NORWEST ADVANTAGE FUNDS
INSTITUTIONAL FUNDS
Supplement Dated March 1, 1999
to Prospectus Dated October 1, 1998 as Amended December 1, 1998
This supplement applies to the following Funds
STRATEGIC INCOME FUND DIVERSIFIED EQUITY FUND
MODERATE BALANCED FUND GROWTH EQUITY FUND
GROWTH BALANCED FUND DIVERSIFIED SMALL CAP FUND
AGGRESSIVE BALANCED-EQUITY FUND SMALL COMPANY STOCK FUND
I. INTERNATIONAL EQUITY PORTFOLIO
Strategic Income Fund, Moderate Balanced Fund, Growth Balanced Fund,
Aggressive Balanced-Equity Fund, Diversified Equity Fund and Growth Equity Fund
invest in Portfolios (as defined in the Prospectus). Each of the Funds now
invests in International Equity Portfolio in addition to the Portfolios in the
Prospectus. The Portfolio is advised by Wells Fargo Bank ("WFB") and subadvised
by Wells Capital Management Incorporated ("WCM"), affiliates of Norwest.
References in the Prospectus to the "Adviser" include, as applicable, references
to WFB and references to "Subadviser" include, as applicable, references to WCM.
a. INVESTMENT OBJECTIVE AND POLICY. The following is inserted
immediately preceding the section entitled "Schroder EM Core Portfolio" on Page
55:
INTERNATIONAL EQUITY PORTFOLIO. The Portfolio seeks long term total
return, with an emphasis on capital appreciation, by investing
primarily in equity securities of foreign companies. The Portfolio
invests at least 80% of its assets in a diversified portfolio of
common stock of companies located or operating in developed and
emerging markets. It is expected that the securities held by the
Portfolio will be traded on a stock exchange or other market in the
country in which the issuer is based, but they also may be traded in
other countries, including the United States. The Portfolio must
invest its assets in the securities of at least five different
countries other than the United States. The Portfolio may also invest
in American Depositary Receipts, European Depositary Receipts, or
other similar instruments convertible into securities of foreign
issuers.
The Adviser uses a fundamentals-driven, value-oriented analysis to
identify companies with above-average potential for long-term growth.
The Adviser considers a company's historical performance and its
projected future earnings. The Adviser also considers other key
criteria such as a company's local, regional or global franchise;
history of effective management demonstrated by expanding revenues and
earnings growth; prudent financial and accounting policies and ability
to take advantage of a changing business environment. In allocating
among countries, regions and industry sectors, the Adviser considers
economic growth prospects, monetary and fiscal policies, political
stability, currency trends, market liquidity and investor sentiment.
Currency Rate Risk Foreign Risk Geographic Concentration Risk
Leverage Risk Market Risk
b. ADVISER, SUBADVISER AND PORTFOLIO MANAGERS. The following is
inserted immediately following the paragraph entitled "Schroder Capital
Management International Inc." on Page 60:
WELLS FARGO BANK, or WFB, is the investment adviser for International
Equity Portfolio. In this capacity, WFB makes investment decisions for
and administers the Portfolio's investment program. WFB's address is
525 Market Street, San Francisco, CA 94105.
<PAGE>
The following is inserted immediately following the paragraph entitled
"Smith Asset Management Group, L.P." on page 60:
WELLS CAPITAL MANAGEMENT INCORPORATED, or WCM, a wholly-owned
subsidiary of WFB, is the investment Subadviser for International
Equity Portfolio. WCM provides investment advisory services to various
bank and thrift institutions, investment companies, pension and profit
sharing plans, trusts, estates, corporations and other business
entities. WCM's address is 525 Market Street, 10th Floor, San
Francisco, CA 94105.
The following is inserted immediately preceding the subsection entitled
"Schroder EM Core Portfolio" on Pages 64, 66 and 68:
PORTFOLIO: INTERNATIONAL EQUITY PORTFOLIO
SUBADVISER: WCM
PORTFOLIO MANAGERS: Katherine Schapiro, CFA (1999) and Stacey Ho,
CFA (1999)
ADVISORY FEE: 1.20%
The following is inserted immediately preceding the section entitled
"Dormant Investment Advisory Arrangements" on Page 72:
Wells Fargo Portfolio Managers:
STACEY HO, CFA, associated with WCM since 1997. Ms. Ho is co-manager
for the international equity portfolios and funds. Prior thereto, she
was a senior portfolio manager at Clemente Capital Management and
prior thereto, managed Japanese and U.S. equity portfolios at Edison
International.
KATHERINE SCHAPIRO, CFA, associated with WFB since 1992. Prior to her
association with WFB, she was a vice president and fund manager for
Newport Pacific Management, an international investment advisory firm
based in San Francisco. Ms. Schapiro is President of the Security
Analysts of San Francisco.
c. ALLOCATION OF ASSETS TO INTERNATIONAL EQUITY PORTFOLIO. The following
table sets forth the current allocations of each Fund in the International style
and in the international Portfolios. The table also lists the applicable page
number in the Prospectus and the number of Portfolios in which the Fund invests.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
INTERNATIONAL INTERNATIONAL INTERNATIONAL SCHRODER EM
STYLE PORTFOLIO EQUITY PORTFOLIO CORE PORTFOLIO
----------------------------------------------------------------------
----------------------------------------------------------------------
FUND NAME (PAGE PORTFOLIOS % % RANGE % % RANGE % % RANGE % % RANGE
NUMBERS)
- -------------------------------------------------------------------------------------------------------------------
Moderate Balanced 16 6 3.8-8.3 4.4 2.3-6.4 1.4 0.8-1.9 0.2 0-1.3
(39-40)
Growth Balanced (40-41) 15 9.8 6.8-12.8 7.2 4.2-9.9 2.2 1.5-2.9 0.4 0-2
Aggressive Balanced-Equity 15 12 9-15 8.8 5.6-11.6 2.7 2-3.4 0.5 0-2.3
(41-42)
Diversified Equity 12 15 13.5-16.5 11.0 8.1-13.1 3.4 1.9-4.9 0.6 0-2.6
(44-45)
Growth Equity (45-46) 9 30 28-32 22.1 17-25.3 6.8 4.8-8.8 1.2 0-5.1
- ---------------------------------- --------- ------ ----------- ------ --------- ------ ---------- ----- ----------
</TABLE>
II. SMALL COMPANY STOCK PORTFOLIO
Strategic Income Fund, Moderate Balanced Fund, Growth Balanced Fund,
Aggressive Balanced-Equity Fund, Diversified Equity Fund, Growth Equity Fund,
Diversified Small Cap Fund and Small Company Stock Fund invest in Small Company
Stock Portfolio. All references in the prospectus to Crestone Capital
Management, Inc. (subadviser of Small Company Stock Portfolio) and to Kirk
McCown of Crestone, the portfolio manager of the Portfolio, are deleted.
<PAGE>
The portfolio manager for Small Company Stock Portfolio (as described
on page 70) has been changed. The following replaces, in its entirety, the
subsection beginning "Portfolio: Small Company Stock Portfolio" under the
sections entitled "Strategic Income Fund," "Moderate Balanced Fund, Growth
Balanced Fund, Aggressive Balanced-Equity Fund," "Diversified Equity Fund,
Growth Equity Fund," "Diversified Small Cap Fund" and "Small Company Stock Fund"
in the tables on Pages 64 to 69:
PORTFOLIO: SMALL COMPANY STOCK PORTFOLIO
PORTFOLIO MANAGERS: Kenneth Lee (1999) and Thomas Zeifang (1999)
ADVISORY FEE: 0.90%
The following is inserted in the section entitled "Portfolio
Managers-Norwest Portfolio Managers" on Page 70:
KENNETH LEE, associated with Norwest or its affiliates since 1999. Mr.
Lee also provides fundamental security analysis and portfolio
management at WCM. He has been associated with WCM or its affiliates
since 1993.
THOMAS ZEIFANG, associated with Norwest or its affiliates since 1999.
Mr. Zeifang also is a portfolio manager at WCM, with whom he has been
associated since 1995. Prior to 1995, he served as an analyst at Fleet
Investment Advisors.
<PAGE>
NORWEST ADVANTAGE FUNDS
GROWTH BALANCED FUND LARGE COMPANY GROWTH FUND
INCOME EQUITY FUND DIVERSIFIED SMALL CAP FUND
VALUGROWTHSM STOCK FUND SMALL COMPANY STOCK FUND
DIVERSIFIED EQUITY FUND SMALL CAP OPPORTUNITIES FUND
GROWTH EQUITY FUND INTERNATIONAL FUND
A SHARES - B SHARES - C SHARES
Supplement Dated March 1, 1999
to Prospectus Dated October 1, 1998
I. INTERNATIONAL EQUITY PORTFOLIO
Growth Balanced Fund, Diversified Equity Fund and Growth Equity Fund invest
in Portfolios (as defined in the Prospectus). Each of the Funds now invests in
International Equity Portfolio in addition to the Portfolios in the Prospectus.
The Portfolio is advised by Wells Fargo Bank ("WFB") and subadvised by Wells
Capital Management Incorporated ("WCM"), affiliates of Norwest. References in
the Prospectus to the "Adviser" include, as applicable, references to WFB and
references to "Subadviser" include, as applicable, references to WCM.
a. INVESTMENT OBJECTIVE AND POLICY. The following is inserted immediately
preceding the section entitled "Investment Objectives and Policies-Description
of Portfolios-Schroder EM Core Portfolio" on Page 36:
INTERNATIONAL EQUITY PORTFOLIO. The Portfolio seeks long term total
return, with an emphasis on capital appreciation, by investing
primarily in equity securities of foreign companies. The Portfolio
invests at least 80% of its assets in a diversified portfolio of
common stock of companies located or operating in developed and
emerging markets. It is expected that the securities held by the
Portfolio will be traded on a stock exchange or other market in the
country in which the issuer is based, but they also may be traded in
other countries, including the United States. The Portfolio must
invest its assets in the securities of at least five different
countries other than the United States. The Portfolio may also invest
in American Depositary Receipts, European Depositary Receipts, or
other similar instruments convertible into securities of foreign
issuers.
The Adviser uses a fundamentals-driven, value-oriented analysis to
identify companies with above-average potential for long-term growth.
The Adviser considers a company's historical performance and its
projected future earnings. The Adviser also considers other key
criteria such as a company's local, regional or global franchise;
history of effective management demonstrated by expanding revenues and
earnings growth; prudent financial and accounting policies and ability
to take advantage of a changing business environment. In allocating
among countries, regions and industry sectors, the Adviser considers
economic growth prospects, monetary and fiscal policies, political
stability, currency trends, market liquidity and investor sentiment.
Currency Rate Risk Foreign Risk Geographic Concentration Risk
Leverage Risk Market Risk
b. ADVISER, SUBADVISER AND PORTFOLIO MANAGERS. The following is inserted
immediately following the paragraph entitled "Schroder Capital Management
International Inc." on Page 40:
WELLS FARGO BANK, or WFB, is the investment adviser for International
Equity Portfolio. In this capacity, WFB makes investment decisions for
and administers the Portfolio's investment program. WFB's address is
525 Market Street, San Francisco, CA 94105.
The following is inserted immediately following the paragraph entitled
"Smith Asset Management Group, L.P." on page 40:
<PAGE>
WELLS CAPITAL MANAGEMENT INCORPORATED, or WCM, a wholly-owned
subsidiary of WFB, is the investment Subadviser for International
Equity Portfolio. WCM provides investment advisory services to various
bank and thrift institutions, investment companies, pension and profit
sharing plans, trusts, estates, corporations and other business
entities. WCM's address is 525 Market Street, 10th Floor, San
Francisco, CA 94105.
The following is inserted immediately preceding the subsection entitled
"Schroder EM Core Portfolio" on Pages 42 and 44:
PORTFOLIO: INTERNATIONAL EQUITY PORTFOLIO
SUBADVISER: WCM
PORTFOLIO MANAGERS: Katherine Schapiro, CFA (1999) and Stacey Ho,
CFA (1999)
ADVISORY FEE: 1.20%
The following is inserted immediately preceding the section entitled
"Dormant Investment Advisory Arrangements" on Page 47:
Wells Fargo Portfolio Managers:
STACEY HO, CFA, associated with WCM since 1997. Ms. Ho is co-manager
for the international equity portfolios and funds. Prior thereto, she
was a senior portfolio manager at Clemente Capital Management and
prior thereto, managed Japanese and U.S. equity portfolios at Edison
International.
KATHERINE SCHAPIRO, CFA, associated with WFB since 1992. Prior to her
association with WFB, she was a vice president and fund manager for
Newport Pacific Management, an international investment advisory firm
based in San Francisco. Ms. Schapiro is President of the Security
Analysts of San Francisco.
c. ALLOCATION OF ASSETS TO INTERNATIONAL EQUITY PORTFOLIO. The following
table sets forth the current allocations of each Fund in the International style
and in the international Portfolios. The table also lists the applicable page
number in the Prospectus and the number of Portfolios in which the Fund invests.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
INTERNATIONAL INTERNATIONAL INTERNATIONAL SCHRODER EM
STYLE PORTFOLIO EQUITY PORTFOLIO CORE PORTFOLIO
----------------------------------------------------------------------
----------------------------------------------------------------------
FUND NAME (PAGE NUMBERS) PORTFOLIOS % % RANGE % % RANGE % % RANGE % % RANGE
- -------------------------------------------------------------------------------------------------------------------
Growth Balanced (21) 15 9.8 6.8-12.8 7.2 4.2-9.9 2.2 1.5-2.9 0.4 0-2
Diversified Equity (24) 12 15 13.5-16.5 11.0 8.1-13.1 3.4 1.9-4.9 0.6 0-2.6
Growth Equity (25) 9 30 28-32 22.1 17-25.3 6.8 4.8-8.8 1.2 0-5.1
- ---------------------------------- --------- ------ ----------- ------ --------- ------ ---------- ----- ----------
</TABLE>
II. SMALL COMPANY STOCK PORTFOLIO
Growth Balanced Fund, Diversified Equity Fund, Growth Equity Fund,
Diversified Small Cap Fund and Small Company Stock Fund invest in Small Company
Stock Portfolio. The portfolio manager for Small Company Stock Portfolio (as
described on page 46) has been changed. All references in the Prospectus to
Crestone Capital Management, Inc. (Subadviser of Small Company Stock Portfolio)
and to Kirk McCown of Crestone, the portfolio manager of the Portfolio, are
deleted. The following replaces, in its entirety, the subsection beginning
"Portfolio: Small Company Stock Portfolio" under the sections entitled "Growth
Balanced Fund," "Diversified Equity Fund," Growth Equity Fund," "Diversified
Small Cap Fund" and "Small Company Stock Fund" in the tables on Pages 42 to 45:
PORTFOLIO: SMALL COMPANY STOCK PORTFOLIO
PORTFOLIO MANAGERS: Kenneth Lee (1999) and Thomas Zeifang (1999)
ADVISORY FEE: 0.90%
<PAGE>
The following is inserted in the section entitled "Portfolio Managers
- -- Norwest Portfolio Managers" on Pages 46-47:
KENNETH LEE, associated with Norwest or its affiliates since 1999. Mr.
Lee also provides fundamental security analysis and portfolio
management at WCM, with whom he has been associated since 1995.
THOMAS ZEIFANG, associated with Norwest or its affiliates since 1999.
Mr. Zeifang also is a portfolio manager at WCM, with whom he has been
associated since 1995. Prior to 1995, he served as an analyst at Fleet
Investment Advisors.
III. VALUGROWTH STOCK FUND
The portfolio manager for ValuGrowth Stock Fund (as described on page
46) was changed effective December 1, 1998. All references in the Prospectus to
David S. Lunt, the portfolio manager of the Fund, are deleted. The following
replaces, in its entirety, the section entitled "ValuGrowth Stock Fund" on Page
43:
VALUGROWTH STOCK FUND
PORTFOLIO MANAGER: Charles J. Meyer, CFA (1998)
ADVISORY FEE: 0.80% - first $300 million; 0.76% - next $400
million; 0.72% - remaining
The following is inserted in the section entitled "Portfolio Managers
- -- Norwest Portfolio Managers" on Page 46:
CHARLES J. MEYER, CFA, associated with Norwest or its affiliates since
1998. Mr. Meyer is a Director - Institutional Portfolio Management.
From 1992 to 1998, Mr. Meyer was a portfolio manager for Montana Board
of Investments.
IV. MISCELLANEOUS
The following replaces, in its entirety, the last subsection under the
section entitled "Diversified Small Cap Fund" on Page 45:
PORTFOLIO: SMALL CAP VALUE PORTFOLIO
SUBADVISER: SMITH
PORTFOLIO MANAGER: Stephen S. Smith, CFA (1997)
ADVISORY FEE: 0.95%
The following replaces, in its entirety, the first sentence under the
section entitled "Conversion Feature" on Page 50:
B Shares will automatically convert to A Shares 7 years from the end of
the calendar month in which the Fund accepted your purchase.
