------------------------------------------------------------------------
IMPORTANT NOTICE: PLEASE COMPLETE THE
ENCLOSED PROXY BALLOT AND RETURN IT AS SOON AS POSSIBLE.
FOR YOUR CONVENIENCE YOU MAY
VOTE BY CALLING THE
TOLL-FREE TELEPHONE
NUMBER PRINTED ON YOUR
PROXY BALLOT.
YOU ALSO MAY VOTE BY INTERNET AT WWW.PROXYVOTE.COM.
-----------------
A CONFIRMATION OF YOUR TELEPHONE VOTE WILL BE MAILED TO YOU.
------------------------------------------------------------------------------
THE ACHIEVEMENT FUNDS TRUST
ONE FREEDOM VALLEY DRIVE
OAKS, Pennsylvania 19456
December 20, 2000
Dear Valued Shareholder:
We are seeking your approval of a proposed reorganization of mutual
funds of The Achievement Funds Trust into corresponding mutual funds of Wells
Fargo Funds Trust. The proposed reorganization arises out of Wells Fargo &
Company's acquisition of First Security Corporation, which is the parent company
of the investment advisor to the Funds of The Achievement Funds Trust, which we
refer to as the Achievement Funds.
In the reorganization, each Achievement Fund listed below will transfer
all of its assets and liabilities to the corresponding Fund of Wells Fargo Funds
Trust, which we refer to as the Wells Fargo Funds. We refer to the Achievement
Funds and the Wells Fargo Funds together as the Funds. The six Achievement Funds
will be merged into existing Wells Fargo Funds. The following table lists the
Achievement Funds and the corresponding Wells Fargo Funds that are part of the
proposed reorganization.
<PAGE>
<TABLE>
<S> <C>
------------------------------------------------------ ----------------------------------------------------
ACHIEVEMENT FUNDS WELLS FARGO FUNDS
------------------------------------------------------ ----------------------------------------------------
Equity Fund Growth Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Balanced Fund Asset Allocation Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Municipal Bond Fund National Tax-Free Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Idaho Municipal Bond Fund National Tax-Free Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Intermediate Term Bond Fund Income Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Short-Term Bond Fund Stable Income Fund
------------------------------------------------------ ----------------------------------------------------
</TABLE>
WHAT ARE SOME OF THE POTENTIAL BENEFITS OF THE PROPOSED REORGANIZATION?
o The broader product array of the Wells Fargo Funds, and the expanded
range of investment options and shareholder services available to
shareholders of the Wells Fargo Funds, consisting of more than 65
mutual funds.
o The greater breadth, depth and varied expertise of the investment
management personnel employed by the investment advisor and
sub-advisors to the Wells Fargo Funds.
o The potential greater investment opportunities, analyst coverage and
market presence of the Wells Fargo Funds into which the Achievement
Funds will be reorganized.
o The potential improved operating efficiencies of the Wells Fargo Funds into
which the Achievement Funds will be reorganized.
o The enhanced viability of the combined Funds due to larger asset size
and multiple channels of distribution for the Wells Fargo Funds.
Wells Fargo Bank, N.A. has agreed to pay all expenses of the
reorganization, so Achievement Fund shareholders will not bear these costs.
The Board of Trustees of The Achievement Funds Trust has unanimously
approved the reorganization and believes that it is in the best interests of
the Achievement Funds' shareholders. They recommend that you vote your
proxy to approve the reorganization.
Please read the enclosed proxy materials and consider the information
provided. We encourage you to complete and mail your proxy card promptly. No
postage is necessary if you mail it in the United States. You also may vote by
telephone by calling the toll-free number printed on your proxy ballot, or vote
by Internet (http://www.proxyvote.com. If you have any questions about the
proxy or about the proposed fund reorganization, call your trust officer,
investment professional, or the Achievement Funds' Customer Service at
1-800-472-0577.
Very truly yours,
Robert Nesher
President
The Achievement Funds Trust
<PAGE>
Equity Fund
BALANCED FUND
MUNICIPAL Bond Fund
IDAHO MUNICIPAL Bond Fund
INTERMEDIATE TERM Bond Fund
SHORT-TERM BOND FUND
THE ACHIEVEMENT FUNDS TRUST
ONE FREEDOM VALLEY DRIVE
OAKS, PENNSYLVANIA 19456
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SCHEDULED FOR FEBRUARY 8, 2001
This is the formal notice and agenda for the Achievement Funds' special
shareholder meeting. It tells shareholders what proposal will be voted on and
the time and place of the meeting. We refer to the six funds of The Achievement
Funds Trust listed above as the Achievement Funds and the five Wells Fargo Funds
listed in the attached proxy statement/prospectus as the Wells Fargo Funds. We
refer to all of them together as the Funds.
To the Shareholders of the Achievement Funds:
A special meeting of shareholders of each of the Achievement Funds
will be held on February 8, 2001, at 11:00 a.m. (Eastern Time) at the offices
of the Achievement Funds located at One Freedom Valley Drive, Oaks,
Pennsylvania 19456 to consider the following:
1. The proposal to approve an Agreement and Plan of Reorganization.
Under this Agreement,each Achievement Fund will transfer all of
its assets and liabilities to a corresponding Wells Fargo Fund
in exchange for shares of the same class of the corresponding
Wells Fargo Fund having equal value, which will be distributed
proportionately to the shareholders of the Achievement Fund.
Upon completion of the transactions contemplated by the
Agreement and Plan of Reorganization, The Achievement Funds
Trust will be terminated.
2. Any other business that properly comes before the meeting.
Shareholders of record as of the close of business on December 1, 2000
are entitled to vote at the meeting. Whether or not you expect to attend the
meeting, please complete and return the enclosed proxy card (voting
instruction card).
By Order of the Board of Trustees
William E. Zitelli, Jr.
Vice President and Secretary
December 20, 2000
YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES
THAT YOU ARE ENTITLED TO VOTE.
<PAGE>
22
COMBINED PROXY STATEMENT/PROSPECTUS
December 20, 2000
THE ACHIEVEMENT FUNDS TRUST
One Freedom Valley Drive
Oaks, Pennsylvania 19456
WELLS FARGO FUNDS TRUST
P.O. Box 7066
San Francisco, California 94120-7066
WHAT IS THIS DOCUMENT AND WHY WE ARE SENDING IT TO YOU?
This document is a combined proxy statement and prospectus.It contains
the information that shareholders of The Achievement Funds Trust should know
before voting on the proposal before them, and should be retained for future
reference. It is both the proxy statement of the six funds of The Achievement
Funds Trust listed below, which we refer to as the Achievement Funds, and a
prospectus for the five funds of Wells Fargo Funds Trust listed below, which we
refer to as the Wells Fargo Funds.
<PAGE>
<TABLE>
<S> <C>
------------------------------------------------------ ----------------------------------------------------
ACHIEVEMENT FUNDS WELLS FARGO FUNDS
------------------------------------------------------ ----------------------------------------------------
Equity Fund Growth Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Balanced Fund Asset Allocation Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Municipal Bond Fund National Tax-Free Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Idaho Municipal Bond Fund National Tax-Free Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Intermediate Term Bond Fund Income Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Short-Term Bond Fund Stable Income Fund
------------------------------------------------------ ----------------------------------------------------
</TABLE>
HOW WILL THE REORGANIZATION WORK?
The reorganization of each Achievement Fund will involve three steps:
o the transfer of the assets and liabilities of the Achievement Fund to
its corresponding Wells Fargo Fund in exchange for shares of the same
class of the Wells Fargo Fund having equivalent value to the net
assets transferred;
o the pro rata distribution of the same class of shares of the Wells
Fargo Fund to the shareholders of record of the Achievement Fund as of
the effective date of the reorganization in full redemption of all
shares of the Achievement Fund; and
o the liquidation and termination of the Achievement Funds.
As a result of the reorganization, shareholders of each Achievement
Fund will hold shares of the same class of the corresponding Wells Fargo Fund
having the same total value as the shares of the Achievement Fund that they
held immediately before the reorganization. If a majority of the shares of one
of the Achievement Funds does not approve the reorganization, that Fund
will not participate in the reorganization. In such a case, the Achievement
Fund will continue its operations beyond the date of the reorganization and
its Trustees will consider what further action is appropriate.
IS ADDITIONAL INFORMATION ABOUT THE FUNDS AVAILABLE?
Yes, additional information about the Funds is available in the:
o Prospectuses for the Achievement Funds and for the Wells Fargo Funds;
o Annual Reports to shareholders of the Achievement Funds and of the
Wells Fargo Funds; and
o Statements of Additional Information, or SAIs, for the Achievement
Funds and for the Wells Fargo Funds.
These documents are on file with the Securities and Exchange
Commission, which we refer to as the SEC.
The effective prospectuses and Management's Discussion of Fund
Performance included in the Achievement Funds' Annual Report are legally deemed
to be part of this proxy statement/prospectus. The SAI to this proxy
statement/prospectus also is legally deemed to be part of this document. There
also is an Agreement and Plan of Reorganization between the Achievement Funds
and the Wells Fargo Funds that describes the technical details of how the
reorganization will be accomplished. The Agreement and Plan of Reorganization
has been filed with the SEC and is available by any of the methods described
below.
o A prospectus for the Wells Fargo Fund(s) whose shares you would own
after the Reorganization accompanies this statement. The five Wells
Fargo Funds are advised by Wells Fargo Bank, N.A., which we refer to as
Wells Fargo Bank. The prospectus and annual report to shareholders of
the Achievement Funds, containing audited financial statements for the
most current fiscal year, have been previously mailed to shareholders.
o Management's Discussion of Fund Performance for each of the Wells Fargo
Funds contained in the most recent Annual Report is included at Exhibit
C.
Copies of all of those documents are available upon request without
charge by writing to or calling:
The Achievement Funds
One Freedom Valley Drive
Oaks, PA 19456
1-800-472-0577
Wells Fargo Funds
P.O. Box 7066
San Francisco, CA 94120-7066
1-800-552-9612
You also may view or obtain these documents from the SEC:
In Person: At the SEC's Public Reference Room in
Washington, D.C.
By Phone: 1-800-SEC-0330
By Mail: Public Reference Section
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549-6009
(duplicating fee required)
By Email: [email protected]
(duplicating fee required)
By Internet: www.sec.gov
(Wells Fargo Funds Trust; The Achievement
Funds Trust)
OTHER IMPORTANT THINGS TO NOTE:
o An investment in the Wells Fargo Funds is not a deposit in Wells Fargo
Bank or any other bank and is not insured or guaranteed by the FDIC or
any other government agency.
o You may lose money by investing in the Funds.
o The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
<PAGE>
TABLE OF CONTENTS
PAGE
Introduction
Proposal : Approval of Reorganization of the Achievement Funds
Reasons for the Reorganization
Summary
Comparison of Current Fees
Comparison of Investment Objectives, Principal Investment Strategies
and Policies Common and Specific Risk Considerations Comparison of
Shareholder Services and Procedures Comparison of Investment Advisors
and Investment Advisory Fees Comparison of Other Principal Service
Providers Comparison of Business Structures
Terms of the Reorganization
Board Consideration of the Reorganization
Performance
Federal Income Tax Consequences and Federal Tax Opinions
Fees and Expenses of the Reorganization
Information on Voting
Existing and Pro Forma Capitalizations
Outstanding Shares
Interest of Certain Persons in the Transactions
Exhibit A -- Fee Tables
Exhibit B -- Comparison of Investment objectives and Strategies
Exhibit C -- Management's Discussion of Fund Performance for Each of the Wells
Fargo Funds
<PAGE>
Introduction
On October 25, 2000, Wells Fargo & Company, the parent company of Wells
Fargo Bank, acquired First Security Corporation, the parent company of First
Security Investment Management, Inc., the investment advisor to the Achievement
Funds. We refer to this transaction as the Acquisition. The Board of Trustees of
The Achievement Funds Trust called this shareholder meeting to allow
shareholders of the Achievement Funds to consider and vote on a proposal arising
out of the Acquisition. The proposal concerns the proposed reorganization of six
Achievement Funds into corresponding Wells Fargo Funds. We refer to these
reorganizations as the Reorganization.
PROPOSAL : APPROVAL OF REORGANIZATION OF ACHIEVEMENT FUNDS
On November 1, 2000, the Board of Trustees of The Achievement Funds
Trust unanimously voted to approve the Reorganization, subject to approval by
each Achievement Fund's shareholders. In the Reorganization, each Achievement
Fund will transfer its assets to its corresponding Wells Fargo Fund, which will
assume the liabilities of the Achievement Fund. Upon the transfer of assets,
shares of that Wells Fargo Fund will be distributed to shareholders of that
Achievement Fund. Any shares you own of an Achievement Fund at the time of the
Reorganization will be cancelled and you will receive shares of the same class
of the corresponding Wells Fargo Fund having a value equal to the value of your
shares of the Achievement Fund. The Reorganization is expected to be a tax-free
transaction for federal income tax purposes. If approved by shareholders, the
Reorganization is expected to occur in February 2001.
Reasons for the Reorganization
The Reorganization is part of the plan to consolidate all mutual fund
operations after the Acquisition. Wells Fargo Bank currently operates a fund
family consisting of over 65 mutual funds. Consolidating the Achievement Funds
into the larger Wells Fargo Fund family can benefit all Achievement Fund
shareholders.
The Board of Trustees of The Achievement Funds Trust concluded that
participation in the proposed Reorganization is in the best interests of each
Achievement Fund and its shareholders. In reaching that conclusion, the Trustees
considered, among other things:
1. The broader product array of the more than 65 Wells Fargo
mutual funds, and the expanded range of investment options and
shareholder services available to investors in those funds.
2. The greater breadth, depth and varied expertise of the
investment management personnel employed by the investment
advisor and sub-advisors of all of the Wells Fargo Funds.
3. The enhanced viability of the combined Funds due to larger
asset size and multiple channels of distribution for the
Wells Fargo Funds.
4. The potential greater investment opportunities, analyst
coverage and market presence of the Wells Fargo Funds into
which the Achievement Funds will be reorganized.
5. The potential for greater operating efficiencies of the Wells
Fargo Funds into which the Achievement Funds will be
reorganized.
6. The performance track records of the Wells Fargo Funds into
which the Achievement Funds will be reorganized.
7. The expense ratios of the Wells Fargo Funds as compared to
their corresponding Achievement Funds.
8. The tax-free nature of the Reorganization for federal income
tax purposes.
9. The compatibility of the investment objectives and principal
investment strategies of the Wells Fargo Funds with those
of the Achievement Funds.
10. The undertaking by Wells Fargo Bank to bear the expenses of
the Reorganization.
The Trustees also concluded that the economic interests of the
shareholders of the Achievement Funds would not be diluted as a result of the
proposed Reorganization since the number of Wells Fargo Funds shares to be
issued to Achievement Fund shareholders will be calculated based on the
respective net asset value of the Funds. For a more complete discussion of all
of the factors considered by the Board of The Achievement Funds Trust in
approving the Reorganization, see pages 22-24.
SUMMARY
The following summary highlights differences between each Achievement
Fund and its corresponding Wells Fargo Fund that you will own after the
Reorganization. This summary is not complete and does not contain all of the
information that you should consider before voting on the Reorganization. For
more complete information, please read this entire document and the enclosed
Wells Fargo Fund prospectus(es).
Comparison of Current Fees
As shown in the following chart, in every case except the Institutional
Class of the Achievement Equity Fund-Wells Fargo Growth Fund pairing and the
Institutional Class of the Achievement Balanced Fund-Wells Fargo Asset
Allocation Fund pairing, the Wells Fargo Funds have total operating expense
ratios that are the same as or lower than those of the corresponding share
classes of the Achievement Funds, after waivers and reimbursements. In every
case except the Retail Class A and Class B of the Achievement Equity Fund-Wells
Fargo Growth Fund pairing, the Wells Fargo Funds have total operating expense
ratios that are lower than those of the corresponding share classes of the
Achievement Funds, before waivers and reimbursements.
<PAGE>
<TABLE>
<S> <C> <C> <C>
---------------------------- ------------------------------- ---------------------------- -------------------------------
TOTAL OPERATING EXPENSES TOTAL OPERATING EXPENSES
BEFORE/AFTER WAIVERS AND BEFORE/AFTER WAIVERS AND
ACHIEVEMENT FUND/ REIMBURSEMENTS WELLS FARGO FUND/ REIMBURSEMENTS
SHARE CLASS SHARE CLASS
---------------------------- ------------------------------- ---------------------------- -------------------------------
Equity Fund Growth Fund
Class A 1.28% / 1.15% Class A 1.44% / 1.12%
Class B 2.03% / 1.90% Class B 2.24% / 1.87%
Institutional Class 1.03% / 0.90% Institutional Class 1.02% / 1.00%
---------------------------- ------------------------------- ---------------------------- -------------------------------
Balanced Fund Asset Allocation Fund
Class A 1.30% / 1.15% Class A 1.20% / 0.99%
Class B 2.05% / 1.90% Class B 1.99% / 1.74%
Institutional Class 1.05% / 0.90% Institutional Class 1.03% / 1.00%
---------------------------- ------------------------------- ---------------------------- -------------------------------
Municipal Bond Fund National Tax-Free Fund
Class A 1.18% / 1.00% Class A 0.97% / 0.80%
Class B 1.93% / 1.65% Class B 1.73% / 1.55%
Institutional Class 0.93% / 0.75% Institutional Class 0.68% / 0.60%
---------------------------- ------------------------------- ---------------------------- -------------------------------
------------------------------------------------------------ ------------------------------------------------------------
Idaho Municipal Bond Fund National Tax-Free Fund
Class A 1.30% / 1.00% Class A 0.97% / 0.80%
Class B 2.05% / 1.65% Class B 1.73% / 1.55%
Institutional Class 1.05% / 0.75% Institutional Class 0.68% / 0.60%
------------------------------------------------------------ ------------------------------------------------------------
Intermediate Term Bond Fund Income Fund
Class A 1.18% / 1.00% Class A 1.10% / 1.00%
Institutional Class 0.93% / 0.75% Institutional Class 0.76% / 0.75%
------------------------------------------------------------ ------------------------------------------------------------
Short-Term Bond Fund Stable Income Fund
Class A 1.32% / 1.00% Class A 1.06% / 0.90%
Institutional Class 1.07% / 0.75% Institutional Class 0.79% / 0.65%
---------------------------- ------------------------------- ---------------------------- -------------------------------
</TABLE>
<PAGE>
Another important point to consider is that currently, the actual fees
paid by the Achievement Funds are less than their permitted gross fees because
of fee waivers by certain of the Achievement Funds' service providers, but the
waivers are voluntary, which means the waivers and reimbursements could be
rescinded at any time, increasing the total operating expenses of the
Achievement Funds up to the maximum amount shown above. In contrast, Wells Fargo
Bank, as the investment advisor and administrator to each of the Wells Fargo
Funds is contractually obligated through waivers or reimbursements to maintain
the net operating expense ratios shown in the chart above. Wells Fargo Bank is
obligated to maintain the net operating expense ratio for the Growth Fund until
at least February 1, 2002, and to maintain the net operating expense ratio for
the Asset Allocation Fund until at least November 8, 2001. Similarly, Wells
Fargo Bank is obligated to maintain the net operating expense ratios for the
National Tax-Free Fund until at least November 1, 2001, and to maintain the net
operating expense ratio for the Income and Stable Income Funds until at least
October 1, 2001. Upon the expiration of the applicable mandatory waiver period,
the net operating expense ratios of each Wells Fargo Fund may be increased only
with the approval of the Board of Trustees. See Exhibit A for a breakdown of the
specific fees charged to each Wells Fargo Fund and Achievement Fund, and more
information about expenses.
Comparison of Investment Objectives,Principal Investment Strategies and Policies
Each Achievement Fund and its corresponding Wells Fargo Fund pursue
similar investment objectives and hold substantially similar securities. As a
result, the proposed Reorganization is not expected to cause significant
portfolio turnover or transaction expenses from the sale of securities that are
incompatible with the investment objective(s) of the Wells Fargo Fund. A few key
differences do exist which are summarized here.
The Achievement Funds' investment objective(s) or goal(s) are
classified as fundamental, which means that the Board cannot change them without
shareholder approval. The Wells Fargo Funds' investment objectives are not
classified as fundamental, which means that the Board can change them without
shareholder approval. The Wells Fargo Funds believe that this approach allows
the Board to better respond to changing market conditions and to save the Wells
Fargo Funds and their shareholders money by eliminating the need to solicit
proxies to obtain shareholder approval to change an investment objective to
respond to changing market conditions.
The Wells Fargo Funds also have fewer and different "fundamental"
investment policies, which can only be changed with shareholder approval and can
restrict a fund's ability to respond to new developments and changing trends.
Investment policies may limit a portfolio manager from investing in a security
that is consistent with the investment objectives and principal investment
strategies of a Fund and otherwise an appropriate investment. The Wells Fargo
Funds' fundamental investment policies were developed with a view to avoiding
restrictions that unnecessarily hamper a portfolio manager's discretion, and to
conforming the investment polices of each of the Wells Fargo Funds to the
flexibility currently allowed by federal and state law. Also, the list of
"fundamental" policies is consistent across all Wells Fargo Funds (with limited
exceptions), which greatly facilitates compliance and monitoring activities.
The following charts compare the investment objective(s) and principal
investment strategies of each Achievement Fund and the corresponding Wells Fargo
Fund, and describes the key differences between the Funds. A more detailed
comparison of the Funds' investment objectives, strategies and other investment
policies can be found at Exhibit B. You can find additional information about a
specific Fund's investment objective(s), principal investment strategies and
investment policies in its prospectus and SAI.
<PAGE>
<TABLE>
<S> <C> <C> <C>
-------------------------- -------------------------- --------------------------------- -----------------------------------------
FUND NAMES OBJECTIVE PRINCIPAL STRATEGY KEY DIFFERENCES
-------------------------- -------------------------- --------------------------------- -----------------------------------------
Achievement Equity Fund Seeks long-term capital The Fund invests in a The Achievement Equity Fund includes
appreciation with diversified portfolio of U.S. current income as a secondary
current income as a equity securities, and objective, whereas long-term capital
secondary consideration emphasizes investments in appreciation is the Wells Fargo Growth
in selecting securities. companies with medium to large Fund's only objective. Despite this
market capitalizations. stated difference, both Funds invest
principally in equity securities of
companies with medium to large market
capitalizations, and in selecting
securities both Funds analyze the
earnings growth trend of the company.
The Wells Fargo Growth Fund has the
authority to invest up to 25% of its
total assets in foreign securities,
whereas the Achievement Equity Fund
does not invest in foreign securities.
-------------------------- -------------------------- --------------------------------- -----------------------------------------
-------------------------- -------------------------- --------------------------------- -----------------------------------------
Wells Fargo Growth Fund Seeks long-term capital The Fund invests principally in
appreciation. a diversified portfolio of
common stocks and other
equity securities of
domestic and foreign
companies, whose market
capitalization falls
within the range of the
Russell 1000 Index, which
is considered a mid- to
large-capitalization
index. The Fund looks for
companies that have a
strong earnings growth
trend and above-average
prospects for future
growth.
-------------------------- -------------------------- --------------------------------- -----------------------------------------
-------------------------- -------------------------- --------------------------------- ------------------------------------------
FUND NAMES OBJECTIVE PRINCIPAL STRATEGY KEY DIFFERENCES
-------------------------- -------------------------- --------------------------------- ------------------------------------------
Achievement Balanced Fund Seeks total return The Fund invests in a Both Funds are diversified, seek total
consisting of capital diversified portfolio of U.S. return and invest in three asset
appreciation and current equity securities and classes, (i) stocks, (ii) bonds, and
income consistent with investment grade fixed-income (iii) money market instruments. The
prudent investment risk. securities. Achievement Balanced Fund, however,
individually selects the securities
within the three asset classes, whereas
the Wells Fargo Asset Allocation Fund
selects specific stock and fixed income
securities based on their weighting in a
a specific index. In addition, the
Achievement Balanced Fund has minimum
requirements for each asset class but the
Wells Fargo Asset Allocation Fund does
not. The Wells Fargo Asset Allocation Fund
may invest up to 25% of its total assets in
foreign securities that qualify as money
market instruments, whereas the Achievement
Balanced Fund does not invest in foreign
securities.
-------------------------- -------------------------- --------------------------------- ------------------------------------------
-------------------------- -------------------------- --------------------------------- ------------------------------------------
Wells Fargo Asset Seeks long-term total The Fund does not select
Allocation Fund return, consistent with securities individually, but
reasonable risk. rather buys substantially all
or a representative sample of
the securities of various
indexes in seeking to replicate
the total return of the index.
The Fund uses an asset
allocation model to allocate
and reallocate assets among
common stocks (S&P 500 Index),
U.S. Treasury bonds (Lehman
Brothers 20+ Bond Index) and
money market instruments,
operating with a "normal"
allocation of 60% stocks and
40% bonds. The Fund invests in
asset classes that it believes
are undervalued in order to
achieve better long-term,
risk-adjusted returns.
-------------------------- -------------------------- --------------------------------- ------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
-------------------------- -------------------------- --------------------------------- ------------------------------------------
FUND NAMES OBJECTIVE PRINCIPAL STRATEGY KEY DIFFERENCES
-------------------------- -------------------------- --------------------------------- ------------------------------------------
Achievement Municipal Seeks as high a level of The Fund invests primarily in a Both Funds invest primarily in municipal
Bond Fund current income exempt from diversified portfolio of securities with income that is exempt from
federal income taxes as is investment grade federal income tax and federal alternative
consistent with preservation municipal obligations. minimum tax ("AMT"). The Achievement
Municipal Bond Fund reserves the right to
invest up to 20% of its net assets in
securities that generate income subject to
AMT. The Wells Fargo National Tax-Free
Fund reserves the right to invest up to 20%
of its net assets in securities that
generate income subject to federal income
tax, including AMT. The Achievement
Municipal Bond Fund does not have any
restriction with respect to the maturities
of securities held, whereas the dollar
weighted maturity of the Wells Fargo
National Tax-Free Fund's portfolio is
generally between 10 and 20 years.
-------------------------- -------------------------- --------------------------------- ------------------------------------------
-------------------------- -------------------------- --------------------------------- ------------------------------------------
Wells Fargo National Seeks current income The Fund invests primarily in a
Tax-Free Fund exempt from federal diversified portfolio of
income tax. investment grade municipal
securities with average
maturities between 10 and 20
years.
-------------------------- -------------------------- --------------------------------- ------------------------------------------
-------------------------- -------------------------- --------------------------------- ------------------------------------------
FUND NAMES OBJECTIVE PRINCIPAL STRATEGY KEY DIFFERENCES
-------------------------- -------------------------- --------------------------------- ------------------------------------------
Achievement Idaho Seeks high current The Fund invests primarily in a Both Funds invest in municipal securities
Municipal Bond Fund income exempt from focused portfolio of with income that is exempt from federal
federal and Idaho income investment grade municipal income tax. The Achievement Idaho Municipal
taxes. bonds of Idaho issuers. Bond Fund, however, invests primarily in
Idaho municipal securities, the interest from
from which also is exempt from Idaho personal
income tax. In contrast, the Wells Fargo
National Tax-Free Fund invests in municipal
securities throughout the United States, the
interest of which would not be exempt from
Idaho personal income tax. In addition, the
Achievement Idaho Municipal Bond Fund does
not have any restriction with respect to the
maturities of securities held, whereas the
dollar weighted maturity of the Wells Fargo
National Tax-Free Fund's portfolio is
generally between 10 and 20 years.
-------------------------- -------------------------- --------------------------------- ------------------------------------------
-------------------------- -------------------------- --------------------------------- ------------------------------------------
Wells Fargo National Seeks current income The Fund invests primarily in a
Tax-Free Fund exempt from federal diversified portfolio of
income tax. investment grade municipal
securities with average
maturities between 10 and 20
years.
-------------------------- -------------------------- --------------------------------- ------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
-------------------------- -------------------------- --------------------------------- ------------------------------------------
FUND NAMES OBJECTIVE PRINCIPAL STRATEGY KEY DIFFERENCES
-------------------------- -------------------------- --------------------------------- ------------------------------------------
-------------------------- -------------------------- --------------------------------- ------------------------------------------
Achievement Intermediate Seeks current income The Fund invests principally The Wells Fargo Income Fund may invest up
Term Bond Fund consistent with prudent in a diversified portfolio to 20% of its total assets in non-investment
investment risk and of investment grade fixed grade securities (in the fifth highest
liquidity. income securities, while category), whereas the Achievement
maintaining a dollar- Intermediate Bond Fund may invest only in
weighted average maturity. investment grade securities. The
Achievmement Intermediate Bond Fund may only
invest up to 30% of its assets in a
combination of U.S. dollar denominated bonds
of foreign issuers, mortgage-backed
securities, asset-backed securities and
floating or variable rate corporate notes.
In contrast, the Wells Fargo Income Fund has
has higher limits, including up to 50% of
its assets in mortgage-backed securities and
and up to 35% of its assets in asset-backed
securities. The Wells Fargo Income Fund
has the flexibility to vary its weighted
average maturity across a range of years
that is wider than that of the Achievement
Intermediate Term Bond Fund.
-------------------------- -------------------------- --------------------------------- ------------------------------------------
-------------------------- -------------------------- --------------------------------- ------------------------------------------
Wells Fargo Income Fund Seeks current income and The Fund invests in a
total return. diversified portfolio
consisting of 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. The Fund
anticipates maintaining an
average dollar-weighted
maturity of between 3 and
15 years.
-------------------------- -------------------------- --------------------------------- ------------------------------------------
-------------------------- -------------------------- --------------------------------- ------------------------------------------
FUND NAMES OBJECTIVE PRINCIPAL STRATEGY KEY DIFFERENCES
-------------------------- -------------------------- --------------------------------- ------------------------------------------
Achievement Short-Term Seeks current income The Fund invests in a portfolio Both Funds invest principally in
Bond Fund with preservation of of high quality fixed income investment grade securities. The
principal and liquidity. securities, while maintaining a Achievement Short-Term Bond Fund may
dollar-weighted average invest up to 30% of its assets in a
maturity of less than two years. combination of mortgage-backed securities,
asset-backed securities and floating or
variable rate corporate bonds, whereas the
Wells Fargo Stable Income Fund may invest
up to 65% of its portfolio in mortgage-
backed securities alone. The Achievement
Short-Term Bond Fund maintains a dollar-
weighted average maturity of less than 2
years with no stated target duration,
whereas the Wells Fargo Stable Income Fund
seeks to maintain a portfolio duration of
between 2 and 5 years with no stated target
average maturity.
-------------------------- -------------------------- --------------------------------- ------------------------------------------
-------------------------- -------------------------- --------------------------------- ------------------------------------------
Wells Fargo Stable Seeks to maintain The Fund invests solely in
Income Fund stability of principal another fund that, in turn,
while providing low invests principally in
volatility total return. short-term investment-grade
securities which include
mortgage-backed securities and
U.S. Government obligations.
The Fund invests 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.
-------------------------- -------------------------- --------------------------------- ------------------------------------------
</TABLE>
<PAGE>
Common and Specific Risk Considerations
Because of the similarities in investment objectives and policies, the
Achievement Funds and the Wells Fargo Funds are subject to substantially similar
investment risks. The following discussion describes the principal risks that
may affect the Funds' portfolios as a whole, and compares the principal risks
associated with the Achievement Fund and its corresponding Wells Fargo Fund. You
will find additional descriptions of specific risks for each Fund below and in
the prospectus for the particular Achievement Fund or Wells Fargo Fund.
Equity Securities. All of the Funds that invest in equity securities
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. The Funds that
invest in smaller companies, in foreign companies (including investments made
through ADRs and similar instruments), and in emerging markets are subject to
additional risks, including less liquidity and greater price volatility. A
Fund's investments in foreign companies and emerging markets are also subject to
special risks associated with international investing, including currency,
economic, political, regulatory and diplomatic risks.
Debt Securities. All of the Funds that invest in debt securities, such
as notes and bonds, 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 when due. 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 a Fund's portfolio investments,
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 securities have adjustable or
variable rate features, which can reduce the effect of interest rate changes on
the value of those securities. 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.
Achievement Equity Fund/Wells Fargo Growth Fund
The principal risks associated with investing in the Achievement Equity
Fund and the Wells Fargo Growth Fund are the risks associated with investments
in equity securities as described above. The Achievement Equity Fund utilizes a
growth value strategy in selecting securities. In contrast, the Wells Fargo
Growth Fund utilizes solely a growth strategy, which can, at times, subject the
Fund to greater risk than the Achievement Equity Fund. To the extent the Wells
Fargo Growth Fund exercises the right to invest in foreign securities, it may be
subject to additional risks associated with investments in foreign securities,
including fluctuating currency rates and risks emanating from political and
economic developments in foreign countries. The Achievement Equity Fund does not
invest in foreign securities, and thus is not subject to these additional risks.
Achievement Balanced Fund/Wells Fargo Asset Allocation Fund
The principal risks of investing in the Achievement Balanced Fund and
the Wells Fargo Asset Allocation Fund are the risks associated with investing in
equity and debt securities as described above. Both Funds invest in similar
securities and have similar risks. Because the Wells Fargo Asset Allocation Fund
may invest up to 25% of its assets in foreign securities that qualify as money
market instruments, it may be subject to additional risks associated with
foreign securities, including currency, economic, political, regulatory and
diplomatic risks. The Achievement Balanced Fund does not invest in foreign
securities, and thus is not subject to these additional risks. The Wells Fargo
Asset Allocation Fund is not required to keep a minimum investment in each asset
class, nor is it prohibited from investing all of its assets in a single class.
This strategy is designed to enhance returns, but it may, at times, expose the
Fund to greater equity or debt risk than the Achievement Balanced Fund.
Achievement Municipal Bond Fund/Wells Fargo National Tax-Free Fund
The principal risks of investing in the Achievement Municipal Bond Fund
and the Wells Fargo National Tax-Free Fund are the risks associated with debt
securities described above. Both Funds invest in similar securities and have
similar risks, however, the Achievement Municipal Bond Fund does not have any
restriction with respect to the maturities of securities held, whereas the
average dollar weighted maturity of the Wells Fargo National Tax-Free Fund's
portfolio is generally between 10 and 20 years. As of January 31, 2000, however,
the average option-adjusted maturity of the Achievement Municipal Bond was
approximately 9 years. The interest rate risk of each Fund relative to the other
is, in part, a reflection of the relative maturity of their portfolios. In
general, the Fund with the longer weighted average maturity at any point in time
is exposed to greater interest rate risk, but has a higher potential return.
Achievement Idaho Municipal Bond Fund/Wells Fargo National Tax-Free Fund
The principal risks associated with the Achievement Idaho Municipal
Bond Fund and the Wells Fargo National Tax-Free Fund are the risks associated
with debt securities described above. Because the Achievement Idaho Municipal
Bond Fund invests primarily in obligations of Idaho issuers, it is subject to
risks associated with economic conditions in the state of Idaho that could
affect Idaho municipal securities. The Wells Fargo National Tax-Free Fund is
diversified among many states and thus is less vulnerable to economic conditions
in any one state. In addition, the Achievement Idaho Municipal Bond Fund, as a
non-diversified portfolio, is subject to increased risk because of the impact
(positive or negative) that any one issuer may have on the Fund's holdings. The
Wells Fargo National Tax-Free Fund, as a diversified portfolio, does not have
the additional risks associated with a non-diversified fund. The Achievement
Idaho Municipal Bond Fund does not have any restriction with respect to the
maturities of securities held, whereas the average dollar weighted maturity of
the Wells Fargo National Tax-Free Fund's portfolio is generally between 10 and
20 years. As of January 31, 2000, however, the average option-adjusted maturity
of the Achievement Idaho Municipal Bond was approximately 9 years. The interest
rate risk of each Fund relative to the other is, in part, a reflection of the
relative maturity of their portfolios. In general, the Fund with the longer
weighted average maturity at any point in time is exposed to greater interest
rate risk, but has a higher potential return.
Achievement Intermediate Term Bond Fund/Wells Fargo Income Fund
The principal risks associated with the Achievement Intermediate Term
Bond Fund and the Wells Fargo Income Fund are the risks associated with debt
securities described above. To the extent that the Wells Fargo Income Fund
exercises its right to invest 20% of its assets in non-investment grade
securities, it may be subject to greater credit risk that an issuer may default
on a non-investment grade bond than the Achievement Intermediate Term Bond Fund,
which may invest in only investment grade securities. To the extent the Wells
Fargo Income Fund extends its weighted average portfolio maturity beyond 10
years, which is the maximum permitted for the Achievement Intermediate Term Bond
Fund, it may be subject to greater interest rate risk.
Achievement Short-Term Bond Fund/Wells Fargo Stable Income Fund
The principal risks associated with the Achievement Short-Term Bond
Fund and the Wells Fargo Stable Income Fund are the risks associated with debt
securities described above. To the extent that the Achievement Short-Term Bond
Fund invests only in investment grade securities in the three highest
categories, while the Wells Fargo Stable Income Fund may invest in investment
grade securities in the four highest categories, the Achievement Short-Term Bond
Fund might be subject to less credit risk that an issuer would default. Because
the Wells Fargo Stable Income Fund has a longer average portfolio duration than
the Achievement Short-Term Bond Fund, it is subject to more interest rate risk
than the Achievement Short-term Bond Fund, which has a shorter average portfolio
duration. Because the Wells Fargo Stable Income Fund may invest more of its
total assets (up to 65%) in mortgage-backed securities than the Achievement
Short-Term Bond Fund (only up to 35%), the Wells Fargo Stable Income Fund is
subject to greater risk that consumers will either accelerate their prepayment
of mortgage loans, which can shorten the duration of the portfolio and decrease
its return, or extend their payment of mortgage loans for longer than
anticipated, which can extend the duration of the portfolio and also decrease
its return.
Comparison of Shareholder Services and Procedures
The Achievement Funds and Wells Fargo Funds have similar shareholder
services and procedures. The Wells Fargo Funds, however, have a larger variety
of share classes available to investors. The Achievement Funds offer two retail
classes, Class A and B. The Wells Fargo Funds offer three retail classes, Class
A, Class B and Class C Shares. Also, the Wells Fargo Funds offer institutional
shares and service shares of certain Funds, and Online Shares of two Funds.
Similar to Class A and Class B shares of the Wells Fargo Funds, the
Achievement Funds' Class A shares have a front-end load, and Class B shares have
a contingent deferred sales load. Both the Achievement Funds and the Wells Fargo
Funds waive front-end sales loads for certain investors, including certain
employees, officers and trustees of the Funds and various entities affiliated
with the Funds. The fee tables in Exhibit A include comparative information
about maximum sales charges on purchases and maximum deferred sales charges on
redemptions for the Funds. For more detailed information on sales charges,
including volume purchase sales charge breakpoints and waivers, and reductions
of deferred sales charges over time, see the Funds' prospectuses. All
Achievement Fund shareholders will receive shares of the same class of the
corresponding Wells Fargo Fund. For example, shareholders with A Shares will
receive A Shares. The Reorganization will not trigger any sales charges for
shareholders.
Each Achievement Fund has adopted a distribution plan that allows the
Fund to pay distribution and service fees for the sale and distribution of its
shares. Similarly, the Wells Fargo Funds have adopted a distribution plan and
shareholder servicing plan to permit the Funds to pay for shareholder servicing
and distribution-related services. Each class of each Wells Fargo Fund has the
same or lower aggregate distribution and shareholder servicing fees as the
corresponding class of the corresponding Achievement Fund.
The Achievement Funds and Wells Fargo Funds have substantially similar
policies with respect to redemption procedures and the pricing of fund shares.
The Wells Fargo Funds and Achievement Funds generally permit exchanges between
like share classes of all their funds. For both the Achievement Funds and the
Wells Fargo Funds, an exchange of fund shares generally is taxable for federal
income tax purposes. Both the Achievement Funds and the Wells Fargo Funds permit
systematic withdrawals from their respective funds. If you have a systematic
withdrawal plan in effect for your Achievement Fund holdings, it will
automatically be carried over to the Wells Fargo Funds.
Both the Achievement Funds and the Wells Fargo Funds distribute capital
gains, if any, to shareholders at least annually. The Achievement Funds and
Wells Fargo Funds that invest primarily in equity securities declare and pay
distributions of net investment income on a different frequency. The chart below
summarizes when distributions are declared and paid for the Achievement Funds
and the Wells Fargo Funds.
<TABLE>
<S> <C> <C>
------------------------------------------------- ------------------------------------ -------------------------------
NAME OF FUND FREQUENCY DECLARED FREQUENCY PAID
------------------------------------------------- ------------------------------------ -------------------------------
Achievement Equity Fund quarterly quarterly
Wells Fargo Growth Fund annually annually
------------------------------------------------- ------------------------------------ -------------------------------
------------------------------------------------- ------------------------------------ -------------------------------
Achievement Balanced Fund monthly monthly
Wells Fargo Asset Allocation Fund quarterly quarterly
------------------------------------------------- ------------------------------------ -------------------------------
------------------------------------------------- ------------------------------------ -------------------------------
Achievement Municipal Bond Fund daily monthly
Wells Fargo National Tax-Free Fund daily monthly
------------------------------------------------- ------------------------------------ -------------------------------
------------------------------------------------- ------------------------------------ -------------------------------
Achievement Idaho Municipal Bond Fund daily monthly
Wells Fargo National Tax-Free Fund daily monthly
------------------------------------------------- ------------------------------------ -------------------------------
------------------------------------------------- ------------------------------------ -------------------------------
Achievement Intermediate Term Bond Fund daily monthly
Wells Fargo Income Fund daily monthly
------------------------------------------------- ------------------------------------ -------------------------------
------------------------------------------------- ------------------------------------ -------------------------------
Achievement Short-Term Bond Fund daily monthly
Wells Fargo Stable Income Fund monthly monthly
------------------------------------------------- ------------------------------------ -------------------------------
</TABLE>
Both the Achievement Funds and the Wells Fargo Funds offer a choice between
automatically reinvesting dividends in additional shares and receiving the
distribution by check.
The Achievement Funds' prospectus and the Wells Fargo Funds'
prospectuses and SAIs contain more detailed discussions of shareholder services
and procedures.
Comparison of Investment Advisors and Investment Advisory Fees
Wells Fargo Bank serves directly as the investment advisor to the Wells
Fargo Growth, Asset Allocation, National Tax-Free and Income Funds. Because the
Wells Fargo Stable Income Fund is a gateway fund that invests substantially all
of its assets in a core portfolio of Wells Fargo Core Trust, Wells Fargo Bank
does not provide investment advisory services to this Fund directly. Wells Fargo
Bank instead serves as the investment advisor to the core portfolio in which the
Wells Fargo Stable Income Fund invests. Thus, Wells Fargo Bank serves as the
investment advisor to each of the Wells Fargo Funds either directly or
indirectly. Wells Fargo Bank is located at 525 Market Street, San Francisco, CA
94105. 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 September 30, 2000, Wells Fargo Bank and its affiliates
provided advisory services for over $129 billion in assets. First Security
Investment Management, Inc, a wholly-owned subsidiary of First Security
Corporation, is currently the investment advisor to each of the Achievement
Funds.
In advance of the May 11, 2001 effectiveness of certain provisions of
the Gramm-Leach-Bliley financial services modernization legislation, Wells Fargo
Bank's mutual fund advisory and administrative activities will be spun-off to a
separate division of Wells Fargo Bank, or to a new wholly-owned subsidiary of
either Wells Fargo Bank or Wells Fargo & Company, which we refer to as the New
Wells Entity. As required under the Gramm-Leach-Bliley Act, the New Wells Entity
will then register as an investment adviser under federal law. Regardless of
which type of entity is selected as the New Wells Entity, the current mutual
fund personnel at Wells Fargo Bank will become employees of the New Wells
Entity, and the New Wells Entity will provide services of at least the same
nature and quality with at least the same resources available to it, for the
same fee, to each of the Wells Fargo Funds. References to Wells Fargo Bank as
advisor and administrator to the Wells Fargo Funds should be interpreted as
referring to the New Wells Entity following this spin-off.
The following chart highlights the annual rate of investment advisory
fees paid by each Achievement Fund and Wells Fargo Fund as a percentage of
average net assets.
<PAGE>
<TABLE>
<S> <C>
----------------------------------------------------------------------- ---------------------------------
ADVISORY FEE (CONTRACTUAL)
FUND
----------------------------------------------------------------------- ---------------------------------
Achievement Equity Fund 0.74%
Wells Fargo Growth Fund 0.75%
----------------------------------------------------------------------- ---------------------------------
Achievement Balanced Fund 0.74%
Wells Fargo Asset Allocation Fund 0.80%
----------------------------------------------------------------------- ---------------------------------
Achievement Municipal Bond Fund 0.60%
Wells Fargo National Tax-Free Fund 0.40%
----------------------------------------------------------------------- ---------------------------------
----------------------------------------------------------------------- ---------------------------------
Achievement Idaho Municipal Bond Fund 0.60%
Wells Fargo National Tax-Free Fund 0.40%
----------------------------------------------------------------------- ---------------------------------
Achievement Intermediate Term Bond Fund 0.60%
Wells Fargo Income Fund 0.50%
----------------------------------------------------------------------- ---------------------------------
Achievement Short-Term Bond Fund 0.60%
Wells Fargo Stable Income Fund 0.50%
----------------------------------------------------------------------- ---------------------------------
</TABLE>
Wells Capital Management Incorporated, or WCM, a wholly owned
subsidiary of Wells Fargo Bank, is the sub-advisor directly or indirectly for
each of the Wells Fargo Funds, except the Asset Allocation Fund. Because the
Stable Income Fund is a gateway Fund, WCM provides its sub-advisory services to
that Fund indirectly by providing sub-advisory services to the core portfolio in
which the Stable Income Fund invests. In that capacity, it is responsible for
the day-to-day investment management activities of each of the Wells Fargo
Funds, except the Asset Allocation Fund. As of September 30, 2000, WCM provided
advisory services for over $86 billion in assets.
Barclays Global Fund Advisors, or BGFA, a wholly owned subsidiary of
Barclays Global Investors, N.A., is the sub-adviser for the Wells Fargo Asset
Allocation Fund. In that capacity, it is responsible for the model that is used
to manage the investment portfolio and the selection of securities for the Asset
Allocation Fund. As of September 30, 2000, BGFA and its affiliates provided
investment advisory services for over $830 billion in assets.
<PAGE>
Comparison of Other Principal Service Providers
The following is a list of principal service providers for the
Achievement Funds and Wells Fargo Funds:
<TABLE>
<S> <C> <C>
--------------------------------- -------------------------------------------------------------------------------------
SERVICE PROVIDERS
--------------------------------- -------------------------------------------------------------------------------------
--------------------------------- --------------------------------------------- ---------------------------------------
SERVICE ACHIEVEMENT FUNDS WELLS FARGO FUNDS
--------------------------------- --------------------------------------------- ---------------------------------------
Investment Advisor First Security Investment Management, Inc. Wells Fargo Bank
61 South Main Street 525 Market Street
Salt Lake City, UT 84111 San Francisco, CA 94120
--------------------------------- --------------------------------------------- ---------------------------------------
--------------------------------- --------------------------------------------- ---------------------------------------
Sub-advisor None WCM (all Funds except the Asset
Allocation Fund)
525 Market Street
San Francisco, CA 94120
BGFA (Asset Allocation Fund)
45 Fremont Street
San Francisco, CA 94105
--------------------------------- --------------------------------------------- ---------------------------------------
--------------------------------- --------------------------------------------- ---------------------------------------
Distributor SEI Investments Distribution Co. Stephens Inc.
One Freedom Valley Drive 111 Center Street
Oaks, PA 19456 Little Rock, AR 72201
--------------------------------- --------------------------------------------- ---------------------------------------
--------------------------------- --------------------------------------------- ---------------------------------------
Administrator SEI Investments Mutual Fund Services Wells Fargo Bank
--------------------------------- --------------------------------------------- ---------------------------------------
--------------------------------- --------------------------------------------- ---------------------------------------
Custodian First Union National Bank Wells Fargo Bank Minnesota,
N.A.
Barclays Global Investors (for Asset
Allocation Fund only)
--------------------------------- --------------------------------------------- ---------------------------------------
--------------------------------- --------------------------------------------- ---------------------------------------
Fund Accountant Accounting services performed under the Forum Accounting Services, LLC
Administration Agreement.
--------------------------------- --------------------------------------------- ---------------------------------------
--------------------------------- --------------------------------------------- ---------------------------------------
Transfer Agent and Dividend DST Systems Inc. Boston Financial Data Services, Inc.
Disbursing Agent
--------------------------------- --------------------------------------------- ---------------------------------------
--------------------------------- --------------------------------------------- ---------------------------------------
Independent Auditors Deloitte & Touche LLP KPMG LLP
--------------------------------- --------------------------------------------- ---------------------------------------
</TABLE>
Comparison of Business Structures
Federal securities laws largely govern the way mutual funds operate,
but they do not cover every aspect of a fund's existence and operation. State
law and each Fund's governing documents create additional operating rules and
restrictions that funds must follow. The Achievement Funds are organized as
series of a Massachusetts business trust, whereas the Wells Fargo Funds are
series of a Delaware business trust. This difference will not significantly
affect the operation of your Fund or change the responsibilities, powers or the
fiduciary duty of the Wells Fargo Funds' Board of Trustees.
Under both Delaware and Massachusetts law, shareholders have the right
to vote on matters as specified in the Trust Instrument or Declaration of Trust.
The Wells Fargo Funds' Declaration of Trust requires shareholder approval of a
matter only if required under the federal securities laws or if the Board
decides to submit the matter to shareholders. Accordingly, Wells Fargo Fund
shareholders may have more limited voting rights than the shareholders of the
Achievement Funds. In this regard, The Achievement Funds Trust's Trust
Instrument permits shareholders to vote on amendments to the Trust Instrument
that would adversely affect shareholders' rights. The Wells Fargo Funds'
Declaration of Trust permits the Board of Trustees to amend it without
shareholder approval unless the federal securities laws expressly require it.
Similarly, The Achievement Funds Trust's Trust Instrument gives shareholders the
express right to vote on certain mergers and reorganizations, and requires the
affirmative vote of a majority of the outstanding shares. Wells Fargo Fund
shareholders have the right to vote for reorganizations only if expressly
required under the federal securities laws.
<PAGE>
Terms of the Reorganization
At the effective time of the Reorganization, each Wells Fargo Fund will
acquire all of the assets, and assume all of the liabilities, of the
corresponding Achievement Fund shown in the table below in exchange for shares
of the corresponding class of the Wells Fargo Fund.
<TABLE>
<S> <C>
------------------------------------------------------ ----------------------------------------------------
ACHIEVEMENT FUNDS WELLS FARGO FUNDS
------------------------------------------------------ ----------------------------------------------------
Equity Fund Growth Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Balanced Fund Asset Allocation Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Municipal Bond Fund National Tax-Free Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Idaho Municipal Bond Fund National Tax-Free Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Intermediate Term Bond Fund Income Fund
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
Short-Term Bond Fund Stable Income Fund
------------------------------------------------------ ----------------------------------------------------
</TABLE>
Each Wells Fargo Fund will issue the number of full and fractional
shares determined by dividing the net value of all the assets of each respective
Achievement Fund by the net asset value of one share of the Wells Fargo Fund.
The Agreement and Plan of Reorganization, copies of which are available upon
request, provides the time for and method of determining the net value of the
Achievement Funds' assets and the net asset value of a share of the Wells Fargo
Funds. To determine the valuation of the assets transferred by each Achievement
Fund and the number of shares of each Wells Fargo Fund to be transferred, the
parties will use the standard valuation methods used by the Wells Fargo Funds in
determining daily net asset values, which do not differ materially from the
standard methods used by the Achievement Funds. The valuation will occur on the
closing date of the Reorganization, which is expected to be on or about February
2001, and will be done at the time of day the Achievement Funds and Wells Fargo
Funds ordinarily calculate their net asset value.
Each Achievement Fund will distribute the Wells Fargo Fund shares
received in the Reorganization to its shareholders in liquidation of the
Achievement Fund. Through this process, shareholders of record of each
Achievement Fund will be credited with shares of the corresponding Wells Fargo
Fund having a value equal to the Achievement Fund shares that the shareholders
hold of record at the effective time of the Reorganization. At that time, the
Achievement Fund will redeem and cancel its outstanding shares and will wind-up
its affairs and terminate as soon as is reasonably practicable after the
Reorganization.
The parties may terminate the Reorganization plan by mutual consent and
each party has the right to unilaterally terminate the Reorganization plan under
certain circumstances. For example, either party may at any time terminate the
Reorganization plan unilaterally upon a determination by its Board that
proceeding with the Reorganization is not in the best interest of its
shareholders. Completion of the Reorganization is subject to numerous conditions
set forth in the Reorganization plan. An important condition to closing is that
the Achievement Funds and Wells Fargo Funds receive a tax opinion to the effect
that the Reorganization will not be taxable for federal income tax purposes for
the Achievement Funds, the Wells Fargo Funds or the Achievement Funds'
shareholders. Other material conditions include the receipt of legal opinions
regarding the Achievement Funds, the Wells Fargo Funds and the Reorganization.
Last, the closing is conditioned upon both the Achievement Funds and Wells Fargo
Funds receiving the necessary documents to transfer the assets and liabilities
of each Achievement Fund to its corresponding Wells Fargo Fund, and to transfer
the Wells Fargo Fund shares back to its corresponding Achievement Fund in
exchange for the assets received.
Board Consideration of the Reorganization
The Trustees of the Achievement Funds were first advised of the
proposed Reorganization of the Achievement Funds into the Wells Fargo Funds at
the regular quarterly meeting of the Trustees held on August 4, 2000. Summary
information concerning the comparative performance and operating expense ratios
of the Achievement Funds and the Wells Fargo Funds was distributed and discussed
at that meeting.
<PAGE>
A special meeting of the Trustees was held on October 5, 2000, to
consider the proposed Reorganization. The Trustees requested and received from
Wells Fargo Bank and First Security Investment Management, Inc., written
materials concerning the Wells Fargo Funds and the proposed Reorganization.
Those materials included information on the investment objectives and the
strategies of the Wells Fargo Funds, comparative operating expense ratio and
performance information, a description of the service providers and marketing
plans for the Wells Fargo Funds, and an analysis of the projected benefits to
Achievement Fund shareholders from the proposed Reorganization.
At a meeting on November 1, 2000, the Trustees of the Achievement Funds
met again to consider the Reorganization and unanimously approved the
Reorganization plan and determined that the Reorganization of the Achievement
Funds into the Wells Fargo Funds would be in the best interests of each Fund and
its shareholders. The Trustees further determined that the interests of existing
shareholders of each Fund would not be diluted upon the Reorganization.
Consequently, the Trustees recommend approval of the Reorganization for the
following reasons:
o GREATER PRODUCT ARRAY AND ENHANCED RANGE OF INVESTMENT OPTIONS
Investors in the Wells Fargo Funds family will enjoy a wide array of
investment options and strategies. The Wells Fargo Funds family consists of more
than 65 mutual funds, including over 20 different equity funds, 12 asset
allocation and balanced funds, 11 tax-free funds, 8 income funds and 14 money
market funds. Currently, the Achievement Funds family has 6 funds, of which 1 is
an equity fund, 1 is a balanced fund, 2 are tax-free funds and 2 are income
funds.
This broader range of investment options will permit an investor in the
Wells Fargo Funds family to diversify his or her investments and to participate
in investment styles currently prevalent in the market. Shareholders are free,
with a few exceptions, to make exchanges across the entire spectrum of Wells
Fargo Funds. The Wells Fargo Funds family also employs seven different
sub-advisors to provide specialized expertise with respect to certain investment
styles and market segments, including international, index, small cap, mid cap
and large cap styles and domestic and foreign technology companies. Thus, if the
Reorganization is approved, you will have increased investment options and
greater flexibility to change investments.
o TAX-FREE CONVERSION OF ACHIEVEMENT FUND SHARES
If you were to redeem your investment in the Achievement Funds to
invest in the Wells Fargo Funds or another investment product, you generally
would recognize gain or loss for federal income tax purposes upon the redemption
of the shares. By contrast, it is intended that the proposed Reorganization of
the Achievement Funds will result in your investment being transferred to the
corresponding Wells Fargo Fund without recognition of gain or loss for federal
income tax purposes. Based on the conclusion that the Reorganization is not
taxable, after the Reorganization you will have the same basis and holding
period for your Wells Fargo Fund shares as you had for your Achievement Fund
shares for federal income tax purposes. As a shareholder of an open-end fund,
you will continue to have the right to redeem any or all of your shares at net
asset value at any time. At that time, you generally would recognize a gain or
loss for federal income tax purposes.
o MARKET PRESENCE
The Reorganization has the potential for the former shareholders of the
Achievement Funds to achieve greater investment leverage and market presence. As
of September 30, 2000, the Wells Fargo Fund family had approximately $68 billion
in assets, and was the 27th largest mutual fund family in the United States.
Fund investment opportunities for a mutual fund or a fund family tend to
increase as fund or fund family assets increase by giving fund portfolio
managers broader investment opportunities and lower trading costs.
o IMPROVED OPERATING EFFICIENCIES
The Wells Fargo Funds have the potential to operate more efficiently
than the Achievement Funds by, among other things, having a larger group of
funds with greater assets, thereby reducing certain fixed costs as a percentage
of fund assets, such as legal, compliance and the board of trustee expenses. The
Reorganization also has the potential to achieve efficiencies by eliminating the
need for two sets of service providers, compliance systems and boards of
trustees.
o ENHANCED VIABILITY
The combined Achievement and Wells Fargo Funds will be more viable due
to the larger asset size and the multiple channels of distribution. Shares of
the Wells Fargo Funds are sold through 32 organizations affiliated with Wells
Fargo & Company and through 288 third-party organizations. As a result of those
relationships, sales of new shares of the Wells Fargo Funds are significantly
higher than sales of new shares of the Achievement Funds. The multiple
distribution channels available to the Wells Fargo Funds should enhance the
market presence and facilitate the operating efficiencies described above.
<PAGE>
o COMPATIBLE OBJECTIVES AND INVESTMENT STRATEGIES
As discussed in the section entitled "Comparison of Investment
Objectives, Principal Investment Strategies and Policies," each Wells Fargo Fund
and Achievement Fund have compatible investment objectives and strategies,
although the phrasing of the investment objective(s) differ slightly. As a
result, the proposed Reorganization is not expected to cause significant
portfolio turnover or transaction expenses from the sale of securities that are
incompatible with the investment objective(s) of the Wells Fargo Fund. It also
is not expected to significantly alter the risk/potential return profile of any
shareholder's investment.
o EXPENSES OF THE REORGANIZATION
Well Fargo Bank has agreed to pay all of the expenses of the
Reorganization so shareholders of the Achievement Funds and Wells Fargo Funds
will not bear these costs.
Performance
The following table shows the average annual total returns of the
Institutional Class shares of the Achievement Funds and Wells Fargo Funds for 1,
5 and 10 years (or, if less, since inception). For more information regarding
the total returns of each of the Funds, see the "Financial Highlights" in the
Wells Fargo Funds' prospectuses accompanying this statement or your Achievement
Fund prospectus. Of course, past performance does not predict future results.
<TABLE>
<S> <C> <C> <C> <C>
------------------------------------------------------------ ------------ ------------- --------------- --------------
AVERAGE ANNUAL TOTAL RETURN1 SINCE
AS OF SEPTEMBER 30, 2000 1 YEAR 5 YEARS 10 YEARS INCEPTION
(INCEPTION DATE OF FUND)
------------------------------------------------------------ ------------ ------------- --------------- --------------
Achievement Equity Fund (12/28/94) 19.80% 17.80% N/A 20.11%2
Wells Fargo Growth Fund (9/6/96)3 14.55% 18.12% 16.34% N/A
------------------------------------------------------------ ------------ ------------- --------------- --------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
------------------------------------------------------------ ------------ ------------- --------------- --------------
Achievement Balanced Fund (12/28/94) 14.53% 12.92% N/A 14.58%2
Wells Fargo Asset Allocation4 11.95% 15.44% 14.52% N/A
------------------------------------------------------------ ------------ ------------- --------------- --------------
Achievement Municipal Bond Fund (10/31/96) 4.65% N/A N/A 4.75%2
Wells Fargo National Tax-Free Fund5 5.55% 5.58% 6.29% N/A
------------------------------------------------------------ ------------ ------------- --------------- --------------
------------------------------------------------------------ ------------ ------------- --------------- --------------
Achievement Idaho Municipal Bond Fund (12/28/94) 5.88% 4.40% N/A 5.61%2
Wells Fargo National Tax-Free Fund5 5.55% 5.58% 6.29% N/A
------------------------------------------------------------ ------------ ------------- --------------- --------------
------------------------------------------------------------ ------------ ------------- --------------- --------------
Achievement Intermediate Term Bond Fund (12/28/94) 5.66% 5.23% N/A 6.36%2
Wells Fargo Income Fund6 5.57% 5.37% 6.98% N/A
------------------------------------------------------------ ------------ ------------- --------------- --------------
Achievement Short-Term Bond Fund (12/28/94) 5.82% 5.36% N/A 5.67%2
Wells Fargo Stable Income Fund (11/11/94) 5.67% 5.62% N/A 5.90%2
------------------------------------------------------------ ------------ ------------- --------------- --------------
-----------------------
</TABLE>
1 The returns for the Institutional Class shares do not reflect applicable
sales charges and higher fees and expenses of the Class A and Class B
shares of the Funds. Thus, returns for the Class A and Class B shares of
both the Achievement Funds and the Wells Fargo Funds were lower than
reflected in this table.
2 The performance history is from inception date, which is next to the fund's
name, because the fund is not old enough to have a 5-year and/or 10-year
history.
3 The Institutional Class shares of the Wells Fargo Growth Fund commenced
operations on September 6, 1996. Performance shown for periods prior to the
inception of the Institutional Class shares of the Fund reflects the
performance of the Class A shares (which commenced operations on August 2,
1990) adjusted to reflect the fees and expenses of the Institutional Class
shares.
4 The Institutional Class shares of the Wells Fargo Asset Allocation Fund
commenced operations on November 11, 1999. Performance shown for periods
prior to the inception of the Institutional Class shares of the Fund
reflects the performance of the Class A shares (which commenced operations
on November 13, 1986) adjusted to reflect the fees and expenses of the
Institutional Class shares.
5 The Institutional Class shares of the Wells Fargo National Tax-Free Fund
commenced operations on August 2, 1993. Performance shown for periods prior
to the inception of the Institutional Class shares of the Fund reflects the
performance of the Class A shares (which commenced operations on August 1,
1989) adjusted to reflect the fees and expenses of the Institutional Class
shares.
6 The Institutional Class shares of the Wells Fargo Income Fund commenced
operations on August 2, 1993. Performance shown for periods prior to the
inception of the Institutional Class shares of the Fund reflects the
performance of the Class A shares (which commenced operations on June 9,
1987) adjusted to reflect the fees and expenses of the Institutional Class
shares.
<PAGE>
Material Federal Income Tax Consequences and Federal Income Tax Opinions
The following discussion summarizes the material federal income tax
consequences of the Reorganization that are applicable to Achievement Fund
shareholders. It is based on the Internal Revenue Code, applicable Treasury
Regulations, judicial authority, and administrative rulings and practice, all as
of the date of this proxy statement/prospectus and all of which are subject to
change, including changes with retroactive effect. The discussion below does not
address any state, local or foreign tax consequences of the Reorganization. An
Achievement Fund shareholder's tax treatment may vary depending upon his or her
particular situation. In addition, the following types of Achievement Fund
shareholders, among others, also may be subject to special rules not discussed
below: an insurance company; a tax-exempt organization; a financial institution
or broker-dealer; a person who is neither a citizen nor resident of the United
States or entity that is not organized under the laws of the United States or
political subdivision thereof; a holder of Achievement Fund shares as part of a
hedge, straddle or conversion transaction; or a person that does not hold
Achievement Fund shares as a capital asset at the time of the Reorganization.
Neither the Achievement Funds nor the Wells Fargo Funds has requested
or will request an advance ruling from the Internal Revenue Service (the "IRS")
as to the federal income tax consequences of the Reorganization or any related
transaction. The IRS could adopt positions contrary to that discussed below and
such positions could be sustained. Achievement Fund shareholders are urged to
consult with their own tax advisors and financial planners as to the particular
tax consequences of the merger to the Achievement Fund shareholder, including
the applicability and effect of any state, local or foreign laws, and the effect
of possible changes in applicable tax laws.
The obligation of the Achievement Funds and the Wells Fargo Funds to
consummate the Reorganization is conditioned upon the receipt of an opinion of
counsel substantially to the effect that, on the basis of the representations
set forth or referred to in the opinion, the Reorganization with respect to each
Achievement Fund and the corresponding Wells Fargo Fund will be treated for
federal income tax purposes as a tax-free reorganization under Section 368(a) of
the Internal Revenue Code and that an Achievement Fund and corresponding Wells
Fargo Fund will each be a party to a reorganization within the meaning of
Section 368(b) of the Internal Revenue Code. Provided that the Reorganization so
qualifies and an Achievement Fund and the corresponding Wells Fargo Fund are so
treated:
o Neither an Achievement Fund nor the corresponding Wells Fargo
Fund will recognize any gain or loss as a result of the
Reorganization.
o An Achievement Fund shareholder will not recognize any gain or
loss as a result of the receipt of Wells Fargo Fund shares in
exchange for such shareholder's Wells Fargo Fund shares
pursuant to the Reorganization.
o An Achievement Fund shareholder's aggregate tax basis in Wells
Fargo Fund shares received pursuant to the Reorganization will
equal such shareholder's aggregate tax basis in Achievement
Fund shares held immediately before the Reorganization.
o An Achievement Fund shareholder's holding period for the Wells
Fargo Fund shares received pursuant to the Reorganization will
include the period during which the Achievement Fund shares
have been held.
The tax opinion described above will be based upon facts,
representations and assumptions to be set forth or referred to in the opinion
and the continued accuracy and completeness of representations made by the
Achievement Funds and the Wells Fargo Funds, including representations in
certificates to be delivered by the management of each of the Achievement Funds
and Wells Fargo Funds, which if incorrect in any material respect would
jeopardize the conclusions reached in the opinion.
Regardless of whether the acquisition of the assets and liabilities of
an Achievement Fund by a corresponding Wells Fargo Fund qualifies as a tax-free
reorganization as described above, the sale of securities by an Achievement Fund
prior to the Reorganization, whether in the ordinary course of business or in
anticipation of the Reorganization, is expected to result in a taxable
distribution to the Achievement Funds' shareholders.
Since its formation, each of the Achievement Funds and Wells Fargo
Funds believe it has qualified as a separate "regulated investment company"
under the Internal Revenue Code. Accordingly, each of the Achievement Funds and
Wells Fargo Funds believes it has been, and expects to continue to be, relieved
of federal income tax liability to the extent it makes distributions of its
taxable income and gains to its shareholders.
Fees and Expenses of the Reorganization
All fees and expenses, including accounting expenses, legal expenses,
proxy expenses, portfolio transfer taxes (if any) or other similar expenses
incurred in connection with the completion of the Reorganization will be paid by
Wells Fargo Bank.
Information on Voting
This proxy statement/prospectus is being provided in connection with
the solicitation of proxies by the Board of Trustees of the Achievement Funds to
solicit your vote for a proposal at a meeting of shareholders, which we refer to
as the Meeting. The Meeting will be held at the offices of the Achievement Funds
located at One Freedom Valley Drive, Oaks, Pennsylvania on February 8, 2001 at
11:00 a.m. (Eastern Time).
You may vote in one of three ways. You may complete and sign the
enclosed proxy card and mail it to us in the enclosed prepaid return envelope
(if mailed in the United States). You may vote on the Internet by going to
http://www.proxyvote.com and following the instructions. Last, you also can call
the toll-free number printed on your proxy ballot. To vote via the Internet or
telephone you will need the "control number" that appears on your proxy card.
You may revoke a proxy once it is given. If you desire to revoke a
proxy, you must submit to the appropriate Achievement Fund a later dated proxy
or a written notice of revocation, or otherwise give written notice of
revocation in person at the Meeting. All properly executed proxies received in
time for the Meeting will be voted as specified in the proxy, or, if no
specification is made, FOR the proposal.
Only shareholders of record on December 1, 2000 are entitled to notice
of and to vote at the Meeting. Each share held as of the close of business on
December 1, 2000 is entitled to one vote. For each Achievement Fund, the
presence in person or by proxy of one-half of the shares of the Fund entitled to
vote is required to constitute a quorum at the meeting for the transaction of
all business. Approval of the Reorganization by any Achievement Fund requires
the lesser of (1) 67% or more of the Fund's voting shares, if holders of more
than 50% of the Fund's outstanding shares are present or represented by proxy,
or (2) more than 50% of a Fund's outstanding voting securities.
The election inspectors will count your vote at the Meeting if cast by
proxy or in person. The election inspectors will count:
* votes cast "for" approval of the proposal to determine whether
sufficient affirmative votes have been cast;
* abstentions and broker non-votes of shares (in addition to votes
cast "for") to determine whether a quorum is present at
the Meeting, but not abstentions or broker non-votes to
determine whether a proposal has been approved.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and for which the broker lacks discretionary
voting authority.
The Trustees of the Achievement Funds know of no matters other than
those described in this proxy statement/prospectus that will be brought before
the Meeting. If, however, any other matters properly come before the Meeting, it
is the Trustees' intention that proxies will be voted on such matters based on
the judgment of the persons named in the enclosed form of proxy.
In addition to the solicitation of proxies by mail or expedited
delivery service, the Board of Trustees of The Achievement Funds Trust, and
employees and agents of Wells Fargo & Company and First Security Corporation and
their affiliates may solicit proxies by telephone. Wells Fargo Bank will
reimburse upon request persons holding shares as nominees for their reasonable
expenses in sending soliciting material to their principals.
Existing and Pro Forma Capitalization
The following table sets forth as of the date specified in the chart
below, (i) the current capitalization of the Achievement Funds, (ii) the current
capitalization of the Wells Fargo Funds, and (iii) the pro forma capitalization
of the Wells Fargo Funds, adjusted to give effect to the proposed acquisition of
assets at net asset value.
<PAGE>
<TABLE>
<S> <C> <C> <C>
----------------------------------------------------------- ----------------------- ------------------ ------------------
NET ASSET VALUE
ACHIEVEMENT EQUITY FUND/ TOTAL SHARES PER SHARE
WELL FARGO GROWTH FUND NET ASSETS OUTSTANDING
----------------------------------------------------------- ----------------------- ------------------ ------------------
Achievement Equity Fund
Class A $ 12,424,001 643,652 $ 19.30
Class B $ 2,770,514 146,337 $ 18.93
Institutional Class $ 299,105,279 15,408,808 $ 19.41
----------------------------------------------------------- ----------------------- ------------------ ------------------
Wells Fargo Growth Fund
Class A $ 311,038,398 13,632,002 $ 22.82
Class B $ 69,433,478 4,349,140 $ 15.96
Institutional Class $ 52,560,754 1,961,425 $ 26.80
----------------------------------------------------------- ----------------------- ------------------ ------------------
Pro Forma Wells Fargo Growth Fund
(as of 9/30/00)
Class A $ 323,482,399 14,176,514 $22.82
Class B $ 72,203,992 4,522,677 $15.96
Institutional Class $ 351,666,033 13,123,223 $26.80
----------------------------------------------------------- ----------------------- ------------------ ------------------
----------------------------------------------------------- ----------------------- ------------------ ------------------
NET ASSET VALUE
ACHIEVEMENT BALANCED FUND/ TOTAL SHARES PER SHARE
WELLS FARGO ASSET ALLOCATION FUND NET ASSETS OUTSTANDING
----------------------------------------------------------- ----------------------- ------------------ ------------------
Achievement Balanced Fund
Class A $ 3,351,769 230,864 $ 14.52
Class B $ 1,939,824 133,880 $ 14.49
Institutional Class $ 207,243,425 14,254,869 $ 14.54
----------------------------------------------------------- ----------------------- ------------------ ------------------
Wells Fargo Asset Allocation Fund
Class A $ 1,266,357,592 51,975,430 $ 24.36
Class B $ 577,525,888 39,087,713 $ 14.78
Institutional Class $ 20,821,881 854,269 $ 24.37
----------------------------------------------------------- ----------------------- ------------------ ------------------
----------------------------------------------------------- ----------------------- ------------------ ------------------
Pro Forma Wells Fargo Asset Allocation Fund (as of
9/30/00)
Class A $ 1,269,709,361 52,113,004 $24.36
Class B $ 579,465,712 39,218,992 $14.78
Institutional Class $ 228,065,306 9,356,940 $24.37
----------------------------------------------------------- ----------------------- ------------------ ------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
----------------------------------------------------------- ----------------------- ------------------ ------------------
ACHIEVEMENT MUNICIPAL BOND FUND/ NET ASSET VALUE
ACHIEVEMENT IDAHO MUNICIPAL BOND FUND/ TOTAL SHARES PER SHARE
WELLS FARGO NATIONAL TAX-FREE FUND NET ASSETS OUTSTANDING
----------------------------------------------------------- ----------------------- ------------------ ------------------
Achievement Municipal Bond Fund (Fund A)
Class A $ 4,551,965 480,307 $ 9.48
Class B $ 2,058,309 217,171 $ 9.48
Institutional Class $ 62,324,532 6,572,701 $ 9.48
----------------------------------------------------------- ----------------------- ------------------ ------------------
----------------------------------------------------------- ----------------------- ------------------ ------------------
Achievement Idaho Municipal Bond Fund (Fund B)
Class A $ 8,036,404 791,089 $ 10.16
Class B $ 1,669,696 164,220 $ 10.17
Institutional Class $ 21,251,674 2,097,071 $ 10.13
----------------------------------------------------------- ----------------------- ------------------ ------------------
Wells Fargo National Tax-Free Fund (Fund C)
Class A $ 64,858,654 6,669,992 $ 9.72
Class B $ 18,366,568 1,888,663 $ 9.72
Institutional Class $ 244,625,581 25,144,150 $ 9.73
----------------------------------------------------------- ----------------------- ------------------ ------------------
----------------------------------------------------------- ----------------------- ------------------ ------------------
Pro Forma Wells Fargo National Tax-Free Fund
(Fund A + Fund C) (as of 6/30/00)
Class A $ 69,410,619 7,138,109 $ 9.72
Class B $ 20,424,877 2,100,322 $ 9.72
Institutional Class $ 306,950,113 31,550,244 $ 9.73
----------------------------------------------------------- ----------------------- ------------------ ------------------
----------------------------------------------------------- ----------------------- ------------------ ------------------
Pro Forma Wells Fargo National Tax-Free Fund (Fund B +
Fund C) (as of 6/30/00)
Class A $ 72,895,058 7,496,445 $ 9.72
Class B $ 20,036,264 2,060,360 $ 9.72
Institutional Class $ 265,877,255 27,328,520 $ 9.73
----------------------------------------------------------- ----------------------- ------------------ ------------------
----------------------------------------------------------- ----------------------- ------------------ ------------------
Pro Forma Wells Fargo National Tax-Free Fund (Fund A+
Fund B + Fund C) (as of 6/30/00)
Class A $ 77,447,023 7,964,564 $ 9.72
Class B $ 22,094,573 2,272,020 $ 9.72
Institutional Class $ 328,201,787 33,734,623 $ 9.73
----------------------------------------------------------- ----------------------- ------------------ ------------------
----------------------------------------------------------- ----------------------- ------------------ ------------------
ACHIEVEMENT INTERMEDIATE TERM BOND FUND/ NET ASSET VALUE
WELLS FARGO INCOME FUND TOTAL SHARES PER SHARE
NET ASSETS OUTSTANDING
----------------------------------------------------------- ----------------------- ------------------ ------------------
Achievement Intermediate Term Bond Fund
Class A $ 1,163,686 117,378 $ 9.91
Institutional Class $ 154,133,014 15,583,779 $ 9.89
----------------------------------------------------------- ----------------------- ------------------ ------------------
Wells Fargo Income Fund
Class A $ 16,894,583 1,907,505 $ 8.86
Institutional Class $ 369,718,662 41,785,788 $ 8.85
----------------------------------------------------------- ----------------------- ------------------ ------------------
----------------------------------------------------------- ----------------------- ------------------ ------------------
Pro Forma Wells Fargo Income Fund
(as of 5/31/00)
Class A $ 18,058,269 2,038,893 $ 8.86
Institutional Class $ 523,851,676 59,205,994 $ 8.85
----------------------------------------------------------- ----------------------- ------------------ ------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
----------------------------------------------------------- ----------------------- ------------------ ------------------
NET ASSET VALUE
ACHIEVEMENT SHORT-TERM BOND FUND/ TOTAL SHARES PER SHARE
WELLS FARGO STABLE INCOME FUND NET ASSETS OUTSTANDING
----------------------------------------------------------- ----------------------- ------------------ ------------------
Achievement Short-Term Bond Fund
Class A $ 173,999 17,812 $ 9.77
Institutional Class $ 28,719,631 2,937,325 $ 9.78
----------------------------------------------------------- ----------------------- ------------------ ------------------
Wells Fargo Stable Income Fund
Class A $ 8,912,003 878,114 $ 10.15
Institutional Class $ 191,357,706 18,850,427 $ 10.15
----------------------------------------------------------- ----------------------- ------------------ ------------------
----------------------------------------------------------- ----------------------- ------------------ ------------------
Pro Forma Wells Fargo Stable Income Fund
(as of 5/31/00)
Class A $ 9,086,002 895,258 $ 10.15
Institutional Class $ 220,077,337 21,679,570 $ 10.15
----------------------------------------------------------- ----------------------- ------------------ ------------------
</TABLE>
Outstanding Shares
As of December 1, 2000, each Achievement Fund and its corresponding
Wells Fargo Fund had the following numbers of shares outstanding:
<TABLE>
<S> <C> <C> <C>
-------------------------------------- ------------------- ------------------------------ --------------------
Achievement Funds # of Shares Wells Fargo Funds # of Shares
Outstanding Outstanding
-------------------------------------- ------------------- ------------------------------ --------------------
-------------------------------------- ------------------- ------------------------------ --------------------
Equity Fund 16,632,644 Growth Fund 19,395,562
-------------------------------------- ------------------- ------------------------------ --------------------
-------------------------------------- ------------------- ------------------------------ --------------------
Balanced Fund 14,469,326 Asset Allocation Fund 93,726,367
-------------------------------------- ------------------- ------------------------------ --------------------
-------------------------------------- ------------------- ------------------------------ --------------------
Municipal Bond Fund 7,097,825 National Tax-Free Fund 32,371,789
-------------------------------------- ------------------- ------------------------------ --------------------
-------------------------------------- ------------------- ------------------------------ --------------------
Idaho Municipal Bond Fund 2,987,680 National Tax-Free Fund 32,371,789
-------------------------------------- ------------------- ------------------------------ --------------------
-------------------------------------- ------------------- ------------------------------ --------------------
Intermediate Term Bond Fund 14,719,456 Income Fund 55,398,895
-------------------------------------- ------------------- ------------------------------ --------------------
-------------------------------------- ------------------- ------------------------------ --------------------
Short Term Bond Fund 2,894,971 Stable Income Fund 18,093,147
-------------------------------------- ------------------- ------------------------------ --------------------
</TABLE>
Interest of Certain Persons in the Transactions
To the knowledge of the Achievement Funds and Wells Fargo Funds, the
following are the only persons who owned of record or beneficially, five percent
or more of the outstanding shares of any class of an Achievement Fund or Wells
Fargo Fund:
<PAGE>
As of November 15, 2000
<TABLE>
<S> <C> <C> <C> <C> <C>
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Fund Name & Address Class of % of Class % of Fund % of Fund
Shares Post
Type of Closing
Ownership
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Achievement Short FISERV Securities, Inc. Class A/ 48.25% 0.25% .03%
Term Bond Fund Trade House Acct. Record Holder
Attn: Mutual Funds
One Commerce Square
Philadelphia, PA 19103-7042
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Honey J. Larson Class A/ 25.50% 0.13% .02%
1798 Milbrook Road Record Holder
Salt Lake City, UT 84106-3277
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
First Security Bank NA Trust Class I/ 35.7% 35.56% 4.83%
For the First Security Incentive Record Holder
Plan
Trust Securities Admin. Dept
P.O. Box 25297
Salt Lake City, UT 84125-0297
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
First Security Corporation Class I/ 32.33% 32.20% 4.37%
Trust Groups-Reinvest Account Record Holder
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
First Security Corporation Class I/ 29.22% 29.11% 3.95%
Trust Groups-Cash Account Record Holder
First Security Bank of Utah NA
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Achievement Municipal FISERV Securities, Inc. Class B/ 19.78% 0.56% 0.09%
Bond Fund FAO 18477687 Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market St., Suite 1200
Philadelphia, PA 19103-7084
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class B/ 13.28% 0.38% 0.06%
FAO 18117949 Record Holder
Attn: Mutual Funds Dept.
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class B/ 8.16% 0.23% 0.04%
Attn: Mutual Funds Dept. Record Holder
FAO 18486470
One Commerce Square, Suite 1200
Philadelphia, PA 19103-7084
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class B/ 7.98% 0.23% 0.04%
FAO 18279885 Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street, Suite 120
Philadelphia, PA 19103-7084
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class B/ 7.85% 0.22% 0.04%
FAO 18279705 Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class B/ 7.42% 0.21% 0.03%
FAO 183606866 Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class A/ 98.41% 5.39% 0.89%
Trade House Acct. Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7042
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
First Security Corporation Class I/ 95.82% 87% 14.50%
Trust Groups-Trust Account Record Holder
First Security Bank of Utah NA
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class B/ 5.77% 0.16% 0.03%
FAO 18440788 Record Holder
Attn: Mutual Funds Dept.
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7084
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Achievement Equity Fund FISERV Securities, Inc. Class A/ 68.57% 2.67% 1.14%
Trade House Acct. Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7084
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
First Security Corporation Class I/ 69.45% 66.11% 24.11%
Trust Groups-Cash Acct. Record Holder
First Security Bank of Utah NA
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Achievement Intermediate First Security Corporation Class I/ 84.13% 83.50% 19.11%
Term Bond Fund Trust Groups-Cash Acct. Record Holder
First Security Bank of Utah NA
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
First Security Corporation Class I/ 15.37% 15.26% 3.49%
Trust Groups-Reinvest Acct. Record Holder
First Security Bank of Utah NA
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class A/ 78.02% 0.56% 0.13%
Trade House Acct. Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7042
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Achievement Idaho First Security Corporation Class I/ 98.92% 68.01% 5.04%
Municipal Bond Fund Trust Groups-Cash Acct. Record Holder
First Security Bank of Utah NA
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class A/ 92.59% 23.90% 1.77%
Trade House Acct. Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class A/ 23.07% 1.24% 0.09%
FAO 18432161 Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class A/ 12.61% 0.68% 0.05%
FAO 18209519 Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class A/ 12.19% 0.66% 0.05%
FAO 18513647 Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
FISERV Securities, Inc. Class A/ 7.08% 0.38% 0.03%
FAO 18042685 Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Achievement Balanced Fund FISERV Securities, Inc. Class A/ 75.96% 1.14% 0.09%
Trade House Acct. Record Holder
Attn: Mutual Funds
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
First Security Corporation Class I/ 70.89% 69.16% 5.5%
Trust Groups-Reinvest Acct. Record Holder
First Security Bank of Utah NA
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
First Security Bank NA TR for Class I/ 27.90% 27.21% 2.16%
the Record Holder
First Security Incentive Saving
Plan
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
WF National MLPF&S for the Sole Benefit of Class C/ 18.53% 0.42% 0.32%
Tax-Free Fund its Customers Record Holder
Attn: Mutual Fund Admin.
4800 Deer Park Drive
Jacksonville, FL 32246-6484
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Dean Witter for the Benefit of Class C/ 9.66% 0.22% 0.16%
William D. Hughes Personal Rep Record Holder
FBO T
P.O. Box 250 Church Street
Station
New York, NY 10008-0250
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Dean Witter FBO Class C/ 20.02% 0.45% 0.34%
Wells Fargo Bank Loan Collateral Record Holder
P.O. Box 250 Church Street
Station
New York, NY 10008-0250
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Dentru & Co. Class I/ 28.34% 20.25% 15.41%
Non-Discretionary Cash Record Holder
1740 Broadway Mail 8676
Denver, CO 80274-0001
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Wells Fargo Bank MN NA FBO Class I/ 5.87% 4.20% 3.20%
Tax Free Income Fund I Record Holder
Attn: Mutual Fund Ops
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Wells Fargo Bank MN NA FBO Class I/ 27.49% 19.65% 14.95%
Tax Free Income Fund I Record Holder
Attn: Mutual Fund Ops
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Wells Fargo Bank MN NA FBO Class I/ 37.34% 26.70% 20.30%
Tax Free Income Fund I Record Holder
Attn: Mutual Fund Ops
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
WF Stable Income Fund Norwest Investment Services, Inc. Class B/ 8.17% 0.12% 0.10%
FBO 102953761 Record Holder
Northstar Building East -8th
Floor
608 Second Avenue, South
Minneapolis, MN 55402-1916
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Norwest Investment Services, Inc. Class B/ 6.12% 0.09% 0.08%
FBO 731186551 Record Holder
Northstar Building East -9th
Floor
608 Second Avenue, South
Minneapolis, MN 55402-1916
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Norwest Investment Services, Inc. Class B/ 8.02% 0.12% 0.10%
FBO 708238851 Record Holder
Northstar Building East -9th
Floor
608 Second Avenue, South
Minneapolis, MN 55402-1916
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Charles Schwab & Company Class A/ 7.19% 0.35% 0.31%
Special Custody Account Record Holder
Exclusively FBO the Customers
101 Montgomery Street
San Francisco, CA 94104-4122
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Northstar Investment Services, Class A/ 10.21% 0.50% 0.44%
Inc. Record Holder
FBO 021219031
Northstar Building East -9th
Floor
608 Second Avenue, South
Minneapolis, MN 55402-1916
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Northstar Investment Services, Class A/ 5.10% 0.25% 0.22%
Inc. Record Holder
FBO 021263991
Northstar Building East -9th
Floor
608 Second Avenue, South
Minneapolis, MN 55402-1916
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Northstar Investment Services, Class A/ 23.90% 1.18% 1.02%
Inc. Record Holder
FBO 021453811
Northstar Building East -9th
Floor
608 Second Avenue, South
Minneapolis, MN 55402-1916
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
EMSEG & Co. Class I/ 6.93% 6.49% 5.61%
Stable Income Fund I Record Holder
c/o Mutual Fund Processing
P.O. Box 1450
Minneapolis, MN 55485-1450
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
EMSEG & Co. Class I/ 11.72% 10.97% 9.50%
Stable Income Fund I Record Holder
c/o Mutual Fund Processing
P.O. Box 1450
Minneapolis, MN 55485-1450
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
EMSEG & Co. Class I/ 66.76% 62.49% 54.09%
Stable Income Fund I Record Holder
c/o Mutual Fund Processing
P.O. Box 1450
Minneapolis, MN 55485-1450
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
WF Income Fund Wells Fargo Bank MN NA FBO Class A/ 41.63% 1.60% 1.23%
Income Bond Fund Class A Record Holder
Attn: Mutual Fund Ops
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Firlin & Co. Class I/ 13.69% 12.91% 9.96%
c/o National Bank of Commerce Record Holder
Attn: Trust Resources
P.O. Box 82480
Lincoln, NE 68501-2408
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Firlin & Co. Class I/ 7.51% 7.08% 5.46%
c/o National Bank of Commerce Record Holder
Attn: Trust Resources
P.O. Box 82480
Lincoln, NE 68501-2408
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Dentru & Co. Class I/ 14.52% 13.68% 10.55%
Non-Discretionary Cash Record Holder
1740 Broadway
Denver, CO 80274-0001
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Wells Fargo Bank MN NA FBO Class I/ 21.75% 20.50% 15.81%
Income Fund I Record Holder
Attn: Mutual Fund Ops
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Wells Fargo Bank MN NA FBO Class I/ 28.29% 26.67% 20.57%
Income Fund I Record Holder
Attn: Mutual Fund Ops
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Wells Fargo Bank MN NA FBO Class I/ 8.02% 7.56% 5.83%
Income Fund I Record Holder
Attn: Mutual Fund Ops
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
WF Asset Allocation Fund MLPF&S for the Sole Benefit of Class C/ 10.32% 0.25% 0.23%
its Record Holder
Customers
Attn: Mutual Fund Admin.
4800 Deer Park
Jacksonville, FL 32246-6484
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
EMJAYCO Class I/ 5.70% 0.05% 0.04%
Omnibus Account Record Holder
P.O. Box 17909
Milwaukee, WI 53217
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Wells Fargo Bank MN NA FBO Class I/ 5.18% 0.04% 0.04%
Stagecoach Balanced Fund CL 1 Record Holder
Attn: Mutual Fund Ops
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Wells Fargo Bank MN NA FBO Class I/ 77.27% 0.68% 0.63%
Stagecoach Balanced Fund CL 1 Record Holder
Attn: Mutual Fund Ops
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
WF Growth Fund Investors Services Group Class A/ 15.78% 10.77% 6.80%
FBO Wells Fargo/Portfolio Advisor Record Holder
Customer
211 South Gulph Road
King of Prussia, PA 19406-3103
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Dentru & Co. Class I/ 6.28% 0.63% 0.40%
Non-Discretionary Cash Record Holder
1740 Broadway
Denver, CO 80274-0001
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Wells Fargo Bank MN NA FBO Class I/ 34.06% 3.42% 2.16%
ValuGrowth Stock Fund I Record Holder
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Wells Fargo Bank MN NA FBO Class I/ 24.07% 2.42% 1.52%
ValuGrowth Stock Fund I Record Holder
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
Wells Fargo Bank MN NA FBO Class I/ 28.54% 2.87% 1.81%
ValuGrowth Stock Fund I Record Holder
P.O. Box 1533
Minneapolis, MN 55480-1533
-------------------------- ---------------------------------- --------------- --------------- ----------- ------------
</TABLE>
To the knowledge of the Achievement Funds and Wells Fargo Funds, the
following are the only persons who owned of record or beneficially, more than
25% of the outstanding shares of any Achievement Fund or Wells Fargo Fund:
<PAGE>
As of November 15, 2000
<TABLE>
<S> <C> <C> <C> <C>
------------------------- ---------------------------------- ------------------------ -------------- -----------------
Fund Name and Address Type of % of Fund % of Fund
Ownership Post-Closing
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
Achievement Short Term First Security Bank NA Trust Class I/ 35.56% 4.83%
Bond Fund for the First Security Incentive Record Holder
Plan
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
First Security Corporation Class I/ 32.20% 4.37%
Trust Groups-Reinvest Account Record Holder
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
First Security Corporation Class I/ 29.11% 3.95%
Trust Groups-Cash Account Record Holder
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
Achievement Municipal First Security Corporation Class I/ 87.00% 14.50%
Bond Fund Trust Groups-Trust Account Record Holder
First Security Bank of Utah NA
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
Achievement Equity Fund First Security Corporation Class I/ 66.11% 24.11%
Trust Groups-Cash Account Record Holder
First Security Bank of Utah, NA
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
Achievement First Security Corporation Class I/ 83.50% 19.11%
Intermediate Term Bond Trust Groups Cash Account Record Holder
Fund First Security Bank of Utah, NA
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
Achievement Idaho First Security Corporation Class I/ 68.01% 5.04%
Municipal Bond Fund Trust Groups-Cash Account Record Holder
First Security Bank of Utah, NA
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
Achievement Balanced First Security Corporation Class I/ 69.16% 5.50%
Fund Trust Groups-Reinvest Account Record Holder
First Security Bank of Utah, NA
Trust Security Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
First Security Bank NA TR Class I/ 27.21% 2.16%
for the First Security Incentive Record Holder
Savings Plan
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
WF National Tax-Free Wells Fargo Bank, MN NA FBO Class I/ 26.70% 20.30%
Fund Tax Free Income Fund I Record Holder
Attn: Mutual Fund Ops
P.O. Box 1533
Minneapolis, MN 55480-1533
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
WF Stable Income Fund EMSEG & Co. Class I/ 62.49% 54.09%
Stable Income Fund I Record Holder
c/o Mutual Fund Processing
P.O. Box 1450
Minneapolis, MN 55485-1450
------------------------- ---------------------------------- ------------------------ -------------- -----------------
------------------------- ---------------------------------- ------------------------ -------------- -----------------
WF Income Fund Wells Fargo Bank MN NA FBO Class I/ 26.67% 20.57%
Income Fund I Record Holder
Attn: Mutual Fund Ops
P.O. Box 1533
Minneapolis, MN 55480-1533
------------------------- ---------------------------------- ------------------------ -------------- -----------------
</TABLE>
In addition, as of November 15, 2000, First Security Bank, N.A., an
indirect wholly-owned subsidiary of Wells Fargo & Company, or its affiliates
controlled or held with sole or shared power to vote more than 25% of the
outstanding shares of each of the Achievement Funds, respectively, in a trust,
agency, custodial or other fiduciary or representative capacity. As a result,
First Security Bank, N.A. may be deemed to control each of the Funds and may be
able to greatly affect (if not determine) the outcome of the shareholder vote on
the reorganization. Therefore, National City Bank of Minnesota, an independent
fiduciary engaged by First Security Bank, N.A. will vote the shares of the
Achievement Funds that are entitled to be voted by First Security Bank, N.A. As
of November 15, 2000, the officers and Trustees of the Achievement Funds as a
group owned less than 1% of each Achievement Fund. As of November 15, 2000, the
officers and Trustees as a group of the Wells Fargo Funds owned less than 1% of
each of the Wells Fargo Funds.
<PAGE>
A-23
EXHIBIT A - FEE TABLES
These tables describe the fees and expenses that you may pay if you buy
and hold shares of a Fund. The examples are intended to help you compare the
costs of investing in the Funds with the cost of investing in other mutual
funds.
<TABLE>
<S> <C> <C>
ACHIEVEMENT WELLS FARGO
CLASS A EQUITY FUND GROWTH FUND
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... 4.50% 5.75%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None1
(as a percentage of the lower of the NAV on the date of original
purchase or the NAV on the date of the redemption)
Annual Fund Operating Expenses (expenses that are deducted
from fund assets, as a percentage of average net assets)
Management fee.................................................. 0.74% 0.75%
Distribution (Rule 12b-1) fee................................... 0.25%4 0.00%
Other expenses.................................................. 0.29% 0.69%
Total Annual Fund Operating Expenses (Gross).................... 1.28%2 1.44%
Waivers......................................................... Note 2 0.32%
Net Annual Fund Operating Expenses.............................. Note 2 1.12%3
ACHIEVEMENT WELLS FARGO
CLASS B EQUITY FUND GROWTH FUND
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... None None
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... 5.00% 5.00%
(as a percentage of the lower of the NAV on the date of original
purchase or the NAV on the date of the redemption)
Annual Fund Operating Expenses (expenses that are deducted
from fund assets, as a percentage of average net assets)
Management fee.................................................. 0.74% 0.75%
Distribution (Rule 12b-1) fee................................... 1.00%4 0.75%
Other expenses.................................................. 0.29% 0.74%
Total Annual Fund Operating Expenses (Gross).................... 2.03%2 2.24%
Waivers......................................................... Note 2 0.37%
Net Annual Fund Operating Expenses.............................. Note 2 1.87%3
-----------------------
</TABLE>
1. 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.
2. The advisor of the Achievement Equity Fund voluntarily waived certain fees
and expenses to maintain certain net operating expense ratios. For the
fiscal year ended January 31, 2000, the net operating expense ratio for the
Fund was as follows: 1.15% for the Class A Shares and 1.90% for the Class B
Shares. Because these waivers may be eliminated at any time, they are not
shown in the above tables.
3. The advisor and administrator of the Wells Fargo Growth Fund has committed
until at least February 1, 2002 to waive fees and/or reimburse expenses to
the extent necessary to maintain the Fund's net operating expense ratio
shown. After this time, the net operating expense ratio for the Wells Fargo
Growth Fund may be increased only with the approval of the Board of
Trustees.
4. Includes distribution and service fees for the sale and distribution of
Fund shares and for services provided to shareholders. Shareholder service
fees for the retail classes of the Wells Fargo Funds are included in the
line item "Other Expenses."
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT WELLS FARGO
INSTITUTIONAL CLASS EQUITY FUND GROWTH FUND
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... None None
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None
(as a percentage of the lower of the NAV on the date of original
purchase or the NAV on the date of the redemption)
Annual Fund Operating Expenses (expenses that are deducted
from fund assets, as a percentage of average net assets)
Management fee.................................................. 0.74% 0.75%
Distribution (Rule 12b-1) fee................................... 0.00% 0.00%
Other expenses.................................................. 0.29% 0.27%
Total Annual Fund Operating Expenses (Gross).................... 1.03%1 1.02%
Waivers......................................................... Note 1 0.02%
Net Annual Fund Operating Expenses.............................. Note 1 1.00%2
-------------------------
</TABLE>
1. The advisor of the Achievement Equity Fund voluntarily waived certain fees
and expenses to maintain certain net operating expense ratios. For the
fiscal year ended January 31, 2000, the net operating expense ratio for the
Institutional Class Shares of the Fund was 0.90%. Because these waivers may
be eliminated at any time, they are not shown in the above table.
2. The advisor and administrator of the Wells Fargo Growth Fund has committed
until at least February 1, 2002 to waive fees and/or reimburse expenses to
the extent necessary to maintain the Fund's net operating expense ratio
shown. After this time, the net operating expense ratio for the Wells Fargo
Growth Fund may be increased only with the approval of the Board of
Trustees.
Example of Expenses:
You would pay the following expenses on a $10,000 investment assuming that the
Fund has a 5% annual return and that Fund operating expenses remain the same,
that fee waivers are not in effect for the Achievement Fund, or for the Wells
Fargo Fund after the first year, and that you redeem your shares at the end of
each period. Your actual costs may be higher or lower than those shown.
<TABLE>
<S> <C> <C>
ACHIEVEMENT EQUITY WELLS FARGO
CLASS A FUND GROWTH FUND
------- ---- -----------
One Year............................................. $575 $683
Three Year........................................... $838 $975
Five Year............................................ $1,121 $1,288
Ten Year............................................. $1,926 $2,174
ACHIEVEMENT EQUITY WELLS FARGO
CLASS B FUND GROWTH FUND
------- ---- -----------
One Year............................................. $706 $690
Three Year........................................... $1,037 $965
Five Year............................................ $1,293 $1,366
Ten Year............................................. $2,169 $2,249
</TABLE>
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT EQUITY WELLS FARGO
INSTITUTIONAL CLASS FUND GROWTH FUND
------------------- ---- -----------
One Year............................................. $105 $102
Three Year........................................... $328 $323
Five Year............................................ $569 $561
Ten Year............................................. $1,259 $1,246
</TABLE>
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT WELLS FARGO ASSET
CLASS A BALANCED FUND ALLOCATION FUND
------- ------------- ---------------
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... 4.50% 5.75%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None1
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the redemption)
Annual Fund Operating Expenses (expenses that are deducted
from fund assets, as a percentage of average net assets)
Management fee.................................................. 0.74% 0.80%
Distribution (Rule 12b-1) fee................................... 0.25%4 0.00%
Other expenses.................................................. 0.31% 0.40%
Total Annual Fund Operating Expenses (Gross).................... 1.30%2 1.20%
Waivers......................................................... Note 2 0.21%
Net Annual Fund Operating Expenses.............................. Note 2 0.99%3
ACHIEVEMENT WELLS FARGO ASSET
CLASS B BALANCED FUND ALLOCATION FUND
------- ------------- ---------------
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... None None
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... 5.00% 5.00%
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the redemption)
Annual Fund Operating Expenses (expenses that are deducted
from fund assets, as a percentage of average net assets)
Management fee.................................................. 0.74% 0.80%
Distribution (Rule 12b-1) fee................................... 1.00%4 0.75%
Other expenses.................................................. 0.31% 0.44%
Total Annual Fund Operating Expenses (Gross).................... 2.05%2 1.99%
Waivers......................................................... Note 2 0.25%
Net Annual Fund Operating Expenses.............................. Note 2 1.74%3
-------------------------
</TABLE>
1. 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.
2. The advisor of the Achievement Balanced Fund voluntarily waived certain
fees and expenses to maintain certain net operating expense ratios. For the
fiscal year ended January 31, 2000, the net operating expense ratio for the
Fund was as follows: 1.15% for the Class A Shares and 1.90% for the Class B
Shares. Because these waivers may be eliminated at any time, they are not
shown in the above table.
3. The advisor and administrator of the Wells Fargo Asset Allocation Fund has
committed until at least November 8, 2001 to waive fees and/or reimburse
expenses to the extent necessary to maintain the Fund's net operating
expense ratio shown. After this time, the net operating expense ratio for
the Wells Fargo Asset Allocation Fund may be increased only with the
approval of the Board of Trustees.
4. Includes distribution and service fees for the sale and distribution of
Fund shares and for services provided to shareholders. Shareholder service
fees for the retail classes of the Wells Fargo Funds are listed in the line
item "Other Expenses."
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT BALANCED WELLS FARGO ASSET
INSTITUTIONAL CLASS FUND ALLOCATION FUND
------------------- ---- ---------------
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... None None
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the redemption)
Annual Fund Operating Expenses (expenses that are deducted
from fund assets, as a percentage of average net assets)
Management fee.................................................. 0.74% 0.80%
Distribution (Rule 12b-1) fee................................... 0.00% 0.00%
Other expenses.................................................. 0.31% 0.23%
Total Annual Fund Operating Expenses (Gross).................... 1.05%1 1.03%
Waivers......................................................... Note 1 0.03%
Net Annual Fund Operating Expenses.............................. Note 1 1.00%2
-------------------------
</TABLE>
1. The advisor of the Achievement Balanced Fund voluntarily waived certain
fees and expenses to maintain certain net operating expense ratios. For the
fiscal year ended January 31, 2000, the net operating expense ratio for the
Institutional Class Shares of the Fund was 0.90%. Because these waivers may
be eliminated at any time, they are not shown in the above table.
2. The advisor and administrator of the Wells Fargo Asset Allocation Fund has
committed until at least November 8, 2001 to waive fees and/or reimburse
expenses to the extent necessary to maintain the Fund's net operating
expense ratio shown. After this time, the net operating expense ratio for
the Wells Fargo Asset Allocation Fund may be increased only with the
approval of the Board of Trustees.
Example of Expenses:
You would pay the following expenses on a $10,000 investment assuming that the
Fund has a 5% annual return and that Fund operating expenses remain the same,
that fee waivers are not in effect for the Achievement Fund, or for the Wells
Fargo Fund after the first year, and that you redeem your shares at the end of
each period. Your actual costs may be higher or lower than those shown.
<TABLE>
<S> <C> <C>
ACHIEVEMENT BALANCED WELLS FARGO ASSET
CLASS A FUND ALLOCATION FUND
------- ---- ---------------
One Year............................................. $ 576 $ 670
Three Year........................................... $ 884 $ 914
Five Year............................................ $1,131 $ 1,178
Ten Year............................................. $1,947 $ 1,928
ACHIEVEMENT BALANCED WELLS FARGO ASSET
CLASS B FUND ALLOCATION FUND
------- ---- ---------------
One Year............................................. $ 708 $ 677
Three Year........................................... $ 1,043 $ 900
Five Year............................................ $ 1,303 $1,250
Ten Year............................................. $ 2,190 $1,996
</TABLE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT BALANCED WELLS FARGO ASSET
INSTITUTIONAL CLASS FUND ALLOCATION FUND
------------------- ---- ---------------
One Year............................................. $ 107 $ 102
Three Year........................................... $ 334 $ 325
Five Year............................................ $ 579 $ 566
Ten Year............................................. $ 1,283 $ 1,257
</TABLE>
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT MUNICIPAL WELLS FARGO NATIONAL
BOND FUND TAX-FREE FUND
CLASS A
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... 4.00% 4.50%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None1
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the
redemption)
Annual Fund Operating Expenses (expenses that are deducted from fund assets, as
a percentage of average net assets)
Management fee.................................................. 0.60% 0.40%
Distribution (Rule 12b-1) fee................................... 0.25%4 0.00%
Other expenses.................................................. 0.33% 0.57%
Total Annual Fund Operating Expenses (Gross).................... 1.18%2 0.97%
Waivers......................................................... Note 2 0.17%
Net Annual Fund Operating Expenses.............................. Note 2 0.80%3
ACHIEVEMENT MUNICIPAL WELLS FARGO NATIONAL
BOND FUND TAX-FREE FUND
CLASS B
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... None None
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... 5.00% 5.00%
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the
redemption)
Annual Fund Operating Expenses (expenses that are deducted from fund assets, as
a percentage of average net assets)
Management fee.................................................. 0.60% 0.40%
Distribution (Rule 12b-1) fee................................... 1.00%4 0.75%
Other expenses.................................................. 0.33% 0.58%
Total Annual Fund Operating Expenses (Gross).................... 1.93%2 1.73%
Waivers......................................................... Note 2 0.18%
Net Annual Fund Operating Expenses.............................. Note 2 1.55%3
-----------------------
</TABLE>
1. 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.
2. The advisor of the Achievement Municipal Bond Fund voluntarily waived
certain fees and expenses to maintain certain net operating expense ratios.
For the fiscal year ended January 31, 2000, the net operating expense ratio
for the Fund was as follows: 1.00% for the Class A Shares and 1.65% for the
Class B Shares. Because these waivers may be eliminated at any time, they
are not shown in the above table.
3. The advisor and administrator of the Wells Fargo National Tax-Free Fund has
committed until at least November 1, 2001 to waive fees and/or reimburse
expenses to the extent necessary to maintain the Fund's net operating
expense ratio shown. After this time, the net operating expense ratio for
the Wells Fargo National Tax-Free Fund may be increased only with the
approval of the Board of Trustees.
4. Includes distribution and service fees for the sale and distribution of
Fund shares and for services provided to shareholders. Shareholder service
fees for the retail classes of the Wells Fargo Funds are included in the
line item "Other Expenses."
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT MUNICIPAL WELLS FARGO NATIONAL
BOND FUND TAX-FREE FUND
INSTITUTIONAL CLASS
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... None None
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the
redemption)
Annual Fund Operating Expenses (expenses that are deducted from fund assets, as
a percentage of average net assets)
Management fee.................................................. 0.60% 0.40%
Distribution (Rule 12b-1) fee................................... 0.00% 0.00%
Other expenses.................................................. 0.33% 0.28%
Total Annual Fund Operating Expenses (Gross).................... 0.93%1 0.68%
Waivers......................................................... Note 1 0.08%
Net Annual Fund Operating Expenses.............................. Note 1 0.60%2
-----------------------
</TABLE>
1. The advisor of the Achievement Municipal Bond Fund voluntarily waived
certain fees and expenses to maintain certain net operating expense ratios.
For the fiscal year ended January 31, 2000, the net operating expense ratio
for the Institutional Class Shares of the Fund was 0.75%. Because these
waivers may be eliminated at any time, they are not shown in the above
table.
2. The advisor and the administrator of the Wells Fargo National Tax-Free Fund
has committed until at least November 1, 2001 to waive fees and/or
reimburse expenses to the extent necessary to maintain the Fund's net
operating expense ratio shown. After this time, the net operating expense
ratio for the Wells Fargo National Tax-Free Fund may be increased only with
the approval of the Board of Trustees.
Example of Expenses:
You would pay the following expenses on a $10,000 investment assuming that the
Fund has a 5% annual return and that Fund operating expenses remain the same,
that fee waivers are not in effect for the Achievement Fund, or for the Wells
Fargo Fund after the first year, and that you redeem your shares at the end of
each period. Your actual costs may be higher or lower than those shown.
<TABLE>
<S> <C> <C>
ACHIEVEMENT WELLS FARGO NATIONAL
MUNICIPAL TAX-FREE FUND
CLASS A BOND FUND
One Year............................................. $ 515 $ 528
Three Year........................................... $ 760 $ 729
Five Year............................................ $ 1,023 $ 946
Ten Year............................................. $ 1,775 $ 1,571
</TABLE>
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT WELLS FARGO NATIONAL
MUNICIPAL TAX-FREE FUND
CLASS B BOND FUND
One Year............................................. $ 696 $ 658
Three Year........................................... $ 1,006 $ 827
Five Year............................................ $ 1,242 $1,122
Ten Year............................................. $ 2,062 $1,730
ACHIEVEMENT WELLS FARGO NATIONAL
MUNICIPAL TAX-FREE FUND
INSTITUTIONAL CLASS BOND FUND
One Year............................................. $ 95 $ 61
Three Year........................................... $ 296 $ 210
Five Year............................................ $ 515 $ 371
Ten Year............................................. $ 1,143 $ 839
</TABLE>
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT IDAHO WELLS FARGO NATIONAL
MUNICIPAL TAX-FREE FUND
CLASS A BOND FUND Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... 4.00% 4.50%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None1
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the
redemption)
Annual Fund Operating Expenses (expenses that are deducted from fund assets, as
a percentage of average net assets)
Management fee.................................................. 0.60% 0.40%
Distribution (Rule 12b-1) fee................................... 0.25%4 0.00%
Other expenses.................................................. 0.45% 0.57%
Total Annual Fund Operating Expenses (Gross).................... 1.30%2 0.97%
Waivers......................................................... Note 2 0.17%
Net Annual Fund Operating Expenses.............................. Note 2 0.80%3
ACHIEVEMENT IDAHO WELLS FARGO NATIONAL
MUNICIPAL TAX-FREE FUND
CLASS B BOND FUND Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... None None
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... 5.00% 5.00%
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the
redemption)
Annual Fund Operating Expenses (expenses that are deducted from fund assets, as
a percentage of average net assets)
Management fee.................................................. 0.60% 0.40%
Distribution (Rule 12b-1) fee................................... 1.00%4 0.75%
Other expenses.................................................. 0.45% 0.58%
Total Annual Fund Operating Expenses (Gross).................... 2.05%2 1.73%
Waivers......................................................... Note 2 0.18%
Net Annual Fund Operating Expenses.............................. Note 2 1.55%3
-----------------------
</TABLE>
1. 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.
2. The advisor of the Achievement Idaho Municipal Bond Fund voluntarily waived
certain fees and expenses to maintain certain net operating expense ratios.
For the fiscal year ended January 31, 2000, the net operating expense ratio
for the Fund was as follows: 1.00% for the Class A Shares and 1.65% for the
Class B Shares. Because these waivers may be eliminated at any time, they
are not shown in the above table.
3. The advisor and administrator of the Wells Fargo National Tax-Free Fund has
committed until at least November 1, 2001 to waive fees and/or reimburse
expenses to the extent necessary to maintain the Fund's net operating
expense ratio shown. After this time, the net operating expense ratio for
the Wells Fargo National Tax-Free Fund may be increased only with the
approval of the Board of Trustees.
4. Includes distribution and service fees for the sale and distribution of
Fund shares and for services provided to shareholders. Shareholder service
fees for the retail classes of the Wells Fargo Funds are included in the
line item "Other Expenses."
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT IDAHO WELLS FARGO NATIONAL
MUNICIPAL TAX-FREE FUND
INSTITUTIONAL CLASS BOND FUND Shareholder Fees (fees paid directly from your
investment):
Maximum Sales Charge (Load) on Purchases ....................... None None
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the
redemption)
Annual Fund Operating Expenses (expenses that are deducted from fund assets, as
a percentage of average net assets)
Management fee.................................................. 0.60% 0.40%
Distribution (Rule 12b-1) fee................................... 0.00% 0.00%
Other expenses.................................................. 0.45% 0.28%
Total Annual Fund Operating Expenses (Gross).................... 1.05%1 0.68%
Waivers......................................................... Note 1 0.08%
Net Annual Fund Operating Expenses.............................. Note 1 0.60%2
-----------------------
</TABLE>
1. The advisor of the Achievement Idaho Municipal Bond Fund voluntarily waived
certain fees and expenses to maintain certain net operating expense ratios.
For the fiscal year ended January 31, 2000, the net operating expense ratio
for the Institutional Class Shares of the Fund was 0.75%. Because these
waivers may be eliminated at any time, they are not shown in the above
table.
2. The advisor and administrator of the Wells Fargo National Tax-Free Fund has
committed until at least November 1, 2001 to waive fees and/or reimburse
expenses to the extent necessary to maintain the Fund's net operating
expense ratio shown. After this time, the net operating expense ratio for
the Wells Fargo National Tax-Free Fund may be increased only with the
approval of the Board of Trustees.
Example of Expenses:
You would pay the following expenses on a $10,000 investment assuming that the
Fund has a 5% annual return and that Fund operating expenses remain the same,
that fee waivers are not in effect for the Achievement Fund, or for the Wells
Fargo Fund after the first year, and that you redeem your shares at the end of
each period. Your actual costs may be higher or lower than those shown.
<TABLE>
<S> <C> <C>
ACHIEVEMENT IDAHO WELLS FARGO NATIONAL
MUNICIPAL TAX-FREE FUND
CLASS A BOND FUND
One Year............................................. $ 527 $ 528
Three Year........................................... $ 796 $ 729
Five Year............................................ $ 1,084 $ 946
Ten Year............................................. $ 1,905 $ 1,571
</TABLE>
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT IDAHO WELLS FARGO NATIONAL
MUNICIPAL TAX-FREE FUND
CLASS B BOND FUND
One Year............................................. $ 708 $ 658
Three Year........................................... $ 1,043 $ 827
Five Year............................................ $ 1,303 $1,122
Ten Year............................................. $ 2,190 $1,730
ACHIEVEMENT IDAHO WELLS FARGO NATIONAL
MUNICIPAL TAX-FREE FUND
INSTITUTIONAL CLASS BOND FUND
One Year............................................. $ 107 $ 61
Three Year........................................... $ 334 $ 210
Five Year............................................ $ 579 $ 371
Ten Year............................................. $ 1,283 $ 839
</TABLE>
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT
INTERMEDIATE TERM WELLS FARGO
CLASS A BOND FUND INCOME FUND
------- --------- -----------
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... 3.50% 4.50%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None1
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the redemption)
Annual Fund Operating Expenses (expenses that are deducted
from fund assets, as a percentage of average net assets)
Management fee.................................................. 0.60% 0.50%
Distribution (Rule 12b-1) fee................................... 0.25%4 0.00%
Other expenses.................................................. 0.33% 0.60%
Total Annual Fund Operating Expenses (Gross).................... 1.18%2 1.10%
Waivers......................................................... Note 2 0.10%
Net Annual Fund Operating Expenses.............................. Note 2 1.00%3
ACHIEVEMENT
INTERMEDIATE TERM WELLS FARGO
INSTITUTIONAL CLASS BOND FUND INCOME FUND
------------------- --------- -----------
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... None None
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the redemption)
Annual Fund Operating Expenses (expenses that are deducted
from fund assets, as a percentage of average net assets)
Management fee.................................................. 0.60% 0.50%
Distribution (Rule 12b-1) fee................................... 0.00% 0.00%
Other expenses.................................................. 0.33% 0.26%
Total Annual Fund Operating Expenses (Gross).................... 0.93%2 0.76%
Waivers......................................................... Note 2 0.01%
Net Annual Fund Operating Expenses.............................. Note 2 0.75%3
-----------------------
</TABLE>
1. 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.
2. The advisor of the Achievement Intermediate Term Bond Fund voluntarily
waived certain fees and expenses to maintain certain net operating expense
ratios. For the fiscal year ended January 31, 2000, the net operating
expense ratio for the Fund was as follows: 1.00% for the Class A and 0.75%
for the Institutional Class Shares. Because these waivers may be eliminated
at any time, they are not shown in the above table.
3. The advisor and administrator of the Wells Fargo Income Fund has committed
until at least October 1, 2001 to waive fees and/or reimburse expenses to
the extent necessary to maintain the Fund's net operating expense ratio
shown. After this time, the net operating expense ratio for the Wells Fargo
Income Fund may be increased only with the approval of the Board of
Trustees.
4. Includes distribution and service fees for the sale and distribution of
Fund shares and for services provided to shareholders. Shareholder service
fees for the retail classes of the Wells Fargo Funds are included in the
line item "Other Expenses."
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
Example of Expenses:
You would pay the following expenses on a $10,000 investment assuming that the
Fund has a 5% annual return and that Fund operating expenses remain the same,
that fee waivers are not in effect for the Achievement Fund, or for the Wells
Fargo Fund after the first year, and that you redeem your shares at the end of
each period. Your actual costs may be higher or lower than those shown.
<TABLE>
<S> <C> <C>
ACHIEVEMENT
INTERMEDIATE TERM WELLS FARGO
CLASS A FUND INCOME FUND
------- ---- -----------
One Year............................................. $ 466 $ 547
Three Year........................................... $ 712 $ 775
Five Year............................................ $ 976 $ 1,020
Ten Year............................................. $ 1,732 $ 1,721
ACHIEVEMENT
INTERMEDIATE TERM WELLS FARGO
INSTITUTIONAL CLASS FUND INCOME FUND
------------------- ---- -----------
One Year............................................. $ 95 $ 77
Three Year........................................... $ 296 $ 242
Five Year............................................ $ 515 $ 421
Ten Year............................................. $ 1,143 $ 941
</TABLE>
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
<TABLE>
<S> <C> <C>
ACHIEVEMENT
SHORT-TERM WELLS FARGO
CLASS A BOND FUND STABLE INCOME FUND
------- --------- ------------------
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... 1.50% 1.50%
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None1
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the
redemption)
Annual Fund Operating Expenses (expenses that are deducted from fund assets, as
a percentage of average net assets)
Management fee.................................................. 0.60% 0.50%3
Distribution (Rule 12b-1) fee................................... 0.25%5 0.00%
Other expenses.................................................. 0.47% 0.56%3
Total Annual Fund Operating Expenses (Gross).................... 1.32%2 1.06%
Waivers......................................................... Note 2 0.16%
Net Annual Fund Operating Expenses.............................. Note 2 0.90%4
ACHIEVEMENT
SHORT-TERM WELLS FARGO
INSTITUTIONAL CLASS BOND FUND STABLE INCOME FUND
------------------- --------- ------------------
Shareholder Fees (fees paid directly from your investment):
Maximum Sales Charge (Load) on Purchases ....................... None None
(as a percentage of offering price)
Maximum Deferred Sales Charge (Load) ........................... None None
(as a percentage of the lower of the NAV on the date of
original purchase or the NAV on the date of the
redemption)
Annual Fund Operating Expenses (expenses that are deducted from fund assets, as
a percentage of average net assets)
Management fee.................................................. 0.60% 0.50%3
Distribution (Rule 12b-1) fee................................... 0.00% 0.00%
Other expenses.................................................. 0.47% 0.29%3
Total Annual Fund Operating Expenses (Gross).................... 1.07%2 0.79%
Waivers......................................................... Note 2 0.14%
Net Annual Fund Operating Expenses.............................. Note 2 0.65%4
------------------------
</TABLE>
1. 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.
2. The advisor of the Achievement Short-Term Bond Fund voluntarily waived
certain fees and expenses to maintain certain net operating expense ratios.
For the fiscal year ended January 31, 2000, the net operating expense ratio
for the Fund was as follows: 1.00% for the Class A Shares and 0.75% for the
Institutional Class Shares. Because these waivers may be eliminated at any
time, they are not shown in the above table.
3. This fee combines expenses charged at the fund and core portfolio levels.
4. The advisor and the administrator of the Wells Fargo Stable Income Fund has
committed until at least October 1, 2001 to waive fees and/or reimburse
expenses to the extent necessary to maintain the Fund's net operating
expense ratio shown. After this time, the net operating expense ratio for
the Wells Fargo Stable Income Fund may be increased only with the approval
of the Board of Trustees.
5. Includes distribution and service fees for the sale and distribution of
Fund shares and for services provided to shareholders. Shareholder service
fees for the retail classes of the Wells Fargo Funds are included in the
line item "Other Expenses."
<PAGE>
EXHIBIT A - FEE TABLES (Continued)
Example of Expenses:
You would pay the following expenses on a $10,000 investment assuming that the
Fund has a 5% annual return and that Fund operating expenses remain the same,
that fee waivers are not in effect for the Achievement Fund, or for the Wells
Fargo Fund after the first year, and that you redeem your shares at the end of
each period. Your actual costs may be higher or lower than those shown.
<TABLE>
<S> <C> <C>
ACHIEVEMENT
SHORT-TERM BOND FUND WELLS FARGO
CLASS A STABLE INCOME FUND
------- ------------------
One Year............................................. $ 282 $ 240
Three Year........................................... $ 562 $ 466
Five Year............................................ $ 863 $ 711
Ten Year............................................. $ 1,716 $ 1,411
ACHIEVEMENT
SHORT-TERM BOND FUND WELLS FARGO
INSTITUTIONAL CLASS STABLE INCOME FUND
------------------- ------------------
One Year............................................. $ 109 $ 66
Three Year........................................... $ 340 $ 238
Five Year............................................ $ 590 $ 425
Ten Year............................................. $ 1,306 $ 965
</TABLE>
<PAGE>
B-1
EXHIBIT B -- COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES
WELLS FARGO GROWTH FUND
Comparison of:....ACHIEVEMENT Equity Fund which will reorganize into
WELLS FARGO GROWTH FUND
<TABLE>
<S> <C>
Objectives:
----------------------------------------------------------------------------------------------------------------------------
------------------------------------ ---------------------------------------------------------------------------------------
Achievement Equity Fund: o seeks long-term capital appreciation with current income as a secondary
consideration in selecting securities.
------------------------------------ ---------------------------------------------------------------------------------------
------------------------------------ ---------------------------------------------------------------------------------------
Wells Fargo Growth Fund: o seeks long-term capital appreciation.
------------------------------------ ---------------------------------------------------------------------------------------
Investment Strategies:
----------------------------------------------------------------------------------------------------------------------------
---------------------- -----------------------------------------------------------------------------------------------------
Achievement Equity The Achievement Equity Fund, a diversified portfolio, invests primarily U.S. exchange-traded common
Fund: stocks and other equity securities of companies with market capitalizations in excess of $500
million, and emphasizes investments in companies with medium to and large market capitalizations.
The Fund seeks its income by selecting securities of companies that are experiencing growth in
earnings and whose securities appear attractively priced based on proprietary valuation
methods. Under normal market conditions, the Fund invests at least 80% of its total assets in common
stocks. The Fund will invest no more than 20% of its total assets in securities convertible or exchangeable
into common stock. The Fund may invest in convertible debentures that have a received a rating of A or
higher by Standard & Poors ("S&P") or Moody's Investor Service ("Moody's") or that its advisor determines
are of comparable quality. Additionally, under normal market conditions, the Equity Fund may invest up
to 10% of its total assets in money market and U.S. equity index mutual funds.
---------------------- -----------------------------------------------------------------------------------------------------
---------------------- -----------------------------------------------------------------------------------------------------
Wells Fargo Growth The Wells Fargo Growth Fund, a diversified portfolio, invests principally in common stocks and other equity
Fund: securities that that strong earnings growth and above-average prospects for future growth. The Fund's
investment advisor focuses its investment strategy on larger capitalization stocks. Under normal market
conditions, the Fund invests:
o at least 65% of total assets in equity securities, including common and preferred stocks and
securities convertible into common stocks;
o the majority of its total assets in issues of companies with market capitalization that falls
within but towards the higher end of, the range of the Russell 1000 Index, an index comprised of
the 1,000 largest U.S. companies based on total market capitalization, that is considered a
mid-capitalization index (As of December 31, 1999, this range was from $220 million to $604
billion.); and
o up to 25% of total assets in foreign companies through American Depositary Receipts ("ADRs") and
similar instruments.
---------------------- -----------------------------------------------------------------------------------------------------
------------------------------------------------------- --------------------------------------------------------------------
Portfolio Managers
------------------------------------------------------- --------------------------------------------------------------------
------------------------------------------------------- --------------------------------------------------------------------
Achievement Equity Fund Sterling K. Jenson, CFA
------------------------------------------------------- --------------------------------------------------------------------
------------------------------------------------------- --------------------------------------------------------------------
Wells Fargo Growth Fund Kelli K. Hill
Stephen Biggs
------------------------------------------------------- --------------------------------------------------------------------
</TABLE>
<PAGE>
B-9
WELLS FARGO ASSET ALLOCATION FUND
Comparison of:....ACHIEVEMENT BALANCED Fund
which will reorganize into WELLS FARGO ASSET ALLOCATION FUND
<TABLE>
<S> <C>
Objectives:
--------------------------------------------------------------------------------------------------------------------------
--------------------------------- ----------------------------------------------------------------------------------------
Achievement Balanced Fund: o seeks total return consisting of capital appreciation and current income
consistent with prudent investment risk.
--------------------------------- ----------------------------------------------------------------------------------------
--------------------------------- ----------------------------------------------------------------------------------------
Wells Fargo Asset Allocation o seeks long-term total return, consistent with reasonable risk.
Fund:
--------------------------------- ----------------------------------------------------------------------------------------
Investment Strategies:
--------------------------------------------------------------------------------------------------------------------------
-------------------------- -----------------------------------------------------------------------------------------------
Achievement Balanced The Achievement Balanced Fund, a diversified portfolio, invests primarily in equity securities,
Fund: intermediate maturity fixed income securities and money market instruments. Under normal market
conditions, the Fund invests between 25-75% of its total assets in a U.S. exchange-traded
common stocks with market capitalizations over $500 million and securities convertible or
exchangeable into common stock, and a minimum of 25% of its total assets in a broad range of fixed
income securities, U.S. Government securities, corporate bonds and debentures, asset-backed
and mortgage-backed securities, U.S. dollar denominated debt securities of foreign issuers.
Over time, the Fund ordinarily will invest approximately 60% of its assets in equity securities, and 40%
of its total assets in fixed income securities, although these percentages may vary as discussed
above. For the fixed income component, the Fund targets investment grade fixed income securities with a
weighted average maturity between three and ten years. The Fund will not invest more than 20% of its
assets allocated to fixed income securities in the lowest category of investment grade ratings.
-------------------------- -----------------------------------------------------------------------------------------------
-------------------------- -----------------------------------------------------------------------------------------------
Wells Fargo Asset The Wells Fargo Asset Allocation Fund, a diversified portfolio, allocates and reallocates
Allocation Fund: assets among common stocks, U.S. Treasury Bonds and money market instruments. Similar to the
Achievement Fund Balanced Fund, the advisor manages the Fund assuming a "normal" allocation of 60%
stocks and 40% bonds. Also, similar to the Achievement Balanced Fund, the Wells Fargo Asset
Allocation Fund is not required to maintain this 60/40% asset allocation. Unlike the
Achievement Balanced Fund, however, the Wells Fargo Asset Allocation Fund is not required to maintain
a minimum amount in any of its three asset classes: stocks, bonds and money market instruments. The
Wells Fargo Asset Allocation Fund's investment advisor does not individually select the stocks or bonds
in the portfolio. Rather, the advisor establishes the asset allocation percentages for each asset class.
The advisor then selects common stocks to replicate the S&P 500 Index and fixed income securities
to replicate the Lehman Brothers 20+ Index. The Lehman Brothers Index consists of bonds
having remaining maturities in excess of 20 years. The Wells Fargo Asset Allocation Fund also may
invest up to 25% of total assets in foreign obligations qualifying as money market instruments.
-------------------------- -----------------------------------------------------------------------------------------------
-------------------------------------------------------- -----------------------------------------------------------------
Portfolio Managers
-------------------------------------------------------- -----------------------------------------------------------------
-------------------------------------------------------- -----------------------------------------------------------------
Achievement Balanced Fund Sterling K. Jenson, CFA
-------------------------------------------------------- -----------------------------------------------------------------
-------------------------------------------------------- -----------------------------------------------------------------
Wells Fargo Asset Allocation Fund N/A
-------------------------------------------------------- -----------------------------------------------------------------
</TABLE>
<PAGE>
WELLS FARGO NATIONAL TAX-FREE FUND
Comparison of:....ACHIEVEMENT MUNICIPAL BOND Fund
which will reorganize into WELLS FARGO NATIONAL TAX-FREE FUND
<TABLE>
<S> <C>
Objectives:
--------------------------------------------------------------------------------------------------------------------------
---------------------------------- ---------------------------------------------------------------------------------------
Achievement Municipal o seeks as high a level of current income exempt from federal income taxes as is consistent
Bond Fund: with preservation of capital
---------------------------------- ---------------------------------------------------------------------------------------
---------------------------------- ---------------------------------------------------------------------------------------
Wells Fargo National Tax-Free o seeks current income exempt from federal income
Fund:
---------------------------------- ---------------------------------------------------------------------------------------
Investment Strategies:
--------------------------------------------------------------------------------------------------------------------------
--------------------------- ----------------------------------------------------------------------------------------------
Achievement Municipal The Achievement Municipal Bond Fund invests primarily in municipal securities issued by U.S.
Bond Fund: states, territories, possessions and political subdivisions, the interest from which is
exempt from federal income taxes. The Fund will not invest more than 20% of its assets in
securities which pay interest subject to the alternative minimum tax ("AMT"). The Fund
invests only in investment grade municipal securities. Investment grade municipal bonds are those
rated at the time of investment in one of the four highest rating categories by a major rating
agency, or determined by the advisor to be of equivalent quality. The Fund may not invest more
than 20% of its assets in municipal bonds rated in the lowest category of investment grade
ratings. The Fund will not invest more than 15% of its assets in obligations of issuers
located in any single state, territory or possession. There are no restrictions on the Fund's
average weighted maturity or on the maturity of any single security held by the Fund.
--------------------------- ----------------------------------------------------------------------------------------------
--------------------------- ----------------------------------------------------------------------------------------------
Wells Fargo National The Wells Fargo National Tax-Free Fund invests in a diversified portfolio of investment
Tax-Free Fund: grade municipal securities. The Fund invests at least 80% of its net assets in municipal
securities paying interest exempt from federal income taxes, including the federal AMT. The
Fund may invest up to 20% of its net assets in securities with income subject to federal income tax,
including federal AMT. The Wells Fargo National Tax-Free Fund invests in municipal securities rated
in one of the four highest credit categories by a nationally recognized ratings organization
("NRRO"), or in unrated securities if the advisor deems them to be of comparable quality, but
does not have any limit on the amount it may invest in the lowest investment grade category. The Fund
emphasizes investments in municipal securities that produce interest income rather than stability
of the Fund's NAV. The dollar weighted average maturity of the Fund's assets normally will be
between 10 and 20 years.
--------------------------- ----------------------------------------------------------------------------------------------
------------------------------------------------------ -------------------------------------------------------------------
Portfolio Managers
------------------------------------------------------ -------------------------------------------------------------------
------------------------------------------------------ -------------------------------------------------------------------
Achievement Municipal Bond Fund: John B. Tousley, CFA
------------------------------------------------------ -------------------------------------------------------------------
------------------------------------------------------ -------------------------------------------------------------------
Wells Fargo National Tax-Free Fund: Stephen Galiani
------------------------------------------------------ -------------------------------------------------------------------
</TABLE>
<PAGE>
WELLS FARGO NATIONAL TAX-FREE FUND
Comparison of:....ACHIEVEMENT IDAHO MUNICIPAL BOND Fund
which will reorganize into WELLS FARGO NATIONAL TAX-FREE FUND
Objectives:
<TABLE>
<S> <C>
------------------------------------------------------------------------------------------------------------------------------
------------------------------------ -----------------------------------------------------------------------------------------
Achievement Idaho Municipal Bond o seeks high current income exempt from Federal and Idaho income taxes.
Fund:
------------------------------------ -----------------------------------------------------------------------------------------
------------------------------------ -----------------------------------------------------------------------------------------
Wells Fargo National Tax-Free Fund: o seeks current income exempt from federal income taxes.
------------------------------------ -----------------------------------------------------------------------------------------
Investment Strategies:
------------------------------------------------------------------------------------------------------------------------------
--------------------- --------------------------------------------------------------------------------------------------------
Achievement Idaho The Achievement Idaho Municipal Bond Fund invests primarily in municipal securities issued by the State of
Municipal Bond Fund: Idaho and its cities, counties and political subdivisions, the interest from which is exempt from Federal
and Idaho income taxes. The Fund also may invest in the municipal bonds of other U.S. states,
territories and possessions and their political subdivisions. The Fund will not invest more
than 20% of its assets in securities which pay interest subject to the federal AMT. The Fund invests only
in municipal bonds that are investment grade. The Fund will not invest more than 20% of its assets in
municipal bonds rated in the lowest category of investment ratings. There is no restriction on the Fund's
average weighted maturity or on the maturity of any single security held by the Fund.
--------------------- --------------------------------------------------------------------------------------------------------
--------------------- --------------------------------------------------------------------------------------------------------
Wells Fargo The Wells Fargo National Tax-Free Fund invests in a diversified portfolio of investment grade
National Tax-Free Fund: municipal securities. The Fund invests at least 80% of its net assets in municipal securities paying
interest exempt from federal income taxes, including the federal AMT. The Fund may invest up to 20%
of its net assets in securities with income subject to federal income tax, including federal AMT. The
Wells Fargo National Tax-Free Fund invests in municipal securities rated in one of the four highest
credit categories by an NRRO, or in unrated securities if the Advisor deems them to be of comparable
quality, but does not have any limit on the amount it may invest in the lowest investment grade category.
The Fund emphasizes investments in municipal securities that produce interest income rather than
stability of the Fund's NAV. The dollar weighted average maturity of the Fund's assets normally will be
between 10 and 20 years.
--------------------- --------------------------------------------------------------------------------------------------------
------------------------------------------------------- ----------------------------------------------------------------------
Portfolio Managers
------------------------------------------------------- ----------------------------------------------------------------------
------------------------------------------------------- ----------------------------------------------------------------------
Achievement Idaho Municipal Bond Fund John B. Tousley, CFA
------------------------------------------------------- ----------------------------------------------------------------------
------------------------------------------------------- ----------------------------------------------------------------------
Wells Fargo National Tax-Free Fund Stephen Galiani
------------------------------------------------------- ----------------------------------------------------------------------
</TABLE>
<PAGE>
WELLS FARGO INCOME FUND
Comparison of:....ACHIEVEMENT INTERMEDIATE TERM BOND Fund
which will reorganize into WELLS FARGO INCOME FUND
Objectives:
<TABLE>
<S> <C>
----------------------------------------------------------------------------------------------------------------------------
------------------------------------ ---------------------------------------------------------------------------------------
Achievement Intermediate Term Bond o seeks current income consistent with prudent investment risk and liquidity.
Fund:
------------------------------------ ---------------------------------------------------------------------------------------
------------------------------------ ---------------------------------------------------------------------------------------
Wells Fargo Income Fund: o seeks current income and total return.
------------------------------------ ---------------------------------------------------------------------------------------
Investment Strategies:
----------------------------------------------------------------------------------------------------------------------------
---------------------- -----------------------------------------------------------------------------------------------------
Achievement The Achievement Intermediate Term Bond Fund invests primarily in investment grade fixed income
Intermediate Term securities issued or guaranteed by the U.S. government, its agencies and instrumentalities, and
Bond Fund: corporate issuers. The Fund also may invest in other fixed income securities, including
asset-backed securities, floating or variable rate corporate notes and mortgage-backed
securities. The Fund may invest up to 40% of its assets in a combination of U.S. dollar
denominated bonds of foreign issuers, mortgage-backed securities, asset-backed securities and
floating or variable rate corporate debt instruments. The Fund maintains a dollar-weighted average maturity
between three and ten years; however, there is no limit on the maximum maturity for a particular
investment. The Fund will not invest more than 20% of its assets in fixed income securities rated
in the lowest category of investment grade securities.
---------------------- -----------------------------------------------------------------------------------------------------
---------------------- -----------------------------------------------------------------------------------------------------
Wells Fargo Income The Wells Fargo Income Fund invests in a diversified portfolio of debt and variable-rate debt
Fund: securities issued by domestic and foreign issuers. The Fund invests 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. The Fund targets 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 to 6 years).
Under normal market conditions, the Fund invests:
o up to 70% of its 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;
o at least 30% of its total assets in U.S. Government obligations;
o up to 50% of its total assets in mortgage-backed securities and up to 35% in asset-backed
securities; and
o at least 80% of its 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 an NRRO.
---------------------- -----------------------------------------------------------------------------------------------------
------------------------------------------------------- --------------------------------------------------------------------
Portfolio Managers
------------------------------------------------------- --------------------------------------------------------------------
------------------------------------------------------- --------------------------------------------------------------------
Achievement Intermediate Term Bond Fund Mark L. Anderson
------------------------------------------------------- --------------------------------------------------------------------
------------------------------------------------------- --------------------------------------------------------------------
Wells Fargo Income Fund Marjorie H. Grace, CFA
Mark Walter
------------------------------------------------------- --------------------------------------------------------------------
</TABLE>
<PAGE>
WELLS FARGO STABLE INCOME FUND
Comparison of:....ACHIEVEMENT SHORT-TERM BOND Fund
which will reorganize into WELLS FARGO STABLE INCOME FUND
Objectives:
<TABLE>
<S> <C>
--------------------------------------------------------------------------------------------------------------------------
--------------------------------- ----------------------------------------------------------------------------------------
Achievement Short-Term Bond o seeks current income with preservation of principal and liquidity.
Fund:
--------------------------------- ----------------------------------------------------------------------------------------
--------------------------------- ----------------------------------------------------------------------------------------
Wells Fargo Stable Income Fund: o seeks stability of principal while providing low volatility total return.
--------------------------------- ----------------------------------------------------------------------------------------
Investment Strategies:
--------------------------------------------------------------------------------------------------------------------------
-------------------------- -----------------------------------------------------------------------------------------------
Achievement Short-Term The Achievement Short Term Bond Fund invests primarily in a diversified portfolio of fixed
Bond Fund: income securities issued or guaranteed by the U.S. government, its agencies and
instrumentalities, and corporate issuers. The Fund may invest up to 30% of its assets in a
combination of U.S. dollar denominated bonds of foreign issuers, mortgage backed securities,
asset-backed securities, and floating or variable rate corporate debt instruments. The Fund
maintains a dollar-weighted average maturity of less than two years and individual Fund
investments will have a maximum maturity of five years. The Fund invests only in fixed income
securities rated at the time of investment in one of the three highest rating categories
by a major rating agency, or determined by the advisor to be of equivalent quality.
-------------------------- -----------------------------------------------------------------------------------------------
-------------------------- -----------------------------------------------------------------------------------------------
Wells Fargo Stable The Wells Fargo Stable Income Fund invests in a portfolio of fixed and variable rate U.S.
Income Fund: 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. Under normal market conditions, the Fund invests:
o at least 65% of its total assets in income-producing debt securities;
o up to 65% of its total assets in mortgage-backed securities;
o up to 25% of its total assets in other types of asset-backed securities;
o up to 25% of its total assets in mortgage-backed securities that are not U.S.
Government obligations; and
o up to 50% of its total assets in U.S. Government obligations.
The Fund may not invest more than 30% of its total assets in 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 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 is a gateway fund that makes these investments by investing
substantially all of its assets in a diversified core portfolio with substantially similar
investment objectives and investment strategies. The Fund may invest only in investment grade
securities.
-------------------------- -----------------------------------------------------------------------------------------------
-------------------------- -----------------------------------------------------------------------------------------------
-------------------------- -----------------------------------------------------------------------------------------------
-------------------------------------------------------- -----------------------------------------------------------------
Portfolio Managers
-------------------------------------------------------- -----------------------------------------------------------------
-------------------------------------------------------- -----------------------------------------------------------------
Achievement Short-Term Bond Fund Mark L. Anderson
-------------------------------------------------------- -----------------------------------------------------------------
-------------------------------------------------------- -----------------------------------------------------------------
Wells Fargo Stable Income Fund John Huber
-------------------------------------------------------- -----------------------------------------------------------------
</TABLE>
<PAGE>
C-17
EXHIBIT C
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
FOR EACH OF THE WELLS FARGO FUNDS
GROWTH FUND
Investment Objective The Growth Fund (the "Fund") seeks long-term capital
appreciation.
Advisor
Wells Fargo Bank, N.A.
Sub-Advisor
Wells Capital Management Incorporated
Fund Managers
Kelli Hill
Stephen Biggs
Inception Date
08/02/90
Performance Highlights
------------------------------------------------------------------------------
The Fund's Class A shares returned 14.40%1 for the one-year period that
ended September 30, 2000, excluding sales charges. The Fund underperformed its
benchmark, the S&P 500 Index2, which returned 13.28% during the period. The
Fund's Class A shares distributed no dividend income and $3.05 per share in
capital gains during the period. Please keep in mind that past performance is no
guarantee of future results.
Technology stocks were a main factor driving the Fund's outperformance
relative to the S&P 500 Index over the fiscal year. Enterprise and network
storage stocks such as Veritas and EMC Corporation were clear winners as the
demand for storage, driven by the Internet, continued to be very robust. Optical
networking stocks such as Nortel Networks, Cisco Systems and Uniphase also
performed very well through the year.
In utilities, AES Corporation was another standout; it benefited as the
demand for electrical power exceeded the supply. Even though there has been much
concern regarding consumer spending over the year, Kohls Department Store was a
great contributor to the Fund's performance.
Strategic Outlook.
---------------- -------------------------------------------------------------
The Fund's managers anticipate a stable-to-lower interest rate
environment through at least the fourth quarter of 2000. As a result, the market
is expected to improve in late 2000 and 2001, especially if the euro stabilizes
and the price of oil reaches equilibrium. This scenario should allow investors
to regain confidence in large cap growth stocks. The Fund's managers also
believe that the high-growth sectors, such as technology and telecommunications,
would also benefit.
<PAGE>
--------
1 Figures quoted represent past performance, which is no guarantee of future
results. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's Advisor has committed through January 30, 2002,
to waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower.
Performance shown for Class A, Class B and Institutional Class shares of the
Wells Fargo Growth Fund for periods prior to November 8, 1999, reflects
performance of the Class A, Class B and Institutional shares of the Stagecoach
Growth Fund (the accounting survivor of a merger of the Stagecoach Growth Fund
and the Norwest Advantage ValuGrowth Stock Fund), its predecessor Fund.
Effective at the close of business November 5, 1999, the Stagecoach and Norwest
Advantage Funds were reorganized into the Wells Fargo Funds. Performance shown
for the Class A shares of the Fund for periods prior to January 1, 1992,
reflects performance of the shares of the Select Stock Fund of Wells Fargo
Investment Trust for Retirement Programs, a predecessor portfolio with the same
investment objective and policies as the Fund. Performance shown for the Class B
shares of the Fund for the period from January 1, 1992, to January 1, 1995,
reflects performance of the Class A shares of the Fund, with expenses of the
Class A shares adjusted to reflect Class B sales charges and expenses.
Performance shown for the Class B shares of the Fund for period prior to January
1, 1992, reflects performance of the shares of the predecessor portfolio, with
expenses adjusted to reflect Class B charges and expenses. Performance shown for
the Institutional Class shares of the Fund for the period from January 1, 1992,
to September 6, 1996, reflects performance of the Fund's Class A shares. For
periods prior to January 1, 1992, the performance shown reflects the performance
of the shares of the Select Stock Fund of Wells Fargo Investment Trust for
Retirement Programs, a predecessor portfolio with the same investment objective
and policies as the Fund. For Class A, the maximum front-end sales charge is
5.75%. The maximum contingent-deferred sales charge for Class B shares is 5.00%.
Class B share performance including sales charge assumes the maximum
contingent-deferred sales charge for the corresponding time period.
Institutional Class shares are sold without sales charges.
2 The S&P 500 Index is an unmanaged index of 500 widely-held common stocks
representing, among others, industrial, financial, utility, and transportation
companies listed or traded on national exchanges or over-the-counter markets.
The Fund is a professionally managed mutual fund. You cannot invest directly in
an index.
3The ten largest equity holdings are calculated based on the market value of
the securities divided by total market value of the portfolio.
4 Portfolio holdings are subject to change.
5 The chart compares the performance of the Wells Fargo Growth Fund Class A and
Institutional Class shares since inception with the S&P 500 Index. The chart
assumes a hypothetical investment of $10,000 in Class A and Institutional Class
shares and reflects all operating expenses and, for Class A shares, assumes the
maximum initial sales charge of 5.75%.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Excluding Sales Charges Including Sales Charges
------------------------------------------------------------------ ---------------------------------------------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
6-Month* 1 Year 5-Year 10-Year 6-Month 1-Year 5-Year 10-Year
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
Class A (4.04) 14.40 18.06 16.31 (9.55) 7.84 16.66 15.62
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
Class B (4.43) 13.48 17.21 15.56 (9.21) 8.53 16.99 15.56
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
Institutional (3.98) 14.55 18.12 16.34
Class
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
Benchmark
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
S&P 500 Index (3.60) 13.28 21.69 19.44
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
*Returns for periods less than one year are not annualized.
------------------------------- ---------------------------- ---------------------------------- ----------------------
CHARACTERISTICS TEN LARGEST EQUITY
(as of September 30, 2000 HOLDINGS3
(as of September 30, 2000)
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Beta* 0.97 General Electric Company 5.18%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Price to Earnings Ratio 38.7x Cisco Systems Incorporated 4.47%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Price to Book Ratio 7.44x Citigroup Incorporated 3.43%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Median Market Cap ($B) 48.4 EMC Corporation 3.15%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Number of Holdings 93 American International Group 3.10%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Portfolio Turnover 51% Nortel Networks Corporation 3.01%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
AES Corporation 2.88%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Microsoft Corporation 2.81%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Pfizer Incorporated 2.40%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Intel Corporation 2.39%
------------------------------- ---------------------------- ---------------------------------- ----------------------
*A measure of the Fund's sensitivity to market movements. The benchmark beta is
1.00 by definition.
------------------------------------------------------------ ---------------------------------------------------------
Sector Distribution4
(as of September 30, 2000)[Chart]
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Technology 35%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Financial 16%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Health Care 9%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Consumer Cyclical 7%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Energy 7%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Consumer Non-Cyclical 6%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Consumer Services 4%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Telecommunications 4%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Industrials 3%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Utilities 3%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Commercial Services 2%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Basic Materials 2%
------------------------------------------------------------ ---------------------------------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Growth of $10,000 Investment5
[graph]
------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
<PAGE>
ASSET ALLOCATION FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Asset Allocation Fund (the "Fund") seeks long-term total return,
consistent with reasonable risk.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Barclays Global Fund Advisors
FUND MANAGERS.....
Team Managed
INCEPTION DATE
11/13/86
PERFORMANCE HIGHLIGHTS
-----------------------------------------------------------------------
The Fund's Class A shares posted an 11.96%1 return for the year ended
September 30, 2000, excluding sales charges. The Fund outperformed one of its
benchmarks, the Lehman Brothers 20+ U.S. Treasury Bond Index2 (Lehman Index)
which returned 10.12%, but underperformed its other benchmark, the S&P 500
Index3, which was up 13.28%. The Fund's Class A shares distributed $0.55 per
share in dividend income and $3.69 per share in capital gains during the period.
Please keep in mind that past performance is no guarantee of future results.
The year was marked by unusual volatility in both the bond and stock
markets. The Fund managed to weather this volatility through a series of asset
reallocations. Each rebalancing allowed the Fund to take advantage of shifts in
relative market strengths of stocks, bonds and cash items. For the first three
quarters of 2000, bonds were the best performing asset class, gaining 2.7%, with
cash returning 4.9% and stocks declining 1.4%.
The rally in equity markets in the fourth quarter of 1999, led Fund
managers to maintain an asset mix weighted toward stocks. In January 2000,
equity markets stumbled on news of strong economic growth. Technology stocks
fueled the downturn, dragging down both the S&P 500 Index and Nasdaq Composite
Index4 (Nasdaq). In March, a rally of old economy stocks allowed the markets to
regain lost territory. The bond market rebounded sharply, with the Lehman Index
returning 9.3% for the first quarter. In response to these events, the Fund
rebalanced the portfolio twice. In January, it raised bond allocations to take
advantage of the bond rally. However, as bond yields declined in February, a
second reallocation was made in favor of equities. This enabled the Fund to take
advantage of the March stock market recovery.
The second quarter of 2000, was marked by extreme volatility in all
stock markets. Nasdaq lost 13.23% for the quarter and the S&P 500 Index shed
2.66%. The bond market, however, managed to end the quarter with a 2.17%
increase. The Fund responded by rebalancing the portfolio a third time in favor
of bonds.
Strong signs of a market slowdown were evident by the end of the third
quarter. With interest rates left unchanged by the Federal Reserve Board in
August, investors prepared for a soft landing. Market volatility continued
throughout the period, with steep declines in stock indexes after profit
warnings by Intel and Apple rattled the markets.
STRATEGIC OUTLOOK.
------------------------------------------------------------------------------
The Fund will continue to invest in a mix of stocks, bonds and cash to
capture optimal performance without incurring undue risk. Notwithstanding
concerns over earnings growth, the tactical allocation continues to favor equity
over bonds, which continue to be overvalued. This is driven by relatively low
bond yields and by the fact that earnings growth remains at historically high
levels.
<PAGE>
1 Figures quoted represent past performance, which is no guarantee of future
results. Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost. The Fund's Advisor has committed through
January 30, 2002, to waive fees and/or reimburse expenses to the extent
necessary to maintain a certain net operating expense ratio for the Fund.
Actual reductions of operating expenses can increase total return to
shareholders. Without these reductions, the Fund's return would have been
lower.
Performance shown for Class A, Class B and Class C shares of the Wells
Fargo Asset Allocation Fund for periods prior to November 8, 1999, reflects
performance of the Class A, Class B and Class C shares of the Stagecoach
Asset Allocation Fund (the accounting survivor of a merger of the Stagecoach
Asset Allocation Fund and the Stagecoach Balanced Fund), its predecessor
fund. Effective at the close of business November 5, 1999, the Stagecoach and
Norwest Advantage Funds were reorganized into the Wells Fargo Funds.
Performance shown for the Class A shares for periods prior to January 2,
1992, reflects performance of the shares of the Asset Allocation Fund for the
Wells Fargo Investment Trust for Retirement Programs, a predecessor portfolio
with the same investment objectives and policies as the Stagecoach Fund.
Performance shown for the Class B shares for periods prior to January 1,
1995, reflects performance of the Class A shares of the Stagecoach Fund
adjusted to reflect Class B sales charges and expenses. Performance shown for
Class C Shares for periods prior to April 1, 1998, reflects performance of
the Class B shares, adjusted for Class C sales charges and expenses.
Performance shown for the Institutional Class shares for periods prior to
November 8, 1999 reflects performance of the Class A shares of the
predecessor fund. For Class A shares the maximum front-end sales charge is
5.75%. The maximum contingent deferred sales charge for Class B shares is
5.00%. The maximum contingent deferred sales charge for Class C shares is
1.00%. Class B and C share performance including sales charge assumes the
maximum contingent deferred sales charge for the corresponding time period.
Institutional shares are sold without sales charges.
2 The Lehman Brothers 20+ U.S. Treasury Bond Index is an unmanaged index
composed of securities in the U.S. Treasury Index with maturities of 20 years
or greater. The U.S. Treasury Index represents public obligations of the U.S.
Treasury with a remaining maturity of one year or more. You cannot invest
directly in an index.
3 The S&P 500 Index is an unmanged index of 500 widely-held common stocks
representing, among others, industrial, financial, utility and transportation
companies listed or traded on national exchanges or over-the-counter markets.
The Fund is professionally managed mutual fund. You cannot invest directly in
an index.
4 The Nasdaq Composite Index is a broad-based capitalization-weighted index of
all Nasdaq National Market and Small Cap stocks. You cannot invest directly
in an index.
5 The ten largest equity holdings are calculated based on the market value of
the securities divided by total market value of the portfolio.
6 Portfolio holdings are subject to change.
7 The chart compares the performance of the Wells Fargo Asset Allocation Fund
Class A and the Institutional Class shares since inception with the S&P 500
Index and the Lehman Brothers 20+ U.S. Treasury Bond Index. The chart assumes
a hypothetical $ investment in Class A and Institutional Class shares and
reflects all operating expenses and, for Class A shares, assumes the maximum
initial sales charge of 5.75%.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Excluding Sales Charges Including Sales Charges
------------------------------------------------------------------ ---------------------------------------------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
6-Month* 1 Year 5-Year 10-Year 6-Month 1-Year 5-Year 10-Year
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
Class A (1.50) 11.96 15.44 14.52 (7.15) 5.50 14.08 13.84
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
Class B (1.83) 11.21 14.73 13.89 (6.71) 6.48 14.50 13.89
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
Class C (1.80) 11.17 14.73 13.89 (2.78) 10.23 14.73 13.89
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
Institutional (1.50) 11.95 15.44 14.52
Class**
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
Benchmark
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
Lehman 3.34 10.12 7.63 10.28
Brothers 20+
Index
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
S&P 500 Index (3.60) 13.28 21.69 19.44
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------ ------------
*Returns for periods less than one year are not annualized.
**Share class commenced operations on November 8, 1999. Total returns are based
on the Class A shares adjusted for Institutional Class expenses.
------------------------------- ---------------------------- ---------------------------------- ----------------------
CHARACTERISTICS TEN LARGEST HOLDINGS5
(as of September 30, 2000 (as of September 30, 2000)
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Beta 0.68* U.S. Treasury Bond, 8.00%, 4.02%
11/15/21
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Average Coupon of Bond 5.79% General Electric Company 2.89%
Portfolio
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Average Maturity of Bond 21.2 years U.S. Treasury Bond, 6.25%, 2.51%
Portfolio 5/15/30
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Average Duration of Bond 10.5 years U.S. Treasury Bond, 6.125%, 2.00%
Portfolio 11/15/27
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Number of Holdings 529 Cisco Systems Incorporated 1.98%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Portfolio Turnover 37% U.S. Treasury Bond, 7.125%, 1.76%
2/15/23
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
U.S. Treasury Bill, due 10/12/00 1.76%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Microsoft Corporation 1.61%
------------------------------- ---------------------------- ---------------------------------- ----------------------
------------------------------- ---------------------------- ---------------------------------- ----------------------
Exxon Mobil Corporation 1.57%
------------------------------- ---------------------------- ---------------------------------- ----------------------
*A measure of the Fund's sensitivity to market movements. The benchmark beta is
1.00 by definition.
---------------------------------- -------- ----------------------------- -------------------
STRATEGIC ALLOCATIONS6 ACTUAL ASSET ALLOCATION
(as of September 30, 2000)
---------------------------------- -------- ----------------------------- -------------------
---------------------------------- -------- ----------------------------- -------------------
Stocks 60% 64%
---------------------------------- -------- ----------------------------- -------------------
---------------------------------- -------- ----------------------------- -------------------
Bonds 40% 36%
---------------------------------- -------- ----------------------------- -------------------
------------------------------------------ --------------------------------
SECTOR ALLOCATION6 [Chart]
(as of September 30, 2000)
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
U.S. Treasury Securities 36%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Technology 19%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Financial 12%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Health Care 7%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Energy 4%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Consumer Non-Cyclical 4%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Consumer Cyclical 4%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Telecommunications 4%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Consumer Services 3%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Basic Materials 2%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Industrials 2%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Commercial Services 2%
------------------------------------------ --------------------------------
------------------------------------------ --------------------------------
Utilities 1%
------------------------------------------ --------------------------------
------------------------------------------------------------ ---------------------------------------------------------
Growth of $10,000 Investment7
[graph]
------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
<PAGE>
NATIONAL TAX-FREE FUND
INVESTMENT OBJECTIVE The National Tax-Free Fund (the "Fund") seeks current
income exempt from federal income taxes.
ADVISOR .........
------------------------------------------------------------------------------
Wells Fargo Bank, N.A.
SUB-ADVISOR.......
-------------------------------------------------------------------------------
Wells Capital Management, Incorporated
FUND MANAGER
Stephen Galiani
INCEPTION DATE
08/01/89.
PERFORMANCE HIGHLIGHTS
-------------------------------------------------------------------------------
The Fund's Class A shares returned 0.50%1 during the 12-month period
ended June 30, 2000, excluding sales charges, underperforming the Lehman
Brothers Municipal Bond Index2 (the Index), which returned 3.25%. The Fund's
Class A shares distributed $0.53 per share in dividend income and $0.01 in
capital gains during the period. Please keep in mind that past performance is no
guarantee of future results.
The Fund is normally more aggressive that the Index both in terms of
duration and credit exposure. While this strategy has the potential to produce a
high rate of tax-free income, it also hurt Fund performance during the eight
months of the reporting period - a period characterized by rising interest rates
and widening credit spreads. The Fund, and the entire municipal sector, were
also negatively affected by shareholder redemptions, which resulted in the sale
of certain investments during periods of market weakness. Losses incurred by the
Fund will ultimately be used to reduce or eliminate future capital gains
distributions.
STRATEGIC OUTLOOK
-------------------------------------------------------------------------------
The Fund expects municipal yields to decline in the coming months, and
is well positioned for the potential to capitalize on this development. And
unless the municipal bond market experiences another dramatic sell-off, the Fund
is potentially positioned to continue generating attractive dividends.
<PAGE>
1 Figures quoted represent past performance, which is no guarantee of future
results. Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost. The Fund's Advisor has committed through
October 31, 2001, to waive fees and/or reimburse expenses to the extent
necessary to maintain a certain net operating expense ratio for the Fund.
Actual reductions of operating expenses can increase total return to
shareholders. Without these reductions, the Fund's return would have been
lower.
Performance shown for Class A, Class B and Institutional Class shares of
the Wells Fargo National Tax-Free Fund for periods prior to November 8, 1999,
reflects performance of the Class A, Class B and Class C shares of the
Norwest Advantage Tax-Free Income Fund (the accounting survivor of a merger
of the Norwest Advantage Tax-Free Income Fund and the Stagecoach National
Tax-Free Fund), its predecessor fund. Effective at the close of business
November 5, 1999, the Stagecoach and Norwest Advantage Funds were reorganized
into the Wells Fargo Funds. Performance of the Class B shares for periods
prior to August 6, 1993 reflects performance of the Class A shares of the
Norwest Advantage Fund adjusted to reflect Class B sales charges and
expenses. Performance shown for Class C shares for periods prior to November
8, 1999 reflects performance of the Class B shares of the Norwest Advantage
Fund adjusted for Class C charges and expenses.
For Class A shares, the maximum front-end sales charge is 4.50%. The maximum
contingent deferred sales charge (CDSC) for Class B is 5.00%. The maximum
CDSC for Class C shares is 1.00%. Class B and C share performance including
sales charge assumes the maximum contingent deferred sales charge for the
corresponding time period. Institutional shares are sold without sales
charges.
2 The Lehman Brothers Municipal Bond Index is an unmanaged index composed of
municipal bonds. The total return of the index does not include the effect of
sales charges, and you cannot invest directly in an index. Had the Index
incurred operating expenses, its performance would have been lower.
3 The chart compares the performance of the Wells Fargo National Tax-Free Fund
Class A and Institutional Class shares for the most recent 10 years with the
Lehman Brothers Municipal Bond Index. The chart assumes a hypothetical
$10,000 investment in Class A and Institutional Class shares and reflects all
operating expenses and, for Class A shares, assumes the maximum initial sales
charge of 4.50%. The Fund is a professionally managed mutual fund.
4 The average credit rating is compiled from ratings from Standard & Poor's
and/or Moody's Investors Services (together "rating agencies"). Standard &
Poor's is a trademark of McGraw-Hill, Inc. and has been licensed. The Fund is
not sponsored, sold or promoted by these rating agencies and these rating
agencies make no representation regarding the advisability of investing in
the Fund.
5 The formula used to calculate the SEC yield is described in detail in the
Fund's Statement of Additional Information and is designed to standardize the
yield calculations so that all mutual fund companies with the same or similar
portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned
adjusted by any gain or loss realized due to the return of principal, less
expenses and the maximum offering price calculated on a 30-day month-end
basis.
6 The distribution rate is based on the actual distributions made by the Fund.
The distribution rate is calculated by annualizing the most recent income
dividend and dividing that figure by the applicable current public offering
price.
7 A portion of the Fund's income may be subject to federal, state and/or local
income taxes or the alternative minimum tax (AMT). The Fund's taxable
equivalent yield is based on the federal income tax rate of 39.60%. Any
capital gains distributions may be taxable. The value of the securities
subject to AMT is represented as a percentage of net assets.
8 Portfolio holdings are subject to change.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Excluding Sales Charges Including Sales Charges
------------------------------------------------------------------ --------------------------------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
6-Month* 1 Year 5-Year 10-Year 1-Year 5-Year 10-Year
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
Class A 4.31 0.50 5.50 6.01 (4.02) 4.53 5.52
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
Class B 3.92 (0.24) 4.72 5.24 (4.99) 4.38 5.24
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
Class C 4.03 (0.13) 4.74 5.25 (1.09) 4.74 5.25
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
Institutional 4.52 0.73 5.55 6.04
Class
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
Benchmark
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
Lehman 4.48 3.25 5.88 7.06
Brothers
Municipal Bond
Index
---------------- ---------- ------------ ------------ ------------ ------------ ------------ ------------
*Returns for periods less than one year are not annualized.
------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT3
[GRAPH]
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
--------------------------------------- ----------------------------------
CHARACTERISTICS
(as of May 31, 2000)
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
Average Credit Quality4 AA
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
Weighted Average Coupon 4.78%
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
Estimated Duration 9.75 years
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
NAV (A, B, C & I) $9.72, $9.72, $9.73 & $9.73
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
Portfolio Turnover 79%
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
Number of Holdings 152
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
SEC Yield5
(A, B, C. Inst.) 5.47%, 4.98%, 4.98%, 5.92%
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
Distribution Rate6
(A, B, C, Inst.) 5.23%, 4.73%, 4.73%, 5.67%
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
Taxable Equivalent Yield7
(A, B, C, Inst.) 9.06%, 8.25%, 8.25%, 9.80%
--------------------------------------- ----------------------------------
--------------------------------------- ----------------------------------
Alternative Minimum Tax7 7.60%
--------------------------------------- ----------------------------------
---------------------------------- ---------------------- --------------------------------- ----------------------
CREDIT QUALITY MATURITY DISTRIBUTIONS8
(as of June 30, 2000)
---------------------------------- ---------------------- --------------------------------- ----------------------
---------------------------------- ---------------------- --------------------------------- ----------------------
AAA/Treasuries/Agencies 41% 20-30 Years 47%
---------------------------------- ---------------------- --------------------------------- ----------------------
---------------------------------- ---------------------- --------------------------------- ----------------------
AA 22% 10-20 Years 32%
---------------------------------- ---------------------- --------------------------------- ----------------------
---------------------------------- ---------------------- --------------------------------- ----------------------
Unrated 13% 5-10 Years 7%
---------------------------------- ---------------------- --------------------------------- ----------------------
---------------------------------- ---------------------- --------------------------------- ----------------------
BBB 12% 1-5 Years 9%
---------------------------------- ---------------------- --------------------------------- ----------------------
---------------------------------- ---------------------- --------------------------------- ----------------------
A 9% 0-1 Years 5%
---------------------------------- ---------------------- --------------------------------- ----------------------
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Cash 3%
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</TABLE>
<PAGE>
INCOME FUND
INVESTMENT OBJECTIVE The Wells Fargo Income Fund (the "Fund") seeks current
income and total return.
ADVISOR .........
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Wells Fargo Bank, N.A.
SUB-ADVISOR.......
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Wells Capital Management Incorporated
FUND MANAGER......
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Marjorie Grace, CFA (since 1/96); Mark Walter
INCEPTION DATE....
--------------------------------------------------------------------------------
6/9/87
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund's Class A shares returned (0.23)%1 for the 12-month period
that ended May 31, 2000, excluding sales charges. The Fund underperformed its
benchmark, the Lehman Brothers Aggregate Bond Index2, which returned 2.11%
during the period. The Fund's Class A shares distributed 0.60% per share in
dividend income and no capital gains during the period. Please keep in mind that
past performance is no guarantee of future results.
The Fund's performance over the period reflected the impact of rising
interest rates that depressed bond prices while increasing yields. In fact, the
yield on the 10-year U.S. Treasury note, similar in duration to the Fund's
average, a good proxy for the Fund, increased nearly 0.65% over the past year.
In addition, both corporate bonds and mortgage-backed securities underperformed
U.S. Treasuries, causing yields in these sectors to increase much more than
yields for U.S. Treasuries. Fund performance was mainly hampered by maintaining
a longer maturity than its peers.
Over the 12-month period, the Fund restructured its bond holdings to
offset the impact of changing interest rates on various bond holdings. For
example, the Fund reduced its exposure to corporate bonds from an overweight
position of 58% to a more neutral position of 45%. The proceeds were invested in
U.S. Treasuries. The Fund also remains underweighted in agency notes, another
underperforming sector during recent months.
The Fund currently maintains a "barbell" structure, with most portfolio
assets concentrated in short- and long-term maturities. The reallocation of
portfolio assets, combined with declining interest rates between intermediate-
and long-term U.S. Treasury bonds, contributed to an exceptional first and
second quarter, helping the Fund regain its "A" performance rating.
<PAGE>
1 Figures quoted represent past performance, which is no guarantee of future
results. Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost. The Fund's Advisor has committed through
September 30, 2001, to waive fees and/or reimburse expenses to the extent
necessary to maintain a certain net operating expense ratio for the Fund.
Actual reductions of operating expenses can increase total return to
shareholders. Without these reductions, the Fund's return would have been
lower.
Performance shown for Class A, Class B and Institutional Class shares of
the Wells Fargo Income Fund for periods prior to November 8, 1999, reflects
performance of the Class A, Class B and Institutional Class shares of the
Norwest Advantage Income Fund (the accounting survivor of a merger of the
Norwest Advantage Income Fund, Total Return Bond and Performa Strategic Value
Bond Funds at the close of business November 5, 1999), its predecessor fund.
Effective at the close of business November 5, 1999, the Stagecoach and
Norwest Advantage Funds were reorganized into the Wells Fargo Funds.
For Class A shares, the maximum front-end sales charge is 4.50%. The
maximum contingent deferred sales charge (CDSC) for Class B is 5.00%. Class B
share performance including sales charge assumes the maximum contingent
deferred sales charge for the corresponding time period. Institutional shares
are sold without sales charges.
2 The Fund changed its benchmark to the Lehman Brothers Aggregate Bond Index
because it is more representative of the Fund's average portfolio maturity
and holdings. The Lehman Brothers Aggregate Bond Index is composed of the
Lehman Brothers Government/Credit Index and Mortgage-Backed Securities Index
and includes Treasury issues, agency issues, corporate bond issues and
mortgage-backed securities. The Fund is a professionally managed mutual fund.
You cannot invest directly in an index.
3 The Lehman Brothers Intermediate Government/Credit Index is an unmanaged index
composed of U.S. Government securities with maturities in the one-to 10-year
range, including securities issued by the U.S. Treasury and U.S. Government
agencies. It also contains all publicly issued, fixed-rate non convertible
investment-grade domestic corporate debt in the one-to 10-year range. The Fund
is a professionally managed mutual fund. You cannot invest directly in an index.
4 The chart compares the performance of the Wells Fargo Income Fund Class A and
Institutional Class shares for the most recent ten years with the Lehman
Brothers Aggregate Bond Index and the Lehman Brother Intermediate
Government/Credit Index, the former benchmark for this fund. The chart assumes a
hypothetical $10,000 investment in Class A Shares and Institutional Class
shares, reflects all operating expenses and, for Class A shares, assumes the
maximum initial sales charge of 4.50%. The Fund is a professionally managed
mutual fund.
5 The average credit quality is compiled from ratings from Standard & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's
is a registered trademark of McGraw-Hill, Inc., and has been licensed. The Fund
is not sponsored, sold or promoted by these rating agencies and these rating
agencies make no representation regarding the advisability of investing in the
Fund.
6 The distribution rate is based on the actual distributions made by the Fund.
The distribution rate is calculated by annualizing the Fund's most recent income
dividend and dividing that figure by the applicable current public offering
price.
7 The formula used to calculate the SEC yield is described in detail in
the Fund's Statement of Additional Information and is designed to standardize
the yield calculations so that all mutual fund companies with the same or
similar portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
8 Portfolio holdings are subject to change.
<PAGE>
<TABLE>
<S> <C>
STRATEGIC OUTLOOK.
---------------------------------------------------------------------------------------------------------------------------------
The Fund will continue to employ yield curve strategies when appropriate to enhance performance and stress
high-quality assets.
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</TABLE>
AVERAGE ANNUAL TOTAL RETURNI (%) (as of May 31, 2000)
------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------ Including Sales Charge
Excluding Sales Charge
--------------- -------- -------- --------- --------- ------- ----------
-------------- 1-Year 5-Year 10-Year 1-Year 5-Year 10-Year
Year-To-Date*
-----------------------------------
Class A 0.95 (0.23) 4.79 6.74 (4.72) 3.83 6.25
-----------------------------------
Class B 0.52 (1.00) 4.01 5.92 (5.67) 3.70 5.92
-----------------------------------
Institutional Class 1.06 (0.10) 4.82 6.74
-----------------------------------
Benchmark
-----------------------------------
Lehman Brothers Aggregate Bond 1.87 2.11 5.97 7.77
Index
-----------------------------------
Lehman Brothers Intermediate
Government/Credit Index3 1.43 2.49 5.59 7.23
---------------------------------------------------------------------------------------------------------------
*Returns for periods less than one year are not annualized.
GROWTH OF $10,000 INVESTMENT4
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Line Graph
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CHARACTERISTICS (as of May 31, 2000)
------------------------------------- ---- -----------------------------------------
Portfolio Turnover 124%
Number of Holdings 99
Average Credit Quality5 AA
Weighted Average Coupon 7.88%
Estimated Weighted Average Life 10.99 years
Estimated Duration 6.01 years
NAV (A, B, I) $8.86, $8.84, $8.85
Distribution6 Rate (A, B, I) 6.40%, 5.95%, 6.95%
SEC Yield7 6.30%, 5.85%, 6.85%
</TABLE>
PORTFOLIO ALLOCATION8
(as of May 31, 2000)
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Pie Graph
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<PAGE>
STABLE INCOME FUND
INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------
The Wells Fargo Stable Income Fund (the "Fund") seeks stability of
principal while providing low volatility total return.
ADVISOR
Wells Fargo Bank, N.A.
SUB-ADVISOR
Wells Capital Management Incorporated
FUND MANAGER
John Huber (since 1998)
INCEPTION DATE
11/11/94
PERFORMANCE HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund's Class A shares returned a 4.28%1 for the 12-month period ended
May 31, 2000, excluding sales charges. The Fund underperformed its benchmark,
the Merrill Lynch Treasury Bill One-Year Index2, which returned 4.76% during the
period. The Fund's Class A shares distributed $0.54 per share in dividend income
and no capital gains during the period. Please keep in mind that past
performance is no guarantee of future results.
The Fund performed well over the period despite an interest rate
environment that profoundly affected short term U.S. Treasury bills. The
prospect of the U.S. Treasury Department's discontinuation of one-year U.S.
Treasury bills only heightened volatility. Yet the Fund's diversified holdings
across several sectors, including mortgage- and asset-backed securities plus
corporate and taxable municipal bonds, contributed to the Fund's continued
success.
As spreads widened because of the U.S. Treasury Department's buyback
program, the Fund added floating, fixed-rate and municipal securities to the
portfolio to capture attractive yields. These short term securities, which have
yielded between 7% to 8%, should continue to aid the Fund's performance going
forward. At the same time, the Fund increased its exposure to discontinue agency
paper, which also should help boost returns over the ensuing year.
STRATEGIC OUTLOOK
-------------------------------------------------------------------------------
Going forward, historically wide yield spreads provide a significant
advantage for the Fund, and should contribute to the Fund's performance. The
Fund will continue to focus on selection of undervalued securities and sectors
on a strategically diversified basis while maintaining a controlled duration
around its key benchmark, the one-year U.S. Treasury bill. The Fund also expects
that long-term interest rates will remain in their recent range until the
Federal Reserve Board eases it monetary policy. If this is the case, the
environment for fixed-income securities will improve from an interest rate
perspective, with spreads narrowing toward their historic norms. This
combination of events bodes well for fixed-income investors.
<PAGE>
1 Figures quoted represent past performance, which is no guarantee of future
results. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's Advisor has committed through September 30, 2001
to waive fees and/or reimburse expenses to the extent necessary to maintain a
certain net operating expense ratio for the Fund. Actual reductions of operating
expenses can increase total return to shareholders. Without these reductions,
the Fund's returns would have been lower.
Performance shown for Class A, Class B and Institutional Class shares of
the Wells Fargo Stable Income Fund for periods prior to November 8, 1999,
reflects performance of the Class A, Class B and Institutional Class shares of
the Norwest Advantage Stable Income fund, its predecessor fund. Effective at the
close of business November 5, 1999, the Norwest Advantage Funds were reorganized
into the Wells Fargo Funds. Performance shown for Class A shares for periods
prior to May 2, 1996 reflects performance of the Institutional Class shares of
the Norwest Fund adjusted for Class A sales charges. Performance shown for Class
B shares for periods prior to May 17, 1996 reflects performance of the
Institutional Class shares of the Norwest Fund adjusted for Class B sales
charges and expenses. For Class A shares, the maximum front-end sales charge is
1.50%. The maximum contingent-deferred sales charge for Class B shares is 5.00%.
Class B share performance including sales charge assumes the sales charge for
the corresponding period. Institutional Class shares are sold without sales
charges.
2 The Merrill Lynch Treasury Bill One-Year Index is an unmanaged measure of the
performance of the One-Year Treasury bill. Treasury bills are guaranteed by the
U.S. Government and, if held to maturity, offer a fixed rate of return and fixed
principal value. The Fund is a professionally managed mutual fund. You cannot
invest directly in an index.
3 The chart compares the performance of the Wells Fargo Stable Income Fund Class
A and Institutional Class shares since inception with the Merrill Lynch Treasury
Bill One-Year Index. The chart assumes a hypothetical $10,000 investment in
Class A Shares and reflects all operating expenses and, for Class A shares,
assumes the maximum initial sales charge of 1.50%. The Fund is a professionally
managed mutual fund. You cannot invest directly in an index.
4 The average credit quality is compiled from ratings from Standard & Poor's
and/or Moody's Investors Service (together "rating agencies"). Standard & Poor's
is a registered trademark of McGraw-Hill, Inc., and has been licensed. The Fund
is not sponsored, sold or promoted by these rating agencies and these rating
agencies make no representation regarding the advisability of investing in the
Fund.
5 The distribution rate is based on the actual distributions made by the Fund.
The distribution rate is calculated by annualizing the Fund's most recent income
dividend and dividing that figure by the applicable current public offering
price.
6 The formula used to calculate the SEC yield is described in detail in
the Fund's Statement of Additional Information and is designed to standardize
the yield calculations so that all mutual fund companies with the same or
similar portfolios quote a uniform yield figure for their non-money market
advertisements. SEC yields include the actual amount of interest earned adjusted
by any gain or loss realized due to the return of principal, less expenses and
the maximum offering price calculated on a 30-day month-end basis.
7 The Fund invests exclusively in Wells Fargo Core Portfolios. This chart
represents the portfolio allocations of the portfolios in which it invests.
Portfolio holdings are subject to change.
<PAGE>
AVERAGE ANNUAL TOTAL RETURNI (%) (as of May 31, 2000)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------- Including Sales Charge
Excluding Sales Charge
--------------- -------- -------- ---------- --------- ------- ------------
-------------- 1-Year 5-Year Since 1-Year 5-Year Since
Year-To-Date* Inception Inception
----------------------------------
Class A 1.97 4.28 5.45 5.73 2.71 5.13 5.44
----------------------------------
Class B 1.57 3.40 4.64 4.92 1.91 4.64 4.92
----------------------------------
Institutional Class 2.07 4.32 5.48 5.76
----------------------------------
Benchmark
----------------------------------
Merrill Lynch Treasury Bill 2.36 4.76 5.52
One-Year Index
-----------------------------------------------------------------------------------------------------------------
*Returns for periods less than one year are not annualized.
GROWTH OF $10,000 INVESTMENT3
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------------------------------------------------------------
Line Graph
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------------------------------------------------------------
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CHARACTERISTICS (as of May 31, 2000)
--------------------------------------- -- -----------------------------------------
Portfolio Turnover 40%
Number of Holdings 132
Average Credit Quality4 AA
Weighted Average Coupon 6.85%
Estimated Weighted Average Maturity 2.39 years
Estimated Average Duration 1.00 year
NAV (A, B, I) $10.15, $10.14, $10.15
Distribution5 Rate (A, B, I) 5.35%, 4.69%, 5.67%
SEC Yield6 6.28%, 5.62%, 6.63%
</TABLE>
PORTFOLIO ALLOCATION7
(as of May 31, 2000)
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Pie Graph
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