financial
Institutions Examination Council Supervisory Policy Statement on Securities
Activities. High-risk mortgage securities are generally those with long
durations or those which are likely to be more sensitive to interest-rate
fluctuations.

Mortgage Participation Certificates. The Funds also may invest in the
following types of FHLMC mortgage pass-through securities. FHLMC issues two
types of mortgage pass-through securities: mortgage participation certificates
("PCs") and guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA
certificates in that each PC represents a pro rata share of all

12
<PAGE>

interest and principal payments made and owed on the underlying pool of
mortgages. GMCs also represent a pro rata interest in a pool of mortgages. These
instruments, however, pay interest semiannually and return principal once a year
in guaranteed minimum payments. These mortgage pass-through securities differ
from bonds in that principal is paid back by the borrower over the length of the
loan rather than returned in a lump sum at maturity. They are called "pass-
through" securities because both interest and principal payments, including
prepayments, are passed through to the holder of the security. PCs and GMCs are
both subject to prepayment risk.

Options Trading
---------------

The Funds may purchase or sell options on individual securities or options
on indices of securities. The purchaser of an option risks a total loss of the
premium paid for the option if the price of the underlying security does not
increase or decrease sufficiently to justify the exercise of such option. The
seller of an option, on the other hand, will recognize the premium as income if
the option expires unrecognized but foregoes any capital appreciation in excess
of the exercise price in the case of a call option and may be required to pay a
price in excess of current market value in the case of a put option.

A call option for a particular security gives the purchaser of the option
the right to buy, and a writer the obligation to sell, the underlying security
at the stated exercise price at any time prior to the expiration of the option,
regardless of the market price of the security. The premium paid to the writer
is in consideration for undertaking the obligation under the option contract. A
put option for a particular security gives the purchaser the right to sell, and
the writer the option to buy, the security at the stated exercise price at any
time prior to the expiration date of the option, regardless of the market price
of the security.

The Funds will write call options only if they are "covered." In the case
of a call option on a security or currency, the option is "covered" if a Fund
owns the instrument underlying the call or has an absolute and immediate right
to acquire that instrument without additional cash consideration (or, if
additional cash consideration is required, cash, U.S. Government securities or
other liquid high grade debt obligations, in such amount are held in a
segregated account by the Fund's custodian) upon conversion or exchange of other
securities held by it. For a call option on an index, the option is covered if a
Fund maintains with its custodian a diversified portfolio of securities
comprising the index or liquid assets equal to the contract value. A call option
is also covered if a Fund holds an offsetting call on the same instrument or
index as the call written. The Funds will write put options only if they are
"secured" by liquid assets maintained in a segregated account by the Funds'
custodian in an amount not less than the exercise price of the option at all
times during the option period.

A Fund may buy put and call options and write covered call and secured put
options. Options trading is a highly specialized activity which entails greater
than ordinary investment risk. Options may be more volatile than the underlying
instruments, and therefore, on a percentage basis, an investment in options may
be subject to greater fluctuation than an investment in the underlying
instruments themselves. Purchasing options is a specialized investment technique
that entails a substantial risk of a complete loss of the amounts paid as
premiums to the writer of the option. If the Advisor is incorrect in its
forecast of market value or other factors when writing options, the Fund would
be in a worse position than it would have

13
<PAGE>

been had if it had not written the option. If a Fund wishes to sell an
underlying instrument (in the case of a covered call option) or liquidate assets
in a segregated account (in the case of a secured put option), the Fund must
purchase an offsetting option if available, thereby incurring additional
transactions costs.

Below is a description of some of the types of options in which certain
Funds may invest.

A stock index option is an option contract whose value is based on the
value of a stock index at some future point in time. Stock indexes fluctuate
with changes in the market values of the stocks included in the index. The
effectiveness of purchasing or writing stock index options will depend upon the
extent to which price movements in a Fund's investment portfolio correlate with
price movements of the stock index selected. Accordingly, successful use by a
Fund of options on stock indexes will be subject to the Advisor's ability to
correctly analyze movements in the direction of the stock market generally or of
particular industry or market segments. When a Fund writes an option on a stock
index, the Fund will place in a segregated account with the Fund's custodian
cash or liquid securities in an amount at least equal to the market value of the
underlying stock index and will maintain the account while the option is open or
otherwise will cover the transaction.

The Funds may invest in stock index futures contracts and options on stock
index futures contracts. A stock index futures contract is an agreement in which
one party agrees to deliver to the other an amount of cash equal to a specific
dollar amount multiplied by the difference between the value of a specific stock
index at the close of the last trading day of the contract and the price at
which the agreement is made. Stock index futures contracts may be purchased to
protect a Fund against an increase in the prices of stocks that the Fund intends
to purchase. The purchase of options on stock index futures contracts are
similar to other options contracts as described above, where a Fund pays a
premium for the option to purchase or sell a stock index futures contract for a
specified price at a specified date. With options on stock index futures
contracts, a Fund risks the loss of the premium paid for the option. The Funds
may also invest in interest-rate futures contracts and options on interest-rate
futures contracts. These securities are similar to stock index futures contracts
and options on stock index futures contracts, except they derive their price
from an underlying interest rate rather than a stock index.

Interest-rate and index swaps involve the exchange by a Fund with another
party of their respective commitments to pay or receive interest (for example,
an exchange of floating-rate payments for fixed-rate payments). Index swaps
involve the exchange by a Fund with another party of cash flows based upon the
performance of an index of securities. Interest-rate swaps involve the exchange
by a Fund with another party of cash flows based upon the performance of a
specified interest rate. In each case, the exchange commitments can involve
payments to be made in the same currency or in different currencies. The Funds
will usually enter into swaps on a net basis. In so doing, the two payment
streams are netted out, with a Fund receiving or paying, as the case may be,
only the net amount of the two payments. If a Fund enters into a swap, it will
maintain a segregated account on a gross basis, unless the contract provides for
a segregated account on a net basis. The risk of loss with respect to swaps
generally is limited to the net amount of payments that a Fund is contractually
obligated to make. There is also a risk of a default by the other party to a
swap, in which case a Fund may not receive net amount of payments that the Fund
contractually is entitled to receive.

14
<PAGE>

Other Investment Companies
--------------------------

The Funds may invest in shares of other open-end management investment
companies, up to the limits prescribed in Section 12(d) of the 1940 Act.
Currently, under the 1940 Act, a Fund that invests directly in a portfolio of
securities is limited to, subject to certain exceptions, (i) 3% of the total
voting stock of any one investment company, (ii) 5% of such Fund's total assets
with respect to any one investment company and (iii) 10% of such Fund's total
assets. Gateway Funds, whose policies are to invest some or all of their assets
in the securities of one or more open-end management investment companies, are
excepted from these limitations. Other investment companies in which the Funds
invest can be expected to charge fees for operating expenses, such as investment
advisory and administration fees, that would be in addition to those charged by
the Funds.

Participation Interests
-----------------------

Each Fund, may purchase participation interests in loans or instruments in
which the Fund may invest directly that are owned by banks or other
institutions. A participation interest gives a Fund an undivided proportionate
interest in a loan or instrument. Participation interests may carry a demand
feature permitting the holder to tender the interests back to the bank or other
institution. Participation interests, however, do not provide the Fund with any
right to enforce compliance by the borrower, nor any rights of set-off against
the borrower and the Fund may not directly benefit from any collateral
supporting the loan in which it purchased a participation interest. As a result,
the Fund will assume the credit risk of both the borrower and the lender that is
selling the participation interest.

Privately Issued Securities
---------------------------

The Funds may invest in privately issued securities, including those which
may be resold only in accordance with Rule 144A under the Securities Act of 1933
("Rule 144A Securities"). Rule 144A Securities are restricted securities that
are not publicly traded. Accordingly, the liquidity of the market for specific
Rule 144A Securities may vary. Delay or difficulty in selling such securities
may result in a loss to a Fund. Privately issued or Rule 144A Securities that
are determined by the Advisor to be "illiquid" are subject to the Funds' policy
of not investing more than 15% of its net assets in illiquid securities. The
Advisor, under guidelines approved by the Board of Trustees of the Trust, will
evaluate the liquidity characteristics of each Rule 144A Security proposed for
purchase by a Fund on a case-by-case basis and will consider the following
factors, among others, in its evaluation: (1) the frequency of trades and quotes
for the Rule 144A Security; (2) the number of dealers willing to purchase or
sell the Rule 144A Security and the number of other potential purchasers; (3)
dealer undertakings to make a market in the Rule 144A Security; and (4) the
nature of the Rule 144A Security and the nature of the marketplace trades (e.g.,
the time needed to dispose of the Rule 144A Security, the method of soliciting
offers and the mechanics of transfer).

Repurchase Agreements
---------------------

Each Fund may enter into repurchase agreements, wherein the seller of a
security to a Fund agrees to repurchase that security from a Fund at a mutually
agreed upon time and price. A Fund

15
<PAGE>

may enter into repurchase agreements only with respect to securities that could
otherwise be purchased by such Fund. All repurchase agreements will be fully
collateralized at 102% based on values that are marked to market daily. The
maturities of the underlying securities in a repurchase agreement transaction
may be greater than twelve months, although the maximum term of a repurchase
agreement will always be less than twelve months. If the seller defaults and the
value of the underlying securities has declined, a Fund may incur a loss. In
addition, if bankruptcy proceedings are commenced with respect to the seller of
the security, the Funds' disposition of the security may be delayed or limited.

A Fund may not enter into a repurchase agreement with a maturity of more
than seven days, if, as a result, more than 15% of the market value of such
Fund's net assets would be invested in repurchase agreements with maturities of
more than seven days and illiquid securities. A Fund will only enter into
repurchase agreements with primary broker/dealers and commercial banks that meet
guidelines established by the Board of Trustees and that are not affiliated with
the investment advisor. The Funds may participate in pooled repurchase agreement
transactions with other funds advised by the Advisor.

Reverse Repurchase Agreements
-----------------------------

The Funds may enter into reverse repurchase agreements (an agreement under
which a Fund sells their portfolio securities and agrees to repurchase them at
an agreed-upon date and price). At the time a Fund enters into a reverse
repurchase agreement it will place in a segregated custodial account liquid
assets such as U.S. Government securities or other liquid high-grade debt
securities having a value equal to or greater than the repurchase price
(including accrued interest) and will subsequently monitor the account to ensure
that such value is maintained. Reverse repurchase agreements involve the risk
that the market value of the securities sold by the Funds may decline below the
price at which the Funds are obligated to repurchase the securities. Reverse
repurchase agreements may be viewed as a form of borrowing.

Stripped Securities
-------------------

Each Fund may purchase Treasury receipts, securities of government-
sponsored enterprises (GSEs), and other "stripped" securities that evidence
ownership in either the future interest payments or the future principal
payments on U.S. Government and other obligations. The stripped securities the
Funds may purchase are issued by the U.S. Government (or a U.S. Government
agency or instrumentality) or by private issuers such as banks, corporations and
other institutions at a discount to their face value. The Funds will not
purchase stripped mortgage-backed securities ("SMBS"). The stripped securities
purchased by the Funds generally are structured to make a lump-sum payment at
maturity and do not make periodic payments of principal or interest. Hence, the
duration of these securities tends to be longer and they are therefore more
sensitive to interest rate fluctuations than similar securities that offer
periodic payments over time. The stripped securities purchased by the Funds are
not subject to prepayment or extension risk.

The Funds may purchase participations in trusts that hold U.S. Treasury
securities (such as TIGRs and CATS) or other obligations where the trust
participations evidence ownership in either the future interest payments or the
future principal payments on the obligations. These

16
<PAGE>

participations are normally issued at a discount to their "face value," and can
exhibit greater price volatility than ordinary debt securities because of the
way in which their principal and interest are returned to investors.

Unrated Investments
-------------------

The Funds may purchase instruments that are not rated if, in the opinion of
the Advisor, such obligations are of investment quality comparable to other
rated investments that are permitted to be purchased by such Fund. After
purchase by a Fund, a security may cease to be rated or its rating may be
reduced below the minimum required for purchase by the Fund. Neither event will
require a sale of such security by the Fund. To the extent the ratings given by
Moody's Investors Services ("Moody's") or Standard & Poor's ("S&P") may change
as a result of changes in such organizations or their rating systems, a Fund
will attempt to use comparable ratings as standards for investments in
accordance with the investment policies contained in its Prospectus and in this
SAI. The ratings of Moody's and S&P are more fully described in the SAI
Appendix.

U.S. Government Obligations
---------------------------

The Funds may invest in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities ("U.S. Government Obligations").
Payment of principal and interest on U.S. Government Obligations (i) may be
backed by the full faith and credit of the United States (as with U.S. Treasury
bills and GNMA certificates) or (ii) may be backed solely by the issuing or
guaranteeing agency or instrumentality itself (as with FNMA notes). In the
latter case, investors must look principally to the agency or instrumentality
issuing or guaranteeing the obligation for ultimate repayment, which agency or
instrumentality may be privately owned. There can be no assurance that the U.S.
Government will provide financial support to its agencies or instrumentalities
where it is not obligated to do so. In addition, U.S. Government Obligations are
subject to fluctuations in market value due to fluctuations in market interest
rates. As a general matter, the value of debt instruments, including U.S.
Government Obligations, declines when market interest rates increase and rises
when market interest rates decrease. Certain types of U.S. Government
Obligations are subject to fluctuations in yield or value due to their structure
or contract terms.

Zero Coupon Bonds
-----------------

The Funds may invest in zero coupon bonds. Zero coupon bonds are securities
that make no periodic interest payments, but are instead sold at discounts from
face value. The buyer of such a bond receives the rate of return by the gradual
appreciation of the security, which is redeemed at face value on a specified
maturity date. Because zero coupon bonds bear no interest, they are more
sensitive to interest-rate changes and are therefore more volatile. When
interest rates rise, the discount to face value of the security deepens and the
securities decrease more rapidly in value, when interest rates fall, zero coupon
securities rise more rapidly in value because the bonds carry fixed interest
rates that become more attractive in a falling interest rate environment.

17
<PAGE>

Nationally Recognized Ratings Organizations
-------------------------------------------

The ratings of Moody's, S&P, Division of The McGraw Hill Companies, Inc.,
Duff & Phelps Credit Rating Co., Fitch Investors Service, Inc. Thomson Bank
Watch and IBCA Inc. represent their opinions as to the quality of debt
securities. It should be emphasized, however, that ratings are general and not
absolute standards of quality, and debt securities with the same maturity,
interest rate and rating may have different yields while debt securities of the
same maturity and interest rate with different ratings may have the same yield.
Subsequent to purchase by the Funds, an issue of debt securities may cease to be
rated or its rating may be reduced below the minimum rating required for
purchase by the Funds. The Advisor will consider such an event in determining
whether the Fund involved should continue to hold the obligation.

MANAGEMENT

The following information supplements, and should be read in conjunction
with, the section in each Prospectus entitled "Organization and Management of
the Funds." The principal occupations during the past five years of the Trustees
and principal executive Officers of the Trust are listed below. The address of
each, unless otherwise indicated, is 525 Market Street, 12th Floor, San
Francisco, CA 94105. Trustees deemed to be "interested persons" of the Trust for
purposes of the 1940 Act are indicated by an asterisk.

<TABLE>
<CAPTION>
Principal Occupations
Name, Age and Address Position During Past 5 Years
--------------------- -------- -------------------
<S> <C> <C>
*Robert C. Brown Trustee Director, Federal Farm Credit Banks Funding
5038 Kestral Parkway South Corporation and Farm Credit System
Sarasota, Fl 34231 Financial Assistance Corporation since
February 1993

Donald H. Burkhardt, 70 Trustee Principal of the Burkhardt Law Firm.
777 South Steele Street
Denver, CO 80209

Jack S. Euphrat, 77 Trustee Private Investor.
415 Walsh Road
Atherton, CA 94027

Thomas S. Goho, 56 Trustee Business Associate Professor, Wake Forest
321 Beechcliff Court University, Calloway School of Business and
Winston-Salem, NC 27104 Accountancy since 1994.

Peter G. Gordon, 56 Trustee Chairman and Co-Founder of Crystal Geyser Water
Crystal Geyser Water Co. Company and President of Crystal Geyser Roxane
55 Francisco Street, Suite 410 Water Company since 1977.
San Francisco, CA 94133
</TABLE>

18
<PAGE>

<TABLE>
<CAPTION>
Principal Occupations
Name, Age and Address Position During Past 5 Years
--------------------- -------- -------------------
<S> <C> <C>
*W. Rodney Hughes, 72 Trustee Private Investor.
31 Dellwood Court
San Rafael, CA 94901

*Richard M. Leach, 63 Trustee President of Richard M. Leach Associates (a
P.O. Box 1888 financial consulting firm) since 1992.
New London, NH 03257

*J. Tucker Morse, 54 Trustee Private Investor/Real Estate Developer; Chairman
10 Legare Street of Vault Holdings, LLC.
Charleston, SC 29401

Timothy J. Penny, 45 Trustee Senior Counselor to the public relations firm of
500 North State Street Himle-Horner since January 1995 and Senior Fellow
Waseca, MN 56093 at the Humphrey Institute, Minneapolis, Minnesota
(a public policy organization) since January 1995.

Donald C. Willeke, 59 Trustee Principal of the law firm of Willeke & Daniels.
201 Ridgewood Avenue
Minneapolis, MN 55403

Michael J. Hogan, 41 President Executive Vice President of Wells Fargo Bank, N.A.
since July 1999. Senior Vice President of Wells
Fargo Bank, N.A. from April 1997 to May 1999.
Vice President of American Express Financial
Advisors from May 1996 to April 1997, and Director
of American Express Financial Advisors from March
1993 to May 1996.

Karla M. Rabusch, 41 Treasurer Senior Vice President of Wells Fargo Bank, N.A.,
since May 2000. Vice President of Wells Fargo
Bank, N.A. from December 1997 to May 2000. Prior
thereto, Director of Managed Assets Investment
Accounting of American Express Financial Advisors
from May 1994 to November 1997.

C. David Messman, 40 Secretary Vice President and Senior Counsel of Wells Fargo
Bank, N.A. since January 1996. Prior thereto,
Branch Chief, Division of Investment Management,
U.S. Securities and Exchange Commission.
</TABLE>

Each of the Trustees and Officers listed above act in the identical
capacities for Wells Fargo Variable Trust and Wells Fargo Core Trust (including
the Trust, collectively the "Fund
19
<PAGE>

Complex"). All of the non-interested Trustees are also members of the Audit and
Nominating Committees of the Trust, and of each other trust in the Fund Complex.

Each Trustee receives an annual retainer (payable quarterly) of $40,000
from the Fund Complex, and also receives a combined fee of $1,000 for attendance
at Fund Complex Board meetings, and a combined fee of $250 for attendance at
committee meetings. If a committee meeting is held absent a full Board meeting,
each attending Trustee will receive a $1,000 combined fee. These fees apply
equally for in-person or telephonic meetings, and Trustees are reimbursed for
all out-of-pocket expenses related to attending meetings. The Trustees do not
receive any retirement benefits or deferred compensation from the Trust or any
other member of the Fund Complex. The Trust's officers are not compensated by
the Trust for their services. For the period November 8, 1999, closing date of
the Reorganization, through May 31, 2000, the end of the fiscal period for the
Funds, the Trustees have been paid and/or have accrued the following
compensation:

Compensation Table
Period Ended May 31, 2000
-------------------------

Trustee Compensation
------- ------------

Robert C. Brown $23,102
Donald H. Burkhardt $22,384
Jack S. Euphrat $27,254
Thomas S. Goho $27,254
Peter G. Gordon $27,254
W. Rodney Hughes $26,754
Richard M. Leach $22,102
J. Tucker Morse $26,754
Timothy J. Penny $23,602
Donald C. Willeke $23,602

As of the date of this SAI, Trustees and Officers of the Trust as a group
beneficially owned less than 1% of the outstanding shares of the Trust.

Investment Advisor. Subject to the general supervision of the Board, Wells
------------------
Fargo Bank provides investment advisory services to the Funds. As investment
advisor, Wells Fargo Bank furnishes investment guidance and policy direction in
connection with the daily portfolio management of the Funds. Wells Fargo Bank
furnishes to the Trust's Board of Trustees periodic reports on the investment
strategy and performance of each Fund. Wells Fargo Bank provides the Funds with,
among other things, money market security and fixed-income research, analysis
and statistical and economic data and information concerning interest rate and
securities markets trends, portfolio composition, and credit conditions.

The Funds operate under three types of advisory arrangements: (i) stand-
alone Funds with an investment advisor and sub-advisor; (ii) gateway feeder
Funds that invest in a single corresponding core portfolio of Wells Fargo Core
Trust ("Core Trust") and have "dormant" advisory arrangements at the gateway
level; and (iii) gateway blended Funds that invest in two or

20
<PAGE>

more core portfolios and have both active and dormant advisory arrangements at
the gateway level.

As compensation for its advisory services for the following stand-alone
Funds, Wells Fargo Bank is entitled to receive a monthly fee at the annual rates
indicated below of each Fund's average daily net assets:

Annual Rate
Stand-Alone Funds (as a percentage of net assets)
----------------- -------------------------------

Corporate Bond 0.50%
Income 0.50%
Income Plus 0.60%
Intermediate Government Income 0.50%
Limited Term Government Income 0.50%
Variable Rate Government 0.50%

As described in the second category above, the Stable Income Fund
invests 100% of its assets in a single respective core portfolio of Core Trust.
Because the Fund invests all of its assets in a single portfolio, no investment
advisory services are currently provided at the gateway feeder Fund level.
However, in order to preserve flexibility to allow the Fund to either invest in
more than one core portfolio of Core Trust or to convert to a stand-alone Fund
with a direct advisory relationship, the Fund has a "dormant" advisory
arrangement with Wells Fargo Bank. Under the dormant advisory arrangement, Wells
Fargo Bank will receive no advisory fees as long as the gateway feeder Fund
invests all (or substantially all) of its assets in one core portfolio of Core
Trust. In the event that the Fund converts into a gateway blended Fund as
described above, Wells Fargo Bank as advisor would be entitled to receive a fee
of 0.25% for asset allocation services. The dormant advisory rate listed below
mirrors the advisory fee charged by Wells Fargo Bank to the Core Trust portfolio
in which the gateway feeder Fund invests.

<TABLE>
<CAPTION>
Active Dormant Asset Pass-through
Gateway Feeder Fund Advisory Fees Allocation Fees* Advisory Fees**
------------------- ------------- --------------- -------------
<S> <C> <C> <C>
Stable Income 0.00% 0.25% 0.50%
</TABLE>

--------------------
* Represents the proposed advisory fee payable to Wells Fargo Bank as advisor
if the Fund converts into a gateway blended Fund.

** Represents the advisory fee payable to Wells Fargo Bank as advisor to the
Fund of Core Trust. This would be the proposed advisory fee payable to
Wells Fargo Bank as advisor if the Fund converts into a stand-alone Fund.

As described in the third category above, the Diversified Bond Fund
invests its assets in two or more core portfolios of Core Trust. Wells Fargo
Bank determines the core portfolios of Core Trust in which the gateway blended
Fund invests and the percentage allocation that such Fund would make to each
core portfolio. For these asset allocation services, Wells Fargo Bank is
entitled to receive a fee as indicated in the chart below. The Fund also has the
dormant advisory arrangements described above with respect to the Stable Income
Fund.

21
<PAGE>

<TABLE>
<CAPTION>
Advisory Fees Core Level
Gateway Blended Fund (Maximum Asset Allocation Fees) Dormant Advisory Fees*
-------------------- ------------------------------- ---------------------
<S> <C> <C>
Diversified Bond 0.25% 0.50%
</TABLE>

--------------------
* Because the gateway blended Fund invests in two or more Core Trust
portfolios with varying advisory fees, the dormant advisory fees are based
on a formula that reflects a blended fee rate.

As discussed in the "Historical Fund Information" section, the Funds
were created as part of the reorganization of the Stagecoach and Norwest Funds.
Therefore, the information shown below concerning the dollar amount of advisory
(and other) fees paid shows the dollar amount of fees paid to either Wells Fargo
Bank or NIM by a Fund or its predecessor portfolio that is considered the
surviving entity for accounting purposes.

FORMER STAGECOACH FUNDS

For the periods indicated below, the Funds or the predecessor
portfolios to the Funds listed below paid to Wells Fargo Bank the following
advisory fees and Wells Fargo Bank waived the indicated amounts:

<TABLE>
<CAPTION>
Eleven-Month
Period Ended Year Ended
Fund 05/31/00 06/30/99
---- -------------- -----------
Fees Paid Fees Waived Fees Paid Fees Waived
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Corporate Bond $ 10,795 $ 72,100 $ 23,084 $ 53,704
Income Plus $158,250 $ 91,954 $ 59,858 $147,160
Limited Term Government
Income $494,200 $226,918 $ 459,093 $237,095
Variable Rate Government $159,008 $260,591 $ 204,891 $479,326
</TABLE>

<TABLE>
<CAPTION>
Three-Month
Period Ended Year Ended
Fund 6/30/98 3/31/98
---- ------------- ----------
Fees Paid Fees Waived Fees Paid Fees Waived
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Corporate Bond $ 2,427 $ 5,498 N/A N/A
Income Plus N/A N/A N/A N/A
Limited Term Government

Income $ 75,268 $ 36,209 $ 132,389 $309,195
Variable Rate Government $158,638 $315,545 $1,355,943* $294,181*
</TABLE>

--------------------
* These amounts are for the year ended December 31, 1997. Prior to December
12, 1997, these amounts reflect fees paid by the corresponding Overland
predecessor portfolio.

22
<PAGE>

FORMER NORWEST FUNDS

For the periods indicated below, the Funds or the predecessor
portfolios to the Funds listed below paid to Wells Fargo Bank and NIM the
following advisory fees and Wells Fargo and NIM waived the indicated amounts:

<TABLE>
<CAPTION>
Period Ended Period Ended
05/31/00* 11/05/99*
------------ ------------

Wells Fargo NIM
----------- ---
Fund Fees Paid Fees Waived Fees Paid Fees Waived
---- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Diversified Bond $ 100,755 $165,874 $155,604 $ 42,913
Income $1,156,527 $ 26,008 $799,663 $ 0
Intermediate Government
Income $1,325,550 $536,678 $636,285 $ 0
Stable Income** $ 765,977 $ 40,780 $ 0 $ 0
</TABLE>

--------------------
* For the year ended May 31, 2000, the predecessor portfolios to the Funds
paid NIM advisory fees for the period June 1, 1999 through November 5,
1999 and the Funds paid Wells Fargo Bank advisory fees for the period
November 8, 1999 through May 31, 2000.

** Amounts allocated from Core Portfolio for 12-month fiscal year ended May
31, 2000.

<TABLE>
<CAPTION>
Year Ended Year Ended
05/31/99 05/31/98
---------- ----------

NIM NIM
--- ---

Fund Fees Paid Fees Waived Fees Paid Fees Waived
---- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Diversified Bond* $ 715 $392,977 $ 551,714 $376,973
Income $1,735,605 $ 0 $1,314,324 $ 90,387
Intermediate Government
Income $1,470,878 $ 0 $1,315,676 $ 0
Stable Income $ 0 $ 0 $ 406,937 $ 0
</TABLE>

* Fees paid and/or waived do not include amounts allocated from the underlying
core portfolios.

General. Each Fund's Advisory Contract will continue in effect for more
-------
than two years from the effective date provided the continuance is approved
annually (i) by the holders of a majority of the respective Fund's outstanding
voting securities or by the Trust's Board of Trustees and (ii) by a majority of
the Trustees of the Trust who are not parties to the Advisory Contract or
"interested persons" (as defined in the 1940 Act) of any such party. A Fund's
Advisory Contract may be terminated on 60 days' written notice by either party
and will terminate automatically if assigned.

Investment Sub-Advisors. Wells Fargo Bank has engaged Wells Capital
-----------------------
Management Incorporated (formerly, Wells Fargo Investment Management) ("WCM"),
Galliard Capital Management, Inc. ("Galliard") and Peregrine Capital Management,
Inc. ("Peregrine") to serve as investment sub-advisors to the stand-alone Funds
of the Trust and the core portfolios of Core Trust in which the gateway blended
and gateway feeder Funds invest, as listed in the chart below

23
<PAGE>

(collectively, the "Sub-Advisors"). Subject to the direction of the Trust's and
Core Trust's Boards of Trustees and the overall supervision and control of Wells
Fargo Bank and the Trust and Core Trust, the Sub-Advisors make recommendations
regarding the investment and reinvestment of the Funds' assets. The Sub-Advisors
furnish to Wells Fargo Bank periodic reports on the investment activity and
performance of the Funds. The Sub-Advisors also furnish such additional reports
and information as Wells Fargo Bank and the Trust's and Core Trust's Board of
Trustees and officers may reasonably request.

Wells Fargo Bank has engaged WCM as investment sub-advisor for the
stand-alone Funds of the Trust listed below. For providing sub-advisory
services, WCM is entitled to receive fees as described below.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
Fund Fee
-----------------------------------------------------------------------------------
<S> <C>
Corporate Bond 0-400M 0.15%
400-800M 0.125%
>800M 0.10%
-----------------------------------------------------------------------------------
Income 0-400M 0.15%
400-800M 0.125%
>800M 0.10%
-----------------------------------------------------------------------------------
Income Plus 0-400M 0.20%
400-800M 0.175%
>800M 0.15%
-----------------------------------------------------------------------------------
Intermediate Government Income 0-400M 0.15%
400-800M 0.125%
>800M 0.10%
-----------------------------------------------------------------------------------
Limited Term Government Income 0-400M 0.15%
400-800M 0.125%
>800M 0.10%
-----------------------------------------------------------------------------------
Variable Rate Government 0-400M 0.15%
400-800M 0.125%
>800M 0.10%
-----------------------------------------------------------------------------------
</TABLE>

Wells Fargo Bank has engaged Peregrine and Galliard to serve as
investment sub-advisors to the core portfolios in which the Diversified Bond and
Stable Income Funds invest, as listed in the chart below.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Sub- Sub-Advisory
Fund Core Portfolio(s) Advisors Fees
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Diversified Bond Managed Fixed Income Portfolio Galliard 0-100M 0.10%
100-200M 0.08%
> 200M 0.06%
-------------------------------------------------------------------------------------
Positive Return Bond Portfolio Peregrine 0-10M 0.40%
10-25M 0.30%
25-300M 0.20%
>300M 0.10%
--------------------------------------------------------------------------------------
Strategic Value Bond Portfolio Galliard 0-100M 0.13%
100-200M 0.10%
> 200M 0.08%
------------------------------------------------------------------------------------------------------------------
Stable Income Stable Income Portfolio Galliard 0-300M 0.045%
> 300M 0.04%
------------------------------------------------------------------------------------------------------------------
</TABLE>

24
<PAGE>

Administrator. The Trust has retained Wells Fargo Bank as Administrator
-------------
on behalf of each Fund. Under the Administration Agreement between Wells Fargo
Bank and the Trust, Wells Fargo Bank shall provide as administration services,
among other things: (i) general supervision of the Funds' operations, including
coordination of the services performed by each Fund's investment advisor,
transfer agent, custodian, shareholder servicing agent(s), independent auditors
and legal counsel, regulatory compliance, including the compilation of
information for documents such as reports to, and filings with, the U.S.
Securities and Exchange Commission ("SEC") and state securities commissions; and
preparation of proxy statements and shareholder reports for each Fund; and (ii)
general supervision relative to the compilation of data required for the
preparation of periodic reports distributed to the Trust's officers and Board of
Trustees. Wells Fargo Bank also furnishes office space and certain facilities
required for conducting the Funds' business together with ordinary clerical and
bookkeeping services. The Administrator is entitled to receive a fee of up to
0.15% of each Fund's average daily net assets on an annual basis.

As discussed in the "Historical Fund Information" section, the Funds
were created as part of the reorganization of the Stagecoach and Norwest Funds.
Therefore, the information shown below concerning the dollar amounts of
administration fees paid shows the dollar amount of fees paid to administrators
by a Fund or its predecessor portfolio that is considered the surviving entity
for accounting purposes.

FORMER STAGECOACH FUNDS

The predecessor Stagecoach Funds had retained Wells Fargo Bank as
Administrator from March 25, 1999 through the date of the Reorganization, on the
same terms as are currently in effect. Prior to March 25, 1999, the predecessor
Stagecoach Funds had retained Wells Fargo Bank as Administrator and Stephens as
Co-Administrator on behalf of each Fund. Wells Fargo Bank and Stephens were
entitled to receive monthly fees of 0.03% and 0.04%, respectively, of the
average daily net assets of each Fund. Prior to February 1, 1998, Wells Fargo
Bank and Stephens received monthly fees of 0.04% and 0.02%, respectively, of the
average daily net assets of each Fund. In connection with the change in fees,
the responsibility for performing various administration services was shifted to
the Co-Administrator.

For the periods indicated below, the Funds listed below and their
predecessor portfolios paid the following dollar amounts to Wells Fargo Bank and
Stephens for administration and, as applicable, co-administration fees.

<TABLE>
<CAPTION>
Eleven-Month
Period Ended Year Ended
05/31/00 06/30/99
-------------- -----------
Wells Wells
Fund Fargo Total Fargo Stephens
---- ----- ----- ----- --------
<S> <C> <C> <C> <C>
Corporate Bond $ 24,869 $ 6,156 $ 3,524 $ 2,632
Income Plus $ 62,551 $226,730 $129,803 $96,827
Limited Term Government Income $216,724 $112,334 $ 64,311 $48,023
Variable Rate Government $125,879 $108,802 $ 62,295 $46,507
</TABLE>

-----------------------

25
<PAGE>

<TABLE>
<CAPTION>
Three-Month
Period Ended Year Ended
6/30/98 3/31/98
------------- ----------
Wells Wells
Fund Total Fargo Stephens Total Fargo Stephens
---- ----- ----- -------- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C>
Corporate Bond $ 1,107 $ 478 $ 629 N/A N/A N/A
Income Plus N/A N/A N/A N/A N/A N/A
Limited Term Government Income $ 15,606 $ 6,711 $ 8,895 $ 54,262 $ 36,356 $17,906
Variable Rate Government $ 64,485* $ 27,729* $ 36,756* $282,517** $189,286** $93,231**
</TABLE>

-----------------------
* These figures are for the six-month period ended June 30, 1998.
** These figures are for the year ended December 31, 1997.

FORMER NORWEST FUNDS

With respect to the predecessor Norwest Funds, Forum Financial
Services, Inc. ("Forum") managed all aspects of the operation of the Funds,
except those which were the responsibility of Forum Administrative Services, LLC
("FAdS") as administrator or Norwest in its capacity as administrator. For the
year ended May 31, 2000, Forum/FAdS and Wells Fargo Bank received administrative
fees for the periods June 1, 1999 through November 5, 1999 and November 8, 1999
through May 31, 2000, respectively.

For the periods indicated below, the following Funds paid the following
dollar amounts as administration fees:

<TABLE>
<CAPTION>
Period Ended Period Ended Year Ended Year Ended
05/31/00 11/05/99 05/31/99 05/31/98
-------------- -------------- -------------- -----------
Fund
----
Wells Fargo Forum/FAdS Forum/FAdS Forum/FAdS
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Diversified Bond $159,977 $ 1,686 $ 3,131 $ 32,399
Income $359,684 $144,638 $164,941 $115,539
Intermediate
Government Income $567,627 $ 96,531 $209,982 $203,711
Stable Income $175,125 $ 38,739 $ 41,464 $ 8,167
</TABLE>

Distributor. Stephens Inc. ("Stephens," or the "Distributor"), located
-----------
at 111 Center Street, Little Rock, Arkansas 72201, serves as Distributor for the
Funds. The Funds have adopted a distribution plan (the "Plan") under Section
12(b) of the 1940 Act and Rule 12b-1 thereunder (the "Rule") for their Class B
and Class C shares. The Plan was adopted by the Trust's Board of Trustees,
including a majority of the Trustees who were not "interested persons" (as
defined in the 1940 Act) of the Funds and who had no direct or indirect
financial interest in the operation of the Plan or in any agreement related to
the Plan (the "Non-Interested Trustees").

26
<PAGE>

Under the Plan and pursuant to the related Distribution Agreement, the
Class B and Class C shares of the Funds pay Stephens up to 0.75% of the average
daily net assets attributable to each Class as compensation for distribution-
related services or as reimbursement for distribution-related expenses.

The actual fee payable to the Distributor by the above-indicated Funds
and Classes is determined, within such limits, from time to time by mutual
agreement between the Trust and the Distributor and will not exceed the maximum
sales charges payable by mutual funds sold by members of the National
Association of Securities Dealers, Inc. ("NASD") under the Conduct Rules of the
NASD. The Distributor may enter into selling agreements with one or more selling
agents (which may include Wells Fargo Bank and its affiliates) under which such
agents may receive compensation for distribution-related services from the
Distributor, including, but not limited to, commissions or other payments to
such agents based on the average daily net assets of Fund shares attributable to
their customers. The Distributor may retain any portion of the total
distribution fee payable thereunder to compensate it for distribution-related
services provided by it or to reimburse it for other distribution-related
expenses.

Stephens has entered into an arrangement whereby sales
commissions payable to broker/dealers with respect to sales of Class B shares of
the Funds are financed by an unaffiliated third party lender. Under this
financing arrangement, Stephens has assigned certain amounts that it is entitled
to receive pursuant to the Distribution Plan to the third party lender, as
reimbursement and consideration for these payments.

DISTRIBUTION FEES
-----------------

<TABLE>
<CAPTION>
Printing/ Comp. to Comp. to
Fund/Class Total Advertising Mailing Underwriters Br./Dlrs. Other
---------- ----- ----------- ------- ------------ --------- -----
<S> <C> <C> <C> <C> <C> <C>
Corporate Bond*
Class A $ 642 $ 642 $0 $ 0 $ 0 N/A
Class B $ 79,949 $ 0 $0 $ 0 $ 79,949
Class C $ 11,151 $ 0 $0 $ 9,425 $1,726 N/A

Income
Class A $ 0 $ 0 $0 $ 0 $ 0 N/A
Class B $ 72,427 $ 0 $ 72,427

Income Plus*
Class A $ 1,266 $1,266 $0 $ 0 $ 0 N/A
Class B $243,837 $ 0 $0 $ 0 $243,837
Class C $ 20,585 $ 0 $0 $13,731 $6,854 N/A

Intermed. Govt. Inc.
Class A $ 0 $ 0 $0 $ 0 $ 0 N/A
</TABLE>

27
<PAGE>

<TABLE>
<CAPTION>
Printing/ Comp. to Comp. to
Fund/Class Total Advertising Mailing Underwriters Br./Dlrs. Other
---------- ----- ----------- ------- ------------ --------- -----
<S> <C> <C> <C> <C> <C> <C>
Class B $407,091 $ 0 $0 $ 0 $ 0 $407,091
Class C $ 32,096 $ 0 $0 $19,763 $12,334 N/A

Ltd. Term Govt.*
Class A 0 $ 0 $0 $ 0 $ 0 N/A
Class B $ 70,421 $ 0 $0 $ 0 $ 0 $ 70,421

Stable Income
Class A 0 $ 0 $0 $ 0 $ 0 N/A
Class B $ 19,196 $ 0 $0 $ 0 $ 0 $ 19,196
Class C $ 0 $ 0 $0 $ 0 $ 0 N/A

Variable Rate Govt.*
Class A $ 63,994 $63,994 $0 $ 0 $ 0 N/A
</TABLE>

* The fees paid by the predecessor Stagecoach Funds represent the fees paid to
Stephens for distribution services for the twelve-month period ended May 31,
2000.

General. The Plan will continue in effect from year to year if such
-------
continuance is approved by a majority vote of both the Trustees of the Trust and
the Non-Interested Trustees. Any Distribution Agreement related to the Plan also
must be approved by such vote of the Trustees and the Non-Interested Trustees.
Such Agreement will terminate automatically if assigned, and may be terminated
at any time, without payment of any penalty, by a vote of a majority of the
outstanding voting securities of the relevant class of the Fund or by vote of a
majority of the Non-Interested Trustees on not more than 60 days' written
notice. The Plan may not be amended to increase materially the amounts payable
thereunder without the approval of a majority of the outstanding voting
securities of the Fund, and no material amendment to the Plan may be made except
by a majority of both the Trustees of the Trust and the Non-Interested Trustees.

The Plan provides that the Treasurer of the Trust shall provide to the
Trustees, and the Trustees shall review, at least quarterly, a written report of
the amounts expended (and purposes therefor) under the Plan. The Rule also
requires that the selection and nomination of Trustees who are not "interested
persons" of the Trust be made by such disinterested Trustees.

Wells Fargo Bank, an interested person (as that term is defined in
Section 2(a)(19) of the 1940 Act) of the Trust, acts as a selling agent for the
Funds' shares pursuant to selling agreements with Stephens authorized under the
Plan. As a selling agent, Wells Fargo Bank has an indirect financial interest in
the operation of the Plan. The Board of Trustees has concluded that the Plan is
reasonably likely to benefit the Funds and their shareholders because the Plan
authorizes the relationships with selling agents, including Wells Fargo Bank,
that have previously developed distribution channels and relationships with the
retail customers that the Funds are designed to serve. The Board believes that
these relationships and distribution channels provide potential for increased
Fund assets and ultimately corresponding economic

28
<PAGE>

efficiencies (i.e., lower per-share transaction costs and fixed expenses) that
are generated by increased assets under management.

Shareholder Servicing Agent. The Funds have approved a Servicing Plan
---------------------------
and have entered into related Shareholder Servicing Agreements with financial
institutions, including Wells Fargo Bank. Under the agreements, Shareholder
Servicing Agents (including Wells Fargo Bank) agree to perform, as agents for
their customers, administrative services, with respect to Fund shares, which
include aggregating and transmitting shareholder orders for purchases, exchanges
and redemptions; maintaining shareholder accounts and records; and providing
such other related services as the Trust or a shareholder may reasonably
request. For providing shareholder services, a Servicing Agent is entitled to a
fee from the applicable Fund of up to 0.25% on an annualized basis, of the
average daily net assets of the class of shares owned of record or beneficially
by the customers of the Servicing Agent during the period for which payment is
being made. The amounts payable under the Shareholder Servicing Plan and
Agreements are shown below. The Servicing Plan and related Shareholder Servicing
Agreements were approved by the Trust's Board of Trustees and provide that a
Fund shall not be obligated to make any payments under such Plan or related
Agreements that exceed the maximum amounts payable under the Conduct Rules of
the NASD.

Fund Fee
---- ---

Corporate Bond
Class A 0.25%
Class B 0.25%
Class C 0.25%

Diversified Bond
Institutional None

Income
Class A 0.25%
Class B 0.25%
Institutional None

Income Plus
Class A 0.25%
Class B 0.25%
Class C 0.25%

29
<PAGE>

Fund Fee
---- ---

Intermediate Government Income
Class A 0.25%
Class B 0.25%
Class C 0.25%
Institutional None

Limited Term Government Income
Class A 0.25%
Class B 0.25%
Institutional None

Stable Income
Class A 0.25%
Class B 0.25%
Institutional None

Variable Rate Government
Class A 0.25%

General. The Servicing Plan will continue in effect from year to year
-------
if such continuance is approved by a majority vote of the Trustees of the Trust,
and the Non-Interested Trustees. Any form of Servicing Agreement related to the
Servicing Plan also must be approved by such vote of the Trustees and Non-
Interested Trustees. Servicing Agreements may be terminated at any time, without
payment of any penalty, by vote of a majority of the Board of Trustees,
including a majority of the Non-Interested Trustees. No material amendment to
the Servicing Plan or related Servicing Agreements may be made except by a
majority of both the Trustees of the Trust and the Non-Interested Trustees.

The Servicing Plan requires that the Administrator shall provide to the
Trustees, and the Trustees shall review, at least quarterly, a written report of
the amounts expended (and purposes therefor) under the Servicing Plan.

Custodian. Wells Fargo Bank Minnesota, N.A. ("Wells Fargo MN" or
---------
"Custodian"), formerly known as Norwest Bank Minnesota, N.A., located at 6th and
Marquette, Minneapolis, Minnesota 55479, acts as Custodian for each Fund. The
Custodian, among other things, maintains a custody account or accounts in the
name of each Fund, receives and delivers all assets for each Fund upon purchase
and upon sale or maturity, collects and receives all income and other payments
and distributions on account of the assets of each Fund, and pays all expenses
of each Fund. For its services as Custodian, Wells Fargo MN is entitled to
receive a fee of 0.02% of the average daily net assets of each Fund except the
Diversified Bond Fund and Stable Income Fund. The Diversified Bond Fund and
Stable Income Fund, as Gateway Funds, are not charged a custody fee at the
Gateway level, provided that they remain Gateway Funds and Wells Fargo MN
receives custodial fees for the Core Trust portfolios.

30
<PAGE>

Fund Accountant. Forum Accounting Services, LLC ("Forum Accounting"),
---------------
located at Two Portland Square, Portland, Maine 04101, serves as Fund Accountant
for the Funds. For its services as Fund Accountant, Forum Accounting is entitled
to receive a monthly base fee per Fund of $5,000. In addition, each Fund pays a
monthly fee of $1,000 per class, and Forum Accounting is entitled to receive a
fee equal to 0.0025% of the average annual daily net assets of each Fund.

Transfer and Dividend Disbursing Agent. Boston Financial Data
--------------------------------------
Services, Inc. ("BFDS"), located at Two Heritage Drive, Quincy, Massachusetts
02171, acts as Transfer and Dividend Disbursing Agent for the Funds. For
providing such services, BFDS is entitled to receive a per-account fee plus
transaction fees and certain out-of-pocket costs. BFDS is also entitled to
receive a complex base fee from all the Funds of the Trust, Wells Fargo Core
Trust and Wells Fargo Variable Trust.

Underwriting Commissions. Stephens serves as the principal
------------------------
underwriter distributing securities of the Funds on a continuous basis. Stephens
served as principal underwriter of the Stagecoach predecessor portfolios whereas
Forum served as underwriter of the predecessor Norwest portfolios. The
information shown below regarding underwriting commissions paid for the last
three fiscal years reflects the amounts paid by the predecessor Stagecoach fund
family and Norwest fund family, and represents the total value of commissions
paid across the fund families.

For the year-ended September 30, 1999, the aggregate dollar amount of
underwriting commissions paid to Stephens as sales/redemptions of the shares of
the predecessor Stagecoach fund family was $6,214,051. Stephens retained
$2,289,826 of such commissions. For the year-ended September 30, 1999, Wells
Fargo Securities Inc., an affiliated broker-dealer of the Trust retained
2,324,394.93.

For the three-month period ended June 30, 1998, the aggregate dollar
amount of underwriting commissions paid to Stephens on sales/redemptions of the
shares of the predecessor Stagecoach fund family was $1,546,670. Stephens
retained $485,869 of such commissions. WFSI retained $1,068,673 of such
commissions.

For the year ended March 31, 1998, the aggregate dollar amount of
underwriting commissions paid to Stephens on sales/redemptions of the shares of
the predecessor Stagecoach fund family was $7,671,295 and Stephens retained
$939,892 of such commissions. WFSI retained $5,348,626 of such commissions.

For the nine-month period ended September 30, 1996, the aggregate
amount of underwriting commissions paid to Stephens on sales/redemptions of the
shares of the predecessor Stagecoach fund family was $2,917,738. Stephens
retained $198,664 of such commissions, WFSI and its registered representatives
received $2,583,027 and $136,047 respectively, of such commissions.

For the periods indicated below, the aggregate dollar amount of
underwriting commissions paid to Forum and Stephens by the Fund or predecessor
Norwest Funds and the amounts retained by Forum and Stephens are as follows:

31
<PAGE>

<TABLE>
<CAPTION>
Year Ended Year Ended
05/31/99 05/31/98
------------ --------
Forum Forum
----- -----
Payable Retained Payable Retained
------- -------- ------- --------
<S> <C> <C> <C>
$168,000 $16,000 $95,000 $9,000
</TABLE>

Code of Ethics.
--------------

The Fund Complex, the Advisor, the Sub-Advisors and Stephens each have
adopted a code of ethics which contains policies on personal securities
transactions by "access persons." These policies substantially comply in all
material respects with the amendments to Rule 17j-1 under the 1940 Act as set
forth in the August 20, 1999 Adopting Release. Each code of ethics, among other
things, permits access persons to invest in certain securities, subject to
various restrictions and requirements. More specifically, each code of ethics
either prohibits its access persons from purchasing or selling securities that
may be purchased or held by a Fund or permits such access persons to purchase or
sell such securities, subject to certain restrictions. For purposes of a code of
ethics, an access person means (i) a director, trustee or officer of a fund or
investment adviser; (ii) any employee of a fund or investment adviser (or any
company in a control relationship to a fund or investment adviser) who, in
connection makes, participates in, or obtains information about the purchase or
sale of securities by a fund, or whose functions relate to the making of any
recommendations with respect to the purchases or sales; and (iii) any natural
person in a control relationship to a fund or investment adviser who obtains
information concerning recommendations made to a fund regarding the purchase or
sale of securities. Portfolio managers and other persons who assist in the
investment process are subject to additional restrictions. The above
restrictions do not apply to purchases or sales of certain types of securities,
including mutual fund shares, money market instruments and certain U.S.
Government securities. To facilitate enforcement, the codes of ethics generally
require that an access person, other than "disinterested" directors or trustees,
submit reports to a designated compliance person regarding transactions
involving securities which are eligible for purchase by a Fund. The codes of
ethics for the Fund Complex, Advisor, Sub-Advisors and Stephens are on public
file with, and are available from, the SEC.

PERFORMANCE CALCULATIONS

The Funds may advertise certain yield and total return information.
Quotations of yield and total return reflect only the performance of a
hypothetical investment in a Fund or class of shares during the particular time
period shown. Yield and total return vary based on changes in the market
conditions and the level of a Fund's expenses, and no reported performance
figure should be considered an indication of performance which may be expected
in the future.

In connection with communicating its performance to current or
prospective shareholders, these figures may also be compared to the performance
of other mutual funds tracked by mutual

32
<PAGE>

fund rating services or to unmanaged indices which may assume reinvestment of
dividends but generally do not reflect deductions for administrative and
management costs.

Performance information for a Fund or Class of shares in a Fund may be
useful in reviewing the performance of such Fund or Class of shares and for
providing a basis for comparison with investment alternatives. The performance
of a Fund and the performance of a Class of shares in a Fund, however, may not
be comparable to the performance from investment alternatives because of
differences in the foregoing variables and differences in the methods used to
value portfolio securities, compute expenses and calculate performance.

Performance information may be advertised for non-standardized
periods, including year-to-date and other periods less than a year for the
Funds. Annual and Semi-Annual Reports for the Funds may contain additional
performance information, and are available free of charge upon request.

Average Annual Total Return: The Funds may advertise certain total
---------------------------
return information. As and to the extent required by the SEC, an average annual
compound rate of return ("T") is computed by using the redeemable value at the
end of a specified period ("ERV") of a hypothetical initial investment ("P")
over a period of years ("n") according to the following formula: P(1+T)/N/=ERV.

Average Annual Total Return for the Applicable Period Ended May 31,
-------------------------------------------------------------------
2000/1/
----

<TABLE>
<CAPTION>
Fund Inception/2/ Ten Year Five Year One Year
---- ------------ -------- ---------- --------
<S> <C> <C> <C> <C>
Corporate Bond
Class A (1.66)% N/A N/A (8.30)%
Class B (1.52)% N/A N/A (9.17)%
Class C (0.32)% N/A N/A (5.58)%

Diversified Bond
Institutional 7.97% 6.57% 5.96% 3.22%

Income
Class A 6.65% 6.25% 3.83% (4.72)%
Class B 6.21% 5.92% 3.70% (5.67)%
Institutional 7.02% 6.74% 4.82% (0.10)%

Income Plus
Class A (4.08)% N/A N/A (10.37)%
Class B (4.24)% N/A N/A (11.22)%
Class C (2.38)% N/A N/A (7.74)%

Intermediate Government Income
Class A 6.94% 5.83% 4.22% (2.67)%
Class B 6.42% 5.53% 4.09% (3.71)%
Class C 6.42% 5.53% 4.39% 0.12%
Institutional 7.23% 6.33% 5.20% 1.94%

Limited Term Government Income
</TABLE>

33
<PAGE>

<TABLE>
<CAPTION>
Fund Inception/2/ Ten Year Five Year One Year
---- ------------ -------- ---------- --------
<S> <C> <C> <C> <C>
Class A 3.94% N/A 3.98% (2.44)%
Class B 4.00% N/A 3.95% (3.42)%
Institutional 4.73% N/A 5.01% 2.30%

Stable Income
Class A 5.44% N/A 5.13% 2.71%
Class B 4.92% N/A 4.64% 1.91%
Institutional 5.76% N/A 5.48% 4.32%

Variable Rate Government
Class A 3.90% N/A 3.39% (0.62)%
</TABLE>
-------------------
/1/ Return calculations, except as indicated, reflect the inclusion of front-
end sales charges for Class A shares and the maximum applicable contingent
deferred sales charge ("CDSC") for Class B and Class C shares. The annual
average total return for the Corporate Bond, Income Plus, Limited Term
Government Income and Variable Rate Government Funds is for the applicable
eleven-month period-ended May 31, 2000. The average annual total return for
the Diversified Bond, Income, Intermediate Government Income and Stable
Income Funds is for the applicable year-ended May 31, 2000.

/2/ For purposes of showing performance information, the inception date of each
Fund's predecessor portfolio is as follows: Corporate Bond Fund -- April 1,
1998, Diversified Bond Fund -- December 31, 1982, Income Fund -- June 9,
1987, Income Plus Fund -- July 13, 1998, Intermediate Government Income
Fund--December 31, 1982, Limited Term Government Income Fund -- October 27,
1993, Stable Income Fund -- November 11, 1994 and Variable Rate Government
Fund --November 1, 1990. The actual inception date of each class may differ
from the inception date of the corresponding Fund.

Cumulative Total Return. In addition to the above performance
-----------------------
information, each Fund may also advertise the cumulative total return of the
Fund. Cumulative total return is based on the overall percentage change in value
of a hypothetical investment in the Fund, assuming all Fund dividends and
capital gain distributions are reinvested, without reflecting the effect of any
sales charge that would be paid by an investor, and is not annualized.

[WELLS NEEDS TO CONFIRM NUMBERS]
--------------------------------

Cumulative Total Return for the Applicable Year Ended May 31, 2000/1/
------------------------------------------------------------------

<TABLE>
<CAPTION>
Fund Inception/2/ Ten Year Five Year One Year
---- ------------ -------- ---------- --------
<S> <C> <C> <C> <C>
Corporate Bond
Class A (3.57)% N/A N/A (8.30)%
Class B (3.26)% N/A N/A (9.17)%
Class C (0.68)% N/A N/A (5.58)%

Diversified Bond
Institutional 279.96% 89.01% 33.56% 3.22%

Income
Class A 130.48% 91.98% 26.37% (4.72)%
</TABLE>

34
<PAGE>

<TABLE>
<CAPTION>
Fund Inception/2/ Ten Year Five Year One Year
---- ------------ -------- ---------- --------
<S> <C> <C> <C> <C>
Class B 118.59% 77.77% 19.89% (5.67)%
Institutional 141.34% 91.99% 26.54% (0.10)%

Income Plus
Class A 7.54% N/A N/A (10.37)%
Class B 7.83% N/A N/A (11.22)%
Class C 4.44% N/A N/A (7.74)%

Intermediate Government Income
Class A 221.67% 76.26% 22.95% (2.67)%
Class B 195.54% 71.23% 22.21% (3.71)%
Class C 195.57% 71.25% 23.96% 0.12%
Institutional 236.99% 84.77% 28.88% 1.94%

Limited Term Government Income
Class A 29.04% N/A 21.54% (2.44)%
Class B 29.50% N/A 21.40% (3.42)%
Institutional 35.58% N/A 27.68% 2.30%

Stable Income
Class A 34.21% N/A 28.43% 2.71%
Class B 30.53% N/A 25.45% 1.91%
Institutional 36.44% N/A 30.57% 4.32%

Variable Rate Government
Class A 44.33% N/A 18.16% (0.62)%
</TABLE>
-------------------
/1/ Return calculations, except as indicated, reflect the inclusion of front-
end sales charges for Class A shares and the maximum applicable contingent
deferred sales charge ("CDSC") for Class B and Class C shares.

/2/ For purposes of sharing performance information, the inception date of each
Fund's predecessor portfolio is as follows: Corporate Bond Fund -- April 1,
1998, Diversified Bond Fund -- December 31, 1982, Income Fund -- June 9,
1987, Income Plus Fund -- July 13, 1998, Intermediate Government Income
Fund-- December 31, 1982, Limited Term Government Income Fund -- October
27, 1993, Stable Income Fund -- November 11, 1994 and Variable Rate
Government Fund -- November 1, 1990. The actual inception date of each
class may differ from the inception date of the corresponding Fund.

Yield Calculations: The Funds may, from time to time, include their
------------------
yields and effective yields in advertisements or reports to shareholders or
prospective investors. Quotations of yield for the Funds are based on the
investment income per share earned during a particular seven-day or thirty-day
period, less expenses accrued during a period ("net investment income") and are
computed by dividing net investment income by the offering price per share on
the last date of the period, according to the following formula:

YIELD = 2[(a - b + 1)/6/ - 1]
-----
cd

35
<PAGE>

where a = dividends and interest earned during the period; b =
expenses accrued for the period (net of reimbursements); c = the average daily
number of shares of each class outstanding during the period that were entitled
to receive dividends; and d = the maximum offering price per share of each class
of shares on the last day of the period.

Effective Yield: Effective yields for the Funds are based on the
---------------
change in the value of a hypothetical investment (exclusive of capital changes)
over a particular thirty-day period, less a pro-rata share of each Fund's
expenses accrued over that period (the "base period"), and stated as a
percentage of the investment at the start of the base period (the "base period
return"). The base period return is then annualized multiplying by 365/30, with
the resulting yield figure carried to at least the nearest hundredth of one
percent. "Effective yield" for the Funds assumes that all dividends received
during the period have been reinvested. Calculation of "effective yield" begins
with the same "base period return" used in the calculation of yield, which is
then annualized to reflect weekly compounding pursuant to the following formula:

Effective Thirty-Day Yield = [(Base Period Return +1)/365/30/]-1

Yields for the Applicable Period Ended May 31, 2000/1/
---------------------------------------------------

<TABLE>
<CAPTION>
Fund Thirty-day Yield (After Waiver)
---- -------------------------------
<S> <C>
Corporate Bond
Class A 7.02%
Class B 6.29%
Class C 6.24%

Diversified Bond
Institutional 6.31%

Income
Class A 6.62%
Class B 5.88%
Institutional 6.87%

Income Plus
Class A 7.14%
Class B 6.43%
Class C 6.43%
</TABLE>

36
<PAGE>

<TABLE>
<CAPTION>
Fund Thirty-day Yield (After Waiver)
---- -------------------------------
<S> <C>
Intermediate Government Income
Class A 6.36%
Class B 5.62%
Class C 5.61%
Institutional 6.64%

Limited Term Government Income
Class A 5.69%
Class B 4.94%
Institutional 5.97%

Stable Income
Class A 5.72%
Class B 4.98%
Institutional 5.98%

Variable Rate Government
Class A 5.29%
</TABLE>
--------------------
/1/ The amounts shown above reflect all front-end sales charges and applicable
CDSCs. "After Waiver" figures reflect any waived fees or reimbursed
expenses throughout the period.

The yields for each class of shares will fluctuate from time to time,
unlike bank deposits or other investments that pay a fixed yield for a stated
period of time, and do not provide a basis for determining future yields since
they are based on historical data. Yield is a function of portfolio quality,
composition, maturity and market conditions as well as the expenses allocated to
a Fund or to a particular class of a Fund.

In addition, investors should recognize that changes in the net asset
values of shares of each class of a Fund will affect the yield of the respective
class of shares for any specified period, and such changes should be considered
together with such class' yield in ascertaining such class' total return to
shareholders for the period. Yield information for each class of shares may be
useful in reviewing the performance of the class of shares and for providing a
basis for comparison with investment alternatives. The yield of each class of
shares, however, may not be comparable to the yields from investment
alternatives because of differences in the foregoing variables and differences
in the methods used to value portfolio securities, compute expenses and
calculate yield.

From time to time and only to the extent the comparison is appropriate
for a Fund or a class of shares, the Trust may quote the performance or price-
earnings ratio of a Fund or a class of the Fund in advertising and other types
of literature as compared with the performance of the S&P Index, the Dow Jones
Industrial Average, the Lehman Brothers 20+ Treasury Index, the Lehman Brothers
5-7 Year Treasury Index, Donoghue's Money Fund Averages, Real Estate Investment
Averages (as reported by the National Association of Real Estate Investment
Trusts), Gold Investment Averages (provided by the World Gold Council), Bank
Averages (which is calculated from figures supplied by the U.S. League of
Savings Institutions based on effective annual rates of

37
<PAGE>

interest on both passbook and certificate accounts), average annualized
certificate of deposit rates (from the Federal Reserve G-13 Statistical Releases
or the Bank Rate Monitor), the Salomon One Year Treasury Benchmark Index, the
Consumer Price Index (as published by the U.S. Bureau of Labor Statistics),
other managed or unmanaged indices or performance data of bonds, municipal
securities, stocks or government securities (including data provided by Ibbotson
Associates), or by other services, companies, publications or persons who
monitor mutual funds on overall performance or other criteria. The S&P Index and
the Dow Jones Industrial Average are unmanaged indices of selected common stock
prices. The performance of a Fund or a class also may be compared to that of
other mutual funds having similar objectives. This comparative performance could
be expressed as a ranking prepared by Lipper Analytical Services, Inc., CDA
Investment Technologies, Inc., Bloomberg Financial Markets or Morningstar, Inc.,
independent services which monitor the performance of mutual funds. The Funds'
performance will be calculated by relating net asset value per share of each
class at the beginning of a stated period to the net asset value of the
investment, assuming reinvestment of all gains distributions paid, at the end of
the period. The Funds' comparative performance will be based on a comparison of
yields, as described above, or total return, as reported by Lipper, Survey
Publications, Donoghue or Morningstar, Inc.

Any such comparisons may be useful to investors who wish to compare
past performance of the Funds or a class of shares with the performance of a
Fund's competitors. Of course, past performance cannot be a guarantee of future
results. The Trust also may include, from time to time, a reference to certain
marketing approaches of the Distributor, including, for example, a reference to
a potential shareholder being contacted by a selected broker or dealer. General
mutual fund statistics provided by the Investment Trust Institute may also be
used.

The Trust also may use the following information in advertisements and
other types of literature, only to the extent that the information is
appropriate for each class of shares of a Fund: (i) the Consumer Price Index may
be used to assess the real rate of return from an investment in each class of
shares of a Fund; (ii) other government statistics, including, but not limited
to, The Survey of Current Business, may be used to illustrate investment
attributes of each class of shares of a Fund or the general economic, business,
investment, or financial environment in which a Fund operates; (iii) the effect
of tax-deferred compounding on the investment returns of each class of shares of
a Fund or on returns in general, may be illustrated by graphs, charts, etc.,
where such graphs or charts would compare, at various points in time, the return
from an investment in each class of shares of the Fund (or returns in general)
on a tax-deferred basis (assuming reinvestment of capital gains and dividends
and assuming one or more tax rates) with the return on a taxable basis; and (iv)
the sectors or industries in which the Fund invests may be compared to relevant
indices of stocks or surveys (e.g., S&P Industry Surveys) to evaluate the
historical performance or current or potential value of each class of shares of
a Fund with respect to the particular industry or sector.

In addition, the Trust also may use, in advertisements and other types
of literature, information and statements: (1) showing that bank savings
accounts offer a guaranteed return of principal and a fixed rate of interest,
but no opportunity for capital growth; and (2) describing Wells Fargo Bank, and
its affiliates and predecessors, as one of the first investment managers to
advise investment accounts using asset allocation and index strategies. The
Trust also may include in advertising and other types of literature information
and other data from reports and studies

38
<PAGE>

prepared by the Tax Foundation, including information regarding federal and
state tax levels and the related "Tax Freedom Day."

The Trust also may discuss in advertising and other types of
literature that a Fund has been assigned a rating by an NRRO, such as Standard
Poor's Corporation. Such rating would assess the creditworthiness of the
investments held by a Fund. The assigned rating would not be a recommendation to
purchase, sell or hold a Fund's shares since the rating would not comment on the
market price of a Fund's shares or the suitability of a Fund for a particular
investor. In addition, the assigned rating would be subject to change,
suspension or withdrawal as a result of changes in, or unavailability of,
information relating to a Fund or its investments. The Trust may compare the
performance of each class of shares of a Fund with other investments which are
assigned ratings by NRROs. Any such comparisons may be useful to investors who
wish to compare each class' past performance with other rated investments.

From time to time, a Fund may use the following statements, or
variations thereof, in advertisements and other promotional materials: "Wells
Fargo Bank, as a Shareholder Servicing Agent for the Trust, provides various
services to its customers that are also shareholders of the Funds. These
services may include access to the Trust's account information through Automated
Teller Machines (ATMs), the placement of purchase and redemption requests for
shares of the Funds through ATMs and the availability of combined Wells Fargo
Bank and Wells Fargo Funds Trust account statements."

The Trust also may disclose, in advertising and other types of
literature, information and statements that WCM, a subsidiary of Wells Fargo
Bank, is listed in the top 100 by Institutional Investor magazine in its July
1997 survey "America's Top 300 Money Managers." This survey ranks money managers
in several asset categories. The Trust also may disclose in advertising and
other types of sales literature the assets and categories of assets under
management by the Trust's investment advisor.

The Trust may also disclose in advertising and other types of sales
literature the assets and categories of assets under management by a fund's
investment advisor or sub-advisor and the total amount of assets and mutual fund
assets managed by Wells Fargo Bank. As of June 30, 2000, Wells Fargo Bank and
its affiliates managed over $160.5 billion in assets.

The Trust may disclose in advertising and other types of literature
that investors can open and maintain Sweep Accounts over the Internet or through
other electronic channels (collectively, "Electronic Channels"). Such
advertising and other literature may discuss the investment options available to
investors, including the types of accounts and any applicable fees. Such
advertising and other literature may disclose that Wells Fargo Bank is the first
major bank to offer an on-line application for a mutual fund account that can be
filled out completely through Electronic Channels. Advertising and other
literature may disclose that Wells Fargo Bank may maintain Web sites, pages or
other information sites accessible through Electronic Channels (an "Information
Site") and may describe the contents and features of the Information Site and
instruct investors on how to access the Information Site and open a Sweep
Account. Advertising and other literature may also disclose the procedures
employed by Wells Fargo Bank to secure information provided by investors,
including disclosure and discussion of the tools and services for accessing
Electronic Channels. Such advertising or other literature may include
discussions of the advantages of

39
<PAGE>

establishing and maintaining a Sweep Account through Electronic Channels and
testimonials from Wells Fargo Bank customers or employees and may also include
descriptions of locations where product demonstrations may occur. The Trust may
also disclose the ranking of Wells Fargo Bank as one of the largest money
managers in the United States.

DETERMINATION OF NET ASSET VALUE

Net asset value per share for each class of the Funds is determined as
of the close of regular trading (currently 1:00 p.m. (Pacific time), 3:00 p.m.
(Central time), 4:00 p.m. (Eastern time)) on each day the New York Stock
Exchange ("NYSE") is open for business. Expenses and fees, including advisory
fees, are accrued daily and are taken into account for the purpose of
determining the net asset value of the Funds' shares.

Securities of a Fund for which market quotations are available are
valued at latest prices. Any security for which the primary market is an
exchange is valued at the last sale price on such exchange on the day of
valuation or, if there was no sale on such day, the latest bid price quoted on
such day. In the case of other Fund securities, including U.S. Government
securities but excluding money market instruments and debt securities maturing
in 60 days or less, the valuations are based on latest quoted bid prices. Money
market instruments and debt securities maturing in 60 days or less are valued at
amortized cost. Futures contracts will be marked to market daily at their
respective settlement prices determined by the relevant exchange. Prices may be
furnished by a reputable independent pricing service approved by the Trust's
Board of Trustees. Prices provided by an independent pricing service may be
determined without exclusive reliance on quoted prices and may take into account
appropriate factors such as institutional-size trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics and other market data. All other securities and other assets of
a Fund for which current market quotations are not readily available are valued
at fair value as determined in good faith by the Trust's Board of Trustees and
in accordance with procedures adopted by the Trustees.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Shares of the Funds may be purchased on any day the Funds are open for
business. Each Fund is open for business each day the NYSE is open for trading
(a "Business Day"). Currently, the NYSE is closed on New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day (each a "Holiday"). When any
Holiday falls on a weekend, the NYSE typically is closed on the weekday
immediately before or after such Holiday.

Payment for shares may, in the discretion of the Advisor, be made in
the form of securities that are permissible investments for the Funds. For
further information about this form of payment please contact Stephens. In
connection with an in-kind securities payment, the Funds will require, among
other things, that the securities be valued on the day of purchase in accordance
with the pricing methods used by a Fund and that such Fund receives satisfactory
assurances that (i) it will have good and marketable title to the securities
received by it; (ii) that the securities are in proper form for transfer to the
Fund; and (iii) adequate information will be provided concerning the basis and
other matters relating to the securities.

40
<PAGE>

Under the 1940 Act, the Funds may suspend the right of redemption or
postpone the date of payment upon redemption for any period during which the
NYSE is closed (other than customary weekend and holiday closings, or during
which trading is restricted, or during which as determined by the SEC by rule or
regulation) an emergency exists as a result of which disposal or valuation of
portfolio securities is not reasonably practicable, or for such periods as the
SEC may permit. The Trust may also redeem shares involuntarily or make payment
for redemption in securities or other property if it appears appropriate to do
so in light of the Trust's responsibilities under the 1940 Act. In addition, the
Trust may redeem shares involuntarily to reimburse the Fund for any losses
sustained by reason of the failure of a shareholder to make full payment for
shares purchased or to collect any charge relating to a transaction effected for
the benefit of a shareholder which is applicable to shares of a Fund as provided
from time to time in the Prospectus.

The dealer reallowance for purchases of Class A shares of each Fund, except the
Stable Income Fund is as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------
FRONT-END SALES FRONT-END SALES DEALER
CHARGE AS % CHARGE AS % ALLOWANCE
AMOUNT OF PUBLIC OF NET AMOUNT AS % OF PUBLIC
OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
---------------------------------------------------------------------------------------
Less than $50,000 4.50% 4.71% 4.00%
---------------------------------------------------------------------------------------
$50,000 to $99,999 4.00% 4.17% 3.50%
---------------------------------------------------------------------------------------
$100,000 to $249,999 3.50% 3.63% 3.00%
---------------------------------------------------------------------------------------
$250,000 to $499,999 2.50% 2.56% 2.25%
---------------------------------------------------------------------------------------
$500,000 to $999,999 2.00% 2.04% 1.75%
---------------------------------------------------------------------------------------
$1,000,000 and over/1/ 0.00% 0.00% 1.00%
---------------------------------------------------------------------------------------
</TABLE>

/1/ We will assess Class A shares purchases of $1,000,000 or more a 1.00% CDSC
if they are redeemed within one year from the date of purchase. Charges are
based on the lower of the NAV on the date of purchase or the date of
redemption.

The dealer reallowance for purchases of Class A shares of the Stable Income Fund
is as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------
FRONT-END SALES FRONT-END SALES DEALER
CHARGE AS % CHARGE AS % ALLOWANCE
AMOUNT OF PUBLIC OF NET AMOUNT AS % OF PUBLIC
OF PURCHASE OFFERING PRICE INVESTED OFFERING PRICE
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
---------------------------------------------------------------------------------------
Less than $50,000 1.50% 1.52% 1.35%
---------------------------------------------------------------------------------------
$50,000 to $99,999 1.00% 1.01% 0.90%
---------------------------------------------------------------------------------------
$100,000 to $249,999 0.75% 0.76% 0.70%
---------------------------------------------------------------------------------------
$250,000 to $499,999 0.75% 0.76% 0.70%
---------------------------------------------------------------------------------------
$500,000 to $999,999 0.50% 0.50% 0.50%
---------------------------------------------------------------------------------------
$1,000,000 and over1 0.00% 0.00% 0.50%
---------------------------------------------------------------------------------------
</TABLE>

/1/ We will assess Class A shares purchases of $1,000,000 or more a 0.50% CDSC
if they are redeemed within one year from the date of purchase. Charges are
based on the lower of the NAV on the date of purchase or the date of
redemption.

Purchases and Redemptions Through Brokers and/or Their Affiliates. A broker
-----------------------------------------------------------------
may charge transaction fees on the purchase and/or sale of Fund shares in
addition to those fees described in the Prospectus in the Summary of Expenses.
The Trust has authorized one or more brokers to receive on its behalf purchase
and redemption orders, and such brokers are authorized

41
<PAGE>

to designate other intermediaries to receive purchase and redemption orders on
the Trust's behalf. The Trust will be deemed to have received a purchase or
redemption order for Fund shares when an authorized broker or, if applicable, a
broker's authorized designee, receives the order.

Reduced Sales Charges for Former Norwest Advantage Fund Class B
---------------------------------------------------------------
Shareholders. No contingent deferred sales charge is imposed on redemptions of
------------
Class B shares of a former Norwest Advantage Fund purchased prior to October 1,
1999, to effect a distribution (other than a lump sum distribution) from an IRA,
Keogh plan or Section 403(b) custodial account or from a qualified retirement
plan.

Reduced Sales Charges for Employees of the Transfer Agent. Employees of
---------------------------------------------------------
Boston Financial Data Services, Inc., transfer agent for the Trust, may purchase
Class A shares at net asset value.

PORTFOLIO TRANSACTIONS

The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policies
established by the Trust's Board of Trustees, Wells Fargo Bank is responsible
for each Fund's portfolio decisions and the placing of portfolio transactions.
In placing orders, it is the policy of the Trust to obtain the best results
taking into account the dealer's general execution and operational facilities,
the type of transaction involved and other factors such as the dealer's risk in
positioning the securities involved. While Wells Fargo Bank generally seeks
reasonably competitive spreads or commissions, the Funds will not necessarily be
paying the lowest spread or commission available.

Purchases and sales of non-equity securities usually will be principal
transactions. Portfolio securities normally will be purchased or sold from or to
dealers serving as market makers for the securities at a net price. Each of the
Funds also will purchase portfolio securities in underwritten offerings and may
purchase securities directly from the issuer. Generally, municipal obligations
and taxable money market securities are traded on a net basis and do not involve
brokerage commissions. The cost of executing a Fund's portfolio securities
transactions will consist primarily of dealer spreads and underwriting
commissions. Under the 1940 Act, persons affiliated with the Trust are
prohibited from dealing with the Trust as a principal in the purchase and sale
of securities unless an exemptive order allowing such transactions is obtained
from the SEC or an exemption is otherwise available. The Fund may purchase
securities from underwriting syndicates of which Stephens or Wells Fargo Bank is
a member under certain conditions in accordance with the provisions of a rule
adopted under the 1940 Act and in compliance with procedures adopted by the
Board of Trustees.

Wells Fargo Bank, as Investment Advisor to the Funds, may, in circumstances
in which two or more dealers are in a position to offer comparable results for a
Fund portfolio transaction, give preference to a dealer that has provided
statistical or other research services to Wells Fargo Bank. By allocating
transactions in this manner, Wells Fargo Bank is able to supplement its research
and analysis with the views and information of securities firms. Information so

42
<PAGE>

received will be in addition to, and not in lieu of, the services required to be
performed by Wells Fargo Bank under the Advisory Contracts, and the expenses of
Wells Fargo Bank will not necessarily be reduced as a result of the receipt of
this supplemental research information. Furthermore, research services furnished
by dealers through which Wells Fargo Bank places securities transactions for a
Fund may be used by Wells Fargo Bank in servicing its other accounts, and not
all of these services may be used by Wells Fargo Bank in connection with
advising the Funds.

Portfolio Turnover. The portfolio turnover rate is not a limiting factor
------------------
when Wells Fargo Bank deems portfolio changes appropriate. Changes may be made
in the portfolios consistent with the investment objectives and policies of the
Funds whenever such changes are believed to be in the best interests of the
Funds and their shareholders. The portfolio turnover rate is calculated by
dividing the lesser of purchases or sales of portfolio securities by the average
monthly value of the Fund's portfolio securities. For purposes of this
calculation, portfolio securities exclude all securities having a maturity when
purchased of one year or less. Portfolio turnover generally involves some
expenses to the Funds, including brokerage commissions or dealer mark-ups and
other transaction costs on the sale of securities and the reinvestment in other
securities. Portfolio turnover also can generate short-term capital gain tax
consequences. Portfolio turnover rate is not a limiting factor when Wells Fargo
Bank deems portfolio changes appropriate.

FUND EXPENSES

From time to time, Wells Fargo Bank and Stephens may waive fees from the
Funds in whole or in part. Any such waiver will reduce expenses and,
accordingly, have a favorable impact on a Fund's performance.

Except for the expenses borne by Wells Fargo Bank and Stephens, the Trust
bears all costs of its operations, including the compensation of its Trustees;
advisory, shareholder servicing and administration fees; payments pursuant to
any Plan; interest charges; taxes; fees and expenses of its independent
auditors, legal counsel, transfer agent and dividend disbursing agent;
expenses of redeeming shares; expenses of preparing and printing a Prospectus
(except the expense of printing and mailing a Prospectus used for promotional
purposes, unless otherwise payable pursuant to a Plan), shareholders' reports,
notices, proxy statements and reports to regulatory agencies; insurance
premiums and certain expenses relating to insurance coverage; trade
association membership dues; brokerage and other expenses connected with the
execution of portfolio transactions; fees and expenses of its custodian,
including those for keeping books and accounts and calculating the net asset
value per share of a Fund; expenses of shareholders' meetings; expenses
relating to the issuance, registration and qualification of a Fund's shares;
pricing services, organizational expenses and any extraordinary expenses.
Expenses attributable to the Fund are charged against Fund assets. General
expenses of the Trust are allocated among all of the funds of the Trust,
including the Funds, in a manner proportionate to the net assets of each Fund,
on a transactional basis, or on such other basis as the Trust's Board of
Trustees deems equitable.

43
<PAGE>

FEDERAL INCOME TAXES

The following information supplements and should be read in conjunction
with the Prospectus section entitled "Taxes." The Prospectus of each Fund
generally describes the tax treatment of distributions by the Fund. This section
of the SAI includes additional information concerning federal income taxes.

General. The Trust intends to continue to qualify each Fund as a regulated
-------
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), as long as such qualification is in the best interests of
the Fund's shareholders. Each Fund will be treated as a separate entity for
federal income tax purposes. Thus, the provisions of the Code applicable to
regulated investment companies generally will be applied separately to each
Fund, rather than to the Trust as a whole. In addition, capital gains, net
investment income, and operating expenses will be determined separately for each
Fund. As a regulated investment company, each Fund will not be taxed on its net
investment income and capital gain distributed to its shareholders.

Qualification as a regulated investment company under the Code requires,
among other things, that each Fund derive at least 90% of its annual gross
income from dividends, interest, certain payments with respect to securities
loans, gains from the sale or other disposition of stock or securities or
foreign currencies (to the extent such currency gains are directly related to
the regulated investment company's principal business of investing in stock or
securities) and other income (including, but not limited to, gains from options,
futures or forward contracts) derived with respect to its business of investing
in such stock, securities or currencies; and (b) diversify its holdings so that,
at the end of each quarter of the taxable year, (i) at least 50% of the market
value of the Fund's assets is represented by cash, government securities and
other securities limited in respect of any one issuer to an amount not greater
than 5% of the Fund's assets and 10% of the outstanding voting securities of
such issuer, and (ii) not more than 25% of the value of its assets is invested
in the securities of any one issuer (other than U.S. Government obligations and
the securities of other regulated investment companies), or in two or more
issuers which the Fund controls and which are determined to be engaged in the
same or similar trades or businesses.

The Funds must also distribute or be deemed to distribute to their
shareholders at least 90% of their net investment income (including, for this
purpose, net short-term capital gain) earned in each taxable year. In general,
these distributions must actually or be deemed to be made in the taxable year.
However, in certain circumstances, such distributions may be made in the 12
months following the taxable year. Furthermore, distributions declared in
October, November or December of one taxable year and paid by January 31 of the
following taxable year will be treated as paid by December 31 of the first
taxable year. The Funds intend to pay out substantially all of their net
investment income and net realized capital gains (if any) for each year.

Excise Tax. A 4% nondeductible excise tax will be imposed on each Fund
----------
(other than to the extent of its tax-exempt interest income) to the extent it
does not meet certain minimum distribution requirements by the end of each
calendar year. Each Fund intends to actually or be

44
<PAGE>

deemed to distribute substantially all of its net investment income and net
capital gains by the end of each calendar year and, thus, expects not to be
subject to the excise tax.

Taxation of Fund Investments. Except as provided herein, gains and losses
----------------------------
on the sale of portfolio securities by a Fund will generally be capital gains
and losses. Such gains and losses will ordinarily be long-term capital gains and
losses if the securities have been held by the Fund for more than one year at
the time of disposition of the securities.

Gains recognized on the disposition of a debt obligation (including tax-
exempt obligations) purchased by a Fund at a market discount (generally at a
price less than its principal amount) will be treated as ordinary income to the
extent of the portion of market discount which accrued, but was not previously
recognized pursuant to an available election, during the term the Fund held the
debt obligation.

If an option granted by a Fund lapses or is terminated through a closing
transaction, such as a repurchase by the Fund of the option from its holder, the
Fund will realize a short-term capital gain or loss, depending on whether the
premium income is greater or less than the amount paid by the Fund in the
closing transaction. Some realized capital losses may be deferred if they result
from a position which is part of a "straddle," discussed below. If securities
are sold by the Fund pursuant to the exercise of a call option written by it,
the Fund will add the premium received to the sale price of the securities
delivered in determining the amount of gain or loss on the sale. If securities
are purchased by a Fund pursuant to the exercise of a put option written by it,
such Fund will subtract the premium received from its cost basis in the
securities purchased.

The amount of any gain or loss realized by a Fund on closing out a
regulated futures contract will generally result in a realized capital gain or
loss for federal income tax purposes. Regulated futures contracts held at the
end of each fiscal year will be required to be "marked to market" for federal
income tax purposes pursuant to Section 1256 of the Code. In this regard, they
will be deemed to have been sold at market value. Sixty percent (60%) of any net
gain or loss recognized on these deemed sales, and sixty percent (60%) of any
net realized gain or loss from any actual sales, will generally be treated as
long-term capital gain or loss, and the remainder will be treated as short-term
capital gain or loss. Transactions that qualify as designated hedges are
excepted from the "mark-to-market" rule and the "60%/40%" rule.

Under Section 988 of the Code, a Fund generally will recognize ordinary
income or loss to the extent that gain or loss realized on the disposition of
portfolio securities is attributable to changes in foreign currency exchange
rates. In addition, gain or loss realized on the disposition of a foreign
currency forward contract, futures contract, option or similar financial
instrument, or of foreign currency itself, will generally be treated as ordinary
income or loss. The Funds will attempt to monitor Section 988 transactions,
where applicable, to avoid adverse Federal income tax impact.

Offsetting positions held by a Fund involving certain financial forward,
futures or options contracts may be considered, for tax purposes, to constitute
"straddles." "Straddles" are defined to include "offsetting positions" in
actively traded personal property. The tax treatment of "straddles" is governed
by Section 1092 of the Code which, in certain circumstances, overrides or
modifies the provisions of Section 1256. If a Fund were treated as entering into
"straddles" by

45
<PAGE>

engaging in certain financial forward, futures or option contracts, such
straddles could be characterized as "mixed straddles" if the futures, forwards,
or options comprising a part of such straddles were governed by Section 1256 of
the Code. The Fund may make one or more elections with respect to "mixed
straddles." Depending upon which election is made, if any, the results with
respect to the Fund may differ. Generally, to the extent the straddle rules
apply to positions established by the Fund, losses realized by the Fund may be
deferred to the extent of unrealized gain in any offsetting positions. Moreover,
as a result of the straddle and the conversion transaction rules, short-term
capital loss on straddle positions may be recharacterized as long-term capital
loss, and long-term capital gain may be characterized as short-term capital gain
or ordinary income.

If a Fund enters into a "constructive sale" of any appreciated position in
stock, a partnership interest, or certain debt instruments, the Fund must
recognize gain (but not loss) with respect to that position. For this purpose, a
constructive sale occurs when the Fund enters into one of the following
transactions with respect to the same or substantially identical property: (i) a
short sale; (ii) an offsetting notional principal contract; or (iii) a futures
or forward contract.

If a Fund purchases shares in a "passive foreign investment company"
("PFIC"), the Fund may be subject to Federal income tax and an interest charge
imposed by the IRS upon certain distributions from the PFIC or the Fund's
disposition of its PFIC shares. If the Fund invests in a PFIC, the Fund intends
to make an available election to mark-to-market its interest in PFIC shares.
Under the election, the Fund will be treated as recognizing at the end of each
taxable year the difference, if any, between the fair market value of its
interest in the PFIC shares and its basis in such shares. In some circumstances,
the recognition of loss may be suspended. The Fund will adjust its basis in the
PFIC shares by the amount of income (or loss) recognized. Although such income
(or loss) will be taxable to the Fund as ordinary income (or loss)
notwithstanding any distributions by the PFIC, the Fund will not be subject to
Federal income tax or the interest charge with respect to its interest in the
PFIC under the election.

Foreign Taxes. Income and dividends received by a Fund from sources within
-------------
foreign countries may be subject to withholding and other taxes imposed by such
countries. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes. In certain circumstances, a regulated investment
company is eligible to file an election with the IRS pursuant to which the
regulated investment company may pass-through to its shareholders foreign taxes
paid by the regulated investment company, which may be claimed either as a
credit or deduction by the shareholders. None of the Funds expects to qualify
for the election.

Capital Gain Distributions. Distributions which are designated by a Fund as
--------------------------
capital gain distributions will be taxed to shareholders as long-term term
capital gain (to the extent such dividends do exceed the Fund's actual net
capital gains for the taxable year), regardless of how long a shareholder has
held Fund shares. Such distributions will be designated as capital gain
distributions in a written notice mailed by the Fund to its shareholders not
later than 60 days after the close of the Fund's taxable year.

Disposition of Fund Shares. A disposition of Fund shares pursuant to a
--------------------------
redemption (including a redemption in-kind) or an exchange will ordinarily
result in a taxable capital gain or

46
<PAGE>

loss, depending on the amount received for the shares (or are deemed to be
received in the case of an exchange) and the cost of the shares.

If a shareholder exchanges or otherwise disposes of Fund shares within 90
days of having acquired such shares and if, as a result of having acquired those
shares, the shareholder subsequently pays a reduced sales charge on a new
purchase of shares of the Fund or a different regulated investment company, the
sales charge previously incurred in acquiring the Fund's shares shall not be
taken into account (to the extent such previous sales charges do not exceed the
reduction in sales charges on the new purchase) for the purpose of determining
the amount of gain or loss on the disposition, but will be treated as having
been incurred in the acquisition of such other shares. Also, any loss realized
on a redemption or exchange of shares of the Fund will be disallowed to the
extent that substantially identical shares are acquired within the 61-day period
beginning 30 days before and ending 30 days after the shares are disposed of.

If a shareholder receives a designated capital gain distribution (to be
treated by the shareholder as a long-term capital gain) with respect to any Fund
share and such Fund share is held for six months or less, then (unless otherwise
disallowed) any loss on the sale or exchange of that Fund share will be treated
as a long-term capital loss to the extent of the designated capital gain
distribution. The loss disallowance rules described in this paragraph do not
apply to losses realized under a periodic redemption plan.

Federal Income Tax Rates. As of the printing of this SAI, the maximum
------------------------
individual tax rate applicable to ordinary income is 39.6% (marginal tax rates
may be higher for some individuals to reduce or eliminate the benefit of
exemptions and deductions); the maximum individual marginal tax rate applicable
to net capital gain is 20%; and the maximum corporate tax rate applicable to
ordinary income and net capital gain is 35% (marginal tax rates may be higher
for some corporations to reduce or eliminate the benefit of lower marginal
income tax rates). Naturally, the amount of tax payable by an individual or
corporation will be affected by a combination of tax laws covering, for example,
deductions, credits, deferrals, exemptions, sources of income and other matters.

Backup Withholding. The Trust may be required to withhold, subject to
------------------
certain exemptions, at a rate of 31% ("backup withholding") on all distributions
and redemption proceeds (including proceeds from exchanges and redemptions in-
kind) paid or credited to an individual Fund shareholder, unless the shareholder
certifies that the "taxpayer identification number" ("TIN") provided is correct
and that the shareholder is not subject to backup withholding, or the IRS
notifies the Trust that the shareholder's TIN is incorrect or that the
shareholder is subject to backup withholding. Such tax withheld does not
constitute any additional tax imposed on the shareholder, and may be claimed as
a tax payment on the shareholder's Federal income tax return. An investor must
provide a valid TIN upon opening or reopening an account. Failure to furnish a
valid TIN to the Trust also could subject the investor to penalties imposed by
the IRS.

47
<PAGE>

authority to control substantial decisions of that trust), foreign estate (i.e.,
the income of which is not subject to U.S. tax regardless of source), foreign
corporation, or foreign partnership (each, a "foreign shareholder") will be
subject to U.S. withholding tax (at a rate of 30% or a lower treaty rate, if
applicable). Withholding will not apply if a distribution paid by the Fund to a
foreign shareholder is "effectively connected" with a U.S. trade or business
(or, if an income tax treaty applies, is attributable to a U.S. permanent
establishment of the foreign shareholder), in which case the reporting and
withholding requirements applicable to U.S. persons will apply. Capital gain
distributions generally are not subject to tax withholding.

New Regulations. On October 6, 1997, the Treasury Department issued new
---------------
regulations (the "New Regulations") which make certain modifications to the
backup withholding, U.S. income tax withholding and information reporting rules
applicable to foreign shareholders. The New Regulations will generally be
effective for payments made after December 31, 2000, subject to certain
transition rules. Among other things, the New Regulations will permit the Funds
to estimate the portion of their distributions qualifying as capital gain
distributions for purposes of determining the portion of such distributions paid
to foreign shareholders that will be subject to federal income tax withholding.
Prospective investors are urged to consult their own tax advisors regarding the
New Regulations.

Corporate Shareholders. Corporate shareholders of the Funds may be eligible
----------------------
for the dividends-received deduction on dividends distributed out of a Fund's
income attributable to dividends received from domestic corporations, which, if
received directly by the corporate shareholder, would qualify for such
deduction. A distribution by a Fund attributable to dividends of a domestic
corporation will only qualify for the dividends-received deduction if (i) the
corporate shareholder generally holds the Fund shares upon which the
distribution is made for at least 46 days during the 90 day period beginning 45
days prior to the date upon which the shareholder becomes entitled to the
distribution; and (ii) the Fund generally holds the shares of the domestic
corporation producing the dividend income for at least 46 days during the 90 day
period beginning 45 days prior to the date upon which the Fund becomes entitled
to such dividend income.

Tax-Deferred Plan. The shares of the Funds are available for a variety of
-----------------
tax-deferred retirement and other plans, including Individual Retirement
Accounts ("IRA"), Simplified Employee Pension Plans ("SEP-IRA"), Savings
Incentive Match Plans for Employees ("SIMPLE plans"), Roth IRAs, and Education
IRAs, which permit investors to defer some of their income from taxes. Investors
should contact their selling agents for details concerning retirement plans.

Other Matters. Investors should be aware that the investments to be made by
-------------
the Funds may involve sophisticated tax rules that may result in income or gain
recognition by the Funds without corresponding current cash receipts. Although
the Funds will seek to avoid significant noncash income, such noncash income
could be recognized by the Funds, in which case the Funds may distribute cash
derived from other sources in order to meet the minimum distribution
requirements described above.

The foregoing discussion and the discussions in the Prospectuses applicable
to each shareholder address only some of the Federal tax considerations
generally affecting investments

48
<PAGE>

in the Funds. Each investor is urged to consult his or her tax advisor regarding
specific questions as to federal, state, local or foreign taxes.

CAPITAL STOCK

The Funds are eight of the funds in the Wells Fargo Funds Trust family of
funds. The Trust was organized as a Delaware business trust on March 10, 1999.

Most of the Trust's Funds are authorized to issue multiple classes of
shares, one class generally subject to a front-end sales charge and, in some
cases, classes subject to a contingent-deferred sales charge, that are offered
to retail investors. Certain of the Trust's Funds also are authorized to issue
other classes of shares, which are sold primarily to institutional investors.
Each share in a Fund represents an equal, proportionate interest in the Fund
with all other shares. Shareholders bear their pro rata portion of the Fund's
operating expenses, except for certain class-specific expenses (e.g., any state
securities registration fees, shareholder servicing fees or distribution fees
that may be paid under Rule 12b-1) that are allocated to a particular class.
Please contact Shareholder Services at 1-800-222-8222 if you would like
additional information about other Funds or classes of shares offered.

With respect to matters affecting one class but not another, shareholders
vote as a class; for example, the approval of a Plan. Subject to the foregoing,
all shares of a Fund have equal voting rights and will be voted in the
aggregate, and not by series, except where voting by a series is required by law
or where the matter involved only affects one series. For example, a change in a
Fund's fundamental investment policy affects only one series and would be voted
upon only by shareholders of the Fund involved. Additionally, approval of an
advisory contract, since it affects only one Fund, is a matter to be determined
separately by Series. Approval by the shareholders of one Series is effective as
to that Series whether or not sufficient votes are received from the
shareholders of the other Series to approve the proposal as to those Series.

As used in the Prospectuses and in this SAI, the term "majority," when
referring to approvals to be obtained from shareholders of a Class of shares of
a Fund, means the vote of the lesser of (i) 67% of the shares of the Class
represented at a meeting if the holders of more than 50% of the outstanding
shares of the Class are present in person or by proxy, or (ii) more than 50% of
the outstanding shares of the Class of the Fund. The term "majority," when
referring to approvals to be obtained from shareholders of the Fund, means the
vote of the lesser of (i) 67% of the shares of the Fund represented at a meeting
if the holders of more than 50% of the outstanding shares of the Fund are
present in person or by proxy, or (ii) more than 50% of the outstanding shares
of the Fund. The term "majority," when referring to the approvals to be obtained
from shareholders of the Trust as a whole, means the vote of the lesser of (i)
67% of the Trust's shares represented at a meeting if the holders of more than
50% of the Trust's outstanding shares are present in person or by proxy, or (ii)
more than 50% of the Trust's outstanding shares.

Shareholders are not entitled to any preemptive rights. All shares are
issued in uncertificated form only, and, when issued, will be fully paid and
non-assessable by the Trust. The Trust may dispense with an annual meeting of
shareholders in any year in which it is not required to elect Trustees under the
1940 Act.

49
<PAGE>

Each share of a class of a Fund represents an equal proportional interest
in the Fund with each other share of the same class and is entitled to such
dividends and distributions out of the income earned on the assets belonging to
the Fund as are declared in the discretion of the Trustees. In the event of the
liquidation or dissolution of the Trust, shareholders of a Fund are entitled to
receive the assets attributable to that Fund that are available for
distribution, and a distribution of any general assets not attributable to a
particular Fund or portfolio that are available for distribution in such manner
and on such basis as the Trustees in their sole discretion may determine.

Set forth below, as of August 31, 2000, is the name, address and share
ownership of each person known by the Trust to have beneficial or record
ownership of 5% or more of a class of a Fund or 5% or more of the voting
securities as a whole. The term "N/A" is used where a shareholder holds 5% or
more of a class, but less than 5% of a Fund as a whole.

5% OWNERSHIP AS OF AUGUST 31, 2000
----------------------------------

<TABLE>
<CAPTION>
Type of Percentage
Fund Name and Address Ownership of Class
---- ---------------- --------- ----------
<S> <C> <C> <C>
CORPORATE BOND
Class A Norwest Investment Services Inc. Record 10.00%
FBO-011482791
North Star Building East, 9th Floor
608 Second Avenue, South
Minneapolis, MN 55479-0162

Wells Fargo Bank MN NA FBO Record and 7.28%
R. Michel A/C 359673001 Beneficiary
Attn: Mutual Funds OPS
P.O. Box 1533
Minneapolis, MN 55480-1533

Class B N/A

Class C Dean Witter For The Benefit of Record 9.54%
Advocates to End Domestic Violence
PO Box 250 Church Street Station
New York, NY 10008-0250

Dean Witter For The Benefit of Record and 13.30%
Debashish Mukhapadhyay Beneficiary
PO Box 250 Church Street Station
New York, NY 10008-0250

EMJAYCO Record 13.40%
Omnibus Account
P.O. Box 17909
Milwaukee, WI 53217-0909

National Bank of Alaska Trust Record 6.97%
301 West Northern Lights Boulevard
Anchorage, AK 99503-2648
</TABLE>

50
<PAGE>

<TABLE>
<CAPTION>
Type of Percentage
Fund Name and Address Ownership of Class
---- ---------------- --------- --------
<S> <C> <C> <C>
DIVERSIFIED
BOND FUND
Institutional Class Wells Fargo Bank MN NA FBO Record 5.59%
Acct #2100014356-4
Diversified Bond Fund I
C/O Mutual Fund Processing PO
Box 1450 NW 8477
Minneapolis, MN 55485-1450

Seret & Co. Record 9.40%
ATTN: Jill Siekmeier
C/O Norwest Bank Colorado NA
1740 Broadway MS 8676
Denver, CO 80274-0001

Wells Fargo Bank MN NA FBO Record 8.87%
Acct #2100014357-7
Diversified Bond Fund I
Attn: Mutual Funds OPS
PO Box 1533
Minneapolis, MN 55480-1533

Wells Fargo Bank MN NA FBO Record 62.90%
Acct #2100014058-0
Diversified Bond Fund I
Attn: Mutual Funds OPS
PO Box 1533
Minneapolis, MN 55480-1533

INCOME FUND
Class A Wells Fargo Bank MN NA FBO Record 38.16%
Income Bond Fund Class A
Attn: Mutual Funds OPS
PO Box 1533
Minneapolis, MN 55480-1533

Class B N/A

Institutional Class Wells Fargo Bank MN NA FBO Record 28.49%
Acct #2100013949-7
Income Fund I
Attn: Mutual Funds OPS
PO Box 1533
Minneapolis, MN 55480-1533

Wells Fargo Bank MN NA FBO Record 37.17%
Acct #2100014312-4
Income Fund I
Attn: Mutual Funds OPS
PO Box 1533
Minneapolis, MN 55480-1533

Dentu & CO Record 19.05%
Non-Discretionary Cash
1740 Broadway Mail 8676
Denver, CO 80274-0001

Wells Fargo Bank MN NA FBO Record 10.49%
Acct #2100014314-0
Income Fund I
Attn: Mutual Funds OPS
PO Box 1533
Minneapolis, MN 55480-1533
</TABLE>

51
<PAGE>

<TABLE>
<CAPTION>
Type of Percentage
Fund Name and Address Ownership of Class
---- ---------------- --------- --------
<S> <C> <C> <C>
INCOME PLUS
Class A Norwest Investment Services Inc. Record 9.74%
FBO-710961841
Nor Star Building East 8th Floor
Minneapolis, MN 55479

Class B N/A

Class C Dean Witter for the Benefit of Record and 9.48%
Charles Allen Beneficiary
PO Box 250 Church Street Station
New York, NY 10008-0250

Dean Witter for the Benefit of Record and 7.08%
Marlene Dellamore TTEE FBO Beneficiary
PO Box 250 Church Street Station
New York, NY 10008-0250

Dean Witter Reynolds Custodian for Record and 5.59%
Jean Baker Beneficiary
PO Box 250 Church Street Station
New York, NY 10008-0250

Dean Witter for the Benefit of Record and 7.43%
Robert M. Anderson Beneficiary
PO Box 250 Church Street Station
New York, NY 10008-0250

INTERMEDIATE
GOVERNMENT
INCOME FUND
Class A Wells Fargo Bank Record 23.56%
FBO Retirement Plans Omnibus
PO Box 63015
San Francisco, CA 94163-0001

Investor Services Group Record 14.47%
FBO Wells Fargo/Portfolio Advisory
Customer
211 South Gulph Road
King of Prussia, PA 194006-0001

Class B N/A

Class C MLPF&S For The Sole Benefit of its Record 17.52%
Customers
ATTN: Mutual Fund Administration
4800 Deer Lake Drive East, 3rd Floor
Jacksonville, FL 32246-6484

Dean Witter for the Benefit of Record and 11.40%
Arthur J. & Sylvia Zanello PLEBS FBO Beneficiary
PO Box 250 Church Street Station
New York, NY 10008-0250

Institutional Class EMSEG & Co. Record 46.78%
Acct #210014380-7
Interim US Gov't Fund I
C/O Mutual Fund Processing PO
Box 1450 NW 8477
Minneapolis, MN 55485-1450
</TABLE>

52
<PAGE>

<TABLE>
<CAPTION>
Type of Percentage
Fund Name and Address Ownership of Class
---- ---------------- --------- --------
<S> <C> <C> <C>
EMSEG & Co. Record 25.70%
Acct #210014381-0
Interim US Gov't Fund I
C/O Mutual Fund Processing PO
Box 1450 NW 8477
Minneapolis, MN 55485-1450

EMSEG & Co. Record 12.00%
Acct #210014383-6
Interim US Gov't Fund I
C/O Mutual Fund Processing PO
Box 1450 NW 8477
Minneapolis, MN 55485-1450

DENTRU & Co. Record 13.33%
1740 Broadway Mail 8676
Denver, CO 80274-0001

LIMITED TERM
GOVERNMENT
INCOME FUND
Class A Wells Fargo Bank Record 17.81%
FBO Retirement Plans Omnibus
PO Box 63015
San Francisco, CA 94163-0001

Merrill Lynch Trust Company TTE Record 11.80%
FBO Qualified Retirement Plans
ATTN: John Sebulsky
265 Davidson Avenue, 4th Floor
Somerset, NJ 00873-4120

MLPF&S For the Sole Benefit of Its Customers Record 9.91%
ATTN: Mutual Fund Administration
4800 Deer Lake Dr. East, 3rd Floor
Jacksonville, FL 32246-6484

Class B N/A

Institutional Class EMSEG & CO Record 27.00%
Acct #210014315-5
Limited Term Gov't Income 1
c/o Mutual Fund Processing
P.O. Box 1450 NW 8477
Minneapolis, MN 55485-1450

EMSEG & CO Record 30.81%
Acct #210014316-6
Limited Term Gov't Income FD1
c/o Mutual Fund Processing
P.O. Box 1450 NW 8477
Minneapolis, MN 55485-1450

EMSEG & CO Record 36.71%
Acct #210014423-3
Limited Term Gov't Income FD1
c/o Mutual Fund Processing
P.O. Box 1450 NW 8477
Minneapolis, MN 55485-1450

DIM & CO Record 10.75%
ATTN: MF DEPT. A-88-4
P.O. Box 9800
Calabasas, CA 91372-0800
</TABLE>

53
<PAGE>

<TABLE>
<CAPTION>
Type of Percentage
Fund Name and Address Ownership of Class
---- ---------------- --------- --------
<S> <C> <C> <C>
STABLE INCOME NORWEST INVESTMENT SERVICES INC Record 24.75%
Class A FBO 021453811
Northstar Building East - 9th Floor
608 Second Avenue South
Minneapolis, MN 55402-1916

NORWEST INVESTMENT SERVICES INC Record 10.68%
FBO 021219031
Northstar Building East - 8th Floor
608 Second Avenue South
Minneapolis, MN 55402-1916

NORWEST INVESTMENT SERVICES INC Record 5.33%
FBO 021263991
Northstar Building East - 8th Floor
608 Second Avenue South
Minneapolis, MN 55402-1916

Class B NORWEST INVESTMENT SERVICES INC Record 8.71%
FBO 731186551
Northstar Building East - 9th Floor
608 Second Avenue South
Minneapolis, MN 55402-1916

NORWEST INVESTMENT SERVICES INC Record 8.93%
FBO 102953761
Northstar Building East - 8th Floor
608 Second Avenue South
Minneapolis, MN 55402-1916

NORWEST INVESTMENT SERVICES INC Record 8.77%
FBO 708238851
Northstar Building East - 9th Floor
608 Second Avenue South
Minneapolis, MN 55402-1916

Institutional Class EMSEG & CO Record 68.82%
Acct #2100014418-1
STABLE INCOME FUND I
c/o Mutual Fund Processing
P.O. Box 1450 NEW 8477
Minneapolis, MN 55485-1450

EMSEG & CO Record 11.11%
Acct #2100014417-8
STABLE INCOME FUND I
c/o Mutual Fund Processing
P.O. Box 1450 NEW 8477
Minneapolis, MN 55485-1450

EMSEG & CO Record 5.45%
Acct #2100014416-5
STABLE INCOME FUND I
c/o Mutual Fund Processing
P.O. Box 1450 NEW 8477
Minneapolis, MN 55485-1450

VARIABLE RATE
GOVERNMENT
Class A Attn: Larry Morgan Record 24.00%
APCO EMPLOYEES CREDIT UNION
1608 7th Avenue North
Birmingham, AL 35203-1987
</TABLE>

54
<PAGE>

<TABLE>
<CAPTION>
Type of Percentage
Fund Name and Address Ownership of Class
---- ---------------- --------- --------
<S> <C> <C> <C>
MLPF&S FOR THE SOLE BENEFIT Record 9.95%
OF ITS CUSTOMERS
ATTN: Mutual Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 32246-6484

Euro Bank Record 5.24%
1901 Ponce DeLeon Boulevard
Coral Gables, FL 33124-4414

Blue Bonnet Federal Union Record 5.38%
1301 McKinney, Suite 531
Houston, TX 77010-3029

VISIONS FEDERAL CREDIT UNION Record 5.46%
24 McKinley Avenue
Endicott, NY 13760-5415

Salomon Smith Barney Inc. Record 5.91%
Acct #00119617705
333 West 34th Street, 3rd Floor
New York, NY 10001

Salomon Smith Barney Inc. Record 6.76%
Acct #00157672735
333 West 34th Street, 3rd Floor
New York, NY 10001
</TABLE>

For purposes of the 1940 Act, any person who owns directly or through one
or more controlled companies more than 25% of the voting securities of a company
is presumed to "control" such company. Accordingly, to the extent that a
shareholder identified in the foregoing table is identified as the beneficial
holder of more than 25% of a class (or Fund), or is identified as the holder of
record of more than 25% of a class (or Fund) and has voting and/or investment
powers, it may be presumed to control such class (or Fund).

OTHER

The Trust's Registration Statement, including the Prospectuses and SAI for
the Funds and the exhibits filed therewith, may be examined at the office of the
U.S. Securities and Exchange Commission in Washington, D.C. Statements contained
in the Prospectuses or the SAI as to the contents of any contract or other
document referred to herein or in the Prospectuses are not necessarily complete,
and, in each instance, reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.

COUNSEL

Morrison & Foerster LLP, 2000 Pennsylvania Avenue, N.W., Suite 5500,
Washington, D.C. 20006, as counsel for the Trust, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance of the
shares of beneficial interest being sold pursuant to the Funds' Prospectuses.

55
<PAGE>

INDEPENDENT AUDITORS

KPMG LLP has been selected as the independent auditors for the Trust. KPMG
LLP provides audit services, tax return preparation and assistance and
consultation in connection with review of certain SEC filings. KPMG LLP's
address is Three Embarcadero Center, San Francisco, California 94111.

FINANCIAL INFORMATION

The portfolios of investments and audited financial statements for the
predecessor Stagecoach and Norwest Funds for the year or period ended May 31,
2000 are hereby incorporated by reference to the Funds' Annual Reports.

56
<PAGE>

APPENDIX

The following is a description of the ratings given by Moody's and S&P to
corporate and municipal bonds, municipal notes, and corporate and municipal
commercial paper.

Corporate Bonds
---------------

Moody's: The four highest ratings for corporate bonds are "Aaa," "Aa," "A"
-------
and "Baa." Bonds rated "Aaa" are judged to be of the "best quality" and carry
the smallest amount of investment risk. Bonds rated "Aa" are of "high quality by
all standards," but margins of protection or other elements make long-term risks
appear somewhat greater than "Aaa" rated bonds. Bonds rated "A" possess many
favorable investment attributes and are considered to be upper medium grade
obligations. Bonds rated "Baa" are considered to be medium grade obligations;
interest payments and principal security appear adequate for the present, but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well. Moody's
also applies numerical modifiers in its rating system: 1, 2 and 3 in each rating
category from "Aa" through "Baa" in its rating system. The modifier 1 indicates
that the security ranks in the higher end of its category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks
in the lower end.

S&P: The four highest ratings for corporate and municipal bonds are "AAA,"
---
"AA," "A" and "BBB." Bonds rated "AAA" have the "highest rating" assigned by S&P
and have "an extremely strong capacity" to pay interest and repay principal.
Bonds rated "AA" have a "very strong capacity" to pay interest and repay
principal and "differ from the highest rated obligations only in small degree."
Bonds rated "A" have a "strong capacity" to pay interest and repay principal,
but are "somewhat more susceptible" to adverse effects of changes in economic
conditions or other circumstances than bonds in higher rated categories. Bonds
rated "BBB" are regarded as having "adequate protection parameters" to pay
interest and repay principal, but changes in economic conditions or other
circumstances are more likely to lead to a "weakened capacity" to make such
repayments. The ratings from "AA" to "BBB" may be modified by the addition of a
plus or minus sign to show relative standing within the category.

Commercial Paper
----------------

Moody's: The highest rating for commercial paper is "P-1" (Prime-1).
-------
Issuers rated "P-1" have a "superior ability for repayment of senior short-term
debt obligations." Issuers rated "P-2" (Prime-2) "have a strong capacity for
repayment of senior short-term debt obligations," but earnings trends, while
sound, will be subject to more variation.

A-1
<PAGE>

S&P: The "A-1" rating for commercial paper is rated "in the highest
---
category" by S&P and "the obligor's capacity to meet its financial commitment on
the obligation is strong." The "A-1+" rating indicates that said capacity is
"extremely strong." The A-2 rating indicates that said capacity is
"satisfactory," but that corporate and municipal commercial paper rated "A-2" is
"more susceptible" to the adverse effects of changes in economic conditions or
other circumstances than commercial paper rated in higher rating categories.

A-2
<PAGE>

WELLS FARGO FUNDS TRUST
Telephone: 1-800-222-8222

STATEMENT OF ADDITIONAL INFORMATION
Dated October 1, 2000

WELLS FARGO WEALTHBUILDER GROWTH PORTFOLIO
WELLS FARGO WEALTHBUILDER GROWTH BALANCED PORTFOLIO
WELLS FARGO WEALTHBUILDER GROWTH AND INCOME PORTFOLIO

Wells Fargo Funds Trust (the "Trust") is an open-end, management investment
company. This Statement of Additional Information ("SAI") contains additional
information about three funds in the Trust's family of funds (each a "Portfolio"
and collectively the "Portfolios") -- the Wells Fargo WealthBuilder Growth
Portfolio, Wells Fargo WealthBuilder Growth Balanced Portfolio and Wells Fargo
WealthBuilder Growth and Income Portfolio. Each Portfolio is considered
diversified under the Investment Company Act of 1940, as amended (the "1940
Act"). The Portfolios offer a single class of shares.

This SAI is not a prospectus and should be read in conjunction with the
Portfolios' Prospectus, dated October 1, 2000. All terms used in this SAI that
are defined in the Prospectus have the meanings assigned in the Prospectus. A
copy of the Prospectus may be obtained free of charge by calling 1-800-222-8222
or writing to Wells Fargo Funds, P.O. Box 8266, Boston, MA 02266-8266.
<PAGE>

TABLE OF CONTENTS

Historical Portfolio Information................................. 1

Investment Policies.............................................. 2

Additional Permitted Investment Activities and Associated Risks.. 4

Management....................................................... 21

Performance Calculations......................................... 29

Determination of Net Asset Value................................. 33

Additional Purchase and Redemption Information................... 33

Portfolio Transactions........................................... 34

Portfolio Expenses............................................... 35

Federal Income Taxes............................................. 36

Capital Stock.................................................... 41

Other............................................................ 43

Counsel.......................................................... 43

Independent Auditors............................................. 43

Financial Information............................................ 43

Appendix......................................................... A-1
</TABLE>
<PAGE>

HISTORICAL PORTFOLIO INFORMATION

On March 25, 1999, the Board of Trustees of Norwest Advantage Funds
("Norwest"), the Board of Directors of Stagecoach Funds, Inc. ("Stagecoach") and
the Board of Trustees of the Trust approved an Agreement and Plan of
Reorganization providing for, among other things, the transfer of the assets and
stated liabilities of various predecessor Norwest portfolios to the Portfolios
(the "Reorganization"). Prior to November 5, 1999, the effective date of the
consolidation of the Portfolios and the predecessor Norwest portfolios, the
Portfolios had only nominal assets.

The Portfolios described in this SAI were created as part of the
reorganization of the Stagecoach family of funds, advised by Wells Fargo Bank,
N.A. ("Wells Fargo Bank" or "Advisor"), and the Norwest Advantage family of
funds, advised by Norwest Investment Management, Inc. ("NIM"), into a single
mutual fund complex. The Reorganization followed the merger of the advisors'
parent companies.

The chart below indicates the predecessor Norwest portfolios that are the
accounting survivors of the Wells Fargo Funds.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Wells Fargo Portfolios Predecessor Portfolios
-----------------------------------------------------------------------------------------------------------------
<S> <C>
Wells Fargo WealthBuilder Growth Portfolio Norwest WealthBuilder II Growth Portfolio
-----------------------------------------------------------------------------------------------------------------
Wells Fargo WealthBuilder Growth Balanced Norwest WealthBuilder II Growth Balanced Portfolio
Portfolio
-----------------------------------------------------------------------------------------------------------------
Wells Fargo WealthBuilder Growth and Income Norwest WealthBuilder II Growth and Income Portfolio
Portfolio
-----------------------------------------------------------------------------------------------------------------
</TABLE>

The Wells Fargo WealthBuilder Growth Portfolio ("Growth Portfolio")
commenced operations on November 8, 1999, as successor to the Norwest
WealthBuilder II Growth Portfolio. The Norwest WealthBuilder II Growth
Portfolio commenced operations on October 1, 1997. The financial highlights
shown for periods prior to November 8, 1999 are the financial highlights of the
Norwest WealthBuilder II Growth Portfolio.

The Wells Fargo WealthBuilder Growth Balanced Portfolio ("Growth Balanced
Portfolio") commenced operations on November 8, 1999, as successor to the
Norwest WealthBuilder II Growth Balanced Portfolio. The Norwest WealthBuilder
II Growth Balanced Portfolio commenced operations on October 1, 1997. The
financial highlights shown for periods prior to November 8, 1999 are the
financial highlights of the Norwest WealthBuilder II Growth Balanced Portfolio.

The Wells Fargo WealthBuilder Growth and Income Portfolio ("Growth and
Income Portfolio") commenced operations on November 8, 1999, as successor to the
Norwest WealthBuilder II Growth and Income Portfolio. The Norwest WealthBuilder
II Growth and Income Portfolio commenced operations on October 1, 1997. The
financial highlights shown for periods prior to November 8, 1999 are the
financial highlights of the Norwest WealthBuilder II Growth and Income
Portfolio.

1
<PAGE>

INVESTMENT POLICIES

Each Portfolio seeks to achieve its investment objective by investing
substantially all of its investable assets in the securities of affiliated and
non-affiliated open-ended management investment companies or series (the
"Underlying Funds"). Accordingly, the investment experience of each of these
Portfolios will correspond directly with the investment experience of its
respective Underlying Funds.

Information concerning each Portfolio's investment objective is set forth
in the Prospectus for the Portfolios. There can be no assurance that the
Portfolios will achieve their objectives. The principal features of the
Portfolios' investment programs and the primary risks associated with those
investment programs are discussed in the Prospectus. The principal features and
certain risks of the Underlying Funds also are discussed in the Prospectus.
However, since certain Underlying Funds are not advised by the Advisor and are
not affiliated with the Portfolios, there can be no assurance that the
Underlying Funds will follow their stated policies.

Fundamental Investment Policies
-------------------------------

Each Portfolio has adopted the following investment policies, all of which
are fundamental policies; that is, they may not be changed without approval by
the vote of the holders of a majority (as defined in the 1940 Act) of the
outstanding voting securities of such Portfolio.

The Portfolios may not:

(1) purchase the securities of issuers conducting their principal business
activity in the same industry if, immediately after the purchase and as a result
thereof, the value of a Portfolio's investments in that industry would equal or
exceed 25% of the current value of the Portfolio's total assets, provided that
this restriction does not limit a Portfolio's investments in: (i) U.S.
Government securities; (ii) repurchase agreements; or (iii) securities of other
investment companies;

(2) purchase securities of any issuer if, as a result, with respect to 75%
of a Portfolio's total assets, more than 5% of the value of its total assets
would be invested in the securities of any one issuer or the Portfolio's
ownership would be more than 10% of the outstanding voting securities of any one
issuer, provided that this restriction does not limit a Portfolio's investments
in securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities, or investments in securities of other investment companies;

(3) borrow money, except to the extent permitted under the 1940 Act,
including the rules, regulations and exemptions thereunder;

(4) issue senior securities, except to the extent permitted under the 1940
Act, including the rules, regulations and exemptions thereunder;

(5) make loans to other parties if, as a result, the aggregate value of
such loans would exceed one-third of a Portfolio's total assets. For the
purposes of this limitation, entering into

2
<PAGE>

repurchase agreements, lending securities and acquiring any debt securities are
not deemed to be the making of loans;

(6) underwrite securities of other issuers, except to the extent that the
purchase of permitted investments directly from the issuer thereof or from an
underwriter for an issuer and the later disposition of such securities in
accordance with a Portfolio's investment program may be deemed to be an
underwriting;

(7) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent a Portfolio from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business); nor

(8) purchase or sell commodities, provided that (i) currency will not be
deemed to be a commodity for purposes of this restriction, (ii) this restriction
does not limit the purchase or sale of futures contracts, forward contracts or
options, and (iii) this restriction does not limit the purchase or sale of
securities or other instruments backed by commodities or the purchase or sale of
commodities acquired as a result of ownership of securities or other
instruments.

Non-Fundamental Investment Policies
-----------------------------------

Each Portfolio has adopted the following non-fundamental policies which may
be changed by the Trustees of the Trust at any time without approval of such
Portfolio's shareholders.

(1) Each Portfolio may invest in shares of other open-end management
investment companies, to the extent permitted under the 1940 Act, including the
rules, regulations and exemptions thereunder.

(2) Each Portfolio may not invest or hold more than 15% of the Portfolio's
net assets in illiquid securities. For this purpose, illiquid securities
include, among others, (a) securities that are illiquid by virtue of the absence
of a readily available market or legal or contractual restrictions on resale,
(b) fixed time deposits that are subject to withdrawal penalties and that have
maturities of more than seven days, and (c) repurchase agreements not terminable
within seven days.

(3) Each Portfolio may invest in futures or options contracts regulated by
the CFTC for (i) bona fide hedging purposes within the meaning of the rules of
the CFTC and (ii) for other purposes if, as a result, no more than 5% of the
Portfolio's net assets would be invested in initial margin and premiums
(excluding amounts "in-the-money") required to establish the contracts.

(4) Each Portfolio may lend securities from its portfolio to approved
brokers, dealers and financial institutions, to the extent permitted under the
1940 Act, including the rules, regulations and exemptions thereunder, which
currently limit such activities to one-third of the value of a Portfolio's total
assets (including the value of the collateral received). Any such loans of
portfolio securities will be fully collateralized based on values that are
marked-to-market daily.

3
<PAGE>

(5) Each Portfolio may not make investments for the purpose of exercising
control or management, provided that this restriction does not limit a
Portfolio's investments in securities of other investment companies or
investments in entities created under the laws of foreign countries to
facilitate investment in securities in that country.

(6) Each Portfolio may not purchase securities on margin (except for
short-term credits necessary for the clearance of transactions).

(7) Each Portfolio may not sell securities short, unless it owns or has
the right to obtain securities equivalent in kind and amount to the securities
sold short (short sales "against the box"), and provided that transactions in
futures contracts and options are not deemed to constitute selling securities
short.

General
-------

Notwithstanding the foregoing policies, any other investment companies in
which the Portfolios may invest have adopted their own investment policies,
which may be more or less restrictive than those listed above, thereby allowing
a Portfolio to participate in certain investment strategies indirectly that are
prohibited under the fundamental and non-fundamental investment policies listed
above.

ADDITIONAL PERMITTED INVESTMENT ACTIVITIES AND ASSOCIATED RISKS

Set forth below are descriptions of certain investments and additional
investment policies for the Portfolios. For purposes of monitoring the
investment policies and restrictions of the Portfolios (with the exception of
the loans of portfolio securities policy described below), the amount of any
securities lending collateral held by a Portfolio will be excluded in
calculating total assets.

Each Portfolio seeks to achieve its investment objective by investing
substantially all of its assets in the securities of the Underlying Funds.
Therefore, although the following discusses the additional permitted investment
activities and associate risks of the Portfolios, it applies equally to the
Underlying Funds, which may invest in one or more of the following types of
investments. Thus, as used herein, the term "Portfolios" shall refer equally to
both the Portfolios of the Trust as well as the Underlying Funds in each
Portfolio. However, since certain Underlying Funds are non-affiliated with the
Advisor or the Portfolios, there can be no assurance that the Underlying
Portfolios will continue to invest in these permitted investment activities.

Although each Portfolio intends to invest substantially all of its assets
in the Underlying Funds, each Portfolio reserves the right to invest assets not
so invested in other instruments as outlined in the Prospectus.

Asset-Backed Securities
-----------------------

The Portfolios may invest in various types of asset-backed securities.
Asset-backed securities are securities that represent an interest in an
underlying security. The asset-backed securities in which the Portfolios invest
may consist of undivided fractional interests in pools of

4
<PAGE>

consumer loans or receivables held in trust. Examples include certificates for
automobile receivables ("CARS") and credit card receivables ("CARDS"). Payments
of principal and interest on these asset-backed securities are "passed through"
on a monthly or other periodic basis to certificate holders and are typically
supported by some form of credit enhancement, such as a surety bond, limited
guaranty, or subordination. The extent of credit enhancement varies, but usually
amounts to only a fraction of the asset-backed security's par value until
exhausted. Ultimately, asset-backed securities are dependent upon payment of the
consumer loans or receivables by individuals, and the certificate holder
frequently has no recourse to the entity that originated the loans or
receivables. The actual maturity and realized yield will vary based upon the
prepayment experience of the underlying asset pool and prevailing interest rates
at the time of prepayment. Asset-backed securities are relatively new
instruments and may be subject to greater risk of default during periods of
economic downturn than other instruments. Also, the secondary market for certain
asset-backed securities may not be as liquid as the market for other types of
securities, which could result in a Portfolio experiencing difficulty in valuing
or liquidating such securities. The Portfolios may also invest in securities
backed by pools of mortgages. The investments are described under the heading
"Mortgage-Related Securities."

Bank Obligations
----------------

The Portfolios may invest in bank obligations, including certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations of
domestic banks, foreign subsidiaries of domestic banks, foreign branches of
domestic banks, and domestic and foreign branches of foreign banks, domestic
savings and loan associations and other banking institutions. With respect to
such securities issued by foreign branches of domestic banks, foreign
subsidiaries of domestic banks, and domestic and foreign branches of foreign
banks, a Portfolio may be subject to additional investment risks that are
different in some respects from those incurred by a Portfolio which invests only
in debt obligations of domestic issuers. Such risks include possible future
political and economic developments, the possible imposition of foreign
withholding taxes on interest income payable on the securities, the possible
establishment of exchange controls or the adoption of other foreign governmental
restrictions which might adversely affect the payment of principal and interest
on these securities and the possible seizure or nationalization of foreign
deposits. In addition, foreign branches of U.S. banks and foreign banks may be
subject to less stringent reserve requirements and to different accounting,
auditing, reporting and recordkeeping standards than those applicable to
domestic branches of U.S. banks.

Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period of
time.

Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate. Time
deposits which may be held by a Portfolio will not benefit from insurance from
the Bank Insurance Fund or the Savings Association Insurance Fund administered
by the Federal Deposit Insurance Corporation ("FDIC"). Bankers' acceptances are
credit instruments evidencing the obligation of a bank to pay a draft drawn on
it by a customer. These instruments reflect the obligation both of the bank and
of the drawer to pay the face amount of the instrument upon maturity. The other
short-term obligations may include uninsured, direct obligations, bearing fixed,
floating- or variable-interest rates.

5
<PAGE>

Bonds
-----

The Portfolios may invest in bonds. A bond is an interest-bearing security
issued by a company or governmental unit. The issuer of a bond has a contractual
obligation to pay interest at a stated rate on specific dates and to repay
principal (the bond's face value) periodically or on a specified maturity date.
An issuer may have the right to redeem or "call" a bond before maturity, in
which case the investor may have to reinvest the proceeds at lower market rates.
The value of fixed-rate bonds will tend to fall when interest rates rise and
rise when interest rates fall. The value of "floating-rate" or "variable-rate"
bonds, on the other hand, fluctuate much less in response to market interest
rate movements than the value of fixed rate bonds.

Borrowing
---------

The Portfolios may borrow money for temporary or emergency purposes,
including the meeting of redemption requests. Borrowing involves special risk
considerations. Interest costs on borrowings may fluctuate with changing market
rates of interest and may partially offset or exceed the return earned on
borrowed funds (or on the assets that were retained rather than sold to meet the
needs for which funds were borrowed). Under adverse market conditions, a
Portfolio might have to sell portfolio securities to meet interest or principal
payments at a time when investment considerations would not favor such sales.
Reverse repurchase agreements, short sales not against the box, dollar roll
transactions and other similar investments that involve a form of leverage have
characteristics similar to borrowings but are not considered borrowings if the
Portfolio maintains a segregated account.

Commercial Paper
----------------

The Portfolios may invest in commercial paper (including variable amount
master demand notes) which refers to short-term, unsecured promissory notes
issued by corporations to finance short-term credit needs. Commercial paper is
usually sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations which permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangements between the issuer and a commercial
bank acting as agent for the payee of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes.
Investments by the Portfolios in commercial paper (including variable rate
demand notes and variable rate master demand notes issued by domestic and
foreign bank holding companies, corporations and financial institutions, as well
as similar instruments issued by government agencies and instrumentalities) will
consist of issues that are rated in one of the two highest rating categories by
a Nationally Recognized Ratings Organization ("NRRO"). Commercial paper may
include variable- and floating-rate instruments. See also "Nationally
Recognized Ratings Organization."

6
<PAGE>

Convertible Securities
----------------------

The Portfolios may invest in convertible securities. A convertible security
is generally a debt obligation or preferred stock that may be converted within a
specified period of time into a certain amount of common stock of the same or a
different user. A convertible security provides a fixed-income stream and the
opportunity, through its conversion feature, to participate in the capital
appreciation resulting from a market price advance in its underlying common
stock. As with a straight fixed-income security, a convertible security tends to
increase in market value when interest rates decline and decrease in value when
interest rates rise. Like a common stock, the value of a convertible security
also tends to increase as the market value of the underlying stock rises, and it
tends to decrease as the market value of the underlying stock declines. Because
its value can be influenced by both interest rate and market movements, a
convertible security is not as sensitive to interest rates as a similar fixed-
income security, nor is it as sensitive to changes in share price as its
underlying stock.

The creditworthiness of the issuer of a convertible security may be
important in determining the security's true value. This is because the holder
of a convertible security will have recourse only to the issuer. In addition, a
convertible security may be subject to redemption by the issuer, but only after
a specified date and under circumstances established at the time the security is
issued.

While the Portfolios use the same criteria to rate a convertible debt
security that it uses to rate a more conventional debt security, a convertible
preferred stock is treated like a preferred stock for a Portfolio's financial
reporting, credit rating, and investment limitation purposes. A preferred stock
is subordinated to all debt obligations in the event of insolvency, and an
issuer's failure to make a dividend payment is generally not an event of default
entitling the preferred shareholder to take action. A preferred stock generally
has no maturity date, so that its market value is dependent on the issuer's
business prospects for an indefinite period of time. In addition, distributions
from preferred stock are dividends, rather than interest payments, and are
usually treated as such for corporate tax purposes.

Derivative Securities
---------------------

The Portfolios may invest in various instruments that may be considered
"derivatives," including structured notes, bonds or other instruments with
interest rates that are determined by reference to changes in the value of other
interest rates, indices or financial indicators ("References") or the relative
change in two or more References. Some derivative securities represent
relatively recent innovations in the bond markets, and the trading market for
these instruments is less developed than the markets for traditional types of
debt instruments. It is uncertain how these instruments will perform under
different economic and interest rate scenarios. Because certain of these
instruments are leveraged, their market values may be more volatile than other
types of bonds and may present greater potential for capital gain or loss.
Derivative securities and their underlying instruments may experience periods of
illiquidity, which could cause a Portfolio to hold a security it might otherwise
sell or could force the sale of a security at inopportune times or for prices
that do not reflect current market value. The possibility of default by the
issuer or the issuer's credit provider may be greater for these structured and
derivative instruments than for other types of instruments. As new types of
derivative securities are

7
<PAGE>

developed and offered to investors, the Advisor will, consistent with the
Portfolio's investment objective, policies and quality standards, consider
making investments in such new types of derivative securities. See also "Futures
Contracts and Options."

Dollar Roll Transactions
------------------------

A Portfolio may enter into "dollar roll" transactions wherein a Portfolio
sells fixed income securities, typically mortgage-backed securities, and makes a
commitment to purchase similar, but not identical, securities at a later date
from the same party. Like a forward commitment, during the roll period no
payment is made for the securities purchased and no interest or principal
payments on the security accrue to the purchaser, but a Portfolio assumes the
risk of ownership. A Portfolio is compensated for entering into dollar roll
transactions by the difference between the current sales price and the forward
price for the future purchase, as well as by the interest earned on the cash
proceeds of the initial sale. Like other when-issued securities or firm
commitment agreements, dollar roll transactions involve the risk that the market
value of the securities sold by a Portfolio may decline below the price at which
a Portfolio is committed to purchase similar securities. In the event the buyer
of securities under a dollar roll transaction becomes insolvent, the Portfolios
use of the proceeds of the transaction may be restricted pending a determination
by the other party, or its trustee or receiver, whether to enforce the
Portfolios obligation to repurchase the securities.

Floating- and Variable-Rate Obligations
---------------------------------------

The Portfolios may purchase floating- and variable-rate obligations such as
demand notes and bonds. Variable-rate demand notes include master demand notes
that are obligations that permit a Portfolio to invest fluctuating amounts,
which may change daily without penalty, pursuant to direct arrangements between
a Portfolio, as lender, and the borrower. The interest rate on a floating-rate
demand obligation is based on a known lending rate, such as a bank's prime rate,
and is adjusted automatically each time such rate is adjusted. The interest rate
on a variable-rate demand obligation is adjusted automatically at specified
intervals. The issuer of such obligations ordinarily has a right, after a given
period, to prepay at its discretion the outstanding principal amount of the
obligations plus accrued interest upon a specified number of days' notice to the
holders of such obligations. Frequently, such obligations are secured by letters
of credit or other credit support arrangements provided by banks.

There generally is no established secondary market for these obligations
because they are direct lending arrangements between the lender and borrower.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, a Portfolio's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. Such
obligations frequently are not rated by credit rating agencies and each
Portfolio may invest in obligations which are not so rated only if the Advisor
determines that at the time of investment the obligations are of comparable
quality to the other obligations in which such Portfolio may invest. The
Advisor, on behalf of each Portfolio, considers on an ongoing basis the
creditworthiness of the issuers of the floating- and variable-rate demand
obligations in such Portfolio's investment portfolio. Floating- and variable-
rate instruments are subject to interest-rate risk and credit risk.

8
<PAGE>

The floating- and variable-rate instruments that the Portfolios may
purchase include certificates of participation in such instruments.

Foreign Government Securities
-----------------------------

Foreign Government Securities investments include the securities of
"supranational" organizations such as the International Bank for Reconstruction
and Development and the Inter-American Development Bank if the Advisor believes
that the securities do not present risks inconsistent with the Portfolio's
investment objective.

Foreign Obligations and Securities
----------------------------------

Each Portfolio may invest in high-quality, short-term debt obligations of
foreign branches of U.S. banks, U.S. branches of foreign banks and short-term
debt obligations of foreign governmental agencies that are denominated in and
pay interest in U.S. dollars. Investments in foreign obligations involve certain
considerations that are not typically associated with investing in domestic
obligations. There may be less publicly available information about a foreign
issuer than about a domestic issuer and the available information may be less
reliable. In addition, with respect to certain foreign countries, taxes may be
withheld at the source under foreign tax laws, and there is a possibility of
expropriation or confiscatory taxation, political or social instability or
diplomatic developments that could adversely affect investments in, the
liquidity of, and the ability to enforce contractual obligations with respect
to, securities of issuers located in those countries. The Portfolios may invest
in securities denominated in currencies other than the U.S. dollar and may
temporarily hold funds in bank deposits or other money market investments
denominated in foreign currencies. Therefore, the Portfolios may be affected
favorably or unfavorably by exchange control regulations or changes in the
exchange rate between such currencies and the dollar. Changes in foreign
currency exchange rates influence values within a Portfolio from the perspective
of U.S. investors. The rate of exchange between the U.S. dollar and other
currencies is determined by the forces of supply and demand in the foreign
exchange markets. These forces are affected by the international balance of
payments and other economic and financial conditions, government intervention,
speculation and other factors.

The Portfolios may enter into forward currency exchange contracts ("forward
contracts") to attempt to minimize the risk to the Portfolios from adverse
changes in the relationship between currencies or to enhance income. A forward
contract is an obligation to buy or sell a specific currency for an agreed price
at a future date which is individually negotiated and is privately traded by
currency traders and their customers. The Portfolios will either cover a
position in such a transaction or maintain, in a segregated account with their
custodian bank, cash or high-grade marketable money market securities having an
aggregate value equal to the amount of any such commitment until payment is
made.

The Portfolios may invest in foreign securities through American Depositary
Receipts ("ADRs"), Canadian Depositary Receipts ("CDRs"), European Depositary
Receipts ("EDRs"), International Depositary Receipts ("IDRs") and Global
Depositary Receipts ("GDRs") or other similar securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs (sponsored or unsponsored) are receipts typically issued by a
U.S. bank or trust

9
<PAGE>

company and traded on a U.S. stock exchange, and CDRs are receipts typically
issued by a Canadian bank or trust company that evidence ownership of underlying
foreign securities. Issuers of unsponsored ADRs are not contractually obligated
to disclose material information in the U.S. and, therefore, such information
may not correlate to the market value of the unsponsored ADR. EDRs and IDRs are
receipts typically issued by European banks and trust companies, and GDRs are
receipts issued by either a U.S. or non-U.S. banking institution, that evidence
ownership of the underlying foreign securities. Generally, ADRs in registered
form are designed for use in U.S. securities markets and EDRs and IDRs in bearer
form are designed primarily for use in Europe. Each Portfolio may not invest 25%
or more of its assets in foreign obligations.

Investments in foreign obligations involve certain considerations that are
not typically associated with investing in domestic securities. There may be
less publicly available information about a foreign issuer than about a domestic
issuer. Foreign issuers also are not generally subject to the same accounting,
auditing and financial reporting standards or governmental supervision as
domestic issuers. In addition, with respect to certain foreign countries, taxes
may be withheld at the source under foreign tax laws, and there is a possibility
of expropriation or confiscatory taxation, political, social and monetary
instability or diplomatic developments that could adversely affect investments
in, the liquidity of, and the ability to enforce contractual obligations with
respect to, securities of issuers located in those countries. Investment income
on certain foreign securities in which a Portfolio may invest may be subject to
foreign withholding or other taxes that could reduce the return on these
securities. Tax treaties between the United States and foreign countries,
however, may reduce or eliminate the amount of foreign taxes to which the
Portfolio would be subject.

Forward Commitment, When-Issued and Delayed-Delivery Transactions
-----------------------------------------------------------------

The Portfolios may purchase or sell securities on a when-issued or delayed
delivery basis and make contracts to purchase or sell securities for a fixed
price at a future date beyond customary settlement time. Delivery and payment on
such transactions normally take place within 120 days after the date of the
commitment to purchase. Securities purchased or sold on a when-issued, delayed-
delivery or forward commitment basis involve a risk of loss if the value of the
security to be purchased declines, or the value of the security to be sold
increases, before the settlement date. The Portfolios will establish a
segregated account in which they will maintain cash, U.S. Government obligations
or other high-quality debt instruments in an amount at least equal in value to
each such Portfolio's commitments to purchase when-issued securities. If the
value of these assets declines, a Portfolio will place additional liquid assets
in the account on a daily basis so that the value of the assets in the account
is equal to the amount of such commitments.

Futures Contracts and Options
-----------------------------

A Portfolio may seek to enhance its return through the writing (selling)
and purchasing of exchange-traded and over-the-counter options on fixed income
securities or indices. A Portfolio may also attempt to hedge against a decline
in the value of securities owned by it or an increase in the price of securities
which it plans to purchase through the use of those options and the purchase and
sale of interest rate futures contracts and options on those futures contracts.
These

10
<PAGE>

instruments are often referred to as "derivatives," which may be defined as
financial instruments whose performance is derived, at least in part, from the
performance of another asset (such as a security, currency or an index of
securities).

A call option is a contract pursuant to which the purchaser of the call
option, in return for a premium paid, has the right to buy the security
underlying the option at a specified exercise price at any time during the term
of the option. The writer of the call option, who receives the premium, has the
obligation upon exercise of the option to deliver the underlying security
against payment of the exercise price during the option period. A put option
gives its purchaser, in return for a premium, the right to sell the underlying
security at a specified price during the term of the option. The writer of the
put, who receives the premium, has the obligation to buy the underlying
security, upon exercise at the exercise price during the option period. The
amount of premium received or paid is based upon certain factors, including the
market price of the underlying security or index, the relationship of the
exercise price to the market price, the historical price volatility of the
underlying security or index, the option period, supply and demand and interest
rates.

Certain futures strategies employed by a Portfolio in making temporary
allocations may not be deemed to be for bona fide hedging purposes, as defined
by the Commodity Futures Trading Commission.

A Portfolio's use of options and futures contracts subjects a Portfolio to
certain investment risks and transaction costs to which it might not otherwise
be subject. These risks include: (1) dependence on the Advisor's ability to
predict movements in the prices of individual securities and fluctuations in the
general securities markets; (2) imperfect correlations between movements in the
prices of options or futures contracts and movements in the price of the
securities hedged or used for cover which may cause a given hedge not to achieve
its objective; (3) the fact that the skills and techniques needed to trade these
instruments are different from those needed to select the other securities in
which a Portfolio invests; (4) lack of assurance that a liquid secondary market
will exist for any particular instrument at any particular time, which, among
other things, may hinder a Portfolio's ability to limit exposures by closing its
positions; (5) the possible need to defer closing out of certain options,
futures contracts and related options to avoid adverse tax consequences; and (6)
the potential for unlimited loss when investing in futures contracts or writing
options for which an offsetting position is not held.

Other risks include the inability of a Portfolio, as the writer of covered
call options, to benefit from any appreciation of the underlying securities
above the exercise price and the possible loss of the entire premium paid for
options purchased by a Portfolio. In addition, the futures exchanges may limit
the amount of fluctuation permitted in certain futures contract prices during a
single trading day. A Portfolio may be forced, therefore, to liquidate or close
out a futures contract position at a disadvantageous price. There can be no
assurance that a liquid market will exist at a time when a Portfolio seeks to
close out a futures position or that a counterparty in an over-the-counter
option transaction will be able to perform its obligations.

11
<PAGE>

Guaranteed Investment Contracts
-------------------------------

The Portfolios may invest in guaranteed investment contracts ("GICs")
issued by insurance companies. Pursuant to such contracts, a Portfolio makes
cash contributions to a deposit fund of the insurance company's general account.
The insurance company then credits to the deposit fund on a monthly basis
guaranteed interest at a rate based on an index. The GICs provide that this
guaranteed interest will not be less than a certain minimum rate. The insurance
company may assess periodic charges against a GIC for expense and service costs
allocable to it, and these charges will be deducted from the value of the
deposit fund. A Portfolio will purchase a GIC only when the Advisor has
determined that the GIC presents minimal credit risks to the Portfolio and is of
comparable quality to instruments in which the Portfolio may otherwise invest.
Because a Portfolio may not receive the principal amount of a GIC from the
insurance company on seven days' notice or less, a GIC may be considered an
illiquid investment. The term of a GIC will be one year or less. The interest
rate on a GIC may be tied to a specified market index and is guaranteed not to
be less than a certain minimum rate.

High Yield/Junk Bonds
---------------------

The Portfolios may invest in high yield bonds, also known as "junk bonds."
Securities rated less than Baa by Moody's or BBB by Standard & Poor's ("S&P")
are classified as non-investment grade securities and are considered speculative
by those rating agencies. Junk bonds may be issued as a consequence of corporate
restructurings, such as leveraged buyouts, mergers, acquisitions, debt
recapitalizations, or similar events or by smaller or highly leveraged
companies. Although the growth of high yield/high risk securities market in the
1980's had paralleled a long economic expansion, many issuers subsequently have
been affected by adverse economic and market conditions. It should be recognized
that an economic downturn or increase in interest rates is likely to have a
negative effect on: (1) the high yield bond market; (2) the value of high
yield/high risk securities; and (3) the ability of the securities' issuers to
service their principal and interest payment obligations, to meet their
projected business goals or to obtain additional financing. In addition, the
market for high yield/high risk securities, which is concentrated in relatively
few market makers, may not be as liquid as the market for investment grade
securities. Under adverse market or economic conditions, the market for high
yield/high risk securities could contract further, independent of any specific
adverse changes in the condition of a particular issuer. As a result, a
Portfolio could find it more difficult to sell these securities or may be able
to sell the securities only at prices lower than if such securities were widely
traded. Prices realized upon the sale of such lower rated or unrated securities,
under these circumstances, may be less than the prices used in calculating a
Portfolio's net asset value.

In periods of reduced market liquidity, prices of high yield/high risk
securities may become more volatile and may experience sudden and substantial
price declines. Also, there may be significant disparities in the prices quoted
for high yield/high risk securities by various dealers. Under such conditions, a
Portfolio may have to use subjective rather than objective criteria to value its
high yield/high risk securities investments accurately and rely more heavily on
the judgment of the Advisor.

Lower rated or unrated debt obligations also present risks based on payment
expectations. If an issuer calls the obligation for redemption, the Advisor may
have to replace the security with a

12
<PAGE>

lower yielding security, resulting in a decreased return for investors. If a
Portfolio experiences unexpected net redemptions, the Advisor may be forced to
sell a Portfolio's higher rated securities, resulting in a decline in the
overall credit quality of a Portfolio's investment portfolio and increasing the
exposure of a Portfolio to the risks of high yield/high risk securities.

Illiquid Securities
-------------------

The Portfolios may invest in securities not registered under the Securities
Act of 1933, as amended (the "1933 Act") and other securities subject to legal
or other restrictions on resale. Because such securities may be less liquid than
other investments, they may be difficult to sell promptly at an acceptable
price. Delay or difficulty in selling securities may result in a loss or be
costly to a Portfolio.

Loans of Portfolio Securities
-----------------------------

Each Portfolio may lend its portfolio securities pursuant to guidelines
approved by the Board of Trustees of the Trust to brokers, dealers and financial
institutions, provided: (1) the loan is secured continuously by collateral
consisting of cash, securities of the U.S. Government, its agencies or
instrumentalities, or an irrevocable letter of credit issued by a bank organized
under the laws of the United States, organized under the laws of a State, or a
foreign bank that has filed an agreement with the Federal Reserve Board to
comply with the same rules and regulations applicable to U.S. banks in
securities credit transactions, and such collateral being maintained on a daily
marked-to-market basis in an amount at least equal to the current market value
of the securities loaned plus any accrued interest or dividends; (2) the
Portfolio may at any time call the loan and obtain the return of the securities
loaned upon sufficient prior notification; (3) the Portfolio will receive any
interest or dividends paid on the loaned securities; and (4) the aggregate
market value of securities loaned will not at any time exceed the limits
established by the 1940 Act.

A Portfolio will earn income for lending its securities because cash
collateral pursuant to these loans will be invested subject to the investment
objectives, principal investment strategies and policies of the Portfolio. In
connection with lending securities, a Portfolio may pay reasonable finders,
administrative and custodial fees. Loans of securities involve a risk that the
borrower may fail to return the securities or may fail to provide additional
collateral. In either case, a Portfolio could experience delays in recovering
securities or collateral or could lose all or part of the value of the loaned
securities. Although voting rights, or rights to consent, attendant to
securities on loan pass to the borrower, such loans may be called at any time
and will be called so that the securities may be voted by a Portfolio if a
material event affecting the investment is to occur. A Portfolio may pay a
portion of the interest or fees earned from securities lending to a borrower or
securities lending agent. Borrowers and placing brokers may not be affiliated,
directly or indirectly, with the Trust, the Advisor, or the Distributor.

Mortgage-Related Securities
---------------------------

The Portfolios may invest in mortgage-related securities. Mortgage pass-
through securities are securities representing interests in "pools" of mortgages
in which payments of both interest and principal on the securities are made
monthly, in effect "passing through" monthly payments made

13
<PAGE>

by the individual borrowers on the residential mortgage loans which underlie the
securities (net of fees paid to the issuer or guarantor of the securities).
Payment of principal and interest on some mortgage pass-through securities (but
not the market value of the securities themselves) may be guaranteed by the full
faith and credit of the U.S. Government or its agencies or instrumentalities.
Mortgage pass-through securities created by non- government issuers (such as
commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers) may be supported
by various forms of insurance or guarantees, including individual loan, title,
pool and hazard insurance, and letters of credit, which may be issued by
governmental entities, private insurers or the mortgage poolers.

Prepayment Risk. The stated maturities of mortgage-related securities may
be shortened by unscheduled prepayments of principal on the underlying
mortgages. Therefore, it is not possible to predict accurately the average
maturity of a particular mortgage-related security. Variations in the maturities
of mortgage-related securities will affect the yield of the Portfolios. Early
repayment of principal on mortgage-related securities may expose a Portfolio to
a lower rate of return upon reinvestment of principal. Also, if a security
subject to prepayment has been purchased at a premium, in the event of
prepayment the value of the premium would be lost. Like other fixed-income
securities, when interest rates rise, the value of a mortgage-related security
generally will decline; however, when interest rates decline, the value of
mortgage-related securities with prepayment features may not increase as much as
other fixed-income securities.

Collateralized Mortgage Obligations ("CMOs") and Adjustable Rate Mortgages
("ARMs"). The Portfolios may also invest in investment grade CMOs. CMOs may be
collateralized by whole mortgage loans but are more typically collateralized by
portfolios of mortgage pass-through securities guaranteed by the Government
National Mortgage Association ("GNMA"), the Federal Home Loan Mortgage
Corporation ("FHLMC") or Federal National Mortgage Association ("FNMA"). CMOs
are structured into multiple classes, with each class bearing a different stated
maturity. Payments of principal, including prepayments, are first returned to
investors holding the shortest maturity class; investors holding the longer
maturity classes receive principal only after the first class has been retired.
As new types of mortgage-related securities are developed and offered to
investors, the Advisor will, consistent with a Portfolio's investment objective,
policies and quality standards, consider making investments in such new types of
mortgage-related securities.

The Portfolios each may invest in ARMs issued or guaranteed by the GNMA,
FNMA or the FHLMC. The full and timely payment of principal and interest on GNMA
ARMs is guaranteed by GNMA and backed by the full faith and credit of the U.S.
Government. FNMA also guarantees full and timely payment of both interest and
principal, while FHLMC guarantees full and timely payment of interest and
ultimate payment of principal. FNMA and FHLMC ARMs are not backed by the full
faith and credit of the United States. However, because FNMA and FHLMC are
government-sponsored enterprises, these securities are generally considered to
be high quality investments that present minimal credit risks. The yields
provided by these ARMs have historically exceeded the yields on other types of
U.S. Government securities with comparable maturities, although there can be no
assurance that this historical performance will continue.

The mortgages underlying ARMs guaranteed by GNMA are typically insured or
guaranteed by the Federal Housing Administration, the Veterans Administration or
the Farmers Home

14
<PAGE>

Administration, while those underlying ARMs issued by FNMA or FHLMC are
typically conventional residential mortgages which are not so insured or
guaranteed, but which conform to specific underwriting, size and maturity
standards.

The interest rates on the mortgages underlying the ARMs and some of the
CMOs in which the Portfolios may invest generally are readjusted at periodic
intervals ranging from one year or less to several years in response to changes
in a predetermined commonly-recognized interest rate index. The adjustable rate
feature should reduce, but will not eliminate, price fluctuations in such
securities, particularly when market interest rates fluctuate. The net asset
value of a Portfolio's shares may fluctuate to the extent interest rates on
underlying mortgages differ from prevailing market interest rates during interim
periods between interest rate reset dates. Accordingly, investors could
experience some loss if they redeem their shares of a Portfolio or if a
Portfolio sells these portfolio securities before the interest rates on the
underlying mortgages are adjusted to reflect prevailing market interest rates.
The holder of ARMs and CMOs are also subject to repayment risk.

The Portfolios will not invest in CMOs that, at the time of purchase, are
"high-risk mortgage securities" as defined in the then current Federal Financial
Institutions Examination Council Supervisory Policy Statement on Securities
Activities. High-risk mortgage securities are generally those with long
durations or those which are likely to be more sensitive to interest-rate
fluctuations.

Mortgage Participation Certificates. The Portfolios also may invest in the
following types of FHLMC mortgage pass-through securities. FHLMC issues two
types of mortgage pass-through securities: mortgage participation certificates
("PCs") and guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA
certificates in that each PC represents a pro rata share of all interest and
principal payments made and owed on the underlying pool of mortgages. GMCs also
represent a pro rata interest in a pool of mortgages. These instruments,
however, pay interest semiannually and return principal once a year in
guaranteed minimum payments. These mortgage pass-through securities differ from
bonds in that principal is paid back by the borrower over the length of the loan
rather than returned in a lump sum at maturity. They are called "pass-through"
securities because both interest and principal payments, including prepayments,
are passed through to the holder of the security. PCs and GMCs are both subject
to prepayment risk.

Municipal Bonds
---------------

The Portfolios may invest in municipal bonds. The two principal
classifications of municipal bonds are "general obligation" and "revenue" bonds.
Municipal bonds are debt obligations issued to obtain funds for various public
purposes. Industrial development bonds are a specific type of revenue bond
backed by the credit and security of a private user. Certain types of industrial
development bonds are issued by or on behalf of public authorities to obtain
funds to provide privately-operated facilities.

From time to time, proposals have been introduced before Congress for the
purpose of restricting or eliminating the federal income tax exemption for
interest on municipal obligations. For example, under federal tax legislation
enacted in 1986, interest on certain private activity bonds must be included in
an investor's alternative minimum taxable income, and corporate investors must
treat all tax-exempt interest as an item of tax preference. Moreover the
Portfolios

15
<PAGE>

cannot predict what legislation, if any, may be proposed in the state
legislature regarding the state income tax status of interest on such
obligations, or which proposals, if any, might be enacted. Such proposals, while
pending or if enacted, might materially and adversely affect the availability of
municipal obligations generally for investment by the Portfolios and the
liquidity and value of a Portfolio's investment portfolio. In such an event, a
Portfolio would re-evaluate its investment objective and policies and consider
possible changes in its structure or possible dissolution.

Certain of the municipal obligations held by a Portfolio may be insured as
to the timely payment of principal and interest. The insurance policies usually
are obtained by the issuer of the municipal obligation at the time of its
original issuance. In the event that the issuer defaults on interest or
principal payment, the insurer will be notified and will be required to make
payment to the bondholders. There is, however, no guarantee that the insurer
will meet its obligations. In addition, such insurance does not protect against
market fluctuations caused by changes in interest rates and other factors.

Municipal Notes. The Portfolios may invest in municipal notes. Municipal
notes include, but are not limited to, tax anticipation notes ("TANs"), bond
anticipation notes ("BANs"), revenue anticipation notes ("RANs") and
construction loan notes. Notes sold as interim financing in anticipation of
collection of taxes, a bond sale or receipt of other revenues are usually
general obligations of the issuer.

TANs. An uncertainty in a municipal issuer's capacity to raise taxes as a
result of such events as a decline in its tax base or a rise in delinquencies
could adversely affect the issuer's ability to meet its obligations on
outstanding TANs. Furthermore, some municipal issuers mix various tax proceeds
into a general fund that is used to meet obligations other than those of the
outstanding TANs. Use of such a general fund to meet various obligations could
affect the likelihood of making payments on TANs.

BANs. The ability of a municipal issuer to meet its obligations on its BANs
is primarily dependent on the issuer's adequate access to the longer term
municipal bond market and the likelihood that the proceeds of such bond sales
will be used to pay the principal of, and interest on, BANs.

RANs. A decline in the receipt of certain revenues, such as anticipated
revenues from another level of government, could adversely affect an issuer's
ability to meet its obligations on outstanding RANs. In addition, the
possibility that the revenues would, when received, be used to meet other
obligations could affect the ability of the issuer to pay the principal of, and
interest on, RANs.

The values of outstanding municipal securities will vary as a result of
changing market evaluations of the ability of their issuers to meet the interest
and principal payments (i.e., credit risk). Such values also will change in
response to changes in the interest rates payable on new issues of municipal
securities (i.e., market risk).

Other Investment Companies
--------------------------

The principal investment strategy of each Portfolio is to invest in shares
of other open-end management investment companies, up to the limits prescribed
in Section 12(d) of the 1940

16
<PAGE>

Act and pursuant to the portfolio allocation percentages discussed in the
Prospectus. Each Portfolio seeks to achieve its investment objective by
investing substantially all of its investable assets in the Underlying Funds.
Accordingly, the investment experience of each of these Portfolios will
correspond directly with the investment experience of its respective Underlying
Funds. Under the 1940 Act, a Portfolio's investment in such securities currently
is limited to, subject to certain exceptions, (i) 3% of the total voting stock
of any one investment company, (ii) 5% of such Portfolio's total assets with
respect to any one investment company and (iii) 10% of such Portfolio's total
assets. Other investment companies in which the Portfolios invest can be
expected to charge fees for operating expenses, such as investment advisory and
administration fees, that would be in addition to those charged by the
Portfolios.

Participation Interests
-----------------------

Each Portfolio may purchase participation interests in loans or instruments
in which the Portfolio may invest directly that are owned by banks or other
institutions. A participation interest gives a Portfolio an undivided
proportionate interest in a loan or instrument. Participation interests may
carry a demand feature permitting the holder to tender the interests back to the
bank or other institution. Participation interests, however, do not provide the
Portfolio with any right to enforce compliance by the borrower, nor any rights
of set-off against the borrower and the Portfolio may not directly benefit from
any collateral supporting the loan in which it purchased a participation
interest. As a result, the Portfolio will assume the credit risk of both the
borrower and the lender that is selling the participation interest.

Privately Issued Securities
---------------------------

The Portfolios may invest in privately issued securities, including those
which may be resold only in accordance with Rule 144A under the Securities Act
of 1933 ("Rule 144A Securities"). Rule 144A Securities are restricted securities
that are not publicly traded. Accordingly, the liquidity of the market for
specific Rule 144A Securities may vary. Delay or difficulty in selling such
securities may result in a loss to a Portfolio. Privately issued or Rule 144A
Securities that are determined by the Advisor to be "illiquid" are subject to
the Portfolios' policy of not investing more than 15% of their net assets in
illiquid securities. The Advisor, under guidelines approved by Board of
Trustees of the Trust, will evaluate the liquidity characteristics of each Rule
144A Security proposed for purchase by a Portfolio on a case-by-case basis and
will consider the following factors, among others, in their evaluation: (1) the
frequency of trades and quotes for the Rule 144A Security; (2) the number of
dealers willing to purchase or sell the Rule 144A Security and the number of
other potential purchasers; (3) dealer undertakings to make a market in the Rule
144A Security; and (4) the nature of the Rule 144A Security and the nature of
the marketplace trades (e.g., the time needed to dispose of the Rule 144A
Security, the method of soliciting offers and the mechanics of transfer).

Repurchase Agreements
---------------------

Each Portfolio may enter into repurchase agreements, wherein the seller of
a security to a Portfolio agrees to repurchase that security from a Portfolio at
a mutually agreed upon time and price. A Portfolio may enter into repurchase
agreements only with respect to securities that could otherwise be purchased by
such Portfolio. All repurchase agreements will be fully collateralized at

17
<PAGE>

102% based on values that are marked to market daily. The maturities of the
underlying securities in a repurchase agreement transaction may be greater than
twelve months, although the maximum term of a repurchase agreement will always
be less than twelve months. If the seller defaults and the value of the
underlying securities has declined, a Portfolio may incur a loss. In addition,
if bankruptcy proceedings are commenced with respect to the seller of the
security, the Portfolios' disposition of the security may be delayed or limited.

A Portfolio may not enter into a repurchase agreement with a maturity of
more than seven days, if, as a result, more than 15% of the market value of such
Portfolio's net assets would be invested in repurchase agreements with
maturities of more than seven days and illiquid securities. A Portfolio will
only enter into repurchase agreements with primary broker/dealers and commercial
banks that meet guidelines established by the Board of Trustees and that are not
affiliated with the Advisor. The Portfolios may participate in pooled repurchase
agreement transactions with other funds advised by the Advisor.

Reverse Repurchase Agreements
-----------------------------

The Portfolios may enter into reverse repurchase agreements. Reverse
repurchase agreements are transactions in which a Portfolio sells a security and
simultaneously commits to repurchase that security from the buyer at an agreed
upon price on an agreed upon future date. The resale price in a reverse
repurchase agreement reflects a market rate of interest that is not related to
the coupon rate or maturity of the sold security. For certain demand agreements,
there is no agreed upon repurchase date and interest payments are calculated
daily, often based on the prevailing overnight repurchase rate. Because certain
of the incidents of ownership of the security are retained by a Portfolio,
reverse repurchase agreements may be viewed as a form of borrowing by a
Portfolio from the buyer, collateralized by the security sold by the Portfolio.
A Portfolio will use the proceeds of reverse repurchase agreements to Portfolio
redemptions or to make investments. In most cases these investments either
mature or have a demand feature to resell to the issuer on a date not later than
the expiration of the agreement. Interest costs on the money received in a
reverse repurchase agreement may exceed the return received on the investments
made by the Portfolio with those monies. Any significant commitment of a
Portfolio's assets to the reverse repurchase agreements will tend to increase
the volatility of a Portfolio's net asset value per share.

Short Sales
-----------

The Portfolios may make short sales of securities they own or have the
right to acquire at no added cost through conversion or exchange of other
securities they own (referred to as short sales "against the box") and to make
short sales of securities which they do not own or have the right to acquire. A
short sale that is not made "against the box" is a transaction in which a
Portfolio sells a security it does not own in anticipation of a decline in the
market price for the security. When a Portfolio makes a short sale, the proceeds
it receives are retained by the broker until that Portfolio replaces the
borrowed security. In order to deliver the security to the buyer, a Portfolio
must arrange through a broker to borrow the security and, in so doing, a
Portfolio becomes obligated to replace the security borrowed at its market price
at the time of replacement, whatever the price may be.

18
<PAGE>

If the Portfolio makes a short sale "against the box," the Portfolio would
not immediately deliver the securities sold and would not receive the proceeds
from the sale. The seller is said to have a short position in the securities
sold until it delivers the securities sold, at which time it receives the
proceeds of the sale. The Portfolio's decision to make a short sale "against the
box" may be a technique to hedge against market risks when the Advisor believes
that the price of a security may decline, causing a decline in the value of a
security owned by the Portfolio or a security convertible into or exchangeable
for such security. In such case, any future losses in the Portfolio's long
position would be reduced by an offsetting future gain in the short position.
The Portfolio's ability to enter into short sales transactions is limited by
certain tax requirements.

Each Portfolio may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short (short sales "against the box"), and provided that transactions in futures
contracts and options are not deemed to constitute selling securities short.

Stripped Securities
-------------------

The Portfolios may purchase Treasury receipts, securities of government-
sponsored enterprises ("GSEs"), and other "stripped" securities that evidence
ownership in either the future interest payments or the future principal
payments on U.S. Government and other obligations. The stripped securities the
Portfolios may purchase are issued by the U.S. Government (or a U.S. Government
agency or instrumentality) or by private issuers such as banks, corporations and
other institutions at a discount to their face value. The Portfolios will not
purchase stripped mortgage-backed securities ("SMBS"). The stripped securities
purchased by the Portfolios generally are structured to make a lump-sum payment
at maturity and do not make periodic payments of principal or interest. Hence,
the duration of these securities tends to be longer and they are therefore more
sensitive to interest rate fluctuations than similar securities that offer
periodic payments over time. The stripped securities purchased by the Portfolios
are not subject to prepayment or extension risk.

The Portfolios may purchase participations in trusts that hold U.S.
Treasury securities (such as TIGRs and CATS) or other obligations where the
trust participations evidence ownership in either the future interest payments
or the future principal payments on the obligations. These participations are
normally issued at a discount to their "face value," and can exhibit greater
price volatility than ordinary debt securities because of the way in which their
principal and interest are returned to investors.

Swap Agreements
---------------

To manage its exposure to different types of investments, a Portfolio may
enter into interest rate, currency and mortgage (or other asset) swap agreements
and may purchase and sell interest rate "caps," "floors" and "collars." In a
typical interest rate swap agreement, one party agrees to make regular payments
equal to a floating interest rate on a specified amount (the "notional principal
amount") in return for payments equal to a fixed interest rate on the same
amount for a specified period. If a swap agreement provides for payment in
different currencies, the parties may also agree to exchange the notional
principal amount. Mortgage swap agreements are similar to interest rate swap
agreements, except that the notional principal amount is tied to a reference
pool

19
<PAGE>

of mortgages. In a cap or floor arrangement, one party agrees, usually in return
for a fee, to make payments under particular circumstances. For example, the
purchaser of an interest rate cap has the right to receive payments to the
extent a specified interest rate exceeds a agreed upon level; the purchaser of
an interest rate floor has the right to receive payments to the extent a
specified interest rate falls below an agreed upon level. A collar arrangement
entitles the purchaser to receive payments to the extent a specified interest
rate falls outside an agreed upon range.

Swap agreements may involve leverage and may be highly volatile; depending
on how they are used they may have a considerable impact on the Portfolio's
performance. Swap agreements involve risks depending upon the counterparties'
creditworthiness and ability to perform as well as the Portfolio's ability to
terminate its swap agreements or reduce its exposure through offsetting
transactions.

U.S. Government Obligations
---------------------------

The Portfolios may invest in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities ("U.S. Government Obligations").
Payment of principal and interest on U.S. Government Obligations (i) may be
backed by the full faith and credit of the United States (as with U.S. Treasury
bills and GNMA certificates) or (ii) may be backed solely by the issuing or
guaranteeing agency or instrumentality itself (as with FNMA notes). In the
latter case investors must look principally to the agency or instrumentality
issuing or guaranteeing the obligation for ultimate repayment, which agency or
instrumentality may be privately owned. There can be no assurance that the U.S.
Government will provide financial support to its agencies or instrumentalities
where it is not obligated to do so. In addition, U.S. Government Obligations are
subject to fluctuations in market value due to fluctuations in market interest
rates. As a general matter, the value of debt instruments, including U.S.
Government Obligations, declines when market interest rates increase and rises
when market interest rates decrease. Certain types of U.S. Government
Obligations are subject to fluctuations in yield or value due to their structure
or contract terms.

Warrants
--------

The Portfolios may invest in warrants. A warrant is an option to purchase
an equity security at a specified price (usually representing a premium over the
applicable market value of the underlying equity security at the time of the
warrant's issuance) and usually during the specified period of time. The price
of warrants does not necessarily move parallel to the prices of the underlying
securities. Warrants have no voting rights, receive no dividends and have no
rights with respect to the assets of the issuer. Unlike convertible securities
and preferred stocks, warrants do not pay a fixed dividend. Investments in
warrants involve certain risks, including the possible lack of a liquid market
for the resale of the warrants, potential price fluctuations as a result of a
speculation or other factors and failure of the price of the underlying security
to reach a level at which the warrant can be prudently exercised. To the extent
that the market value of the security that may be purchased upon exercise of the
warrant rises above the exercise price, the value of the warrant will tend to
rise. To the extent that the exercise price equals or exceeds the market value
of such security, the warrants will have little or no market value. If a warrant
is not exercised within the specified time period, it will become worthless and
the Portfolio will lose the purchase price paid for the warrant and the right to
purchase the underlying security.

20
<PAGE>

Zero Coupon Bonds
-----------------

The Portfolios may invest in zero coupon bonds. Zero coupon bonds are
securities that make no periodic interest payments, but are instead sold at
discounts from face value. The buyer of such a bond receives the rate of return
by the gradual appreciation of the security, which is redeemed at face value on
a specified maturity date. Because zero coupon bonds bear no interest, they are
more sensitive to interest-rate changes and are therefore more volatile. When
interest rates rise, the discount to face value of the security deepens and the
securities decrease more rapidly in value, when interest rates fall, zero coupon
securities rise more rapidly in value because the bonds carry fixed interest
rates that become more attractive in a falling interest rate environment.

Nationally Recognized Ratings Organizations
-------------------------------------------

The ratings of Moody's Investors Services ("Moody's"), S&P, divisions of
McGraw Hill, Duff & Phelps Credit Rating Co., Fitch Investors Service, Inc.,
Thomson Bank Watch and IBCA Inc. represent their opinions as to the quality of
debt securities. It should be emphasized, however, that ratings are general and
not absolute standards of quality, and debt securities with the same maturity,
interest rate and rating may have different yields while debt securities of the
same maturity and interest rate with different ratings may have the same yield.
Subsequent to purchase by the Portfolios, an issue of debt securities may cease
to be rated or its rating may be reduced below the minimum rating required for
purchase by the Portfolios. The Advisor will consider such an event in
determining whether the Portfolio involved should continue to hold the
obligation.

See the Appendix regarding the ratings systems of Moody's and S&P.

MANAGEMENT

The following information supplements, and should be read in conjunction
with, the section in the Prospectus entitled "Organization and Management of the
Portfolios." The principal occupations during the past five years of the
Trustees and principal executive Officers of the Trust are listed below. The
address of each, unless otherwise indicated, is 525 Market Street, 12th Floor,
San Francisco, CA 94105. Trustees deemed to be "interested persons" of the Trust
for purposes of the 1940 Act are indicated by an asterisk.

<TABLE>
<CAPTION>
Principal Occupations
Name, Age and Address Position During Past 5 Years
--------------------- -------- -------------------
<S> <C> <C>
*Robert C. Brown, 65 Trustee Director, Federal Farm Credit Banks Funding
5038 Kestral Parkway South Corporation and Farm Credit System
Sarasota, FL 34231 Financial Assistance Corporation since
February 1993.

Donald H. Burkhardt, 70 Trustee Principal of the Burkhardt Law Firm.
777 South Steele Street
Denver, CO 80209
</TABLE>

21
<PAGE>

<TABLE>
<CAPTION>
Principal Occupations
Name, Age and Address Position During Past 5 Years
--------------------- -------- -------------------
<S> <C> <C>
Jack S. Euphrat, 77 Trustee Private Investor.
415 Walsh Road
Atherton, CA 94027

Thomas S. Goho, 56 Trustee Business Associate Professor, Wake Forest
321 Beechcliff Court University, Calloway School of Business and
Winston-Salem, NC 27104 Accountancy since 1994.

Peter G. Gordon, 56 Trustee Chairman and Co-Founder of Crystal Geyser
Crystal Geyser Water Co. Water Company and President of Crystal Geyser
55 Francisco Street, Suite 410 Roxane Water Company since 1977.
San Francisco, CA 94133

*W. Rodney Hughes, 72 Trustee Private Investor.
31 Dellwood Court
San Rafael, CA 94901

*Richard M. Leach, 63 Trustee President of Richard M. Leach Associates (a
P.O. Box 1888 financial consulting firm) since 1992.
New London, NH 03257

*J. Tucker Morse, 54 Trustee Private Investor/Real Estate Developer;
10 Legare Street Chairman of Vault Holdings, LLC.
Charleston, SC 29401

Timothy J. Penny, 45 Trustee Senior Counselor to the public relations firm
500 North State Street of Himle-Horner since January 1995 and Senior
Waseca, MN 56093 Fellow at the Humphrey Institute, Minneapolis,
Minnesota (a public policy organization) since
January 1995.

Donald C. Willeke, 59 Trustee Principal of the law firm of Willeke & Daniels.
201 Ridgewood Avenue
Minneapolis, MN 55403

Michael J. Hogan, 41 President Executive Vice President of Wells Fargo Bank,
N.A. since July 1999. Senior Vice President
of Wells Fargo Bank, N.A. from April 1997 to
May 1999. Vice President of American Express
Financial Advisors from May 1996 to April
1997, and Director of American Express
Financial Advisors from March 1993 to May 1996.
</TABLE>

22
<PAGE>

<TABLE>
<CAPTION>
Principal Occupations
Name, Age and Address Position During Past 5 Years
--------------------- -------- -------------------
<S> <C> <C>
Karla M. Rabusch, 41 Treasurer Senior Vice President of Wells Fargo Bank,
N.A., since May 2000. Vice President of Wells
Fargo Bank, N.A. from December 1997 to May
2000. Prior thereto, Director of Managed
Assets Investment Accounting of American
Express Financial Advisors from May 1994 to
November 1997.

C. David Messman, 40 Secretary Vice President and Senior Counsel of Wells
Fargo Bank, N.A. since January 1996. Prior
thereto, Branch Chief, Division of Investment
Management, U.S. Securities and Exchange
Commission.
</TABLE>

Each of the Trustees and Officers listed above act in the identical
capacities for Wells Fargo Variable Trust and Wells Fargo Core Trust (including
the Trust, collectively the "Fund Complex"). All of the non-interested Trustees
are also members of the Audit and Nominating Committees of the Trust, and of
each other trust in the Fund Complex.

Each Trustee receives an annual retainer (payable quarterly) of $40,000
from the Fund Complex, and also receives a combined fee of $1,000 for attendance
at Fund Complex Board meetings, and a combined fee of $250 for attendance at
committee meetings. If a committee meeting is held absent a full Board meeting,
each attending Trustee will receive a $1,000 combined fee. These fees apply
equally for in-person or telephonic meetings, and Trustees are reimbursed for
all out-of-pocket expenses related to attending meetings. The Trustees do not
receive any retirement benefits or deferred compensation from the Trust or any
other member of the Fund Complex. The Trust's officers are not compensated by
the Trust for their services. For the period November 8, 1999, the closing of
the Reorganization, through May 31, 2000, the end of the fiscal period for the
Portfolios, the Trustees have been paid and/or have accrued the following
compensation:

Compensation Table
Period Ended May 31, 2000
-------------------------
Trustee Compensation
------- ------------

23
<PAGE>

Donald C. Willeke $23,602

As of the date of this SAI, Trustees and Officers of the Trust as a group
beneficially owned less than 1% of the outstanding shares of the Trust.

Investment Advisor. Wells Fargo Bank provides investment advisory services
------------------
to the Portfolios. As the Advisor, Wells Fargo Bank furnishes investment
guidance and policy direction in connection with the daily portfolio management
of the Portfolios. Wells Fargo Bank furnishes to the Trust's Board of Trustees
periodic reports on the investment strategy and performance of each Portfolio.

As compensation for its advisory services, Well Fargo Bank is entitled to
receive a monthly fee at the annual rates indicated below of each Portfolio's
average daily net assets:

Annual Rate
Portfolio (as percentage of net assets)
--------- -----------------------------

Growth Portfolio 0.35%
Growth Balanced Portfolio 0.35%
Growth and Income Portfolio 0.35%

For periods prior to November 5, 1999, NIM served as advisor to the
predecessor Norwest portfolios. As compensation for its services, NIM was
entitled to receive investment advisory and allocation fees from each portfolio
at an annual rate of 0.35% of the portfolios average daily net assets.

The Portfolios paid advisory fees and the advisers waived such fees in the
following amounts as indicated for the periods shown:

<TABLE>
<CAPTION>
Period Ended Period Ended
05/31/00 11/05/99
----------- ------------
Wells Fargo NIM
----------- ---
Fees Fees Fees Fees
Portfolios Paid Waived Paid Waived
---------- ---- ------ ---- ------
<S> <C> <C> <C> <C>
Growth Portfolio $0 $56,463 $10,355 $12,556
Growth Balanced Portfolio $0 $58,270 $27,201 $10,648
Growth and Income Portfolio $0 $32,293 $ 3,628 $12,965

<CAPTION>
Year Ended Year Ended
05/31/99 05/31/98
----------- ------------
NIM NIM
--- ---
Fees Fees Fees Fees
Portfolios Paid Waived Paid Waived
---------- ---- ------ ---- ------
<S> <C> <C> <C> <C>
Growth Portfolio $ 63 $31,609 $0 $5,939
Growth Balanced Portfolio $8,596 $48,437 $0 $9,786
Growth and Income Portfolio $4,157 $32,146 $0 $7,907
</TABLE>

24
<PAGE>

General. Each Portfolio's Advisory Contract will continue in effect for
-------
more than two years from the effective date provided the continuance is approved
annually (i) by the holders of a majority of the respective Portfolio's
outstanding voting securities or by the Trust's Board of Trustees and (ii) by a
majority of the Trustees of the Trust who are not parties to the Advisory
Contract or "interested persons" (as defined in the 1940 Act) of any such party.
A Portfolio's Advisory Contract may be terminated on 60 days' written notice by
either party and will terminate automatically if assigned.

The Portfolios are unique from the other funds of the Trust in that, as a
"fund of funds" which invests all of their assets in the Underlying Funds, the
Portfolios do not have an investment sub-advisor.

Administrator. The Trust has retained Wells Fargo Bank as Administrator on
-------------
behalf of each Portfolio. Under the Administration Agreement between Wells
Fargo Bank and the Trust, Wells Fargo Bank shall provide as administration
services, among other things: (i) general supervision of the Portfolios'
operations, including coordination of the services performed by each Portfolio's
Advisor, transfer agent, custodian, shareholder servicing agent(s), independent
auditors and legal counsel, regulatory compliance, including the compilation of
information for documents such as reports to, and filings with, the U.S.
Securities and Exchange Commission ("SEC") and state securities commissions; and
preparation of proxy statements and shareholder reports for each Portfolio; and
(ii) general supervision relative to the compilation of data required for the
preparation of periodic reports distributed to the Trust's officers and Board of
Trustees. Wells Fargo Bank also furnishes office space and certain facilities
required for conducting the Portfolios' business together with ordinary clerical
and bookkeeping services. The Administrator is entitled to receive a fee of up
to 0.15% of each Portfolio's average daily net assets on an annual basis.

With respect to the predecessor Norwest portfolios, Forum Financial
Services, Inc. ("Forum") managed all aspects of the operation of the portfolios,
except those which were the responsibility of Forum Administrative Services, LLC
("FAdS") as administrator or Norwest in its capacity as administrator.

The predecessor portfolios paid to Forum/FAdS through November 8, 1999, and
the Portfolios paid to Wells Fargo Bank from November 8, 1999 through May 31,
2000 the following fees for administration services:

Period Ended Period Ended
05/31/00 11/05/99
----------- ------------
Portfolios Wells Fargo Forum/FAdS
---------- ----------- ------------

Growth Portfolio $ 24,199 $0
Growth Balanced Portfolio $ 24,972 $0
Growth and Income Portfolio $ 13,840 $0

25
<PAGE>

<TABLE>
<CAPTION>
Year Ended Year Ended
05/31/99 05/31/98
---------- ----------
Forum/FAdS Forum/FAdS
---------- ----------
Fees Fees Fees Fees
Portfolio Paid Waived Paid Waived
--------- ---- ------ ---- ------
<S> <C> <C> <C> <C>
Growth Portfolio $4,525 $4,523 $1,697 $1,697
Growth Balanced Portfolio $8,148 $1,043 $2,796 $2,796
Growth and Income Portfolio $5,186 $4,792 $2,259 $2,259
</TABLE>

Distributor. Stephens Inc. ("Stephens," the "Distributor"), located at 111
-----------
Center Street, Little Rock, Arkansas 72201, serves as Distributor for the
Portfolios. The Portfolios have adopted a distribution plan (a "Plan") under
Section 12(b) of the 1940 Act and Rule 12b-1 thereunder (the "Rule"). The Plan
was adopted by the Trust's Board of Trustees, including a majority of the
Trustees who were not "interested persons" (as defined in the 1940 Act) of the
Portfolios and who had no direct or indirect financial interest in the operation
of the Plan or in any agreement related to the Plan (the "Non-Interested
Trustees").

Under the Plan and pursuant to the related Distribution Agreement, each
Portfolio pays Stephens up to 0.75% of the average daily net assets of the
Portfolio as compensation for distribution-related services or as reimbursement
for distribution-related expenses.

The actual fee payable to the Distributor by the Portfolios is determined,
within such limits, from time to time by mutual agreement between the Trust and
the Distributor and will not exceed the maximum sales charges payable by mutual
funds sold by members of the National Association of Securities Dealers, Inc.
("NASD") under the Conduct Rules of the NASD. The Distributor may enter into
selling agreements with one or more selling agents (which may include Wells
Fargo Bank and its affiliates) under which such agents may receive compensation
for distribution-related services from the Distributor, including, but not
limited to, commissions or other payments to such agents based on the average
daily net assets of Portfolio shares attributable to their customers. The
Distributor may retain any portion of the total distribution fee payable
thereunder to compensate it for distribution-related services provided by it or
to reimburse it for other distribution-related expenses.

The predecessor portfolios had retained Forum as distributor for each
portfolio pursuant to a distribution plan. The distribution plan authorized
monthly payments at an annual rate of up to 0.75% of the portfolio's average
daily net assets.

For the year ended May 31, 2000, Forum and Stephens received the following
fees for distribution-related services for the periods June 1, 1999 through
November 5, 1999 and November 8, 1999 through May 31, 2000, respectively, as set
forth below, under each Portfolio's Rule 12b-1 Plan:

<TABLE>
<CAPTION>
Printing, Mailing Compensation
Fund Total Advertising & Prospectus to Underwriters
---- ----- ----------- ------------ ---------------
Forum Stephens Forum Stephens Forum Stephens Forum Stephens
----- -------- ----- -------- ----- -------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>

26
<PAGE>

Printing, Mailing Compensation
Fund Total Advertising & Prospectus to Underwriters
---- ----- ----------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth Portfolio $49,094 $120,992 $0 $0 $0 $0 $49,094 $120,992

Growth Balanced
Portfolio $81,105 $124,864 $0 $0 $0 $0 $81,105 $124,864

Growth and Income
Portfolio $35,555 $ 69,201 $0 $0 $0 $0 $35,555 $ 69,201
</TABLE>

General. The Plan will continue in effect from year to year if such
-------
continuance is approved by a majority vote of both the Trustees of the Trust and
the Non-Interested Trustees. Any Distribution Agreement related to the Plan
also must be approved by such vote of the Trustees and the Non-Interested
Trustees. Such Agreement will terminate automatically if assigned, and may be
terminated at any time, without payment of any penalty, by a vote of a majority
of the outstanding voting securities of the Portfolio or by vote of a majority
of the Non-Interested Trustees on not more than 60 days' written notice. The
Plan may not be amended to increase materially the amounts payable thereunder
without the approval of a majority of the outstanding voting securities of the
Portfolio, and no material amendment to the Plan may be made except by a
majority of both the Trustees of the Trust and the Non-Interested Trustees.

The Plan requires that the Treasurer of the Trust shall provide to the
Trustees, and the Trustees shall review, at least quarterly, a written report of
the amounts expended (and purposes therefor) under the Plan. The Rule also
requires that the selection and nomination of Trustees who are not "interested
persons" of the Trust be made by such disinterested Trustees.

Wells Fargo Bank, an interested person (as that term is defined in Section
2(a)(19) of the 1940 Act) of the Trust, acts as a selling agent for the
Portfolios' shares pursuant to selling agreements with Stephens authorized under
the Plan. As a selling agent, Wells Fargo Bank has an indirect financial
interest in the operation of the Plan. The Board of Trustees has concluded that
the Plan is reasonably likely to benefit the Portfolios and their shareholders
because the Plan authorizes the relationships with selling agents, including
Wells Fargo Bank, that have previously developed distribution channels and
relationships with the retail customers that the Portfolios are designed to
serve. The Board believes that these relationships and distribution channels
provide potential for increased Portfolio assets and ultimately corresponding
economic efficiencies (i.e., lower per-share transaction costs and fixed
expenses) that are generated by increased assets under management.

27
<PAGE>

and other payments and distributions on account of the assets of each Portfolio,
and pays all expenses of each Portfolio. For its services as Custodian, Wells
Fargo MN is entitled to receive a fee of 0.02% of the average daily net assets
of each Portfolio.

Fund Accountant. Forum Accounting Services, LLC ("Forum Accounting"),
---------------
located at Two Portland Square, Portland, Maine 04101, serves as Fund Accountant
for the Portfolios. For its services as Fund Accountant, Forum Accounting is
entitled to receive a monthly base fee per Portfolio of $5,000. In addition,
each Portfolio pays a monthly fee of $1,000.00 per class, and Forum Accounting
is also entitled to receive a fee equal to 0.0025% of the average annual daily
net assets of each Portfolio.

Transfer and Dividend Disbursing Agent. Boston Financial Data Services,
--------------------------------------
Inc. ("BFDS"), located at Two Heritage Drive, Quincy, Massachusetts 02171, acts
as Transfer and Dividend Disbursing Agent for the Portfolios. For providing
such services, BFDS is entitled to receive a per-account fee plus transaction
fees and certain out-of-pocket costs. BFDS is also entitled to receive a
complex base fee from all the Portfolios of the Trust, Wells Fargo Core Trust
and Wells Fargo Variable Trust.

Underwriting Commissions. Stephens serves as the principal underwriter
------------------------
distributing securities of the Portfolios on a continuous basis. Forum served
as underwriter of the predecessor Norwest portfolios. For the last three
fiscal years, the portfolios and the predecessor portfolios did not pay any
underwriting commissions.

28
<PAGE>

Code of Ethics.
--------------

The Fund Complex, the Advisor, the Sub-Advisors and Stephens each have
adopted a code of ethics which contains policies on personal securities
transactions by "access persons." These policies substantially comply in all
material respects with the amendments to Rule 17j-1 under the 1940 Act as set
forth in the August 20, 1999 Adopting Release. Each code of ethics, among other
things, permits access persons to invest in certain securities, subject to
various restrictions and requirements. More specifically, each code of ethics
either prohibits its access persons from purchasing or selling securities that
may be purchased or held by a Portfolio or permits such access persons to
purchase or sell such securities, subject to certain restrictions. For purposes
of a code of ethics, an access person means (i) a director, trustee or officer
of a fund or investment adviser; (ii) any employee of a fund or investment
adviser (or any company in a control relationship to a fund or investment
adviser) who, in connection makes, participates in, or obtains information about
the purchase or sale of securities by a fund, or whose functions relate to the
making of any recommendations with respect to the purchases or sales; and (iii)
any natural person in a control relationship to a fund or investment adviser who
obtains information concerning recommendations made to a fund regarding the
purchase or sale of securities. Portfolio managers and other persons who assist
in the investment process are subject to additional restrictions. The above
restrictions do not apply to purchases or sales of certain types of securities,
including mutual fund shares, money market instruments and certain U.S.
Government securities. To facilitate enforcement, the codes of ethics generally
require that an access person, other than "disinterested" directors or trustees,
submit reports to a designated compliance person regarding transactions
involving securities which are eligible for purchase by a Portfolio. The codes
of ethics for the Fund Complex, Advisor, Sub-Advisors and Stephens are on public
file with, and are available from, the SEC.

PERFORMANCE CALCULATIONS

The Portfolios may advertise certain yield and total return information.
Quotations of yield and total return reflect only the performance of a
hypothetical investment in a Portfolio or class of shares during the particular
time period shown. Yield and total return vary based on changes in the market
conditions and the level of a Portfolio's expenses, and no reported performance
figure should be considered an indication of performance which may be expected
in the future.

In connection with communicating its performance to current or prospective
shareholders, these figures may also be compared to the performance of other
mutual funds tracked by mutual fund rating services or to unmanaged indices
which may assume reinvestment of dividends but generally do not reflect
deductions for administrative and management costs.

Performance information for a Portfolio may be useful in reviewing the
performance of such Portfolio and for providing a basis for comparison with
investment alternatives. The performance of a Portfolio, however, may not be
comparable to the performance from investment alternatives because of
differences in the foregoing variables and differences in the methods used to
value portfolio securities, compute expenses and calculate performance.

29
<PAGE>

Performance information may be advertised for non-standardized periods,
including year-to-date and other periods less than a year for the Portfolio.
Annual and Semi-Annual Reports for the Portfolios may contain additional
performance information, and are available free of charge upon request.

Average Annual Total Return: The Portfolios may advertise certain total
---------------------------
return information. As and to the extent required by the SEC, an average annual
compound rate of return ("T") is computed by using the redeemable value at the
end of a specified period ("ERV") of a hypothetical initial investment ("P")
over a period of years ("n") according to the following formula: P(1+T)/n/=ERV.

<TABLE>
<CAPTION>
Average Annual Total Return for the Year Ended May 31, 2000
------------------------------------------------------------

Portfolios Inception One Year
---------- --------- --------
<S> <C> <C>
Growth Portfolio 15.81% 16.75%
Growth Balanced Portfolio 10.44% 9.06%
Growth and Income Portfolio 13.58% 17.23%
</TABLE>

Cumulative Total Return. In addition to the above performance information,
-----------------------
each Portfolio may also advertise the cumulative total return of the Portfolio.
Cumulative total return is based on the overall percentage change in value of a
hypothetical investment in the Portfolio, assuming all Portfolio dividends and
capital gain distributions are reinvested, without reflecting the effect of any
sales charge that would be paid by an investor, and is not annualized.

<TABLE>
<CAPTION>
Cumulative Total Return for the Year Ended May 31, 2000
-------------------------------------------------------

Portfolio Inception One Year
--------- --------- --------
<S> <C> <C>
Growth Portfolio 47.84% 18.53%
Growth Balanced Portfolio 30.29% 10.72%
Growth and Income Portfolio 40.38% 19.02%
</TABLE>

The yields for each share will fluctuate from time to time, unlike bank
deposits or other investments that pay a fixed yield for a stated period of
time, and do not provide a basis for determining future yields since they are
based on historical data. Yield is a function of portfolio quality, composition,
maturity and market conditions as well as the expenses allocated to a Portfolio.

From time to time and only to the extent the comparison is appropriate for
a Portfolio, the Trust may quote the performance or price-earning ratio of a
Portfolio in advertising and other types of literature as compared with the
performance of the S&P Index, the Dow Jones Industrial Average, the Lehman
Brothers 20+ Treasury Index, the Lehman Brothers 5-7 Year Treasury Index,
Donoghue's Money Fund Averages, Real Estate Investment Averages (as reported by
the National Association of Real Estate Investment Trusts), Gold Investment
Averages (provided by the World

30
<PAGE>

Gold Council), Bank Averages (which is calculated from figures supplied by the
U.S. League of Savings Institutions based on effective annual rates of interest
on both passbook and certificate accounts), average annualized certificate of
deposit rates (from the Federal Reserve G-13 Statistical Releases or the Bank
Rate Monitor), the Salomon One Year Treasury Benchmark Index, the Consumer Price
Index (as published by the U.S. Bureau of Labor Statistics), other managed or
unmanaged indices or performance data of bonds, municipal securities, stocks or
government securities (including data provided by Ibbotson Associates), or by
other services, companies, publications or persons who monitor mutual funds on
overall performance or other criteria. The S&P Index and the Dow Jones
Industrial Average are unmanaged indices of selected common stock prices. The
performance of a Portfolio also may be compared to that of other mutual funds
having similar objectives. This comparative performance could be expressed as a
ranking prepared by Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Bloomberg Financial Markets or Morningstar, Inc.,
independent services which monitor the performance of mutual funds. The
Portfolios' performance will be calculated by relating net asset value per share
of each Portfolio at the beginning of a stated period to the net asset value of
the investment, assuming reinvestment of all gains distributions paid, at the
end of the period. The Portfolios' comparative performance will be based on a
comparison of yields or total return, as reported by Lipper, Survey
Publications, Donoghue or Morningstar, Inc.

Any such comparisons may be useful to investors who wish to compare past
performance of the Portfolios with the performance of a Portfolio's competitors.
Of course, past performance cannot be a guarantee of future results. The Trust
also may include, from time to time, a reference to certain marketing approaches
of the Distributor, including, for example, a reference to a potential
shareholder being contacted by a selected broker or dealer. General mutual fund
statistics provided by the Investment Company Institute (the "ICI") may also be
used.

The Trust also may use the following information in advertisements and
other types of literature, only to the extent the information is appropriate for
a Portfolio: (i) the Consumer Price Index may be used to assess the real rate of
return from an investment in a Portfolio; (ii) other government statistics,
including, but not limited to, The Survey of Current Business, may be used to
illustrate investment attributes of a Portfolio or the general economic,
business, investment, or financial environment in which a Portfolio operates;
(iii) the effect of tax-deferred compounding on the investment returns of a
Portfolio or on returns in general, may be illustrated by graphs, charts, etc.,
where such graphs or charts would compare, at various points in time, the return
from an investment in the Portfolio (or returns in general) on a tax-deferred
basis (assuming reinvestment of capital gains and dividends and assuming one or
more tax rates) with the return on a taxable basis; and (iv) the sectors or
industries in which the Portfolio invests may be compared to relevant indices of
stocks or surveys (e.g., S&P Industry Surveys) to evaluate the historical
performance or current or potential value of a Portfolio with respect to the
particular industry or sector.

The Trust also may use, in advertisements and other types of literature,
information and statements: (1) showing that bank savings accounts offer a
guaranteed return of principal and a fixed rate of interest, but no opportunity
for capital growth; and (2) describing Wells Fargo Bank, and its affiliates and
predecessors, as one of the first investment managers to advise investment
accounts using asset allocation and index strategies. The Trust also may include
in advertising and other types of literature information and other data from
reports and studies prepared by the Tax

31
<PAGE>

Foundation, including information regarding federal and state tax levels and the
related "Tax Freedom Day."

The Trust also may discuss in advertising and other types of literature
that a Portfolio has been assigned a rating by an NRRO, such as Standard & Poors
Corporation. Such rating would assess the creditworthiness of the investments
held by a Portfolio. The assigned rating would not be a recommendation to
purchase, sell or hold a Portfolio's shares since the rating would not comment
on the market price of a Portfolio's shares or the suitability of a Portfolio
for a particular investor. In addition, the assigned rating would be subject to
change, suspension or withdrawal as a result of changes in, or unavailability
of, information relating to a Portfolio or its investments. The Trust may
compare the performance of a Portfolio with other investments which are assigned
ratings by NRROs. Any such comparisons may be useful to investors who wish to
compare a Portfolio's past performance with other rated investments.

From time to time, a Portfolio may use the following statements, or
variations thereof, in advertisements and other promotional materials: "Wells
Fargo Bank, as a Shareholder Servicing Agent for the Wells Fargo Funds Trust,
provides various services to its customers that are also shareholders of the
Portfolios. These services may include access to Wells Fargo Funds Trust's
account information through Automated Teller Machines (ATMs), the placement of
purchase and redemption requests for shares of the Portfolios through ATMs and
the availability of combined Wells Fargo Bank and Wells Fargo Funds Trust
account statements."

The Trust also may disclose, in advertising and other types of literature,
information and statements that Wells Capital Management, Inc., a subsidiary of
Wells Fargo Bank, is listed in the top 100 by Institutional Investor magazine in
----------------------
its July 1997 survey "America's Top 300 Money Managers." This survey ranks money
managers in several asset categories. The Trust also may disclose in advertising
and other types of sales literature the assets and categories of assets under
management by the Trust's Advisor and the total amount of assets and mutual fund
assets managed by Wells Fargo Bank. As of June 30, 2000, Wells Fargo Bank and
its affiliates managed over $160.5 billion in assets.

The Trust may disclose in advertising and other types of literature that
investors can open and maintain Sweep Accounts over the Internet or through
other electronic channels (collectively, "Electronic Channels"). Such
advertising and other literature may discuss the investment options available to
investors, including the types of accounts and any applicable fees. Such
advertising and other literature may disclose that Wells Fargo Bank is the first
major bank to offer an on-line application for a mutual fund account that can be
filled out completely through Electronic Channels. Advertising and other
literature may disclose that Wells Fargo Bank may maintain Web sites, pages or
other information sites accessible through Electronic Channels (an "Information
Site") and may describe the contents and features of the Information Site and
instruct investors on how to access the Information Site and open a Sweep
Account. Advertising and other literature may also disclose the procedures
employed by Wells Fargo Bank to secure information provided by investors,
including disclosure and discussion of the tools and services for accessing
Electronic Channels. Such advertising or other literature may include
discussions of the advantages of establishing and maintaining a Sweep Account
through Electronic Channels and testimonials from Wells Fargo Bank customers or
employees and may also include descriptions of locations where

32
<PAGE>

product demonstrations may occur. The Trust may also disclose the ranking of
Wells Fargo Bank as one of the largest money managers in the United States.

DETERMINATION OF NET ASSET VALUE

Net asset value per share for each Portfolio is determined as of the close
of regular trading (currently 1:00 p.m. (Pacific time), 3:00 p.m. (Central
time), 4:00 p.m. (Eastern time)), on each day the New York Stock Exchange
("NYSE") is open for business. Expenses and fees, including advisory fees, are
accrued daily and are taken into account for the purpose of determining the net
asset value of the Portfolios' shares.

Securities of a Portfolio for which market quotations are available are
valued at latest prices. Any security for which the primary market is an
exchange is valued at the last sale price on such exchange on the day of
valuation or, if there was no sale on such day, the latest bid price quoted on
such day. In the case of other Portfolio securities, including U.S. Government
securities but excluding money market instruments and debt securities maturing
in 60 days or less, the valuations are based on latest quoted bid prices. Money
market instruments and debt securities maturing in 60 days or less are valued at
amortized cost. Futures contracts will be marked to market daily at their
respective settlement prices determined by the relevant exchange. Prices may be
furnished by a reputable independent pricing service approved by the Trust's
Board of Trustees. Prices provided by an independent pricing service may be
determined without exclusive reliance on quoted prices and may take into account
appropriate factors such as institutional-size trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics and other market data. All other securities and other assets of
a Portfolio for which current market quotations are not readily available are
valued at fair value as determined in good faith by the Trust's Board of
Trustees and in accordance with procedures adopted by the Trustees.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Shares of the Portfolios may be purchased on any day the Portfolios are
open for business. Each Portfolio is open for business each day the NYSE is
open for trading (a "Business Day"). Currently, the NYSE is closed on New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day (each a
"Holiday"). When any Holiday falls on a weekend, the NYSE typically is closed on
the weekday immediately before or after such Holiday.

Payment for shares may, in the discretion of the Advisor, be made in the
form of securities that are permissible investments for the Portfolios. For
further information about this form of payment, please contact the Distributor.
In connection with an in-kind securities payment, the Portfolios will require,
among other things, that the securities be valued on the day of purchase in
accordance with the pricing methods used by a Portfolio and that such Portfolio
receives satisfactory assurances that (i) it will have good and marketable title
to the securities received by it; (ii) that the securities are in proper form
for transfer to the Portfolio; and (iii) adequate information will be provided
concerning the basis and other matters relating to the securities.

Under the 1940 Act, the Portfolios may suspend the right of redemption or
postpone the date of payment upon redemption for any period during which the
NYSE is closed (other than

33
<PAGE>

customary weekend and holiday closings, or during which trading is restricted,
or during which as determined by the SEC by rule or regulation) an emergency
exists as a result of which disposal or valuation of portfolio securities is not
reasonably practicable, or for such periods as the SEC may permit. The Trust may
also redeem shares involuntarily or make payment for redemption in securities or
other property if it appears appropriate to do so in light of the Trust's
responsibilities under the 1940 Act. In addition, the Trust may redeem shares
involuntarily to reimburse the Portfolio for any losses sustained by reason of
the failure of a shareholder to make full payment for shares purchased or to
collect any charge relating to a transaction effected for the benefit of a
shareholder which is applicable to shares of a Portfolio as provided from time
to time in the Prospectus.

Purchases and Redemptions Through Brokers and/or Their Affiliates. A
-----------------------------------------------------------------
broker may charge transaction fees on the purchase and/or sale of Portfolio
shares in addition to those fees described in the Prospectus in the Summary of
Expenses. The Trust has authorized one or more brokers to receive on its behalf
purchase and redemption orders, and such brokers are authorized to designate
other intermediaries to receive purchase and redemption orders on the Trust's
behalf. The Trust will be deemed to have received a purchase or redemption
order for Portfolio shares when an authorized broker or, if applicable, a
broker's authorized designee, receives the order.

PORTFOLIO TRANSACTIONS

The Trust has no obligation to deal with any dealer or group of dealers in
the execution of transactions in portfolio securities. Subject to policies
established by the Trust's Board of Trustees, Wells Fargo Bank is responsible
for each Portfolio's investment portfolio decisions and the placing of portfolio
transactions. In placing orders, it is the policy of the Trust to obtain the
best results taking into account the dealer's general execution and operational
facilities, the type of transaction involved and other factors such as the
dealer's risk in positioning the securities involved. While Wells Fargo Bank
generally seeks reasonably competitive spreads or commissions, the Portfolios
will not necessarily be paying the lowest spread or commission available.

Purchases and sales of non-equity securities usually will be principal
transactions. Portfolio securities normally will be purchased or sold from or to
dealers serving as market makers for the securities at a net price. Each of the
Portfolios also will purchase portfolio securities in underwritten offerings and
may purchase securities directly from the issuer. Generally, municipal
obligations and taxable money market securities are traded on a net basis and do
not involve brokerage commissions. The cost of executing a Portfolio's
investment portfolio securities transactions will consist primarily of dealer
spreads and underwriting commissions. Under the 1940 Act, persons affiliated
with the Trust are prohibited from dealing with the Trust as a principal in the
purchase and sale of securities unless an exemptive order allowing such
transactions is obtained from the SEC or an exemption is otherwise available.
The Portfolio may purchase securities from underwriting syndicates of which
Stephens or Wells

34
<PAGE>

Fargo Bank is a member under certain conditions in accordance with the
provisions of a rule adopted under the 1940 Act and in compliance with
procedures adopted by the Board of Trustees.

Wells Fargo Bank, as the Advisor to the Portfolios, may, in circumstances
in which two or more dealers are in a position to offer comparable results for a
Portfolio's investment portfolio transaction, give preference to a dealer that
has provided statistical or other research services to Wells Fargo Bank. By
allocating transactions in this manner, Wells Fargo Bank is able to supplement
its research and analysis with the views and information of securities firms.
Information so received will be in addition to, and not in lieu of, the services
required to be performed by Wells Fargo Bank under the Advisory Contracts, and
the expenses of Wells Fargo Bank will not necessarily be reduced as a result of
the receipt of this supplemental research information. Furthermore, research
services furnished by dealers through which Wells Fargo Bank places securities
transactions for a Portfolio may be used by Wells Fargo Bank in servicing its
other accounts, and not all of these services may be used by Wells Fargo Bank in
connection with advising the Portfolios.

Portfolio Turnover. The portfolio turnover rate is not a limiting factor
------------------
when Wells Fargo Bank deems portfolio changes appropriate. Changes may be made
in the portfolios consistent with the investment objectives and policies of the
Portfolios whenever such changes are believed to be in the best interests of the
Portfolios and their shareholders. The portfolio turnover rate is calculated by
dividing the lesser of purchases or sales of portfolio securities by the average
monthly value of the Fund's portfolio securities. For purposes of this
calculation, portfolio securities exclude all securities having a maturity when
purchased of one year or less. Portfolio turnover generally involves some
expenses to the Portfolios, including brokerage commissions or dealer mark-ups
and other transaction costs on the sale of securities and the reinvestment in
other securities. Portfolio turnover also can generate short-term capital gain
tax consequences. Portfolio turnover rate is not a limiting factor when Wells
Fargo Bank deems portfolio changes appropriate.

PORTFOLIO EXPENSES

From time to time, Wells Fargo Bank and Stephens may waive fees from the
Portfolios in whole or in part. Any such waiver will reduce expenses and,
accordingly, have a favorable impact on a Portfolio's performance.

Except for the expenses borne by Wells Fargo Bank and Stephens, the Trust
bears all costs of its operations, including the compensation of its Trustees;
affiliates; advisory, shareholder servicing and administration fees; payments
pursuant to any Plan; interest charges; taxes; fees and expenses of its
independent auditors, legal counsel, transfer agent and dividend disbursing
agent; expenses of redeeming shares; expenses of preparing and printing
Prospectuses (except the expense of printing and mailing Prospectuses used for
promotional purposes, unless otherwise payable pursuant to a Plan),
shareholders' reports, notices, proxy statements and reports to regulatory
agencies; insurance premiums and certain expenses relating to insurance
coverage; trade association membership dues; brokerage and other expenses
connected with the execution of portfolio transactions; fees and expenses of its
custodian, including those for keeping books and accounts and calculating the
net asset value per share of a Portfolio; expenses of shareholders'

35
<PAGE>

meetings; expenses relating to the issuance, registration and qualification of a
Portfolio's shares; and pricing services, organizational expenses and any
extraordinary expenses. Expenses attributable to the Portfolios are charged
against Portfolio assets. General expenses of the Trust are allocated among all
of the funds of the Trust, including the Portfolios, in a manner proportionate
to the net assets of each Portfolio, on a transactional basis, or on such other
basis as the Trust's Board of Trustees deems equitable.

FEDERAL INCOME TAXES

The following information supplements and should be read in conjunction
with the Prospectus section entitled "Taxes." The Prospectus of each Portfolio
generally describes the tax treatment of distributions by the Portfolio. This
section of the SAI includes additional information concerning federal income
taxes.

General. The Trust intends to continue to qualify each Portfolio as a
-------
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"), as long as such qualification is in the best
interests of the Portfolio's shareholders. Each Portfolio will be treated as a
separate entity for federal income tax purposes. Thus, the provisions of the
Code applicable to regulated investment companies generally will be applied
separately to each Portfolio, rather than to the Trust as a whole. In addition,
capital gains, net investment income, and operating expenses will be determined
separately for each Portfolio. As a regulated investment company, each
Portfolio will not be taxed on its net investment income and capital gain
distributed to its shareholders.

Qualification as a regulated investment company under the Code requires,
among other things, that each Portfolio derive at least 90% of its annual gross
income from dividends, interest, certain payments with respect to securities
loans, gains from the sale or other disposition of stock or securities or
foreign currencies (to the extent such currency gains are directly related to
the regulated investment company's principal business of investing in stock or
securities) and other income (including, but not limited to, gains from options,
futures or forward contracts) derived with respect to its business of investing
in such stock, securities or currencies; and (b) diversify its holdings so that,
at the end of each quarter of the taxable year, (i) at least 50% of the market
value of the Portfolio's assets is represented by cash, government securities
and other securities limited in respect of any one issuer to an amount not
greater than 5% of the Portfolio's assets and 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its assets
is invested in the securities of any one issuer (other than U.S. Government
obligations and the securities of other regulated investment companies), or in
two or more issuers which the Portfolio controls and which are determined to be
engaged in the same or similar trades or businesses.

The Portfolios must also distribute or be deemed to distribute to their
shareholders at least 90% of their net investment income (including, for this
purpose, net short-term capital gain) earned in each taxable year. In general,
these distributions must actually or be deemed to be made in the taxable year.
However, in certain circumstances, such distributions may be made in the 12
months following the taxable year. Furthermore, distributions declared in
October, November or December of one taxable year and paid by January 31 of the
following taxable year will be treated as paid by December 31 of the first
taxable year. The Portfolios intend to pay out

36
<PAGE>

substantially all of their net investment income and net realized capital gains
(if any) for each year.

Excise Tax. A 4% nondeductible excise tax will be imposed on each
----------
Portfolio (other than to the extent of its tax-exempt interest income) to the
extent it does not meet certain minimum distribution requirements by the end of
each calendar year. Each Portfolio intends to actually or be deemed to
distribute substantially all of its net investment income and net capital gains
by the end of each calendar year and, thus, expects not to be subject to the
excise tax.

Taxation of Fund Investments. Except as provided herein, gains and losses
----------------------------
on the sale of portfolio securities by a Portfolio will generally be capital
gains and losses. Such gains and losses will ordinarily be long-term capital
gains and losses if the securities have been held by the Portfolio for more than
one year at the time of disposition of the securities.

Gains recognized on the disposition of a debt obligation (including tax-
exempt obligations) purchased by a Portfolio at a market discount (generally at
a price less than its principal amount) will be treated as ordinary income to
the extent of the portion of market discount which accrued, but was not
previously recognized pursuant to an available election, during the term the
Portfolio held the debt obligation.

If an option granted by a Portfolio lapses or is terminated through a
closing transaction, such as a repurchase by the Portfolio of the option from
its holder, the Portfolio will realize a short-term capital gain or loss,
depending on whether the premium income is greater or less than the amount paid
by the Portfolio in the closing transaction. Some realized capital losses may be
deferred if they result from a position which is part of a "straddle," discussed
below. If securities are sold by the Portfolio pursuant to the exercise of a
call option written by it, the Portfolio will add the premium received to the
sale price of the securities delivered in determining the amount of gain or loss
on the sale. If securities are purchased by a Portfolio pursuant to the exercise
of a put option written by it, such Portfolio will subtract the premium received
from its cost basis in the securities purchased.

The amount of any gain or loss realized by a Portfolio on closing out a
regulated futures contract will generally result in a realized capital gain or
loss for federal income tax purposes. Regulated futures contracts held at the
end of each fiscal year will be required to be "marked to market" for federal
income tax purposes pursuant to Section 1256 of the Code. In this regard, they
will be deemed to have been sold at market value. Sixty percent (60%) of any net
gain or loss recognized on these deemed sales, and sixty percent (60%) of any
net realized gain or loss from any actual sales, will generally be treated as
long-term capital gain or loss, and the remainder will be treated as short-term
capital gain or loss. Transactions that qualify as designated hedges are
excepted from the "mark-to-market" rule and the "60%/40%" rule.

Under Section 988 of the Code, a Portfolio generally will recognize
ordinary income or loss to the extent that gain or loss realized on the
disposition of portfolio securities is attributable to changes in foreign
currency exchange rates. In addition, gain or loss realized on the disposition
of a foreign currency forward contract, futures contract, option or similar
financial instrument, or of foreign currency itself, will generally be treated
as ordinary income or loss.

37
<PAGE>

The Portfolios will attempt to monitor Section 988 transactions, where
applicable, to avoid adverse Federal income tax impact.

Offsetting positions held by a Portfolio involving certain financial
forward, futures or options contracts may be considered, for tax purposes, to
constitute "straddles." "Straddles" are defined to include "offsetting
positions" in actively traded personal property. The tax treatment of
"straddles" is governed by Section 1092 of the Code which, in certain
circumstances, overrides or modifies the provisions of Section 1256. If a
Portfolio were treated as entering into "straddles" by engaging in certain
financial forward, futures or option contracts, such straddles could be
characterized as "mixed straddles" if the futures, forwards, or options
comprising a part of such straddles were governed by Section 1256 of the Code.
The Portfolio may make one or more elections with respect to "mixed straddles."
Depending upon which election is made, if any, the results with respect to the
Portfolio may differ. Generally, to the extent the straddle rules apply to
positions established by the Portfolio, losses realized by the Portfolio may be
deferred to the extent of unrealized gain in any offsetting positions. Moreover,
as a result of the straddle and the conversion transaction rules, short-term
capital loss on straddle positions may be recharacterized as long-term capital
loss, and long-term capital gain may be characterized as short-term capital gain
or ordinary income.

If a Portfolio enters into a "constructive sale" of any appreciated
position in stock, a partnership interest, or certain debt instruments, the
Portfolio must recognize gain (but not loss) with respect to that position. For
this purpose, a constructive sale occurs when the Portfolio enters into one of
the following transactions with respect to the same or substantially identical
property: (i) a short sale; (ii) an offsetting notional principal contract; or
(iii) a futures or forward contract.

If a Portfolio purchases shares in a "passive foreign investment company"
("PFIC"), the Portfolio may be subject to Federal income tax and an interest
charge imposed by the IRS upon certain distributions from the PFIC or the
Portfolio's disposition of its PFIC shares. If the Portfolio invests in a PFIC,
the Portfolio intends to make an available election to mark-to-market its
interest in PFIC shares. Under the election, the Portfolio will be treated as
recognizing at the end of each taxable year the difference, if any, between the
fair market value of its interest in the PFIC shares and its basis in such
shares. In some circumstances, the recognition of loss may be suspended. The
Portfolio will adjust its basis in the PFIC shares by the amount of income (or
loss) recognized. Although such income (or loss) will be taxable to the
Portfolio as ordinary income (or loss) notwithstanding any distributions by the
PFIC, the Portfolio will not be subject to Federal income tax or the interest
charge with respect to its interest in the PFIC under the election.

Foreign Taxes. Income and dividends received by a Portfolio from sources
-------------
within foreign countries may be subject to withholding and other taxes imposed
by such countries. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes. In certain circumstances, a
regulated investment company is eligible to file an election with the IRS
pursuant to which the regulated investment company may pass-through to its
shareholders foreign taxes paid by the regulated investment company, which may
be claimed either as a credit or deduction by the shareholders. None of the
Portfolios expect to qualify for the election.

38
<PAGE>

Capital Gain Distributions. Distributions which are designated by a
--------------------------
Portfolio as capital gain distributions will be taxed to shareholders as long-
term term capital gain (to the extent such dividends do exceed the Portfolio's
actual net capital gains for the taxable year), regardless of how long a
shareholder has held Portfolio shares. Such distributions will be designated as
capital gain distributions in a written notice mailed by the Portfolio to its
shareholders not later than 60 days after the close of the Portfolio's taxable
year.

Disposition of Fund Shares. A disposition of Portfolio shares pursuant to
--------------------------
a redemption (including a redemption in-kind) or an exchange will ordinarily
result in a taxable capital gain or loss, depending on the amount received for
the shares (or are deemed to be received in the case of an exchange) and the
cost of the shares.

If a shareholder exchanges or otherwise disposes of Portfolio shares within
90 days of having acquired such shares and if, as a result of having acquired
those shares, the shareholder subsequently pays a reduced sales charge on a new
purchase of shares of the Portfolio or a different regulated investment company,
the sales charge previously incurred in acquiring the Portfolio's shares shall
not be taken into account (to the extent such previous sales charges do not
exceed the reduction in sales charges on the new purchase) for the purpose of
determining the amount of gain or loss on the disposition, but will be treated
as having been incurred in the acquisition of such other shares. Also, any loss
realized on a redemption or exchange of shares of the Portfolio will be
disallowed to the extent that substantially identical shares are acquired within
the 61-day period beginning 30 days before and ending 30 days after the shares
are disposed of.

If a shareholder receives a designated capital gain distribution (to be
treated by the shareholder as a long-term capital gain) with respect to any
Portfolio share and such Portfolio share is held for six months or less, then
(unless otherwise disallowed) any loss on the sale or exchange of that Portfolio
share will be treated as a long-term capital loss to the extent of the
designated capital gain distribution. The loss disallowance rules described in
this paragraph do not apply to losses realized under a periodic redemption plan.

39
<PAGE>

shareholder is subject to backup withholding. Such tax withheld does not
constitute any additional tax imposed on the shareholder, and may be claimed as
a tax payment on the shareholder's Federal income tax return. An investor must
provide a valid TIN upon opening or reopening an account. Failure to furnish a
valid TIN to the Trust also could subject the investor to penalties imposed by
the IRS.

Foreign Shareholders. Under the Code, distributions attributable to net
--------------------
investment income, net short-term capital gain and certain other items realized
by a Portfolio and paid to a nonresident alien individual, foreign trust (i.e.,
trust which a U.S. court is able to exercise primary supervision over
administration of that trust and one or more U.S. persons have authority to
control substantial decisions of that trust), foreign estate (i.e., the income
of which is not subject to U.S. tax regardless of source), foreign corporation,
or foreign partnership (each, a "foreign shareholder") will be subject to U.S.
withholding tax (at a rate of 30% or a lower treaty rate, if applicable).
Withholding will not apply if a distribution paid by the Portfolio to a foreign
shareholder is "effectively connected" with a U.S. trade or business (or, if an
income tax treaty applies, is attributable to a U.S. permanent establishment of
the foreign shareholder), in which case the reporting and withholding
requirements applicable to U.S. persons will apply. Capital gain distributions
generally are not subject to tax withholding.

New Regulations. On October 6, 1997, the Treasury Department issued new
---------------
regulations (the "New Regulations") which make certain modifications to the
backup withholding, U.S. income tax withholding and information reporting rules
applicable to foreign shareholders. The New Regulations will generally be
effective for payments made after December 31, 2000, subject to certain
transition rules. Among other things, the New Regulations will permit the
Portfolios to estimate the portion of their distributions qualifying as capital
gain distributions for purposes of determining the portion of such distributions
paid to foreign shareholders that will be subject to federal income tax
withholding. Prospective investors are urged to consult their own tax advisors
regarding the New Regulations.

Corporate Shareholders. Corporate shareholders of the Portfolios may be
----------------------
eligible for the dividends-received deduction on dividends distributed out of a
Portfolio's income attributable to dividends received from domestic
corporations, which, if received directly by the corporate shareholder, would
qualify for such deduction. A distribution by a Portfolio attributable to
dividends of a domestic corporation will only qualify for the dividends-received
deduction if (i) the corporate shareholder generally holds the Portfolio shares
upon which the distribution is made for at least 46 days during the 90 day
period beginning 45 days prior to the date upon which the shareholder becomes
entitled to the distribution; and (ii) the Portfolio generally holds the shares
of the domestic corporation producing the dividend income for at least 46 days
during the 90 day period beginning 45 days prior to the date upon which the
Portfolio becomes entitled to such dividend income.

Tax-Deferred Plan. The shares of the Portfolios are available for a
-----------------
variety of tax-deferred retirement and other plans, including Individual
Retirement Accounts ("IRA"), Simplified Employee Pension Plans ("SEP-IRA"),
Savings Incentive Match Plans for Employees ("SIMPLE plans"), Roth IRAs, and
Education IRAs, which permit investors to defer some of their income from taxes.
Investors should contact their selling agents for details concerning retirement
plans.

40
<PAGE>

Other Matters. Investors should be aware that the investments to be made
-------------
by the Portfolios may involve sophisticated tax rules that may result in income
or gain recognition by the Portfolios without corresponding current cash
receipts. Although the Portfolios will seek to avoid significant noncash
income, such noncash income could be recognized by the Portfolios, in which case
the Portfolios may distribute cash derived from other sources in order to meet
the minimum distribution requirements described above.

The foregoing discussion and the discussions in the Prospectus applicable
to each shareholder address only some of the Federal tax considerations
generally affecting investments in the Portfolios. Each investor is urged to
consult his or her tax advisor regarding specific questions as to federal,
state, local or foreign taxes.

CAPITAL STOCK

The Portfolios are three of the funds in the Wells Fargo Funds Trust family
of funds. The Trust was organized as a Delaware business trust on March 10,
1999.

Most of the Trust's funds are authorized to issue multiple classes of
shares, one class generally subject to a front-end sales charge and, in some
cases, classes subject to a contingent-deferred sales charge, that are offered
to retail investors. Certain of the Trust's funds also are authorized to issue
other classes of shares, which are sold primarily to institutional investors.
Each share in a fund represents an equal, proportionate interest in a fund with
all other shares. Shareholders bear their pro rata portion of the fund's
operating expenses, except for certain class-specific expenses (e.g., any state
securities registration fees, shareholder servicing fees or distribution fees
that may be paid under Rule 12b-1) that are allocated to a particular class.
Please contact Shareholder Services at 1-800-222-8222 if you would like
additional information about other funds or classes of shares offered.

With respect to matters affecting one class but not another, shareholders
vote as a class; for example, the approval of a Plan. Subject to the foregoing,
all shares of a Portfolio have equal voting rights and will be voted in the
aggregate, and not by series, except where voting by a series is required by law
or where the matter involved only affects one series. For example, a change in
a Portfolio's fundamental investment policy affects only one series and would be
voted upon only by shareholders of the Portfolio involved. Additionally,
approval of an advisory contract, since it affects only one Portfolio, is a
matter to be determined separately by Series. Approval by the shareholders of
one Series is effective as to that Series whether or not sufficient votes are
received from the shareholders of the other Series to approve the proposal as to
those Series.

As used in the Prospectus and in this SAI, the term "majority," when
referring to approvals to be obtained from shareholders of the Portfolio, means
the vote of the lesser of (i) 67% of the shares of the Portfolio represented at
a meeting if the holders of more than 50% of the outstanding shares of the
Portfolio are present in person or by proxy, or (ii) more than 50% of the
outstanding shares of the Portfolio. The term "majority," when referring to the
approvals to be obtained from shareholders of the Trust as a whole, means the
vote of the lesser of (i) 67% of the Trust's shares represented at a meeting if
the holders of more than 50% of the Trust's

41
<PAGE>

outstanding shares are present in person or by proxy, or (ii) more than 50% of
the Trust's outstanding shares.

Each share of a class of a Portfolio represents an equal proportional
interest in the Portfolio with each other share of the same class and is
entitled to such dividends and distributions out of the income earned on the
assets belonging to the Portfolio as are declared in the discretion of the
Trustees. In the event of the liquidation or dissolution of the Trust,
shareholders of a Portfolio are entitled to receive the assets attributable to
that Portfolio that are available for distribution, and a distribution of any
general assets not attributable to a particular Portfolio or investment
portfolio that are available for distribution in such manner and on such basis
as the Trustees in their sole discretion may determine.

Set forth below, as of August 31, 2000, is the name, address and share
ownership of each person known by the Trust to have beneficial or record
ownership of 5% or more of a class of a Portfolio or 5% or more of the voting
securities as a whole. The term "N/A" is used where a shareholder holds 5% or
more of a class, but less than 5% of a Portfolio as a whole.

5% OWNERSHIP AS OF AUGUST 31, 2000
----------------------------------

<TABLE>
<CAPTION>
Type of Percentage
Portfolio Name and Address Ownership of Class
--------- ---------------- --------- --------
<S> <C> <C> <C>
GROWTH PORTFOLIO N/A N/A N/A
GROWTH BALANCED PORTFOLIO N/A N/A N/A
GROWTH AND INCOME PORTFOLIO Dean Witter for the Benefit of 6.04%
Sundahl Limited Partnership
P.O. Box 250
Church Street Station
New York, NY 10008-0250
</TABLE>

For purposes of the 1940 Act, any person who owns directly or through one
or more controlled companies more than 25% of the voting securities of a company
is presumed to "control" such company. Accordingly, to the extent that a
shareholder identified in the foregoing table is identified as the beneficial
holder of more than 25% of a class (or Portfolio), or is identified as the
holder of record of more than 25% of a class (or Portfolio) and has voting
and/or investment powers, it may be presumed to control such class (or
Portfolio).

OTHER

The Trust's Registration Statement, including the Prospectus and SAI for
the Portfolios and the exhibits filed therewith, may be examined at the office
of the U.S. Securities and Exchange Commission in Washington, D.C. Statements
contained in the Prospectus or the SAI as to the

42
<PAGE>

contents of any contract or other document referred to herein or in the
Prospectus are not necessarily complete, and, in each instance, reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference.

COUNSEL

INDEPENDENT AUDITORS

FINANCIAL INFORMATION

The portfolios of investments and audited financial statements for the
Portfolios for the year ended May 31, 2000, are hereby incorporated by reference
to the Portfolios' Annual Report.

43
<PAGE>

APPENDIX

The following is a description of the ratings given by Moody's and S&P to
corporate and municipal bonds, municipal notes, and corporate and municipal
commercial paper.

Corporate Bonds
---------------

Commercial Paper
----------------

A-1
<PAGE>

commercial paper rated "A-2" is "more susceptible" to the adverse effects of
changes in economic conditions or other circumstances than commercial paper
rated in higher rating categories.

A-2
<PAGE>

WELLS FARGO FUNDS TRUST
File Nos. 333-74295; 811-09253

PART C
OTHER INFORMATION

Item 23. Exhibits.
---------

<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
(a) - Amended and Restated Declaration of Trust, incorporated by
reference to Post-Effective Amendment No. 8, filed
December 17, 1999.

(b) - Not applicable.

(d)(1)(i) - Investment Advisory Agreement with Wells Fargo Bank,
N.A., incorporated by reference to Post-Effective
Amendment No. 8, filed December 17, 1999.

(ii) - Fee and Expense Agreement between Wells Fargo Funds
Trust and Wells Fargo Bank, N.A., incorporated by reference
to Post-Effective Amendment No. 8, filed December 17,
1999.

(2)(i) - Sub-Advisory Contract with Barclays Global Fund Advisors,
incorporated by reference to Post-Effective Amendment
No. 8, filed December 17, 1999.

(ii) - Sub-Advisory Contract with Galliard Capital Management,
Inc., incorporated by reference to Post-Effective Amendment
No. 8, filed December 17, 1999.

(iii) - Sub-Advisory Contract with Peregrine Capital Management,
Inc., incorporated by reference to Post-Effective Amendment
No. 8, filed December 17, 1999.

(iv) - Sub-Advisory Contract with Schroder Investment
Management North America Inc., incorporated by reference
to Post-Effective Amendment No. 8, filed December 17,
1999.
</TABLE>

C-1
<PAGE>

<TABLE>
<S> <C>
(v) - Sub-Advisory Contract with Smith Asset Management
Group, L.P., incorporated by reference to Post-Effective
Amendment No. 10, filed May 10, 2000.

(vi) - Form of Sub-Advisory Contract with Wells Capital
Management Incorporated, incorporated by reference to Post-
effective Amendment No. 1, filed May 28, 1999.

(e)(i) - Form of Distribution Agreement along with Form of Selling
Agreement, incorporated by reference to Post-effective
Amendment No. 1, filed May 28, 1999.

(ii) - Distribution Plan, incorporated by reference to Post-Effective
Amendment No. 8, filed December 17, 1999.

(f) - Not applicable.

(g)(1) - Custody Agreement with Barclays Global Investors, N.A.,
incorporated by reference to Post-Effective Amendment
No. 8, filed December 17, 1999.

(2) - Custody Agreement with Norwest Bank Minnesota, N.A.,
incorporated by reference to Post-Effective Amendment
No. 8, filed December 17, 1999.

(3) - Securities Lending Agreement by and among Wells Fargo
Funds Trust, Wells Fargo Bank, N.A. and Norwest Bank
Minnesota, N.A., incorporated by reference to Post-Effective
Amendment No. 8, filed December 17, 1999.

(h)(1) - Administration Agreement with Wells Fargo Bank, N.A.,
incorporated by reference to Post-Effective Amendment
No. 8, filed December 17, 1999.

(2)(i) - Fund Accounting Agreement, incorporated by reference to
Post-Effective Amendment No. 9, filed February 1, 2000.

(3) - Transfer Agency and Service Agreement with Boston
Financial Data Services, Inc., incorporated by reference to
Post-Effective Amendment No. 8, filed December 17, 1999.

(4) - Shareholder Servicing Plan, incorporated by reference to
Post-Effective Amendment No. 8, filed December 17, 1999.
</TABLE>

C-2
<PAGE>

<TABLE>
<S> <C>
(5) - Form of Shareholder Servicing Agreement, incorporated by
reference to Post-Effective Amendment No. 8, filed
December 17, 1999.

(i) - Legal Opinion, filed herewith.

(j)(A) - Consent of Independent Auditors for WealthBuilder
Portfolios of Funds Trust, filed herewith.

(B) - Consent of Independent Auditors for Income Funds of Funds
Trust, filed herewith.

(j)(1) - Power of Attorney, Robert C. Brown, incorporated by
reference to Post-Effective Amendment No. 10, filed May
10, 2000.

(2) - Power of Attorney, Donald H. Burkhardt, incorporated by
reference to Post-Effective Amendment No. 10, filed May
10, 2000.

(3) - Power of Attorney, Jack S. Euphrat, incorporated by
reference to Post-Effective Amendment No. 10, filed May
10, 2000.

(4) - Power of Attorney, Thomas S. Goho, incorporated by
reference to Post-Effective Amendment No. 10, filed May
10, 2000.

(5) - Power of Attorney, Peter G. Gordon, incorporated by
reference to Post-Effective Amendment No. 10, filed May
10, 2000.

(6) - Power of Attorney, W. Rodney Hughes, incorporated by
reference to Post-Effective Amendment No. 10, filed May
10, 2000.

(7) - Form of Power of Attorney, Richard M. Leach, incorporated
by reference to Post-Effective Amendment No. 10, filed May
10, 2000.

(8) - Power of Attorney, J. Tucker Morse, incorporated by
reference to Post-Effective Amendment No. 10, filed May
10, 2000.
</TABLE>

C-3
<PAGE>

<TABLE>
<S> <C>
(9) - Power of Attorney, Timothy J. Perry, incorporated by
reference to Post-Effective Amendment No. 10, filed May
10, 2000.

(10) - Power of Attorney, Donald C. Willeke, incorporated by
reference to Post-Effective Amendment No. 10, filed May
10, 2000.

(11) - Power of Attorney, Michael J. Hogan, incorporated by
reference to Post-Effective Amendment No. 10, filed May
10, 2000.

(12) - Power of Attorney, Karla M. Rabusch, incorporated by
reference to Post-Effective Amendment No. 10, filed May
10, 2000.

(k) - Not applicable.

(l) - Not applicable.

(m) - Rule 12b-1 Plan, incorporated by reference to Post-effective
Amendment No. 8, filed December 17, 1999.

(n) - Rule 18f-3 Plan, incorporated by reference to Post-Effective
Amendment No. 8, filed December 17, 1999.

(p)(1) - Joint Code of Ethics for Funds Trust, Core Trust and Variable Trust, filed herewith.

(2) - Wells Fargo Bank, N.A. Code of Ethics, filed herewith.

(3) - Barclays Global Investors, N.A. Code of Ethics, filed
herewith.

(4) - Dresdner RCM Global Investors, Inc. Code of Ethics, filed
herewith.

(5) - Galliard Capital Management, Inc. Code of Ethics, filed
herewith.

(6) - Peregrine Capital Management, Inc. Code of Ethics, filed
herewith.

(7) - Schroder Investment Management North America Inc.
Code of Ethics, filed herewith.
</TABLE>

C-4
<PAGE>

<TABLE>
<S> <C>
(8) - Smith Asset Management Group, L.P. Code of Ethics, filed
herewith.

(9) - Wells Capital Management Incorporated Code of Ethics,
filed herewith.
</TABLE>

Item 24. Persons Controlled by or Under Common Control with the Fund.
-----------------------------------------------------------

Registrant believes that no person is controlled by or under common
control with Registrant.

Item 25. Indemnification.
---------------

Article V of the Registrant's Declaration of Trust limits the
liability and, in certain instances, provides for mandatory indemnification of
the Registrant's trustees, officers, employees, agents and holders of beneficial
interests in the Trust. In addition, the Trustees are empowered under Section
3.9 of the Registrant's Declaration of Trust to obtain such insurance policies
as they deem necessary.

Item 26. Business and Other Connections of Investment Adviser.
----------------------------------------------------

(a) Wells Fargo Bank, N.A. ("Wells Fargo Bank"), a wholly-owned
subsidiary of Wells Fargo & Company, serves as investment adviser to all of the
Registrant's investment portfolios, and to certain other registered open-end
management investment companies. Wells Fargo Bank's business is that of a
national banking association with respect to which it conducts a variety of
commercial banking and trust activities.

To the knowledge of Registrant, none of the directors or executive
officers of Wells Fargo Bank is or has been at any time during the past two
fiscal years engaged in any other business, profession, vocation or employment
of a substantial nature, except that certain executive officers also hold
various positions with and engage in business for Wells Fargo & Company and/or
its subsidiaries.

(b) Barclays Global Fund Advisors ("BGFA"), a wholly-owned subsidiary
of Barclays Global Investors, N.A. ("BGI"), serves as an adviser or sub-adviser
to various Funds of the Trust and as adviser or sub-adviser to certain other
open-end management investment companies. The description of BGFA in Parts A and
B of this Registration Statement is incorporated by reference herein. The
directors and officers of BGFA also serve as directors or officers of BGI. To
the knowledge of the Registrant, none of the directors or executive officers of
BGFA is or has been at any time during the past two fiscal years engaged in any
other business, profession, vocation or employment of a substantial nature.

C-5
<PAGE>

(c) Wells Capital Management Incorporated ("WCM"), a wholly-owned
subsidiary of Wells Fargo Bank, N.A., serves as sub-adviser to various Funds of
the Trust. The description of WCM in Parts A and B of this Registration
Statement is incorporated by reference in Parts A and B of this Registration
Statement is incorporated by reference herein. None of the directors and
principal executive officers of WCM serves, or has served in the past two fiscal
years, in such capacity for any other entity.

(d) Peregrine Capital Management, Inc. ("Peregrine"), an indirect
wholly-owned subsidiary of Wells Fargo & Company, serves as sub-adviser to
various Funds of the Trust. The description of Peregrine in Parts A and B of the
Registration Statement, is incorporated by reference herein. To the knowledge of
the Registrant, none of the directors or executive officers of this sub-adviser
is or has been at any time during the last two fiscal years engaged in any other
business, profession, vocation or employment of a substantial nature.

(e) Schroder Investment Management North America Inc. ("SIMNA"),
serves as sub-adviser to various Funds of the Trust. The description of SIMNA in
Parts A and B of the Registration Statement are incorporated by reference
herein. The address is 787 Seventh Avenue, 34th Floor, New York, NY 10019.
Schroder Capital Management International Limited ("Schroder Ltd.") is a United
Kingdom affiliate of SIMNA which provides investment management services to
international clients located principally in the United States. Schroder Ltd.
and Schroders p.l.c. are located at 31 Gresham St., London ECZV 7QA, United
Kingdom. To the knowledge of the Registrant, none of the directors or executive
officers of this sub-adviser is or has been at any time during the last two
fiscal years engaged in any other business, profession, vocation or employment
of a substantial nature.

(f) Galliard Capital Management, Inc. ("Galliard"), an indirect,
wholly-owned subsidiary of Wells Fargo & Company serves as sub-adviser to
various Funds of the Trust. The descriptions of Galliard. in Parts A and B of
the Registration Statement, are incorporated by reference herein. The address of
Galliard is LaSalle Plaza, Suite 2060, 800 LaSalle Avenue, Minneapolis,
Minnesota 55479. To the knowledge of the Registrant, none of the directors or
executive officers of this sub-adviser is or has been at any time during the
last two fiscal years engaged in any other business, profession, vocation or
employment of a substantial nature.

(g) Smith Asset Management, L.P. ("Smith"), an indirect, partially-
owned subsidiary of Wells Fargo & Company serves as sub-adviser to various Funds
of the Trust. The descriptions of Smith in Parts A and B of the Registration
Statement, are incorporated by reference herein. The address of Smith is 300
Crescent Court, Suite 750, Dallas, Texas 75201. To the knowledge of the
Registrant, none of the directors or executive officers of this sub-adviser is
or has been at any time during the last two fiscal years engaged in any other
business, profession, vocation or employment of a substantial nature.

C-6
<PAGE>

(h) Golden Capital Management ("Golden"), a division of Smith Asset
Management, L.P. serves as the investment sub-advisor to the OTC Growth Fund of
the Trust. The descriptions of Golden in Parts A and B of the Registration
Statement, are incorporated by reference herein. The address of Golden is 10926
David Taylor Drive, Suite 180, Charlotte, North Carolina 28262. To the knowledge
of the Registrant, none of the directors or executive officers of this sub-
adviser is or has been at any time during the last two fiscal years engaged in
any other business, profession, vocation or employment of a substantial nature.

(i) Dresdner RCM Global Investors LLC ("Dresdner"), an indirect,
wholly owned subsidiary of Dresdner Bank AG serves as the sub-advisor for the
Specialized Technology Fund of the Trust. The descriptions of Dresdner in Parts
A and B of the Registration Statement, are incorporated by reference herein. The
address of Dresdner is Four Embarcadero Center, San Francisco, California 94111.
To the knowledge of the Registrant, none of the directors or executive officers
of this sub-adviser is or has been at any time during the last two fiscal years
engaged in any other business, profession, vocation or employment of a
substantial nature.

Item 27. Principal Underwriters.
----------------------

(a) Stephens Inc. ("Stephens"), distributor for the Registrant, does
not presently act as investment adviser for any other registered investment
companies, but does act as principal underwriter for Barclays Global Investors
Funds, Inc., Nations Fund, Inc., Nations Fund Trust, Nations Annuity Trust,
Nations LifeGoal Funds, Inc., Nations Reserves, Nations Funds Trust, Wells Fargo
Variable Trust and Wells Fargo Funds Trust, and is the exclusive placement agent
for Nations Master Investment Portfolio and Wells Fargo Core Trust, all of which
are registered open-end management investment companies.

(b) Information with respect to each director and officer of the
principal underwriter is incorporated by reference to Form ADV and Schedules A
and D thereto, filed by Stephens with the Securities and Exchange Commission
pursuant to the Investment Advisers Act of 1940 (file No. 501-15510).

Item 28. Location of Accounts and Records.
--------------------------------

(a) The Registrant maintains accounts, books and other documents
required by Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder (collectively, "Records") at the offices of Wells Fargo Bank, 525
Market Street, San Francisco, California 94105.

C-7
<PAGE>

(b) Wells Fargo Bank maintains all Records relating to its services
as investment adviser and administrator at 525 Market Street, San Francisco,
California 94105.

(c) BGFA and BGI maintain all Records relating to their services as
sub-adviser and custodian, respectively, at 45 Fremont Street, San Francisco,
California 94105.

(d) Stephens maintains all Records relating to its services as
distributor at 111 Center Street, Little Rock, Arkansas 72201.

(e) Norwest Bank Minnesota, N.A. maintains all Records relating to
its services as custodian at 6th & Marquette, Minneapolis, Minnesota 55479-0040.

(f) Wells Capital Management Incorporated maintains all Records
relating to its services as investment sub-adviser at 525 Market Street, San
Francisco, California 94105.

(g) Peregrine Capital Management, Inc. maintains all Records relating
to its services as investment sub-adviser at 800 LaSalle Avenue, Minneapolis,
Minnesota 55479.

(h) Galliard Capital Management, Inc. ("Galliard") maintains all
Records relating to its services as investment sub-adviser at 800 LaSalle
Avenue, Suite 2060, Minneapolis, Minnesota 55479.

(i) Smith Asset Management Group, LP maintains all Records relating
to its services as investment sub-adviser at 500 Crescent Court, Suite 250,
Dallas, Texas 75201.

(j) Golden Capital Management maintains all Records relating to its
services as investment sub-adviser at 10926 David Taylor Drive, Suite 180,
Charlotte, North Carolina 28262.

(k) Schroder Investment Management North America Inc. maintains all
Records relating to its services as investment sub-adviser at 787 Seventh
Avenue, New York, New York 10019.

(l) Dresdner RCM Global Investors, Inc. maintains all Records
relating to its services as investment sub-adviser at Four Embarcadero Center,
San Francisco, California 94111.

C-8
<PAGE>

Item 29. Management Services.
-------------------

Other than as set forth under the captions "Organization and
Management of the Funds" in the Prospectus constituting Part A of this
Registration Statement and "Management" in the Statement of Additional
Information constituting Part B of this Registration Statement, the Registrant
is not a party to any management-related service contract.

Item 30. Undertakings. Not applicable.
------------

C-9
<PAGE>

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement on Form N-1A pursuant to Rule 485(b) under the Securities Act of 1933,
and has duly caused this Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized in the City of San
Francisco, State of California on the 1st day of October, 2000.

WELLS FARGO FUNDS TRUST

By: /s/ Dorothy A. Peters
----------------------
Dorothy A. Peters
Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 15 to its Registration Statement on Form N-1A has been
signed below by the following persons in the capacities and on the date
indicated:

Signature Title Date
--------- ----- ----

* Trustee
------------------------
Robert C. Brown

* Trustee
------------------------
Donald H. Burkhardt

* Trustee
------------------------
Jack S. Euphrat

* Trustee
------------------------
Thomas S. Goho

* Trustee
------------------------
Peter G. Gordon

* Trustee
------------------------
W. Rodney Hughes

* Trustee
------------------------
Richard M. Leach

* Trustee
------------------------
J. Tucker Morse

* Trustee
------------------------
Timothy J. Penny

* Trustee
------------------------
Donald C. Willeke 10/01/2000

*By: /s/ Dorothy A. Peters
----------------------
Dorothy A. Peters
As Attorney-in-Fact
October 1, 2000
<PAGE>

SIGNATURES
----------

Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment to its Registration Statement on Form
N-1A to be signed on its behalf by the undersigned, thereto duly authorized in
the City of San Francisco, State of California on the 1st day of October, 2000.

WELLS FARGO CORE TRUST

By /s/ Dorothy A. Peters
----------------------
Dorothy A. Peters
Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement on Form N-1A has been signed below by the
following persons in the capacities and on the date indicated:

Signature Title Date
--------- ----- ----

* Trustee
------------------------
(Robert C. Brown)

* Trustee
-------------------------
(Jack S. Euphrat)

* Trustee
------------------------
(Thomas S. Goho)

* Trustee
------------------------
(Peter Gordon)

* Trustee
------------------------
(W. Rodney Hughes)

* Trustee
------------------------
(J. Tucker Morse)

* Trustee
------------------------
(Donald H. Burkhardt)

* Trustee
------------------------
(Richard M. Leach)

* Trustee
------------------------
(Timothy J. Penny)

* Trustee
------------------------
(Donald C. Willeke)

By /s/ Dorothy A. Peters 10/01/00
----------------------
Dorothy A. Peters
As Attorney-in-Fact
October 1, 2000
<PAGE>

WELLS FARGO FUNDS TRUST
FILE NOS. 333-74295; 811-09253

EXHIBIT INDEX

Exhibit Number Description

EX-99.B(i) Opinion and Consent of Counsel

EX-99.B(j)(A) Consent of Independent Auditors for WealthBuilder Portfolios
of Funds Trust
(B) Consent of Independent Auditors for Income Funds of Funds
Trust and Core Trust

EX-99.B(p)(1) Joint Code of Ethics for Funds Trust, Core Trust and
Variable Trust
(2) Wells Fargo Bank, N.A. Code of Ethics
(3) Barclays Global Investors, N.A. Code of Ethics
(4) Dresdner RCM Global Investors, Inc. Code of Ethics
(5) Galliard Capital Management, Inc. Code of Ethics
(6) Peregrine Capital Management, Inc. Code of Ethics
(7) Schroder Investment Management North America Inc. Code of
Ethics
(8) Smith Asset Management Group, L.P. Code of Ethics
(9) Wells Capital Management Incorporated Code of Ethics