<PAGE> 1
As filed with the Securities and Exchange Commission
on December 18, 1995
Registration No. 33-16296; 811-8275
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Post-Effective Amendment No. 31 [x]
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 33 [x]
(Check appropriate box or boxes)
--------------------
OVERLAND EXPRESS FUNDS, INC.
(Exact Name of Registrant as specified in Charter)
111 Center Street
Little Rock, Arkansas 72201
(Address of Principal Executive Offices, including Zip Code)
--------------------
Registrant's Telephone Number, including Area Code: (800) 458-6589
Richard H. Blank, Jr.
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
(Name and Address of Agent for Service)
With a copy to:
Robert M. Kurucza, Esq.
Marco E. Adelfio, Esq.
Morrison & Foerster
2000 Pennsylvania Ave., N.W.
Washington, D.C. 20006
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant [ ] on _________ pursuant
to Rule 485(b), or to Rule 485(b), or
[ ] 60 Days after filing pursuant [x] on February 19, 1996 pursuant
to Rule 485(a), or to Rule 485(a)
[ ] 75 days after filing pursuant [ ] on (date) pursuant
to paragraph (a)(2) paragraph (a)(2) of Rule 485
<PAGE> 2
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has registered an indefinite number of shares of its Common
Stock, $.001 par value, under the Securities Act of 1933, pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Rule 24f-2
Notice for the fiscal year ending December 31, 1995, will be filed with the
Securities and Exchange Commission on or about February 28, 1996.
This Post-Effective Amendment to the Registrant's Registration Statement also
has been executed by Master Investment Trust (another registered investment
company with separate series in which certain of the Registrant's series invest
substantially all of their assets) and by such company's trustees and principal
officers.
<PAGE> 3
EXPLANATORY NOTE
This Post-Effective Amendment No. 31 to the Registration Statement
(the "Amendment") of Overland Express Funds, Inc. (the "Company") is being
filed to describe the proposed conversion (which is subject to shareholder
approval) to master/feeder structure of one of the Company's existing funds,
the Strategic Growth Fund (the "Fund"). The Fund will invest substantially all
of its assets in a new master portfolio, the Capital Appreciation Master
Portfolio, to be registered in Master Investment Trust, a management
investment company organized as a Delaware business trust (SEC File No.
811-6415). This Amendment does not affect the Registration Statement for the
Company's Asset Allocation Fund, California Tax-Free Bond Fund, California
Tax-Free Money Market Fund, Municipal Income Fund, Money Market Fund, National
Tax-Free Institutional Money Market Fund, Overland Sweep Fund, U.S. Government
Income Fund, U.S. Treasury Money Market Fund, Short-Term Municipal Income Fund,
Short-Term Government-Corporate Income Fund and Variable Rate Government Fund.
<PAGE> 4
Cross Reference Sheet
STRATEGIC GROWTH FUND
Form N-1A Item Number
- ---------------------
<TABLE>
<CAPTION>
Part A Prospectus Captions
- ------ -------------------
<S> <C>
1 Cover Page
2 Prospectus Summary; Summary of Expenses
3 Financial Highlights
4 Management of the Fund and the Master Portfolio;
5 Investment Objectives and Policies; Additional Permitted Investment Activities; Management of
the Fund and the Master Portfolio; Distribution Plan; Servicing Plan
6 Organization and Capital Stock;
7 Purchase of Shares; Exchange Privileges; Dividends and Distributions; Taxes
8 Redemption of Shares
9 Not Applicable
Part B Statement of Additional Information Captions
- ------ --------------------------------------------
10 Cover Page
11 Table of Contents
12 Introduction
13 Investment Restrictions; Portfolio Transactions
14 Management
15 Management
16 Management; Distribution Plans; Servicing Plan; Custodian and Transfer and
Dividend Disbursing Agent; Independent Auditors
17 Portfolio Transactions
18 Capital Stock
19 Determination of Net Asset Value
20 Federal Income Taxes
21 Distribution Plans
22 Calculation of Yield and Total Return
23 Financial Statements
Part C Other Information
- ------ -----------------
24-32 Information required to be included in Part C is set forth under the appropriate Item, so
numbered, in Part C of this Document.
</TABLE>
<PAGE> 5
[LOGO]
Telephone: (800) 552-9612
Overland Express Funds, Inc. (the "Company") is a professionally managed,
open-end, series investment company. This Prospectus contains information about
one of the funds in the Overland Express Family of Funds -- the STRATEGIC GROWTH
FUND (the "Fund").
THE FUND INVESTS ALL OF ITS ASSETS IN A SEPARATE PORTFOLIO (AT TIMES, THE
"MASTER PORTFOLIO") OF MASTER INVESTMENT TRUST (THE "TRUST"), AN OPEN-END
MANAGEMENT INVESTMENT COMPANY, RATHER THAN IN A PORTFOLIO OF SECURITIES. THE
MASTER PORTFOLIO HAS THE SAME INVESTMENT OBJECTIVE AS THE FUND. THEREFORE, THE
FUND'S INVESTMENT EXPERIENCE CORRESPONDS DIRECTLY WITH THE MASTER PORTFOLIO'S
INVESTMENT EXPERIENCE. SHARES OF THE MASTER PORTFOLIO MAY BE PURCHASED ONLY BY
OTHER INVESTMENT COMPANIES OR SIMILAR ACCREDITED INVESTORS.
The investment objective of the Strategic Growth Fund is to provide
investors with an above-average level of capital appreciation. It seeks to
achieve this objective by investing all of its assets in the Capital
Appreciation Master Portfolio of the Trust, which has the same investment
objective as the Fund. The Capital Appreciation Master Portfolio seeks to
achieve its investment objective through the active management of a broadly
diversified portfolio of equity securities of companies expected to experience
strong growth in revenues, earnings and assets. This Prospectus describes two
classes of shares of the Fund -- Class A Shares and Class D Shares.
This Prospectus sets forth concisely the information you should know before
investing in the Fund and should be read and retained for future reference. A
Statement of Additional Information dated February 19, 1996, containing
additional and more detailed information about the Fund (the "SAI"), has been
filed with the Securities and Exchange Commission (the "SEC") and is hereby
incorporated by reference into this Prospectus. The SAI is available without
charge and can be obtained by writing the Company at P.O. Box 63084, San
Francisco, CA 94163 or by calling the Company at the telephone number printed
above.
------------------------
FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED, ENDORSED OR
GUARANTEED BY, WELLS FARGO BANK, N.A. ("WELLS FARGO BANK") OR ANY OF ITS
AFFILIATES. SUCH SHARES ARE NOT INSURED BY THE U.S. GOVERNMENT, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN A FUND
INVOLVES CERTAIN INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL.
WELLS FARGO BANK IS THE INVESTMENT ADVISER AND PROVIDES CERTAIN OTHER SERVICES
TO THE FUND AND THE MASTER PORTFOLIO, FOR WHICH IT IS COMPENSATED.
STEPHENS INC. ("STEPHENS"), WHICH IS NOT AFFILIATED WITH
WELLS FARGO BANK, IS THE SPONSOR AND
DISTRIBUTOR FOR THE FUND.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER
REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING
AUTHORITIES PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS DATED FEBRUARY 19, 1996
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary......................................................................... ii
Summary of Expenses........................................................................ v
Financial Highlights....................................................................... vii
Investment Objective and Policies.......................................................... 1
Additional Permitted Investment Activities................................................. 3
Management of the Fund and the Master Portfolio............................................ 6
Determination of Net Asset Value........................................................... 12
Purchase of Shares......................................................................... 13
Exchange Privileges........................................................................ 19
Redemption of Shares....................................................................... 21
Distribution Plans......................................................................... 24
Servicing Plan............................................................................. 24
Dividends and Distributions................................................................ 24
Taxes...................................................................................... 25
Custodian and Transfer and Dividend Disbursing Agent....................................... 26
Organization and Capital Stock............................................................. 26
</TABLE>
i
<PAGE> 7
PROSPECTUS SUMMARY
The Company, as an open-end investment company, provides a convenient way
for you to invest in portfolios of securities selected and supervised by
professional management. The following provides information about the Fund and
the Master Portfolio.
Q. WHAT ARE THE INVESTMENT OBJECTIVES AND PERMISSIBLE INVESTMENTS OF THE
FUND AND THE MASTER PORTFOLIO?
A. The investment objective of the Strategic Growth Fund is to provide
investors with an above-average level of capital appreciation. The Fund
seeks to achieve this investment objective by investing all of its assets
in the Capital Appreciation Master Portfolio of the Trust, which is a
professionally managed, open-end series investment company. The Capital
Appreciation Master Portfolio has the same investment objective as the
Fund. The Capital Appreciation Master Portfolio seeks to achieve its
investment objective through the active management of a broadly
diversified portfolio of equity securities of companies expected to
experience strong growth in revenues, earnings and assets. The Fund and
Master Portfolio are designed to provide above-average capital growth for
investors willing to assume above-average risk. As with all mutual funds,
there can be no assurance that the Fund or Master Portfolio will achieve
its investment objective.
The Master Portfolio invests primarily in common stocks that are expected
by Wells Fargo Bank to have above-average prospects for appreciation. In
pursuing its investment objective, the Master Portfolio may invest in the
common stocks of companies with small, or medium-sized capitalizations and
in securities acquired through initial public offerings. The Master
Portfolio also may temporarily invest in preferred stock or
investment-grade debt securities. In addition, the Master Portfolio may
purchase or sell options on securities and on indices of securities, may
purchase warrants, and may purchase privately issued securities that may
be resold only in accordance with Rule 144A under the Securities Act of
1933. See "Investment Objective and Policies" and "Additional Permitted
Investment Activities."
Q. WHO MANAGES MY INVESTMENTS?
A. Wells Fargo Bank, as the investment adviser of the Master Portfolio,
manages the investments of the Master Portfolio. The Company has not
retained the services of a separate investment adviser for the Fund
because the Fund invests all of its assets in the Master Portfolio. Wells
Fargo also provides the Fund and the Master Portfolio with transfer
agency, dividend disbursing agency and custodial services. Wells Fargo
Bank is entitled to receive a monthly advisory fee at the annual rate of
0.50% of the average daily net assets of the Master Portfolio. See
"Management of the Fund and the Master Portfolio -- Master/Feeder
Structure."
Q. WHO IS THE SPONSOR, ADMINISTRATOR AND DISTRIBUTOR?
A. Stephens serves as the sponsor, administrator and distributor for the
Company and the Trust. See "Management of the Fund and the Master
Portfolio."
Q. HOW MAY I PURCHASE SHARES?
A. Shares of the Fund may be purchased on any day the New York Stock Exchange
(the "Exchange") is open for trading. There is a maximum sales load of
4.50% (4.71% of the net
ii
<PAGE> 8
amount invested) for purchasing Class A Shares of the Fund. Class D Shares
are subject to a maximum contingent deferred sales charge of 1.00% of the
lesser of net asset value at purchase or net asset value at redemption. In
most cases, the minimum initial purchase amount for the Fund is $1,000.
The minimum initial purchase amount is $100 for shares purchased through
the Systematic Purchase Plan and $250 for shares purchased through
qualified retirement plans. The minimum subsequent purchase amount is $100
or more. You may purchase shares of the Fund through Stephens, Wells Fargo
Bank, as transfer agent (the "Transfer Agent"), or any authorized
broker/dealer or financial institution. Purchases of shares of the Fund
may be made by wire directly to the Transfer Agent. The Strategic Growth
Fund may pay the Distributor a monthly fee at an annual rate of up to
0.25% of the Fund's average daily net assets attributable to Class A
Shares and a monthly fee at an annual rate of up to 0.75% of the Fund's
average daily net assets attributable to Class D Shares to compensate the
distributor for distribution-related services provided by it or to
reimburse it for other distribution-related expenses. See "Purchase of
Shares" and "Distribution Plans." The Fund also may pay servicing agents a
fee at an annual rate of up to 0.25% of the Fund's average daily net
assets attributable to Class D Shares to compensate them for certain
services. See "Servicing Plan."
Q. HOW WILL I RECEIVE DIVIDENDS?
A. Dividends on shares of the Fund are declared and paid annually and are
automatically reinvested in additional shares of the same class of the
Fund. You may elect to receive dividends by check. Any capital gains will
be distributed annually and may be reinvested in Fund shares of the same
class or paid by check at your election. All reinvestments of dividends
and/or capital gain distributions in shares of the Fund are effected at
the then current net asset value free of any sales load. In addition, you
may elect to reinvest Fund dividends and/or capital gain distributions in
shares of the same class of another fund in the Overland Express Family of
Funds with which you have an established account that has met the
applicable minimum initial investment requirement. The Fund's net
investment income available for distribution to holders of the Fund's
Class D Shares is reduced by the amount of servicing fees payable to
servicing agents under the Servicing Plan (as defined below). See
"Dividends and Distributions."
Q. HOW MAY I REDEEM SHARES?
A. On any day the Exchange is open, shares may be redeemed upon request to
Stephens or the Transfer Agent directly or through any authorized
broker/dealer or financial institution. Shares may be redeemed by a
request in good form in writing or through telephone direction. Proceeds
are payable by check. Accounts of less than the applicable minimum initial
purchase amount may be redeemed at the option of the Company. Except for
any contingent deferred sales charge which may be applicable upon
redemption of Class D Shares, the Company does not charge for redeeming
its shares. However, the Company reserves the right to impose charges for
wiring redemption proceeds. See "Redemption of Shares."
Q. WHAT ARE SOME OF THE POTENTIAL RISKS ASSOCIATED WITH AN INVESTMENT IN THE
FUND?
A. An investment in the Fund is not insured against loss of principal. The
Master Portfolio's investments are subject to market risk. Market risk is
the possibility that stock prices will
iii
<PAGE> 9
decline over short or even extended periods. The U.S. stock market
experiences periods when stock prices rise and periods when stock prices
decline. In addition, investments in the Fund and Master Portfolio are not
bank deposits or obligations of Wells Fargo Bank and are not insured by
the Federal Deposit Insurance Corporation ("FDIC"). Therefore, you should
be prepared to accept some risk with the money invested in the Fund. Given
the relatively novel nature of the master/feeder structure, accounting and
operational difficulties, although unlikely, could arise. The Fund was
reorganized, and the Master Portfolio was formed, in 1996 and, therefore,
have a limited operational history as a master/feeder structure. As with
all mutual funds, there can be no assurance that the Fund or the Master
Portfolio will achieve its investment objective.
Because the Master Portfolio engages in active portfolio management,
the Master Portfolio may experience relatively high turnover and
transaction (i.e., brokerage commission) costs. Portfolio turnover also
can generate short-term capital gains tax consequences. You should consult
your individual tax advisor with respect to your particular tax situation.
The Master Portfolio may invest a significant portion of its assets in
the securities of smaller and newer issuers. Investments in such companies
may present opportunities for capital appreciation because of high
potential earnings growth. However, such investments may present greater
risks than investments in larger-size companies with more established
operating histories, diverse product lines and financial capacity.
Securities of small and new companies generally trade less frequently or
in limited volume, or only in the over-the-counter market or on a regional
securities exchange. As a result, the prices of such securities may be
more volatile than those of larger, more established companies and, as a
group, these securities may suffer more severe price declines during
periods of generally declining equity prices. See "Investment Objective
and Policies" and "Additional Permitted Investment Activities."
Q. WHAT ARE DERIVATIVES AND DO THE FUND AND MASTER PORTFOLIO USE THEM?
A. Derivatives are financial instruments whose value is derived, at least in
part, from the price of another security or a specified asset, index or
rate. The Master Portfolio uses derivatives only to a limited extent in
ways that are incidental to its overall strategy of investing directly in
common stocks. For example, the Master Portfolio may, from time to time,
hold options, warrants or debt instruments that are convertible into (and
whose value is, therefore, "derived from") common stocks.
Q. WHAT STEPS ARE TAKEN TO CONTROL DERIVATIVES-RELATED RISKS?
A. Wells Fargo Bank, as investment adviser to the Master Portfolio, uses a
variety of internal risk management procedures to ensure that derivatives
use is consistent with the Fund's and the Master Portfolio's investment
objective, does not expose the Fund or the Master Portfolio to undue risks
and is closely monitored. These procedures include providing periodic
reports to the Boards of Directors and Trustees concerning the use of
derivatives. Derivatives use also is subject to broadly applicable
investment policies. For example, neither the Fund nor the Master
Portfolio may invest more than a specified percentage of its assets in
"illiquid securities," including those derivatives that do not have active
secondary markets. Nor may certain derivatives be used without
establishing adequate "cover" in compliance with SEC rules limiting the
use of leverage.
iv
<PAGE> 10
SUMMARY OF EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
STRATEGIC GROWTH
-------------------
CLASS A CLASS D
SHARES SHARES
------- -------
<S> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)......................................... 4.50% 0.00%
Maximum Deferred Sales Load* (as a percentage of the lesser of net asset value
at purchase or net asset value at redemption)
Redemption during year 1.................................................... 0.00% 1.00%
Redemption after year 1..................................................... 0.00% 0.00%
</TABLE>
ANNUAL FUND OPERATING EXPENSES**
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
CLASS A CLASS D
SHARES SHARES
------- -------
<S> <C> <C>
Management Fees(1)............................................................ 0.40% 0.40%
12b-1 Fees.................................................................... 0.25% 0.75%
Total Other Expenses(1):
Servicing Fees.............................................................. 0.00% 0.25%
Other Expenses(1)........................................................... 0.55% 0.55%
------- -------
Total Fund Operating Expenses(1)***........................................... 1.20% 1.95%
</TABLE>
- ------------
(1) After any waivers or reimbursements.
EXAMPLES
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment in
Class A Shares of the Fund, assuming (1) a 5% annual return
and (2) redemption at the end of each time period
indicated.................................................... $ 57 $ 81 $ 108 $ 184
You would pay the following expenses on a $1,000 investment in
Class D Shares of the Fund, assuming (1) a 5% annual return
and (2) redemption at the end of each time period
indicated.................................................... $ 30 $ 61 $ 105 $ 227
You would pay the following expenses on the same investment in
Class D Shares of the Fund, assuming no redemption........... $ 20 $ 61 $ 105 $ 227
</TABLE>
- ------------
* See "Contingent Deferred Sales Charge."
** Other mutual funds may invest in the Master Portfolio. Such other funds'
expenses and, accordingly, investment returns may differ from those of the
corresponding Fund.
*** As further described in the Prospectus under the caption "Management of the
Fund and the Master Portfolio", Stephens and Wells Fargo Bank each has
agreed to waive or reimburse all or a portion of its respective fees in
circumstances where Fund expenses that are subject to limitations imposed
under state securities laws and regulations exceed such limitations. In
addition, Stephens and Wells Fargo Bank each may elect, in its sole
discretion, to otherwise waive its respective fees or reimburse expenses.
Any such waivers or reimbursements with respect to the Fund would reduce
the total expenses of the Fund. The percentages shown above with respect to
Class A Shares and Class D Shares under "Management Fees", "Total Other
Expenses", and "Total Fund Operating Expenses" are based on amounts
incurred during the
v
<PAGE> 11
most recent fiscal year by the Fund as a "stand-alone" fund, prior to its
conversion to the master/feeder structure, reflecting voluntary fee waivers
and expense reimbursements. Absent waivers and reimbursements, "Management
Fees," "Total Other Expenses" and "Total Fund Operating Expenses," with
respect to the Class A Shares would have been 0.50%, 0.80% and 1.55%,
respectively. Absent waivers and reimbursements, these percentages, with
respect to Class D Shares, would have been 0.50%, 0.98% and 2.23%,
respectively. Long-term shareholders of the Fund could pay more in
distribution related charges than the economic equivalent of the maximum
front-end sales charges applicable to mutual funds sold by members of the
National Association of Securities Dealers, Inc. ("NASD"). There can be no
assurance that voluntary fee waivers and reimbursements will continue.
------------------------
The purpose of the foregoing tables is to assist you in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. The expenses and fees set forth include the Fund's proportionate
share of the expenses of the Master Portfolio. The figures are based on the 1994
actual expenses of the Class A and Class D shares of the Strategic Growth Fund,
the predecessor operating investment company series to the Master Portfolio
(referred to at times as the "Predecessor Fund"). There are no other sales
loads, redemption fees or exchange fees charged by the Fund. However, the
Company reserves the right to impose charges for wiring redemption proceeds. The
Examples should not be considered a representation of past or future expenses;
actual expenses may be greater or lesser than those shown. With regard to the
combined fees and expenses of the Fund and the Master Portfolio following
conversion to the master/feeder structure, the Board of Directors of the Company
has considered whether various costs and benefits of investing all of a Fund's
assets in the Master Portfolio rather than directly in portfolio securities
would be more or less than if the Fund invested in portfolio securities
directly. The Board of Directors has determined that the aggregate fees assessed
by the Fund and the Master Portfolio should be less than or approximately equal
to those expenses that would be incurred had the Fund invested directly in the
portfolio securities held by the Master Portfolio. See Prospectus sections under
"Management of the Fund and the Master Portfolio", "Distribution Plans" and
"Purchase of Shares" for more complete descriptions of the various costs and
expenses applicable to the Fund. In addition, if the Fund were to no longer
invest in the Master Portfolio, these expenses may change.
vi
<PAGE> 12
FINANCIAL HIGHLIGHTS
The following information has been derived from the Financial Highlights in
the Fund's 1994 and 1995 financial statements. The audited financial statements
for the year ended December 31, 1994 are attached to the SAI and have been
audited by KPMG Peat Marwick LLP, independent auditors, whose report dated
February 17, 1995 also is attached to the SAI. The unaudited financial
statements for the six months ended June 30, 1995 also are attached to the SAI.
Because the master/feeder structure was approved by Fund's shareholders on
[JANUARY 30, 1996], the financial highlights for the periods presented refer
only to the prior operating history of the Fund on a stand-alone basis. This
information should be read in conjunction with the Fund's annual financial
statements, semi-annual financial statements and the respective notes thereto.
The SAI has been incorporated by reference into this Prospectus.
STRATEGIC GROWTH FUND
FOR A CLASS A SHARE OUTSTANDING AS SHOWN
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED PERIOD ENDED
1995 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1994 1993(1)
----------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 13.29 $ 13.20 $ 10.00
Income from Investment Operations:
Net Investment Loss....................................... (0.03) (0.11) (0.03)
Net Realized and Unrealized Gain on Investments........... 3.80 0.67 3.68
----------- ------------ ------------
Total from Investment Operations............................ 3.77 0.56 3.65
Less Distributions:
Dividends from Net Investment Income...................... 0.00 0.00 (0.03)
Distributions from Net Realized Capital Gain.............. 0.00 (0.33) (0.41)
----------- ------------ ------------
Tax Return of Capital..................................... 0.00 (0.14) (0.01)
Total Distributions......................................... (0.47) (0.45)
Net Asset Value, End of Period.............................. $ 17.06 $ 13.29 $ 13.20
=========== ============ ============
Total Return (not annualized)(2)............................ 28.37% 4.23% 36.56%
Ratios/Supplemental Data:
Net Assets, End of Period (000)........................... $ 39,053 $ 26,744 $ 25,413
Number of Shares Outstanding, End of Period (000)......... 2,289 2,013 1,926
Ratios to Average Net Assets (annualized):
Ratio of Expenses to Average Net Assets(3)................ 1.25% 1.20% 0.66%
Ratio of Net Investment Loss to Average Net Assets(4)..... (0.60)% (0.81)% (0.01)%
Portfolio Turnover.......................................... 97% 149% 182%
- ------------
(1) The Strategic Growth Fund commenced operations on
January 20, 1993.
(2) Total returns do not include any sales charges or
contingent deferred sales charges.
(3) Ratio of Expenses to Average Net Assets Prior to Waived
Fees and Reimbursed Expenses (not including expenses
incurred by the Master Portfolio)....................... 1.40% 1.55% 1.64%
(4) Ratio of Net Investment Income (Loss) to Average Net
Assets Prior to Waived Fees and Reimbursed Expenses (not
including expenses incurred by the Master Portfolio).... (0.75)% (1.16)% (0.99)%
</TABLE>
vii
<PAGE> 13
STRATEGIC GROWTH FUND
FOR A CLASS D SHARE OUTSTANDING AS SHOWN
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED PERIOD ENDED
1995 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1994 1993(1)
----------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period......................... $ 16.54 $ 16.55 $ 15.00
Income from Investment Operations:
Net Investment Loss........................................ (0.13) (0.24) (0.43)
Net Realized and Unrealized Capital Gain on Investments.... 4.74 0.81 2.51
----------- ------------ ------------
Total from Investment Operations............................. 4.61 0.57 2.08
Less Distributions:
Dividends from Net Investment Income....................... 0.00 0.00 0.00
Distributions from Net Realized Capital Gain............... 0.00 (0.40) (0.53)
----------- ------------ ------------
Tax Return of Capital...................................... 0.00 (0.18) 0.00
Total Distributions.......................................... (0.58) (0.53)
Net Asset Value, End of Period............................... $ 21.15 $ 16.54 $ 16.55
=========== ============ ============
Total Return (not annualized)(2)............................. 27.87% 3.46% 13.84%
Ratios/Supplemental Data:
Net Assets, End of Period (000)............................ $ 18,840 $ 15,335 $ 11,932
Number of Shares Outstanding, End of Period (000).......... 891 927 721
Ratios to Average Net Assets (annualized):
Ratio of Expenses to Average Net Assets(3)................. 2.00% 1.95% 0.61%
Ratio of Net Investment Loss to Average Net Assets(4)...... (1.34)% (1.56)% (1.00)%
Portfolio Turnover........................................... 97% 149% 182%
- ------------
(1) This class commenced operations on July 1, 1993.
(2) Total returns do not include any sales charges or contingent
deferred sales charges.
(3) Ratio of Expenses to Average Net Assets Prior to Waived
Fees and Reimbursed Expenses (not including expenses
incurred by the Master Portfolio)........................ 2.09% 2.23% 2.14%
(4) Ratio of Net Investment Income (Loss) to Average Net
Assets Prior to Waived Fees and Reimbursed Expenses (not
including expenses incurred by the Master Portfolio)..... (1.44)% (1.84)% (2.53)%
</TABLE>
viii
<PAGE> 14
INVESTMENT OBJECTIVE AND POLICIES
Set forth below is a description of the investment objective and related
policies of the Fund and the Master Portfolio. As with all mutual funds, there
can be no assurance that the Fund or Master Portfolio will achieve its
investment objective.
Investment Objective -- The investment objective of the Capital
Appreciation Master Portfolio is to provide investors with an above-average
level of capital appreciation. It seeks to achieve this objective through the
active management of a broadly-diversified portfolio of equity securities of
companies expected to experience strong growth in revenues, earnings and assets.
The Master Portfolio is designed to provide above-average capital growth for
investors willing to assume above-average risk.
The Strategic Growth Fund seeks to achieve its investment objective by
investing all of its assets in the Capital Appreciation Master Portfolio, which
has the same investment objective as the Fund. The Fund may withdraw its
investment in the Master Portfolio only if the Board of Directors of the Company
determines that such action is in the best interests of the Fund and its
shareholders. Upon such withdrawal, the Company's Board would consider
alternative investments, including investing all of the Fund's assets in another
investment company with the same investment objective as the Fund or hiring an
investment adviser to manage the Fund's assets in accordance with the investment
policies described below with respect to the Master Portfolio. The investment
objective and policies of the Master Portfolio are described in this section.
For a description of the management and expenses of the Master Portfolio, see
the Prospectus section "Management of the Fund and the Master Portfolio."
EQUITY SECURITIES
The Master Portfolio invests primarily in common stocks that Wells Fargo
Bank, as the Master Portfolio's investment adviser, believes have
better-than-average prospects for appreciation. These stocks may have some of
the following characteristics:
- Low or no dividends
- Smaller market capitalizations
- Less market liquidity
- Relatively short operating histories
- Aggressive capitalization structures (including high debt levels)
- Involvement in rapidly growing/changing industries and/or new
technologies
Under normal market conditions, the Master Portfolio will hold at least 20
common stock issues spread across multiple industry groups, with the majority of
these holdings consisting of established growth companies, turnaround or
acquisition candidates, or attractive larger capitalization companies.
Additionally, it is expected that the Master Portfolio will from time to
time acquire securities through initial public offerings, and will acquire and
hold common stocks of smaller and newer issuers. It is expected that no more
than 40% of the Master Portfolio's assets will be invested in these highly
aggressive issues at one time. There may be some additional risks associated
with investments
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in smaller and/or newer companies because their shares tend to be less liquid
than securities of larger companies. Further, shares of small and new companies
are generally more sensitive to purchase and sale transactions and changes in
the issuer's financial condition and, therefore, the prices of such stocks may
be more volatile than those of larger company stocks.
From time to time Wells Fargo Bank may determine that conditions in the
securities markets make pursuing the Master Portfolio's basic investment
strategy inconsistent with the best interests of the Master Portfolio's
investors. At such times, Wells Fargo Bank may use temporary alternative
strategies, primarily designed to reduce fluctuations in the value of the Master
Portfolio's assets. In implementing these temporary "defensive" strategies, the
Master Portfolio may invest in preferred stock or investment-grade debt
securities that are convertible into common stock and in money market
securities. It is expected that these temporary "defensive" investments will not
exceed 30% of the Master Portfolio's total assets.
The Master Portfolio pursues an active trading investment strategy, and the
length of time the Master Portfolio has held a particular security is not
generally a consideration in investment decisions. Accordingly, the Master
Portfolio's portfolio turnover rate may be higher than that of other funds that
do not pursue an active trading investment strategy. Portfolio turnover
generally involves some expense to the Master Portfolio, including brokerage
commissions or dealer mark-ups and other transactions costs on the sale of
securities and the reinvestment in other securities. Portfolio turnover also can
generate short-term capital gains tax consequences.
Though the Master Portfolio will hold a number of larger capitalization
stocks, under normal market conditions, and subject to the additional risks
described above, more than 50% of the Master Portfolio's total assets will be
invested in companies with smaller to medium capitalizations. The Master
Portfolio will invest primarily in companies with a market capitalization of $50
million or greater, but may invest in companies with a market capitalization
under $50 million if the investment adviser to the Master Portfolio believes
such investments to be in the best interests of the Master Portfolio. It is
currently expected that the majority of the Master Portfolio's investments will
be in companies with market capitalizations, at the time of acquisition, of up
to $750 million.
Under ordinary market conditions, at least 65% of the value of the total
assets of the Master Portfolio will be invested in common stocks and in
securities which are convertible into common stocks that Wells Fargo Bank, as
investment adviser, believes have better-than-average prospects for
appreciation. The Master Portfolio also may invest in convertible debt
securities. At most, 5% of the Master Portfolio's net assets will be invested in
convertible debt securities that are not either rated in the four highest rating
categories by one or more nationally recognized statistical rating organizations
("NRSROs"), such as Moody's Investor Service, Inc. ("Moody's") or Standard &
Poor's Corporation ("S&P"), or unrated securities determined by Wells Fargo Bank
to be of comparable quality. Securities rated in the fourth lowest rating
category (i.e., rated "BBB" by S&P or "Baa" by Moody's) are regarded by S&P as
having an adequate capacity to pay interest and repay principal, but changes in
economic conditions or other circumstances are more likely to lead to a weakened
capacity to make such repayments. Moody's considers such securities as having
speculative characteristics.
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ADDITIONAL PERMITTED INVESTMENT ACTIVITIES
PRIVATELY ISSUED SECURITIES (RULE 144A)
The Master Portfolio may invest in privately issued securities which may be
resold in accordance with Rule 144A under the Securities Act of 1933 ("Rule 144A
Securities"). Rule 144A Securities are restricted securities which are not
publicly traded. Accordingly, the liquidity of the market for specific Rule 144A
Securities may vary. Wells Fargo Bank, using guidelines approved by the Board of
Directors of the Company, will evaluate the liquidity characteristics of each
Rule 144A Security proposed for purchase by the Master Portfolio on a
case-by-case basis and will consider the following factors, among others, in
their evaluation: (1) the frequency of trades and quotes for the Rule 144A
Security; (2) the number of dealers willing to purchase or sell the Rule 144A
Security and the number of other potential purchasers; (3) dealer undertakings
to make a market in the Rule 144A Security; and (4) the nature of the Rule 144A
Security and the nature of the marketplace trades (e.g., the time needed to
dispose of the Rule 144A Security, the method of soliciting offers and the
mechanics of transfer).
CORPORATE REORGANIZATIONS
The Master Portfolio may invest in securities for which a tender or
exchange offer has been made or announced, and in securities of companies for
which a merger, consolidation, liquidation or similar reorganization proposal
has been announced if, in the judgment of Wells Fargo Bank, there is a
reasonable prospect of capital appreciation significantly greater than the added
portfolio turnover expenses inherent in the short term nature of such
transactions. The principal risk associated with such investments is that such
offers or proposals may not be consummated within the time and under the terms
contemplated at the time of the investment, in which case, unless such offers or
proposals are replaced by equivalent or increased offers or proposals which are
consummated, the Master Portfolio may sustain a loss.
OPTIONS
The Master Portfolio may purchase or sell options on individual securities
and options on indices of securities as a means of achieving additional return
or of hedging the value of the Master Portfolio's portfolio. If the Master
Portfolio has sold an option, it may terminate its obligation by effecting a
closing purchase transaction. This is accomplished by purchasing an option of
the same series as the option previously sold. There can be no assurance that a
closing purchase transaction can be effected when the Master Portfolio so
desires.
The purchaser of an option risks a total loss of the premium paid for the
option if the price of the underlying security does not increase or decrease
sufficiently to justify exercise. The seller of an option, on the other hand,
will recognize the premium as income if the option expires unrecognized but
foregoes any capital appreciation in excess of the exercise price in the case of
a call option and may be required to pay a price in excess of current market
value in the case of a put option. Options purchased and sold other than on an
exchange in private transactions also impose on the Master Portfolio the credit
risk that the counterparty will fail to honor its obligations. All investments
by the
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Master Portfolio in off-exchange options will be treated as "illiquid" and will
therefore be subject to the Master Portfolio's policy of not investing more than
15% of its net assets in illiquid securities. The Master Portfolio will
establish a segregated account with its Custodian in which it will maintain
liquid assets in an amount at least equal in value to the Master Portfolio's
commitments under off-exchange options.
WARRANTS
The Master Portfolio may invest no more than 5% of its net assets at the
time of purchase in warrants (other than those that have been acquired in units
or attached to other securities) and not more than 2% of its net assets in
warrants which are not listed on the New York or American Stock Exchange.
Warrants represent rights to purchase securities at a specific price valid for a
specific period of time. The prices of warrants do not necessarily correlate
with the prices of the underlying securities. The Master Portfolio may only
purchase warrants on securities in which the Master Portfolio may invest
directly.
REPURCHASE AGREEMENTS
The Master Portfolio may enter into repurchase agreements wherein the
seller of a security to the Master Portfolio agrees to repurchase that security
from the Master Portfolio at a mutually agreed-upon time and price. The period
of maturity is usually quite short, often overnight or a few days, although it
may extend over a number of months. The Master Portfolio may enter into
repurchase agreements only with respect to obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities (including
government-sponsored enterprises) ("U.S. Government obligations") and other
securities that could otherwise be purchased by the Master Portfolio. All
repurchase agreements will be fully collateralized based on values that are
marked to market daily. If the seller defaults and the value of the underlying
securities has declined, the Master Portfolio may incur a loss. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the security,
the Master Portfolio's disposition of the security may be delayed or limited.
The Master Portfolio will only enter into repurchase agreements with registered
broker/dealers and commercial banks that meet guidelines established by the
Board of Directors and are not affiliated with the investment adviser. The
Master Portfolio may also participate in pooled repurchase agreement
transactions with other funds advised by Wells Fargo Bank.
INVESTMENT IN FOREIGN SECURITIES
The Master Portfolio may invest in securities of foreign governmental and
private issuers that are denominated in and pay interest in U.S. dollars. These
securities may take the form of American Depositary Receipts ("ADRs") and
European Depositary Receipts ("EDRs"). These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company which evidence ownership of underlying securities issued by a foreign
corporation. EDRs, which are sometimes referred to as Continental Depositary
Receipts ("CDRs"), are receipts issued in Europe typically by non-United States
banks and trust companies that evidence ownership of either foreign or domestic
securities. Generally, ADRs in registered form are designed for use in the
United States
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securities markets and EDRs and CDRs in bearer form are designed for use in
Europe. Investments in foreign securities involve certain considerations that
are not typically associated with investing in domestic securities. There may be
less publicly available information about a foreign issuer than about a domestic
issuer. Foreign issuers also are not generally subject to the same accounting,
auditing and financial reporting standards or governmental supervision as
domestic issuers. In addition, with respect to certain foreign countries,
interest may be withheld at the source under foreign income tax laws, and there
is a possibility of expropriation or confiscatory taxation, political or social
instability or diplomatic developments that could adversely affect investments
in, the liquidity of, and the ability to enforce contractual obligations with
respect to, securities of issuers located in those countries.
MONEY MARKET INSTRUMENTS
The Master Portfolio may invest in the following types of money market
instruments that have remaining maturities not exceeding one year: (i) U.S.
Government obligations; (ii) negotiable certificates of deposit, bankers'
acceptances and fixed time deposits and other obligations of domestic banks
(including foreign branches) that have more than $1 billion in total assets at
the time of investment and are members of the Federal Reserve System or are
examined by the Comptroller of the Currency or whose deposits are insured by the
FDIC; and (iii) commercial paper rated at the date of purchase "P-1" by Moody's
or "A-1" or "A-1+" by S&P. The Master Portfolio also may invest in short-term
U.S. dollar-denominated obligations of foreign banks (including U.S. branches)
that at the time of investment: (i) have more than $10 billion, or the
equivalent in other currencies, in total assets; (ii) are among the 75 largest
foreign banks in the world as determined on the basis of assets; and (iii) have
branches or agencies in the United States.
OTHER INVESTMENT COMPANIES
The Master Portfolio may invest in shares of other open-end, management
investment companies, subject to the limitations of Section 12(d)(1) of the
Investment Company Act of 1940 (the "1940 Act"), and provided that (i) any such
purchases will be limited to temporary investments in shares of unaffiliated
investment companies and (ii) the investment adviser will waive its advisory
fees for that portion of the Master Portfolio's assets so invested, except when
such purchase is part of a plan of merger, consolidation, reorganization or
acquisition. Subject to the limitations of the 1940 Act, the Master Portfolio
may purchase shares of exchange-listed closed-end funds consistent with pursuing
its investment objective. The Master Portfolio does not intend to invest more
than 5% of its net assets in such securities during the coming year.
Notwithstanding any other investment policy or limitation (whether or not
fundamental), as a matter of fundamental policy, the Fund may invest all of its
assets in the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies and
limitations as the Fund. A decision to so invest all of its assets may,
depending on the circumstances applicable at the time, require the approval of
shareholders.
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The investment objective of the Master Portfolio and the Fund, as set forth
in the first paragraphs of the section describing the investment objectives and
policies of the Master Portfolio and the Fund, is fundamental; that is, the
investment objective may not be changed without approval by the vote of the
holders of a majority of the outstanding voting securities of the Master
Portfolio or the Fund, as applicable, and, as described under "Capital Stock" in
the SAI. If the Board of Trustees determines, however, that the Master
Portfolio's investment objective can best be achieved by a substantive change in
a non-fundamental investment policy or strategy, the Trust may make such change
without shareholder approval, and the Company will disclose any such material
changes in the then current prospectus.
In addition, as matters of fundamental policy, the Master Portfolio may:
(i) not purchase securities of any issuer (except U.S. Government obligations)
if as a result, with respect to 75% of the Master Portfolio's assets, more than
5% of the value of the Master Portfolio's total assets would be invested in the
securities of such issuer or the Master Portfolio would own more than 10% of the
outstanding voting securities of such issuer; (ii) borrow from banks up to 10%
of the current value of its net assets for temporary purposes only in order to
meet redemptions, and these borrowings may be secured by the pledge of up to 10%
of the current value of its net assets (but investments may not be purchased
while any such outstanding borrowings exceed 5% of its net assets); (iii) make
loans of portfolio securities in accordance with its investment policies; and
(iv) not invest 25% or more of its assets (i.e., concentrate) in any particular
industry, except that the Master Portfolio may invest 25% or more of its assets
in U.S. Government obligations. With respect to fundamental investment policy
(iii) above, the Master Portfolio does not intend to make loans of its portfolio
securities during the coming year.
As a matter of non-fundamental policy, the Master Portfolio may invest up
to 15% of the current value of its net assets in illiquid securities. For this
purpose, illiquid securities include, among others, (a) securities that are
illiquid by virtue of the absence of a readily available market or legal or
contractual restrictions on resale, (b) fixed time deposits that are subject to
withdrawal penalties and that have maturities of more than seven days, and (c)
repurchase agreements not terminable within seven days. Disposing of illiquid or
restricted securities may involve additional costs and require additional time.
MANAGEMENT OF THE FUND AND THE MASTER PORTFOLIO
The Company has retained the services of Stephens as administrator and
distributor for the Fund but has not retained the services of an investment
adviser for the Fund since the Company seeks to achieve the investment objective
of the Fund by investing all of the Fund's assets in the Master Portfolio of the
Trust. The Company's Board of Directors supervises the actions of the Fund's
administrator and distributor, as set forth below, and decides upon matters of
general policy. As noted above, the Fund may withdraw its investment in the
Master Portfolio only if the Board of Directors of the Company determines that
it is in the best interests of the Fund and its shareholders to do so. Upon any
such withdrawal, the Board of Directors of the Company would consider what
action might be taken, including the investment of all the assets of the Fund in
another pooled investment entity having the same investment objective as the
Fund or the hiring of an investment adviser to manage the Fund's assets in
accordance with the investment policies described above with respect to the
Master Portfolio.
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The Master Portfolio has retained the services of Wells Fargo Bank as
investment adviser and Stephens as administrator and distributor. The Board of
Trustees of the Trust is responsible for the general management of the Master
Portfolio and supervising the actions of Wells Fargo Bank and Stephens in these
capacities. Additional information regarding the Officers and Directors of the
Company and the Officers and Trustees of the Trust is included in the Fund's SAI
under "Management."
MASTER/FEEDER STRUCTURE
The Fund, a series of the Company which is an open-end management
investment company, invests all of its assets in the Master Portfolio of the
Trust which has the same investment objective as the Fund. See "Investment
Objective and Policies." The Trust is organized as a trust under the laws of the
State of Delaware. See "Organization and Capital Stock." In addition to selling
its interests to the Fund, the Master Portfolio may sell its interests to other
mutual funds or accredited investors. The expenses and, correspondingly, the
returns of other investment options in the Master Portfolio may differ from
those of the Fund.
The Board of Directors believes that, if other mutual funds or accredited
investors invest their assets in the Master Portfolio, certain economies of
scale may be realized with respect to the Master Portfolio. For example, fixed
expenses that otherwise would have been borne solely by the Fund would be spread
among a larger asset base provided by more than one fund investing in the Master
Portfolio. The Fund and other entities investing in the Master Portfolio are
each liable for all obligations of the Master Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance existed and the Trust itself is
unable to meet its obligations. Accordingly, the Company's Board of Directors
believes that the Fund and its shareholders will not be adversely affected by
investing Fund assets in the Master Portfolio. However, if a mutual fund or
institutional investor with a larger pro rata ownership of the Master
Portfolio's securities than the Fund withdraws its investment from the Master
Portfolio, the economies of scale (e.g., spreading fixed expenses among a larger
asset base) that the Company's Board believes should be available through
investment in the Master Portfolio may not be fully achieved. In addition, given
the relative novelty of the master/feeder structure, accounting or operational
difficulties, although unlikely, could arise.
The investment objective and other fundamental policies of the Master
Portfolio, which are identical to those of the Fund, cannot be changed without
approval by the holders of a majority (as defined in the 1940 Act) of the Master
Portfolio's outstanding interests. Whenever the Fund, as an interestholder of
the Master Portfolio is requested to vote on any matter submitted to
interestholders of the Master Portfolio, the Fund will hold a meeting of its
shareholders to consider such matters. The Fund will cast its votes in
proportion to the votes received from its shareholders. Shares for which the
Fund receives no voting instructions will be voted in the same proportion as the
votes received from the other Fund shareholders.
Certain policies of the Master Portfolio which are non-fundamental may be
changed by vote of a majority of the Trust's Trustees without interestholder
approval. If the Master Portfolio's investment objective or fundamental or
nonfundamental policies are changed, the Fund may elect to change its objective
or policies to correspond to those of the Master Portfolio. The Fund may also
elect to redeem
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its interests in the Master Portfolio and either seek a new investment company
with a matching objective in which to invest or retain its own investment
adviser to manage the Fund's portfolio in accordance with its objective. In the
latter case, the Find's inability to find a substitute investment company in
which to invest or equivalent management services could adversely affect
shareholders' investments in the Fund. The Fund will provide shareholders with
30 days' written notice prior to the implementation of any change in the
investment objective of the Fund or the Master Portfolio, to the extent
possible. Information regarding additional options, if any, for investment in
the Master Portfolio is available from Stephens and may be obtained by calling
(800) 643-9691.
INVESTMENT ADVISER
Pursuant to an Investment Advisory Contract, the Master Portfolio is
advised by Wells Fargo Bank, 420 Montgomery Street, San Francisco, California
94163, a wholly owned subsidiary of Wells Fargo & Company. Wells Fargo Bank, one
of the largest banks in the United States, was founded in 1852 and is the oldest
bank in the western United States. As of September 30, 1995, various divisions
of Wells Fargo Bank managed approximately $33.9 billion of assets of
individuals, trusts, estates and institutions. Wells Fargo Bank is the
investment adviser to the other separately managed series of the Company (other
than those structured as "feeder funds"), and to six other registered open-end
management investment companies, each of which consists of several separately
managed investment portfolios.
Under the Investment Advisory Contract with the Master Portfolio, Wells
Fargo Bank has agreed to furnish to the Master Portfolio investment guidance and
policy direction in connection with the daily portfolio management of the Master
Portfolio. Pursuant to the Investment Advisory Contract, Wells Fargo Bank also
furnishes to the Board of Directors periodic reports on the investment strategy
and performance of the Master Portfolio.
Purchase and sale orders of the securities held by the Master Portfolio may
be combined with those of other accounts that Wells Fargo Bank manages, and for
which it has brokerage placement authority, in the interest of seeking the most
favorable overall net results. When Wells Fargo Bank determines that a
particular security should be bought or sold for the Master Portfolio and other
accounts managed by Wells Fargo Bank, Wells Fargo Bank undertakes to allocate
those transactions among the participants equitably. From time to time, the
Master Portfolio, to the extent consistent with its investment objective,
policies and restrictions, may invest in securities of companies with which
Wells Fargo Bank has a lending relationship.
For its services under the Investment Advisory Contract, Wells Fargo Bank
is entitled to a monthly advisory fee at the annual rate of 0.50% of the average
daily net assets of the Master Portfolio. From time to time Wells Fargo Bank may
waive such fee in whole or in part. Any waiver would reduce expenses of the
Master Portfolio and, accordingly, have a favorable impact on the yield or
return of the Master Portfolio and, in turn, the Fund. For the year ended
December 31, 1994, Wells Fargo Bank was paid 0.40% of the average daily net
assets of the Fund as compensation for its services as investment adviser.
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Mr. Jon Hickman is primarily responsible for the day-to-day management of
the Capital Appreciation Master Portfolio and has performed such duties since
the inception of the Strategic Growth Fund, the Predecessor Fund to the Capital
Appreciation Master Portfolio. In addition, he also manages equity and balanced
portfolios for individuals and employee benefit plans. He has approximately ten
years of experience in the investment management field and is a member of Wells
Fargo's Equity Strategy Committee. Mr. Hickman has a B.A. and an M.B.A. in
finance from Brigham Young University and has been with Wells Fargo Bank since
the merger with Crocker National Bank in 1986.
Mr. Robert Bissell is also primarily responsible for the day-to-day
management of the Capital Appreciation Master Portfolio and has performed such
duties since the inception of the Strategic Growth Fund. Mr. Bissell joined
Wells Fargo Bank at the time of the merger with Crocker Bank and has been with
the combined organization for over 20 years. Prior to joining Wells Fargo Bank,
he was a vice president and investment counselor with M.H. Edie Investment
Counseling, where he managed institutional and high-net-worth portfolios. Mr.
Bissell holds a finance degree from the University of Virginia. He is a
chartered financial analyst and a member of the Los Angeles Society of Financial
Analysts.
Mr. Steve Enos assists Mr. Jon Hickman and Mr. Robert Bissell with the
management of the Capital Appreciation Master Portfolio. Mr. Enos is a member of
the Wells Fargo Growth Equity Team. He began his career with First Interstate
Bank, where he was assistant vice president and portfolio manager. Prior to
joining Wells Fargo Bank, he was a principal at Dolan Capital Management where
he managed both personal and pension portfolios. Mr. Enos received his
undergraduate degree in economics from the University of California at Davis.
Mr. Enos is a Chartered Financial Analyst and a member of the Association for
Investment Management and Research.
Ms. Sandra Thornton also assists Jon Hickman and Robert Bissell with the
management of the Capital Appreciation Master Portfolio. Ms. Thornton manages
equity portfolios and is a member of the Wells Fargo Growth Equity Team. Prior
to joining Wells Fargo in 1993, she worked in the research department of RCM
Capital Management. She obtained her license as a Certified Public Accountant
from the State of California while performing tax/financial planning services at
Price Waterhouse. She holds a B.A. from Albertus Magnus College and is a
Chartered Financial Analyst.
SPONSOR, ADMINISTRATOR AND DISTRIBUTOR
Stephens, 111 Center Street, Little Rock, Arkansas 72201, has entered into
agreements with the Company and the Trust under which Stephens acts as
administrator for the Fund and the Master Portfolio. For these administrative
services, Stephens is entitled to receive from the Fund a monthly fee at the
annual rate of 0.15% of its average daily net assets; decreasing to 0.10% of the
average daily net assets of the Fund in excess of $200 million. From time to
time, Stephens may waive fees from the Fund in whole or in part. Any such waiver
will reduce expenses of the Fund and, accordingly, have a favorable impact on
the yield or return of the Fund. Under the agreement with the Trust, Stephens is
not entitled to receive a fee for providing administrative services to the
Master Portfolio so long as Stephens is entitled to be compensated for providing
administrative services to another mutual fund that invests all of its assets in
the Master Portfolio.
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Under the respective Administration Agreements with the Fund and the Master
Portfolio, Stephens has agreed to provide as administrative services, among
other things, (i) general supervision of the operation of the Fund and the
Master Portfolio, including coordination of the services performed by the
various service providers, including the investment adviser (for the Master
Portfolio), transfer agent, custodian, independent auditors and legal counsel;
(ii) in connection with regulatory compliance, compilation of information for
documents such as reports to, and filings with, the SEC and state securities
commissions, and the preparation of proxy statements and shareholder reports for
the Fund and the Master Portfolio; and (iii) general supervision relative to the
compilation of data required for the preparation of periodic reports distributed
to the Company's officers and Board of Directors and the Trust's Board of
Trustees. Stephens also furnishes office space and certain facilities required
for conducting the business of the Fund and the Master Portfolio and pays the
compensation of the directors, officers and employees of the Company and the
Trust who are affiliated with Stephens.
Stephens, as the principal underwriter of the Fund within the meaning of
the 1940 Act, has also entered into a Distribution Agreement with the Company
pursuant to which Stephens has the responsibility for distributing Class A
Shares and Class D Shares of the Fund. The Distribution Agreement provides that
Stephens shall act as agent for the Fund for the sale of its Class A Shares and
Class D Shares and may enter into selling agreements with broker/dealers or
financial institutions to market and make available Class A Shares and Class D
Shares to their respective customers.
Under the Distribution Agreement, Stephens is entitled to receive from the
Fund a monthly fee at an annual rate of up to 0.25% of the average daily net
assets of the Class A Shares of the Fund and a monthly fee at an annual rate of
up to 0.75% of the average daily net assets of the Class D Shares of the Fund.
The actual fee payable to Stephens is determined, within such limits, from time
to time by mutual agreement between the Company and Stephens, and may not exceed
the maximum amount payable under the Rules of Fair Practice of the NASD.
Stephens may enter into selling agreements with one or more selling agents under
which such agents may receive from Stephens compensation for sales support
services. Such compensation may include, but is not limited to, commissions or
other payments to such agents based on the average daily net assets of Fund
shares attributable to them. Services provided by selling agents in exchange for
commissions and other payments to selling agents are the principal sales support
services provided to the Fund. Stephens may retain any portion of the total
distribution fee payable under the Distribution Agreement to compensate it for
distribution-related services provided by it or to reimburse it for other
distribution-related expenses. Since the Distribution Agreement provides for
fees that are used by Stephens to pay for distribution services, a plan of
distribution for each class of shares (individually a "Plan," collectively the
"Plans") and the Distribution Agreement are approved and reviewed in accordance
with Rule 12b-1 under the 1940 Act, which regulates the manner in which an
investment company may, directly or indirectly, bear the expense of distributing
its shares. See Prospectus section captioned "Distribution Plans" for a more
complete description of the Plans.
Stephens serves as placement agent for the Master Portfolio for which it is
not compensated. Stephens is a full service broker/dealer and investment
advisory firm. Stephens and its predecessor have been providing securities and
investment services for more than 60 years. Additionally, they have been
providing discretionary portfolio management services since 1983. Stephens
currently
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manages investment portfolios for pension and profit sharing plans, individual
investors, foundations, insurance companies and university endowments.
SERVICING AGENTS
The Fund may enter into servicing agreements with one or more servicing
agents on behalf of Class D Shares of the Fund. Under such agreements, servicing
agents provide shareholder liaison services, which may include responding to
customer inquiries and providing information on shareholder investments, and
provide such other related services as the Fund or a Class D shareholder may
reasonably request. For these services, a servicing agent receives a fee which
will not exceed, on an annualized basis for the Fund's then current fiscal year,
0.25% of the average daily net assets of the Class D Shares of the Fund
represented by Class D Shares owned by investors with whom the servicing agent
maintains a servicing relationship, or an amount which equals the maximum amount
payable to the servicing agent under applicable laws, regulations or rules,
whichever is less.
---------------------
The Master Portfolio's Investment Advisory Contract and the Administration
Agreements with the Master Portfolio and the Fund provide that, if in any fiscal
year, the total aggregate expenses of the Master Portfolio and the Fund incurred
by, or allocated to, the Master Portfolio and the Fund (excluding taxes,
interest, brokerage commissions and other portfolio transaction expenses,
expenditures that are capitalized in accordance with generally accepted
accounting principles, extraordinary expenses and amounts accrued or paid under
a Plan) exceed the most restrictive expense limitation applicable to a Fund
imposed by the securities laws or regulations of the states in which the Fund's
shares are registered for sale, Wells Fargo Bank and Stephens shall waive their
fees proportionately under the Investment Advisory Contract and the
Administration Agreements, respectively, for the fiscal year to the extent of
the excess, or reimburse the excess, but only to the extent of their respective
fees. The Investment Advisory Contract and the Administration Agreements further
provide that the total expenses shall be reviewed monthly so that, to the extent
the annualized expenses for such month exceed the most restrictive applicable
annual expense limitation, the monthly fees under the Investment Advisory
Contract and the Administration Agreements shall be reduced as necessary.
Currently, the most stringent applicable state expense ratio limitation is 2.50%
of the first $30 million of the Fund's average net assets for its current fiscal
year, 2% of the next $70 million of such assets, and 1.50% of such assets in
excess of $100 million.
Except for the expenses borne by Wells Fargo Bank and Stephens, the Company
and the Trust bear all costs of their respective operations, including the
compensation of the Company's directors and the Trust's trustees who are not
officers or employees of Wells Fargo Bank or Stephens or any of their
affiliates; advisory (in the case of the Master Portfolio), shareholder
servicing (in the case of the Fund), and administration fees; payments pursuant
to any Plans (in the case of the Fund); interest charges; taxes; fees and
expenses of independent auditors; legal counsel, transfer agent and dividend
disbursing agent; expenses of redeeming Fund shares or interests in the Master
Portfolio; expenses of preparing and printing prospectuses (except the expense
of printing and mailing prospectuses used for promotional purposes, unless
otherwise payable pursuant to a Plan), shareholders' or investors' reports,
notices, proxy statements and reports to regulatory agencies; insurance premiums
and certain expenses relating to insurance coverage; trade association
membership dues; brokerage and other expenses connected with the execution of
portfolio transactions; fees and
11
<PAGE> 25
expenses of the custodian, including those of keeping books and accounts and
calculating the net asset value of the Fund and the Master Portfolio; expenses
of shareholders' or investors' meetings; expenses relating to the issuance,
registration and qualification of shares of the Fund; pricing services;
organizational expenses; and any extraordinary expenses. Expenses attributable
to the Fund and/or the Master Portfolio are charged against the respective
assets of the Fund and/or the Master Portfolio. A pro rata portion of the
expenses of the Company or Trust are charged against the assets of the Fund or
Master Portfolio as applicable.
DETERMINATION OF NET ASSET VALUE
Net asset value per share for the Fund is determined by Wells Fargo Bank on
each day that the Exchange is open for trading as of the close of regular
trading on the Exchange (referred to hereafter as the "close of the Exchange"),
which is currently 4:00 p.m. New York time. The net asset value of a share of a
class of a Fund is the value of total net assets attributable to each class
divided by the number of outstanding shares of that class. The value of net
assets per class is determined daily by adjusting the net assets per class at
the beginning of the day by the value of each class's shareholder activity, net
investment income and net realized and unrealized gains or losses for that day.
Net investment income is calculated each day for each class by attributing to
each class a pro rata share of daily income and common expenses, and by
assigning class-specific expenses to each class as appropriate. The net asset
value of each class is expected to fluctuate daily and is based on the net asset
value of the Capital Appreciation Master Portfolio in which the Fund invests.
The value of the assets of the Master Portfolio (other than debt
obligations maturing in 60 days or less) is determined as of the close of the
Exchange, which is currently 4:00 p.m. New York time. Except for debt
obligations with remaining maturities of 60 days or less, which are valued at
amortized cost, assets are valued at current market prices or, if such prices
are not readily available, at fair value as determined in good faith by the
Board of Trustees. Prices used for such valuations may be provided by
independent pricing services.
PERFORMANCE DATA
From time to time, the Company may advertise various total return
information with respect to a class of shares of the Fund. Total return
information is based on the historical earnings and performance of such class of
shares of the Fund and should not be considered representative of future
performance.
The total return of a class of shares of the Fund is calculated by
subtracting (i) the public offering price of the class of shares (which includes
the maximum sales charge for the class of shares) of one share at the beginning
of the period, from (ii) the net asset value of all shares of a class of shares
an investor would own at the end of the period for the share held at the
beginning of the period (assuming reinvestment of all dividends and capital gain
distributions), and dividing by (iii) the public offering price per share of a
class of shares at the beginning of the period. The resulting percentage
indicates the positive or negative rate of return that an investor would have
earned from reinvested dividends and capital gain distributions and changes in
share price during the period for the class of shares. The Fund may also, at
times, calculate total return of a class of shares based on net asset value per
share of a class of shares (rather than the public offering price), in
12
<PAGE> 26
which case the figures would not reflect the effect of any sales charges that
would have been paid by an investor in the class of shares, or by assuming that
a sales charge other than the maximum sales charge (reflecting the Volume
Discounts set forth below) is assessed, provided that total return data derived
pursuant to the calculation described above are also presented.
Because of differences in the fees and/or expenses borne by Class D Shares
of the Fund, the total return on such shares can be expected, at any given time,
to differ from the total return on Class A Shares. Performance information will
be computed separately for Class A Shares and Class D Shares. Additional
information about the performance of the Fund is contained in the Annual Report
for the Fund. The Annual Report may be obtained free of charge by calling the
Company at 800-552-9612.
PURCHASE OF SHARES
Shares of the Fund may be purchased on any day the Exchange is open for
trading through Stephens, the Transfer Agent, or any authorized broker/dealers
or financial institutions with which Stephens has entered into agreements. Such
broker/dealers or financial institutions are responsible for the prompt
transmission of purchase, exchange or redemption orders, and may independently
establish and charge additional fees to their clients for such services, other
than services related to purchase orders, which would reduce the clients'
overall yield or return. The Exchange is closed on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day (each, a "Holiday"). When any Holiday falls on a Saturday, the
Exchange usually is closed the preceding Friday, and when any Holiday falls on a
Sunday, the Exchange is closed the following Monday.
In most cases, the minimum initial purchase amount for the Fund is $1,000.
The minimum initial purchase amount is $100 for purchases through the Systematic
Purchase Plan and $250 for purchases through a retirement plan qualified under
the Internal Revenue Code of 1986, as amended (the "Code"). The minimum
subsequent purchase amount is $100. The minimum initial or subsequent purchase
amount requirements may be waived or lowered for investments effected on a group
basis by certain entities and their employees, such as pursuant to a payroll
deduction or other accumulation plan. The Company reserves the right to reject
any purchase order. All funds, net of sales loads, will be invested in full and
fractional shares. Checks will be accepted for the purchase of the Fund's
shares, subject to collection at full face value in U.S. dollars. Inquiries may
be directed to the Company at the telephone number on the front cover of the
Prospectus.
Shares of the Fund are offered continuously at the applicable offering
price (including any sales load) next determined after a purchase order is
received. Payment for shares purchased through a broker/dealer will not be due
from the broker/dealer until the settlement date, three business days after the
order is placed. It is the broker/dealer's responsibility to forward payment for
shares being purchased to the Fund promptly. Payment for orders placed directly
through the Transfer Agent must accompany the order.
------------------------
When payment for shares of the Fund through the Transfer Agent is by a
check that is drawn on any member bank of the Federal Reserve System, federal
funds normally become available to the Fund on the business day after the day
the check is deposited. Checks drawn on a non-member bank
13
<PAGE> 27
or a foreign bank may take substantially longer to be converted into federal
funds and, accordingly, may delay execution of an order.
When shares of the Fund are purchased through a broker/dealer or financial
institution, Stephens reallows that portion of the sales load designated below
as the Dealer Allowance. Stephens has established a non-cash compensation
program, pursuant to which broker/dealers or financial institutions that sell
shares of the Fund may earn additional compensation in the form of trips to
sales seminars or vacation destinations, tickets to sporting events, theater or
other entertainment, opportunities to participate in golf or other outings and
gift certificates for meals or merchandise. If all sales charges are paid or
reallowed to a broker/dealer or financial institution, it may be deemed an
"underwriter" under the Securities Act of 1933. When shares are purchased
directly through the Transfer Agent and no broker/dealer or financial
institution is involved with the purchase, the entire sales load is paid to
Stephens.
Sales loads relating to orders for the purchase of Class A Shares in the
Fund are as follows:
<TABLE>
<CAPTION>
DEALER
SALES LOAD SALES LOAD ALLOWANCE
CLASS A SHARES AS % OF AS % OF NET AS % OF
-------------- OFFERING AMOUNT OFFERING
AMOUNT OF PURCHASE PRICE INVESTED PRICE
------------------ ---------- ----------- ---------
<S> <C> <C> <C>
Less than $100,000.......................................... 4.50% 4.71% 4.05%
$100,000 up to $199,999..................................... 4.00 4.17 3.60
$200,000 up to $399,999..................................... 3.50 3.63 3.15
$400,000 up to $599,999..................................... 2.50 2.56 2.25
$600,000 up to $799,999..................................... 2.00 2.04 1.80
$800,000 up to $999,999..................................... 1.00 1.01 0.90
$1,000,000 up to $2,499,999................................. 0.60 0.60 0.50
$2,500,000 up to $4,999,999................................. 0.40 0.40 0.40
$5,000,000 up to $8,999,999................................. 0.25 0.25 0.25
$9,000,000 and over......................................... 0.00 0.00 0.00
</TABLE>
Class D Shares are not subject to a front-end sales load. However, Class D
Shares which are redeemed within one year from the receipt of a purchase order
will be subject to a contingent deferred sales charge equal to 1% of the dollar
amount equal to the lesser of the net asset value at the time of purchase of the
shares being redeemed or the net asset value of such shares at the time of
redemption.
A selling agent or servicing agent and any other person entitled to receive
compensation for selling or servicing shares may receive different compensation
for selling or servicing Class A Shares as compared with Class D Shares.
REDUCED SALES CHARGE -- CLASS A SHARES
The above Volume Discounts are available to you based on the combined
dollar amount being invested in Class A Shares of the Fund or of Class A Shares
of one or more of the other portfolios of the Company which assess a sales load
(the "Load Funds"). Because Class D Shares are not subject
14
<PAGE> 28
to a front-end sales charge, the amount of Class D Shares you hold is not
considered in determining any volume discount.
The Right of Accumulation allows you to combine the amount being invested
in Class A Shares of the Fund with the total net asset value of Class A Shares
in any of the Load Funds already owned in accordance with the above sales load
schedule to reduce the sales load. For example, if you own Class A Shares of the
Load Funds with an aggregate net asset value of $90,000 and invest an additional
$20,000 in the Class A Shares of the Fund, the sales load on the entire
additional amount would be 4.00% of the offering price. To obtain such discount,
you must provide sufficient information at the time of purchase to permit
verification that the purchase qualifies for the reduced sales load, and
confirmation of the order is subject to such verification. The Right of
Accumulation may be modified or discontinued at any time with respect to all
Class A Shares purchased thereafter.
A Letter of Intent allows you to purchase Class A Shares of the Fund over a
13-month period at reduced sales loads based on the total amount intended to be
purchased plus the total net asset value of Class A Shares in any of the Load
Funds already owned. Each investment made during the period receives the reduced
sales load applicable to the total amount of the intended investment. If such
amount is not invested within the period, you must pay the difference between
the sales loads applicable to the purchases made and the charges previously
paid.
You may Reinvest proceeds from a redemption of Class A Shares of the Fund
in the Class A Shares of the Fund or in Class A Shares of another of the
Company's investment portfolios that offers Class A Shares at net asset value,
without a sales load, within 120 days after such redemption. However, if the
other investment portfolio charges a sales load that is higher than the sales
load you have paid in connection with the Class A Shares you have redeemed, you
pay the difference. In addition, the Class A Shares of the other investment
portfolio to be acquired must be registered for sale in your state of residence.
The amount that may be so reinvested may not exceed the amount of the redemption
proceeds, and a written order for the purchase of the Class A Shares must be
received by the Fund or the Transfer Agent within 120 days after the effective
date of the redemption.
If you realized a gain on your redemption, the reinvestment will not alter
the amount of any federal capital gains tax payable on the gain. If you realized
a loss on your redemption, the reinvestment may cause some or all of such loss
on the redemption to be disallowed as a tax deduction, depending on the number
of Class A Shares purchased by reinvestment and the period of time that has
elapsed after the redemption, although for tax purposes, the amount disallowed
is added to the cost of the Class A Shares acquired upon the reinvestment.
Reductions in front-end sales loads apply to purchases by a single
"person," including an individual, members of a family unit, consisting of a
husband, wife, and children under the age of 21 purchasing securities for their
own account, or a trustee or other fiduciary purchasing for a single fiduciary
account or single trust estate.
Reductions in front-end sales loads also apply to purchases by individual
members of a "qualified group." The reductions are based on the aggregate dollar
amount of Class A Shares purchased by all members of the qualified group. For
purposes of this paragraph, a qualified group consists of a "company," as
defined in the 1940 Act, which has been in existence for more than six months
and which has a primary purpose other than acquiring shares of the Fund at a
reduced sales load, and the
15
<PAGE> 29
"related parties" of such company. For purposes of this paragraph, a "related
party" of a company is: (i) any individual or other company who directly or
indirectly owns, controls or has the power to vote five percent or more of the
outstanding voting securities of such company; (ii) any other company of which
such company directly or indirectly owns, controls or has the power to vote five
percent or more of its outstanding voting securities; (iii) any other company
under common control with such company; (iv) any executive officer, director or
partner of such company or of a related party; and (v) any partnership of which
such company is a partner.
Purchases may be made at net asset value, without a front-end sales charge,
to the extent that you are investing proceeds from a redemption of shares of
another open-end investment company for which you paid a front-end sales load
and such redemption occurred within thirty (30) days prior to the date of the
purchase order. You must notify the Fund and/or the transfer agent at the time
you place such purchase order of your eligibility for the waiver of front-end
sales charges and provide satisfactory evidence thereof (e.g., a confirmation of
the redemption and the load paid). Such purchases may not be made at net asset
value to the extent the proceeds are from a redemption of shares of another
open-end investment company that is affiliated with the Company on which you
paid a contingent deferred sales charge upon redemption.
Class A Shares of the Fund may be purchased at net asset value, without a
sales load, by Directors, officers and employees (and their spouses and children
under the age of 21) of the Company, Stephens, its affiliates and other
broker/dealers that have entered into agreements with Stephens to sell such
shares. Class A Shares of the Fund also may be purchased at a purchase price
equal to the net asset value of such shares, without a sales load, by present
and retired Directors, officers and employees (and their spouses and children
under the age of 21) of Wells Fargo Bank and its affiliates if Wells Fargo Bank
and/or the respective affiliates agree. Such shares also may be purchased at
such price by employee benefit and thrift plans for such persons and by any
investment advisory, trust or other fiduciary account (other than an individual
retirement account) that is maintained, managed or advised by Wells Fargo Bank
or Stephens or their affiliates. In addition, Class A Shares may be purchased at
net asset value by pension, profit sharing or other employee benefit plans
established under Section 401 of the Code.
Class A Shares of the Fund may be purchased at net asset value (without
payment of a sales load) by the following types of investors when the trades are
placed through an omnibus account maintained with the Fund by a broker/dealer:
trust companies; retirement and deferred compensation plans and the trusts used
to fund these plans; and investment advisers and financial planners who charge a
management, consulting or other fee for their services and who place trades on
their own behalf or on behalf of their clients; and clients of such investment
advisers or financial planners who place trades on their own behalf if the
clients' accounts are linked to the master account of such investment adviser or
financial planner on the books and records of the broker/dealer.
By investing in the Fund, a shareholder appoints the Transfer Agent, as
agent, to establish an open account to which all shares purchased will be
credited, together with any dividends and capital gain distributions that are
paid in additional shares. See "Dividends and Distributions." Although most
shareholders elect not to receive stock certificates, certificates for full
shares of the Fund can be obtained on request. It is more complicated to redeem
shares held in certificated form, and the expedited redemption described below
is not available with respect to certificated shares.
16
<PAGE> 30
CONTINGENT DEFERRED SALES CHARGE -- CLASS D SHARES
Class D Shares which are redeemed within one year of the receipt of a
purchase order for such shares will be subject to a contingent deferred sales
charge equal to 1.00% of an amount equal to the lesser of the net asset value at
the time of purchase for the Class D Shares being redeemed or the net asset
value of such shares at the time of redemption. Accordingly, a contingent
deferred sales charge will not be imposed on amounts representing increases in
net asset value above the net asset value at the time of purchase. In addition a
charge will not be assessed on Class D Shares purchased through reinvestment of
dividends or capital gains distributions. In determining whether a contingent
deferred sales charge is applicable to a redemption, Class D Shares are
considered redeemed on a first-in, first-out basis so that Class D Shares held
for a longer period of time are considered redeemed prior to more recently
acquired shares.
The contingent deferred sales charge is waived on redemptions of Class D
Shares (i) following the death or disability (as defined in the Code) of a
shareholder, (ii) to the extent that the redemption represents a minimum
required distribution from an individual retirement account or other retirement
plan to a shareholder who has reached age 70 1/2, (iii) effected pursuant to the
Company's right to liquidate a shareholder's account if the aggregate net asset
value of the shareholder's account is less than the minimum account size, or
(iv) in connection with the combination of the Company with any other registered
investment company by a merger, acquisition of assets, or by any other
reorganization transaction.
Investors who are entitled to purchase Class A Shares of the Fund at net
asset value without a sales load should not purchase Class D Shares. Other
investors, including those who are entitled to purchase Class A Shares of the
Fund at a reduced sales load, should compare the fees assessed on Class A Shares
against those assessed on Class D Shares (including potential contingent
deferred sales charges and higher Rule 12b-1 Fees) in light of the amount to be
invested and the anticipated time that the shares will be owned.
Shares of the Fund may be purchased by any of the methods described below.
INITIAL PURCHASE OF FUND SHARES BY WIRE
1. Telephone toll free (800) 572-7797. Give the name of the Fund, the class
of shares to be purchased, the name(s) in which the shares are to be registered,
the address, social security or tax identification number (where applicable) of
the person or entity in whose name(s) the shares are to be registered, dividend
payment election, amount to be wired, name of the wiring bank and name and
telephone number of the person to be contacted in connection with the order. An
account number will be assigned.
17
<PAGE> 31
2. Instruct the wiring bank, which may charge a separate fee, to transmit
the specified amount in federal funds ($1,000 or more) to:
Wells Fargo Bank, N.A.
San Francisco, California
Bank Routing Number: 121000248
Wire Purchase Account Number: 4068-000462
Attention: Overland Express Strategic Growth Fund (designate Class A
or D)
Account Name(s): (name(s) in which to be registered)
Account Number: (as assigned by telephone)
3. A completed Account Application should be mailed, or sent by
telefacsimile with the original subsequently mailed, to the following address
immediately after the funds are wired and must be received and accepted by the
Transfer Agent before an account can be opened:
Wells Fargo Bank, N.A.
Overland Express Shareholder Services
P.O. Box 63084
San Francisco, California 94163
Telefacsimile: 1-415-781-4082
4. Share purchases are effected at the public offering price, or, in the
case of Class D Shares, at the net asset value, next determined after the
Account Application is received and accepted.
INITIAL PURCHASE OF FUND SHARES BY MAIL
1. Complete an Account Application. Indicate the services to be used.
2. Mail the Account Application and a check for $1,000 or more, payable to
"Overland Express Strategic Growth Fund (designate Class A or D)" to its mailing
address set forth above.
ADDITIONAL PURCHASES
Additional purchases of $100 or more may be made by instructing the Fund's
Transfer Agent to debit an approved account designated in your Account
Application, by wire by instructing the wiring bank to transmit the specified
amount as directed above for initial purchases, or by mail with a check payable
to "Overland Express Strategic Growth Fund (designate Class A or D)" to the
above address. Write the Fund account number on the check and include the
detachable stub from a Statement of Account or a letter providing the account
number.
SYSTEMATIC PURCHASE PLAN
The Company's Systematic Purchase Plan provides you with a convenient way
to establish and automatically add to your existing accounts on a monthly basis.
If you elect to participate in this plan you must specify an amount ($100 or
more) to be withdrawn automatically by the Transfer Agent on a monthly basis
from a designated bank account (provided your bank is a participant in the
automated clearing house system). The Transfer Agent withdraws and uses this
amount to purchase shares of the Fund on or about the fifth business day of each
month. There are no additional fees charged for participating in this plan.
18
<PAGE> 32
You may change the investment amount, suspend purchases or terminate the
election at any time by providing written notice to the Transfer Agent at least
five business days prior to any scheduled transaction. An election will be
terminated automatically if the designated bank account balance is insufficient
to make a scheduled withdrawal, or if either the designated bank account or your
account is closed.
PURCHASES THROUGH AUTHORIZED BROKER/DEALERS AND FINANCIAL INSTITUTIONS
Purchase orders for shares of the Fund placed through authorized
broker/dealers and financial institutions by the close of the Exchange on any
day that the Fund's shares are offered for sale, including orders for which
payment is to be made from free cash credit balances in securities accounts held
by a dealer, will be effective on the same day the order is placed if received
by the Transfer Agent before the close of business. Purchase orders that are
received by a dealer or financial institution after the close of the Exchange or
by the Transfer Agent after the close of business generally will be effective on
the next day that shares are offered. The broker/dealer or financial institution
is responsible for the prompt transmission of purchase orders to the Transfer
Agent. Payment for Fund shares is not due until settlement date. Broker/dealers
and financial institutions may benefit from temporary use of payments to the
Fund during the settlement period. A broker/dealer or financial institution that
is involved in a purchase transaction may charge separate account, service or
transaction fees. Financial institutions may be required to register as dealers
pursuant to applicable state securities laws, which may differ from federal law
and any interpretations expressed herein.
EXCHANGE PRIVILEGES
You may exchange Class A Shares of the Fund for shares of the same class of
the Company's other investment portfolios or for shares of the California
Tax-Free Money Market Fund, the Money Market Fund, the National Tax-Free
Institutional Money Market Fund or the U.S. Treasury Money Market Fund in an
identically registered account at respective net asset values, provided that, if
the other investment portfolio charges a sales load on the purchase of the class
of shares being exchanged that is higher than the sales load that you have paid
in connection with the shares you are exchanging, you pay the difference. Class
D Shares of the Fund may be exchanged for Class D Shares of one of the Company's
other investment portfolios that offer Class D Shares or for Class A Shares of
the Money Market Fund in an identically registered account at respective net
asset values. You are not charged a contingent deferred sales charge on
exchanges of Class D Shares for shares of the same class of another of the
Company's investment portfolios or for Class A Shares of the Money Market Fund.
If you exchange Class D Shares for shares of the same class of another
investment portfolio, or for Class A Shares of the Money Market Fund, the
remaining period of time (if any) that the contingent deferred sales charge is
in effect will be computed from the time of the initial purchase of the
previously held shares. Accordingly, if you exchange Class D Shares for Class A
Shares of the Money Market Fund, and redeem the shares of the Money Market Fund
within one year of the receipt of the purchase order for the exchanged Class D
Shares, you will have to pay a deferred sales charge equal to the contingent
deferred sales charge applicable to the previously exchanged Class D Shares. If
you exchange Class D Shares of an investment portfolio for Class A Shares of the
Money Market
19
<PAGE> 33
Fund, you may subsequently re-exchange the acquired Class A Shares only for
Class D Shares. If you re-exchange the Class A Shares of the Money Market Fund
for Class D Shares, the remaining period of time (if any) that the contingent
deferred sales charge is in effect will be computed from the time of your
initial purchase of Class D Shares. In addition, shares of the other investment
portfolio to be acquired must be registered for sale in your state of residence.
You should obtain, read and retain the Prospectus for the portfolio which you
desire to exchange into before submitting an exchange order.
You may exchange shares by writing the Transfer Agent as indicated below
under Redemption by Mail, or by calling the Transfer Agent or your authorized
broker/dealer or financial institution or servicing agent, unless you have
elected not to authorize telephone exchanges in the Account Application (in
which case you may subsequently authorize such telephone exchanges by completing
a Telephone Exchange Authorization Form and submitting it to the Transfer Agent
in advance of the first such exchange). Shares held in certificated form may not
be exchanged by telephone. The Transfer Agent's number for exchanges is (800)
572-7797.
Procedures applicable to redemption of the Fund's shares are also
applicable to exchanging shares, except that, with respect to an exchange
transaction between accounts registered in identical names, no signature
guarantee is required unless the amount being exchanged exceeds $25,000. The
Company reserves the right to limit the number of times shares may be exchanged
between investment portfolios, or to reject in whole or in part any exchange
request into a fund when management believes that such action would be in the
best interest of the Fund's other shareholders, such as when management believes
that such action would be appropriate to protect such fund against disruptions
in portfolio management resulting from frequent transactions by those seeking to
time market fluctuations. Any such rejection will be made by management on a
prospective basis only, upon notice to the shareholder given not later than 10
days following such shareholder's most recent exchange. The Company reserves the
right to modify or discontinue exchange privileges at any time. Under SEC rules,
60 days prior notice of any amendments or termination of exchange privileges
will be given to shareholders, except under certain extraordinary circumstances.
A capital gain or loss for tax purposes may be realized upon an exchange,
depending upon the cost or other basis of shares redeemed.
Telephone redemption or exchange privileges are made available to you
automatically upon opening an account, unless you decline such privileges. These
privileges authorize the Transfer Agent to act on telephone instructions from
any person representing himself or herself to be the investor and reasonably
believed by the Transfer Agent to be genuine. The Company will require the
Transfer Agent to employ reasonable procedures, such as requiring a form of
personal identification, to confirm that instructions are genuine. If the
Transfer Agent does not follow such procedures, the Company and the Transfer
Agent may be liable for any losses attributable to unauthorized or fraudulent
instructions. Neither the Company nor the Transfer Agent will be liable for
following telephone instructions reasonably believed to be genuine.
20
<PAGE> 34
REDEMPTION OF SHARES
Shares may be redeemed at their next determined net asset value after
receipt of a request in proper form by the Transfer Agent directly or through
any authorized broker/dealer or financial institution.
Except for any contingent deferred sales charge which may be applicable
upon redemption of Class D Shares, as described under "Purchase of Shares," the
Company does not charge for redemption transactions. However, a broker/dealer or
financial institution that is involved in a redemption transaction may charge
separate account, service or transaction fees. On a day the Fund is open for
business, redemption orders received by an authorized broker/dealer or financial
institution before the close of the Exchange, and received by the Transfer Agent
before the close of business on the same day will be executed at the net asset
value per share determined at the close of the Exchange on that day. Redemption
orders received by authorized broker/dealers or financial institutions after the
close of the Exchange, or not received by the Transfer Agent prior to the close
of business, will be executed at the net asset value determined at the close of
the Exchange on the next business day.
Redemption proceeds, net of any contingent deferred sales charge applicable
with respect to Class D Shares, ordinarily will be remitted within seven days
after the order is received in proper form, except proceeds may be remitted over
a longer period to the extent permitted by the SEC under extraordinary
circumstances. If an expedited redemption is requested, redemption proceeds will
be distributed only if the check used for investment is deemed to be cleared for
payment by the your bank, currently considered by the Company to be a period of
15 days after investment. The proceeds, of course, may be more or less than
cost. Payment of redemption proceeds may be made in securities, subject to
regulation by some state securities commissions.
REDEMPTION BY MAIL
1. Write a letter of instruction. Indicate the dollar amount of or number
of shares to be redeemed. Refer to your Fund account number and provide either a
social security or a tax identification number (as applicable).
2. Sign the letter in exactly the same way the account is registered. If
there is more than one owner of the shares, all must sign.
3. If shares to be redeemed have a value of $5,000 or more, or redemption
proceeds are to be paid to someone other than you at your address of record, the
signature(s) must be guaranteed by an "eligible guarantor institution," which
includes a commercial bank that is a member of the Federal Deposit Insurance
Corporation, a trust company, a member firm of a domestic stock exchange, a
savings association, or a credit union that is authorized by its charter to
provide a signature guarantee. Signature guarantees by notaries public are not
acceptable. Further documentation will be requested from corporations,
administrators, executors, personal representatives, trustees or custodians.
4. If shares to be redeemed are held in certificated form, enclose the
certificates with the letter. Do not sign the certificates and for protection
use registered mail.
21
<PAGE> 35
5. Mail the letter to the Transfer Agent at the mailing address set forth
under "Purchase of Shares."
Unless other instructions are given in proper form, a check for the
proceeds of redemption, net of any contingent deferred sales charge applicable
with respect to Class D Shares, will be sent to your address of record.
SYSTEMATIC WITHDRAWAL PLAN
The Company's Systematic Withdrawal Plan provides a way for you to have
shares redeemed from your accounts and the proceeds, net of any contingent
deferred sales charge applicable with respect to Class D Shares, distributed to
you on a monthly basis. You may elect to participate in this plan if you have a
shareholder account valued at $10,000 or more as of the date of your election to
participate, and are not a participant in the Company's Systematic Purchase Plan
at any time while participating in this plan. To participate in the plan,
specify an amount ($100 or more) to be distributed by check to your address of
record or deposited in a designated bank account. The Transfer Agent redeems
sufficient shares and mails or deposits the proceeds of the redemption, net of
any contingent deferred sales charge applicable with respect to Class D Shares,
as instructed on or about the fifth business day prior to the end of each month.
There are no additional fees charged for participating in this plan.
You may change the withdrawal amount, suspend withdrawals or terminate the
election at any time by providing written notice to the Transfer Agent at least
five business days prior to a scheduled transaction. An election will be
terminated automatically if your account balance is insufficient to make a
scheduled withdrawal or if your account is closed.
EXPEDITED REDEMPTIONS
If shares are not held in certificated form, you may request an expedited
redemption of shares by letter or telephone (unless you have elected not to
authorize telephone redemptions on your Account Application or other form that
is on file with the Transfer Agent) on any day the Fund is open for business.
See "Exchange Privileges" for additional information regarding telephone
redemption privileges.
You may request expedited redemption by telephone by calling the Transfer
Agent at (800) 572-7797.
You may request expedited redemption by mail by mailing your expedited
redemption request to the Transfer Agent at the mailing address set forth under
"Purchase of Shares -- Initial Purchase of Fund Shares by Wire."
Upon request, proceeds of expedited redemptions of $5,000 or more, net of
any contingent deferred sales charge applicable with respect to Class D Shares,
will be wired or credited to the bank indicated in your Account Application or
wired to an authorized broker/dealer or financial institution designated in your
Account Application. The Company reserves the right to impose charges for wiring
redemption proceeds. When proceeds of an expedited redemption are to be paid to
someone other than yourself, to an address other than that of record, or to a
bank, broker/dealer or other
22
<PAGE> 36
financial institution that has not been predesignated, the expedited redemption
request must be made by letter and the signature(s) on the letter must be
guaranteed, regardless of the amount of the redemption. If an expedited
redemption request is received by the Transfer Agent by the close of business on
any day the Fund is open for business, the redemption proceeds will be
transmitted to your bank or predesignated broker/dealer or financial institution
on the next business day (assuming the investment check has cleared as described
above), absent extraordinary circumstances. A check for proceeds of less than
$5,000 will be mailed to your address of record, except that, in the case of
investments in the Company that have been effected through broker/dealers, banks
and other institutions that have entered into special arrangements with the
Company, the full amount of the redemption proceeds may be transmitted by wire
or credited to a designated account.
REDEMPTIONS THROUGH AUTHORIZED BROKER/DEALERS AND FINANCIAL INSTITUTIONS
Redemption requests placed through authorized broker/dealers and financial
institutions by the close of the Exchange on any day that the Fund's shares are
offered for sale will be effective on the same day the request is placed if
received by the Transfer Agent before the close of business. Redemption requests
that are received by a dealer or financial institution after the close of the
Exchange or by the Transfer Agent after the close of business generally will be
effective on the next day that shares are offered. The broker/dealer or
financial institution is responsible for the prompt transmission of redemption
requests to the Transfer Agent. Unless you have made other arrangements, and
have informed the Transfer Agent of such arrangements, proceeds of redemptions
made through authorized broker/dealers and financial institutions will be
credited to your account with such broker/dealer or institution. You may request
a check from the broker/dealer or financial institution or may elect to retain
the redemption proceeds in your account. The broker/dealer or financial
institution may benefit from the use of the redemption proceeds prior to the
clearance of a check issued to you for such proceeds or prior to disbursement or
reinvestment of such proceeds on your behalf.
------------------------
The proceeds of redemption may be more or less than the amount invested
and, therefore, a redemption may result in a gain or loss for federal and state
income tax purposes.
Due to the high cost of maintaining small accounts, the Company reserves
the right to redeem accounts that fall below $1,000. Prior to such a redemption,
you will be notified in writing and permitted 30 days to make additional
investments to raise the account balance to the specified minimum.
23
<PAGE> 37
DISTRIBUTION PLANS
The Company's Board of Directors has adopted a Plan on behalf of each class
of shares of the Fund. Under the Plans and pursuant to the Distribution
Agreement, the Fund may pay certain distribution-related expenses. As discussed
above, under the Distribution Agreement, Stephens is entitled to receive from
the Fund, as compensation for distribution-related services, a monthly fee at
the annual rate of up to 0.25% of the average daily net assets of the Class A
Shares of the Fund and a monthly fee at the annual rate of up to 0.75% of the
average daily net assets of the Class D Shares of the Fund. Since the fee
payable to Stephens under the Distribution Agreement is based upon a percentage
of the average daily net assets of a class of shares of the Fund and not upon
the actual expenditures of Stephens, the expenses of Stephens (which may include
overhead expenses) may be more or less than the fees received by it under the
Distribution Agreement. All or a portion of these fees may be paid by Stephens
to broker-dealers or financial institutions who have entered into selling agent
agreements with Stephens, as compensation for sales support services.
SERVICING PLAN
The Company's Board of Directors has adopted a servicing plan ("Servicing
Plan") on behalf of the Class D Shares of the Fund. Pursuant to the Servicing
Plan the Fund may enter into servicing agreements with one or more servicing
agents (which may include Wells Fargo Bank and its affiliates) who agree to
provide administrative support services to their customers who are the record or
beneficial owners of Class D Shares. Such servicing agents will be compensated
at an annual rate of up to 0.25% of the average daily net asset value of the
Class D Shares held of record or beneficially by such customers.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to declare as a dividend substantially all of its net
investment income annually to shareholders of record at 4:00 p.m. (New York
time) on the day of declaration. Net capital gains of the Fund, if any, will be
distributed annually (or more frequently to the extent permitted to avoid
imposition of the 4% excise tax described in the SAI).
Dividends and/or capital gain distributions will have the effect of
reducing the net asset value per share by the amount distributed on the record
date. Although a distribution paid to an investor on newly issued shares shortly
after purchase would represent, in substance, a return of capital, the
distribution would consist of net investment income and, accordingly, would be
taxable as ordinary income.
Dividends and/or capital gain distributions paid by the Fund will be
invested in additional shares of the same class of the Fund at net asset value
(without any sales load) and credited to your account on the reinvestment date
or, at your election, paid by check. Dividend checks and Statements of Account
will be mailed approximately three business days after the payment date. In
addition, you may elect to reinvest Fund dividends and/or capital gain
distributions in shares of another fund in the Overland Express Family of Funds
with which you have an established account that has met the applicable minimum
initial investment requirement.
24
<PAGE> 38
The Fund's net investment income available for distribution to the holders
of Class D Shares will be reduced by the amount of shareholder servicing fees
payable to shareholder servicing agents under the Servicing Plan and by the
incremental distribution fees payable under the Distribution Plan. There may be
certain other differences in fees (e.g., transfer agent fees) between Class A
Shares and Class D Shares that would affect their relative dividends.
TAXES
By complying with applicable provisions of the Code, the Fund will not be
subject to federal income taxes with respect to net investment income and net
realized capital gains distributed to its shareholders. Dividends from the
investment income (which includes net short-term capital gains, if any) declared
and paid by the Fund will be taxable as ordinary income to the Fund's
shareholders. Whether you take dividend payments in cash or have them
automatically reinvested in additional shares, they will be taxable. Generally,
dividends are taxable to shareholders at the time they are paid. However,
dividends declared payable in October, November and December and made payable to
shareholders of record in such a month are treated as paid and are thereby
taxable as of December 31, provided that such dividends are actually paid no
later than January 31 of the following year. You may be eligible to defer the
taxation of dividend and capital gain distributions on shares of a Fund which
are held under a qualified tax-sheltered retirement plan. The Fund intends to
pay out all its net investment income and net realized capital gains (if any)
for each year. Corporate shareholders may be eligible for the dividends-received
deduction on the dividends (excluding the net capital gain dividends) paid by
the Fund to the extent the Fund's income is derived from certain dividends
received from domestic corporations. In order to qualify for the
dividends-received deduction, a corporate shareholder must hold the Fund shares
paying the dividends upon which a dividend-received deduction is based for at
least 46 days.
Portions of the Fund's investment income may be subject to foreign taxes
withheld at the source; however, the Fund does not expect to be able to pass
through any portion of the foreign taxes to its shareholders.
The Fund will inform you of the amount and nature of such dividends and
capital gains. You should keep all statements you receive to assist in your
personal record keeping. The Company is required to withhold, subject to certain
exemptions, at a rate of 31% on dividends paid and redemption proceeds
(including proceeds from exchanges) paid or credited to individual shareholders
of the Fund if a correct Taxpayer Identification Number, certified when
required, is not on file with the Company or the Transfer Agent. In connection
with this withholding requirement, you will be asked to certify on your Account
Application that the social security or taxpayer identification number you
provide is correct and that you are not subject to 31% backup withholding for
previous underreporting to the IRS.
The Fund seeks to comply with the applicable provisions of the Code by
investing all of its assets in the Master Portfolio. The Trust intends to
qualify for federal income tax purposes as a partnership. As such, the Fund will
be deemed to own directly its proportionate share of the Trust's assets.
Therefore, any interest, dividends and gains or losses of a Master Portfolio
will be deemed to have been "passed through" to the Fund and other investors in
the Master Portfolio, regardless of whether
25
<PAGE> 39
such interest, dividends, gains or losses have been distributed by the Master
Portfolio or losses have been realized by the Fund and other investors.
Accordingly, if the Master Portfolio were to accrue but not distribute any
interest, dividends or gains, the Fund would be deemed to have realized and
recognized its proportionate share of interest, dividends, gains or losses
without receipt of any corresponding distribution. However, each Master
Portfolio will seek to minimize recognition by investors of interest, dividends,
gains or losses without a corresponding distribution.
Foreign shareholders may be subject to different tax treatment, including a
withholding tax. See "Federal Income Tax - Foreign Shareholders" in the SAI.
Further federal tax considerations are discussed in the SAI. You should
consult your individual tax advisor with respect to your particular tax
situation as well as the state and local tax status of investments in shares of
the Fund.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT
Wells Fargo Bank has been retained to act as the custodian and transfer and
dividend disbursing agent for the Fund and the Master Portfolio. Wells Fargo
Bank's principal place of business is 420 Montgomery Street, San Francisco,
California 94163, and its transfer and dividend disbursing agency activities are
managed at 525 Market Street, San Francisco, California 94105.
ORGANIZATION AND CAPITAL STOCK
The Company, an open-end investment company, was incorporated in Maryland
on April 27, 1987. The authorized capital stock of the Company consists of
20,000,000,000 shares having a par value of $.001 per share. The Company
currently offers thirteen series of shares, each representing an interest in one
of the funds in the Overland Express Family of Funds -- the Asset Allocation,
California Tax-Free Bond, California Tax-Free Money Market, Money Market,
Municipal Income, National Tax-Free Institutional Money Market, Overland Sweep,
Short-Term Government-Corporate Income, Short-Term Municipal Income, Strategic
Growth, U.S. Government Income, U.S. Treasury Money Market and Variable Rate
Government Funds. The Board of Directors may, in the future, authorize the
issuance of other series of capital stock representing shares of additional
investment portfolios or funds. All shares of the Company have equal voting
rights and will be voted in the aggregate, and not by series or class, except
where voting by series is required by law or where the matter involved affects
only one series. The Company may dispense with the annual meeting of
shareholders in any fiscal year in which it is not required by the 1940 Act to
elect Directors; however, shareholders are entitled to call a meeting of
shareholders for purposes of voting on removal of a director or directors. In
addition, whenever the Fund is requested to vote on matters pertaining to the
Master Portfolio, the Company will hold a meeting of the Fund's shareholders and
will cast its vote as instructed by Fund shareholders. The Directors of the
Company will vote shares for which they receive no voting instructions in the
same proportion as the shares for which they do receive voting instructions. A
more detailed statement of the voting rights of shareholders is contained in the
SAI. All shares of the Company, when issued, will be fully paid and
nonassessable.
26
<PAGE> 40
The Trust was established on August 15, 1991, as a Delaware business trust.
The Trust's Declaration of Trust permits the Board of Trustees to issue
beneficial interests in the Trust to investors based on their proportionate
investments in the Trust. The Trust currently has five series of beneficial
interests -- the Cash Investment Trust, Short-Term Government-Corporate Income,
Short-Term Municipal Income, Tax-Free Money Market and Capital Appreciation
Master Portfolios. The Trust is no longer offering interests of the 1-3 Year
Duration Government Income Master Portfolio.
27
<PAGE> 41
<TABLE>
<C> <S>
OVERLAND EXPRESS FUNDS, INC. STRATEGIC GROWTH FUND
ACCOUNT APPLICATION
C/O OVERLAND EXPRESS SHAREHOLDER SERVICES, WELLS FARGO BANK, N.A PAGE 1 OF 5
POST OFFICE BOX 63084, SAN FRANCISCO, CALIFORNIA 94163
FOR PERSONAL SERVICE PLEASE CALL
YOUR INVESTMENT SPECIALIST OR 1-800-572-7797
</TABLE>
- --------------------------------------------------------------------------------
1. ACCOUNT REGISTRATION / / NEW ACCOUNT / / ADDITIONAL INVESTMENT OR CHANGE
TO ACCOUNT #
------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
/ / INDIVIDUAL 1. Individual - -
--------------------------------- ------- ------- -------
USE LINE 1 First Name Initial Last Name Soc. Security No.
/ / JOINT OWNERS 2. Joint Owner (Only one Soc. Security No. is
--------------------------------- required for Joint Owners)
USE LINES 1 & 2 First Name Initial Last Name
Joint Tenancy with right of survivorship is presumed unless Tenancy in Common is
indicated:
/ / Tenants in Common
/ / TRANSFER TO 3. Uniform
---------------------------------------------------------------
MINORS Transfer Custodian's Name (only one) Minor's State of Residence
USE LINE 3 to Minors - -
--------------------------------- ------- ------- -------
Minor's Name (only one) Minor's Soc. Security No.
/ / TRUST* 4. Trust Name
-----------------------------------------------------------
USE LINE 4 Trustee(s)
-----------------------------------------------------------
(If you would like Trustee's name included in registration.)
Trust ID Number
---------------------------------------------------
Please attach title page, the page(s) allowing investment in a mutual fund
("powers page") and signature page, and complete Section 7, "Authorization
for Trusts and Organizations."
/ / ORGANIZATION* 5. Organization Name -
---------------------------- ----------- -------------
USE LINE 5 *Complete "Authorization for Trusts and Tax I.D. No.
Organizations" (Section 7).
</TABLE>
- --------------------------------------------------------------------------------
ADDRESS:
Number and Street Apartment No.
------------------------------------- -------
City State Zip Code
-------------------------- ----------- -----------
Telephone Numbers: (DAY) - - (EVENING) - -
------- ------ ------ ----- ----- -----
(Area Code) (Area Code)
- --------------------------------------------------------------------------------
(CONTINUED)
<PAGE> 42
<TABLE>
<S> <C>
STRATEGIC GROWTH FUND
[LOGO] ACCOUNT APPLICATION
PAGE 2 OF 5
</TABLE>
- --------------------------------------------------------------------------------
2. INVESTMENT INSTRUCTIONS (Minimum initial investment: $1,000.)
- --------------------------------------------------------------------------------
INVESTMENT AMOUNT: $
-------------------------
TYPE OF ACCOUNT (CHOOSE ONE ONLY):
/ / Class A Shares, or
/ / Class D Shares (not available for
purchases of $9,000,000 or more)
Note: If no choice is indicated, Class A Shares will be selected.
METHOD OF PAYMENT: / / Debit bank account designated in Section 3.
/ / Check attached (payable to Overland Express
Strategic Growth Fund (designate Class A or D)).
/ / Funds have been wired to my Overland Express
Account #
--------------------------
- --------------------------------------------------------------------------------
SETTLEMENT ARRANGEMENTS: (Check only one if applicable)
/ / Automatic debit/credit of an account with a bank that has been authorized
by the Transfer Agent. (If you check this box, your initial and/or
subsequent purchases and redemptions can be settled through the bank
account you designate in Section 3.) Please attach a voided check or
deposit slip and fill in bank account information in Section 3.
/ / Bank wire instructions. (If you check this box, redemptions can be
settled by wire through the bank account you designate below. Some banks
impose fees for wires; check with your bank to determine policy. The
Company reserves the right to impose a charge for wiring redemption
proceeds.) Please attach a voided check or deposit slip and fill in bank
account information in Section 3.
- --------------------------------------------------------------------------------
SYSTEMATIC PURCHASE PLAN:
/ / I hereby authorize you to systematically withdraw from the bank account
designated in Section 3 the following amount to purchase shares of the
Fund. I understand and agree that the designated account will be debited
on or about the fifth business day of each month to effect the Fund
purchase and that such monthly investments shall continue until my
written notice to cancel has been received by you at least five (5)
business days prior to the next scheduled Fund purchase.
Monthly Investment Amount: $
------------------ (minimum $100)
- --------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWAL PLAN:
/ / I hereby authorize you to systematically redeem a sufficient number of
shares from my Overland Express account and to distribute the amount
specified below by check to the registration address set forth in Section
1 or the bank account designated in Section 3. I understand and agree
that the redemption of shares and mailing or depositing of proceeds will
occur on or about the fifth business day prior to the end of each month
and that such monthly payments shall continue until my written notice to
cancel has been received by you at least five (5) business days prior to
the next scheduled withdrawal.
Monthly Withdrawal Amount: $
------------------ (minimum $100)
/ / Mail check to registration set forth in Section 1.
/ / Distribute funds to bank account designated in Section 3.
- --------------------------------------------------------------------------------
3. BANK ACCOUNT INFORMATION
- --------------------------------------------------------------------------------
----------------------------------------------------------------------------
Bank Name
----------------------------------------------------------------------------
Address City State Zip
----------------------------------------------------------------------------
Bank Account Number Bank Routing Number
- --------------------------------------------------------------------------------
(CONTINUED)
<PAGE> 43
<TABLE>
<S> <C>
STRATEGIC GROWTH FUND
[LOGO] ACCOUNT APPLICATION
PAGE 3 OF 5
</TABLE>
- --------------------------------------------------------------------------------
4. REDUCED SALES CHARGES (If Applicable.)
- --------------------------------------------------------------------------------
LETTER OF INTENT -- CLASS A SHARES
I may qualify for a reduced sales charge based on the total amount I intend to
invest over a 13-month period (the "Period"), plus the value of any shares I
already own, by agreeing to this Letter of Intent (the "Letter"). Stephens
Inc. will hold in escrow shares registered in my name equal to 5% of the
amount invested. Dividends and distributions on the escrowed shares will be
paid to me or credited to my Account. Upon completion of the specified minimum
purchase within the Period, all shares held in escrow will be deposited in my
Account or delivered to me. I may include the combined asset value of shares
of any of the portfolios of the Overland Express Funds which assess a sales
charge ("Load Funds"), owned as of the date of the Letter toward the
completion of the total purchase. If the total amount invested within the
Period does not equal or exceed the specified minimum purchase, I will be
requested to pay the difference between the amount of the sales charge paid
and the amount of the sales charge applicable to the total purchases made. If,
within 20 days following the mailing of a written request, I have not paid
this additional sales charge to Stephens Inc., sufficient escrowed shares will
be redeemed for payment of the additional sales charge. Shares remaining in
escrow after this payment will be deposited in my Account. The intended
purchase amount may be increased at any time during the Period by filing a
revised Letter for the Period.
/ / I agree to the Letter of Intent set forth above. It is my intention to
invest over a 13-month period in the Load Funds an aggregate amount equal
to at least:
/ / $100,000 / / $200,000 / / $400,000 / / $600,000
/ / $800,000 / / $1,000,000 / / $2,500,000 / / $5,000,000 / / $9,000,000
Existing accounts must be identified in advance. If the value of currently
owned shares is to be applied towards completion of this Letter of Intent,
please list accounts below.
Account # Account #
---------------------- ----------------
RIGHT OF ACCUMULATION -- CLASS A SHARES
/ / I qualify for reduced sales charges under the Right of Accumulation. The
value of shares presently held in the Overland Express accounts listed
below, combined with this investment, totals $100,000 or more.
Account # Account #
---------------------- ----------------
- --------------------------------------------------------------------------------
5. TELEPHONE INSTRUCTIONS (Do NOT check this box if you wish to authorize
telephone instructions.)
- --------------------------------------------------------------------------------
/ / If this box is checked, you are NOT authorized to honor my telephone
instructions for purchase of additional Fund shares, redemptions of Fund
shares and exchanges of shares between Overland Express Funds. If this
box is not checked, I understand that telephone instructions will be
effected by debiting/crediting the account designated in Section 3 (if
approved) and that if a designated account has not been authorized and
approved, a check or wire transfer will be required for a purchase and a
check will be sent for a redemption.
- --------------------------------------------------------------------------------
6. DISTRIBUTIONS (Do NOT check boxes if you want reinvestment.)
- --------------------------------------------------------------------------------
All dividends and capital distributions will be automatically reinvested in
shares of the same class of the Fund unless otherwise indicated:
/ / Invest dividends in Account # of Fund
----------------------- -------------
of the Overland Express Family of Funds.
/ / Invest capital gain distributions in Account # of Fund
------------ --------
of the Overland Express Family of Funds.
/ / Pay dividends by check and/or / / pay capital gains distributions by check
AND MAIL CHECKS TO:
/ / The registration address set forth in Section 1.
/ / The bank account designated in Section 3.
- --------------------------------------------------------------------------------
(CONTINUED)
<PAGE> 44
<TABLE>
<S> <C>
STRATEGIC GROWTH FUND
[LOGO] ACCOUNT APPLICATION
PAGE 4 OF 5
</TABLE>
- --------------------------------------------------------------------------------
7. AUTHORIZATION FOR TRUSTS AND ORGANIZATIONS (If Applicable.)
- --------------------------------------------------------------------------------
CORPORATIONS, TRUSTS, PARTNERSHIPS OR OTHER ORGANIZATIONS MUST COMPLETE
THIS SECTION.
<TABLE>
<S> <C> <C> <C> <C>
Registered Owner is a: / / Trust / / Corporation, Incorporated Association
/ / Partnership / / Other:
-----------------------------------------------------
(such as Non-Profit Organization, Religious Organization,
Sole Proprietorship, Investment Club, Non-incorporated
Association, etc.)
</TABLE>
The following named persons are currently officers/trustees/general
partners/other authorized signatories of the Registered Owner; this(these)
Authorized Person(s) is(are) currently authorized under the applicable
governing document to act with full power to sell, assign or transfer
securities of Overland Express Funds, Inc. for the Registered Owner and to
execute and deliver any instrument necessary to effectuate the authority
hereby conferred:
<TABLE>
<S> <C> <C>
Name Title Specimen Signature
---------------------------------- ---------------------------------- ----------------------------------
---------------------------------- ---------------------------------- ----------------------------------
---------------------------------- ---------------------------------- ----------------------------------
</TABLE>
Overland Express Funds, Inc., Stephens Inc. and Wells Fargo Bank, N.A.
may, without inquiry, act upon the instruction of ANY PERSON(S) purporting
to be (an) Authorized Person(s) as named in the Authorization Form last
received by you, and shall not be liable for any claims, expenses
(including legal fees) or losses resulting from acting upon any
instructions reasonably believed to be genuine.
FOR CORPORATIONS AND INCORPORATED ASSOCIATIONS:
I, , Secretary of the
------------------------------------------
above-named Registered Owner, do hereby certify that at a meeting on
at which a quorum was present throughout, the Board of
-----------------
Directors of the corporation/the officers of the association duly adopted
a resolution, which is in full force and effect and in accordance with the
Registered Owner's charter and by-laws, which resolution: (1) empowered
the above-named Authorized Person(s) to effect securities transactions for
the Registered Owner on the terms described above; (2) authorized the
Secretary to certify, from time to time, the names and titles of the
officers of the Registered Owner and to notify you when changes in the
office occur; and (3) authorized the Secretary to certify that such a
resolution has been duly adopted and will remain in full force and effect
until you receive a duly executed amendment to the Authorization Form.
Witness my hand on behalf of the corporation/association on this
day of , 19
------ -------------------------------- ----
<TABLE>
<S> <C>
------------------------------------------------
Secretary (Signature Guarantee or
Corporate Seal is Required)
FOR ALL OTHER ORGANIZATIONS: ------------------------------------------------
Certifying Trustee, General Partner, or Other
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(CONTINUED)
<PAGE> 45
<TABLE>
<S> <C>
STRATEGIC GROWTH FUND
[LOGO] ACCOUNT APPLICATION
PAGE 5 OF 5
---------------------------------------------------------------------------------------------------------------
8. SIGNATURE, TAX INFORMATION & CERTIFICATION
---------------------------------------------------------------------------------------------------------------
/ / U.S. CITIZEN OR RESIDENT
I understand that the Federal Government requires Overland Express Funds, Inc. to withhold and pay to
the Internal Revenue Service 31% from all interest, dividends, capital gains distributions and
proceeds from redemptions UNLESS I have provided a certified taxpayer identification (Social Security
or Employer Identification) number and certify in the Withholding Status below that I am NOT subject
to backup withholding. The taxpayer identification number I provided in Section 1 will be the number
under which any taxable earnings will be reported to the IRS.
WITHHOLDING STATUS: Unless I indicate that I am subject to backup withholding by checking the box
below, I certify that 1) I have NOT been notified by the IRS that I am subject to backup withholding
as a result of a failure to report all interest or dividends, OR 2) I have been notified by the IRS
that I am no longer subject to backup withholding: / / I am currently subject to backup withholding.
/ / NON-RESIDENT ALIEN (In order to claim this exemption, ALL owners on the account must be non-resident
aliens and sign below.)
I am not a U.S. citizen or resident (nor is this account held by a foreign corporation, partnership,
estate or trust) and my permanent address is:
Country:
----------------------------------------------- ----------------------------------
By signing below, I (we) certify, under penalties of perjury, that I (we) have full authority and legal
capacity to purchase shares of the Fund and affirm that I (we) have received a current prospectus and agree
to be bound by its terms and further certify that 1) the correct taxpayer identification number has been
provided in Section 1 of this Application and that the Withholding Status information, above, is correct OR
2) all owners are entitled to claim non-resident alien status. Investors should be aware that the failure to
check the box under "Telephone Instructions" above means that the telephone exchange and redemption
privileges will be provided. A shareholder would bear the risk of loss in the event of the fraudulent use of
the pre-authorized redemption or exchange privileges. Please see "Exchange Privileges" and "Redemption of
Shares" in the Prospectus for more information on these privileges.
X SIGNATURE GUARANTEE: NOT REQUIRED WHEN
----------------------------------------------------- ESTABLISHING NEW ACCOUNTS. Required only if
Individual (or Custodian) date establishing privileges in Block 2 on an
existing account. Signature Guarantee may be
X provided by an "eligible guarantor
--------------------------------------------------- institution," which includes a commercial bank,
Joint Owner (if any) date trust company, member firm of a domestic stock
exchange, savings association, or credit union
X that is authorized by its charter to provide a
----------------------------------------------------- signature guarantee.
Corporate Officer or Trustee date
AFFIX SIGNATURE GUARANTEE STAMP
----------------------------------------------------- -----------------------------------------------
Title of Corporate Officer or Trustee Signature Guaranteed By
---------------------------------------------------------------------------------------------------------------
</TABLE>
DEALER INFORMATION
<TABLE>
<S> <C> <C>
- ------------------------------------------- ---------------------
Dealer Name Branch ID #
- ------------------------------------------- --------------------- --------------------
Representative's Last Name Rep ID # Rep Phone #
X
------------------------------------------------------------------------------------------------------
Authorized signature of Broker/Dealer Title date
</TABLE>
<PAGE> 46
SPONSOR, ADMINISTRATOR AND DISTRIBUTOR
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
TRANSFER AND DIVIDEND DISBURSING AGENT
AND CUSTODIAN
Wells Fargo Bank, N.A.
P.O. Box 63084
San Francisco, California 94163
LEGAL COUNSEL
Morrison & Foerster
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Three Embarcadero Center
San Francisco, California 94111
NOT FDIC INSURED
FOR MORE INFORMATION ABOUT THE FUND,
SIMPLY CALL (800) 552-9612,
OR WRITE:
OVERLAND EXPRESS FUNDS, INC.
C/O OVERLAND EXPRESS
SHAREHOLDER SERVICES
WELLS FARGO BANK, N.A.
P.O. BOX 63084
SAN FRANCISCO, CALIFORNIA 94163
[LOGO]
------------------------
PROSPECTUS
------------------------
Strategic Growth Fund
------------------------
February 19, 1996
------------------------
NOT FDIC INSURED
83P 12/95
<PAGE> 47
OVERLAND EXPRESS FUNDS, INC.
STRATEGIC GROWTH FUND
Telephone: (800) 552-9612
STATEMENT OF ADDITIONAL INFORMATION
DATED FEBRUARY 19, 1996
__________________________________
Overland Express Funds, Inc. (the "Company") is a professionally
managed, open-end series investment company. This Statement of Additional
Information ("SAI") contains information about one of the Company's series --
the STRATEGIC GROWTH FUND (the "Fund"). The Fund offers two classes of shares
- -- Class A Shares and Class D Shares. This SAI relates to both classes of
shares. The investment objective of the Fund is described in the Prospectus
under the heading "Investment Objective and Policies." The Fund seeks to
achieve its investment objective by investing all of its assets in the Capital
Appreciation Master Portfolio (at times, the "Master Portfolio") of Master
Investment Trust (the "Trust"), which has the same investment objective as the
Fund. The Fund may withdraw its investment in the Capital Appreciation Master
Portfolio at any time, if the Board of Directors of the Company determines that
such action is in the best interests of the Fund and its shareholders. Upon
such withdrawal, the Company's Board would consider alternative investments,
including investing all of the Fund's assets in another investment company with
the same investment objective as the Fund or hiring an investment adviser to
manage the Fund's assets in accordance with the investment policies and
restrictions described in the Prospectus and below with respect to the Trust.
This SAI is not a prospectus and should be read in conjunction
with the Fund's Prospectus, dated February 19, 1996. All terms used in this
SAI that are defined in the Prospectus will have the meanings assigned in the
Prospectus. A copy of the Prospectus may be obtained without charge by writing
Stephens Inc., the Company's sponsor, administrator and distributor, at 111
Center Street, Little Rock, Arkansas 72201, or calling the Transfer Agent at
the telephone number indicated above.
__________________________________
1
<PAGE> 48
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Distribution Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Servicing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Calculation of Yield and Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Determination of Net Asset Value.... . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Federal Income Tax... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Other.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Custodian and Transfer and Dividend Disbursing Agent . . . . . . . . . . . . . . . . . . 21
Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
2
<PAGE> 49
INVESTMENT RESTRICTIONS
The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "Investment Objectives
and Policies." The Fund and the Master Portfolio are subject to the following
investment restrictions, all of which are fundamental policies. These
restrictions cannot be changed, as to either the Fund or the Master Portfolio,
without approval by the holders of a majority (as defined by the 1940 Act) of
the outstanding voting securities of the Fund or the Master Portfolio, as
appropriate. Whenever the Fund is requested to vote on a fundamental policy of
the Master Portfolio, the Fund will hold a meeting of Fund shareholders and it
will cast its votes as instructed by such shareholders.
Neither the Fund nor the Master Portfolio may:
(1) purchase the securities of issuers conducting their
principal business activity in the same industry if, immediately after the
purchase and as a result thereof, the value of the Fund's investments in that
industry would equal or exceed 25% of the current value of the Fund's total
assets, provided that there is no limitation with respect to investments in
securities issued or guaranteed by the United States Government, its agencies
or instrumentalities; and provided further, that the Fund may invest all its
assets in a diversified, open-end management investment company, or a series
thereof, with substantially the same investment objective, policies and
restrictions as such Fund, without regard to the limitations set forth in this
paragraph (1);
(2) purchase or sell real estate (other than securities secured
by real estate or interests therein or securities issued by companies that
invest in real estate or interests therein), commodities or commodity contracts
or interests in oil, gas, or other mineral exploration or development programs;
(3) purchase securities on margin (except for short-term
credits necessary for the clearance of transactions) or make short sales of
securities;
(4) underwrite securities of other issuers, except to the
extent that the purchase of permitted investments directly from the issuer
thereof or from an underwriter for an issuer and the later disposition of such
securities in accordance with the Fund's investment program may be deemed to be
an underwriting; and provided further, that the purchase by the Fund of
securities issued by a diversified, open-end management investment company, or
a series thereof, with substantially the same investment objective, policies
and restrictions as such Fund shall not constitute an underwriting for purposes
of this paragraph (4);
(5) make investments for the purpose of exercising control or
management; provided that the Fund may invest all its assets in a diversified,
open-end management company, or a series thereof, with substantially the same
investment objective, policies and restrictions as such Fund, without regard to
the limitations set forth in this paragraph (5);
3
<PAGE> 50
(6) issue senior securities, except that the Fund may borrow
from banks up to 10% of the current value of its net assets for temporary
purposes only in order to meet redemptions, and these borrowings may be secured
by the pledge of up to 10% of the current value of its net assets (but
investments may not be purchased while any such outstanding borrowings exceed
5% of its net assets);
(7) make loans of portfolio securities having a value that
exceeds 50% of the current value of its total assets, provided that, this
restriction does not apply to the purchase of fixed time deposits, repurchase
agreements, commercial paper and other types of debt instruments commonly sold
in a public or private offering; nor
(8) purchase securities of any issuer (except securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) if, as
a result, with respect to 75% of its total assets, more than 5% of the value of
its total assets would be invested in the securities of any one issuer or, with
respect to 100% of its total assets, the Fund's ownership would be more than
10% of the outstanding voting securities of such issuer, provided that the Fund
may invest all its assets in a diversified, open-end management investment
company, or a series thereof, with substantially the same investment objective,
policies and restrictions as such Fund, without regard to the limitations set
forth in this paragraph (8).
With respect to fundamental investment policy (7), the Fund and
the Master Portfolio do not intend to loan their portfolio securities during
the coming year.
The Fund and the Master Portfolio are subject to the following
non-fundamental policies. These restrictions may be changed by a vote of a
majority of the Directors of the Company or the Trustees of the Trust, as the
case may be, at any time.
Neither the Fund nor the Master Portfolio may:
(1) purchase or retain securities of any issuer if the officers
or directors of the Fund or its Investment Adviser owning beneficially more
than one-half of one percent (0.5%) of the securities of the issuer together
own beneficially more than 5% of such securities;
(2) purchase or sell real estate limited partnership interests;
nor
(3) write, purchase or sell puts, calls or options or any
combination thereof, except to the extent described in the Prospectus and
except that the Master Portfolio may purchase securities with put rights in
order to maintain liquidity;
(4) invest in securities of issuers who, with their
predecessors, have been in existence less than three years, unless the
securities are fully guaranteed or insured by the
4
<PAGE> 51
U.S. Government if, by reason thereof, the value of its aggregate investment in
such securities will exceed 5% of its total assets;
(5) purchase securities of any issuer (except securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) if, as
a result, more than 5% of the value of the Fund's total assets would be
invested in the securities of any one issuer; nor
(6) invest more than 15% of the Fund's net assets in illiquid
securities. For this purpose, illiquid securities include, among others, (a)
securities that are illiquid by virtue of the absence of a readily available
market or legal or contractual restrictions on resale, (b) fixed time deposits
that are subject to withdrawal penalties and that have maturities of more than
seven days, and (c) repurchase agreements not terminable within seven days.
(7) In addition, as a matter of non-fundamental policy, the
Fund may invest in shares of other open-end, management investment companies,
subject to the limitations of Section 12(d)(1) of the Act, provided that any
such purchases will be limited to temporary investments in shares of
unaffiliated investment companies and the Investment Adviser will waive its
advisory fees for that portion of the Fund's assets so invested, except when
such purchase is part of a plan of merger, consolidation, reorganization or
acquisition. The Fund does not intend to invest more than 5% of its net assets
in such securities during the coming year. Notwithstanding any other
investment policy or limitation (whether or not fundamental), as a matter of
fundamental policy, the Fund may invest all of its assets in the securities of
a single open-end management investment company with substantially the same
fundamental investment objective, policies and limitations as the Fund. A
decision to so invest all of its assets may, depending on the circumstances
applicable at the time, require approval of shareholders.
MANAGEMENT
The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "Management of the Fund
and the Master Portfolio." The principal occupations during the past five
years of the directors and executive officers of the Company are listed below.
The address of each, unless otherwise indicated, is 111 Center Street, Little
Rock, Arkansas 72201. Directors deemed to be "interested persons" of the
Company for purposes of the Act are indicated by an asterisk.
<TABLE>
<CAPTION>
Principal Occupations
Name, Address and Age Position During Past 5 Years
- --------------------- -------- ---------------------
<S> <C> <C>
Jack S. Euphrat, 73 Director Private Investor.
415 Walsh Road
Atherton, CA 94027.
</TABLE>
5
<PAGE> 52
<TABLE>
<S> <C> <C>
*R. Greg Feltus, 44 Director, Senior Vice President
Chairman and of Stephens; Manager
President of Financial Services
Group; President of
Stephens
Insurance Services
Inc.; Senior Vice
President of Stephens
Sports Management
Inc.; and President of
Investor Brokerage
Insurance Inc.
Thomas S. Goho, 53 Director T.B. Rose Faculty
321 Beechcliff Court Fellow-Business,
Winston-Salem, NC 27104 Wake Forest University
Calloway School, of
Business and Accountancy:
Associate Professor of
Finance of the School of
Business and Accounting at
Wake Forest University
since 1983.
*Zoe Ann Hines, 46 Director Senior Vice President
of Stephens and
Director of Brokerage
Accounting; and
Secretary of Stephens
Resource Management.
*W. Rodney Hughes, 69 Director Private Investor.
31 Dellwood Court
San Rafael, CA 94901
Robert M. Joses, 77 Director Private Investor.
47 Dowitcher Way
San Rafael, CA 94901
*J. Tucker Morse, 51 Director Private, Investor;
10 Legrae Street Real Estate
Charleston, SC 29401 Developer; Chairman
of Renaissance
Properties Ltd.;
President of Morse
Investment
Corporation; and Co-
Managing Partner of
Main Street Ventures.
</TABLE>
6
<PAGE> 53
<TABLE>
<S> <C> <C>
Richard H. Blank, Jr., 39 Chief Associate of
Operating Financial Services
Officer, Group of Stephens;
Secretary and Director of Stephens
Treasurer Sports Management
Inc.; and Director of
Capo Inc.
</TABLE>
COMPENSATION TABLE
For the Fiscal Year Ended December 31, 1994
<TABLE>
<CAPTION>
Total Compensation
Aggregate Compensation from Registrant
Name and Position from Registrant and Fund Complex
- ----------------- ---------------------- ------------------
<S> <C> <C>
Jack S. Euphrat $8,500 $34,188
Director
*R. Greg Feltus 0 0
Director
Thomas S. Goho 8,500 34,188
Director
*Zoe Ann Hines 0 0
Director
*W. Rodney Hughes 8,500 32,188
Director
Robert M. Joses 8,500 34,188
Director
*J. Tucker Morse 8,500 32,188
Director
</TABLE>
Directors of the Company are compensated annually by the Company
and by all the registrants in the fund complex for their services as indicated
in the Compensation Table above and also are reimbursed for all out-of-pocket
expenses relating to attendance at board meetings. Each of the Directors and
Officers of the Company serves in the identical capacity as officers and
Directors of Stagecoach Funds, Inc. and Stagecoach Inc., and as Trustees and/or
Officers of Stagecoach Trust, Master Investment Portfolio, Life & Annuity
Trust, Master Investment Trust and Managed Series Investment Trust, each of
which are registered open-end management investment companies and each of which
is considered to be in the same "fund complex", as such term is defined in Form
N-1A under
7
<PAGE> 54
the 1940 Act, as the Company. The Directors are compensated by other Companies
and Trusts within the fund complex for their services as Directors/Trustees to
such Companies and Trusts. Currently the Directors do not receive any
retirement benefits or deferred compensation from the Company or any other
member of the fund complex.
As of the date of this Statement of Additional Information, the
Directors and Principal Officer of the Company as a group beneficially owned
less than 1% of the outstanding shares of the Company.
Investment Adviser. The Fund has not engaged an investment
adviser. The Master Portfolio (which has the same investment objective as the
Fund, and in which the Fund invests all its assets) is advised by Wells Fargo
Bank. The Advisory Contract provides that Wells Fargo Bank shall furnish to
the Master Portfolio investment guidance and policy direction in connection
with the daily portfolio management of the Master Portfolio. Pursuant to the
Advisory Contract, Wells Fargo Bank furnishes to the Board of Trustees of the
Trust periodic reports on the investment strategy and performance of the Master
Portfolio.
Wells Fargo Bank has agreed to provide to the Master Portfolio,
among other things, money market security and fixed-income research, analysis
and statistical and economic data and information concerning interest rate and
security market trends, portfolio composition, credit conditions and average
maturities of the Master Portfolio.
The Advisory Contract will continue in effect for more than two
years provided the continuance is approved annually (i) by the holders of a
majority of the Master Portfolio's outstanding voting securities or by the
Trust's Board of Trustees and (ii) by a majority of the Trustees of the Trust
who are not parties to the Advisory Contract or "interested persons" (as
defined in the Act) of any such party. The Advisory Contract may be terminated
on 60 days' written notice by either party and will terminate automatically if
assigned.
For the period from inception (January 20, 1993) to February 15,
1996, the Fund operated on a stand-alone basis, did not participate in a
master/feeder structure and retained the services of Wells Fargo Bank as
investment adviser for the Fund. From January 20, 1993 to December 31, 1993,
Wells Fargo Bank waived payment of all advisory fees of $68,217. For the year
ended December 31, 1994, the Fund incurred $197,689 in advisory fees payable to
Wells Fargo Bank, and $9,550 of such fees were waived.
Wells Fargo Bank also serves as Custodian and Transfer and
Dividend Disbursing Agent for both the Fund and the Master Portfolio. See
"Custodian and Transfer and Dividend Disbursing Agent."
Morrison & Foerster, counsel to the Company and the Trust and
special counsel to Wells Fargo Bank, has advised the Company, the Trust and
Wells Fargo Bank that Wells Fargo Bank should be able to perform the services
contemplated by the Advisory Contract,
8
<PAGE> 55
the Agency Agreement, the Custodian Agreement and the Prospectus, without
violation of the Glass-Steagall Act. Such counsel has pointed out, however,
that there are no controlling judicial or administrative interpretations or
decisions and that future judicial or administrative interpretations of, or
decisions relating to, present federal or state statutes and regulations
relating to the permissible activities of banks and their subsidiaries or
affiliates, as well as future changes in federal or state statutes and
regulations and judicial or administrative decisions or interpretations
thereof, could prevent Wells Fargo Bank from continuing to perform, in whole or
in part, such services. If Wells Fargo Bank were prohibited from performing
any of such services, it is expected that new agreements would be proposed with
another entity or entities qualified to perform such services.
Administrator and Distributor. The Company has retained Stephens
as administrator and distributor on behalf of the Fund. In addition, the Trust
has retained Stephens as administrator on behalf of the Master Portfolio.
Under the respective Administration Agreements with the Company and the Trust,
Stephens furnishes the Company and the Trust with office facilities, together
with those ordinary clerical and bookkeeping services that are not furnished by
Wells Fargo Bank. Stephens also has entered into a Distribution Agreement with
the Company pursuant to which Stephens has the responsibility of distributing
shares of the Fund.
For the period from inception to December 31, 1993, the Fund's
administrative fees totaled $20,483. For the year ended December 31, 1993, the
aggregate dollar amount of underwriting commissions paid to Stephens was
$3,604,377, and Stephens retained $3,457,989 of such commissions. For the same
period, Wells Fargo Securities Inc. ("WFSI"), an affiliated broker-dealer of
the Company, and its registered representatives, received $146,388 of such
commissions.
For the year ended December 31, 1994, the Fund's administrative
fees totaled $62,623. For the same period, the aggregate dollar amount of
underwriting commissions paid to Stephens was $1,408,759, and Stephens retained
$1,351,388 of such commissions. WFSI and its registered representatives
received $57,371 of such commissions for the year ended December 31, 1994.
DISTRIBUTION PLANS
The following information supplements and should be read in
conjunction with the Prospectus section entitled "Distribution Plans." As
indicated in the Prospectus, the Fund, on behalf of each of its classes of
shares, has adopted a Plan under Section 12(b) of the Act and Rule 12b-1
thereunder (the "Rule"). The Plan for the Class A Shares was adopted by the
Board of Directors on October 21, 1992 and amended on April 29, 1993 and the
Plan for the Class D Shares was adopted on April 29, 1993; a majority of the
directors who were not "interested persons" (as defined in the Act) of the Fund
and who had no direct or indirect financial interest in the operation of the
Plan or in any agreement related to the Plan (the "Qualified Directors")
adopted the Plans.
9
<PAGE> 56
Under the Plan and pursuant to the Distribution Agreement, the
Fund may pay the Distributor, as compensation for distribution-related
services, a monthly fee at an annual rate of up to 0.25% of the average daily
net assets attributable to Class A Shares and up to 0.75% of the average daily
net assets attributable to the Class D Shares of the Fund. The actual fee
payable to the Distributor is determined, within such limits, from time to time
by mutual agreement between the Company and the Distributor and will not exceed
the maximum sales charges payable by mutual funds sold by members of the
National Association of Securities Dealers, Inc. ("NASD") under the NASD Rules
of Fair Practice. The Distributor may enter into selling agreements with one
or more selling agents under which such agents may receive compensation for
distribution-related services from the Distributor, including, but not limited
to, commissions or other payments to such agents based on the average daily net
assets of Fund shares attributable to them. The Distributor may retain any
portion of the total distribution fee payable thereunder to compensate it for
distribution-related services provided by it or to reimburse it for other
distribution-related expenses.
The Plan will continue in effect from year to year if such
continuance is approved by a majority vote of both the directors of the Company
and the Qualified Directors. Agreements related to the Plan also must be
approved by such vote of the directors and the Qualified Directors. Such
agreements will terminate automatically if assigned, and may be terminated at
any time, without payment of any penalty, by a vote of a majority of the
outstanding voting securities of the Fund. The Plan may not be amended to
increase materially the amounts payable thereunder without the approval of a
majority of the outstanding voting securities of the Fund, and no material
amendment to the Plan may be made except by a majority of both the directors of
the Company and the Qualified Directors.
The Plan requires that the Treasurer of the Fund shall provide to
the directors, and the directors shall review, at least quarterly, a written
report of the amounts expended (and purposes therefore) under the Plan. The
Rule also requires that the selection and nomination of directors who are not
"interested persons" of the Company be made by such disinterested directors.
For the year ended December 31, 1994, the Class A Shares incurred
$67,308 in fees under the Plan. For the same period, the Class D shares
incurred $111,150 in fees under the Plan.
SERVICING PLAN
As indicated in the Fund's Prospectus, the Fund has adopted a
Servicing Plan ("Servicing Plan") with respect to its Class D Shares. The
Board of Directors adopted the Servicing Plan on April 29, 1993. The Board of
Directors included a majority of the Directors who were not "interested
persons" (as defined in the Act) of the Fund and who
10
<PAGE> 57
had no direct or indirect financial interest in the operation of the Servicing
Plan or in any agreement related to the Servicing Plan (the "Servicing Plan
Qualified Directors").
Under the Servicing Plan and pursuant to the Servicing Agreements,
the Fund may pay one or more servicing agents, as compensation for performing
certain services, a fee at an annual rate of up to 0.25% of the average daily
net assets of the Fund attributable to its Class D Shares. The actual fee
payable to servicing agents is determined, within such limit, from time to time
by mutual agreement between the Company and each servicing agent and will not
exceed the maximum service fees payable by mutual funds sold by members of the
NASD under the NASD Rules of Fair Practice.
The Servicing Plan will continue in effect from year to year if
such continuance is approved by a majority vote of both the Directors of the
Company and the Servicing Plan Qualified Directors. Any form of Servicing
Agreement related to the Servicing Plan also must be approved by such vote of
the Directors and the Servicing Plan Qualified Directors. Servicing Agreements
will terminate automatically if assigned, and may be terminated at any time,
without payment of any penalty, by a vote of a majority of the outstanding
Class D Shares of the Fund. The Servicing Plan may not be amended to increase
materially the amount payable thereunder without the approval of a majority of
the outstanding Class D Shares of the Fund, and no material amendment to the
Servicing Plan may be made except by a majority of both the Directors of the
Company and the Qualified Directors.
The Servicing Plan requires that the Treasurer of the Company
shall provide to the Directors, and the Directors shall review, at least
quarterly, a written report of the amounts expended (and purposes therefor)
under the Servicing Plan.
For the year ended December 31, 1994, the Fund paid $37,050 in
servicing fees pursuant to the Plan for Class D shares.
CALCULATION OF YIELD AND TOTAL RETURN
The following information supplements and should be read in
conjunction with the sections in the Prospectus entitled "Determination of Net
Asset Value" and "Performance Data."
As indicated in the Prospectus, the Fund may advertise certain
total return information for a class of shares, computed in the manner
described in the Prospectus. As and to the extent required by the Commission,
an average annual compound rate of return ("T") will be computed by using the
redeemable value at the end of a specified period ("ERV") of a hypothetical
initial investment in a class of shares ("P") over a period of years ("n")
according to the following formula: P(1+T)n = ERV. In addition, as indicated
in the Prospectus, the Fund also may, at times, calculate total return for a
class of shares based on net asset value per share (rather than the public
offering price), in which case the figures
11
<PAGE> 58
would not reflect the effect of any sales charges that would have been paid by
an investor, or would be based on the assumption that a sales charge other than
the maximum sales charge (reflecting a Volume Discount) was assessed, provided
that total return data derived pursuant to the calculation described above also
are presented.
The total returns on the Class A Shares for the period from the
Fund's commencement average annual of operations (January 20, 1993) to December
31, 1994, assuming a 4.50% sales load and no sales load, were 16.97% and
19.75%, respectively. The average annual total return on the Class D Shares of
the Fund for the period from inception (July 1, 1993) to December 31, 1994 was
11.52%. The average annual total returns on the Class A Shares of the Fund for
the one year ended December 31, 1994, assuming a 4.50% sales load and no sales
load, were -0.45% and 4.23%, respectively. The annual total return on the
Class D Shares of the Fund for the one year ended December 31, 1994 was 2.49%,
assuming payment of the 1% CDSC.
From time to time and only to the extent the comparison is
appropriate for a class of shares of the Fund, the Company may quote the
performance or price-earning ratio of a class of shares of the Fund in
advertising and other types of literature as compared to the performance of the
1-Year Treasury Bill Rate, the S&P Index, the Dow Jones Industrial Average, the
Lehman Brothers 20+ Years Treasury Index, the Lehman Brothers 5-7 Year Treasury
Index, Donoghue's Money Fund Averages, Real Estate Investment Averages (as
reported by the National Association of Real Estate Investment Trusts), Gold
Investment Averages (provided by the World Gold Council), Bank Averages (which
is calculated from figures supplied by the U.S. League of Savings Institutions
based on effective annual rates of interest on both passbook and certificate
accounts), average annualized certificate of deposit rates (from the Federal
Reserve G-13 Statistical Releases or the Bank Rate Monitor), the Salomon One
Year Treasury Benchmark Index, the Consumer Price Index (as published by the
U.S. Bureau of Labor Statistics), Ten Year U.S. Government Bond Average, S&P's
Corporate Bond Yield Averages, Schabacter Investment Management Indices,
Salomon Brothers High Grade Bond Index, Lehman Brothers Long-Term High Quality
Government/Corporate Bond Index, other managed or unmanaged indices or
performance data of bonds, stocks or government securities (including data
provided by Ibbotson Associates), or by other services, companies, publications
or persons who monitor mutual funds on overall performance or other criteria.
The S&P Index and the Dow Jones Industrial Average are unmanaged indices of
selected common stock prices. The performance of a class of shares of the Fund
also may be compared to the performance of other mutual funds having similar
objectives. This comparative performance could be expressed as a ranking
prepared by Lipper Analytical Services, Inc., CDA Investment Technologies,
Inc., Bloomberg Financial Markets or Morningstar, Inc., independent services
which monitor the performance of mutual funds. The performance of a class of
shares of the Fund will be calculated by relating net asset value per share at
the beginning of a stated period to the net asset value of the investment,
assuming reinvestment of all gains distributions and dividends paid, at the end
of the period. Any such comparisons may be useful to investors who wish to
compare the class' past performance with that of its competitors. Of course,
past performance cannot be a
12
<PAGE> 59
guarantee of future results. The Company also may include, from time to time,
a reference to certain marketing approaches of the Distributor, including, for
example, a reference to a potential shareholder being contacted by a selected
broker or dealer. General mutual fund statistics provided by the Investment
Company Institute may also be used.
In addition, the Company also may use, in advertisements and other
types of literature, information and statements: (1) showing that bank savings
accounts offer a guaranteed return of principal and a fixed rate of interest,
but no opportunity for capital growth; and (2) describing Wells Fargo Bank, and
its affiliates and predecessors, as one of the first investment managers to
advise investment accounts using asset allocation and index strategies. The
Company also may include in advertising and other types of literature
information and other data from reports and studies prepared by the Tax
Foundation, including information regarding federal and state tax levels and
the related "Tax Freedom Day."
The Company also may use the following information in
advertisements and other types of literature, only to the extent the
information is appropriate for a class of shares of the Fund: (i) the Consumer
Price Index may be used to assess the real rate of return from an investment in
a class of shares of the Fund; (ii) other government statistics, including, but
not limited to, The Survey of Current Business, may be used to illustrate
investment attributes of a class of shares of the Fund or the general economic,
business, investment, or financial environment in which the Fund operates;
(iii) the effect of tax-deferred compounding on the investment returns of a
class of shares of the Fund, or on returns in general, may be illustrated by
graphs, charts, etc., where such graphs or charts would compare, at various
points in time, the return from an investment in a class of shares of the Fund
(or returns in general) on a tax-deferred basis (assuming reinvestment of
capital gains and dividends and assuming one or more tax rates) with the return
on a taxable basis; and (iv) the sectors or industries in which the Fund
invests may be compared to relevant indices of stocks or surveys (e.g., S&P
Industry Surveys) to evaluate the historical performance or current or
potential value of a class of shares of the Fund with respect to the particular
industry or sector.
The Company also may discuss in advertising and other types of
literature that the Fund has been assigned a rating by an NRSRO, such as S&P or
Moody's. Such rating would assess the creditworthiness of the investments held
by the Fund. The assigned rating would not be a recommendation to purchase,
sell or hold the Fund's shares since the rating would not comment on the market
price of the Fund's shares or the suitability of the Fund for a particular
investor. In addition, the assigned rating would be subject to change,
suspension or withdrawal as a result of changes in, or the inavailability of,
information relating to the Fund or its investments. The Company may compare
the performance of the Fund with other investments that are assigned ratings by
the NRSROs. Any such comparisons may be useful to investors who wish to
compare the Fund's past performance with other rated investments.
13
<PAGE> 60
The Company also may disclose, in advertising and other types of
literature, information and statements that the Company's investment adviser,
Wells Fargo Bank, is listed in Nelson Publications' ("Nelson's") "Top 20"
performance rankings as published in the 1994 edition of "America's Best Money
Managers." The Nelson survey ranks the performance of money managers in over
30 asset/style categories and is based on analysis of performance composites
and surveys of institutional money managers. The Company may also disclose in
advertising and other types of sales literature the assets and categories of
assets under management by the Company's investment adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the Prospectus section entitled "Purchase of Shares."
Net asset value per share for each class of the Fund and net asset
value per unit of the Master Portfolio are each determined by Wells Fargo Bank
on each day the Exchange is open for trading as of the close of regular trading
on the Exchange, which is currently 4:00 p.m. New York time.
Securities of the Master Portfolio for which market quotations are
available are valued at latest prices. Any security for which the primary
market is an exchange is valued at the last sale price on such exchange on the
day of valuation or, if there was no sale on such day, the latest bid price
quoted on such day. In the case of other securities, including U.S. Government
securities but excluding money market instruments maturing in 60 days or less,
the valuations are based on latest quoted bid prices. Money market instruments
maturing in 60 days or less are valued at amortized cost. The assets of the
Master Portfolio other than money market instruments maturing in 60 days or
less are valued at latest quoted bid prices. Prices may be furnished by a
reputable independent pricing service approved by the Board of Trustees.
Prices provided by an independent pricing service may be determined without
exclusive reliance on quoted prices and may take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data. All other securities and other assets of the Master
Portfolio for which current market quotations are not readily available are
valued at fair value as determined in good faith by the Trust's Trustees and in
accordance with procedures adopted by the Trustees.
Expenses and fees, including advisory fees are accrued daily and
are taken into account for the purpose of determining the net asset value of
the Master Portfolio's interests and the Fund's shares.
PORTFOLIO TRANSACTIONS
Purchases and sales of securities by the Master Portfolio are
usually principal transactions. Portfolio securities normally are purchased or
sold from or to dealers serving as market makers for the securities at a net
price. The Master Portfolio also may purchase
14
<PAGE> 61
portfolio securities in underwritten offerings and may purchase securities
directly from the issuer. The cost of executing the Master Portfolio's
portfolio securities transactions consists primarily of dealer spreads and
underwriting commissions. Under the 1940 Act, persons affiliated with the
Trust are prohibited from dealing with the Trust as a principal in the purchase
and sale of securities unless an exemptive order or other relief allowing such
transactions is obtained from the SEC or an exemption is otherwise available.
The Master Portfolio may purchase securities from underwriting syndicates of
which Stephens or Wells Fargo Bank is a member under certain conditions in
accordance with the provisions of a rule adopted under the 1940 Act and in
compliance with procedures adopted by the Board of Trustees.
Wells Fargo Bank, as the Investment Adviser of the Master
Portfolio, may, in circumstances in which two or more brokers are in a position
to offer comparable results for the Master Portfolio's portfolio transaction,
give preference to a broker that has provided statistical or other research
services to Wells Fargo Bank. By allocating transactions in this manner, Wells
Fargo Bank is able to supplement its research and analysis with the views and
information of securities firms. Information so received is in addition to,
and not in lieu of, the services referred to be performed by Wells Fargo Bank
under the Advisory Contract, and the expenses of Wells Fargo Bank are not
necessarily reduced as a result of the receipt of this supplemental research
information. Furthermore, research services furnished by dealers through which
Wells Fargo Bank places securities transactions for the Master Portfolio may be
used by Wells Fargo Bank in servicing its other accounts, and not all of these
services may be used by Wells Fargo Bank in connection with advising the Master
Portfolio.
The Trust has no obligation to deal with any dealer or group of
dealers in the execution of transactions in portfolio securities. Subject to
policies established by the Trust's Board of Trustees, Wells Fargo Bank is
responsible for the Master Portfolio decisions and the placing of portfolio
transactions. In placing orders, it is the policy of the Company to obtain the
best results taking into account the dealer's general execution and operational
facilities, the type of transaction involved and other factors such as the
dealer's risk in positioning the securities involved. While Wells Fargo Bank
generally seeks reasonably competitive spreads or commissions, the Master
Portfolio will not necessarily be paying the lowest spread or commission
available.
For the year ended December 31, 1994, the Fund paid brokerage
commissions in the amount of $171,356.
On June 30, 1995, the Fund owned securities of its "regular
brokers or dealers," as defined in the 1940 Act, or their parents, as follows:
$2,582,000 of Goldman Sachs & Co. Pooled Repurchase Agreement.
Portfolio Turnover. Portfolio turnover generally involves some
expenses to the Master Portfolio, including brokerage commissions or dealer
mark-ups and other transactions costs on the sale of securities and the
reinvestment in other securities. A high
15
<PAGE> 62
portfolio turnover rate should not result in the Master Portfolio paying
substantially more brokerage commissions, since most transactions in government
securities and municipal securities are effected on a principal basis.
Portfolio turnover also can generate short-term capital gains tax consequences.
The portfolio turnover rate will not be a limiting factor when Wells Fargo Bank
deems portfolio changes appropriate.
FEDERAL INCOME TAX
The following information supplements and should be read in
conjunction with the Prospectus sections entitled "Dividends and Distributions"
and "Taxes." The Prospectus describes generally the tax treatment of
distributions by the Company. This section of the SAI includes additional
information concerning federal income tax.
Qualification of the Fund as a regulated investment company under
the Code requires, among other things, that (i) the Fund derive (a) at least
90% of its annual gross income from interest, payments with respect to
securities loans, dividends and gains from the sale or other disposition of
securities or options thereon; (ii) the Fund derive less than 30% of its gross
income from gains from the sale or other disposition of securities or options
thereon held for less than three months; and (iii) the Fund diversify its
holdings so that, at the end of each quarter of the taxable year, (a) at least
50% of the market value of the Fund's assets is represented by cash, government
securities and other securities limited in respect of any one issuer to an
amount not greater than 5% of the Fund's assets and 10% of the outstanding
voting securities of such issuer, and (b) not more than 25% of the value of the
Fund's assets is invested in the securities of any one issuer (other than U.S.
Government securities or the securities of other regulated investment
companies), or in two or more issuers which the Fund controls and which are
engaged in the same or similar trades or businesses. As a regulated investment
company, the Fund will not be subject to federal income tax on its net
investment income and net capital gains distributed to its shareholders,
provided that it distributes to its stockholders at least 90% of the sum of its
net investment income and net tax-exempt income earned in each year.
A 4% nondeductible excise tax will be imposed on the Fund to the
extent it does not meet certain minimum distribution requirements by the end of
each calendar year. For this purpose, any income or gain retained by the Fund
that is subject to income tax will be considered to have been distributed by
year-end. In addition, dividends and distributions declared payable as of a
record date in October, November or December of any calendar year are deemed
under the Code to have been distributed by the Fund and received by the
shareholders on December 31 of that calendar year if the dividend is actually
paid no later than January 31 of the following year. Such dividends will,
accordingly, be subject to income tax for the year in which the record date
falls. The Fund intends to distribute substantially all of its net investment
income and net capital gains and, thus, expects to avoid the excise tax.
16
<PAGE> 63
Income and dividends received by the Fund from sources within
foreign countries may be subject to withholding and other taxes (generally at
rates from 10% to 40%) imposed by such countries. Tax conventions between
certain countries and the United States may reduce or eliminate such taxes.
Because the Fund does not expect to hold more than 50% of the value of its
total assets in securities of foreign issuers, the Fund does not expect to be
eligible to elect to "pass through" foreign tax credits to shareholders.
The Master Portfolio will be treated as a non-publicly traded
partnership rather than as a regulated investment company or a corporation
under the Code. As a non-publicly traded partnership under the Code, any
interest, dividends and gains or losses of the Master Portfolio will be deemed
to have been "passed through" to the Fund and other investors in the Master
Portfolio, regardless of whether such interest, dividends or gains have been
distributed by the Master Portfolio or losses have been realized by the Fund
and other investors. Therefore, to the extent the Master Portfolio were to
accrue but not distribute any interest, dividends or gains, or accrue losses,
the Fund would be deemed to have realized and recognized its proportionate
share of interest, dividends, gains or losses without receipt of any
corresponding distribution. However, the Trust will seek to minimize
recognition by investors of interest, dividends, gains or losses without a
corresponding distribution.
Gains or losses on sales of portfolio securities by the Master
Portfolio will be long-term capital gains or losses if the securities have been
held by it for more than one year, except in certain cases including the case
where the Master Portfolio acquires a put or writes a call thereon. Other
gains or losses on the sale of securities will be short-term capital gains or
losses. To the extent that the Fund recognizes long-term capital gains, such
gains will be distributed at least annually. Such distributions will be
taxable to shareholders as long-term capital gains, regardless of how long a
shareholder has held Fund shares. Such distributions will be designated as
capital gain distributions in a written notice mailed by the Fund to
shareholders not later than 60 days after the close of the Fund's taxable year.
If a shareholder receives such a designated capital gain distribution (to be
treated by the shareholder as a long-term capital gain) with respect to any
Fund share and such Fund share is held for six months or less, then (unless
otherwise disallowed) any loss on the sale or exchange of that Fund share will
be treated as a long-term capital loss to the extent of the designated capital
gain distribution. Gain recognized on the disposition of a debt obligation
(including tax-exempt obligations purchased after April 30, 1993) purchased by
the Master Portfolio at a market discount (generally, at a price less than its
principal amount) will be treated as ordinary income to the extent such accrued
market discount had not been previously included as taxable income during the
period of time the Master Portfolio held the debt obligation.
As of the printing of this SAI, the maximum individual tax rate
applicable to ordinary income is 39.6% (effective rates may be higher for some
individuals due to phase out of exemptions and eliminations of deductions); the
maximum individual marginal tax rate applicable to net capital gains is 28%;
and the maximum marginal corporate tax rate applicable to ordinary income and
net capital gains is 35% (except that to eliminate the
17
<PAGE> 64
benefit of lower marginal corporate income tax rates, corporations which have
taxable income in excess of $100,000 for a taxable year will be required to pay
an additional amount of income tax up to $11,750 on taxable income exceeding
$100,000 in a taxable year and corporations which have taxable income in excess
of $15,000,000 for a taxable year will be required to pay an additional tax of
up to $100,000). Naturally, the amount of tax payable by an individual or
corporation will be affected by a combination of tax laws covering, for
example, deductions, credits, deferrals, exemptions, sources of income and
other matters.
If a shareholder exchanges or otherwise disposes of shares of the
Fund within 90 days of having acquired such shares and if, as a result of
having acquired those shares, the shareholder subsequently pays a reduced sales
charge for shares of the Fund or of a different fund, the sales charge
previously incurred in acquiring the Fund's shares shall not be taken into
account (to the extent such previous sales charges do not exceed the reduction
in sales charges) for the purpose of determining the amount of gain or loss on
the exchange, but will be treated as having been incurred in the acquisition of
such other shares.
Also, any loss realized on a redemption or exchange of shares of
the Fund will be disallowed to the extent that substantially identical shares
are reacquired within the 61-day period beginning 30 days before and ending 30
days after the shares are disposed of.
If, in the opinion of the Company, ownership of its shares has or
may become concentrated to an extent that could cause the Company to be deemed
a personal holding company within the meaning of the Code, the Company may
require the redemption of shares or reject any order for the purchase of shares
in an effort to prevent such concentration.
Foreign Shareholders. Under the Code, distributions of net
investment income by the Fund to a nonresident alien individual, nonresident
alien fiduciary of a trust or estate, foreign corporation, or foreign
partnership (a "foreign shareholder") will be subject to U.S. withholding tax
(at a rate of 30% or a lower treaty rate). Withholding will not apply if a
dividend paid by the Fund to a foreign shareholder is "effectively connected"
with a U.S. trade or business, in which case the reporting and withholding
requirements applicable to U.S. citizens, U.S. residents or domestic
corporations will apply. Distributions of net long-term capital gains are not
subject to tax withholding, but in the case of a foreign shareholder who is a
nonresident alien individual, such distributions ordinarily will be subject to
U.S. income tax at a rate of 30% if the individual is physically present in the
U.S. for more than 182 days during the taxable year.
Other Matters. Investors should be aware that the investments to
be made by the Master Portfolio may involve sophisticated tax rules such as
marked to market rules that would result in income or gain recognition by the
Master Portfolio without corresponding current cash receipts. Although the
Master Portfolio will seek to avoid significant noncash income, such noncash
income could be recognized by the Master
18
<PAGE> 65
Portfolio, in which case the Master Portfolio may distribute cash derived from
other sources in order to meet the minimum distribution requirements described
above.
CAPITAL STOCK
The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "Organization and
Capital Stock."
The Fund is comprised of two classes of shares, Class A Shares and
Class D Shares. With respect to matters that affect one class but not another,
shareholders vote as a class; for example, the approval of a Plan. Subject to
the foregoing, on any matter submitted to a vote of shareholders, all shares
then entitled to vote will be voted separately by portfolio unless otherwise
required by the Act, in which case all shares will be voted in the aggregate.
For example, a change in the Fund's fundamental investment policies would be
voted upon only by shareholders of the Fund and not shareholders of the
Company's other investment portfolios. Additionally, approval of an advisory
contract is a matter to be determined separately by the Fund. Approval by the
shareholders of one portfolio is effective as to that portfolio whether or not
sufficient votes are received from the shareholders of the other portfolios to
approve the proposal as to those portfolios. As used in the Prospectus and in
this Statement of Additional Information, the term "majority," when referring
to approvals to be obtained from shareholders of a class of the Fund, means the
vote of the lesser of (i) 67% of the shares of such class of the Fund
represented at a meeting if the holders of more than 50% of the outstanding
shares of such class of the Fund are present in person or by proxy, or (ii)
more than 50% of the outstanding shares of such class of the Fund. The term
"majority," when referring to the approvals to be obtained from shareholders of
the Company as a whole, means the vote of the lesser of (i) 67% of the
Company's shares represented at a meeting if the holders of more than 50% of
the Company's outstanding shares are present in person or by proxy, or (ii)
more than 50% of the Company's outstanding shares. Shareholders are entitled
to one vote for each full share held and fractional votes for fractional shares
held.
The Company may dispense with annual meetings of shareholders in
any year in which it is not required to elect directors under the Act.
However, the Company undertakes to hold a special meeting of its shareholders
for the purpose of voting on the question of removal of a director or directors
if requested in writing of the holders of at least 10% of the Company's
outstanding voting securities, and to assist in communicating with other
shareholders as required by Section 16(c) of the Act.
Each share of a class of the Fund represents an equal proportional
interest in the Fund with each other share of the same class and is entitled to
such dividends and distributions out of the income earned on the assets
belonging to the Fund as are declared in the discretion of the Directors. In
the event of the liquidation or dissolution of the Company, shareholders of the
Fund are entitled to receive the assets attributable to the Fund that are
available for distribution, and a distribution of any general assets not
19
<PAGE> 66
attributable to the Fund that are available for distribution in such manner and
on such basis as the Directors in their sole discretion may determine.
Shareholders are not entitled to any preemptive rights. All
shares, when issued, will be fully paid and non-assessable by the Company.
The Trust is a business trust organized under the laws of
Delaware. In accordance with Delaware law and in connection with the tax
treatment sought by the Trust, the Trust's Declaration of Trust provides that
its investors would be personally responsible for Trust liabilities and
obligations, but only to the extent the Trust property is insufficient to
satisfy such liabilities and obligations. The Declaration of Trust also
provides that the Trust shall maintain appropriate insurance (for example,
fidelity bonding and errors and omissions insurance) for the protection of the
Trust, its investors, Trustees, officers, employees and agents covering
possible tort and other liabilities, and that investors will be indemnified to
the extent they are held liable for a disproportionate share of Trust
obligations. Thus, the risk of an investor incurring financial loss on account
of investor liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.
The Declaration of Trust further provides that obligations of the
Trust are not binding upon the Trustees individually but only upon the property
of the Trust and that the Trustees will not be liable for any action or failure
to act. However, nothing in the Declaration of Trust protects a Trustee
against any liability to which the Trustee would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of the Trustee's office.
The interests in the Master Portfolio have substantially identical
voting and other rights as those rights enumerated above for Fund shares. The
Trust also intends to dispense with annual meetings, but will hold a special
meeting and assist investor communications under the circumstances described
above with respect to the Company in accord with provisions under Section 16(c)
of the Act. Whenever the Fund is requested to vote on a matter with respect to
the Master Portfolio, the Fund will hold a meeting of Fund shareholders and
will cast its votes as instructed by such shareholders. In a situation where
the Fund does not receive instruction from certain of its shareholders on how
to vote the corresponding shares of the Master Portfolio, the Fund will vote
such shares in the same proportion as the shares for which the Fund does
receive voting instructions.
As of December 14, 1995, the shareholders identified below were
known by the Company to own the indicated percentage of the outstanding Shares
of the Fund in the following capacities:
20
<PAGE> 67
<TABLE>
<CAPTION>
Name and Address Percentage
of Shareholder of Class Capacity
- ---------------- ---------- --------
<S> <C> <C>
Class A Shares
- --------------
Merrill Lynch Pierce 26.38% Record
Fenner & Smith, Inc.
Trade House Account
P. O. Box 30561
New Brunswick, NJ 08989
Stephens Inc. 5.16% Record
For Exclusive Benefit
of Customers
P.O. Box 34127
Little Rock, AR 72203
Class D Shares
- --------------
Merrill Lynch Pierce 38.52% Record
Fenner & Smith, Inc.
Trade House Account
P. O. Box 30561
New Brunswick, NJ 08989
</TABLE>
OTHER
The Registration Statements of the Trust and the Company,
including the Fund's Prospectus, the SAI and the exhibits filed therewith, may
be examined at the office of the Commission in Washington, D.C. Statements
contained in the Prospectus or the SAI as to the contents of any contract or
other document referred to herein or in the Prospectus are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.
CUSTODIAN AND TRANSFER AND
DIVIDEND DISBURSING AGENT
The following information supplements and should be read in
conjunction with the section of the Prospectus entitled "Custodian, Transfer
and Dividend Disbursing Agent."
Wells Fargo Bank has been retained to act as Custodian and
Transfer and Dividend Disbursing Agent for the Fund and the Master Portfolio.
The Custodian, among
21
<PAGE> 68
other things, maintains a custody account or accounts in the name of the Fund
and the Master Portfolio, receives and delivers all assets for the Fund and the
Master Portfolio upon purchase and upon sale or maturity, collects and receives
all income and other payments and distributions on account of the assets of the
Fund and the Master Portfolio and pays all expenses of the Fund and the Master
Portfolio. For its services as Custodian, Wells Fargo Bank receives an asset-
based fee and transaction charges from the Master Portfolio; and for its
services as transfer and dividend disbursing agent, it receives a base fee and
per-account fees from the Fund.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP has been selected as the independent
auditors for the Company and the Trust. KPMG Peat Marwick LLP provides audit
services, tax return preparation and assistance and consultation in connection
with review of certain Securities & Exchange Commission filings. KPMG Peat
Marwick LLP's address is Three Embarcadero Center, San Francisco, California
94111.
FINANCIAL INFORMATION
The audited financial statements and portfolio of investments
contained in the Annual Reports for the Company for the most recent fiscal year
are hereby incorporated by reference in this SAI. The Annual Report will be
sent free of charge with this SAI to any shareholder who requests the SAI.
22
<PAGE> 69
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS - 98.90%
11,919 Abbott Laboratories $ 372,911 $ 482,720
1,591 Advanced Micro Devices+ 50,365 57,873
1,723 Aetna Life & Casualty Co 100,839 108,334
1,790 Ahmanson (H F) & Co 36,364 39,380
1,637 Air Products & Chemicals Inc 74,866 91,263
7,411 Airtouch Communications+ 178,297 211,214
457 Alberto-Culver Co Class B 11,837 13,824
3,840 Albertson's Inc 107,294 114,240
3,343 Alcan Aluminium Ltd 76,881 101,126
774 Alco Standard Corp 44,759 61,823
681 Alexander & Alexander Services 16,178 16,259
964 Allergan Inc 23,582 26,149
4,254 Allied Signal Inc 161,395 189,303
2,867 Alltel Corp 82,927 72,750
2,695 Aluminum Co of America 105,890 135,087
1,200 ALZA Corp+ 26,680 28,050
1,736 Amdahl Corp+ 13,247 19,313
1,359 Amerada Hess Corp 69,979 66,421
2,771 American Brands Inc 97,298 110,147
2,819 American Electric Power Inc 102,069 99,017
7,432 American Express Corp 229,520 261,049
3,058 American General Corp 101,179 103,208
1,125 American Greetings Corp Class A 32,604 33,047
4,580 American Home Products Corp 311,125 354,378
4,678 American International Group Inc 465,052 533,292
2,236 American Stores Co 52,893 62,888
8,280 Ameritech Corp 350,406 364,320
1,931 Amgen Inc+ 96,306 155,325
7,356 Amoco Corp 441,654 490,094
3,122 AMP Inc 110,610 131,905
1,140 AMR Corp+ 75,184 85,073
557 Andrew Corp+ 13,421 32,236
3,814 Anheuser-Busch Inc 196,350 216,921
1,818 Apple Computer Inc 64,041 84,423
1,237 Applied Materials Inc+ 69,977 107,155
7,691 Archer-Daniels-Midland Co 123,673 143,245
</TABLE>
22
<PAGE> 70
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,590 Armco Inc+ $ 10,584 $ 10,733
506 Armstrong World Industries Inc 22,391 25,363
652 ASARCO Inc 14,978 19,886
936 Ashland Inc 31,383 32,877
23,629 AT & T Corp 1,322,764 1,255,291
2,381 Atlantic Richfield Corp 271,671 261,315
726 Autodesk Inc 21,245 31,218
2,180 Automatic Data Processing 120,616 137,068
757 Avery Dennison Corp 23,610 30,280
969 Avon Products Inc 57,200 64,923
2,147 Baker Hughes Inc 51,709 44,014
487 Ball Corp 15,271 16,984
738 Bally Entertainment Corp+ 6,816 9,041
2,193 Baltimore Gas & Electric Co 55,990 54,825
5,914 Banc One Corp 210,737 190,727
1,653 Bank of Boston Corp 46,292 61,988
2,848 Bank of New York Inc+ 98,806 114,988
5,538 BankAmerica Corp 264,679 291,437
1,138 Bankers Trust N Y Corp 81,206 70,556
794 Bard (C R) Inc 20,592 23,820
1,423 Barnett Banks Inc 65,365 72,929
5,284 Barrick Gold Corp 147,736 133,421
176 Bassett Furniture Industries 5,740 4,928
900 Bausch & Lomb Inc 39,722 37,350
4,145 Baxter International Inc 119,974 150,774
1,028 Becton Dickenson & Co 45,182 59,881
6,540 Bell Atlantic Corp 381,784 366,240
7,440 BellSouth Corp 439,237 472,440
797 Bemis Co Inc 19,186 20,722
812 Beneficial Corp 32,255 35,728
1,609 Bethlehem Steel Corp+ 25,254 26,146
1,304 Beverly Enterprises+ 14,810 16,137
1,772 Biomet Inc+ 20,760 27,466
1,239 Black & Decker Corp 29,519 38,254
1,590 Block (H & R) Inc 62,435 65,389
1,898 Boatmen's Bancshares Inc 59,504 66,905
</TABLE>
23
<PAGE> 71
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
5,045 Boeing Co $ 229,092 $ 315,943
736 Boise Cascade Corp 20,525 29,808
2,224 Boston Scientific Corp+ 50,583 70,890
404 Briggs & Stratton Corp 14,438 13,938
7,543 Bristol-Myers Squibb Co 451,161 513,867
272 Brown Group Inc 8,340 6,188
1,050 Brown-Forman Corp Class B 30,426 35,044
3,169 Browning-Ferris Industries Inc 91,691 114,480
1,170 Bruno's Inc 13,185 13,601
1,397 Brunswick Corp 24,334 23,749
1,340 Burlington Northern Inc 74,064 84,923
1,923 Burlington Resources Inc 83,000 70,911
1,063 Cabletron Systems Inc+ 56,328 56,605
3,677 Campbell Soup Co 156,012 180,173
2,270 Capital Cities/ABC Inc 150,151 245,160
2,305 Carolina Power & Light Co 71,689 69,726
3,025 Caterpillar Inc 141,007 194,356
941 CBS Inc 54,624 63,047
407 Centex Corp 14,383 11,498
2,861 Central & South West Corp 84,061 75,101
694 Ceridian Corp+ 16,759 25,591
1,391 Champion International Corp 50,594 72,506
1,533 Charming Shoppes Inc 15,160 8,048
2,641 Chase Manhattan Corp 99,842 124,127
3,592 Chemical Banking Corp Class A 149,749 169,722
9,668 Chevron Corp 449,318 450,771
5,475 Chrysler Corp 243,372 262,116
1,281 Chubb Corp 110,467 102,640
1,081 CIGNA Corp 71,941 83,913
462 Cincinnati Milacron Inc 10,765 12,474
2,312 Cinergy Corp 56,342 60,690
1,400 Circuit City Stores Inc 37,016 44,275
4,018 Cisco Systems Inc+ 146,614 203,160
5,921 Citicorp 235,946 342,678
824 Clorox Co 45,200 53,766
1,524 Coastal Corp 43,839 46,292
</TABLE>
24
<PAGE> 72
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
18,887 Coca-Cola Co $ 929,390 $ 1,204,046
2,129 Colgate-Palmolive Co 127,432 155,683
800 Columbia Gas System Inc+ 21,132 25,400
6,638 Columbia HCA Healthcare Corp 273,658 287,094
3,619 Comcast Corp Class A 70,874 67,178
612 Community Psychiatric Centers+ 7,110 6,885
3,895 Compaq Computer Corp+ 99,204 176,736
2,381 Computer Associates International Inc 103,620 161,313
837 Computer Sciences Corp+ 33,747 47,604
3,693 ConAgra Inc 103,927 128,793
1,192 Conrail Inc 65,140 66,305
3,504 Consolidated Edison Co 115,909 103,368
600 Consolidated Freightways 11,744 13,275
1,351 Consolidated Natural Gas Co 64,042 51,000
1,776 Cooper Industries Inc 81,018 70,152
1,235 Cooper Tire & Rubber Co 32,053 30,103
533 Coors (Adolph) Co Class B 9,770 8,728
2,132 CoreStates Financial Corp 62,358 74,354
3,375 Corning Inc 109,096 110,531
2,207 CPC International Inc 110,215 136,282
402 Crane Co 12,044 14,573
376 Cray Research Inc+ 8,418 9,165
1,387 Crown Cork & Seal Co+ 55,396 69,523
1,546 CSX Corp 119,290 116,143
1,736 CUC International Inc+ 68,453 72,912
581 Cummins Engine Co Inc 25,888 25,346
1,433 Cyprus Amax Minerals 38,475 40,841
1,537 Dana Corp 41,530 43,997
2,356 Darden Restaurants Inc+ 26,005 25,622
513 Data General Corp+ 4,859 4,938
1,093 Dayton-Hudson Corp 75,356 78,423
2,530 Dean Witter Discover & Co 104,189 118,910
1,262 Deere & Co 95,762 108,059
778 Delta Air Lines Inc 45,032 57,378
1,194 Deluxe Corp 41,227 39,551
2,170 Detroit Edison Co 70,474 64,015
</TABLE>
25
<PAGE> 73
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,366 Dial Corp $ 29,348 $ 33,809
2,228 Digital Equipment Corp+ 89,101 90,791
1,729 Dillard Department Stores Inc Class A 57,150 50,789
7,754 Disney (Walt) Co 354,061 431,316
2,558 Dominion Resources Inc 109,841 93,367
2,280 Donnelley (R R) & Sons Co 72,658 82,080
888 Dover Corp 50,585 64,602
4,151 Dow Chemical Co 264,113 298,353
1,427 Dow Jones & Co Inc 47,737 52,621
2,775 Dresser Industries Inc 61,776 61,744
1,718 DSC Communications Corp+ 58,024 79,887
3,083 Duke Power Co 126,902 127,945
2,503 Dun & Bradstreet Corp 146,411 131,408
8,222 DuPont (E I) de Nemours 456,608 565,263
297 Eastern Enterprises 8,123 8,873
1,240 Eastman Chemical Co 64,315 73,780
5,114 Eastman Kodak Co 259,993 310,036
1,125 Eaton Corp 56,833 65,391
919 Echlin Inc 28,860 31,935
1,693 Echo Bay Mines Ltd 16,434 15,237
988 Ecolab Inc 22,300 24,206
779 EG & G Inc 14,420 13,048
3,446 Emerson Electric Co 216,480 246,389
1,418 Engelhard Corp 43,653 60,797
3,745 Enron Corp 128,985 131,543
1,007 Enserch Corp 18,731 17,245
3,411 Entergy Corp 109,023 82,290
18,552 Exxon Corp 1,241,909 1,310,235
855 Federal Express Corp+ 51,854 51,941
2,671 Federal Home Loan Mortgage Corp 153,722 183,631
4,019 Federal National Mortgage Association 333,167 379,293
680 Federal Paper Board Co 18,121 24,055
1,339 First Chicago Corp 65,513 80,173
1,777 First Data Corp 92,939 101,067
1,213 First Fidelity Bancorp 57,734 71,567
1,085 First Interstate Bancorp 79,253 87,071
</TABLE>
26
<PAGE> 74
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
304 First Mississippi Corp $ 4,353 $ 10,374
2,604 First Union Corp 119,735 117,831
2,132 Fleet Financial Group Inc 70,162 79,151
663 Fleetwood Enterprises Inc 14,492 13,094
605 Fleming Co Inc 17,262 16,033
1,239 Fluor Corp 57,228 64,428
584 FMC Corp+ 31,683 39,274
15,358 Ford Motor Co 415,262 456,901
582 Foster Wheeler Corp 19,406 20,516
2,741 FPL Group Inc 104,851 105,871
1,119 Fruit of the Loom Inc Class A+ 30,184 23,639
2,090 Gannett Co Inc 109,299 113,383
2,160 Gap Inc 67,633 75,330
981 General Dynamics Corp 42,550 43,532
25,235 General Electric Co 1,309,884 1,422,623
2,356 General Mills Inc 120,771 121,040
11,153 General Motors Corp 519,594 522,797
1,761 General Public Utilities 52,599 52,390
1,197 General Re Corp 152,873 160,248
746 General Signal Corp 25,903 29,654
1,793 Genuine Parts Co 67,542 67,910
1,300 Georgia-Pacific Corp 91,510 112,775
901 Giant Food Inc Class A 22,179 25,566
564 Giddings & Lewis Inc 11,794 10,082
6,598 Gillette Co 216,976 294,436
834 Golden West Financial 36,060 39,302
366 Goodrich (B F) Co 16,886 19,627
2,252 Goodyear Tire & Rubber Co 92,899 92,895
1,355 Grace (W R) & Co 64,281 83,163
794 Grainger (W W) Inc 46,185 46,648
548 Great Atlantic & Pacific Tea Co 14,174 14,454
963 Great Lakes Chemical Corp 63,732 58,021
2,040 Great Western Financial Corp 38,568 42,075
14,440 GTE Corp 510,091 492,765
1,664 Halliburton Co 62,839 59,488
454 Handleman Co 5,543 4,370
</TABLE>
27
<PAGE> 75
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,062 Harcourt General Inc $ 39,899 $ 45,135
506 Harland (John H) Co 12,582 11,575
639 Harnischfeger Industries Inc 15,685 22,125
625 Harris Corp 27,835 32,266
1,271 Hasbro Inc 44,666 40,354
3,651 Heinz (H J) Co 142,997 162,013
419 Helmerich & Payne Inc 13,400 12,361
1,768 Hercules Inc 65,365 86,190
1,253 Hershey Foods Corp 61,794 69,228
7,571 Hewlett Packard Co 363,786 564,040
755 Hilton Hotels Corp 42,462 53,039
6,746 Home Depot Inc 281,397 274,056
2,108 Homestake Mining Co 37,544 34,782
1,942 Honeywell Inc 72,141 83,749
1,436 Household International Inc 57,820 71,082
2,003 Houston Industries Inc 88,510 84,376
1,655 Illinois Tool Works Inc 71,189 91,025
1,707 Inco Ltd 39,521 48,223
1,532 Ingersoll-Rand Co 55,763 58,599
732 Inland Steel Industries Inc 20,585 22,326
12,406 Intel Corp 481,813 785,455
725 Intergraph Corp+ 8,110 8,066
8,664 International Business Machines Corp 537,871 831,744
1,620 International Flavors & Fragrances 67,848 80,595
1,855 International Paper Co 130,730 159,066
1,161 Interpublic Group Cos Inc 36,677 43,538
1,569 ITT Corp 144,540 184,358
1,191 James River Corp 26,953 32,901
670 Jefferson-Pilot Corp 35,923 36,683
9,615 Johnson & Johnson 476,906 650,214
633 Johnson Controls Inc 34,896 35,765
652 Jostens Inc 13,670 13,855
6,810 K Mart Corp 131,034 99,596
524 Kaufman & Broad Home Corp 9,252 7,598
3,246 Kellogg Co 182,065 231,683
786 Kerr-McGee Corp 41,446 42,149
</TABLE>
28
<PAGE> 76
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
3,584 KeyCorp $ 108,776 $ 112,448
2,380 Kimberly-Clark Corp 123,636 142,503
584 King World Productions+ 22,716 23,652
734 Knight-Ridder Inc 40,402 41,746
1,680 Kroger Co+ 36,908 45,150
4,156 Laidlaw Inc Class B 36,938 40,002
4,390 Lilly (Eli) & Co 257,961 344,615
5,385 Limited Inc 114,270 118,470
1,390 Lincoln National Corp 60,183 60,813
1,095 Liz Claiborne Inc 24,783 23,269
2,993 Lockheed Martin Corp 143,441 188,933
891 Loews Corp 99,174 107,811
300 Longs Drug Stores Corp 10,100 11,250
1,220 Loral Corp 44,924 63,135
722 Lotus Development Corp+ 28,921 46,028
535 Louisiana Land & Exploration Co 22,447 21,333
1,641 Louisiana-Pacific Corp 52,824 43,076
2,388 Lowe's Co Inc 58,516 71,342
374 Luby's Cafeterias Inc 8,290 7,527
379 M/A-Com Inc+ 2,981 4,453
1,114 Mallinckrodt Group Inc 35,599 39,547
923 Manor Care Inc 22,150 26,882
1,797 Marriott International 50,792 64,467
1,125 Marsh & McLennan Companies Inc 95,477 91,266
2,398 Masco Corp 71,888 64,746
3,327 Mattel Inc 69,809 86,502
3,667 May Co Department Stores Co 144,767 152,639
1,602 Maytag Corp 26,257 25,632
2,212 MBNA Corp 56,135 74,655
850 McDermott International Inc 23,767 20,506
10,383 McDonald's Corp 314,183 406,235
1,719 McDonnell Douglas Corp 69,029 131,933
767 McGraw-Hill Inc 53,600 58,196
10,206 MCI Communications 247,389 224,532
803 Mead Corp 38,175 47,678
1,762 Medtronic Inc 84,971 135,894
</TABLE>
29
<PAGE> 77
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
2,184 Mellon Bank Corp $ 85,858 $ 90,909
1,517 Melville Corp 61,930 51,957
497 Mercantile Stores Co Inc 19,326 23,111
18,472 Merck & Co Inc 693,184 905,128
421 Meredith Corp 9,219 10,683
2,573 Merrill Lynch & Co Inc 119,862 135,083
3,056 Micron Technology Inc 81,692 167,698
8,627 Microsoft Corp+ 546,445 779,665
343 Millipore Corp 14,001 23,153
6,233 Minnesota Mining & Manufacturing Co 345,425 356,839
5,912 Mobil Corp 498,605 567,552
1,662 Monsanto Co 116,592 149,788
1,452 Moore Corp Ltd 28,088 32,126
2,747 Morgan (J P) & Co Inc 197,685 192,633
451 Morrison Knudsen Corp 8,763 3,044
2,233 Morton International Inc 64,845 65,315
8,785 Motorola Inc 453,161 589,693
134 NACCO Industries Inc Class A 6,310 8,023
1,011 Nalco Chemical Co 35,860 36,775
2,206 National City Corp 62,091 64,801
1,887 National Semiconductor+ 36,613 52,364
688 National Service Industries Inc 18,201 19,866
4,028 NationsBank 207,939 216,002
1,166 Navistar International Corp+ 23,350 17,636
2,422 NBD Bancorp Inc 77,459 77,504
1,441 New York Times Co Class A 35,012 33,864
2,339 Newell Co 48,019 57,306
1,254 Newmont Mining Corp 51,019 52,511
2,178 Niagara Mohawk Power Corp 43,812 32,126
785 NICOR Inc 21,242 21,097
1,078 Nike Inc Class B 67,686 90,552
1,836 NorAm Energy Corp 14,286 11,934
1,191 Nordstrom Inc 40,930 49,278
1,930 Norfolk Southern Corp 128,995 130,034
1,020 Northern States Power Co 46,789 47,048
3,758 Northern Telecom Ltd 115,780 137,167
</TABLE>
30
<PAGE> 78
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
754 Northrop Grumman Corp $ 31,326 $ 39,302
4,867 Norwest Corp 129,972 139,926
5,504 Novell Inc+ 108,877 109,736
1,261 Nucor Corp 60,152 67,464
6,350 NYNEX Corp 273,571 255,588
4,754 Occidental Petroleum Corp 101,764 108,748
780 Ogden Corp 17,364 17,063
2,253 Ohio Edison Co 52,407 50,974
445 ONEOK Inc 9,018 9,512
6,443 Oracle Systems Corp+ 150,610 248,861
1,560 Oryx Energy Co 29,062 21,450
349 Outboard Marine Corp 7,098 6,849
685 Owens Corning Fiberglass+ 27,677 25,259
614 PACCAR Inc 31,452 28,705
1,192 Pacific Enterprises 30,327 29,204
6,455 Pacific Gas & Electric Co 208,562 187,195
6,360 Pacific Telesis Group 196,260 170,130
4,249 PacifiCorp 81,529 79,669
1,764 Pall Corp 34,383 39,249
2,238 Panhandle Eastern Corp 54,115 54,551
1,088 Parker Hannifin Corp 29,731 39,440
3,301 PECO Energy Co 98,398 91,190
3,439 Penney (J C) Co Inc 155,614 165,072
706 Pennzoil Co 41,088 33,270
476 Peoples Energy Corp 14,663 12,317
932 Pep Boys-Manny Moe & Jack 23,627 24,931
11,753 Pepsico Inc 479,225 536,231
577 Perkin-Elmer Corp 19,004 20,484
4,672 Pfizer Inc 338,313 431,576
1,084 Phelps Dodge Corp 54,291 63,956
12,589 Philip Morris Co Inc 715,810 936,307
3,935 Phillips Petroleum Co 129,860 131,331
1,236 Pioneer Hi Bred International Inc 45,916 51,912
2,222 Pitney Bowes Inc 88,067 85,269
658 Pittston Services Group 14,284 15,792
3,554 Placer Dome Inc 78,485 92,848
</TABLE>
31
<PAGE> 79
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
3,409 PNC Bank Corp $ 97,219 $ 89,912
635 Polaroid Corp 22,608 25,876
475 Potlatch Corp 20,520 19,831
3,064 PPG Industries Inc 110,762 131,752
2,071 Praxair Inc 38,570 51,775
877 Premark International Inc 32,027 45,494
2,918 Price/Costco Inc+ 50,393 47,418
10,221 Procter & Gamble Co 587,904 734,634
1,498 Promus Co Inc+ 61,438 58,422
1,415 Providian Corp 54,936 51,294
3,708 Public Services Enterprise Group 119,918 102,897
405 Pulte Corp 12,877 11,340
2,024 Quaker Oats Co 69,034 66,539
1,544 Ralston-Purina Group 62,736 78,744
687 Raychem Corp 26,371 26,364
1,876 Raytheon Co 125,660 145,625
1,181 Reebok International Ltd 34,279 40,154
942 Reynolds Metals Co 46,948 48,749
1,254 Rite Aid Corp 25,112 32,134
626 Roadway Services Inc 34,289 29,579
3,192 Rockwell International Corp 122,640 146,034
1,044 Rohm & Haas Co 58,027 57,290
1,255 Rowan Co Inc+ 10,869 10,197
7,975 Royal Dutch Petroleum Co 865,795 971,953
2,404 Rubbermaid Inc 74,906 66,711
615 Russell Corp 17,733 17,681
765 Ryan's Family Steak House+ 6,286 6,024
1,205 Ryder System Inc 29,868 28,769
973 SAFECO Corp 58,952 55,887
880 Safety-Kleen Corp 14,342 14,190
1,532 Salomon Inc 66,918 61,472
1,332 Santa Fe Energy Resources Inc 13,142 12,654
2,316 Santa Fe Pacific Corp 41,756 59,058
1,953 Santa Fe Pacific Gold Corp 26,969 23,680
7,136 Sara Lee Corp 187,033 203,376
9,066 SBC Communication Inc 392,848 431,768
</TABLE>
32
<PAGE> 80
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
6,690 SCEcorp $ 141,546 $ 114,566
5,510 Schering-Plough Corp 188,044 243,129
3,622 Schlumberger Ltd 229,859 225,017
1,115 Scientific-Atlanta Inc 20,587 24,530
2,228 Scott Paper Co 62,470 110,286
5,543 Seagram Co Ltd 151,438 191,926
5,755 Sears Roebuck & Co 301,358 344,581
1,441 Service Corp International 37,630 45,572
336 Shared Medical System Corp 8,810 13,482
1,935 Shawmut National Corp 48,578 61,678
1,247 Sherwin Williams Co 42,805 44,424
582 Shoney's Inc+ 10,707 6,839
789 Sigma Aldrich Corp 31,338 38,760
2,371 Silicon Graphics Inc+ 83,086 94,544
153 Skyline Corp 2,924 2,773
586 Snap-On Inc 23,203 22,708
1,311 Sonat Inc 42,285 39,986
9,983 Southern Co 214,327 223,370
2,181 Southwest Airlines Co 56,722 52,071
264 Springs Industries Inc Class A 10,066 9,834
5,222 Sprint Corp 179,454 175,590
205 SPX Corp 3,284 2,332
729 St Jude Medical Inc 26,981 36,541
1,214 St Paul Co Inc 55,868 59,790
710 Stanley Works 29,317 26,891
1,352 Stone Container Corp+ 19,316 28,730
764 Stride Rite Corp 10,512 7,927
1,649 Sun Co Inc 47,900 45,141
1,462 Sun Microsystems Inc+ 47,650 70,907
1,718 SunTrust Banks Inc 82,946 100,074
1,075 Super Value Inc 34,697 31,309
2,712 Sysco Corp 76,539 80,004
1,694 Tandem Computers Inc+ 19,764 27,316
1,047 Tandy Corp 42,381 54,313
491 Tektronix Inc 16,161 24,182
9,800 Tele-Communication Inc Class A+ 228,025 229,688
</TABLE>
33
<PAGE> 81
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
872 Teledyne Inc+ $ 21,128 $ 21,364
848 Temple-Inland Inc 37,758 40,386
2,958 Tenet Healthcare Corp+ 39,914 42,521
2,668 Tenneco Inc 131,566 122,728
3,825 Texaco Inc 251,865 251,016
1,386 Texas Instruments Inc 122,180 185,551
3,375 Texas Utilities Co 142,543 116,016
1,228 Textron Inc 68,391 71,378
289 Thomas & Betts Corp 18,464 19,760
5,651 Time Warner Inc 222,355 232,397
1,707 Times Mirror Co Class A 37,584 40,755
447 Timken Co 15,621 20,618
1,123 TJX Companies Inc 25,448 14,880
1,095 Torchmark Corp 54,287 41,336
4,142 Toys R Us Inc+ 137,061 121,154
1,065 Transamerica Corp 61,798 62,036
4,756 Travelers Inc 202,254 208,075
1,015 Tribune Co 55,441 62,296
413 Trinova Corp 12,112 14,455
989 TRW Inc 67,091 78,996
1,106 Tyco International Inc 53,983 59,724
1,439 U.S. Bancorp 36,553 34,626
2,360 U.S. Healthcare Inc 98,984 72,275
382 U.S. Life Corp 15,153 15,376
7,044 U.S. West Inc 310,445 293,207
3,214 Unicom Corp 90,568 85,573
2,362 Unilever NV 271,231 307,355
1,074 Union Camp Corp 51,554 62,158
2,027 Union Carbide Corp 45,888 67,651
1,493 Union Electric Co 60,700 55,614
3,065 Union Pacific Corp 184,097 169,724
2,579 Unisys Corp+ 28,214 28,047
2,535 United Healthcare Corp 109,906 104,886
870 United States Surgical 20,719 18,161
1,876 United Technologies Corp 118,807 146,563
3,630 Unocal Corp 104,719 100,279
</TABLE>
34
<PAGE> 82
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,078 UNUM Corp $ 55,938 $ 50,531
2,564 Upjohn Co 79,205 97,112
929 USAir Group Inc+ 11,881 10,800
1,440 USF & G Corp 23,466 23,400
2,940 UST Inc 83,084 87,465
4,409 USX - Marathon Group 84,061 87,078
1,157 USX - US Steel Group 38,134 39,772
593 Varity Corp+ 24,297 26,092
984 VF Corp 47,022 52,890
5,333 Viacom Inc Class B+ 222,924 247,318
2,532 Wachovia Corp 95,318 90,519
34,200 Wal Mart Stores Inc 871,745 914,850
1,796 Walgreen Co 74,852 90,025
1,988 Warner Lambert Co 145,664 171,714
699 Wells Fargo & Co 91,787 125,995
1,570 Wendy's International Inc 24,258 28,064
818 Western Atlas Inc+ 32,453 36,299
5,359 Westinghouse Electric Corp 80,637 78,375
1,024 Westvaco Corp 39,024 45,312
3,087 Weyerhaeuser Co 129,265 145,475
1,131 Whirlpool Corp 67,150 62,205
1,577 Whitman Corp 25,486 30,554
1,485 Williams Co Inc 45,421 51,789
1,081 Winn-Dixie Stores Inc 62,944 62,428
7,281 WMX Technologies Inc 212,709 206,598
1,946 Woolworth Corp 42,280 29,433
1,331 Worthington Industries Inc 26,004 27,202
1,687 Wrigley (Wm) Jr Co 70,894 78,235
1,639 Xerox Corp 150,259 192,173
386 Yellow Corp 8,661 6,996
714 Zenith Electronic Corp+ 5,377 5,266
192 Zurn Industries Inc 5,527 3,840
------------ ------------
TOTAL COMMON STOCKS $ 52,823,373 $ 59,607,495
</TABLE>
35
<PAGE> 83
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
YIELD TO MATURITY
PRINCIPAL SECURITY NAME MATURITY DATE VALUE
<S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 1.73%
$ 16,000 U.S. Treasury Bills 5.19 % 07/06/95 $ 15,986
61,000 U.S. Treasury Bills 5.25 07/27/95 60,755
102,000 U.S. Treasury Bills 5.42 08/10/95 101,376
57,000 U.S. Treasury Bills 5.48 08/24/95 56,550
21,000 U.S. Treasury Bills 5.49 08/17/95 20,852
244,000 U.S. Treasury Bills 5.54 09/07/95 241,584
552,000 U.S. Treasury Bills 5.56 09/21/95 545,352
------------
TOTAL SHORT-TERM INSTRUMENTS $ 1,042,455
(Cost $1,042,242)
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $53,865,615)*(Notes 1 and 3) 100.63% $60,649,950
Other Assets and Liabilities, Net (0.63)% (378,906)
------ ------------
TOTAL NET ASSETS 100.00% $60,271,044
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------------------
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 8,065,683
Gross Unrealized Depreciation (1,281,348)
-------------
NET UNREALIZED APPRECIATION $ 6,784,335
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
36
<PAGE> 84
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS - 95.97%
$ 1,000,000 ABAG Finance Authority for Nonprofit
Corporations COP CA State Insured 7.10 % 12/01/20 $ 1,031,260
1,000,000 Alameda CA USD AMBAC Insured 6.05 07/01/11 1,010,470
1,000,000 Alameda CA USD MBIA Insured 5.70 12/01/14 965,670
1,000,000 Alameda County CA Public Facilities Corp COP 6.25 06/01/06 1,015,720
1,000,000 Alameda County CA Water District Revenue COP
Water System Project MBIA Insured 6.20 06/01/13 1,008,610
100,000 Albany CA Public Facilities Finance Authority
Lease Revenue Capital Improvement Project 6.90 09/01/12 102,639
500,000 Albany CA Public Facilities Finance Authority
Lease Revenue Capital Improvement Project 7.85 09/01/09 533,520
1,000,000 Antioch CA Development Agency Tax Allocation
Project 1 FGIC Insured 6.40 09/01/17 1,023,670
1,000,000 Berryessa CA USD Series A 6.80 03/01/12 1,036,680
1,000,000 Buena Park CA Community RDA Tax Allocation
Central Business District Project 7.10 09/01/14 1,016,770
3,550,000 California State Department of Water Resources
Central Valley Project Revenue Series L 5.75 12/01/14 3,424,650
1,000,000 California State Department of Water Resources
Central Valley Project Revenue Series L MBIA
Insured 5.50 12/01/09 963,050
</TABLE>
37
<PAGE> 85
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
$ 2,000,000 California State Educational Facilites
Authority Revenue Chapman College Refunding
Pending 7.30 % 01/01/02 $ 2,180,260
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
1,000,000 California State Educational Facilities
Authority Revenue Claremont Colleges Pooled
Facilities 6.38 05/01/22 1,014,460
350,000 California State Educational Facilities
Authority Revenue Loyola Marymount University 6.00 10/01/14 341,719
710,000 California State Educational Facilities
Authority Revenue Loyola Marymount University
Series B 6.55 10/01/12 736,405
1,200,000 California State Educational Facilities
Authority Revenue University of San Diego
Project 6.50 10/01/08 1,259,520
700,000 California State Health Facilities Financing
American Baptist Homes West State Insured 7.65 04/01/14 733,859
1,000,000 California State Health Facilities Financing
Authority Cedar Knoll Insured Series B State
Insured 7.50 08/01/20 1,053,480
1,000,000 California State Health Facilities Financing
Authority Episcopal Homes Foundation Project
State Insured 7.75 07/01/18 1,026,110
400,000 California State Health Facilities Financing
Authority Episcopal Homes Foundation Project
State Insured 7.85 07/01/15 410,440
</TABLE>
38
<PAGE> 86
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 California State Health Facilities Financing
Authority Gould Medical Foundation Escrowed
to Maturity 7.25 % 04/01/10 $ 1,116,410
1,250,000 California State Health Facilities Financing
Authority Gould Medical Foundation Escrowed
to Maturity 7.30 04/01/20 1,374,075
2,855,000 California State Health Facilities Financing
Authority Kaiser Permanente Series A 6.50 12/01/20 2,904,648
1,745,000 California State Health Facilities Financing
Authority Kaiser Permanente Series A 7.00 12/01/10 1,873,013
1,000,000 California State Health Facilities Financing
Authority Kaiser Permanente Series A 7.00 10/01/18 1,062,620
2,000,000 California State Health Facilities Financing
Authority Revenue Catholic Healthcare West
AMBAC Insured 5.75 07/01/15 1,897,340
1,000,000 California State Health Facilities Financing
Authority Revenue Insured Health Facilities
Valleycare Series State Insured 6.50 05/01/05 1,040,830
1,750,000 California State Health Facilities Financing
Authority Revenue Small Insured Health
Facilities Series A 6.75 03/01/20 1,756,685
1,000,000 California State Health Facilities Financing
Authority San Diego Hospital Association MBIA
Insured 6.20 08/01/12 1,006,270
</TABLE>
39
<PAGE> 87
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 525,000 California State HFA Home Mortgage Revenue AMT
Series B Multiple Credit Enhancements 8.00 % 08/01/29 $ 547,717
1,455,000 California State HFA Home Mortgage Revenue AMT
Series D Multiple Credit Enhancements 7.75 08/01/10 1,533,745
360,000 California State HFA Home Mortgage Revenue AMT
Series G Multiple Credit Enhancements 8.15 08/01/19 375,829
1,535,000 California State HFA Home Mortgage Revenue
Series A Multiple Credit Enhancements 7.35 08/01/11 1,624,061
560,000 California State HFA Home Mortgage Revenue
Series B Multiple Credit Enhancements 7.25 08/01/10 589,187
140,000 California State HFA Home Mortgage Revenue
Series F Multiple Credit Enhancements 7.75 08/01/08 147,288
140,000 California State HFA Insured Housing Revenue
AMT Series C MBIA Insured 7.00 08/01/23 144,463
1,575,000 California State HFA Multi-Unit Rental Housing
Revenue AMT Series A 5.50 08/01/15 1,420,272
1,000,000 California State PCR San Diego Gas & Electric
Co AMT 6.80 06/01/15 1,099,520
1,000,000 California State PCR Southern California Edison
AMT 6.90 09/01/06 1,054,390
1,500,000 California State PCR Southern California Edison
Series B 6.85 12/01/08 1,584,705
</TABLE>
40
<PAGE> 88
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,500,000 California State Pollution Control Financing
Authority Resource Recovery Revenue Waste
Management AMT Series A 7.15 % 02/01/11 $ 2,677,000
180,000 California State Public Capital Improvements
Financing Authority Revenue Joint Powers
Agency Pooled Projects Series 8.25 03/01/98 193,466
1,000,000 California State Public Works Board Lease
Revenue University Of California Project
Series A AMBAC Insured 6.30 12/01/09 1,036,720
1,500,000 California State Public Works Board Lease
Revenue University Of California Project
Series B MBIA Insured 5.38 12/01/19 1,362,645
1,500,000 California Statewide Communities Development
Authority Revenue COP Hospital Cedars Sinai
Medical Center 6.50 08/01/12 1,572,300
1,500,000 California Statewide Development Motion Picture
and TV AMBAC Insured 5.25 01/01/14 1,367,220
1,590,000 California Statewide Motion Picture Development
and TV AMBAC Insured 5.25 01/01/13 1,453,499
1,000,000 Cerritos CA Public Financing Authority
Redevelopment Los Cerritos Redevelopment
Project Revenue AMBAC Insured 5.75 11/01/22 953,660
870,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/11 844,318
</TABLE>
41
<PAGE> 89
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 4,000,000 Contra Costa CA Transportation Authority Sales
Tax Revenue Series A FGIC Insured 5.50 % 03/01/08 $ 3,933,840
3,000,000 Contra Costa CA Water District Water Revenue
Series G MBIA Insured 5.75 10/01/14 2,897,730
1,200,000 Contra Costa County CA COP Public Facilities
Merrithew Memorial Hospital Replacement 6.60 11/01/12 1,231,308
500,000 Contra Costa County CA COP Public Facilities
Merrithew Memorial Hospital Replacement 6.63 11/01/22 507,895
270,000 Contra Costa County CA Home Mortgage Revenue
Mortgaged Backed Securities Project AMT
Escrowed to Maturity 7.75 05/01/22 326,030
750,000 Contra Costa County CA Public Financing
Authority Tax Allocation Revenue Series A 7.10 08/01/22 761,520
755,000 Contra Costa County CA Transportation Authority
Sales Tax Revenue Series A Escrowed to
Maturity 6.50 03/01/09 814,471
1,000,000 Covina CA COP Water System Improvement Project 7.30 04/01/16 1,039,790
1,500,000 Cupertino CA COP Series A AMBAC Insured 5.75 07/01/16 1,438,140
745,000 Danville CA COP 6.50 11/01/06 767,566
525,000 Danville CA COP 6.60 11/01/07 540,845
2,675,000 East Bay CA MUD Water System Revenue MBIA
Insured 6.00 06/01/12 2,660,207
3,655,000 East Bay CA Regional Park District Series B 5.75 09/01/13 3,545,313
</TABLE>
42
<PAGE> 90
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 500,000 Eastern Municipal Water District CA Water &
Sewer Revenue Certificates FGIC Insured 6.30 % 07/01/20 $ 504,355
2,500,000 El Dorado County CA Bond Authority Lease
Revenue Capital Facilities Project 7.40 11/01/09 2,666,850
1,000,000 Emeryville CA Public Financing Authority
Housing Increment Revenue Series A 6.35 05/01/10 1,009,050
2,000,000 Emeryville CA Public Financing Authority
Housing Increment Revenue Series A 7.88 02/01/15 2,122,620
2,000,000 Escondido CA Joint Powers Financing Authority
Lease Revenue Center for the Arts AMBAC
Insured 6.00 09/01/18 1,962,940
500,000 Escondido CA USD COP Series B 6.50 09/01/13 511,315
750,000 Escondido CA USD COP Series B 6.50 09/01/14 766,973
1,725,000 Escondido Joint Powers Financing Authority
Lease Revenue Center for the Arts AMBAC
Insured 5.80 09/01/09 1,711,183
1,410,000 Fairfield CA Public Finance Authority CGIC
Insured 5.20 08/01/08 1,322,792
700,000 Fontana CA USD Series B AMBAC Insured 5.40 07/01/08 678,160
3,000,000 Fontana CA USD Series C FGIC Insured 6.11 + 05/01/20 2,587,980
1,000,000 Fresno CA COP Street Improvement Project 6.63 12/01/11 1,027,020
2,000,000 Fresno CA USD Series A MBIA Insured 5.70 08/01/15 1,932,440
3,840,000 Hayward CA COP Capital Improvement Projects 6.80 08/01/17 3,895,795
</TABLE>
43
<PAGE> 91
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,800,000 Huntington Beach CA Public Finance Authority
Revenue Bond 7.00 % 08/01/10 $ 2,736,748
500,000 Industry CA Agency Project 6.70 11/01/03 528,705
1,080,000 Industry CA Urban Development Agency 6.85 11/01/04 1,145,826
1,250,000 Industry CA Urban Development Agency 7.30 05/01/06 1,292,463
500,000 Industry CA Urban Development Agency Project 3 6.60 11/01/02 528,395
1,000,000 Industry CA Urban Development Agency Tax
Allocation MBIA Insured 5.80 05/01/09 1,001,480
1,500,000 Inglewood CA COP Civic Center Improvement
Project Public Finance Authority 7.00 08/01/19 1,530,390
485,000 Inglewood CA Public Finance Authority Revenue
Series C 7.00 05/01/22 495,195
450,000 Irvine Ranch CA Water District Joint Powers
Agency Local Pool Revenue 7.80 02/15/08 470,898
2,000,000 Kern County CA COP 7.10 12/01/07 2,102,500
1,600,000 Lincoln CA RDA Tax Allocation 7.60 08/01/16 1,683,616
1,000,000 Lincoln CA USD Special Tax Community District
Number 1B 7.20 09/01/21 1,061,280
1,000,000 Long Beach CA Finance Authority Revenue AMBAC
Insured 6.00 11/01/17 993,770
7,600,000 Los Angeles CA Airport Revenue Series A FGIC
Insured 5.50 05/15/08 7,439,108
750,000 Los Angeles CA Community College District COP
Prerefunded 7.00 08/15/10 846,623
</TABLE>
44
<PAGE> 92
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Los Angeles CA Community College District COP
Series A CGIC Insured 6.00 % 08/15/08 $ 1,025,600
1,000,000 Los Angeles CA Community RDA Financing
Authority Revenue AMT 5.90 12/01/13 896,290
4,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue 5.38 09/01/23 3,616,720
1,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue 6.38 02/01/20 1,029,610
1,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue Second Issue 6.00 08/15/32 966,940
2,775,000 Los Angeles CA Harbor Revenue AMT Series B 6.50 08/01/13 2,877,148
100,000 Los Angeles CA Harbor Revenue Escrowed to
Maturity 7.60 10/01/18 110,163
120,000 Los Angeles CA SFMR AMT Series A Multiple
Credit Enhancements 7.55 12/01/23 124,580
7,250,000 Los Angeles CA Wastewater System Revenue Series
A 5.70 06/01/20 6,880,323
1,500,000 Los Angeles County CA COP Capital Appreciation
Disney Parking Project 8.05 + 03/01/08 651,285
1,000,000 Los Angeles County CA TRAN Multiple LOC's 4.50 07/01/96 1,006,920
1,000,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B 5.75 07/01/18 954,590
4,275,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B 6.50 07/01/13 4,400,899
</TABLE>
45
<PAGE> 93
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 480,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B FGIC Insured 6.50 % 07/01/15 $ 494,750
2,395,000 Lucia Mar CA USD COP Prerefunded 6.90 05/01/15 2,476,526
1,550,000 Madera CA COP 7.38 05/01/20 1,605,118
1,000,000 Menlo Park CA Community Development Agency Tax
Allocation Las Pulgas Community Project AMBAC
Insured 6.70 10/01/22 1,052,060
665,000 Mid Peninsula CA Regional Open Space District
Promissory Notes 6.30 07/10/10 679,504
2,000,000 Mid Peninsula Regional Open Space District CA
Promissory Notes 7.00 09/01/14 2,081,300
2,110,000 Modesto CA COP Recreational Facilities CA
Public Agency Leasing Corp 7.25 07/01/11 2,190,961
520,000 Mojave CA Water Agency Improvement District M
Morongo Basin 6.25 09/01/02 538,070
500,000 Mojave CA Water Agency Improvement District M
Morongo Basin 6.60 09/01/12 506,010
1,000,000 Montclair CA RDA Project Three 7.15 12/01/15 1,024,380
1,000,000 Mountain View CA Shoreline Regional Park
Community Tax Allocation Series A 5.60 08/01/09 929,600
1,450,000 Nevada County CA COP Solid Waste Western Nevada
County 6.50 10/01/06 1,498,851
</TABLE>
46
<PAGE> 94
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 345,000 Nevada County CA COP Solid Waste Western Nevada
County 7.00 % 06/01/98 $ 349,102
345,000 Nevada County CA COP Solid Waste Western Nevada
County 7.10 06/01/99 350,344
1,000,000 Nevada County CA COP Solid Waste Western Nevada
County 7.50 06/01/21 991,860
1,035,000 Northridge CA Water District AMBAC Insured 5.40 02/01/11 977,382
1,000,000 Nuview CA USD COP 7.25 02/01/16 1,015,870
1,500,000 Ontario CA RDA Revenue Project One MBIA Insured 6.00 08/01/15 1,465,545
1,000,000 Orange County CA CFD Special Tax Series A
Prerefunded 7.45 08/15/04 1,146,690
1,000,000 Orange County CA CFD Special Tax Series A
Prerefunded 7.50 08/15/05 1,148,940
1,945,000 Orange County CA Transit District COP Business
Acquisition Project 6.75 12/01/05 1,853,079
1,000,000 Orange County CA Water District COP Series A 5.50 08/15/10 924,190
1,000,000 Otay CA Municipal Water District GO Improvement
District No. 27 6.70 09/01/22 998,730
1,000,000 Palm Springs CA COP Municipal Golf Course
Expansion Project 7.40 11/01/18 1,031,130
1,500,000 Pittsburg CA RDA Tax Allocation CA Avenue
Community Facilities 90-1 Subordinated 7.40 08/15/20 1,554,105
2,400,000 Pittsburg CA RDA Tax Allocation Los Medanos
Community Development Project FGIC Insured 5.50 08/01/07 2,382,264
</TABLE>
47
<PAGE> 95
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,250,000 Pittsburg CA RDA Tax Allocation Los Medanos
Community Development Project FGIC Insured 5.50 % 08/01/15 $ 2,106,855
1,000,000 Port of Oakland CA Special Facilities Revenue
Mitsui OSK Lines Limited AMT Series A LOC -
Industrial Bank of Japan Ltd 6.70 01/01/07 1,054,630
1,500,000 Rancho CA Water District Financial Authority
Revenue FGIC Insured 6.25 08/01/12 1,527,510
1,000,000 Rancho Cucamonga CA Redevelopment Agency Tax
Allocation MBIA Insured 5.50 09/01/23 919,670
685,000 Rancho Mirage CA Joint Powers 7.50 04/01/09 719,654
1,350,000 Richmond CA Joint Powers Finance Authority
Revenue Series B 7.25 05/15/13 1,383,372
100,000 Richmond CA RDA Tax Allocation Harbour
Redevelopment Project CGIC Insured 7.00 07/01/09 110,646
1,055,000 Riverside CA Sewer Revenue FGIC Insured 5.00 08/01/10 960,683
1,750,000 Riverside County CA Asset Leasing Corporation
Leasehold Revenue Riverside County Hospital
Project A 6.38 06/01/09 1,764,018
3,000,000 Riverside County CA COP Series A 6.88 11/01/09 3,106,230
410,000 Riverside County CA SFMR AMT Project A GNMA
Collateralized 6.85 10/01/16 430,672
1,250,000 Riverside County CA Transportation Commission
Sales Tax Revenue Series A 6.50 06/01/09 1,287,213
</TABLE>
48
<PAGE> 96
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,370,000 Rosemead CA RDA Tax Allocation Redevelopment
Project Area 1-A 5.50 % 10/01/18 $ 1,157,376
1,335,000 Roseville CA Joint Unified High School District
Capital Appreciation Series A 8.00 + 08/01/06 720,366
1,900,000 Sacramento CA COP Light Rail Transportation
Project 6.75 07/01/07 2,049,853
3,600,000 Sacramento CA MUD Electric Revenue Series E
MBIA-IBC Insured 5.70 05/15/12 3,485,340
1,000,000 Sacramento CA MUD Electric Revenue Series Y
MBIA Insured 6.75 09/01/09 1,070,970
500,000 Sacramento CA MUD Electric Revenue Series Z
FGIC Insured 6.45 07/01/10 520,230
850,000 Saint Helena CA COP Series C 7.88 06/01/11 901,213
1,000,000 San Bernardino CA Municipal Water Department
COP FGIC Insured 6.25 02/01/12 1,005,270
2,000,000 San Buenaventura CA Capital Improvement Project
COP 6.85 08/01/16 2,016,180
230,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/01 245,146
250,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/02 267,173
225,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/03 240,577
235,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/04 250,014
235,000 San Carlos CA RDA Tax Allocation Series A 7.10 09/01/05 250,583
1,520,000 San Diego CA COP 6.90 07/15/16 1,580,937
</TABLE>
49
<PAGE> 97
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 San Diego CA Regional Building Authority Lease
Revenue San Miguel Consolidated Fire
Protection District MBIA Insured 5.65 % 01/01/20 $ 943,110
1,230,000 San Diego County CA COP East Mesa Detention
Facilities Project 7.00 10/01/09 1,268,930
500,000 San Diego County CA Regional Transportation
Community Sales Tax Revenue Series A Escrowed
to Maturity 6.00 04/01/08 529,060
2,250,000 San Francisco CA BART Sales Tax Revenue FGIC
Insured 5.50 07/01/15 2,107,238
1,000,000 San Francisco CA City & County Public Utilities
Commission Water Revenue Series A 6.50 11/01/09 1,058,090
2,000,000 San Francisco CA City & County Public Utilities
Commission Water Revenue Series A 6.75 11/01/10 2,150,940
1,800,000 San Joaquin County CA COP North County Landfill
Project 7.00 04/01/11 1,842,498
2,000,000 San Joaquin Hills CA Transportation Corridor
Agency Toll Road Revenue Capital Appreciation 4.55 + 01/01/10 1,322,580
1,000,000 San Jose CA RDA Tax Allocation Park Center
Redevelopment Project 7.00 10/01/05 1,033,020
1,000,000 San Jose CA RDA Tax Allocation Park Center
Redevelopment Project 7.00 10/01/06 1,028,530
1,935,000 San Mateo County CA Board of Education COP 7.10 05/01/21 1,980,318
2,400,000 Santa Clara CA Electric Revenue Series A MBIA
Insured 6.25 07/01/13 2,436,120
</TABLE>
50
<PAGE> 98
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,700,000 Santa Clara County CA COP Multiple Facilities
Project AMBAC Insured 6.00 % 05/15/12 $ 1,690,582
100,000 Santa Clara County CA COP Public Facilities
Corporation 7.75 11/01/08 108,421
1,260,000 Santa Cruz County CA Public Financing Authority
Series C 7.10 08/01/05 1,340,035
750,000 Santa Maria CA RDA Town Center West Side
Parking Facilities FSA Insured 5.25 06/01/11 692,603
1,195,000 Santa Rosa CA High School District FGIC Insured 5.90 05/01/13 1,182,990
1,000,000 Shasta CA Dam Area Public Utility District COP 7.25 03/01/12 1,033,630
350,000 Shasta CA Joint Powers Financing Authority
Landfill Revenue Series A 7.20 07/01/09 366,405
500,000 Shasta CA Joint Powers Financing Authority
Landfill Revenue Series A 7.20 07/01/10 522,680
1,500,000 Snowline CA Joint USD COP 6.40 07/01/18 1,418,850
520,000 Sonoma County CA COP 6.75 10/01/06 552,427
1,000,000 South County CA Regional Wastewater Authority
Revenue Regional Wastewater Facilities &
Capital Improvement FGIC Insured 5.75 08/01/10 984,840
1,000,000 South San Francisco CA Capital Improvements
Financing Authority Revenue South Conference
Center 6.13 09/01/18 924,850
1,105,000 Southern California State HFA SFMR AMT Series A
GNMA Collateralized 7.63 10/01/22 1,155,222
</TABLE>
51
<PAGE> 99
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 540,000 Southern California State HFA SFMR AMT Series A
GNMA Collateralized 7.63 % 10/01/23 $ 566,714
670,000 Southern California State HFA SFMR AMT Series A
GNMA/FNMA Collateralized 6.75 09/01/22 689,021
2,800,000 Southern California State Metropolitan Water
District 5.50 07/01/19 2,573,032
600,000 Southern California State Public Power Agency
Electrical Improvements 7.00 07/01/09 630,282
2,750,000 Southern California State Public Power
Authority Transmission Project Revenue
Southern Transmission Project 6.13 07/01/18 2,728,083
1,450,000 Southern California State Public Power
Authority Transmission Revenue Project 5.75 07/01/21 1,368,017
695,000 Southern California State UHFA SFMR AMT Series
A GNMA/FNMA Collateralized 7.35 09/01/24 721,181
2,000,000 Stanislaus County CA COP Series A 6.85 06/01/12 2,040,220
750,000 Stockton CA Port District Revenue Series A 8.10 01/01/14 807,833
20,000 Stockton CA SFMR Series Government Agency
Collateralized 7.50 02/01/23 21,165
265,000 Sulphur Springs CA USD COP AMBAC Insured 7.15 02/01/11 284,417
5,690,000 Sulphur Springs CA USD Series A MBIA Insured 8.34 + 09/01/13 1,861,199
1,000,000 Sunnyvale CA Financing Authority Utilities
Revenue Solid Waste Materials AMT Series B
MBIA Insured 6.00 10/01/08 1,014,930
</TABLE>
52
<PAGE> 100
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Temecula Valley CA USD Series D FGIC Insured 6.00 % 09/01/14 $ 989,670
1,000,000 Twentynine Palms CA Water District CA COP 7.00 08/01/17 1,013,400
3,000,000 University of California Revenue Multiple
Purpose Project C AMBAC Insured 5.25 09/01/11 2,768,220
2,300,000 University of California Revenue Multiple
Purpose Projects Series C AMBAC Insured 5.25 09/01/12 2,116,023
1,750,000 University of California Revenue Seismic Safety
Project MBIA Insured 5.50 11/01/10 1,679,388
1,095,000 University of California Revenues Multiple
Purpose Projects Series B MBIA Insured 6.00 09/01/13 1,088,737
990,000 Upland CA Housing Authority Revenue Issue A 7.85 07/01/20 1,030,768
1,000,000 Vacaville CA Public Financing Authority Tax
Allocation Redevelopment Project MBIA Insured 6.35 09/01/22 1,013,540
1,135,000 Walnut Valley CA USD Series C FGIC Insured 5.75 08/01/15 1,090,418
1,000,000 West & Central Basin CA Financing Authority
Redevelopment AMBAC Insured 6.13 08/01/12 1,004,560
500,000 West End CA Water Development Treatment &
Conservation Joint Powers Authority 7.00 10/01/04 528,390
</TABLE>
53
<PAGE> 101
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,000,000 West End CA Water Development Treatment &
Conservation Joint Powers Authority 7.00 % 10/01/05 $ 2,108,000
1,000,000 Yolo County CA Housing Authority Mortgage
Revenue AMT FHA Collateralized 7.20 08/01/33 1,044,050
------------
TOTAL CALIFORNIA MUNICIPAL BONDS $273,919,020
(Cost $268,060,381)
SHORT-TERM INSTRUMENTS - 3.35%
CALIFORNIA MUNICIPAL VARIABLE RATE
SECURITIES - 3.24%
$ 1,000,000 California State Health Facilities Financing
Authority Sutter Hospital V/R LOC - Morgan
Guaranty Trust 4.10 % 03/01/20 $ 1,000,000
2,100,000 Irvine CA IDA Improvement Bond V/R LOC -
National Westminster Bank PLC 4.30 09/02/15 2,100,000
1,450,000 Los Angeles County CA IDA COE & DRU V/R AMT LOC
- Dai-Ichi Kangyo Bank Ltd 4.50 12/01/06 1,450,000
950,000 Los Angeles County CA IDA Komax System Inc V/R
AMT LOC - Dai-Ichi Kangyo Bank Ltd 4.50 12/01/06 950,000
1,000,000 Los Angeles County CA V/R 4.40 12/01/05 1,000,000
1,140,000 Orange County CA Improvement Bond V/R Multiple
LOC's 4.60 09/02/18 1,140,000
1,600,000 Orange County CA Sanitation V/R Multiple Credit
Enhancements 4.20 08/01/16 1,600,000
------------
$ 9,240,000
</TABLE>
54
<PAGE> 102
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME VALUE
<S> <C> <C> <C>
SHORT-TERM INSTRUMENTS (CONTINUED)
MONEY MARKET FUNDS - 0.11%
$ 318,271 Arbor Fund CA Tax-Exempt Portfolio $ 318,271
------------
TOTAL SHORT-TERM INSTRUMENTS $ 9,558,271
(Cost $9,558,265)
TOTAL INVESTMENTS IN SECURITIES
(Cost $277,618,646)*(Notes 1 and 3) 99.32% $283,477,291
Other Assets and Liabilities, Net 0.68% 1,943,229
------ ------------
TOTAL NET ASSETS 100.00% $285,420,520
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
+ YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 8,557,614
Gross Unrealized Depreciation (2,698,969)
-------------
NET UNREALIZED APPRECIATION $ 5,858,645
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
55
<PAGE> 103
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES - 104.24%
$ 1,900,000 ABAG CA Finance Authority for Nonprofit
Corporations COP Lucile Salter Packard
Project V/R AMBAC Insured 3.95 % 08/01/23 $ 1,900,000
1,700,000 Alhambra CA IDA Sunclipse V/R LOC - Bank of
America 3.65 05/01/07 1,700,000
5,200,000 Big Bear Lake CA Industrial Revenue Southwest
Gas Corp AMT V/R Series A LOC - Union Bank of
Switzerland 4.10 12/01/28 5,200,000
9,055,000 California State Depatment of Water Resources
Central Valley Project V/R 4.15 12/01/05 9,055,000
2,600,000 California State Health Facilities Financing
Authority Adventist Health System V/R LOC -
Toronto Dominion Bank 3.80 08/01/21 2,600,000
4,900,000 California State HFFA Kaiser Permanente V/R 3.90 05/01/28 4,900,000
900,000 California State PCR Burney Forest Products V/R
AMT LOC - National Westminster Bank PLC 4.35 09/01/20 900,000
965,000 California State PCR Chevron Project V/R 4.10 11/15/01 965,000
2,900,000 California State PCR Financing Authority Solid
Waste Disposal Revenue Shell Oil Co Martinez
Project V/R AMT AMBAC Insured 4.30 12/01/24 2,900,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
56
<PAGE> 104
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 7,300,000 California State PCR Wadham Project V/R AMT LOC
- Banque Paribas 4.35 % 11/01/17 $ 7,300,000
1,000,000 California State PCR Western Waste Industries
Project V/R LOC - Citibank 4.38 12/01/00 1,000,000
1,200,000 California State Pollution Control Financing
Authority PCR Southern California Edison V/R
Series A 4.50 02/28/08 1,200,000
4,000,000 California State Pollution Control Financing
Authority PCR V/R San Diego Gas & Electric Co
V/R Series A 4.25 12/01/07 4,000,000
5,000,000 California State Pollution Control Financing
Authority Solid Waste Disposal Revenue Colmac
Energy Project Series B V/R AMT LOC - Swiss
Bank 4.10 12/01/16 5,000,000
1,400,000 California State Pollution Control Financing
Authority Solid Waste Disposal Revenue Shell
Oil Co Martinez Project Series A V/R AMT 4.30 10/01/24 1,400,000
5,000,000 California State RAW Series C 5.75 04/25/96 5,041,821
3,000,000 California State School Cash Flow 1994 Pooled
Bond 4.50 07/05/95 3,000,237
2,300,000 California Statewide CDA St Joseph Health
System V/R 3.90 07/01/08 2,300,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
57
<PAGE> 105
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 2,500,000 California Statewide Communities Development
Authority Apartment Development Revenue
Series A-6 V/R FNMA Collateralized 4.20 % 05/15/25 $ 2,500,000
3,090,000 California Statewide Community Development
Authority Solid Waste Facilities Revenue
Chevron USA Inc Project V/R AMT 4.30 12/15/24 3,090,000
1,355,000 Chino CA USD V/R LOC - National Westminster
Bank PLC 4.05 09/01/08 1,355,000
4,000,000 Chula Vista CA IDA Revenue San Diego Gas &
Electric V/R AMT 4.25 09/11/95 4,000,000
5,100,000 Colton CA RDA Las Palomas Associates Project
V/R LOC - Bank of America 4.15 11/01/15 5,100,000
1,000,000 Colton CA RDA MFHR V/R LOC - Federal Home Loan
Bank of San Francisco 3.90 05/01/10 1,000,000
1,100,000 Concord CA MFHR Bel Air Apartments V/R AMT LOC
- Bank of America 3.90 12/01/16 1,100,000
2,000,000 Duarte CA RDA COP Johnson Duarte Partners
Project V/R Series B LOC - Bank of America 4.05 12/01/14 2,000,000
8,100,000 Eagle Trust V/R Series 94 MBIA Insured 4.30 09/01/03 8,100,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
58
<PAGE> 106
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 2,250,000 Elk Grove CA USD TRAN 5.00 % 09/14/95 $ 2,254,307
4,400,000 Escondido CA Community Development Commission
COP V/R AMT LOC - Bank of America 4.25 10/01/16 4,400,000
7,000,000 Escondido CA MFHR Morning View Terrace V/R LOC
- Bank of America 3.60 02/15/07 7,000,000
4,400,000 Foothill / Eastern Transportation Corridor
Agency CA Toll Road Revenue V/R LOC - Banque
National de Paris 4.25 01/02/35 4,400,000
3,800,000 Huntington Beach CA MFHR Seabridge Villas V/R
LOC - Bank of America 3.75 02/01/10 3,800,000
3,740,000 Independent Cities Various Pooled Projects V/R
LOC - National Westminster Bank PLC 4.05 06/01/98 3,740,000
4,100,000 Industry CA IDR Helene Curtis Inc Project V/R
LOC - Harris Trust & Savings Bank 4.05 10/01/06 4,100,000
2,400,000 Irvine CA IDA Improvement Bond V/R LOC -
National Westminster Bank PLC 4.30 09/02/15 2,400,000
1,900,000 Irvine CA IDA Irvine East Investment Co V/R LOC
- Bank of America 4.15 12/01/05 1,900,000
2,000,000 Irwindale CA IDR Toys R Us V/R LOC - Bankers
Trust 5.25 12/01/19 2,000,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
59
<PAGE> 107
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 1,000,000 Loma Linda CA Medical Center V/R Series 851-C
LOC - Industrial Bank of Japan Ltd 4.00 % 12/15/15 $ 1,000,000
5,000,000 Long Beach CA Harbor Revenue CP AMT 4.10 09/14/95 5,000,000
6,500,000 Long Beach CA Health Facilities Memorial Health
Services V/R 3.90 10/01/16 6,500,000
9,055,000 Long Beach CA TRAN 4.75 09/20/95 9,067,717
2,600,000 Los Angeles CA Local Educational Agencies
Pooled TRAN V/R 4.50 07/06/95 2,600,257
2,000,000 Los Angeles CA MFHR Series B V/R AMT LOC -
Federal Home Loan Bank of San Francisco 4.20 12/01/26 2,000,000
1,700,000 Los Angeles CA Multifamily Revenue V/R AMT LOC
- Federal Home Loan Bank of San Francisco 4.20 08/01/26 1,700,000
1,000,000 Los Angeles County CA COP Van Nuys Courthouse
Project Prerefunded 9.00 06/01/15 1,066,624
1,200,000 Los Angeles County CA Housing Authority MFHR
Harbor Cove Project V/R LOC - Citibank 3.90 10/01/06 1,200,000
4,500,000 Los Angeles County CA Housing Authority MFHR
Riverpark Apartments V/R AMT LOC - Dai-Ichi
Kangyo Bank Ltd 4.35 09/01/10 4,500,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
60
<PAGE> 108
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 5,000,000 Los Angeles County CA Metropolitan
Transportation Authority CP V/R Multiple
LOC's 3.00 % 09/06/95 $ 5,000,000
3,600,000 Los Angeles County CA Metropolitan
Transportation Authority CP V/R Multiple
LOC's 3.20 10/25/95 3,600,000
7,700,000 Los Angeles County CA Metropolitan
Transportation Authority CP V/R Multiple
LOC's 3.90 08/08/95 7,700,000
1,000,000 Los Angeles County CA Metropolitan
Transportation Authority CP V/R Multiple
LOC's 4.05 07/21/95 1,000,000
6,000,000 Los Angeles County CA TRAN Multiple LOC's 4.50 07/01/96 6,040,200
5,000,000 Los Angeles County CA Transportation Authority
Revenue Union Station Gateway V/R Series A
FSA Insured 4.05 07/01/25 5,000,000
2,900,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue V/R FGIC Insured 3.95 07/01/12 2,900,000
2,900,000 Montebello CA V/R LOC - Bank of America 3.65 04/01/05 2,900,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
61
<PAGE> 109
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 6,000,000 Ontario CA MFHR Park Centre V/R LOC - Bank of
New York 3.80 % 08/01/07 $ 6,000,000
2,100,000 Ontario CA MFHR Vineyard Village V/R LOC -
Industrial Bank of Japan Ltd 4.05 12/01/05 2,100,000
1,500,000 Ontario CA RDA MFHR Daisy Apartments V/R LOC -
Bank of America 3.60 11/01/04 1,500,000
5,000,000 Orange CA Apartment Development Revenue Harbor
Pointe V/R Issue D LOC - Citibank 3.95 12/01/06 5,000,000
2,000,000 Orange County CA Apartment Development Vintage
Woods V/R LOC - Mitsubishi Bank Ltd 4.75 11/01/08 2,000,000
7,000,000 Orange County CA Improvement Bond V/R Multiple
LOC's 4.60 09/02/18 7,000,000
460,000 Orange County CA Municipal Water District COP
V/R Series 89A LOC - National Westminster
Bank PLC 4.45 07/01/97 460,000
325,000 Orange County CA Municipal Water District COP
V/R Series 89A LOC - National Westminster
Bank PLC 4.45 07/01/99 325,000
235,000 Orange County CA Municipal Water District COP
V/R Series 89B LOC - National Westminster
Bank PLC 4.45 07/01/96 235,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
62
<PAGE> 110
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 255,000 Orange County CA Municipal Water District COP
V/R Series 89B LOC - National Westminster
Bank PLC 4.45 % 07/01/97 $ 255,000
250,000 Orange County CA Municipal Water District COP
V/R Series 89B LOC - National Westminster
Bank PLC 4.45 07/01/98 250,000
1,825,000 Orange County CA Municipal Water District COP
V/R Series 89B LOC - National Westminster
Bank PLC 4.45 07/01/08 1,825,000
765,000 Orange County CA Municipal Water District COP
V/R Series 89B LOC - National Westminster
Bank PLC 4.45 07/16/16 765,000
1,000,000 Riverside County CA Transportation Commission
Sales Tax Revenue CP LOC - Industrial Bank of
Japan Ltd 4.15 08/21/95 1,000,000
2,637,000 Sacramento CA MUD CP Multiple LOC's 3.20 10/25/95 2,637,000
4,524,000 Sacramento CA MUD CP Multiple LOC's 3.30 10/17/95 4,524,000
2,000,000 Sacramento CA MUD CP Multiple LOC's 3.60 09/11/95 2,000,000
1,496,000 Sacramento CA MUD CP Multiple LOC's 4.10 08/24/95 1,496,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
63
<PAGE> 111
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 2,780,000 Salinas CA MFHR Brentwood Gardens V/R LOC -
Bank of America 3.60 % 03/01/05 $ 2,780,000
5,000,000 San Bernardino CA Alta Loma Apartments V/R LOC
- Federal Home Loan Bank of Atlanta 4.15 02/01/23 5,000,000
1,600,000 San Bernardino County CA IDA C&M Fine Pack Inc
V/R LOC - Sanwa Bank 4.15 12/01/95 1,600,000
2,185,000 San Bernardino County CA MFHR V/R LOC - Federal
Home Loan Bank of San Francisco 4.15 05/01/17 2,185,000
7,000,000 San Bernardino County CA TRAN 4.50 07/05/96 7,036,820
2,500,000 San Diego CA IDA Revenue San Diego Gas &
Electric CP 3.05 09/11/95 2,500,000
2,000,000 San Diego CA MFHR Los Serano V/R LOC - Citibank 3.60 02/01/09 2,000,000
9,600,000 San Diego CA MFHR Lusk Mira Mesa Apartments V/R
LOC - Bank of America 3.60 04/01/07 9,600,000
3,600,000 San Francisco CA City & County V/R LOC -
Industrial Bank of Japan Ltd 4.15 12/01/05 3,600,000
1,200,000 San Francisco CA MFHR Winterland Project V/R
LOC - Citibank 3.90 06/01/06 1,200,000
5,000,000 San Joaquin County CA TRAN 4.75 10/18/95 5,008,601
2,200,000 San Joaquin County CA Transportation Authority
Sales Tax Revenue V/R LOC - Sumitomo Bank Ltd 4.05 04/01/11 2,200,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
64
<PAGE> 112
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 700,000 San Jose CA IDA Centrifugal Pumps V/R LOC -
Citibank 4.30 % 09/01/95 $ 700,000
1,300,000 San Jose CA MFHR Kimberly Woods Apartments V/R
LOC - Bank of America 3.60 11/01/08 1,300,000
6,500,000 Santa Clara CA Housing Authority MFHR Benton
Park Center V/R LOC - Citibank 3.90 12/01/07 6,500,000
1,400,000 Santa Clara CA Transit System V/R LOC -
Sumitomo Bank Ltd 4.20 06/01/15 1,400,000
1,000,000 Santa Clara County CA HFA MFHR Foxchase
Apartments V/R Series E FGIC Insured 3.90 11/01/07 1,000,000
2,575,000 Santa Clara County CA MFHR Grove Garden
Apartments V/R LOC - Citibank 3.90 03/01/17 2,575,000
4,900,000 Southern California State Public Power
Authority Southern Transmission Project V/R
LOC - Swiss Bank 3.90 07/01/19 4,900,000
1,000,000 Southern California State Rapid Transit
District COP V/R MBIA Insured 4.05 07/01/99 1,000,000
3,000,000 Stockton CA TRAN 5.25 12/08/95 3,006,904
2,300,000 Tracy CA MFHR Sycamore Village Apartments V/R
LOC - Bank of America 3.90 05/01/15 2,300,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
65
<PAGE> 113
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 1,770,000 Turlock CA Irrigation District Revenue V/R
Series A LOC - Canadian Imperial Bank of
Commerce 3.65 % 01/01/14 $ 1,770,000
2,000,000 Vacaville CA MFHR Western Properties Sycamores
Project V/R LOC - Bank of America 3.90 04/01/05 2,000,000
2,600,000 Walnut Creek CA MFHR Creekside Drive Apartments
V/R LOC - Bank of America 3.90 04/01/07 2,600,000
5,000,000 West & Central Basin CA Finance Authority CP 3.10 10/12/95 5,000,000
------------
TOTAL SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES $313,510,488
MONEY MARKET FUNDS - 1.33%
$ 4,000,000 Arbor Fund CA Tax-Exempt Portfolio $ 4,000,000
TOTAL INVESTMENTS IN SECURITIES
(Cost $317,510,488)*(Note 1) 105.57% $317,510,488
Other Assets and Liabilities, Net (5.57)% (16,750,607)
------ ------------
TOTAL NET ASSETS 100.00% $300,759,881
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
66
<PAGE> 114
MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
YIELD TO MATURITY
PRINCIPAL SECURITY NAME MATURITY DATE VALUE
<S> <C> <C> <C> <C>
COMMERCIAL PAPER - 54.70%
$18,000,000 Abbey National North America 5.86 % 09/15/95 $ 17,777,320
5,000,000 American Express Credit Corp 5.70 12/20/95 4,863,833
15,000,000 Asset Securitization Cooperative Corp+ 5.99 07/05/95 14,990,017
18,000,000 Bank of New York Co Inc 5.90 07/05/95 17,988,200
18,000,000 Canadian Imperial Bank of Commerce 5.88 08/30/95 17,823,600
20,000,000 CIT Group Holdings Inc 5.82 09/07/95 19,780,133
9,000,000 Daimler-Benz North America Corp 5.90 11/13/95 8,800,875
4,000,000 Daimler-Benz North America Corp 5.90 11/27/95 3,902,322
15,000,000 Ford Motor Credit Corp 5.82 09/08/95 14,832,675
18,000,000 General Electric Co 5.78 08/02/95 17,907,520
17,500,000 Greenwich Funding Corp 5.97 07/27/95 17,424,546
15,000,000 Hanson Finance (U K) PLC 6.00 07/19/95 14,955,000
11,185,000 International Business Machines Credit Corp 5.87 08/25/95 11,084,692
18,000,000 National Rural Utilities Cooperative Finance
Corp 5.95 08/17/95 17,860,175
18,000,000 New Center Asset Trust 5.94 08/01/95 17,907,930
18,000,000 Siemens Corp 5.94 07/17/95 17,952,480
15,000,000 Southwestern Bell Telephone Co 6.04 07/10/95 14,977,331
9,500,000 Transamerica Finance Corp 5.70 12/07/95 9,260,838
------------
TOTAL COMMERCIAL PAPER $260,089,487
</TABLE>
67
<PAGE> 115
MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT - 3.15%
$15,000,000 Societe Generale 5.95 % 08/15/95 $ 14,999,872
CORPORATE MEDIUM TERM NOTES - 3.79%
$18,000,000 Wachovia Corp 5.94 % 09/13/95 $ 18,000,000
U.S. GOVERNMENT AGENCY DISCOUNT
NOTES - 17.82%
$14,000,000 Federal Home Loan Bank 5.85 %(F) 07/26/95 $ 13,943,125
10,000,000 Federal Home Loan Bank 5.87 (F) 07/05/95 9,993,478
15,990,000 Federal Home Loan Mortgage Corp 5.87 (F) 08/04/95 15,901,353
10,000,000 Federal Home Loan Mortgage Corp 5.91 (F) 07/06/95 9,991,792
35,000,000 Federal Home Loan Mortgage Corp 5.91 (F) 07/20/95 34,891,463
------------
TOTAL U.S. GOVERNMENT AGENCY DISCOUNT NOTES $ 84,721,211
VARIABLE AND FLOATING RATE
NOTES - 17.77%
$ 7,000,000 Beta Finance Inc+ 6.08 % 08/17/95 $ 7,000,000
15,000,000 Boatmen's Bancshares Inc 6.03 09/20/95 14,998,274
15,000,000 First Bank N.A. 6.03 01/17/96 14,998,396
6,000,000 Orange County CA Taxable Note++ 0.00 07/10/95 5,998,310
15,000,000 PNC Funding Corp 6.12 07/26/95 14,998,973
17,500,000 Student Loan Marketing Assoc 5.59 10/12/95 17,500,000
5,000,000 Sweden (Kingdom of) 6.06 10/08/95 4,998,697
4,000,000 U.S. West Financial 6.26 09/05/95 4,001,106
------------
TOTAL VARIABLE AND FLOATING RATE NOTES $ 84,493,756
</TABLE>
68
<PAGE> 116
MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - 3.13%
$14,908,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.10% 07/03/95 $ 14,908,000
TOTAL INVESTMENTS IN SECURITIES
(Cost $477,212,326)*(Note 1) $477,212,326
100.36
Other Assets and Liabilities, Net (0.36)% (1,692,162)
------ ------------
TOTAL NET ASSETS 100.00% $475,520,164
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
(F) YIELD TO MATURITY.
+ THESE SECURITIES ARE EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE
SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS
EXEMPT FROM REGISTRATION TO QUALIFIED INSTITUTIONAL BUYERS. THESE
SECURITIES WERE DEEMED LIQUID BY THE INVESTMENT ADVISER IN ACCORDANCE WITH
POLICIES APPROVED BY THE FUND'S BOARD OF DIRECTORS.
++ SEE NOTE 6 TO THE FINANCIAL STATEMENTS.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
69
<PAGE> 117
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS - 99.05%
ALABAMA - 0.21%
$ 160,000 Alabama State HFA SFMR Series B AMT Multiple
Credit Enhancements 7.40 % 04/01/22 $ 167,629
ALASKA - 1.34%
390,000 Alaska State Housing Finance Corporation Second
Series AMT Government Agency Collateralized 6.70 12/01/25 394,988
670,000 Alaska State Housing Finance Corporation Second
Series AMT Government Agency Collateralized 7.10 06/01/22 689,604
CALIFORNIA - 20.58%
145,000 California State HFA Insured Housing Revenue
AMT Series C MBIA Insured 7.00 08/01/23 149,623
2,000,000 Contra Costa County CA Mortgage Revenue Cedar
Point Apartments Project A FHA Collateralized 6.15 09/01/25 1,989,340
135,000 Riverside County CA SFMR AMT Project A GNMA
Collateralized 6.85 10/01/16 141,807
9,750,000 Riverside County CA SFMR Series B AMT GNMA
Collateralized 8.35 06/01/13 12,292,898
1,055,000 Sacramento CA SFMR AMT Escrowed to Maturity 7.25 10/01/23 1,208,112
830,000 Southern California State HFA SFMR Series A AMT
GNMA/FNMA Collateralized 6.90 10/01/24 860,511
COLORADO - 0.99%
775,000 Pueblo County CO SFMR Series A GNMA/FNMA
Collateralized 6.85 12/01/25 801,707
</TABLE>
70
<PAGE> 118
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
DISTRICT OF COLUMBIA - 0.41%
$ 320,000 District of Columbia HFA SFMR AMT GNMA
Collateralized 7.10 % 12/01/24 $ 331,872
FLORIDA - 0.40%
310,000 Brevard County FL HFA SFMR Refunded Series B
FSA Insured 7.00 03/01/13 321,458
HAWAII - 5.10%
725,000 Hawaii State Airports Systems Revenue AMT FGIC
Insured 7.00 07/01/20 785,907
500,000 Hawaii State Harbor Capital Improvement Revenue
AMT MBIA Insured 7.00 07/01/17 540,685
3,000,000 Hawaii State SFMR AMT Multiple Credit
Enhancements 6.00 07/01/26 2,801,040
IDAHO - 1.84%
1,500,000 Idaho State HFA SFMR Series C-2 AMT 6.35 07/01/15 1,489,500
ILLINOIS - 5.54%
500,000 Chicago IL O'Hare International Airport Special
Facilities Revenue AMT LOC - Bayerische
Landesbank 7.13 05/01/18 521,025
1,900,000 Chicago IL O'Hare International Airport Special
Facilities Revenue AMT MBIA Insured 6.75 01/01/18 1,990,003
1,000,000 Onterie Centers IL Housing Finance Corp
Mortgage Revenue MBIA Insured 7.05 07/01/27 1,041,790
1,000,000 Saint Claire County IL AMT FGIC Insured 5.75 10/01/23 930,210
</TABLE>
71
<PAGE> 119
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
INDIANA - 4.14%
$ 2,500,000 Indiana State HFA Series A-2 AMT FHA
Collateralized 6.45 % 07/01/14 $ 2,472,125
900,000 Indianapolis IN Airport Authority Revenue AMT
MBIA Insured 6.00 01/01/23 872,937
IOWA - 3.36%
420,000 Iowa State Finance Authority SFMR Series B AMT
GNMA/FNMA Collateralized 7.45 07/01/23 438,442
365,000 Iowa State Finance Authority SFMR Series B AMT
Government Agency Collateralized 5.95 07/01/23 338,351
450,000 Iowa State Finance Authority SFMR Series F
AMBAC Insured GNMA/FNMA Collateralized 6.50 01/01/25 452,030
1,450,000 Iowa State Finance Authority Single Family
Revenue Series B AMT GNMA/FNMA Collateralized 6.95 07/01/24 1,485,279
KANSAS - 0.25%
195,000 Kansas City KS Mortgage Revenue AMT Multiple
Credit Enhancements 7.35 12/01/23 206,105
</TABLE>
72
<PAGE> 120
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
KENTUCKY - 5.15%
$ 1,100,000 Kenton County KY Cincinnati/Northern Kentucky
International Airport Revenue AMT FSA Insured 6.30 % 03/01/15 $ 1,110,923
925,000 Kentucky State Housing Corporation Housing
Revenue AMT Multiple Credit Enhancements 5.90 01/01/15 884,476
820,000 Kentucky State Housing Corporation MFHR Series
D AMT FHA Collateralized 6.80 01/01/24 834,571
1,295,000 Kentucky State Housing Corporation MFHR Series
D AMT FHA Collateralized 7.45 01/01/23 1,337,321
LOUISIANA - 2.98%
750,000 Louisiana State HFA Multifamily Mortgage
Revenue FHA Collateralized 6.95 07/01/16 762,810
1,000,000 Louisiana State MFHR AMT FHA Collateralized 5.90 12/01/18 947,630
670,000 Louisiana State Public Facilities Authority
Student Loan Revenue AMT FSA Insured 6.85 01/01/09 701,604
MARYLAND - 1.21%
1,000,000 Prince Georges County MD Housing Authority
Mortgage Revenue Series A FSA Insured 6.10 09/20/20 978,470
MASSACHUSETTS - 4.27%
2,500,000 Massachusetts State HFA Housing Revenue Series
A AMT FSA Insured 6.10 06/01/26 2,415,950
1,000,000 Massachusetts State HFA Residential Development
FNMA Collateralized 6.90 11/15/21 1,036,960
MICHIGAN - 3.10%
</TABLE>
73
<PAGE> 121
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 2,480,000 Mount Clemens MI Housing Corporation MFHR
Series A FHA Collateralized 6.60 % 06/01/22 $ 2,505,941
MINNESOTA - 0.59%
460,000 Minneapolis-St Paul MN Housing Finance Board
Revenue SFMR Phase IX AMT GNMA Collateralized 7.30 08/01/31 480,470
MISSOURI - 0.35%
275,000 Missouri State Housing Development Commission
Mortgage Revenue SFMR Series A AMT GNMA
Collateralized 6.75 06/01/24 282,436
NEVADA - 7.30%
1,340,000 Nevada State Housing Division SFMR Series A-2
AMT FHA Collateralized 6.55 10/01/15 1,343,002
1,825,000 Nevada State Housing Division SFMR Series C AMT
FHA Collateralized 6.35 10/01/13 1,798,866
2,700,000 Washoe County NV Gas Facilities Sierra Pacific
Power AMT MBIA Insured 6.55 09/01/20 2,761,047
NEW JERSEY - 2.21%
500,000 New Jersey State Housing & Mortgage Finance
Home Buyer Agency Revenue AMT MBIA Insured 6.30 04/01/25 494,700
1,250,000 New Jersey State Housing and Mortgage Agency
MFHR FHA Collateralized 7.00 05/01/30 1,296,150
</TABLE>
74
<PAGE> 122
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
NEW YORK - 2.62%
$ 1,600,000 Babylon NY Individual Development Agency V/R
AMT LOC - Union Bank of Switzerland 4.40 % 12/01/24 $ 1,600,000
500,000 New York State Energy R & D Authority Electric
Facilities Revenue Cons Edison Co New York
City AMT MBIA Insured 7.25 11/01/24 522,145
OKLAHOMA - 1.79%
200,000 Pryor Creek OK Economic Development Authority
Mortgage Revenue Series A 7.13 07/01/21 207,016
685,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.10 06/01/22 711,763
500,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.55 05/01/23 526,790
PENNSYLVANIA - 4.41%
990,000 Allegheny County PA Residential Finance
Authority SFMR AMT GNMA/FNMA Collateralized 5.63 11/01/23 877,091
2,200,000 Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Series D AMT
AMBAC Insured 6.05 01/01/19 2,159,256
500,000 Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Series D AMT
AMBAC Insured 7.05 10/01/16 527,420
TEXAS - 0.70%
540,000 Travis County TX HFC Residential Mortgage
Revenue Series A AMT GNMA/FNMA Collateralized 7.00 12/01/11 567,859
</TABLE>
75
<PAGE> 123
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
UTAH - 9.89%
$ 2,295,000 Salt Lake City UT Airport Revenue Series A AMT
FGIC Insured 6.13 % 12/01/22 $ 2,228,193
500,000 Utah State Board of Regents Student Loan
Revenue Series F AMT AMBAC Insured 7.45 11/01/08 535,985
1,100,000 Utah State Board of Regents Student Loan
Revenue Series H AMT AMBAC Insured 6.70 11/01/15 1,142,713
2,000,000 Utah State HFA SFMR Series B-2 AMT FHA
Collateralized 6.50 07/01/15 1,990,520
1,360,000 Utah State HFA SFMR Series C-2 AMT FHA
Collateralized 6.50 07/01/15 1,349,052
750,000 Utah State HFA SFMR Series D-2 AMT FHA
Collateralized 6.45 01/01/11 750,525
VIRGINIA - 1.52%
1,250,000 Virginia State Housing Development Authority
Commonwealth Mortgage Series B-5 AMT FSA
Insured 6.20 07/01/21 1,226,263
WASHINGTON - 3.44%
1,310,000 Washington State Housing Finance Commission
SFMR Series D AMT GNMA/FNMA Collateralized 6.15 01/01/26 1,290,704
1,440,000 Washington State Housing Finance Commission
SFMR Series D AMT GNMA/FNMA Collateralized 7.10 07/01/22 1,484,361
WEST VIRGINIA - 3.36%
3,000,000 West Virginia State Housing Revenue AMT AMBAC
Insured 5.70 05/01/24 2,717,460
------------
TOTAL MUNICIPAL BONDS $ 80,103,421
(Cost $79,535,903)
</TABLE>
76
<PAGE> 124
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME VALUE
<S> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
SHORT-TERM INSTRUMENTS - 0.10%
$ 84,627 National Municipal Fund $ 84,627
(Cost $84,627)
TOTAL INVESTMENTS IN SECURITIES
(Cost $79,620,530)*(Notes 1 and 3) 99.15% $ 80,188,048
Other Assets and Liabilities, Net 0.85% 683,917
------ ------------
TOTAL NET ASSETS 100.00% $ 80,871,965
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 1,751,483
Gross Unrealized Depreciation (1,183,965)
-------------
NET UNREALIZED APPRECIATION $ 567,518
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
77
<PAGE> 125
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS - 89.06%
BASIC INDUSTRIES - 1.50%
11,500 Minerals Technologies Inc $ 344,270 $ 414,000
35,000 N-Viro International Corp+ 298,750 56,875
10,000 OM Group Inc 254,250 285,000
55,000 Quadrax Corp New+ 212,492 113,438
------------ ------------
$ 1,109,762 $ 869,313
BIOTECHNOLOGY - 0.56%
30,000 Liposome Co Inc+ $ 341,728 $ 326,250
BUILDING MATERIALS & SERVICES - 0.76%
20,000 J Ray McDermott SA+ $ 408,370 $ 442,500
COMPUTER SOFTWARE - 12.72%
6,500 ArcSys Inc+ $ 144,375 $ 221,000
10,000 Atria Software Inc+ 443,593 485,000
8,794 First Data Corp 590,201 500,159
48,500 IKOS Systems Inc+ 397,989 442,563
35,000 Metatec Corp Class A+ 394,719 450,625
9,000 Microsoft Corp+ 395,438 813,375
17,000 NETCOM On-Line Communication Services Inc+ 405,063 433,500
19,000 Open Environment Corp+ 344,750 389,500
23,500 Oracle Systems Corp+ 806,563 907,688
30,000 Rational Software Corp+ 367,500 408,750
45,000 Sanctuary Woods Multimedia+ 216,081 230,625
40,000 Seventh Level Inc+ 358,750 570,000
5,000 Sierra On-Line Inc+ 91,250 125,000
3,000 Spyglass Inc+ 51,000 85,875
25,000 Veritas Software Corp+ 342,555 556,250
30,000 Viasoft Inc+ 269,688 393,750
9,000 VideoServer Inc+ 199,875 351,000
------------ ------------
$ 5,819,390 $ 7,364,660
</TABLE>
78
<PAGE> 126
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
COMPUTER SYSTEMS - 11.39%
35,000 Adaptec Inc+ $ 803,064 $ 1,295,000
7,750 Chipcom Corp+ 309,250 184,063
30,000 Cisco Systems Inc+ 797,250 1,516,875
34,500 Komag Inc+ 900,874 1,794,000
12,000 Merix Corp+ 265,000 363,000
20,000 Plaintree Systems Inc+ 221,875 210,000
36,000 Solectron Corp+ 851,938 1,228,500
------------ ------------
$ 4,149,251 $ 6,591,438
CONSUMER - GROWTH - 1.39%
15,000 Barnes & Noble+ $ 429,938 $ 510,000
3,500 Nike Inc Class B 295,155 294,000
------------ ------------
$ 725,093 $ 804,000
ELECTRICAL EQUIPMENT - 6.11%
6,000 Anadigics Inc+ $ 104,500 $ 117,000
10,000 Franklin Electronic Publishers Inc+ 260,800 256,250
25,000 Integrated Device Technology Inc+ 875,125 1,156,250
45,000 Interlink Electronics Inc+ 225,000 618,750
20,000 Nokia Corp ADR Class A 708,380 1,192,500
10,000 Recoton Corp+ 206,250 195,000
------------ ------------
$ 2,380,055 $ 3,535,750
ELECTRONIC SEMICONDUCTORS - 4.52%
30,000 Genus Inc+ $ 413,334 $ 406,875
14,000 Intel Corp 486,750 886,375
25,000 Semtech Corp+ 407,032 418,750
30,000 VLSI Technology Inc+ 883,750 903,750
------------ ------------
$ 2,190,866 $ 2,615,750
ENERGY & RELATED - 3.83%
5,000 Anadarko Petroleum Corp $ 271,025 $ 215,625
15,000 Ensco International Inc+ 250,367 238,125
25,000 KCS Energy 602,323 534,375
20,000 Ranger Oil Ltd 131,400 125,000
</TABLE>
79
<PAGE> 127
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
15,000 Sun Co Inc $ 469,950 $ 410,625
12,000 Tosco Corp 433,807 382,500
17,500 Trigen Energy Corp 300,850 308,438
------------ ------------
$ 2,459,722 $ 2,214,688
ENTERTAINMENT - 5.62%
22,500 Anchor Gaming+ $ 367,093 $ 500,625
34,500 Children's Discovery Centers of
America Inc+ 506,583 577,875
25,000 Circus Circus Entertainment Inc+ 853,359 881,250
5,000 Jacor Communications Inc+ 83,750 80,000
55,000 Radica Games Ltd+ 509,375 178,750
25,000 Regal Cinemas Inc+ 551,740 800,000
45,900 Sports Club Inc+ 370,356 235,238
------------ ------------
$ 3,242,256 $ 3,253,738
ENVIRONMENTAL CONTROL - 2.84%
47,000 Molten Metal Technology Inc+ $ 1,017,970 $ 1,092,750
17,500 Sanifill Inc+ 478,243 549,063
------------ ------------
$ 1,496,213 $ 1,641,813
FINANCE & RELATED - 7.11%
30,000 Countrywide Credit & Industries Inc $ 606,307 $ 630,000
30,000 Emphesys Financial Group 918,213 708,750
8,000 FelCor Suite Hotels Inc 201,500 204,000
30,000 Mid Atlantic Medical Services+ 650,238 555,000
60,000 New Envoy Inc+ 284,846 510,000
15,000 Student Loan Marketing Assoc 564,198 703,125
25,000 Value Health Inc+ 960,761 806,250
------------ ------------
$ 4,186,063 $ 4,117,125
FOOD & RELATED - 1.70%
15,000 General Nutrition Co Inc+ $ 378,750 $ 526,875
30,000 Whole Foods Market Inc+ 566,125 457,500
------------ ------------
$ 944,875 $ 984,375
</TABLE>
80
<PAGE> 128
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
GENERAL BUSINESS & RELATED - 2.11%
12,200 La Quinta Inns Inc $ 343,850 $ 329,400
15,000 Sitel Corp+ 227,009 268,125
10,000 Synopsys Inc+ 471,000 626,250
------------ ------------
$ 1,041,859 $ 1,223,775
HEALTHCARE - 7.37%
30,000 Coram Healthcare+ $ 574,594 $ 423,750
40,000 Genesis Health Ventures Inc+ 909,602 1,185,000
50,000 Healthsouth Corp+ 991,649 868,750
25,000 Renal Treatment Centers+ 474,875 615,625
25,000 Vencor Inc+ 805,118 787,500
55,000 Work Recovery Inc+ 183,874 388,438
------------ ------------
$ 3,939,712 $ 4,269,063
HOSPITAL & MEDICAL SUPPLIES - 4.45%
50,000 Bioject Medical Technologies+ $ 229,063 $ 75,000
40,000 Heart Technology Inc+ 777,569 775,000
25,000 I-Stat Corp+ 604,003 912,500
7,500 ICU Medical Inc+ 90,000 105,938
30,000 Innerdyne Inc+ 143,725 86,250
25,000 Sola International Inc+ 438,304 621,875
------------ ------------
$ 2,282,664 $ 2,576,563
MANUFACTURING PROCESSING - 2.51%
50,000 Endosonics Corp+ $ 410,156 $ 556,250
25,000 Lydall Inc+ 371,040 550,000
15,500 Pall Corp 359,570 344,875
------------ ------------
$ 1,140,766 $ 1,451,125
PHARMACEUTICALS - 0.43%
40,000 Seragen Inc+ $ 305,315 $ 250,000
</TABLE>
81
<PAGE> 129
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
RETAIL STORES - 0.98%
20,000 Pacific Sunwear of California+ $ 187,688 $ 135,000
15,000 PetSmart Inc+ 383,125 431,250
------------ ------------
$ 570,813 $ 566,250
TELECOMMUNICATIONS - 8.12%
20,000 California Microwave Inc+ $ 656,125 $ 501,250
17,500 DSC Communications Corp+ 633,750 813,750
33,000 DSP Communications Inc+ 435,415 684,750
15,000 Geotek Communications Inc+ 132,188 129,375
20,000 Harmonic Lightwaves Inc+ 358,750 335,000
45,000 LCI International Inc+ 729,874 1,378,125
25,000 Paging Network Inc+ 662,785 856,250
------------ ------------
$ 3,608,887 $ 4,698,500
TRANSPORTATION - 3.04%
20,000 Greenbrier Companies Inc $ 307,323 $ 262,500
40,000 Landair Services Inc+ 666,866 540,000
10,000 Marten Transportation Ltd+ 196,250 195,000
30,000 Mesa Airlines Inc+ 531,588 273,750
10,000 Wisconsin Central Transport+ 536,271 490,000
------------ ------------
$ 2,238,298 $ 1,761,250
TOTAL COMMON STOCKS $ 44,581,958 $51,557,926
MUTUAL FUNDS - 0.44%
10,000 Emerging Markets Infrastructure Fund $ 146,100 $ 102,500
15,000 The India Fund Inc 213,750 153,750
------------ ------------
TOTAL MUTUAL FUNDS $ 359,850 $ 256,250
WARRANTS - 3.69%
70,000 Intel Corp expire 3/14/1998 $ 527,688 $ 2,117,500
3,000 Interlink Electronics Inc expire 06/07/1996 0 17,063
------------ ------------
TOTAL WARRANTS $ 527,688 $ 2,134,563
</TABLE>
82
<PAGE> 130
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CONVERTIBLE CORPORATE BONDS - 0.94%
$ 240,000 First Financial Management 5.00% 12/15/99 $ 316,800
100,000 Genesis Health Ventures Inc 6.00 11/30/03 133,750
100,000 LDDS Communications Inc Convertible 5.00 08/15/03 94,750
------------
TOTAL LONG-TERM BONDS $ 545,300
(Cost $414,405)
SHORT-TERM INSTRUMENTS - 7.87%
U.S. TREASURY BILLS - 3.41%
$ 2,000,000 U.S. Treasury Bills 5.56%(F) 09/21/95 $ 1,975,815
REPURCHASE AGREEMENTS - 4.46%
$ 2,582,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.10 07/03/95 $ 2,582,000
------------
TOTAL SHORT-TERM INSTRUMENTS $ 4,557,815
(Cost $4,557,451)
TOTAL INVESTMENTS IN SECURITIES
(Cost $50,441,352)* (Notes 1 and 3) 102.00% $59,051,854
Other Assets and Liabilities, Net (2.00)% (1,159,568)
------ ------------
TOTAL NET ASSETS 100.00% $57,892,286
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
+ NON-INCOME EARNING SECURITIES.
(F) YIELD TO MATURITY.
*COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 12,319,316
Gross Unrealized Depreciation (3,708,814)
-------------
NET UNREALIZED APPRECIATION $ 8,610,502
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
83
<PAGE> 131
U.S. GOVERNMENT INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES - 51.56%
ADJUSTABLE RATE MORTGAGES - 0.92%
$ 22,768 GNMA #8109 (CMT) 6.75 % 03/20/16 $ 23,223
39,766 GNMA #8119 (CMT) 6.75 04/20/16 40,760
12,016 GNMA #8137 (CMT) 6.75 06/20/16 12,316
7,005 GNMA #8268 (CMT) 7.13 08/20/17 7,193
19,079 GNMA #8292 (CMT) 6.75 11/20/17 19,448
34,966 GNMA #8293 (CMT) 6.75 12/20/17 35,709
9,254 GNMA #8310 (CMT) 6.75 01/20/18 9,457
40,387 GNMA #8392 (CMT) 7.13 08/20/18 41,372
39,543 GNMA #8393 (CMT) 7.13 08/20/18 40,531
23,315 GNMA #8429 (CMT) 6.75 11/20/18 23,825
124,779 GNMA #8761 (CMT) 6.50 03/20/21 126,884
------------
$ 380,718
FEDERAL AGENCY - OTHER - 23.79%
$10,000,000 Tennessee Valley Authority 6.38 % 06/15/05 $ 9,893,700
FIXED RATE MORTGAGES - 23.50%
$ 49,067 FHLMC #275825 9.50 % 08/01/16 $ 51,578
19,040 FHLMC #303953 9.00 10/01/17 19,700
48,449 FHLMC #304114 9.00 05/01/18 50,129
126,984 FHLMC #304398 9.00 06/01/18 132,597
47,735 FHLMC #305831 10.00 08/01/18 51,642
9,694 FHLMC #307323 9.50 09/01/18 10,184
75,023 FHLMC #307637 9.50 07/01/16 78,799
43,589 FHLMC #307915 9.50 10/01/18 45,838
6,476 FHLMC #308074 9.50 10/01/18 6,812
26,844 FHLMC #360020 10.00 01/01/18 29,041
36,290 FHLMC #360045 10.00 02/01/19 39,035
56,489 FHLMC #532468 9.50 04/01/19 59,380
22,508 GNMA #150499 10.50 03/15/16 24,830
135,852 GNMA #17087 9.00 09/15/16 143,696
176,241 GNMA #173055 9.00 09/15/16 186,418
112,551 GNMA #176892 9.00 10/15/16 119,447
546,789 GNMA #190848 9.00 01/15/17 578,360
</TABLE>
84
<PAGE> 132
U.S. GOVERNMENT INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES (CONTINUED)
$ 204,190 GNMA #191961 9.00 % 02/15/20 $ 215,172
58,354 GNMA #202624 9.00 11/15/19 61,554
116,730 GNMA #236877 9.00 04/15/18 123,250
81,057 GNMA #285963 9.00 01/15/20 85,416
19,348 GNMA #289319 9.00 11/15/20 20,388
197,390 GNMA #303235 9.00 05/15/21 207,321
223,231 GNMA #304653 9.00 09/15/21 234,461
9,081 GNMA #314150 9.00 10/15/21 9,538
2,105,346 GNMA #319413 7.25 12/15/18 2,096,251
19,220 GNMA #33080 9.00 08/15/22 20,187
45,854 GNMA #335400 9.00 12/15/22 48,161
1,942,746 GNMA #358863 7.25 01/15/24 1,934,295
1,071,328 GNMA II #1124 11.00 01/20/19 1,162,723
531,688 GNMA II #1221 11.00 07/20/19 577,046
170,037 GNMA II #1562 10.00 02/20/21 181,672
62,725 GNMA II #167269 10.00 04/20/16 67,135
91,763 GNMA II #194221 10.00 09/20/20 98,042
372,495 GNMA II #266120 10.00 08/20/19 398,823
11,617 GNMA II #272537 10.00 08/20/19 12,433
18,691 GNMA II #278055 10.00 07/20/19 20,005
83,118 GNMA II #289000 10.00 05/20/20 88,806
251,256 GNMA II #85 10.00 02/20/22 268,449
198,315 GNMA II #908 10.00 01/20/18 211,886
------------
$ 9,770,500
U.S. GOVERNMENT AGENCY NOTES - 3.36%
$ 1,700,000 FNMA Principal Strip 7.58 %(F) 03/09/22 $ 1,396,295
------------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES $ 21,441,213
(Cost $21,284,705)
</TABLE>
85
<PAGE> 133
U.S. GOVERNMENT INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. TREASURY SECURITIES - 44.50%
U.S. TREASURY BONDS - 41.96%
$ 2,000,000 U.S. Treasury Bonds 7.63 % 02/15/25 $ 2,258,740
6,000,000 U.S. Treasury Bonds 11.63 11/15/04 8,248,140
4,500,000 U.S. Treasury Bonds 12.50 08/15/14 6,940,530
$ 17,447,410
U.S. TREASURY NOTES - 2.54%
$ 1,000,000 U.S. Treasury Notes 7.50 % 10/31/99 $ 1,056,090
------------
TOTAL U.S. TREASURY SECURITIES $ 18,503,500
(Cost $19,022,502)
SHORT-TERM INSTRUMENTS - 3.46%
REPURCHASE AGREEMENTS - 3.45%
$ 1,438,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.10 % 07/03/95 $ 1,438,000
(Cost $1,438,000)
TOTAL INVESTMENTS IN SECURITIES
(Cost $41,745,207)* (Notes 1 and 3) 99.52% 41,382,713
Other Assets and Liabilities, Net 0.48% 198,377
------ ------------
TOTAL NET ASSETS 100.00% $ 41,581,090
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
(F) YIELD TO MATURITY.
*COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 379,808
Gross Unrealized Depreciation (742,302)
-------------
NET UNREALIZED DEPRECIATION ($ 362,494)
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
86
<PAGE> 134
VARIABLE RATE GOVERNMENT FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES - 108.69%
ADJUSTABLE RATE MORTGAGES - 90.10%
$ 1,190,065 FHLMC #395009 (COFI) 6.03 % 06/01/29 $ 1,187,089
3,175,120 FHLMC #607289 (CMT) 7.61 09/01/22 3,256,467
5,909,632 FHLMC #607420 (CMT) 7.39 10/01/22 6,035,211
4,190,881 FHLMC #607480 (CMT) 7.47 10/01/22 4,264,221
3,334,763 FHLMC #607635 (CMT) 7.58 12/01/22 3,426,469
2,917,116 FHLMC #607726 (CMT) 7.68 01/01/23 3,000,983
14,317,424 FHLMC #607785 (CMT) 7.75 02/01/23 14,621,669
2,614,295 FHLMC #640065 (CMT) 7.37 01/01/18 2,663,313
8,468,864 FHLMC #755102 (CMT) 6.86 06/01/18 8,570,986
218,840 FHLMC #770641 (COFI) 6.00 02/01/19 216,240
7,590,783 FHLMC #845014 (CMT) 8.13 06/01/00 7,941,857
11,317,685 FHLMC #845130 (CMT) 7.06 06/01/22 11,531,703
56,706 FHLMC #845410 (CMT) 7.04 07/01/23 57,379
53,172,219 FHLMC #845535 (CMT) 7.44 10/01/23 55,008,256
24,896 FHLMC #845613 (CMT) 5.62 01/01/24 25,274
40,415,931 FHLMC #845752 (CMT) 6.00 05/01/24 40,674,997
40,794,560 FHLMC #845790 (CMT) 7.10 05/01/24 41,847,060
26,530,172 FHLMC #845897 (CMT) 7.45 06/01/24 26,848,003
36,181,396 FHLMC #845916 (CMT) 6.66 09/01/24 36,851,114
24,872,939 FHLMC #845969 (6 month LIBOR) 6.38 12/01/24 25,552,965
520,353 FHLMC #845980 (CMT) 7.51 06/01/30 531,723
21,267,982 FHLMC TBA (CMT) 7.28 07/25/95 21,892,729
38,943,521 FHLMC-Giant #846101 (CMT) 7.47 05/01/25 39,892,770
3,916,834 FNMA #110933 (CMT) 7.57 09/01/18 4,036,767
1,625,709 FNMA #123496 (COFI) 5.42 07/01/27 1,609,451
33,542,935 FNMA #124764 (CMT) 7.60 03/01/23 34,360,377
8,762,152 FNMA #124862 (CMT) 7.87 05/01/23 8,893,584
7,844,053 FNMA #124972 (CMT) 6.85 08/01/23 7,927,357
</TABLE>
88
<PAGE> 135
VARIABLE RATE GOVERNMENT FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES (CONTINUED)
$10,434,574 FNMA #136014 (COFI) 5.41 % 05/01/18 $ 10,842,044
31,173,250 FNMA #190166 (CMT) 5.77 11/01/23 31,874,648
56,925,268 FNMA #190726 (CMT) 7.93 03/01/33 58,668,319
10,583,102 FNMA #190826 (CMT) 7.40 03/01/24 10,893,928
25,408,215 FNMA #190878 (CMT) 6.10 06/01/24 25,805,091
36,841,058 FNMA #303336 (CMT) 7.50 05/31/25 37,692,823
24,785,955 FNMA #303349 (CMT) 6.36 05/01/24 25,173,111
11,086,669 FNMA #303386 (CMT) 5.91 06/01/25 11,228,717
1,619,555 FNMA #60585 (COFI) 6.50 11/01/17 1,589,188
667,788 FNMA #60588 (COFI) 6.50 01/01/18 654,432
1,653,505 FNMA #60590 (COFI) 6.50 02/01/18 1,622,502
1,167,436 FNMA #64083 (COFI) 5.51 05/01/18 1,165,241
8,128,652 FNMA #70009 (CMT) 7.30 04/01/18 8,265,783
10,070,308 FNMA #70186 (CMT) 7.52 05/01/21 10,208,775
4,920,099 FNMA #70485 (CMT) 6.81 04/01/27 4,987,750
1,835,435 FNMA #70911 (COFI) 6.36 06/01/19 1,846,906
1,261,051 FNMA #70947 (COFI) 5.93 12/01/28 1,248,441
5,481,956 FNMA #90031 (CMT) 7.94 01/01/20 5,584,743
6,600,000 FNMA TBA (CMT) 6.59 07/28/95 6,583,500
10,000,000 FNMA TBA (COFI) 6.31 07/25/25 10,081,200
178,198 GNMA II #8623 (CMT) 7.50 04/20/25 182,569
2,842,098 GNMA II #8633 (CMT) 7.50 05/20/25 2,979,762
1,960,000 GNMA II #8644 (CMT) 7.50 06/20/25 2,053,345
1,522,183 GNMA II #8998 (CMT) 6.50 06/20/22 1,552,383
10,000,000 GNMA TBA (CMT) 7.00 07/25/25 9,884,375
------------
$695,395,590
</TABLE>
89
<PAGE> 136
VARIABLE RATE GOVERNMENT FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES (CONTINUED)
REAL ESTATE MORTGAGE INVESTMENT
CONDUITS - 18.60%
$ 4,029,016 FHLMC 1421SA 6.36 % 11/15/22 $ 3,957,178
12,759,902 FHLMC 1541KB 6.50 09/15/22 13,038,961
8,749,072 FHLMC 1556 FA 6.01 08/15/13 8,266,998
18,845,126 FHLMC 1609LA 5.91 11/15/23 18,283,353
14,924,601 FHLMC 1614VA 6.06 05/15/23 13,901,818
18,709,658 FHLMC G-18 A 5.75 09/25/23 18,604,510
9,294,421 FNMA 1993-198FA 6.06 10/25/23 9,053,881
18,000,000 FNMA 1993-199FA 6.64 10/25/23 17,437,320
20,576,740 FNMA 1994-15 F 6.74 02/25/24 20,231,462
8,344,327 FNMA 1995-210 FL 6.01 09/25/23 8,261,468
13,149,999 FNMA 94-36 FB 6.36 03/25/24 12,504,071
------------
$143,541,020
TOTAL U.S. GOVERNMENT AGENCY SECURITIES $838,936,610
(Cost $841,419,840)
SHORT-TERM INSTRUMENTS - 5.62%
U.S. TREASURY BILLS - 4.02%
$23,000,000 U.S. Treasury Bills 5.64 %(F) 12/21/95 $ 22,406,830
9,000,000 U.S. Treasury Bills 5.64 (F) 04/04/96 8,626,680
------------
$ 31,033,510
</TABLE>
90
<PAGE> 137
VARIABLE RATE GOVERNMENT FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHORT-TERM INSTRUMENTS (CONTINUED)
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - 1.60%
$12,372,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.10 07/03/95 $ 12,372,000
------------
TOTAL SHORT-TERM INSTRUMENTS $ 43,405,510
(Cost $43,397,467)
TOTAL INVESTMENTS IN SECURITIES
(Cost $884,817,307)* (Notes 1 and 3) 114.32 % $882,342,120
Other Assets and Liabilities, Net (14.32)% (110,503,396)
------ ------------
TOTAL NET ASSETS 100.00% $771,838,724
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
(F) YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 4,729,526
Gross Unrealized Depreciation (7,204,713)
-------------
NET UNREALIZED DEPRECIATION ($ 2,475,187)
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
91
<PAGE> 138
STATEMENT OF ASSETS AND LIABILITIES (unaudited)
June 30, 1995
<TABLE>
<CAPTION>
CALIFORNIA
ASSET CALIFORNIA TAX-FREE
ALLOCATION TAX-FREE MONEY
FUND BOND FUND MARKET FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below) $60,649,950 $283,477,291 $317,510,488
Cash 2,247 28 408,379
Receivables:
Dividends and Interest 113,607 4,933,672 2,426,194
Fund shares sold 1,000 24,214 0
Investment securities sold 0 0 0
Due from administrator
(Note 2) 0 0 0
Organization expenses, net
of amortization 13,034 3,095 0
Prepaid expenses 8,240 0 86
TOTAL ASSETS 60,788,078 288,438,300 320,345,147
LIABILITIES
Payables:
Investment securities
purchased 0 1,006,700 18,277,020
Distribution to
shareholders 323,049 1,288,182 703,805
Fund shares redeemed 75,481 157,281 0
Due to sponsor and
distributor (Note 2) 61,595 264,659 440,452
Due to advisor (Note 2) 37,466 119,059 67,183
Other 19,443 181,899 96,806
TOTAL LIABILITIES 517,034 3,017,780 19,585,266
TOTAL NET ASSETS
$60,271,044 $285,420,520 $300,759,881
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $40,742,876 $264,363,073 $300,855,579
Paid-in capital, Class D
or I 11,658,231 7,987,422 0
Undistributed
(overdistributed) net
investment income 0 (15,018) 0
Undistributed net realized
gain(loss) on
investments 1,085,602 7,226,398 (95,698)
Net unrealized
appreciation
(depreciation) of
investments 6,784,335 5,858,645 0
TOTAL NET ASSETS $60,271,044 $285,420,520 $300,759,881
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
(NOTE 4)
Net assets - Class A* $48,329,397 $278,174,555 $300,759,881
Shares outstanding - Class
A* 3,870,248 26,015,928 300,855,583
Net asset value per share -
Class A* $12.49 $10.69 $1.00
Maximum offering price per
share - Class A* $13.08+ $11.19+ $1.00
Net assets - Class D or I $11,941,647 $7,245,965 N/A
Shares outstanding - Class D
or I 769,581 518,969 N/A
Net asset value and offering
price per share - Class D
or I $15.52 $13.96 N/A
INVESTMENTS AT COST (NOTE 3) $53,865,615 $277,618,646 $317,510,488
</TABLE>
- --------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
+ MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
92
<PAGE> 139
<TABLE>
<CAPTION>
SHORT-TERM SHORT-TERM
MONEY MUNICIPAL GOVERNMENT- MUNICIPAL STRATEGIC
MARKET INCOME CORPORATE INCOME GROWTH
FUND FUND INCOME FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below) $477,212,326 $80,188,048 $491,326 $14,851,046 $59,051,854
Cash 10,657 413 0 0 370
Receivables:
Dividends and Interest 641,347 1,309,204 2,290 54,962 7,485
Fund shares sold 0 98 0 0 247,472
Investment securities sold 0 0 0 0 346,250
Due from administrator
(Note 2) 0 0 0 0 0
Organization expenses, net
of amortization 15,940 36,187 69,930 57,952 43,137
Prepaid expenses 9,423 1,321 2,118 5,590 10,120
TOTAL ASSETS 477,889,693 81,535,271 565,664 14,969,550 59,706,688
LIABILITIES
Payables:
Investment securities
purchased 0 0 0 0 1,498,888
Distribution to
shareholders 1,906,650 359,681 2,178 50,412 0
Fund shares redeemed 0 91,900 0 0 184,373
Due to sponsor and
distributor (Note 2) 269,026 100,010 78,600 85,085 57,059
Due to advisor (Note 2) 97,957 25,670 2,331 864 27,303
Other 95,896 86,045 30,665 25,245 46,779
TOTAL LIABILITIES 2,369,529 663,306 113,774 161,606 1,814,402
TOTAL NET ASSETS $475,520,164 $80,871,965 $451,890 $14,807,944 $57,892,286
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $347,948,557 $68,425,170 $450,543 $14,683,264 $28,745,805
Paid-in capital, Class D
or I 127,609,753 15,907,232 N/A N/A 14,730,909
Undistributed
(overdistributed) net
investment income 0 (36,071) 0 0 (699,968)
Undistributed net realized
gain(loss) on
investments (38,146) (3,991,884) 1,054 (1,339) 6,505,038
Net unrealized
appreciation
(depreciation) of
investments 0 567,518 293 126,019 8,610,502
TOTAL NET ASSETS $475,520,164 $80,871,965 $451,890 $14,807,944 $57,892,286
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
(NOTE 4)
Net assets - Class A* $347,910,986 $66,310,085 $451,890 $14,807,944 $39,052,509
Shares outstanding - Class
A* 347,948,514 6,336,396 90,149 2,967,662 2,289,399
Net asset value per share -
Class A* $1.00 $10.46 $5.01 $4.99 $17.06
Maximum offering price per
share - Class A* $1.00 $10.78** $5.16** $5.14** $17.86+
Net assets - Class D or I $127,609,178 $14,561,880 N/A N/A $18,839,777
Shares outstanding - Class D
or I 127,609,753 1,027,527 N/A N/A 890,580
Net asset value and offering
price per share - Class D
or I $1.00 $14.17 N/A N/A $21.15
INVESTMENTS AT COST (NOTE 3) $477,212,326 $79,620,530 N/A N/A $50,441,352
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
93
<PAGE> 140
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
U.S. GOVERNMENT U.S. TREASURY VARIABLE RATE
INCOME MONEY MARKET GOVERNMENT
FUND FUND FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below) $41,382,713 $212,716,383 $882,342,120
Cash 316 4,264 4,357
Receivables:
Dividends and Interest 464,855 0 6,856,308
Fund shares sold 27,851 0 0
Investment securities sold 1,828 0 11,161,161
Due from administrator
(Note 2) 0 4,586 0
Organization expenses, net
of amortization 11,092 29,056 20,383
Prepaid expenses 13,619 1,276 0
TOTAL ASSETS 41,902,274 212,755,565 900,384,329
LIABILITIES
Payables:
Investment securities
purchased 0 0 120,484,085
Distribution to
shareholders 230,263 861,605 3,837,280
Fund shares redeemed 36,192 0 2,507,219
Due to sponsor and
distributor (Note 2) 24,310 273,734 592,443
Due to advisor (Note 2) 11,719 0 291,133
Other 18,700 33,384 833,445
TOTAL LIABILITIES 321,184 1,168,723 128,545,605
TOTAL NET ASSETS $41,581,090 $211,586,842 $771,838,724
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $39,344,194 $187,768,219 $911,660,298
Paid-in capital, Class D
or I 4,160,199 23,870,597 11,081,488
Undistributed
(overdistributed) net
investment income (12,644) 0 0
Undistributed net realized
gain(loss) on
investments (1,548,165) (51,974) (148,427,875)
Net unrealized
appreciation
(depreciation) of
investments (362,494) 0 (2,475,187)
TOTAL NET ASSETS $41,581,090 $211,586,842 $771,838,724
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
(NOTE 4)
Net assets - Class A* $38,286,316 $187,718,276 $761,846,888
Shares outstanding - Class
A* 3,664,054 187,768,220 81,790,651
Net asset value per share -
Class A* $10.45 $1.00 $9.31
Maximum offering price per
share - Class A* $10.94+ $1.00 $9.60**
Net assets - Class D or I $3,294,774 $23,868,566 $9,991,836
Shares outstanding - Class D
or I 230,651 23,870,597 717,578
Net asset value and offering
price per share - Class D
or I $14.28 $1.00 $13.92
INVESTMENTS AT COST (NOTE 3) $41,745,207 $212,716,383 $884,817,307
</TABLE>
- --------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
+ MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
94
<PAGE> 141
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
CALIFORNIA
ASSET CALIFORNIA TAX-FREE
ALLOCATION TAX-FREE MONEY
FUND BOND FUND MARKET FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 556,430 $ 0 $ 0
Interest 594,678 9,145,445 5,386,764
TOTAL INVESTMENT INCOME
(NOTE 5) 1,151,108 9,145,445 5,386,764
EXPENSES (NOTE 2)
Advisory fees 197,388 715,790 612,243
Administration fees 28,194 193,312 137,280
Custody fees 0 26,033 26,154
Service fees 13,811 9,413 0
Portfolio accounting fees 0 59,242 57,958
Transfer agency fees 24,987 83,249 20,453
Distribution fees 98,109 65,045 68,641
Amortization of
organization expenses 2,092 580 0
Legal and audit fees 16,315 22,915 22,521
Registration fees 27,280 10,783 4,959
Directors' fees 2,975 2,480 2,480
Shareholder reports 7,438 30,739 3,223
Other 3,138 27,023 8,450
TOTAL EXPENSES 421,727 1,246,604 964,362
Less:
Waived fees and reimbursed
expenses (Note 2) (14,400) (571,370) (17,234)
NET EXPENSES 407,327 675,234 947,128
NET INVESTMENT INCOME (LOSS) 743,781 8,470,211 4,439,636
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments 1,085,602 7,226,398 (14,988)
Net change in unrealized
appreciation
(depreciation) of
investments 7,863,987 6,423,193 0
NET GAIN (LOSS) ON
INVESTMENTS 8,949,589 13,649,591 (14,988)
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $9,693,370 $22,119,802 $4,424,648
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
95
<PAGE> 142
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
SHORT-TERM
MONEY MUNICIPAL GOVERNMENT-
MARKET INCOME CORPORATE
FUND FUND INCOME FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 0 $ 0 $ 0
Interest 11,399,083 2,716,643 7,342
TOTAL INVESTMENT INCOME
(NOTE 5) 11,399,083 2,716,643 7,342
EXPENSES (NOTE 2)
Advisory fees 468,085 217,637 0
Administration fees 187,234 43,741 178
Custody fees 34,825 7,745 0
Service fees 0 19,115 0
Portfolio accounting fees 67,456 37,783 0
Transfer agency fees 25,580 26,813 0
Distribution fees 402,810 91,210 297
Amortization of
organization expenses 1,915 14,064 7,756
Legal and audit fees 20,361 16,626 19,780
Registration fees 12,479 35,075 34,712
Directors' fees 2,480 2,480 1,339
Shareholder reports 7,439 17,452 4,960
Other 5,871 7,393 1,488
TOTAL EXPENSES 1,236,535 537,134 70,510
Less:
Waived fees and reimbursed
expenses (Note 2) (83,519) (227,674) (70,152)
NET EXPENSES 1,153,016 309,460 358
NET INVESTMENT INCOME (LOSS) 10,246,067 2,407,183 6,984
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments* 45 (390,953) 1,054
Net change in unrealized
appreciation
(depreciation) of
investments* 0 5,384,340 1,670
NET GAIN (LOSS) ON
INVESTMENTS 45 4,993,387 2,724
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $10,246,112 $7,400,570 $9,708
</TABLE>
- --------------------------------------------------------------------
* FOR THE SHORT-TERM GOVERNMENT-CORPORATE INCOME FUND AND THE SHORT-TERM
MUNICIPAL INCOME FUND THE REALIZED AND UNREALIZED GAINS AND LOSSES ARE
ALLOCATED FROM THEIR CORRESPONDING MASTER PORTFOLIO.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
96
<PAGE> 143
<TABLE>
<CAPTION>
SHORT-TERM
MUNICIPAL STRATEGIC U.S. GOVERNMENT U.S. TREASURY VARIABLE RATE
INCOME GROWTH INCOME MONEY MARKET GOVERNMENT
FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 0 $ 90,762 $ 0 $ 0 $ 0
Interest 296,472 61,604 1,601,367 5,917,639 29,713,693
TOTAL INVESTMENT INCOME
(NOTE 5) 296,472 152,366 1,601,367 5,917,639 29,713,693
EXPENSES (NOTE 2)
Advisory fees 0 116,310 99,975 257,510 2,247,438
Administration fees 9,052 35,083 19,995 103,004 499,076
Custody fees 0 9,500 12,621 20,177 84,525
Service fees 0 20,163 4,362 0 13,634
Portfolio accounting fees 0 28,273 27,098 51,097 120,394
Transfer agency fees 0 17,419 27,168 18,893 43,507
Distribution fees 15,087 98,798 14,702 240,231 1,137,352
Amortization of
organization expenses 9,695 7,389 1,736 5,385 9,608
Legal and audit fees 19,682 13,154 9,414 20,519 91,933
Registration fees 30,438 19,712 21,521 22,411 50,088
Directors' fees 1,339 2,480 2,480 2,480 2,480
Shareholder reports 4,959 12,397 9,917 11,205 21,630
Other 1,488 3,454 6,005 2,453 72,429
TOTAL EXPENSES 91,740 384,132 256,994 755,365 4,394,094
Less:
Waived fees and reimbursed
expenses (Note 2) (70,442) (31,286) (66,764) (104,184) (713,542)
NET EXPENSES 21,298 352,846 190,230 651,181 3,680,552
NET INVESTMENT INCOME (LOSS) 275,174 (200,480) 1,411,137 5,266,458 26,033,141
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments* (264) 6,505,038 (335,352) (39,534) (3,967,504)
Net change in unrealized
appreciation
(depreciation) of
investments* 154,399 5,966,134 3,523,042 0 17,108,703
NET GAIN (LOSS) ON
INVESTMENTS 154,135 12,471,172 3,187,690 (39,534) 13,141,199
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $429,309 $12,270,692 $4,598,827 $5,226,924 $39,174,340
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
97
<PAGE> 144
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
----------------------------------
FOR THE
(UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $ 743,781 $1,490,375
Net realized gain (loss)
on sale of investments 1,085,602 3,975,711
Net change in unrealized
appreciation
(depreciation) of
investments 7,863,987 (6,051,202)
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 9,693,370 (585,116)
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (631,711) (1,253,254)
CLASS D OR I (112,070) (192,825)
In excess of net
investment income
CLASS A* 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A* 0 (3,165,196)
CLASS D OR I 0 (766,987)
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 1,876,897 5,857,662
Reinvestment of dividends
- Class A* 3,583,022 694,596
Cost of shares redeemed -
Class A* (4,635,861) (14,543,493)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* 824,058 (7,991,235)
Proceeds from shares sold
- Class D or I 1,671,125 5,046,708
Reinvestment of dividends
- Class D or I 755,270 87,663
Cost of shares redeemed -
Class D or I (2,034,587) (3,194,348)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 391,808 1,940,023
INCREASE (DECREASE) IN NET
ASSETS 10,165,455 (12,014,590)
NET ASSETS:
Beginning net assets 50,105,589 62,120,179
ENDING NET ASSETS $60,271,044 $50,105,589
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 162,322 497,697
Shares issued in
reinvestment of
dividends - Class A* 333,830 60,791
Shares redeemed - Class A* (404,760) (1,244,313)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* 91,392 (685,825)
Shares sold - Class D or I 116,143 344,653
Shares issued in
reinvestment of
dividends - Class D or I 56,685 6,181
Shares redeemed - Class D
or I (142,292) (221,506)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 30,536 129,328
</TABLE>
- --------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
98
<PAGE> 145
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET
CALIFORNIA TAX-FREE BOND FUND FUND
---------------------------------- ----------------------------------
FOR THE FOR THE
(UNAUDITED) YEAR ENDED (UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31, SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994 JUNE 30, 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $8,470,211 $19,402,678 $4,439,636 $7,235,197
Net realized gain (loss)
on sale of investments 7,226,398 4,054,017 (14,988) (76,188)
Net change in unrealized
appreciation
(depreciation) of
investments 6,423,193 (39,374,337) 0 0
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 22,119,802 (15,917,642) 4,424,648 7,159,009
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (8,274,628) (18,973,436) (4,439,636) (7,235,197)
CLASS D OR I (195,583) (429,242) N/A N/A
In excess of net
investment income
CLASS A* 0 0 0 0
CLASS D OR I 0 0 N/A N/A
From net realized gain on
sales of investments
CLASS A* 0 (3,947,872) 0 0
CLASS D OR I 0 (106,145) N/A N/A
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0 0 0
CLASS D OR I 0 0 N/A N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 6,730,172 15,317,908 278,813,656 630,837,073
Reinvestment of dividends
- Class A* 6,967,983 14,574,219 1,434,791 2,663,580
Cost of shares redeemed -
Class A* (21,916,484) (80,201,764) (267,882,971) (742,727,104)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* (8,218,329) (50,309,637) 12,365,476 (109,226,451)
Proceeds from shares sold
- Class D or I 972,595 2,864,757 N/A N/A
Reinvestment of dividends
- Class D or I 184,156 348,941 N/A N/A
Cost of shares redeemed -
Class D or I (1,618,482) (2,499,120) N/A N/A
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I (461,731) 714,578 N/A N/A
INCREASE (DECREASE) IN NET
ASSETS 4,969,531 (88,969,396) 12,350,488 (109,302,639)
NET ASSETS:
Beginning net assets 280,450,989 369,420,385 288,409,393 397,712,032
ENDING NET ASSETS $285,420,520 $280,450,989 $300,759,881 $288,409,393
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 632,348 1,401,041 278,813,656 630,837,073
Shares issued in
reinvestment of
dividends - Class A* 669,329 1,315,610 1,434,791 2,663,580
Shares redeemed - Class A* (2,066,034) (7,464,971) (267,882,971) (742,727,100)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* (764,357) (4,748,320) 12,365,476 (109,226,447)
Shares sold - Class D or I 70,148 197,191 N/A N/A
Shares issued in
reinvestment of
dividends - Class D or I 13,534 24,268 N/A N/A
Shares redeemed - Class D
or I (116,348) (179,799) N/A N/A
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I (32,666) 41,660 N/A N/A
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
99
<PAGE> 146
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET FUND
----------------------------------
FOR THE
(UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $10,246,067 $11,484,645
Net realized gain (loss)
on sale of investments 45 (36,799)
Net change in unrealized
appreciation
(depreciation) of
investments 0 0
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 10,246,112 11,447,846
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (8,728,806) (11,414,964)
CLASS D OR I (1,517,261) (69,681)
In excess of net
investment income
CLASS A* 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A* 0 0
CLASS D OR I 0 0
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 887,095,686 1,991,327,766
Reinvestment of dividends
- Class A* 3,851,757 4,615,464
Cost of shares redeemed -
Class A* (850,914,329) (1,916,112,891)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* 40,033,114 79,830,339
Proceeds from shares sold
- Class D or I 241,919,895 19,768,852
Reinvestment of dividends
- Class D or I 1,015,908 26,043
Cost of shares redeemed -
Class D or I (126,563,561) (8,557,384)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 116,372,242 11,237,511
INCREASE (DECREASE) IN NET
ASSETS 156,405,401 91,031,051
NET ASSETS:
Beginning net assets 319,114,763 228,083,712
ENDING NET ASSETS $475,520,164 $319,114,763
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 887,095,686 1,991,327,765
Shares issued in
reinvestment of
dividends - Class A* 3,851,757 4,615,464
Shares redeemed - Class A* (850,914,329) (1,916,112,891)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* 40,033,114 79,830,338
Shares sold - Class D or I 241,919,895 19,768,852
Shares issued in
reinvestment of
dividends - Class D or I 1,015,908 26,043
Shares redeemed - Class D
or I (126,563,561) (8,557,384)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 116,372,242 11,237,511
</TABLE>
- --------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** THE FUND COMMENCED OPERATIONS ON SEPTEMBER 19, 1994.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
100
<PAGE> 147
<TABLE>
<CAPTION>
SHORT-TERM GOVERNMENT- CORPORATE
MUNICIPAL INCOME FUND INCOME FUND
---------------------------------- ----------------------------------
FOR THE FOR THE
(UNAUDITED) YEAR ENDED (UNAUDITED) PERIOD ENDED
SIX MONTHS ENDED DECEMBER 31, SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994 JUNE 30, 1995 1994**
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $2,407,183 $6,025,578 $6,984 $1,538
Net realized gain (loss)
on sale of investments (390,953) (3,600,931) 1,054 (1,534)
Net change in unrealized
appreciation
(depreciation) of
investments 5,384,340 (11,048,257) 1,670 157
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 7,400,570 (8,623,610) 9,708 161
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (2,021,606) (5,151,955) (6,984) (1,538)
CLASS D OR I (385,577) (873,623) N/A N/A
In excess of net
investment income
CLASS A* (16,850) (137,633) 0 0
CLASS D OR I (3,614) (26,101) N/A N/A
From net realized gain on
sales of investments
CLASS A* 0 0 0 0
CLASS D OR I 0 0 N/A N/A
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0 0 0
CLASS D OR I 0 0 N/A N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 1,905,703 14,853,144 349,018 97,090
Reinvestment of dividends
- Class A* 1,013,537 2,696,820 3,866 564
Cost of shares redeemed -
Class A* (14,502,350) (35,965,725) 0 0
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* (11,583,110) (18,415,761) 352,884 97,654
Proceeds from shares sold
- Class D or I 302,181 6,605,791 N/A N/A
Reinvestment of dividends
- Class D or I 148,369 363,289 N/A N/A
Cost of shares redeemed -
Class D or I (2,304,241) (3,876,822) N/A N/A
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I (1,853,691) 3,092,258 N/A N/A
INCREASE (DECREASE) IN NET
ASSETS (8,463,878) (30,136,425) 355,608 96,277
NET ASSETS:
Beginning net assets 89,335,843 119,472,268 96,282 5
ENDING NET ASSETS $80,871,965 $89,335,843 $451,890 $96,282
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 184,628 1,375,339 69,843 19,418
Shares issued in
reinvestment of
dividends - Class A* 98,386 257,416 774 114
Shares redeemed - Class A* (1,392,208) (3,481,504) 0 0
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* (1,109,194) (1,848,749) 70,617 19,532
Shares sold - Class D or I 21,463 447,121 N/A N/A
Shares issued in
reinvestment of
dividends - Class D or I 10,638 25,788 N/A N/A
Shares redeemed - Class D
or I (162,774) (283,002) N/A N/A
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I (130,673) 189,907 N/A N/A
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
STATEMENTS.
101
<PAGE> 148
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT-TERM MUNICIPAL INCOME FUND
----------------------------------
FOR THE
(UNAUDITED) PERIOD ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994**
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $275,174 $68,324
Net realized gain (loss)
on sale of investments (264) (33,634)
Net change in unrealized
appreciation
(depreciation) of
investments 154,399 4,179
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 429,309 38,869
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (275,174) (68,324)
CLASS D OR I N/A N/A
In excess of net
investment income
CLASS A* 0 0
CLASS D OR I N/A N/A
From net realized gain on
sales of investments
CLASS A* 0 0
CLASS D OR I N/A N/A
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0
CLASS D OR I N/A N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 4,378,358 12,358,144
Reinvestment of dividends
- Class A* 260,422 30,765
Cost of shares redeemed -
Class A* (1,763,316) (581,114)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* 2,875,464 11,807,795
Proceeds from shares sold
- Class D or I N/A N/A
Reinvestment of dividends
- Class D or I N/A N/A
Cost of shares redeemed -
Class D or I N/A N/A
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I N/A N/A
INCREASE (DECREASE) IN NET
ASSETS 3,029,599 11,778,340
NET ASSETS:
Beginning net assets 11,778,345 5
ENDING NET ASSETS $14,807,944 $11,778,345
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 880,018 2,502,660
Shares issued in
reinvestment of
dividends - Class A* 52,499 6,232
Shares redeemed - Class A* (356,574) (117,174)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* 575,943 2,391,718
Shares sold - Class D or I N/A N/A
Shares issued in
reinvestment of
dividends - Class D or I N/A N/A
Shares redeemed - Class D
or I N/A N/A
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I N/A N/A
</TABLE>
- --------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** THE FUND COMMENCED OPERATIONS ON JUNE 3, 1994.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
102
<PAGE> 149
<TABLE>
STRATEGIC GROWTH FUND U.S. GOVERNMENT INCOME FUND
---------------------------------- ----------------------------------
FOR THE FOR THE
(UNAUDITED) YEAR ENDED (UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31, SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994 JUNE 30, 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) ($200,480) ($449,157) $1,411,137 $3,493,708
Net realized gain (loss)
on sale of investments 6,505,038 1,481,221 (335,352) (1,212,813)
Net change in unrealized
appreciation
(depreciation) of
investments 5,966,134 336,969 3,523,042 (5,164,808)
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 12,270,692 1,369,033 4,598,827 (2,883,913)
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* 0 0 (1,298,703) (3,066,842)
CLASS D OR I 0 0 (112,434) (426,866)
In excess of net
investment income
CLASS A* 0 0 0 0
CLASS D OR I 0 0 0 0
From net realized gain on
sales of investments
CLASS A* 0 (655,929) 0 0
CLASS D OR I 0 (376,137) 0 0
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 (278,477) 0 0
CLASS D OR I 0 (170,680) 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 10,792,880 11,769,539 3,190,486 11,812,017
Reinvestment of dividends
- Class A* 589,218 403,346 315,675 1,241,308
Cost of shares redeemed -
Class A* (7,263,632) (10,877,764) (3,970,308) (22,062,966)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* 4,118,466 1,295,121 (464,147) (9,009,641)
Proceeds from shares sold
- Class D or I 2,749,766 6,859,821 36,814 1,463,572
Reinvestment of dividends
- Class D or I 286,085 175,834 68,611 271,695
Cost of shares redeemed -
Class D or I (3,611,881) (3,485,125) (807,915) (6,683,335)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I (576,030) 3,550,530 (702,490) (4,948,068)
INCREASE (DECREASE) IN NET
ASSETS 15,813,128 4,733,461 2,021,053 (20,335,330)
NET ASSETS:
Beginning net assets 42,079,158 37,345,697 39,560,037 59,895,367
ENDING NET ASSETS $57,892,286 $42,079,158 $41,581,090 $39,560,037
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 731,361 890,673 319,252 1,143,944
Shares issued in
reinvestment of
dividends - Class A* 44,336 30,559 31,746 120,007
Shares redeemed - Class A* (498,970) (834,218) (397,508) (2,181,814)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* 276,727 87,014 (46,510) (917,863)
Shares sold - Class D or I 147,875 410,160 2,692 101,936
Shares issued in
reinvestment of
dividends - Class D or I 17,296 10,884 5,052 19,155
Shares redeemed - Class D
or I (201,744) (214,855) (58,973) (485,093)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I (36,573) 206,189 (51,229) (364,002)
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
103
<PAGE> 150
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND
----------------------------------
FOR THE
(UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $5,266,458 $4,895,405
Net realized gain (loss)
on sale of investments (39,534) (12,441)
Net change in unrealized
appreciation
(depreciation) of
investments 0 0
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 5,226,924 4,882,964
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (4,860,840) (4,799,315)
CLASS D OR I (405,618) (96,090)
In excess of net
investment income
CLASS A* 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A* 0 0
CLASS D OR I 0 0
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 339,405,239 628,656,179
Reinvestment of dividends
- Class A* 2,154,524 1,652,082
Cost of shares redeemed -
Class A* (348,833,162) (553,436,130)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* (7,273,399) 76,872,131
Proceeds from shares sold
- Class D or I 250,095,108 310,876,391
Reinvestment of dividends
- Class D or I 258,576 21,937
Cost of shares redeemed -
Class D or I (230,383,211) (306,998,204)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 19,970,473 3,900,124
INCREASE (DECREASE) IN NET
ASSETS 12,657,540 80,759,814
NET ASSETS:
Beginning net assets 198,929,302 118,169,488
ENDING NET ASSETS $211,586,842 $198,929,302
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 339,405,239 628,656,178
Shares issued in
reinvestment of
dividends - Class A* 2,154,524 1,652,082
Shares redeemed - Class A* (348,833,162) (553,436,130)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* (7,273,399) 76,872,130
Shares sold - Class D or I 250,095,108 310,876,391
Shares issued in
reinvestment of
dividends - Class D or I 258,576 21,937
Shares redeemed - Class D
or I (230,383,211) (306,998,204)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 19,970,473 3,900,124
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
104
<PAGE> 151
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT FUND
----------------------------------
FOR THE
(UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $26,033,141 $74,993,269
Net realized gain (loss)
on sale of investments (3,967,504) (125,280,826)
Net change in unrealized
appreciation
(depreciation) of
investments 17,108,703 (11,149,757)
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 39,174,340 (61,437,314)
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (25,741,615) (74,426,329)
CLASS D OR I (291,526) (566,940)
In excess of net
investment income
CLASS A* 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A* 0 0
CLASS D OR I 0 0
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 8,783,795 357,940,526
Reinvestment of dividends
- Class A* 6,629,248 24,395,946
Cost of shares redeemed -
Class A* (482,098,487) (980,573,296)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* (466,685,444) (598,236,824)
Proceeds from shares sold
- Class D or I 236,169 7,287,276
Reinvestment of dividends
- Class D or I 126,500 232,670
Cost of shares redeemed -
Class D or I (2,745,693) (5,418,430)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I (2,383,024) 2,101,516
INCREASE (DECREASE) IN NET
ASSETS (455,927,269) (732,565,891)
NET ASSETS:
Beginning net assets 1,227,765,993 1,960,331,884
ENDING NET ASSETS $771,838,724 $1,227,765,993
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 945,059 36,230,262
Shares issued in
reinvestment of
dividends - Class A* 715,304 2,505,413
Shares redeemed - Class A* (52,125,334) (101,611,784)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* (50,464,971) (62,876,109)
Shares sold - Class D or I 16,969 495,723
Shares issued in
reinvestment of
dividends - Class D or I 9,131 16,111
Shares redeemed - Class D
or I (197,997) (380,431)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I (171,897) 131,403
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
105
<PAGE> 152
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
--------------------------------------------------
CLASS A
--------------------------------------------------
(UNAUDITED)
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.67 $11.90 $11.45 $11.95
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.16 0.31 0.30 0.47
Net realized and unrealized gain (loss) on
investments 1.82 (0.39) 1.12 0.36
----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 1.98 (0.08) 1.42 0.83
LESS DISTRIBUTIONS:
Dividends from net investment income (0.16) (0.31) (0.30) (0.63)
Distributions from net realized gain 0.00 (0.84) (0.67) (0.70)
----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.16) (1.15) (0.97) (1.33)
----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $12.49 $10.67 $11.90 $11.45
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 18.65% (0.68)% 12.54% 7.44%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $48,329 $40,308 $53,124 $41,165
Number of shares outstanding, end of period
(000) 3,870 3,779 4,465 3,596
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 1.30% 1.30% 1.36% 1.25%
Ratio of net investment income to average net
assets(2) 2.79% 2.41% 2.64% 4.08%
Portfolio turnover 43% 50% 53% 38%
- --------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 1.34% 1.38% 1.47% 1.71%
(2) Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses 2.75% 2.33% 2.53% 3.62%
- --------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
106
<PAGE> 153
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND (CONT.) CALIFORNIA TAX FREE BOND FUND
--------------------------------------------------------------- -------------------------------------
CLASS A (CONT.) CLASS D CLASS A
------------------------ ------------------------------------- ------------------------------------
(UNAUDITED) (UNAUDITED)
YEAR YEAR SIX MONTHS YEAR PERIOD SIX MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31,
1991 1990 1995 1994 1993* 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $10.31 $10.39 $13.26 $14.75 $15.00 $10.20 $11.47 $10.92
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.57 0.63 0.14 0.25 0.07 0.31 0.64 0.63
Net realized and
unrealized gain (loss)
on investments 1.51 0.10 2.26 (0.45) 0.61 0.49 (1.13) 0.75
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT
OPERATIONS 2.08 0.73 2.40 (0.20) 0.68 0.80 (0.49) 1.38
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.44) (0.61) (0.14) (0.25) (0.10) (0.31) (0.64) (0.63)
Distributions from net
realized gain 0.00 (0.20) 0.00 (1.04) (0.83) 0.00 (0.14) (0.20)
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.44) (0.81) (0.14) (1.29) (0.93) (0.31) (0.78) (0.83)
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF
PERIOD $11.95 $10.31 $15.52 $13.26 $14.75 $10.69 $10.20 $11.47
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT
ANNUALIZED)+ 20.69% 7.08% 18.21% (1.38)% 4.56% 7.94% (4.32)% 12.98%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $38,663 $27,689 $11,942 $9,798 $8,996 $278,175 $273,105 $361,779
Number of shares
outstanding, end of
period (000) 3,235 2,686 770 739 610 26,016 26,780 31,529
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 1.38% 1.59% 2.05% 2.01% 0.96% 0.45% 0.50% 0.69%
Ratio of net investment
income to average net
assets(2) 5.23% 6.01% 2.03% 1.75% 0.53% 5.91% 5.87% 5.54%
Portfolio turnover 18% 94% 43% 50% 53% 23% 4% 10%
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 1.56% 1.74% 2.17% 2.20% 1.12% 0.85% 0.95% 0.85%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 5.05% 5.86% 1.91% 1.56% 0.37% 5.51% 5.42% 5.38%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
107
<PAGE> 154
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX FREE BOND FUND (CONT.)
-------------------------------------
CLASS A (CONT.)
-------------------------------------
YEAR YEAR YEAR
ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31,
1992 1991 1990
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.73 $10.27 $10.35
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.68 0.69 0.71
Net realized and unrealized gain (loss) on investments 0.26 0.46 (0.08)
----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 0.94 1.15 0.63
LESS DISTRIBUTIONS:
Dividends from net investment income (0.68) (0.69) (0.71)
Distributions from net realized gain (0.07) 0.00 0.00
----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.75) (0.69) (0.71)
----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $10.92 $10.73 $10.27
----------- ----------- -----------
----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 9.01% 11.62% 6.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $375,376 $332,845 $201,138
Number of shares outstanding, end of period (000) 34,376 31,008 19,576
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 0.50% 0.45% 0.29%
Ratio of net investment income to average net assets(2) 6.24% 6.56% 6.97%
Portfolio turnover 24% 8% 35%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 0.85% 0.87% 0.95%
(2) Ratio of net investment income to average net assets prior
to waived fees and reimbursed expenses 5.89% 6.14% 6.31%
- ---------------------------------------------------------------------------------------------------
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
</TABLE>
108
<PAGE> 155
<TABLE>
<CAPTION>
CALIFORNIA TAX FREE BOND FUND (CONT.) CALIFORNIA TAX FREE MONEY MARKET FUND
------------------------------------- --------------------------------------------------
CLASS D
-------------------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR PERIOD SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993* 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $13.32 $14.98 $15.00 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.36 0.73 0.34 0.02 0.02 0.02 0.03
Net realized and
unrealized gain (loss)
on investments 0.64 (1.47) 0.24 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT
OPERATIONS 1.00 (0.74) 0.58 0.02 0.02 0.02 0.03
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.36) (0.73) (0.34) (0.02) (0.02) (0.02) (0.03)
Distributions from net
realized gain 0.00 (0.19) (0.26) 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.36) (0.92) (0.60) (0.02) (0.02) (0.02) (0.03)
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF
PERIOD $13.96 $13.32 $14.98 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT
ANNUALIZED)+ 7.56% (5.00)% 3.92% 1.63% 2.22% 1.84% 2.54%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $7,246 $7,346 $7,641 $300,760 $288,409 $397,712 $363,067
Number of shares
outstanding, end of
period (000) 519 552 510 300,856 288,409 397,717 363,069
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 1.16% 1.20% 1.32% 0.69% 0.68% 0.66% 0.66%
Ratio of net investment
income to average net
assets(2) 5.20% 5.15% 4.50% 3.23% 2.17% 1.82% 2.50%
Portfolio turnover 23% 4% 10% N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 1.59% 1.82% 1.61% 0.70% 0.70% 0.70% 0.69%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 4.77% 4.53% 4.21% 3.22% 2.15% 1.68% 2.47%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
109
<PAGE> 156
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX FREE MONEY MARKET FUND
MONEY MARKET FUND -------------------------------------
(CONT.) CLASS A
------------------------ -------------------------------------
(UNAUDITED)
YEAR YEAR SIX MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31,
1991 1990 1995 1994 1993
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.04 0.05 0.03 0.04 0.03
Net realized and unrealized gain
(loss) on investments 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 0.04 0.05 0.03 0.04 0.03
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.04) (0.05) (0.03) (0.04) (0.03)
Distributions from net realized
gain 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.04) (0.05) (0.03) (0.04) (0.03)
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 3.99% 5.20% 2.75% 3.70% 2.57%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $299,234 $312,023 $347,911 $307,878 $228,084
Number of shares outstanding, end
of period (000) 299,234 312,023 347,949 307,915 228,085
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to average net
assets(1) 0.66% 0.65% 0.65% 0.68% 0.74%
Ratio of net investment income to
average net assets(2) 3.92% 5.07% 5.43% 3.71% 2.54%
Portfolio turnover N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net
assets prior to waived fees and
reimbursed expenses 0.70% 0.73% 0.69% 0.72% 0.74%
(2) Ratio of net investment income to
average net assets prior to waived
fees and reimbursed expenses 3.88% 4.99% 5.39% 3.67% 2.54%
- ---------------------------------------------------------------------------------------------------
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THIS CLASS COMMENCED OPERATIONS ON AUGUST 18, 1994.
</TABLE>
110
<PAGE> 157
<TABLE>
<CAPTION>
MONEY MARKET FUND (CONT.) MUNICIPAL INCOME FUND
--------------------------------------------------------------- ------------------------
CLASS A (CONT.) CLASS I CLASS A
------------------------------------- ------------------------ ------------------------
(UNAUDITED) (UNAUDITED)
YEAR YEAR YEAR SIX MONTHS PERIOD SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31,
1992 1991 1990 1995 1994* 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $9.91 $11.27
----------- ----------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.03 0.06 0.08 0.03 0.02 0.29 0.60
Net realized and
unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00 0.55 (1.36)
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT
OPERATIONS 0.03 0.06 0.08 0.03 0.02 0.84 (0.76)
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.03) (0.06) (0.08) (0.03) (0.02) (0.29) (0.60)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.03) (0.06) (0.08) (0.03) (0.02) (0.29) (0.60)
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $10.46 $9.91
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT
ANNUALIZED)+ 3.23% 5.65% 7.88% 2.89% 1.83% 8.50% (6.82)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $268,424 $229,863 $198,187 $127,609 $11,237 $66,310 $73,791
Number of shares
outstanding, end of
period (000) 268,434 229,866 198,192 127,610 11,238 6,336 7,446
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 0.75% 0.74% 0.68% 0.39% 0.38% 0.60% 0.43%
Ratio of net investment
income to average net
assets(2) 3.17% 5.54% 7.55% 5.70% 5.05% 5.62% 5.77%
Portfolio turnover N/A N/A N/A N/A N/A 13% 32%
- -----------------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 0.75% 0.75% 0.84% 0.45% 0.55% 1.05% 0.98%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 3.17% 5.53% 7.39% 5.64% 4.88% 5.16% 5.22%
- ---------------------------------------------------------------------------------------------------
</TABLE>
111
<PAGE> 158
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND (CONT.)
-------------------------------------
CLASS A (CONT.)
-------------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31,
1993 1992 1991*
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.56 $10.25 $10.00
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.64 0.66 0.28
Net realized and unrealized gain (loss) on investments 0.71 0.32 0.25
----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 1.35 0.98 0.53
LESS DISTRIBUTIONS:
Dividends from net investment income (0.64) (0.66) (0.28)
Distributions from net realized gain 0.00 (0.01) 0.00
----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.64) (0.67) (0.28)
----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $11.27 $10.56 $10.25
----------- ----------- -----------
----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 13.11% 9.94% 5.81%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $104,701 $52,553 $16,585
Number of shares outstanding, end of period (000) 9,294 4,976 1,618
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 0.39% 0.23% 0.00%
Ratio of net investment income to average net assets(2) 5.56% 6.05% 6.38%
Portfolio turnover 15% 67% 5%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.09% 1.20% 3.02%
(2) Ratio of net investment income to average net assets prior
to waived fees and reimbursed expenses 4.86% 5.08% 3.36%
- ---------------------------------------------------------------------------------------------------
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THE FUND COMMENCED OPERATIONS ON JULY 15, 1991.
** THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
</TABLE>
112
<PAGE> 159
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND (CONT.) STRATEGIC
------------------------------------- SHORT-TERM GOVERNMENT- SHORT-TERM MUNICIPAL GROWTH FUND
CLASS D CORPORATE INCOME FUND INCOME FUND -----------
------------------------------------- ------------------------ ------------------------ CLASS A
FROM FROM -----------
SEPT. 19, JUNE 3,
(UNAUDITED) (UNAUDITED) 1994 (UNAUDITED) 1994 (UNAUDITED)
SIX MONTHS YEAR PERIOD SIX MONTHS (INCEPTION) SIX MONTHS (INCEPTION) SIX MONTHS
ENDED ENDED ENDED ENDED TO ENDED TO ENDED
JUNE 30, DEC. 31, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30,
1995 1994 1993** 1995 1994 1995 1994 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $13.42 $15.26 $15.00 $4.93 $5.00 $4.92 $5.00 $13.29
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.35 0.73 0.36 0.14 0.08 0.11 0.09 (0.03)
Net realized and
unrealized gain (loss)
on investments 0.75 (1.84) 0.26 0.08 (0.07) 0.07 (0.08) 3.80
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
TOTAL FROM INVESTMENT
OPERATIONS 1.10 (1.11) 0.62 0.22 0.01 0.18 0.01 3.77
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.35) (0.73) (0.36) (0.14) (0.08) (0.11) (0.09) 0.00
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
TOTAL FROM DISTRIBUTIONS (0.35) (0.73) (0.36) (0.14) (0.08) (0.11) (0.09) 0.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
NET ASSET VALUE, END OF
PERIOD $14.17 $13.42 $15.26 $5.01 $4.93 $4.99 $4.92 $17.06
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
TOTAL RETURN (NOT
ANNUALIZED)+ 8.22% (7.37)% 4.19% 4.67% 0.28% 3.77% 0.13% 28.37%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $14,562 $15,545 $14,771 $452 $96 $14,808 $11,778 $39,053
Number of shares
outstanding, end of
period (000) 1,028 1,158 968 90 20 2,968 2,392 2,289
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 1.21% 1.02% 1.13% 0.30% 0.30% 0.35% 0.27% 1.25%
Ratio of net investment
income to average net
assets(2) 5.00% 5.17% 4.14% 5.83% 5.77% 4.56% 3.67% (0.60)%
Portfolio turnover 13% 32% 15% N/A N/A N/A N/A 97%
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 1.78% 1.74% 1.84% 58.86% 67.89% 1.52% 1.98% 1.40%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 4.43% 4.45% 3.43% (52.73)% (61.82)% 3.39% 1.96% (0.75)%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
113
<PAGE> 160
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
STRATEGIC GROWTH FUND (CONT.)
-------------------------------------
CLASS A (CONT.) CLASS D
------------------------ -----------
(UNAUDITED)
YEAR PERIOD SIX MONTHS
ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30,
1994 1993* 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $13.20 $10.00 $16.54
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.11) (0.03) (0.13)
Net realized and unrealized gain (loss) on investments 0.67 3.68 4.74
----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 0.56 3.65 4.61
LESS DISTRIBUTIONS:
Dividends from net investment income (0.33) (0.03) 0.00
Distributions from net realized gain (0.14) (0.42) 0.00
----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.47) (0.45) 0.00
----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $13.29 $13.20 $21.15
----------- ----------- -----------
----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 4.23% 36.56% 27.87%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $26,744 $25,413 $18,840
Number of shares outstanding, end of period (000) 2,013 1,926 891
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 1.20% 0.66% 2.00%
Ratio of net investment income to average net assets(2) (0.81)% (0.01)% (1.34)%
Portfolio turnover 149% 182% 97%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.55% 1.64% 2.09%
(2) Ratio of net investment income to average net assets prior
to waived fees and reimbursed expenses (1.16)% (0.99)% (1.44)%
- --------------------------------------------------------------------------------------------------------
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THE FUND COMMENCED OPERATIONS ON JANUARY 20, 1993.
** THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
</TABLE>
114
<PAGE> 161
<TABLE>
<CAPTION> STRATEGIC GROWTH FUND
(CONT.) U.S. GOVERNMENT INCOME FUND
--------------------------------------------------------------------------
CLASS D (CONT.) CLASS A
--------------------------------------------------------------------------
(UNAUDITED)
PERIOD SIX MONTHS YEAR YEAR YEAR
YEAR ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31, DEC. 31,
1994 1993** 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $16.55 $15.00 $9.66 $10.87 $10.56 $10.97
----------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) (0.24) (0.43) 0.35 0.70 0.74 0.79
Net realized and
unrealized gain (loss)
on investments 0.81 2.51 0.79 (1.21) 0.36 (0.14)
----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT
OPERATIONS 0.57 2.08 1.14 (0.51) 1.10 0.65
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.40) 0.00 (0.35) (0.70) (0.74) (0.79)
Distributions from net
realized gain (0.18) (0.53) 0.00 0.00 (0.05) (0.27)
----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.58) (0.53) (0.35) (0.70) (0.79) (1.06)
----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF
PERIOD $16.54 $16.55 $10.45 $9.66 $10.87 $10.56
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT
ANNUALIZED)+ 3.46% 13.84% 12.03% (4.81)% 10.67% 6.27%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $15,335 $11,932 $38,286 $35,838 $50,301 $40,883
Number of shares
outstanding, end of
period (000) 927 721 3,664 3,711 4,628 3,871
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 1.95% 0.61% 0.89% 0.76% 0.53% 0.47%
Ratio of net investment
income to average net
assets(2) (1.56)% (1.00)% 7.11% 6.84% 6.79% 6.26%
Portfolio turnover 149% 182% 80% 50% 115% 128%
- ----------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 2.23% 2.14% 1.20% 1.08% 1.01% 1.13%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses (1.84)% (2.53)% 6.80% 6.52% 6.31% 5.60%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
115
<PAGE> 162
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME FUND (CONT.)
-------------------------------------
CLASS A (CONT.) CLASS D
------------------------ -----------
(UNAUDITED)
YEAR YEAR SIX MONTHS
ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30,
1991 1990 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.30 $10.22 $13.20
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.86 0.87 0.44
Net realized and unrealized gain (loss) on investments 0.90 0.10 1.08
----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 1.76 0.97 1.52
LESS DISTRIBUTIONS:
Dividends from net investment income (0.86) (0.89) (0.44)
Distributions from net realized gain (0.23) 0.00 0.00
----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (1.09) (0.89) (0.44)
----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $10.97 $10.30 $14.28
----------- ----------- -----------
----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 18.08% 10.17% 11.65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $20,457 $11,116 $3,295
Number of shares outstanding, end of period (000) 1,865 1,079 231
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 0.00% 0.07% 1.61%
Ratio of net investment income to average net assets(2) 8.30% 8.65% 6.45%
Portfolio turnover 100% 4% 80%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.87% 2.72% 2.17%
(2) Ratio of net investment income to average net assets prior
to waived fees and reimbursed expenses 6.43% 6.00% 5.90%
- ---------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THE FUND COMMENCED OPERATIONS ON MAY 12, 1992.
** THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
++ THE CLASS COMMENCED OPERATIONS ON JUNE 20, 1994.
116
<PAGE> 163
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME
FUND (CONT.)
U.S. TREASURY MONEY MARKET FUND
------------------------ ----------------------------------------------------------------------------
CLASS D (CONT.) CLASS A CLASS I
------------------------ -------------------------------------------------- ------------------------
(UNAUDITED) (UNAUDITED)
YEAR PERIOD SIX MONTHS YEAR YEAR PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31, DEC. 31, JUNE 30, DEC. 31,
1994 1993** 1995 1994 1993 1992* 1995 1994++
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $14.85 $15.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.86 0.42 0.03 0.03 0.03 0.02 0.03 0.16
Net realized and
unrealized gain (loss)
on investments (1.65) (0.08) 0.00 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
TOTAL FROM INVESTMENT
OPERATIONS (0.79) 0.34 0.03 0.03 0.03 0.02 0.03 0.16
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.86) (0.42) (0.03) (0.03) (0.03) (0.02) (0.03) (0.16)
Distributions from net
realized gain 0.00 (0.07) 0.00 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
TOTAL FROM DISTRIBUTIONS (0.86) (0.49) (0.03) (0.03) (0.03) (0.02) (0.03) (0.16)
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
NET ASSET VALUE, END OF
PERIOD $13.20 $14.85 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
TOTAL RETURN (NOT
ANNUALIZED)+ (5.45)% 2.25% 2.58% 3.44% 2.56% 1.97% 2.71% 2.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $3,722 $9,594 $187,718 $195,031 $118,169 $137,412 $23,869 $3,898
Number of shares
outstanding, end of
period (000) 282 646 187,768 195,042 118,169 137,416 23,871 3,900
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 1.37% 0.90% 0.65% 0.63% 0.52% 0.27% 0.36% 0.23%
Ratio of net investment
income to average net
assets(2) 6.14% 5.90% 5.09% 3.47% 2.55% 3.12% 5.42% 4.42%
Portfolio turnover 50% 115% N/A N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 1.87% 2.03% 0.75% 0.80% 0.77% 0.79% 0.52% 0.57%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 5.64% 4.77% 4.99% 3.30% 2.30% 2.60% 5.25% 4.08%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
117
<PAGE> 164
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT FUND
--------------------------------------------------
CLASS A
--------------------------------------------------
(UNAUDITED)
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.19 $9.99 $9.95 $10.13
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.27 0.43 0.44 0.59
Net realized and unrealized gain (loss) on
investments 0.12 (0.80) 0.04 (0.18)
----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 0.39 (0.37) 0.48 0.41
LESS DISTRIBUTIONS:
Dividends from net investment income (0.27) (0.43) (0.44) (0.59)
Distributions from net realized gain 0.00 0.00 0.00 0.00
----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.27) (0.43) (0.44) (0.59)
----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $9.31 $9.19 $9.99 $9.95
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 4.31% (3.81)% 4.87% 4.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $761,847 $1,215,546 $1,949,013 $2,559,363
Number of shares outstanding, end of period
(000) 81,791 132,256 195,132 257,238
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 0.82% 0.79% 0.76% 0.75%
Ratio of net investment income to average net
assets(2) 5.82% 4.40% 4.37% 5.62%
Portfolio turnover 162% 164% 201% 197%
- ------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 0.97% 0.94% 0.95% 0.94%
(2) Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses 5.67% 4.25% 4.18% 5.43%
- ---------------------------------------------------------------------------------------------------
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
++ THE FUND COMMENCED OPERATIONS ON NOVEMBER 1, 1990.
</TABLE>
118
<PAGE> 165
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT FUND (CONT.)
---------------------------------------------------------------
CLASS A (CONT.) CLASS D
------------------------ -------------------------------------
(UNAUDITED)
YEAR PERIOD SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31,
1991 1990++ 1995 1994 1993*
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $10.12 $10.00 $13.74 $14.93 $15.00
----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.78 0.08 0.37 0.57 0.27
Net realized and
unrealized gain (loss)
on investments 0.01 0.12 0.18 (1.19) (0.07)
----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT
OPERATIONS 0.79 0.20 0.55 (0.62) 0.20
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.78) (0.08) (0.37) (0.57) (0.27)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.78) (0.08) (0.37) (0.57) (0.27)
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF
PERIOD $10.13 $10.12 $13.92 $13.74 $14.93
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT
ANNUALIZED)+ 8.60% 2.75% 4.05% (4.25)% 1.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $566,840 $6,858 $9,992 $12,220 $11,319
Number of shares
outstanding, end of
period (000) 55,933 678 718 889 758
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 0.50% 0.00% 1.33% 1.29% 1.26%
Ratio of net investment
income to average net
assets(2) 7.36% 4.93% 5.35% 3.94% 3.41%
Portfolio turnover 250% N/A 162% 164% 201%
- ---------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 1.08% 5.48% 1.63% 1.55% 1.75%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 6.78% (0.55)% 5.06% 3.68% 2.92%
- ---------------------------------------------------------------------------------------------------
</TABLE>
119
<PAGE> 166
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Overland Express Funds, Inc. (the "Company") is registered under the
Investment Company Act of 1940 (the "1940 Act"), as amended, as an open-end
series investment company. The Company commenced operations on April 7, 1988
and includes ten separate diversified funds: the Asset Allocation Fund, the
Money Market Fund, the Municipal Income Fund, the Overland Sweep Fund, the
Short-Term Government-Corporate Income Fund, the Short-Term Municipal Income
Fund, the Strategic Growth Fund, the U.S. Government Income Fund, the U.S.
Treasury Money Market Fund, the Variable Rate Government Fund, and two
non-diversified funds: the California Tax-Free Bond Fund and the California
Tax-Free Money Market Fund. The financial statements for the Overland Sweep
Fund are presented separately.
Each of the funds presented in this book (the "Funds"), with the exception
of the Money Market Fund, the California Tax-Free Money Market Fund, the Short-
Term Government-Corporate Income Fund, the Short-Term Municipal Income Fund,
and the U.S. Treasury Money Market Fund, commenced offering Class D shares on
July 1, 1993. The U.S. Treasury Money Market Fund and the Money Market Fund
commenced offering Class I shares on June 20, 1994 and August 18, 1994,
respectively. The three classes of shares differ principally in their
respective sales charges, service fees, and distribution fees. Shareholders of
each class also bear certain expenses that pertain to that particular class.
All shareholders bear the common expenses of the Fund, and earn income from the
portfolio, pro rata based on the average daily net assets of each class,
without distinction between share classes. Dividends are declared separately
for each class. Gains are allocated to each class pro rata based upon net
assets of each class on the date of distribution. No class has preferential
dividend rights; differences in per share dividend rates are generally due to
differences in separate class expenses, including distribution and service fees
and from the relative weightings of pro rata income and gain allocations.
120
<PAGE> 167
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
The following significant accounting policies are consistently followed by
the Company in the preparation of its financial statements, and such policies
are in conformity with generally accepted accounting principles for investment
companies.
SECURITY VALUATION
Investments in securities for which the primary market is a national
securities exchange or the NASDAQ National Market System are stated at the last
reported sales price on the day of valuation. U.S. Government obligations are
valued at stated mean between the last reported bid and ask prices. In the
absence of any sale of such securities on the valuation date and in the case of
other securities, excluding debt securities maturing in 60 days or less, the
valuations are based on latest quoted bid prices. Debt securities maturing in
60 days or less are valued at amortized cost. Debt securities other than those
maturing in 60 days or less and other than U.S. government obligations are
valued at the latest quoted bid price. Securities for which quotations are not
readily available are valued at fair value as determined by policies set by the
Board of Directors.
The California Tax-Free Money Market Fund, the Money Market Fund and the
U.S. Treasury Money Market Fund use the amortized cost method to value their
portfolio securities and seek to maintain constant net asset values of $1.00
per share. There is no assurance the Funds will meet this objective. The
amortized cost method involves valuing a security at its cost and amortizing
any discount or premium over the period until maturity, which approximates
market value.
The Short-Term Government-Corporate Income Fund invests only in shares of
the Short-Term Government-Corporate Income Master Portfolio of Master
Investment Trust (the "Trust"). The Short-Term Municipal Income Fund invests
only in shares of the Short-Term Municipal Income Master Portfolio (together
with the Short-Term Government-Corporate Income Master Portfolio, the "Master
Portfolios") of the Trust. The Trust's investments include fixed-, variable-,
and floating-rate instruments. Certain of these floating- and variable-rate
instruments may carry a demand feature that would permit the holder to tender
them back to the issuer at par value prior to maturity. The value of the assets
of each Master Portfolio (other than debt obligations maturing in 60 days or
less) is determined as of the close of regular trading on the New York Stock
Exchange, which is currently 4:00 p.m. New
121
<PAGE> 168
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
York time. Except for debt obligations with remaining maturities of 60 days or
less, which are valued at amortized cost, assets are valued at current market
prices, or if such prices are not readily available, at fair value as
determined by procedures approved by the Board of Trustees.
Cash equivalents relating to firm commitment purchase agreements are
segregated by the custodian and may not be sold without appropriate replacement
while the current commitment is outstanding.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Dividend income is recognized on the
ex-dividend date, and interest income is accrued daily. Realized gains or
losses are reported on the basis of identified cost of securities delivered.
Bond discounts and premiums are amortized as required by the Internal Revenue
Code.
TBA PURCHASE COMMITMENTS
The Overland Express Variable Rate Government Fund enters into "TBA" (to be
announced) purchase commitments to purchase securities for a fixed price at a
future date beyond customary settlement time. Although the unit price has been
established, the principal value has not been finalized. However, the amount of
the commitment will not flucuate more than 2.00% from the principal amount. The
Fund holds, and maintains until the settlement date, cash or high-grade debt
obligations in an amount sufficient to meet the purchase price. TBA purchase
commitments may be considered securities in themselves, and involve a risk of
loss if the value of the security to be purchased declines prior to the
settlement date. This risk is in addition to the risk of decline in the value
of the Fund's other assets. Unsettled TBA purchase commitments are valued at
the current market value of the underlying securities, generally acording to
the procedures described under "Security Valuation" above.
Although the Fund will generally enter into TBA purchase commitments with
the intention of acquiring securities for its portfolio, the Fund may dispose
of a commitment prior to settlement if the Fund's advisor deems it appropriate
to do so.
122
<PAGE> 169
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
TBA purchase commitments at June 30, 1995 were as follows:
<TABLE>
<CAPTION>
DELIVERY COUPON MARKET
AGENCY SHARES/PAR MONTH RATE VALUE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Federal Home Loan Mortgage Corp. 21,267,982 July 7.28% $21,892,729
Federal National Mortgage Assoc. 6,600,000 July 6.59% $6,583,500
Federal National Mortgage Assoc. 10,000,000 July 6.31% $10,081,200
Government National Mortgage Assoc. 10,000,000 July 7.00% $9,884,375
</TABLE>
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell
("repurchase agreements") are treated as collateralized financing transactions
and are recorded at their contracted resale amounts. These repurchase
agreements, if any, are detailed in each Fund's Portfolio of Investments. The
adviser to the Funds pools the Funds' cash and invests in repurchase agreements
entered into by the Funds. The prospectuses require that the cash investments
be fully collateralized based on values that are marked to market daily. The
collateral is held by an agent bank under a tri-party agreement. It is the
adviser's responsibility to value collateral daily and to obtain additional
collateral as necessary to maintain market value equal to or greater than the
resale price. The repurchase agreements held in the Funds at June 30, 1995 are
collateralized by U.S. Treasury or federal agency obligations. The repurchase
agreements were entered into on June 30, 1995.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income of the Asset
Allocation Fund are declared and distributed quarterly. Dividends to
shareholders from net investment income of the Strategic Growth Fund, if any,
are declared and distributed annually. Dividends to shareholders from net
investment income are declared daily and distributed monthly for the California
Tax-Free Bond Fund, the California Tax-Free Money Market Fund, the Money Market
Fund, the Municipal Income Fund, the Short-Term Government-Corporate Income
Fund, the Short-Term Municipal Income Fund, the U.S. Government Income Fund,
the U.S. Treasury Money Market Fund and the Variable Rate Government Fund. Any
dividends to shareholders from net realized capital gain are declared and
distributed annually.
123
<PAGE> 170
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
FEDERAL INCOME TAXES
The Company's policy is to comply with the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and to
distribute substantially all its net investment income and any net realized
capital gains to its shareholders. Therefore, no federal or state income tax
provision is required. The Money Market Fund has a net capital loss
carryforward of $1,392 which will expire in the year 2001 and $36,799 which
will expire in the year 2002. The Municipal Income Fund has a net capital loss
carryforward of $3,600,931 which will expire in the year 2002. The Short-Term
Government-Corporate Income Fund has a net capital loss carryforward of $1,534
which will expire in the year 2002. The Short-Term Municipal Income Fund has a
net capital loss carryforward of $33,634 which will expire in the year 2002.
The U.S. Government Income Fund has a net capital loss carryforward of
$1,212,813 which will expire in the year 2002. The U.S. Treasury Money Market
Fund has a net capital loss carryforward of $12,241 which will expire in the
year 2002. The California Tax-Free Money Market Fund has a net capital loss
carryforward of $76,188, which will expire in the year 2002. The Variable Rate
Government Fund has a net capital loss carryforward of $978,191 which will
expire in 1999, $15,382,953 which will expire in 2000, $2,818,400 which will
expire in the year 2001 and $125,280,827 which will expire in the year 2002.
The Board intends to offset net capital gains with each capital loss
carryforward until each carryforward has been fully utilized or expires. No
capital gain distribution shall be made until the capital loss carryforward has
been fully utilized or expires.
Due to the timing of dividend distributions and the differences in
accounting for income and realized gains (losses) for financial statement and
federal income tax purposes, the fiscal year in which amounts are distributed
may differ from the year in which the income and realized gains (losses) were
recorded by the portfolio. The differences between the income or gains
distributed on a book versus tax basis are shown as excess distributions of net
investment income and net realized gain on sales of investments in the
accompanying Statements of Changes in Net Assets.
ORGANIZATION EXPENSES
Stephens Inc. ("Stephens"), the Funds' administrator, sponsor and
distributor, has incurred expenses in connection with the organization and
initial registration of
124
<PAGE> 171
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
the various funds. These expenses were charged to the individual Funds and are
being amortized by the Funds on a straightline basis over 60 months from the
date the Funds commenced operations.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into separate advisory contracts on behalf of the
Funds, except the Short-Term Government-Corporate Income Fund and the
Short-Term Municipal Income Fund, with Wells Fargo Bank, N.A. ("WFB"). Pursuant
to the contracts, WFB has agreed to provide the Funds with investment guidance
and policy direction in connection with daily portfolio management. Under the
contract with the Asset Allocation Fund, WFB is entitled to be paid a monthly
advisory fee at the annual rate of 0.70% of the Fund's average daily net assets
up to $500 million and 0.60% of the remaining average daily net assets. Under
the contracts with the California Tax-Free Bond Fund, the Municipal Income
Fund, the Strategic Growth Fund, the U.S. Government Income Fund and the
Variable Rate Government Fund, WFB is entitled to be paid a monthly advisory
fee at the annual rate of 0.50% of the average daily net assets of each Fund.
Under the contract with the California Tax-Free Money Market Fund, WFB is
entitled to be paid a monthly advisory fee at the annual rate of 0.45% of the
average daily net assets. Under the contracts with the Money Market Fund and
the U.S. Treasury Money Market Fund, WFB is entitled to be paid a monthly
advisory fee at the annual rate of 0.25% of the average daily net assets.
The Company has entered into contracts on behalf of each Fund, except the
Asset Allocation Fund, with WFB whereby WFB is responsible for providing
custody and portfolio accounting services for the Funds. For all of these
Funds, WFB is entitled to an annual fee for custody services at the annual rate
of 0.0167% of the average daily net assets of each Fund. For portfolio
accounting services, WFB is entitled to a monthly base fee from each Fund of
$2,000 plus an annual fee of 0.07% of the first $50 million, 0.045% of the next
$50 million and 0.02% of the remaining average daily net assets.
In connection with the Asset Allocation Fund, the Company has entered into
a subadvisory contract with Wells Fargo Nikko Investment Advisors ("WFNIA").
125
<PAGE> 172
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
WFNIA is an affiliate of Wells Fargo & Company. Pursuant to the agreement WFB
pays WFNIA a subadvisory fee. Wells Fargo Institutional Trust Company N.A.
("WFITC"), a subsidiary of WFNIA, acts as custodian for this Fund. Custody fees
are paid to WFITC from the sub-advisory fee paid to WFNIA.
On June 21, 1995, Wells Fargo & Co. and the Nikko Securities Co., Ltd.
signed a definitive agreement to sell their joint venture interest in WFNIA to
Barclays PLC ("Barclays") of the U.K. The sale, which is subject to the
approval of appropriate regulatory authorities, is expected to close in the
fourth quarter of 1995.
Barclays is the largest clearing bank in the U.K. with $259 billion in
total assets. Barclays has announced its intention to combine WFNIA with the
quantitative group of BZW Asset Management ("BZWAM"), its international asset
management arm. BZWAM is the largest quantitative fund manager in Europe, with
approximately $32 billion of quantitative funds under management, as of March
31, 1995. The BZW Division of Barclays, of which BZWAM forms a part, is the
investment banking arm of Barclays and offers a full range of investment
banking, capital markets and asset management services.
Under the Investment Company Act of 1940, this proposed change of control
of WFNIA would result in an assignment and termination of the current Sub-
Investment Advisory Agreements between WFNIA, Wells Fargo Bank and the Funds.
Subject to approval of the Company's Board of Directors, it is contemplated
that a special meeting of shareholders of the Funds will be convened to
consider a new Sub-Investment Advisory Agreement with the new sub-advisor,
which will become effective only upon the change of control of WFNIA. It is not
anticipated that the proposed change of control will change the investment
objective or overall investment strategy of the Funds.
The Company has entered into a contract on behalf of the Funds with WFB
whereby WFB provides transfer agent services for the Funds. Under the transfer
agency agreement, WFB is paid a per account fee and other related costs with a
minimum monthly fee of $3,000 per fund unless net assets of the fund are under
$20 million. For as long as the assets remain under $20 million the fund will
not be charged any transfer agency fees by WFB.
126
<PAGE> 173
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
The Funds, except the California Tax-Free Money Market Fund, the Money
Market Fund, the Short-Term Government-Corporate Income Fund, the Short-Term
Municipal Income Fund and the U.S. Treasury Money Market Fund, may enter into
service agreements with one or more servicing agents on behalf of Class D
shares of the Funds. Under such agreements, servicing agents have agreed to
provide shareholder liaison services, including responding to customer
inquiries and providing information on their investments, and to provide such
other related services as the Fund or a Class D shareholder may reasonably
request. For these services, a servicing agent receives a fee, on an annualized
basis for the Fund's then-current fiscal year, not to exceed 0.25% of the
average daily net assets of the Class D shares of the Fund.
<TABLE>
<CAPTION>
SERVICE
FEE
FUND CLASS D
- ---------------------------------------------------------------------------------------------------
<S> <C>
Asset Allocation Fund $13,811
California Tax-Free Bond Fund 9,413
Municipal Income Fund 19,115
Strategic Growth Fund 20,163
U.S. Government Income Fund 4,362
Variable Rate Government Fund 13,634
</TABLE>
The Company has entered into administration and distribution agreements on
behalf of the Funds with Stephens. Under the agreements, Stephens has agreed to
provide supervisory, administrative and distribution services to the Funds. For
providing supervisory and administrative services, the California Tax-Free Bond
Fund, the Short-Term Government-Corporate Income Fund, the Short-Term Municipal
Income Fund, the Strategic Growth Fund and the Variable Rate Government Fund
have each agreed to pay Stephens a monthly fee at the annual rate of 0.15% of
each Fund's average daily net assets up to $200 million and 0.10% of the
average daily net assets in excess of $200 million. For the Asset Allocation
Fund, the California Tax-Free Money Market Fund and the U.S. Government Income
Fund, Stephens is entitled to be compensated for administrative services
monthly at the annual rate of 0.10% of the average daily net assets of such
Fund up to $200 million and 0.05% of the average daily net assets in excess of
$200 million.
127
<PAGE> 174
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
The Money Market Fund, the Municipal Income Fund and the U.S. Treasury Money
Market Fund have each agreed to pay Stephens a monthly administrative fee at
the annual rate of 0.10% of each Fund's average daily net assets.
The Company has adopted separate Distribution Plans for Class A and Class D
shares pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The separate
Class A Distribution Plan for the California Tax-Free Bond Fund, the California
Tax-Free Money Market Fund and the U.S. Government Income Fund provides that
each Fund may defray all or part of the cost of preparing, printing and
distributing prospectuses and other promotional materials by paying on an
annual basis up to the greater of $100,000 or 0.05% of the Class A shares of a
Fund's average daily net assets for costs incurred. Each of these Funds may
participate in joint distribution activities with the other Funds, in which
event expenses reimbursed out of the assets of one of the Funds may be
attributable, in part, to the distribution-related activities of another Fund.
Generally, the expenses of joint distribution activities will be allocated
among the Funds in proportion to their relative net asset sizes.
The Company also has adopted separate distribution plans pursuant to Rule
12b-1 under the 1940 Act, whereby on behalf of Class A shares of the Asset
Allocation Fund, the Money Market Fund, the Municipal Income Fund, the
Strategic Growth Fund, the U.S. Treasury Money Market Fund and the Variable
Rate Government Fund, a Fund may pay Stephens, as compensation for
distribution- related services, a monthly fee at an annual rate of up to 0.25%
of the average daily net assets attributable to the Fund's Class A shares. The
Class D Distribution Plan of the Asset Allocation Fund and Strategic Growth
Fund provide that the Funds may pay the Distributor a monthly fee at an annual
rate of up to 0.75% of each such Fund's average daily net assets attributable
to Class D shares. In addition, the Municipal Income Fund may pay, as
compensation for distribution-related services, a monthly fee at an annual rate
of up to 0.15% of the average daily net assets
128
<PAGE> 175
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
attributable to both of its Class A and D shares. Through February 28, 1995, a
portion of the Municipal Income Fund distribution fee was charged to net
capital for income tax purposes.
<TABLE>
<CAPTION>
DISTRIBUTION
FEES
FUND CLASS A
- ---------------------------------------------------------------------------------------------------
<S> <C>
Asset Allocation Fund $56,675
California Tax-Free Bond Fund 46,219
Municipal Income Fund 56,442
Strategic Growth Fund 38,308
U.S. Government Income Fund 5,977
Variable Rate Government Fund 1,110,085
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION
FEES
FUND CLASS D
- ---------------------------------------------------------------------------------------------------
<S> <C>
Asset Allocation Fund $41,434
California Tax-Free Bond Fund 18,826
Municipal Income Fund 34,768
Strategic Growth Fund 60,490
U.S. Government Income Fund 8,725
Variable Rate Government Fund 27,267
</TABLE>
For the Short-Term Government-Corporate Income Fund and the Short-Term
Municipal Income Fund, the Company has adopted a plan pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "Plan") on behalf of each Fund,
whereby each such Fund has agreed to pay Stephens, as compensation for
distribution-related services, a monthly fee at an annual rate of up to 0.25%
of the average daily net assets of such Fund or the maximum amount payable
under applicable laws, regulations and rules, whichever is less. The actual fee
payable to Stephens is determined within such limit, from time to time by
mutual agreement between the Company and Stephens.
129
<PAGE> 176
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
WAIVED FEES AND REIMBURSED EXPENSES
The following fees/expenses were waived/reimbursed for the six months ended
June 30, 1995:
<TABLE>
<CAPTION>
WAIVED REIMBURSED
FUND FEES EXPENSES
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Asset Allocation $14,400 $0
California Tax-Free Bond 571,370 0
California Tax-Free Money Market 17,234 0
Money Market 83,519 0
Municipal Income 227,674 0
Short-Term Government-Corporate Income 178 69,974
Short-Term Municipal Income 9,052 61,390
Strategic Growth 31,286 0
U.S. Government Income 66,764 0
U.S. Treasury Money Market 104,184 0
Variable Rate Government 713,542 0
</TABLE>
Waived fees and reimbursed expenses continue at the discretion of WFB and
the administrator.
Certain officers and directors of the Company are also officers of
Stephens. At June 30, 1995, Stephens owned 179,807 shares of the Asset
Allocation Fund, 1,631 shares of the California Tax-Free Bond Fund, 45,441
shares of the California Tax-Free Money Market Fund, 1,316,356 shares of the
Money Market Fund, 12,718 shares of the Municipal Income Fund, 5,355 shares of
the Strategic Growth Fund, 2,776 shares of the U.S. Government Income Fund,
121,451 shares of the U.S. Treasury Money Market Fund and 13,136 shares of the
Variable Rate Government Fund.
Stephens has retained $493,044 as sales charges from the proceeds of
capital shares sold by the Company for the six months ended June 30, 1995.
Wells Fargo Securities Inc., a subsidiary of WFB, received $17,432 as sales
charges from the proceeds of capital shares sold by the Company for the six
months ended June 30, 1995.
130
<PAGE> 177
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities, for
each fund for the six months ended June 30, 1995, were as follows:
<TABLE>
<CAPTION>
ASSET CALIFORNIA MUNICIPAL
AGGREGATE PURCHASES ALLOCATION TAX-FREE INCOME
AND SALES OF: FUND BOND FUND FUND
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $1,925,625 $0 $0
Sales proceeds 24,476,791 0 0
OTHER SECURITIES:
Purchases at cost 22,316,766 64,878,557 11,275,000
Sales proceeds 2,124,842 75,272,783 23,838,337
</TABLE>
<TABLE>
<CAPTION>
U.S.
STRATEGIC GOVERNMENT VARIABLE RATE
AGGREGATE PURCHASES GROWTH INCOME GOVERNMENT
AND SALES OF: FUND FUND FUND
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $0 $11,215,234 $0
Sales proceeds 0 14,093,594 93,558,594
OTHER SECURITIES:
Purchases at cost 44,630,807 19,955,747 1,159,920,711
Sales proceeds 45,220,132 18,894,685 1,464,957,941
</TABLE>
- ---------------------------------------------------------------
All funds not reflected in this schedule traded exclusively in short-term
securities.
4. CAPITAL SHARES TRANSACTIONS
As of June 30, 1995, there were 20 billion shares of $.001 par value
capital stock authorized by the Company. As of June 30, 1995, each Fund was
authorized to issue 100 million shares of $.001 par value capital stock for
each class of shares,
131
<PAGE> 178
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
except the California Tax-Free Money Market Fund, the Money Market Fund, the
U.S. Treasury Money Market Fund, and the Variable Rate Government Fund which
are as follows:
<TABLE>
<CAPTION>
SHARES
FUND AUTHORIZED
- ---------------------------------------------------------------------------------------------------
<S> <C>
California Tax-Free Money Market Fund 3 billion
Money Market Fund 1 billion
U.S. Treasury Money Market Fund 1 billion
Variable Rate Government Fund 500 million
</TABLE>
Transactions in capital shares for the six months ended June 30, 1995 are
disclosed in detail in the Statements of Changes in Net Assets.
5. INCOME ALLOCATIONS
The Short-Term Government Corporate-Income Fund and the Short-Term
Municipal Income Fund each are allocated net investment income from their
corresponding Master Portfolio. The detail of allocated net investment income
for the six months ended June 30, 1995 are as follows:
<TABLE>
<CAPTION>
NET
INVESTMENT
INTEREST DIVIDENDS EXPENSES INCOME
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Government-Corporate Income Fund $7,342 $0 $0 $7,342
Short-Term Municipal Income Fund 296,472 $0 $0 296,472
</TABLE>
6. ORANGE COUNTY CALIFORNIA DEBT SECURITIES
As of June 30, 1995, the Money Market Fund held securities issued by Orange
County, California, with a principal amount of $6,000,000 and an estimated fair
value of $4,582,500, with an original maturity date of July 10, 1995. Orange
County filed for protection under Chapter 9 of the Federal Bankruptcy Code on
December 6, 1994, and defaulted on such securities on July 10, 1995. The
bankruptcy court trustee approved an extension of the securities' maturity to
June 30, 1996, and modification of certain other terms, including increasing
the interest rate and providing for some portion of interest to accrue until
the maturity date rather than being due and payable monthly. Concurrent with
the default by
132
<PAGE> 179
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
Orange County, the Money Market Fund entered into a Credit Enhancement
Agreement (the "Agreement") with WFB, pursuant to which it was named as a
beneficiary of an irrevocable letter of credit issued by Bank of America
National Trust and Savings Association ("Bank of America"). The Agreement
provides support for a portion of the Orange County securities held by the Fund
such that Bank of America will make certain payments to the Money Market Fund
under defined circumstances, including failure by Orange County to make any
payment of principal when due.
The Money Market Fund is not obligated to reimburse Bank of America for any
amount drawn under the letter of credit. However, the letter of credit does not
ensure that the Money Market Fund will receive payments equal to the aggregate
amount of Orange County securities. Accordingly, although the Money Market
Fund's Board of Directors has determined that the Orange County securities
subject to the letter of credit currently present minimal credit risks, the
Money Market Fund could incur losses as a result of its Orange County holdings.
A letter of credit fee of $19,383 was paid by WFB on behalf of the Money
Market Fund and was recorded as a contribution of capital on July 10, 1995. The
Money Market Fund initially recorded the credit enhancement as an asset and a
contribution of capital in the amount of the letter of credit fee. Any
subsequent change in the value of the credit enhancement will be recorded as an
adjustment in unrealized securities appreciation (depreciation). Since December
6, 1994, the Orange County securities have been placed on non-accrual status,
with interest income being recognized when received. The Agreement provides for
a draw on the letter of credit on June 30, 1996, for interest unpaid to which
the Money Market Fund is entitled.
7. VARIABLE RATE GOVERNMENT FUND LITIGATION
A purported class action lawsuit was filed on March 14, 1995 in the United
States District Court for the Southern District of California by Conrad D.
Schaefer and Diane L. Schaefer, Trustees for the Schaefer Family Trust of 1992
against the Overland Express Family of Funds "Variable Rate Government Fund,"
Wells Fargo Bank and Wells Fargo & Company. The plaintiffs seek to sue on
behalf of persons
133
<PAGE> 180
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
who bought the fund between January 1, 1991 and March 10, 1995, and allege that
defendants violated the Securities Act of 1933, the Securities Exchange Act of
1934, the Investment Company Act of 1940 and common law by, among other things,
failing to disclose adequately the objectives and risks of the Fund,
specifically, the risks involved in investing in Support Class Bonds, and that
the Fund's prospectuses, annual reports and other documents filed with the
Securities and Exchange Commission contained false and misleading statements
relating thereto. The named plaintiffs allege that the Class as a whole
suffered substantial, but unspecified damages, including interest, in
connection with the purchase of securities covered by the Fund's offering
documents over the course of the specified period. Management of the Company
believes that the case is without merit and intends to vigorously defend
against the action.
134
<PAGE> 181
SHORT-TERM GOVERNMENT-CORPORATE INCOME MASTER
PORTFOLIO -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. TREASURY SECURITIES - 81.79%
U.S. TREASURY NOTES - 81.79%
$ 400,000 U.S. Treasury Notes
(Cost $401,679) 6.25 % 08/31/96 $401,812
SHORT-TERM INSTRUMENTS - 15.94%
U.S. TREASURY BILLS - 12.68%
$ 65,000 U.S. Treasury Bills 5.64 %(F) 04/04/96 $ 62,304
REPURCHASE AGREEMENTS - 3.26%
$ 16,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.10 % 07/03/95 $ 16,000
------------
TOTAL SHORT-TERM INSTRUMENTS $ 78,304
(Cost $78,187)
TOTAL INVESTMENTS IN SECURITIES
(Cost $479,866)*(Notes 1 and 3) 97.73% $ 480,116
Other Assets and Liabilities, Net 2.27% 11,172
------ ------------
TOTAL NET ASSETS 100.00% $ 491,288
------ ------------
------ ------------
</TABLE>
- ---------------------------------------------------------------
(F) YIELD TO MATURITY.
*COSTS FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 784
Gross Unrealized Depreciation (534)
-------------
NET UNREALIZED APPRECIATION $ 250
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
135
<PAGE> 182
SHORT-TERM MUNICIPAL INCOME MASTER PORTFOLIO--
JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS - 79.75%
ARIZONA - 1.38%
$ 200,000 Arizona State Transportation Board Excise Tax
Revenue Maricopa County Regional Area Road
Funding MBIA Insured 6.70 % 07/01/96 $ 204,622
CALIFORNIA - 16.21%
1,000,000 California State RAW Series C 5.75 04/25/96 1,015,840
500,000 Los Angeles CA COP Van Nuys Courthouse Project
Prerefunded 8.90 06/01/06 531,680
500,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue Second Issue 9.00 11/15/97 550,350
300,000 Modesto CA Irrigation District COP 86 Geysers
Geothermal Power Project Series A 6.60 10/01/97 309,429
ILLINOIS - 8.45%
200,000 Chicago IL AMBAC Insured 6.00 01/01/98 207,028
500,000 Illinois State Municipal Electric Agency Power
Supply System Revenue Series A 5.70 02/01/96 503,510
500,000 Illinois State Sales Tax Revenue Series E
Prerefunded 8.10 06/15/10 544,905
INDIANA - 3.40%
500,000 Indiana State Bond Bank Advance Funding Notes
Series A-2 5.75 01/10/96 505,090
LOUISIANA - 3.80%
500,000 East Baton Rouge LA Community Sewer Revenue 9.25 09/01/12 564,230
</TABLE>
136
<PAGE> 183
SHORT-TERM MUNICIPAL INCOME MASTER PORTFOLIO--
JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
MARYLAND - 1.57%
$ 225,000 Prince George County MD Series A 6.60 % 02/01/97 $ 232,589
MASSACHUSETTS - 3.38%
500,000 Massachusetts State Education Loan Authority
Revenue Issue E Series B AMT AMBAC Insured 5.25 07/01/99 502,130
MINNESOTA - 3.23%
200,000 Minneapolis MN Special School District No. One
COP Prerefunded 7.38 02/01/15 214,800
255,000 Minnesota State Convention Center Prerefunded 6.75 04/01/12 265,062
MISSOURI - 1.34%
200,000 Branson MO Tax Allocation Revenue Street
Improvement Project CGIC Insured 4.95 10/01/97 198,650
NEW JERSEY - 1.54%
225,000 New Jersey State Wastewater Revenue Series B 6.50 05/15/96 228,845
</TABLE>
137
<PAGE> 184
SHORT-TERM MUNICIPAL INCOME MASTER PORTFOLIO--
JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
NEW YORK - 7.02%
$ 250,000 New York State Mortgage Agency Revenue
Homeowner Mortgage Series 44 AMT FHA
Collateralized 6.00 % 04/01/99 $ 253,218
250,000 New York State Power Authority Revenue &
General Purpose Series T Prerefunded 7.40 01/01/06 259,140
500,000 United Nations Development Corp Revenue Phase
Two & Three Series B Prerefunded 8.13 07/01/06 529,960
OREGON - 2.06%
300,000 Lane County OR School District No. 52 FGIC
Insured 5.20 12/01/97 305,400
PENNSYLVANIA - 1.53%
200,000 Montgomery County PA Higher Education & Health
Authority Hospital Revenue Bryn Manor
Hospital Project Prerefunded 9.38 12/01/19 226,878
TEXAS - 14.21%
250,000 Brazos TX Higher Education Authority AMT Series
C-1 6.00 11/01/99 256,805
200,000 Dallas TX Waterworks & Sewer System Revenue
Prerefunded 8.40 10/01/01 202,196
275,000 Dallas TX Waterworks & Sewer System Revenue
Series A 9.00 10/01/97 299,789
500,000 Northside TX Independent School District PSFG
Insured 8.60 08/01/97 543,560
275,000 Port of Houston Authority TX AMT 8.50 10/01/98 306,523
500,000 Texas State TRAN 5.00 08/31/95 501,020
</TABLE>
138
<PAGE> 185
SHORT-TERM MUNICIPAL INCOME MASTER PORTFOLIO--
JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
WASHINGTON - 6.92%
$ 200,000 Southern Columbia Basin WA Irrigation District 5.50 % 12/01/98 $ 205,410
200,000 Tacoma WA Sewer Revenue Series B FGIC Insured 5.00 12/01/96 200,338
300,000 Washington State Healthcare Financing
Facilities Authority Revenue Highline
Community Hospital LOC - Bank of Tokyo Ltd 7.40 08/15/09 316,506
300,000 Washington State Public Power Supply System
Nuclear Project Number Three Revenue Series B 6.70 07/01/96 305,625
WEST VIRGINIA - 0.28%
40,000 West Virginia State Hospital Financing
Authority West Virginia Hospital Inc MBIA
Insured 7.20 06/01/16 41,894
WISCONSIN - 3.43%
500,000 Wisconsin State Transportation Series A 6.50 07/01/96 509,485
------------
TOTAL MUNICIPAL BONDS $ 11,842,507
(Cost $11,718,629)
</TABLE>
139
<PAGE> 186
SHORT-TERM MUNICIPAL INCOME MASTER PORTFOLIO--
JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 14.86%
MUNICIPAL BONDS - 11.45%
$ 500,000 Irvine Ranch CA V/R LOC - Dai-Ichi Kangyo Bank
Ltd 4.30 % 09/02/20 $ 500,000
300,000 Platte County WY Pollution Control Revenue
Tri-State G&T V/R Series B LOC - Societe
Generale 4.30 07/01/14 300,000
400,000 Salt Lake City UT Airport Revenue V/R AMT
Series A LOC - Credit Suisse 4.30 06/01/98 400,000
500,000 Uinta County WY PCR Chevron USA Inc Project V/R 4.05 08/18/20 500,000
------------
TOTAL MUNICIPAL BONDS $ 1,700,000
MONEY MARKET FUNDS - 3.41%
$ 461,866 Arbor Institutional Tax Free Portfolio $ 461,866
44,000 National Municipal Fund 44,000
------------
TOTAL MONEY MARKET FUNDS $ 505,866
TOTAL SHORT-TERM INSTRUMENTS $ 2,205,866
(Cost $2,205,866)
TOTAL INVESTMENTS IN SECURITIES
(Cost $13,924,495)*(Notes 1 and 3) 94.6% $14,048,373
Other Assets and Liabilities, Net 5.39% 800,543
------ ------------
TOTAL NET ASSETS 100.00% $ 14,848,916
------ ------------
------ ------------
</TABLE>
- ---------------------------------------------------------------
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 127,339
Gross Unrealized Depreciation (3,461)
-------------
NET UNREALIZED APPRECIATION $ 123,878
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
140
<PAGE> 187
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
JUNE 30, 1995
<TABLE>
<CAPTION>
SHORT-TERM SHORT-TERM
GOVERNMENT- MUNICIPAL
CORPORATE INCOME
INCOME MASTER MASTER
PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market value (see cost
below) $480,116 $14,048,373
Cash 313 47,246
Receivables:
Dividends and Interest 8,359 295,974
Investment securities sold 0 500,000
Due from administrator (Note 2) 1,995 2,204
Organization expenses, net of amortization 3,059 0
Prepaid expenses 4,287 13,135
TOTAL ASSETS 498,129 14,906,932
LIABILITIES
Payables:
Allocations to beneficial interest holders 2,289 54,962
Due to sponsor and distributor (Note 2) 3,423 526
Accrued expenses 1,129 2,528
TOTAL LIABILITIES 6,841 58,016
TOTAL NET ASSETS
$491,288 $14,848,916
INVESTMENTS AT COST (NOTE 3) $479,866 $13,924,495
- --------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
141
<PAGE> 188
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
SHORT-TERM SHORT-TERM
GOVERNMENT- MUNICIPAL
CORPORATE INCOME
INCOME MASTER MASTER
PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest $7,342 $296,473
TOTAL INVESTMENT INCOME 7,342 296,473
EXPENSES (NOTE 2)
Advisory fees 592 28,931
Custody fees 20 997
Amortization of organization expenses 340 478
Legal and audit fees 10,711 10,593
Other 992 2,207
TOTAL EXPENSES 12,655 43,206
Less:
Waived and reimbursed fees (Note 2) (12,655) (43,206)
NET EXPENSES 0 0
NET INVESTMENT INCOME 7,342 296,473
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 1,053 (264)
Net change in unrealized appreciation
(depreciation) of investments 1,786 152,737
NET GAIN ON INVESTMENTS 2,839 152,473
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $10,181 $448,946
- --------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
142
<PAGE> 189
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT-TERM GOVERNMENT-CORPORATE INCOME
MASTER PORTFOLIO
------------------------------------------
(UNAUDITED) FROM SEPT. 19, 1994
SIX MONTHS ENDED (INCEPTION) TO
JUNE 30, 1995 DECEMBER 31, 1994
- --------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income $7,342 $1,617
Net realized gain on sale of investments 1,053 0
Net change in unrealized appreciation
(depreciation) of investments 1,786 (1,536)
NET INCREASE RESULTING FROM OPERATIONS 10,181 81
NET INCREASE IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS 384,929 96,092
INCREASE IN NET ASSETS 395,110 96,173
NET ASSETS:
Beginning net assets 96,178 5
ENDING NET ASSETS $491,288 $96,178
- --------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
143
<PAGE> 190
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT-TERM MUNICIPAL
INCOME MASTER PORTFOLIO
----------------------------------
FROM JUNE 3,
1994
(UNAUDITED) (INCEPTION) TO
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994
- -----------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income $296,473 $73,315
Net realized gain on sale
of investments (264) (1,075)
Net change in unrealized
appreciation
(depreciation) of
investments 152,737 (28,859)
NET INCREASE RESULTING FROM
OPERATIONS 448,946 43,381
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS 2,620,833 11,735,751
INCREASE IN NET ASSETS 3,069,779 11,779,132
NET ASSETS:
Beginning net assets 11,779,137 5
ENDING NET ASSETS $14,848,916 $11,779,137
- ----------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
144
<PAGE> 191
MASTER INVESTMENT TRUST
SHORT-TERM MASTER PORTFOLIOS (UNAUDITED)
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The Short-Term Municipal Income Master Portfolio and the Short-Term
Government-Corporate Income Master Portfolio (the "Master Portfolios") are two
series of the Master Investment Trust (the "Trust"), a business trust organized
under the laws of Delaware on August 14, 1991. The Declaration of Trust permits
the issuance of beneficial interests ("interests"). The Trust currently issues
three series of portfolios: the Cash Investment Trust Master Portfolio, the
Short-Term Government-Corporate Income Master Portfolio and the Short-Term
Municipal Income Master Portfolio. The following significant accounting
policies are consistently followed by the Trust in the preparation of its
financial statements, and such policies are in conformity with generally
accepted accounting principles for investment companies. These financials are
representative of only the Short-Term Government-Corporate Income Master
Portfolio and the Short-Term Municipal Income Master Portfolio.
INVESTMENT POLICY AND SECURITY VALUATION
Each Master Portfolio's investments include fixed-, variable- and
floating-rate instruments. Except during temporary defensive periods, each
Master Portfolio seeks to maintain an average weighted maturity of 90 days to 2
years. The value of assets of each Master Portfolio (other than debt
obligations maturing in 60 days or less) is determined as of the close of
regular trading on the New York Stock Exchange, which is currently 4:00 p.m.
New York time. Except for debt obligations with remaining maturities of 60 days
or less, which are valued at amortized cost, assets are valued at current
market prices, or if such prices are not readily available, at fair value as
determined in accordance with procedures adopted by the Board of Trustees.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Interest income is accrued daily. Realized
gains and losses are reported on the basis of identified cost of securities
delivered. Bond discounts and premiums are amortized as required by the
Internal Revenue Code.
145
<PAGE> 192
MASTER INVESTMENT TRUST
SHORT-TERM MASTER PORTFOLIOS (UNAUDITED)
NOTES TO FINANCIAL STATEMENTS
FEDERAL INCOME TAXES
Each Master Portfolio intends to qualify for federal income tax purposes as
a partnership. Each Master Portfolio therefore believes that it will not be
subject to any federal or state income tax on its income and net capital gains
(if any). However, each investor in a Master Portfolio will be taxed on its
distributive share of the partnership's income for purposes of determining its
federal and state income tax liabilities. The determination of such share will
be made in accordance with the Internal Revenue Code of 1986, as amended
("Code"), and the regulations promulgated thereunder.
It is intended that the Master Portfolios' assets, income and allocations
will be managed in such a way that a regulated investment company investing in
the Master Portfolio will be able to satisfy the requirements of Subchapter M
of the Code, assuming that the investment company invested all of its assets in
the Master Portfolio.
ORGANIZATION EXPENSES
Costs incurred in connection with organization and initial registration as
an investment company under the Investment Company Act of 1940 were advanced by
Stephens Inc. ("Stephens"). Organization expenses are being amortized on a
straight line basis over 60 months from the date the Trust commenced operation.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into separate advisory contracts with WFB on behalf
of each Master Portfolio. Pursuant to the contract, WFB furnishes investment
guidance and policy direction in connection with daily portfolio management of
each Master Portfolio. Under the contract, WFB is entitled to receive a monthly
advisory fee based on an annual rate of 0.50% of the average daily net assets.
The Trust has also entered into a contract with WFB whereby WFB has agreed
to provide custody servicing functions for each Master Portfolio. For providing
this service, WFB is entitled to be compensated for custody services based on a
rate of 0.0167% of the average daily net assets of each Master Portfolio.
146
<PAGE> 193
MASTER INVESTMENT TRUST
SHORT-TERM MASTER PORTFOLIOS (UNAUDITED)
NOTES TO FINANCIAL STATEMENTS
WAIVED FEES AND REIMBURSED EXPENSES
Waived fees and reimbursed expenses for the six months ended June 30, 1995,
were as follows:
<TABLE>
<CAPTION>
WAIVED REIMBURSED
FEES EXPENSES
MASTER PORTFOLIO BY WFB BY STEPHENS
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Short-Term Government-Corporate Income $ 612 $12,043
Short-Term Municipal Income 29,928 13,278
</TABLE>
Waived fees and reimbursed expenses continue at the discretion of WFB and
Stephens.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments exclusive of short-term securities for
the Short-Term Government-Corporate Income Master Portfolio and the Short-Term
Municipal Income Master Portfolio, respectively, for the six months ending June
30, 1995, were as follows:
<TABLE>
<CAPTION>
SHORT-TERM
GOVERNMENT - SHORT-TERM
CORPORATE MUNICIPAL
INCOME INCOME
MASTER MASTER
AGGREGATE PURCHASES AND SALES OF: PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $89,585 $0
Sales proceeds 0 0
OTHER LONG-TERM SECURITIES:
Purchases at cost 0 7,621,398
Sales proceeds 0 165,219
</TABLE>
4. FINANCIAL HIGHLIGHTS
The portfolio turnover rates, excluding short-term securities, for the
Master Portfolio for the six months ended June 30, 1995 are as follows:
<TABLE>
<CAPTION>
SHORT-TERM
GOVERNMENT- SHORT-TERM
CORPORATE INCOME MUNICIPAL INCOME
MASTER PORTFOLIO MASTER PORTFOLIO
FROM
SEPTEMBER 19, FROM
(UNAUDITED) 1994 (UNAUDITED) JUNE 3, 1994
SIX MONTHS (INCEPTION) SIX MONTHS (INCEPTION)
ENDED TO ENDED TO
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1995 1994 1995 1994
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PORTFOLIO TURNOVER 0% 0% 0% 8%
</TABLE>
147
<PAGE> 194
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OVERLAND EXPRESS FUNDS, INC.:
We have audited the accompanying statement of assets and liabilities,
including the portfolios of investments, of the Asset Allocation Fund,
California Tax-Free Bond Fund, California Tax-Free Money Market Fund, Money
Market Fund, Municipal Income Fund, Strategic Growth Fund, U.S. Government
Income Fund, U.S. Treasury Money Market Fund and Variable Rate Government Fund
(nine of the funds comprising Overland Express Funds, Inc.) as of December 31,
1994, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period
then ended, except for Strategic Growth Fund which is for the period from
January 20, 1993 (date of inception) to December 31, 1993, and financial
highlights for the periods indicated herein. These financial statements and
financial highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
December 31, 1994, by examination and other appropriate audit procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the aforementioned funds of Overland Express Funds, Inc. as of December
31, 1994, the results of their operations, the changes in their net assets and
their financial highlights for the periods indicated herein, except as noted
above, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
SAN FRANCISCO, CALIFORNIA
FEBRUARY 17, 1995
148
<PAGE> 195
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS - 64.66%
7,818 Abbott Laboratories $ 207,580 $ 255,062
920 Advanced Micro Devices+ 24,274 22,885
1,096 Aetna Life & Casualty Co 63,488 51,649
1,144 Ahmanson (H F) & Co 22,321 18,447
1,111 Air Products & Chemicals Inc 47,750 49,578
4,769 Airtouch Communications+ 107,194 138,897
292 Alberto-Culver Co Class B 6,443 7,957
2,465 Albertsons Inc 65,299 71,485
2,192 Alcan Aluminium Ltd 44,602 55,622
552 Alco Standard Corp 26,236 34,638
446 Alexander & Alexander Services 10,736 8,251
595 Allergan Inc 13,402 16,809
2,753 Allied Signal Inc 99,606 93,602
1,818 Alltel Corp 56,158 54,767
871 Aluminum Co of America 64,318 75,450
805 ALZA Corp+ 18,905 14,490
1,136 Amdahl Corp 6,036 12,496
915 Amerada Hess Corp 47,346 41,747
3,397 American Barrick Corp 103,275 75,583
1,958 American Brands Inc 63,550 73,425
1,784 American Electric Power Inc 67,565 58,649
4,926 American Express Corp 137,389 145,317
1,998 American General Corp 65,517 56,444
708 American Greetings Corp 20,750 19,116
2,981 American Home Products Corp 187,763 187,058
3,041 American International Group Inc 280,906 298,018
1,368 American Stores Co 30,002 36,765
5,344 Ameritech Corp 218,261 215,764
1,264 Amgen+ 47,780 74,576
4,799 Amoco Corp 268,965 283,741
1,018 AMP Inc 64,303 74,060
718 AMR Corp+ 46,918 38,234
260 Andrew Corp+ 5,490 13,585
2,517 Anheuser-Busch Inc 120,932 128,052
1,159 Apple Computer Inc 37,560 45,201
5,007 Archer-Daniels-Midland Co 71,969 103,269
</TABLE>
8
<PAGE> 196
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,038 Armco Inc+ $ 6,910 $ 6,877
347 Armstrong World Industries Inc 13,057 13,360
426 ASARCO Inc 8,733 12,141
577 Ashland Oil Inc 18,461 19,907
15,111 AT & T Corp 887,375 759,328
1,551 Atlantic Richfield Corp 176,913 157,814
478 Autodesk Inc 11,124 18,941
1,382 Automatic Data Processing 69,154 80,847
526 Avery Dennison Corp 14,164 18,673
671 Avon Products Inc 37,713 40,092
1,345 Baker Hughes Inc 34,600 24,546
263 Ball Corp 7,996 8,285
438 Bally Entertainment Corp+ 3,919 2,683
1,419 Baltimore Gas & Electric Co 37,421 31,395
3,944 Banc One Corp 150,991 100,079
1,051 Bank of Boston Corp 25,496 27,195
3,607 BankAmerica Corp 168,378 142,477
760 Bankers Trust N Y Corp 58,834 42,085
525 Bard (C R) Inc 12,882 14,175
961 Barnett Banks Inc 43,513 36,878
118 Bassett Furniture Industries 4,143 3,363
550 Bausch & Lomb Inc 26,264 18,631
2,748 Baxter International Inc 71,345 77,631
691 Becton Dickenson & Co 25,279 33,168
4,240 Bell Atlantic Corp 255,932 210,940
4,787 BellSouth Corp 275,568 259,096
480 Bemis Co Inc 10,490 11,520
490 Beneficial Corp 18,552 19,110
1,042 Bethlehem Steel Corp+ 16,967 18,756
836 Beverly Enterprises+ 8,707 12,018
1,131 Biomet Inc+ 11,013 15,834
831 Black & Decker Corp 16,678 19,736
1,000 Block (H & R) Inc 39,393 37,125
1,035 Boatmens Bancshares Inc 31,212 28,074
3,299 Boeing Co 126,866 154,228
350 Boise Cascade Corp 7,481 9,363
</TABLE>
9
<PAGE> 197
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
280 Briggs & Stratton Corp $ 10,879 $ 9,170
4,928 Bristol-Myers Squibb Co 277,307 285,208
192 Brown Group Inc 6,120 6,144
656 Brown-Forman Corp Class B 17,322 20,008
1,917 Browning-Ferris Industries Inc 46,972 54,395
738 Bruno's Inc 8,243 6,181
943 Brunswick Corp 14,650 17,799
858 Burlington Northern Inc 46,318 41,291
1,236 Burlington Resources Inc 56,246 43,260
2,422 Campbell Soup Co 93,977 106,871
1,470 Capital Cities/ABC Inc 77,510 125,318
1,544 Carolina Power & Light Co 50,369 41,109
1,975 Caterpillar Inc 78,485 108,872
580 CBS Inc 30,605 32,118
284 Centex Corp 10,925 6,461
1,858 Central & South West Corp 60,130 42,037
456 Ceridian Corp+ 7,835 12,255
893 Champion International Corp 28,644 32,595
993 Charming Shoppes Inc 12,441 6,579
1,736 Chase Manhattan Corp 59,110 59,675
2,360 Chemical Banking Corp 96,539 84,665
6,304 Chevron Corp 282,827 281,316
3,428 Chrysler Corp 154,049 167,972
862 Chubb Corp 76,348 66,697
693 CIGNA Corp 43,459 44,092
319 Cincinnati Milacron Inc 7,122 7,536
1,416 CINergy Corp 33,272 33,099
943 Circuit City Stores Inc 24,759 20,982
2,495 Cisco Systems Inc+ 81,806 87,637
3,806 Citicorp 128,077 157,473
180 Clark Equipment Co+ 6,296 9,765
498 Clorox Co 25,905 29,320
1,030 Coastal Corp 28,795 26,523
12,449 Coca-Cola Co 532,380 641,124
1,420 Colgate-Palmolive Co 75,165 89,993
484 Columbia Gas System Inc+ 11,905 11,374
</TABLE>
10
<PAGE> 198
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
3,492 Columbia/HCA Healthcare Corp $ 142,146 $ 127,458
2,308 Comcast Corp Class A 51,594 36,207
425 Community Psychiatric Centers 4,829 4,675
2,494 Compaq Computer Corp+ 44,720 98,513
1,552 Computer Associates International Inc 47,491 75,272
517 Computer Sciences Corp+ 15,003 26,367
2,390 ConAgra Inc 59,895 74,688
756 Conrail Inc 42,000 38,178
2,257 Consolidated Edison Co 80,651 58,118
328 Consolidated Freightways+ 5,463 7,339
908 Consolidated Natural Gas Co 47,262 32,234
522 Continental Corp 16,353 9,918
1,132 Cooper Industries Inc 56,966 38,630
831 Cooper Tire & Rubber Co 22,137 19,632
369 Coors (Adolph) Co Class B 7,067 6,181
1,373 CoreStates Financial Corp 37,736 35,698
2,210 Corning Inc 70,274 66,024
1,433 CPC International Inc 64,159 76,307
275 Crane Co 7,854 7,391
264 Cray Research Inc+ 6,360 4,158
862 Crown Cork & Seal Co+ 31,260 32,541
1,024 CSX Corp 79,638 71,296
403 Cummins Engine Co Inc 17,748 18,236
893 Cyprus Amax Minerals 23,858 23,330
969 Dana Corp 26,598 22,650
356 Data General Corp+ 3,653 3,560
687 Dayton-Hudson Corp 47,452 48,605
1,655 Dean Witter Discover & Co 64,520 56,063
847 Deere & Co 60,086 56,114
465 Delta Air Lines Inc 24,925 23,483
798 Deluxe Corp 29,899 21,147
1,406 Detroit Edison Co 48,904 36,732
872 Dial Corp 17,202 18,530
1,364 Digital Equipment Corp+ 53,391 45,353
1,101 Dillard Department Stores Inc 41,459 29,452
5,163 Disney (Walt) Co 207,149 238,143
</TABLE>
11
<PAGE> 199
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,676 Dominion Resources Inc $ 77,394 $ 59,917
1,484 Donnelley (R R) & Sons Co 44,742 43,778
544 Dover Corp 28,288 28,084
2,679 Dow Chemical Co 160,307 180,163
962 Dow Jones & Co Inc 30,776 29,822
1,803 Dresser Industries Inc 40,846 34,032
1,090 DSC Communications Corp+ 33,432 39,104
1,964 Duke Power Co 82,204 74,878
1,634 Dun & Bradstreet Corp 100,395 89,870
6,580 DuPont (EI) de Nemours 315,936 370,125
307 E-Systems Inc 13,933 12,779
207 Eastern Enterprises 5,561 5,434
788 Eastman Chemical Co 38,768 39,794
3,274 Eastman Kodak Co 150,847 156,334
749 Eaton Corp 34,791 37,076
566 Echlin Inc 16,286 16,980
1,108 Echo Bay Mines Ltd 11,008 11,773
605 Ecolab Inc 13,287 12,705
541 EG & G Inc 10,556 7,642
2,156 Emerson Electric Co 127,372 134,750
911 Engelhard Corp 24,599 20,270
2,472 Enron Corp 83,861 75,396
624 Enserch Corp 12,347 8,190
2,195 Entergy Corp 81,835 48,016
11,992 Exxon Corp 783,835 728,514
518 Federal Express Corp+ 30,774 31,210
1,754 Federal Home Loan Mortgage Corp 91,141 88,577
2,660 Federal National Mortgage Association 212,378 193,848
400 Federal Paper Board Co 9,356 11,600
901 First Chicago Corp 40,743 43,023
1,081 First Data Corp 53,780 51,212
766 First Fidelity Bancorp 35,408 34,374
761 First Interstate Bancorp 48,063 51,463
214 First Mississippi Corp 2,158 5,350
1,707 First Union Corp 77,780 70,627
1,295 Fleet Financial Group Inc 41,983 42,088
</TABLE>
12
<PAGE> 200
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
463 Fleetwood Enterprises Inc $ 10,472 $ 8,681
347 Fleming Cos Inc 11,099 8,068
787 Fluor Corp 34,416 33,939
331 FMC Corp+ 16,013 19,115
9,874 Ford Motor Co 263,310 276,472
331 Foster Wheeler Corp 10,783 9,847
1,799 FPL Group Inc 70,076 63,190
1,350 Gannett Co Inc 68,942 71,888
1,397 Gap Inc 42,540 42,609
611 General Dynamics Corp 25,569 26,579
16,525 General Electric Co 798,879 842,775
1,536 General Mills Inc 96,889 87,552
7,308 General Motors Corp 348,341 308,763
802 General Re Corp 99,671 99,248
445 General Signal Corp 14,824 14,184
1,170 Genuine Parts Co 43,112 42,120
871 Georgia-Pacific Corp 55,970 62,277
551 Giant Food Inc 12,822 11,984
319 Giddings & Lewis Inc 7,417 4,705
2,162 Gillette Co 118,959 161,610
576 Golden West Financial 24,152 20,304
255 Goodrich (B F) Co 11,760 11,061
1,461 Goodyear Tire & Rubber Co 61,177 49,126
909 Grace (W R) & Co 35,208 35,110
478 Grainger (W W) Inc 27,317 27,605
382 Great Atlantic & Pacific Tea Co 10,277 6,924
682 Great Lakes Chemical Corp 48,574 38,874
1,320 Great Western Financial Corp 23,406 21,120
9,317 GTE Corp 339,547 283,004
1,129 Halliburton Co 42,369 37,398
312 Handleman Co 3,964 3,549
745 Harcourt General Inc 27,202 26,261
278 Harland (John H) Co 7,416 5,560
443 Harnischfeger Industries Inc 9,890 12,459
360 Harris Corp 14,965 15,300
304 Hartmarx Corp+ 2,006 1,786
</TABLE>
13
<PAGE> 201
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
852 Hasbro Inc $ 31,182 $ 24,921
2,363 Heinz (H J) Co 89,145 86,840
216 Helmerich & Payne Inc 7,419 5,535
358 Hercules Inc 31,599 41,304
839 Hershey Foods Corp 40,445 40,587
2,458 Hewlett Packard Co 181,219 245,493
452 Hilton Hotels Corp 20,661 30,454
4,377 Home Depot Inc 182,692 201,342
1,320 Homestake Mining Co 24,509 22,605
1,247 Honeywell Inc 45,384 39,281
924 Household International Inc 34,507 34,304
1,294 Houston Industries Inc 60,138 46,099
1,122 Illinois Tool Works Inc 43,159 49,088
1,109 Inco Ltd 24,486 31,745
1,035 Ingersoll-Rand Co 37,944 32,603
440 Inland Steel Industries Inc+ 12,578 15,455
4,000 Intel Corp 244,293 255,500
434 Intergraph Corp+ 4,782 3,526
5,677 International Business Machines Corp 262,935 417,260
1,097 International Flavors & Fragrances 40,925 50,736
1,230 International Paper Co 80,456 92,711
733 Interpublic Group Cos Inc 21,440 23,548
1,015 ITT Corp 86,048 89,954
797 James River Corp 16,311 16,139
464 Jefferson-Pilot Corp 24,360 24,070
6,244 Johnson & Johnson 252,678 341,859
413 Johnson Controls Inc 22,493 20,237
455 Jostens Inc 9,563 8,474
4,423 K Mart Corp 100,262 57,499
289 Kaufman & Broad Home Corp 5,758 3,721
2,151 Kellogg Co 114,128 125,027
519 Kerr-McGee Corp 26,978 23,874
2,363 KeyCorp 74,777 59,075
1,546 Kimberly-Clark Corp 76,774 78,073
380 King World Productions+ 13,857 13,110
506 Knight-Ridder Inc 28,094 25,553
</TABLE>
14
<PAGE> 202
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,136 Kroger Co+ $ 22,362 $ 27,406
2,849 Lilly (Eli) & Co 140,470 186,966
3,466 Limited Inc 75,994 62,821
937 Lincoln National Corp 40,838 32,795
761 Liz Claiborne Inc 18,833 12,842
594 Lockheed Corp 37,314 43,139
210 Longs Drug Stores Corp 7,077 6,668
815 Loral Corp 25,497 30,868
473 Lotus Development Corp+ 17,039 19,393
346 Louisiana Land & Exploration Co 15,607 12,586
1,064 Louisiana-Pacific Corp 37,431 28,994
1,559 Lowes Cos Inc 32,284 54,175
265 Lubys Cafeterias Inc 6,083 5,929
265 M/A-Com Inc+ 1,824 1,921
742 Mallinckrodt Group Inc 22,389 22,167
611 Manor Care Inc 12,707 16,726
1,219 Marriott International 30,200 34,284
710 Marsh & McLennan Companies Inc 62,596 56,268
942 Martin Marietta Inc 38,379 41,801
1,567 Masco Corp 49,319 35,453
1,745 Mattel Inc 41,582 43,843
1,283 Maxus Energy Corp+ 10,191 4,330
2,415 May Co Department Stores Co 98,139 81,506
1,041 Maytag Corp 17,078 15,615
1,433 MBNA Corp 31,197 33,496
519 McDermott International Inc 14,810 12,845
6,773 McDonalds Corp 181,540 198,110
405 McDonnell Douglas Corp 32,437 57,510
458 McGraw-Hill Inc 30,939 30,629
6,579 MCI Communications 171,225 120,889
557 Mead Corp 25,156 27,084
1,124 Medtronic Inc 37,668 62,523
1,412 Mellon Bank Corp 54,236 43,243
1,022 Melville Corp 46,594 31,554
342 Mercantile Stores Co Inc 11,132 13,509
12,195 Merck & Co Inc 400,805 464,934
</TABLE>
15
<PAGE> 203
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
155 Meredith Corp $ 5,364 $ 7,227
1,857 Merrill Lynch & Co Inc 86,117 66,388
995 Micron Technology Inc 35,835 43,904
5,660 Microsoft Corp+ 307,724 345,968
242 Millipore Corp 7,958 11,707
4,048 Minnesota Mining & Manufacturing Co 217,176 216,062
3,831 Mobil Corp 293,066 322,762
1,121 Monsanto Co 70,499 79,031
980 Moore Corp Ltd 18,337 18,498
1,848 Morgan (J P) & Co Inc 136,055 103,488
310 Morrison Knudsen Corp 7,649 3,953
1,453 Morton International Inc 39,745 41,411
5,698 Motorola Inc 262,990 329,772
95 NACCO Industries Inc Class A 4,187 4,596
674 Nalco Chemical Co 23,707 22,579
1,430 National City Corp 39,861 37,001
262 National Education Corp+ 1,762 1,081
1,602 National Medical Enterprises 17,376 22,628
1,211 National Semiconductor+ 19,883 23,615
477 National Service Industries Inc 12,282 12,223
2,659 NationsBank 135,952 119,987
742 Navistar International Corp+ 17,203 11,223
1,500 NBD Bancorp Inc 48,868 41,063
971 New York Times Co 24,401 21,483
1,521 Newell Co 27,858 31,941
841 Newmont Mining Corp 33,874 30,276
1,415 Niagara Mohawk Power Corp 33,155 20,164
517 NICOR Inc 14,585 11,762
722 Nike Inc Class B 39,873 53,879
1,208 NorAm Energy Corp 10,419 6,493
796 Nordstrom Inc 24,731 33,432
1,309 Norfolk Southern Corp 88,743 79,358
635 Northern States Power Co 29,238 27,940
2,434 Northern Telecom Ltd 68,812 81,235
497 Northrop Grumman Corp 18,041 20,874
3,008 Norwest Corp 78,362 70,312
</TABLE>
16
<PAGE> 204
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
3,598 Novell Inc+ $ 70,105 $ 61,616
844 Nucor Corp 39,542 46,842
4,110 NYNEX Corp 183,002 151,043
3,028 Occidental Petroleum Corp 62,755 58,289
417 Ogden Corp 9,791 7,819
1,459 Ohio Edison Co 36,167 26,992
234 ONEOK Inc 4,876 4,212
2,781 Oracle Systems Corp+ 70,944 122,712
938 Oryx Energy Co 20,849 11,139
154 Oshkosh B'Gosh Inc 2,575 2,156
168 Outboard Marine Corp 3,334 3,297
450 Owens Corning Fiberglass+ 19,502 14,400
401 PACCAR Inc 21,690 17,744
797 Pacific Enterprises 20,368 16,936
4,175 Pacific Gas & Electric Co 148,157 101,766
4,113 Pacific Telesis Group 130,097 117,221
2,745 PacifiCorp 52,719 49,753
1,124 Pall Corp 20,074 21,075
1,405 Panhandle Eastern Corp 34,381 27,749
452 Parker Hannifin Corp 15,331 20,566
2,163 PECO Energy Co 68,106 52,994
2,256 Penney (J C) Co Inc 102,363 100,674
463 Pennzoil Co 30,036 20,430
328 Peoples Energy Corp 10,898 8,569
572 Pep Boys-Manny Moe & Jack 13,424 17,732
7,648 Pepsico Inc 296,821 277,240
399 Perkin-Elmer Corp 13,467 10,224
992 Pet Inc 15,687 19,592
3,040 Pfizer Inc 191,647 234,840
682 Phelps Dodge Corp 32,047 42,199
8,324 Philip Morris Co Inc 422,035 478,630
2,528 Phillips Petroleum Co 80,431 82,792
829 Pioneer Hi Bred International Inc 30,854 28,601
1,511 Pitney Bowes Inc 62,265 47,974
382 Pittston Services Group 7,798 10,123
2,292 Placer Dome Inc 47,160 49,851
</TABLE>
17
<PAGE> 205
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
2,261 PNC Financial Corp $ 68,006 $ 47,764
438 Polaroid Corp 16,023 14,235
304 Potlatch Corp 13,589 11,324
2,082 PPG Industries Inc 71,305 77,294
1,339 Praxair Inc 21,314 27,450
609 Premark International Inc 19,247 27,253
1,897 Price/Costco Inc+ 36,433 24,424
6,613 Procter & Gamble Co 326,908 410,006
1,013 Promus Co Inc+ 41,233 31,403
954 Providian Corp 39,160 29,455
2,373 Public Services Enterprise Group 82,662 62,885
285 Pulte Corp 9,938 6,555
1,306 Quaker Oats Co 44,185 40,160
971 Ralston-Purina Group 34,172 43,331
403 Raychem Corp 15,750 14,357
1,297 Raytheon Co 79,844 82,846
790 Reebok International Ltd 20,885 31,205
579 Reynolds Metals Co 29,121 28,371
795 Rite Aid Corp 13,952 18,583
360 Roadway Services Inc 21,930 20,430
2,116 Rockwell International Corp 73,978 75,647
654 Rohm & Haas Co 35,207 37,360
595 Rollins Environmental Services 4,105 2,901
796 Rowan Co Inc+ 7,752 4,876
5,204 Royal Dutch Petroleum Co 512,330 559,430
1,571 Rubbermaid Inc 50,701 45,166
399 Russell Corp 11,651 12,519
533 Ryan's Family Steak House+ 4,592 3,998
767 Ryder System Inc 19,746 16,874
604 SAFECO Corp 37,645 31,408
536 Safety-Kleen Corp 8,391 7,906
1,034 Salomon Inc 48,302 38,775
850 Santa Fe Energy Resources Inc 8,501 6,800
1,824 Santa Fe Pacific Corp 18,285 31,920
1,288 Santa Fe Pacific Gold Corp+ 18,325 16,583
4,653 Sara Lee Corp 120,275 117,488
</TABLE>
18
<PAGE> 206
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
4,341 SCE Corp $ 103,526 $ 63,487
1,863 Schering-Plough Corp 114,778 137,862
2,341 Schlumberger Ltd 149,281 117,928
744 Scientific-Atlanta Inc 12,016 15,624
752 Scott Paper Co 26,439 51,982
3,617 Seagram Co Ltd 96,642 106,702
3,402 Sears Roebuck & Co 173,559 156,492
847 Service Corp International 20,415 23,504
236 Shared Medical System Corp 5,289 7,729
1,166 Shawmut National Corp 26,634 19,093
838 Sherwin Williams Co 28,000 27,759
404 Shoneys Inc+ 8,678 5,151
476 Sigma Aldrich Corp 17,594 15,708
105 Skyline Corp 2,058 2,021
404 Snap-On Inc 16,689 13,433
838 Sonat Inc 27,488 23,464
6,313 Southern Co 137,097 126,260
1,370 Southwest Airlines Co 39,054 22,948
5,822 Southwestern Bell Corp 245,831 235,063
186 Springs Industries Inc 6,958 6,882
3,396 Sprint Corp 120,833 93,815
147 SPX Corp 2,453 2,444
432 St Jude Medical Inc 14,131 17,172
811 St Paul Co Inc 35,629 36,292
420 Stanley Works 17,649 15,015
866 Stone Container Corp+ 9,420 14,939
455 Stride Rite Corp 6,846 5,062
1,046 Sun Co Inc 29,343 30,073
913 Sun Microsystems Inc+ 23,986 32,412
1,117 SunTrust Banks Inc 49,244 53,337
673 Super Value Inc 23,750 16,489
1,784 Sysco Corp 50,098 45,938
1,101 Tandem Computers Inc+ 10,917 18,855
598 Tandy Corp 19,474 29,975
314 Tektronix Inc 7,777 10,755
5,545 Tele-Communication Inc Class A+ 139,471 120,604
</TABLE>
19
<PAGE> 207
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
535 Teledyne Inc $ 13,138 $ 10,767
563 Temple-Inland Inc 24,989 25,405
1,649 Tenneco Inc 84,823 70,083
2,525 Texaco Inc 162,676 151,184
896 Texas Instruments Inc 65,472 67,088
2,167 Texas Utilities Co 103,304 69,344
851 Textron Inc 47,145 42,869
203 Thomas & Betts Corp 12,940 13,626
3,694 Time Warner Inc 147,056 129,752
1,260 Times Mirror Co 40,140 39,533
313 Timken Co 10,282 11,033
712 TJX Companies Inc 20,286 11,125
689 Torchmark Corp 38,265 24,029
2,757 Toys R Us Inc+ 101,859 84,089
666 Transamerica Corp 38,795 33,134
380 Transco Energy Co 6,294 6,318
3,098 Travelers Inc 133,250 100,685
632 Tribune Co 33,072 34,602
288 Trinova Corp 8,102 8,460
613 TRW Inc 39,452 40,458
692 Tyco International Inc 32,013 32,870
572 U.S. Air Group Inc+ 9,139 2,503
972 U.S. Bancorp 25,001 21,992
1,534 U.S. Healthcare Inc 72,072 63,278
239 U.S. Life Corp 9,696 8,335
4,407 U.S. West Inc 204,283 156,999
2,056 Unicom Corp 60,592 49,344
1,536 Unilever N V 163,081 178,944
675 Union Camp Corp 30,683 31,809
1,446 Union Carbide Corp 27,345 42,476
1,009 Union Electric Co 43,132 35,693
1,997 Union Pacific Corp 127,501 91,113
1,646 Unisys Corp+ 18,447 14,197
1,655 United Healthcare Corp 76,340 74,682
530 United States Surgical 13,612 10,070
1,204 United Technologies Corp 68,561 75,702
</TABLE>
20
<PAGE> 208
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
2,346 Unocal Corp $ 67,212 $ 63,929
721 UNUM Corp 41,281 27,218
1,679 Upjohn Co 46,962 51,629
843 USF & G Corp 14,176 11,486
1,937 UST Inc 53,500 53,752
2,791 USX - Marathon Group 53,677 45,703
732 USX- US Steel Group 24,763 25,986
409 Varity Corp+ 16,808 14,826
609 VF Corp 27,438 29,613
3,472 Viacom Inc Class B+ 135,725 141,050
1,656 Wachovia Corp 63,754 53,406
22,263 Wal Mart Stores Inc 590,625 473,089
1,172 Walgreen Co 45,119 51,275
1,322 Warner Lambert Co 90,826 101,794
504 Wells Fargo & Co 58,621 73,080
991 Wendy's International Inc 14,570 14,246
494 Western Atlas Inc+ 18,001 18,587
3,448 Westinghouse Electric Corp 51,491 42,238
638 Westvaco Corp 22,789 25,042
1,966 Weyerhaeuser Co 81,507 73,725
711 Whirlpool Corp 44,214 36,083
1,024 Whitman Corp 15,197 17,664
867 Williams Co Inc 25,481 21,783
719 Winn-Dixie Stores Inc 43,888 36,939
4,679 WMX Technologies Inc 142,304 122,824
1,279 Woolworth Corp 32,260 19,185
896 Worthington Industries Inc 17,308 17,920
1,143 Wrigley (Wm) Jr Co 44,405 56,436
1,040 Xerox Corp 78,773 102,960
266 Yellow Corp 6,306 6,351
333 Zenith Electronic Corp+ 2,383 3,835
137 Zurn Industries Inc 4,452 2,466
------------ ------------
TOTAL COMMON STOCKS $ 32,379,792 $ 32,396,536
</TABLE>
21
<PAGE> 209
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. TREASURY SECURITIES - 41.15%
$ 2,500,000 U.S. Treasury Bonds 6.25 % 08/15/23 $ 2,030,465
2,300,000 U.S. Treasury Bonds 7.25 05/15/16 2,124,625
2,100,000 U.S. Treasury Bonds 7.88 02/15/21 2,071,778
3,500,000 U.S. Treasury Bonds 8.00 11/15/21 3,510,938
2,600,000 U.S. Treasury Bonds 8.13 08/15/19 2,632,500
2,800,000 U.S. Treasury Bonds 8.50 02/15/20 2,947,871
3,700,000 U.S. Treasury Bonds 8.75 05/15/17 3,979,813
1,000,000 U.S. Treasury Bonds 11.25 02/15/15 1,320,624
------------
TOTAL U.S. TREASURY SECURITIES $ 20,618,614
(Cost $21,715,010)
TOTAL INVESTMENTS IN SECURITIES
(Cost $54,094,802)* 105.81% $ 53,015,150
(Notes 1 and 3)
Other Assets and Liabilities, Net (5.81)% (2,909,561)
------ ------------
TOTAL NET ASSETS 100.00% $ 50,105,589
------ ------------
------ ------------
</TABLE>
- -----------------------------------------------------------
+ NON-INCOME EARNING SECURITIES
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 2,663,232
Gross Unrealized Depreciation (3,742,884)
-------------
NET UNREALIZED DEPRECIATION ($ 1,079,652)
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 210
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS - 96.12%
$ 1,000,000 ABAG Finance Authority for Nonprofit
Corporations COP CA State Insured 7.10 % 12/01/20 $ 996,390
2,125,000 Alameda CA USD 7.00 07/01/13 2,248,059
1,000,000 Alameda CA USD AMBAC Insured 6.05 07/01/11 945,190
1,000,000 Alameda CA USD Principal 6.95 07/01/11 1,055,950
2,000,000 Alameda County CA Public Facilities Corp COP 6.25 06/01/06 1,988,580
1,000,000 Alameda County CA Water District Revenue COP
Water System Project MBIA Insured 6.20 06/01/13 955,090
100,000 Albany CA Public Facilities Finance Authority
Lease Revenue Capital Improvement Project 6.90 09/01/12 100,222
500,000 Albany CA Public Facilities Finance Authority
Lease Revenue Capital Improvement Project 7.85 09/01/09 517,630
1,000,000 Antioch CA Development Agency Tax Allocation
Project 1 FGIC Insured 6.40 09/01/17 968,540
260,000 Baldwin Park CA COP Civic Projects Prerefunded 7.75 08/01/97 278,281
1,000,000 Berryessa CA USD Series A 6.80 03/01/12 997,850
1,000,000 Buena Park CA Community RDA Tax Allocation
Central Business District Project 7.10 09/01/14 866,990
2,000,000 California Educational Facilites Authority
Revenue Chapman College Refunding Pending 7.30 01/01/02 2,110,640
2,700,000 California Educational Facilites Authority
Revenue Saint Marys College of CA Project
Prerefunded 7.50 10/01/20 2,979,747
</TABLE>
28
<PAGE> 211
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 California Educational Facilities Authority
Revenue Claremont Colleges Pooled Facilities 6.38 % 05/01/22 $ 910,140
350,000 California Educational Facilities Authority
Revenue Loyola Marymount University 6.00 10/01/14 315,214
710,000 California Educational Facilities Authority
Revenue Loyola Marymount University Series B 6.55 10/01/12 685,384
1,200,000 California Educational Facilities Authority
Revenue University of San Diego Project 6.50 10/01/08 1,194,444
700,000 California Health Facilities Financing American
Baptist Homes West State Insured 7.65 04/01/14 731,262
1,000,000 California Health Facilities Financing
Authority CA Lutheran Homes Prerefunded 7.50 10/01/11 1,102,050
1,000,000 California Health Facilities Financing
Authority Cedar Knoll Insured Series B State
Insured 7.50 08/01/20 1,000,000
1,000,000 California Health Facilities Financing
Authority Episcopal Homes Foundation Project
State Insured 7.75 07/01/18 1,031,340
400,000 California Health Facilities Financing
Authority Episcopal Homes Foundation Project
State Insured 7.85 07/01/15 412,676
200,000 California Health Facilities Financing
Authority Eskaton Properties Inc Prerefunded 7.38 05/01/08 218,548
</TABLE>
29
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CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 California Health Facilities Financing
Authority Eskaton Properties Inc Prerefunded 7.50 % 05/01/20 $ 1,098,430
1,000,000 California Health Facilities Financing
Authority Gould Medical Foundation Escrowed
to Maturity 7.25 04/01/10 1,031,580
1,250,000 California Health Facilities Financing
Authority Gould Medical Foundation Escrowed
to Maturity 7.30 04/01/20 1,335,763
2,855,000 California Health Facilities Financing
Authority Kaiser Permanente Series A 6.50 12/01/20 2,634,080
1,745,000 California Health Facilities Financing
Authority Kaiser Permanente Series A 7.00 12/01/10 1,734,931
1,000,000 California Health Facilities Financing
Authority Kaiser Permanente Series A 7.00 10/01/18 987,310
1,000,000 California Health Facilities Financing
Authority Revenue Insured Health Facilities
Valleycare Series State Insured 6.50 05/01/05 998,390
1,750,000 California Health Facilities Financing
Authority Revenue Small Insured Health
Facilities Series A 6.75 03/01/20 1,630,108
1,000,000 California Health Facilities Financing
Authority San Diego Hospital Association MBIA
Insured 6.20 08/01/12 957,660
1,535,000 California HFA Home Mortgage Revenue Series A
Multiple Credit Enhancements 7.35 08/01/11 1,579,008
</TABLE>
30
<PAGE> 213
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 525,000 California HFA Home Mortgage Revenue Series B
AMT Multiple Credit Enhancements 8.00 % 08/01/29 $ 544,714
560,000 California HFA Home Mortgage Revenue Series B
Multiple Credit Enhancements 7.25 08/01/10 572,690
1,455,000 California HFA Home Mortgage Revenue Series D
AMT Multiple Credit Enhancements 7.75 08/01/10 1,529,132
140,000 California HFA Home Mortgage Revenue Series F
Multiple Credit Enhancements 7.75 08/01/08 145,751
360,000 California HFA Home Mortgage Revenue Series G
AMT Multiple Credit Enhancements 8.15 08/01/19 375,797
1,575,000 California HFA Multi-Unit Rental Housing
Revenue AMT Series A 5.50 08/01/15 1,294,083
630,000 California PCR Pacific Gas & Electric Co Series
A 8.20 12/01/18 663,755
1,000,000 California PCR San Diego Gas & Electric Co AMT 6.80 06/01/15 1,005,410
500,000 California PCR Southern California Edison
Series AMT 6.90 09/01/06 509,380
1,500,000 California PCR Southern California Edison
Series B 6.85 12/01/08 1,519,275
2,500,000 California Pollution Control Financing
Authority Resource Recovery Revenue Waste
Management Series A AMT 7.15 02/01/11 2,533,050
225,000 California Public Capital Improvements
Financing Authority Revenue Joint Powers
Agency Pooled Projects Series 8.25 03/01/98 241,378
</TABLE>
31
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CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 225,000 California State HFA Insured Housing Revenue
Series C AMT MBIA Insured 7.00 % 08/01/23 $ 225,578
150,000 California State Public Works Board High
Technology Facilities Lease Revenue
University of California Prerefunding 7.60 03/01/98 161,639
1,000,000 California State Public Works Board Lease
Revenue University Of California Project
Series A AMBAC Insured 6.30 12/01/09 986,620
1,500,000 California State Public Works Board Lease
Revenue University Of California Project
Series B MBIA Insured 5.38 12/01/19 1,235,655
500,000 California State University Revenue San Jose
State University Student Series B 7.50 11/01/13 516,930
1,500,000 California Statewide Communities Development
Authority Revenue COP Hospital Cedars Sinai
Medical Center 6.50 08/01/12 1,431,945
1,500,000 California Statewide Development Motion Picture
and TV AMBAC Insured 5.25 01/01/14 1,255,455
1,590,000 California Statewide Motion Picture Development
and TV AMBAC Insured 5.25 01/01/13 1,334,885
2,255,000 Castaic Lake CA Water Agency COP Water Systerm
Improvement Project Prerefunded 7.35 08/01/20 2,466,993
</TABLE>
32
<PAGE> 215
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Cerritos CA Public Financing Authority
Redevelopment Los Cerritos Redevelopment
Project Revenue AMBAC Insured 5.75 % 11/01/22 $ 868,360
870,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/11 793,858
1,415,000 Clayton CA RDA Tax Allocation Revenue AMBAC
Insured 7.00 08/01/20 1,444,078
1,200,000 Contra Costa County CA COP Public Facilities
Merrithew Memorial Hospital Replacement 6.60 11/01/12 1,138,512
500,000 Contra Costa County CA COP Public Facilities
Merrithew Memorial Hospital Replacement 6.63 11/01/22 460,540
270,000 Contra Costa County CA Home Mortgage Revenue
Mortgaged Backed Securities Project AMT
Escrowed to Maturity 7.75 05/01/22 304,549
750,000 Contra Costa County CA Public Financing
Authority Tax Allocation Revenue Series A 7.10 08/01/22 721,073
755,000 Contra Costa County CA Transportation Authority
Sales Tax Revenue Series A Escrowed to
Maturity 6.50 03/01/09 759,772
1,000,000 Covina CA COP Water System Improvement Project 7.30 04/01/16 1,015,270
3,350,000 Cupertino CA COP Open Space Acquisition Project
Prerefunded 6.75 04/01/10 3,563,094
</TABLE>
33
<PAGE> 216
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,475,000 Cupertino CA COP Open Space Acquisition Project
Prerefunded 7.13 % 04/01/06 $ 1,596,688
745,000 Danville CA COP 6.50 11/01/06 746,721
525,000 Danville CA COP 6.60 11/01/07 526,523
3,025,000 East Bay CA MUD Wastewater Treatment System
Revenue Prerefunded 7.20 06/01/20 3,284,212
1,585,000 East Bay CA MUD Wastewater Treatment System
Revenue Prerefunded 7.38 06/01/04 1,733,610
3,655,000 East Bay CA Regional Park District Series B 5.75 09/01/13 3,316,693
500,000 Eastern Municipal Water District CA Water &
Sewer Revenue Certificates FGIC Insured 6.30 07/01/20 474,540
2,500,000 El Dorado County CA Bond Authority Lease
Revenue Capital Facilities Project 7.40 11/01/09 2,575,225
1,000,000 Emeryville CA Public Financing Authority
Housing Increment Revenue Series A 6.35 05/01/10 966,660
2,000,000 Emeryville CA Public Financing Authority
Housing Increment Revenue Series A 7.88 02/01/15 2,096,400
500,000 Escondido CA USD COP Series B 6.50 09/01/13 505,645
750,000 Escondido CA USD COP Series B 6.50 09/01/14 757,110
200,000 Eureka CA Public Financing Authority Tax
Allocation Revenue Eureka RDA Projects
Prerefunded 7.40 11/01/12 215,984
1,410,000 Fairfield CA Public Finance Authority CGIC
Insured 5.20 08/01/08 1,219,805
</TABLE>
34
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CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 950,000 Fontana CA Public Financing Authority Tax
Allocation Revenue Fontana Redevelopment
Project A Prerefunded 7.55 % 12/01/05 $ 1,058,642
1,025,000 Fontana CA Public Financing Authority Tax
Allocation Revenue Fontana Redevelopment
Project A Prerefunded 7.60 12/01/06 1,145,110
700,000 Fontana CA USD Series B AMBAC Insured 5.40 07/01/08 627,424
1,000,000 Fresno CA COP Street Improvement Project 6.63 12/01/11 975,140
3,840,000 Hayward CA COP Capital Improvement Projects 6.80 08/01/17 3,686,016
2,800,000 Huntington Beach CA Public Finance Authority
Revenue Bond 7.00 08/01/10 2,334,192
500,000 Industry CA Agency Project 6.70 11/01/03 501,585
1,080,000 Industry CA Urban Development Agency 6.85 11/01/04 1,095,163
1,250,000 Industry CA Urban Development Agency 7.30 05/01/06 1,253,563
500,000 Industry CA Urban Development Agency Project 3 6.60 11/01/02 509,720
1,000,000 Industry CA Urban Development Agency Tax
Allocation MBIA Insured 5.80 05/01/09 932,610
1,500,000 Inglewood CA COP Civic Center Improvement
Project Public Finance Authority 7.00 08/01/19 1,445,475
490,000 Inglewood CA Public Finance Authority Revenue
Series C 7.00 05/01/22 465,980
</TABLE>
35
<PAGE> 218
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 450,000 Irvine Ranch CA Water District Joint Powers
Agency Local Pool Revenue 7.80 % 02/15/08 $ 445,572
2,000,000 Kern County CA COP 7.10 12/01/07 2,037,300
1,200,000 Lemoore CA Union High School District CGIC
Insured 7.35 02/01/15 1,250,184
1,600,000 Lincoln CA RDA Tax Allocation 7.60 08/01/16 1,625,968
1,000,000 Lincoln CA USD Special Tax Community District
Number 1B 7.20 09/01/21 992,810
250,000 Local Government Finance Authority CA Revenue
Fullerton RDA Prerefunded 7.70 02/01/99 273,283
585,000 Loma Linda CA COP Prerefunded 7.00 12/01/15 613,987
1,000,000 Long Beach CA Finance Authority Revenue AMBAC
Insured 6.00 11/01/17 929,620
1,550,000 Long Beach CA Harbor Revenue AMT Series A 7.25 05/15/19 1,562,106
750,000 Los Angeles CA Community College District COP
Prerefunded 7.00 08/15/10 808,710
1,000,000 Los Angeles CA Community College District COP
Series A CGIC Insured 6.00 08/15/08 963,030
1,000,000 Los Angeles CA Community RDA Financing
Authority Revenue AMT 5.90 12/01/13 882,680
4,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue 5.38 09/01/23 3,212,600
1,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue 6.38 02/01/20 943,370
</TABLE>
36
<PAGE> 219
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 555,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue 6.88 % 01/15/10 $ 586,757
450,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue Principal 7.90 05/01/98 485,712
1,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue Second Issue 6.00 08/15/32 873,670
100,000 Los Angeles CA Harbor Revenue Escrowed to
Maturity 7.60 10/01/18 108,348
500,000 Los Angeles CA Municipal Improvement Corp Lease
Revenue Central Library Project Series A
Prerefunded 7.10 06/01/15 536,790
130,000 Los Angeles CA SFMR Series A AMT Multiple
Credit Enhancements 7.55 12/01/23 134,297
3,320,000 Los Angeles CA Wastewater System Revenue Series
B Prerefunded 7.15 06/01/20 3,596,855
1,500,000 Los Angeles County CA COP Capital Appreciation
Disney Parking Project 6.74 (F) 03/01/08 589,410
1,000,000 Los Angeles County CA COP Multiple Capital
Facilities Project III 6.25 11/01/04 984,770
1,000,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series A 7.40 07/01/09 1,039,580
1,000,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B 5.75 07/01/18 849,770
4,275,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B 6.50 07/01/13 4,102,076
</TABLE>
37
<PAGE> 220
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 480,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B FGIC Insured 6.50 % 07/01/15 $ 472,531
2,395,000 Lucia Mar CA USD COP Prerefunded 6.90 05/01/15 2,402,856
1,550,000 Madera CA COP 7.38 05/01/20 1,554,790
1,000,000 Menlo Park CA Community Development Agency Tax
Allocation Las Pulgas Community Project AMBAC
Insured 6.70 10/01/22 997,350
1,100,000 Mid Peninsula CA Regional Open Space District
CA COP Prerefunded 7.55 09/01/10 1,203,422
665,000 Mid Peninsula CA Regional Open Space District
Promissory Notes 6.30 07/10/10 645,815
2,110,000 Modesto CA COP Recreational Facilities CA
Public Agency Leasing Corporation 7.25 07/01/11 2,174,545
520,000 Mojave CA Water Agency Improvement District M
Morongo Basin 6.25 09/01/02 512,803
500,000 Mojave CA Water Agency Improvement District M
Morongo Basin 6.60 09/01/13 463,600
1,000,000 Montclair CA RDA Project Three 7.15 12/01/15 950,000
1,500,000 Mountain View CA School District Community
Facility District Special Tax Series B CGIC
Insured 7.00 10/01/13 1,529,595
1,000,000 Mountain View CA Shoreline Regional Park
Community Tax Allocation Series A 5.60 08/01/09 869,960
</TABLE>
38
<PAGE> 221
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,450,000 Nevada County CA COP Solid Waste Western Nevada
County 6.50 % 10/01/06 $ 1,420,696
345,000 Nevada County CA COP Solid Waste Western Nevada
County 7.00 06/01/98 337,531
345,000 Nevada County CA COP Solid Waste Western Nevada
County 7.10 06/01/99 334,219
1,000,000 Nevada County CA COP Solid Waste Western Nevada
County 7.50 06/01/21 918,730
1,035,000 Northridge CA Water District AMBAC Insured 5.40 02/01/11 887,264
1,000,000 Nuview CA USD COP 7.25 02/01/16 970,540
400,000 Oceanside CA Community Downtown RDA Prerefunded 7.00 05/01/11 432,880
1,000,000 Orange County CA CFD Special Tax Series A
Prerefunded 7.45 08/15/04 1,098,170
1,000,000 Orange County CA CFD Special Tax Series A
Prerefunded 7.50 08/15/05 1,100,540
1,945,000 Orange County CA Transit District COP Business
Acquisition Project 6.75 12/01/05 1,705,220
1,000,000 Orange County CA Water District COP Series A 5.50 08/15/10 743,070
1,000,000 Otay CA Municipal Water District GO Improvement
District No. 27 6.70 09/01/22 911,410
1,150,000 Oxnard CA Unified High School District COP
Series B Prerefunded 7.70 11/01/19 1,267,990
1,000,000 Palm Springs CA COP Municipal Golf Course
Expansion Project 7.40 11/01/18 991,000
500,000 Pasadena CA COP Capital Project 6.00 01/01/04 486,475
1,000,000 Pasadena CA COP Prerefunded 7.00 12/01/99 1,075,520
</TABLE>
39
<PAGE> 222
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,500,000 Pittsburg CA RDA Tax Allocation CA Avenue
Community Facilities 90-1 Subordinated 7.40 % 08/15/20 $ 1,491,285
2,400,000 Pittsburg CA RDA Tax Allocation Los Medanos
Community Development Project FGIC Insured 5.50 08/01/07 2,211,168
2,000,000 Pittsburg CA RDA Tax Allocation Los Medanos
Community Development Project Prerefunded 7.15 08/01/21 2,191,660
715,000 Port of Oakland CA Port Revenue Series A AMT
BIG Insured 7.60 11/01/09 743,836
500,000 Port of Oakland CA Port Revenue Series A AMT
BIG Insured 7.60 11/01/16 514,160
1,000,000 Port of Oakland CA Special Facilities Revenue
Mitsui OSK Lines Limited Series A AMT LOC -
Industrial Bank of Japan Ltd 6.70 01/01/07 983,840
2,500,000 Ramona CA Municipal Water District COP AMBAC
Insured 7.20 10/01/10 2,615,850
1,500,000 Rancho CA Water District Financial Authority
Revenue FGIC Insured 6.25 08/01/12 1,450,260
1,000,000 Rancho Cucamonga CA Redevelopment Agency Tax
Allocation MBIA Insured 5.50 09/01/23 836,820
685,000 Rancho Mirage CA Joint Powers 7.50 04/01/09 703,488
2,315,000 Rancho Mirage CA Joint Powers Prerefunded 7.50 04/01/09 2,556,084
1,350,000 Richmond CA Joint Powers Finance Authority
Revenue Series B 7.25 05/15/13 1,355,157
</TABLE>
40
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CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 100,000 Richmond CA RDA Tax Allocation Harbour
Redevelopment Project CGIC Insured 7.00 % 07/01/09 $ 103,860
1,750,000 Riverside County CA Asset Leasing Corporation
Leasehold Revenue Riverside County Hospital
Project A 6.38 06/01/09 1,663,725
3,000,000 Riverside County CA COP Series A 6.88 11/01/09 3,028,200
735,000 Riverside County CA SFMR Project A AMT GNMA
Collateralized 6.85 10/01/16 734,067
1,250,000 Riverside County CA Transportation Commission
Sales Tax Revenue Series A 6.50 06/01/09 1,231,550
1,370,000 Rosemead CA RDA Tax Allocation Redevelopment
Project Area 1-A 5.50 10/01/18 1,111,947
1,335,000 Roseville CA Joint Unified High School District
Capital Appreciation Series A 6.30 (F) 08/01/06 633,498
1,900,000 Sacramento CA COP Light Rail Transportation
Project 6.75 07/01/07 1,920,767
1,000,000 Sacramento CA MUD Electric Revenue Series Y
MBIA Insured 6.75 09/01/09 1,015,570
500,000 Sacramento CA MUD Electric Revenue Series Z
FGIC Insured 6.45 07/01/10 497,095
850,000 Saint Helena CA COP Series C 7.88 06/01/11 873,273
1,000,000 San Bernardino CA Municipal Water Department
COP FGIC Insured 6.25 02/01/12 961,900
2,000,000 San Buenaventura CA Capital Improvement Project
COP 6.85 08/01/16 1,947,160
1,525,000 San Buenaventura CA COP Prerefunded 7.45 10/01/08 1,679,315
$ 230,000 San Carlos CA RDA Tax Allocation Series A 7.00 % 09/01/01 $ 239,642
250,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/02 260,328
225,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/03 233,847
235,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/04 243,476
235,000 San Carlos CA RDA Tax Allocation Series A 7.10 09/01/05 244,231
1,520,000 San Diego CA COP 6.90 07/15/16 1,520,714
600,000 San Diego CA IDR Gas & Electric Company Series
B AMT 7.38 12/01/21 607,518
1,000,000 San Diego CA Regional Building Authority Lease
Revenue San Miguel Consolidated Fire
Protection District MBIA Insured 5.65 01/01/20 862,660
500,000 San Diego CA Regional Building Authority Lease
Revenue San Miguel Consolidated Fire
Protection District Prerefunded 7.25 01/01/20 541,760
1,230,000 San Diego County CA COP East Mesa Detention
Facilities Project 7.00 10/01/09 1,244,932
750,000 San Diego County CA Regional Transportation
Community Sales Tax Revenue Series A Escrowed
to Maturity 6.00 04/01/08 724,673
1,000,000 San Francisco CA City & County Public Utilities
Commission Water Revenue Series A 6.50 11/01/09 1,004,200
2,000,000 San Francisco CA City & County Public Utilities
Commission Water Revenue Series A 6.75 11/01/10 2,016,260
</TABLE>
41
<PAGE> 224
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,800,000 San Joaquin County CA COP North County Landfill
Project 7.00 % 04/01/11 $ 1,809,090
2,000,000 San Joaquin Hills CA Transportation Corridor
Agency Toll Road Revenue Capital Appreciation 4.34 (F) 01/01/10 1,021,300
1,000,000 San Jose CA RDA Tax Allocation Park Center
Redevelopment Project 7.00 10/01/05 1,014,920
1,000,000 San Jose CA RDA Tax Allocation Park Center
Redevelopment Project 7.00 10/01/06 1,010,660
1,935,000 San Mateo County CA Board of Education COP 7.10 05/01/21 1,942,527
1,000,000 San Mateo County CA Transportation District
Sales Tax Revenue Series A MBIA Insured 6.70 06/01/10 1,043,130
1,000,000 Santa Ana CA Community RDA Tax Allocation
Series A 7.25 09/01/09 952,200
1,335,000 Santa Clara CA Electric Revenue Refunding
Crossover Series B 7.80 07/01/10 1,375,170
2,400,000 Santa Clara CA Electric Revenue Series A MBIA
Insured 6.25 07/01/13 2,303,592
1,700,000 Santa Clara County CA COP Multiple Facilities
Project AMBAC Insured 6.00 05/15/12 1,593,648
100,000 Santa Clara County CA COP Public Facilities
Corporation 7.75 11/01/08 105,587
605,000 Santa Clara County CA COP Public Facilities
Corporation 7.80 11/01/13 635,686
1,260,000 Santa Cruz County CA Public Financing Authority
Series C 7.10 08/01/05 1,294,045
750,000 Santa Maria CA RDA Town Center West Side
Parking Facilities FSA Insured 5.25 06/01/11 641,985
</TABLE>
42
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CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Shasta CA Dam Area Public Utility District COP 7.25 % 03/01/12 $ 1,001,170
350,000 Shasta CA Joint Powers Financing Authority
Landfill Revenue Series A 7.20 07/01/09 356,654
500,000 Shasta CA Joint Powers Financing Authority
Landfill Revenue Series A 7.20 07/01/10 512,490
1,500,000 Snowline CA Joint USD COP 6.40 07/01/18 1,347,810
520,000 Sonoma County CA COP 6.75 10/01/06 539,854
1,000,000 South County CA Regional Wastewater Authority
Revenue Regional Wastewater Facilities &
Capital Improvement FGIC Insured 5.75 08/01/10 910,700
1,000,000 South Gate CA Public Finance Authority Tax
Allocation Revenue South Gate Revenue South
Gate Redevelopment Prerefunded 7.38 09/01/09 1,085,630
1,000,000 South San Francisco CA Capital Improvements
Financing Authority Revenue South Conference
Center 6.13 09/01/18 863,390
1,160,000 Southern California HFA SFMR Series A AMT GNMA
Collateralized 7.63 10/01/22 1,200,484
555,000 Southern California HFA SFMR Series A AMT GNMA
Collateralized 7.63 10/01/23 575,385
670,000 Southern California HFA SFMR Series A AMT
GNMA/FNMA Collateralized 6.75 09/01/22 648,748
</TABLE>
43
<PAGE> 226
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 695,000 Southern California HFA SFMR Series A AMT
GNMA/FNMA Collateralized 7.35 % 09/01/24 $ 707,677
2,800,000 Southern California Metropolitan Water District 5.50 07/01/19 2,357,012
600,000 Southern California Public Power Agency
Electrical Improvements 7.00 07/01/09 611,526
2,150,000 Southern California Public Power Authority 6.75 07/01/10 2,158,170
2,750,000 Southern California Public Power Authority
Transmission Project Revenue Southern
Transmission Project 6.13 07/01/18 2,518,698
1,450,000 Southern California Public Power Authority
Transmission Revenue Project 5.75 07/01/21 1,243,694
2,000,000 Stanislaus County CA COP 7.40 04/01/04 2,053,940
2,000,000 Stanislaus County CA COP Series A 6.85 06/01/12 1,956,140
750,000 Stockton CA Port District Revenue Series A 8.10 01/01/14 773,700
20,000 Stockton CA SFMR Series Government Agency
Collateralized 7.50 02/01/23 21,531
1,750,000 Suisun City CA RDA Tax Allocation Prerefunded 7.50 10/01/19 1,920,363
265,000 Sulphur Springs CA USD COP AMBAC Insured 7.15 02/01/11 272,945
5,690,000 Sulphur Springs CA USD Series A MBIA Insured 6.90 (F) 09/01/13 1,633,087
1,000,000 Sunnyvale CA Financing Authority Utilities
Revenue Solid Waste Materials Series B AMT
MBIA Insured 6.00 10/01/08 956,620
</TABLE>
44
<PAGE> 227
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Temecula Valley CA USD Series D FGIC Insured 6.00 % 09/01/14 $ 933,280
1,000,000 Turlock CA Irrigation District COP 7.25 01/01/05 1,023,460
1,000,000 Twentynine Palms CA Water District CA COP 7.00 08/01/17 954,210
2,000,000 University of California Revenue Multiple
Purpose Project C AMBAC Insured 5.25 09/01/11 1,693,460
990,000 Upland CA Housing Authority Revenue Issue A 7.85 07/01/20 971,824
325,000 Vacaville CA COP Prerefunded 7.20 12/01/13 349,580
1,000,000 Vacaville CA Public Financing Authority Tax
Allocation Redevelopment Project MBIA Insured 6.35 09/01/22 952,460
370,000 Victorville CA RDA Tax Allocation Bear Valley
Road Redevelopment Project Prerefunded 7.50 11/01/06 411,140
1,000,000 Victorville CA RDA Tax Allocation Bear Valley
Road Redevelopment Project Prerefunded 7.50 11/01/16 1,111,190
1,000,000 West & Central Basin CA Financing Authority
Redevelopment AMBAC Insured 6.13 08/01/12 952,920
1,000,000 West Basin CA Municipal Water District COP
Prerefunded 7.00 08/01/11 1,077,960
580,000 West Covina CA Public Financing Authority Water
Revenue Water System Capital Improvements
Project Prerefunded 7.50 09/01/99 633,604
</TABLE>
45
<PAGE> 228
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 500,000 West End CA Water Development Treatment &
Conservation Joint Powers Authority 7.00 % 10/01/04 $ 515,465
2,000,000 West End CA Water Development Treatment &
Conservation Joint Powers Authority 7.00 10/01/05 2,056,620
1,000,000 Yolo County CA Housing Authority Mortgage
Revenue AMT FHA Collateralized 7.20 08/01/33 992,146
------------
TOTAL CALIFORNIA MUNICIPAL BONDS $269,550,964
(Cost $270,115,511)
VARIABLE RATE MUNICIPAL BONDS - 3.99%
$ 1,000,000 California Health Facilities Financing
Authority Sutter Hospital V/R LOC - Morgan
Guaranty Trust 6.15 % 03/01/20 $ 1,000,000
1,000,000 California State Pollution Control Financing
Authority PCR Shell Oil Company Project V/R
Series C 6.15 10/01/00 1,000,000
900,000 California State Pollution Control Financing
Authority PCR Southern California Edison V/R
Series C 5.00 02/28/08 900,000
900,000 California State Pollution Control Financing
Authority PCR Southern California Edison V/R
Series D 5.00 02/28/08 900,000
900,000 Irvine Ranch CA Water District V/R LOC -
Sumitomo Bank Ltd 6.88 10/01/04 900,000
</TABLE>
46
<PAGE> 229
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
VARIABLE RATE MUNICIPAL BONDS (CONTINUED)
$ 650,000 Los Angeles County CA IDA 353 Properties
Limited Partnership V/R LOC - Dai-Ichi Kangyo
Bank Ltd 6.15 % 12/01/05 $ 650,000
1,450,000 Los Angeles County CA IDA COE & DRU AMT V/R LOC
- Dai-Ichi Kangyo Bank Ltd 6.15 12/01/06 1,450,000
450,000 Los Angeles County CA IDA Gregor H Kloenne &
Son V/R LOC - Dai-Ichi Kangyo Bank Ltd 6.15 12/01/05 450,000
950,000 Los Angeles County CA IDA Komax System Inc V/R
AMT LOC - Dai-Ichi Kangyo Bank Ltd 6.15 12/01/06 950,000
1,000,000 Los Angeles County CA V/R 6.15 12/01/05 1,000,000
2,000,000 Orange County CA Improvement Bond V/R LOC -
Fuji Bank and Industrial Bank of Japan Ltd 6.88 09/02/18 2,000,000
------------
TOTAL VARIABLE RATE MUNICIPAL BONDS $ 11,200,000
(Cost $11,200,000)
MONEY MARKET FUNDS - 0.14%
$ 12,056 Arbor Fund CA Tax-Exempt Portfolio $ 12,056
30,722 Dreyfus General CA Municipal Money Market Fund 30,722
346,202 Nuveen Institutional CA Tax-Exempt Fund 346,202
------------
TOTAL MONEY MARKET FUNDS $ 388,980
(Cost $388,980)
</TABLE>
47
<PAGE> 230
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $281,704,491)* 100.25 % $281,139,944
(Notes 1 and 3)
Other Assets and (0.25)% (688,955)
Liabilities, Net
------ ------------
TOTAL NET ASSETS 100.00 % $280,450,989
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------
+ YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 7,432,752
Gross Unrealized Depreciation (7,997,299)
-------------
NET UNREALIZED DEPRECIATION $( 564,547)
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
48
<PAGE> 231
(THIS PAGE INTENTIONALLY LEFT BLANK)
49
<PAGE> 232
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES - 93.67%
$ 1,700,000 Alhambra CA IDA Sunclipse LOC - Bank of America 3.50 % 05/01/07 $ 1,700,000
2,800,000 California Health Facilities Finance Authority
St Joseph's Health Systems Series B V/R 6.15 07/01/09 2,800,000
2,600,000 California Health Facilities Financing
Authority V/R Adventist Health System LOC -
Toronto Dominion Bank 5.30 08/01/21 2,600,000
1,000,000 California Health Facilities Financing
Authority V/R Childrens Hospital MBIA Insured 5.40 11/01/21 1,000,000
1,000,000 California Health Facilities Financing
Authority Kaiser V/R Permanente 5.30 05/01/28 1,000,000
4,900,000 California Health Facilities Financing
Authority Kaiser Permanente V/R 5.30 05/01/28 4,900,000
7,000,000 California Health Facilities Financing
Authority V/R Memorial Health Services 5.40 10/01/24 7,000,000
4,280,000 California Health Facilities Financing
Authority V/R St. Joseph's Health Systems 6.15 07/01/13 4,280,000
2,410,000 California Housing Finance Authority Home
Mortgage Revenue V/R MBIA Insured 5.51 08/01/10 2,410,000
965,000 California PCR Chevron Project V/R 2.85 11/15/01 965,000
300,000 California PCR Finance Authority Southdown Inc
LOC - Societe Generale 4.35 09/15/98 300,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
53
<PAGE> 233
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 1,500,000 California PCR North County Recycling Center
Series B V/R LOC - Union Bank of Switzerland 5.75 % 07/01/17 $ 1,500,000
2,000,000 California PCR Southern California Edison
Series D 3.55 02/09/95 2,000,000
5,100,000 California PCR Stanislaus Project V/R LOC -
Swiss Bank 6.10 12/01/17 5,100,000
7,300,000 California PCR Wadham Project V/R LOC - Banque
Paribas 5.60 11/01/17 7,300,000
1,000,000 California PCR Western Waste Industries Project
V/R LOC - Citibank 5.87 12/01/00 1,000,000
3,000,000 California School Cash Flow 1994 Pooled Bond 4.50 07/05/95 3,010,978
9,055,000 California State Depatment of Water Resources
Central Valley Project V/R 5.65 12/01/05 9,055,000
4,000,000 California State GO V/R MBIA Insured 4.00 09/01/03 4,000,000
2,000,000 California State Housing Finance Authority AMT
FHA Collateralized 4.30 08/01/26 2,000,696
200,000 California State Pollution Control Financing
Authority PCR Southern California Edison V/R
Series A 5.00 02/28/08 200,000
300,000 California State Pollution Control Financing
Authority PCR Southern California Edison V/R
Series C 5.00 02/28/08 300,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
54
<PAGE> 234
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 4,000,000 California State Pollution Control Financing
Authority PCR V/R San Diego Gas & Electric Co
Series A 4.25 % 12/01/07 $ 4,000,000
5,000,000 California State Pollution Control Financing
Authority Solid Waste Disposal Revenue Colmac
Energy Project Series B V/R LOC - Swiss Bank 5.00 12/01/16 5,000,000
1,500,000 California State RANS Series A 5.00 06/28/95 1,506,303
4,300,000 California State School Board Cash Flow
Contingency LOC - Industrial Bank of Japan
Ltd 4.50 06/28/95 4,313,127
2,300,000 California Statewide CDA V/R St Joseph Health
System 5.40 07/01/08 2,300,000
1,355,000 Chino CA USD V/R LOC - National Westminster
Bank PLC 4.90 09/01/08 1,355,000
5,100,000 Colton CA RDA Las Palomas Associates Project
V/R LOC - Bank of America 6.25 11/01/15 5,100,000
1,000,000 Colton CA RDA MFHR V/R LOC - Federal Home Loan
Bank of San Francisco 5.25 05/01/10 1,000,000
1,100,000 Concord CA MFHR V/R Bel Air Apartments LOC -
Bank of America 5.65 12/01/16 1,100,000
2,000,000 Duarte CA RDA COP Johnson Duarte Partners
Project Series B V/R LOC - Bank of America 4.90 12/01/14 2,000,000
8,100,000 Eagle Trust Series 94 V/R MBIA Insured 5.73 09/01/03 8,100,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
55
<PAGE> 235
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 3,500,000 East Bay CA MUD 3.05 % 01/06/95 $ 3,500,000
2,250,000 Elk Grove CA USD TRAN 5.00 09/14/95 2,264,701
4,400,000 Escondido CA Community Development Commission
COP V/R LOC - Bank of America 6.25 10/01/16 4,400,000
7,000,000 Escondido CA MFHR Morning View Terrace V/R LOC
- Bank of America 5.60 02/15/07 7,000,000
3,900,000 Huntington Beach CA MFHR Seabridge Villas V/R
LOC - Bank of America 3.75 02/01/10 3,900,000
4,590,000 Independent Cities Various Pooled Projects V/R
LOC - National Westminster Bank PLC 4.90 06/01/98 4,590,000
4,100,000 Industry CA IDR Helene Curtis Inc Project V/R
LOC - Harris Trust & Savings Bank 5.40 10/01/06 4,100,000
2,265,000 Irvine CA IDA Improvement Bond V/R LOC -
National Westminster Bank PLC 6.62 09/02/15 2,265,000
2,000,000 Irvine CA IDA Irvine East Investment Co V/R LOC
- Bank of America 6.75 12/01/05 2,000,000
2,000,000 Irwindale CA IDR Toys R Us V/R LOC - Bankers
Trust 5.63 12/01/19 2,000,000
3,000,000 Long Beach CA Health Facilities Memorial Health
Services 5.40 10/01/16 3,000,000
9,055,000 Long Beach CA TRAN 4.75 09/20/95 9,096,133
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
56
<PAGE> 236
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 900,000 Los Angeles CA Community RDA MFHR V/R Skyline
at Southpark Phase II LOC - Industrial Bank
of Japan Ltd 5.35 % 12/01/05 $ 900,000
2,600,000 Los Angeles CA Local Educational Agencies
Pooled TRAN 4.50 07/06/95 2,609,566
300,000 Los Angeles CA MFHR V/R Masselin Manor LOC -
Bank of America 5.45 07/01/15 300,000
300,000 Los Angeles CA V/R LOC - Bank of America 6.00 11/01/09 300,000
1,200,000 Los Angeles County CA Housing Authority MFHR
V/R Harbor Cove Project LOC - Citibank 5.40 10/01/06 1,200,000
4,500,000 Los Angeles County CA Housing Authority MFHR
V/R Riverpark Apartments LOC - Dai-Ichi
Kangyo Bank Ltd 5.55 09/01/10 4,500,000
5,500,000 Los Angeles County CA TRAN 4.50 06/30/95 5,516,442
2,900,000 Montebello CA V/R LOC - Bank of America 3.50 04/01/05 2,900,000
200,000 Monterey CA Peninsula Water Management District
COP Wastewater Reclamation Project V/R LOC -
Sumitomo Bank Ltd 5.40 07/01/22 200,000
6,000,000 Ontario CA MFHR Park Centre V/R LOC - Bank of
New York 5.50 08/01/07 6,000,000
2,100,000 Ontario CA MFHR Vineyard Village V/R LOC -
Industrial Bank of Japan Ltd 5.35 12/01/05 2,100,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
57
<PAGE> 237
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 1,500,000 Ontario CA RDA MFHR Daisy Apartments LOC V/R -
Bank of America 5.50 % 11/01/04 $ 1,500,000
2,000,000 Orange County CA Apartment Development Vintage
Woods V/R LOC - Mitsubishi Bank Ltd 6.50 11/01/08 2,000,000
12,000,000 Orange County CA Improvement Bond V/R LOC -
Fuji Bank and Industrial Bank of Japan Ltd 6.88 09/02/18 12,000,000
460,000 Orange County CA Municipal Water District COP
Series 89A V/R LOC - National Westminster
Bank PLC 6.10 07/01/97 460,000
325,000 Orange County CA Municipal Water District COP
Series 89A V/R LOC - National Westminster
Bank PLC 6.10 07/01/99 325,000
235,000 Orange County CA Municipal Water District COP
Series 89B V/R LOC - National Westminster
Bank PLC 6.10 07/01/96 235,000
255,000 Orange County CA Municipal Water District COP
Series 89B V/R LOC - National Westminster
Bank PLC 6.10 07/01/97 255,000
250,000 Orange County CA Municipal Water District COP
Series 89B V/R LOC - National Westminster
Bank PLC 6.10 07/01/98 250,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
58
<PAGE> 238
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 1,825,000 Orange County CA Municipal Water District COP
Series 89B V/R LOC - National Westminster
Bank PLC 6.10 % 07/01/08 $ 1,825,000
765,000 Orange County CA Municipal Water District COP
Series 89B V/R LOC - National Westminster
Bank PLC 6.10 07/16/16 765,000
1,000,000 Orange County CA Water District 3.35 01/26/95 1,000,000
4,000,000 Orange County CA Water District 3.50 01/13/95 4,000,000
1,400,000 Orange County CA Water District 3.80 01/09/95 1,400,000
2,500,000 Sacramento CA MUD LOC - Morgan Guaranty Trust 3.50 03/08/95 2,500,000
2,780,000 Salinas CA MFHR Brentwood Gardens V/R LOC -
Bank of America 5.50 03/01/05 2,780,000
5,000,000 San Bernardino CA Alta Loma Apartments V/R LOC
- Federal Home Loan Bank of Atlanta 5.45 02/01/23 5,000,000
1,600,000 San Bernardino County CA IDA C & M Fine Pack
Inc V/R LOC - Sanwa Bank 5.05 12/01/95 1,600,000
2,185,000 San Bernardino County CA MFHR LOC - Federal
Home Loan Bank of San Francisco 5.45 05/01/17 2,185,000
2,000,000 San Diego CA MFHR Los Serano LOC - Citibank 6.75 02/01/09 2,000,000
9,600,000 San Diego CA MFHR Lusk Mira Mesa Apartments V/R
LOC - Bank of America 6.50 04/01/07 9,600,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
59
<PAGE> 239
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 3,600,000 San Francisco CA City & County V/R LOC -
Industrial Bank of Japan Ltd 5.15 % 12/01/05 $ 3,600,000
4,815,000 San Francisco CA MFHR Sutter/Post Apartments
V/R LOC - Dai-Ichi Kangyo Bank Ltd 5.60 03/01/18 4,815,000
1,200,000 San Francisco CA MFHR Winterland Project V/R
LOC - Citibank 5.40 06/01/06 1,200,000
5,000,000 San Joaquin County CA 4.75 10/18/95 5,022,882
2,200,000 San Joaquin County CA Transportation Authority
Sales Tax Revenue V/R LOC - Sumitomo Bank Ltd 5.30 04/01/11 2,200,000
700,000 San Jose CA IDA Centrifugal Pumps V/R LOC -
Citibank 5.75 09/01/95 700,000
1,300,000 San Jose CA MFHR Kimberly Woods Apartments V/R
LOC - Bank of America 5.50 11/01/08 1,300,000
500,000 San Luis CA Coastal USD COP V/R LOC - Credit
Suisse 5.25 12/01/08 500,000
2,395,000 San Mateo County CA COP V/R LOC - Swiss Bank 5.00 07/01/98 2,395,000
6,500,000 Santa Clara CA Housing Authority MFHR Benton
Park Center LOC - Citibank 5.40 12/01/07 6,500,000
2,575,000 Santa Clara County CA MFHR Grove Garden
Apartments V/R LOC - Citibank 5.40 03/01/17 2,575,000
1,000,000 Southern California Rapid Transit District COP
V/R MBIA Insured 5.50 07/01/99 1,000,000
3,000,000 Stockton CA 5.25 12/08/95 3,014,715
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
60
<PAGE> 240
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 2,300,000 Tracy CA MFHR Sycamore Village Apartments V/R
LOC - Bank of America 6.00 % 05/01/15 $ 2,300,000
1,915,000 Turlock CA Irrigation District Revenue Series
V/R A LOC - Canadian Imperial Bank of
Commerce 5.63 01/01/14 1,915,000
2,000,000 Vacaville CA MFHR Western Properties The
Sycamores Project V/R LOC - Bank of America 6.00 04/01/05 2,000,000
2,600,000 Walnut Creek CA MFHR Creekside Drive Apartments
V/R LOC - Bank of America 6.00 04/01/07 2,600,000
------------
TOTAL SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES $270,155,543
MONEY MARKET FUNDS - 6.07%
$ 8,500,000 Arbor Fund CA Tax-Exempt Portfolio $ 8,500,000
9,000,000 Dreyfus General CA Municipal Money Market Fund 9,000,000
------------
TOTAL MONEY MARKET FUNDS $ 17,500,000
TOTAL INVESTMENTS IN SECURITIES
(Cost $287,655,543)* (Note 1) 99.74% $287,655,543
Other Assets and Liabilities, Net 0.26% 753,850
------ ------------
TOTAL NET ASSETS 100.00% $288,409,393
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
61
<PAGE> 241
MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT - 4.70%
$15,000,000 Banque Nationale de Paris 5.19 % 03/06/95 $ 14,999,981
COMMERCIAL PAPER - 37.32%
$15,000,000 Associates Corp of North America 5.50 %(+) 01/26/95 $ 14,942,708
10,000,000 Canadian Imperial Bank of Commerce 6.03 (+) 03/01/95 9,901,175
15,000,000 Ciesco LP 5.65 (+) 02/07/95 14,912,896
5,000,000 Daimler-Benz North America Corp 5.50 (+) 01/09/95 4,993,889
14,675,000 Falcon Asset Securitization Corp+ 5.68 (+) 02/14/95 14,573,123
10,000,000 General Electric Credit Corp 5.40 (+) 01/11/95 9,984,722
5,000,000 Greenwich Asset Funding Inc 5.50 (+) 01/24/95 4,982,431
10,000,000 Greenwich Asset Funding Inc 5.85 (+) 02/24/95 9,912,250
15,000,000 Morgan (J P) & Co Inc 5.40 (+) 01/24/95 14,948,250
5,000,000 Siemens Corp 5.63 (+) 02/06/95 4,971,850
15,000,000 Transamerica Financial Corp 5.46 (+) 01/17/95 14,963,600
------------
TOTAL COMMERCIAL PAPER $119,086,894
U.S. GOVERNMENT AGENCY DISCOUNT NOTES - 35.81%
$10,000,000 Federal Home Loan Bank 5.07 %(+) 02/10/95 $ 9,943,667
24,600,000 Federal Home Loan Bank 5.94 (+) 01/19/95 24,526,938
20,000,000 Federal Home Loan Mortgage Corp 5.82 (+) 01/12/95 19,964,433
10,000,000 Federal Home Loan Mortgage Corp 5.95 (+) 01/23/95 9,963,578
20,000,000 Federal National Mortgage Association 5.77 (+) 01/23/95 19,929,478
15,000,000 Federal National Mortgage Association 5.93 (+) 01/09/95 14,980,233
15,000,000 Federal National Mortgage Association 5.94 (+) 01/19/95 14,955,375
------------
TOTAL U.S. GOVERNMENT AGENCY DISCOUNT NOTES $114,263,702
</TABLE>
64
<PAGE> 242
MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C>
VARIABLE AND FLOATING RATE NOTES - 21.22%
$ 5,000,000 American Express Centurion Bank 5.94 % 05/26/95 $ 5,000,000
7,500,000 American Express Centurion Bank 5.94 05/23/95 7,499,014
3,250,000 AT & T Corp 5.69 05/04/95 3,250,557
7,000,000 Beta Finance Inc(D) 5.76 08/17/95 7,000,000
15,000,000 Boatman's Bancshares Inc 6.10 09/20/95 14,994,418
6,000,000 Orange County CA Taxable Note(FF) 0.00 07/10/95 5,998,269
15,000,000 PNC Funding Corp 5.66 07/26/95 14,991,534
5,000,000 Sweden (Kingdom of) 5.50 10/08/95 4,996,315
4,000,000 U.S. West Financial 6.45 09/05/95 4,004,140
------------
TOTAL VARIABLE AND FLOATING RATE NOTES $ 67,734,247
REPURCHASE AGREEMENTS - 1.28%
$ 4,097,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.00 01/03/95 $ 4,097,000
65
MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
TOTAL INVESTMENTS IN SECURITIES
(Cost $320,181,824)*
(Note 1) 100.33 % $320,181,824
Other Assets and Liabilities, Net (0.33)% (1,067,061)
------ ------------
TOTAL NET ASSETS 100.00% $319,114,763
------ ------------
------ ------------
</TABLE>
- ------------------------------------------------------------
+ YIELD TO MATURITY.
(FF) WELLS FARGO BANK HAS CHOSEN TO PUT THESE SECURITIES ON A NON-ACCRUAL
STATUS FOR INCOME, BUT THEY ARE NEITHER DELINQUENT NOR IN DEFAULT AS OF
DECEMBER 31, 1994. INCOME IS RECOGNIZED WHEN RECEIVED.
(D) THE SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS
EXEMPT FROM REGISTRATION TO QUALIFIED INSTITUTIONAL BUYERS. THESE
SECURITIES WERE DEEMED LIQUID BY THE INVESTMENT ADVISER IN ACCORDANCE WITH
POLICIES APPROVED BY THE FUND'S BOARD OF DIRECTORS.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
66
<PAGE> 243
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS - 98.73%
ALABAMA - 0.18%
$ 160,000 Alabama State HFA SFMR Series B AMT Multiple
Credit Enhancements 7.40 % 04/01/22 $ 163,632
ALASKA - 1.20%
405,000 Alaska State Housing Finance Corporation Second
Series AMT Government Agency Collateralized 6.70 12/01/25 378,574
700,000 Alaska State Housing Finance Corporation Second
Series AMT Government Agency Collateralized 7.10 06/01/22 695,758
CALIFORNIA - 18.61%
225,000 California State HFA Insured Housing Revenue
Series C AMT MBIA Insured 7.00 08/01/23 225,578
2,000,000 Contra Costa County CA Mortgage Revenue Cedar
Point Apartments Project A FHA Collateralized 6.15 09/01/25 1,797,860
245,000 Riverside County CA SFMR Project A AMT GNMA
Collateralized 6.85 10/01/16 244,689
9,750,000 Riverside County CA SFMR Series B AMT GNMA
Collateralized 8.35 06/01/13 11,598,990
1,055,000 Sacramento CA SFMR AMT Escrowed to Maturity 7.25 10/01/23 1,093,982
830,000 Southern California HFA SFMR Series A AMT
GNMA/FNMA Collateralized 6.90 10/01/24 824,688
1,000,000 Vallejo CA MFHR FHA Collateralized 5.65 05/01/27 811,730
</TABLE>
70
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MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
COLARADO - 0.86%
$ 775,000 Pueblo County CO SFMR Series A GNMA/FNMA
Collateralized 6.85 % 12/01/25 $ 764,166
DISTRICT OF COLUMBIA - 0.36%
320,000 District of Columbia HFA SFMR AMT GNMA
Collateralized 7.10 12/01/24 322,486
FLORIDA - 0.38%
335,000 Brevard County FL HFA SFMR Refunded Series B
FSA Insured 7.00 03/01/13 341,486
HAWAII - 4.34%
725,000 Hawaii State Airports Systems Revenue AMT FGIC
Insured 7.00 07/01/20 730,053
500,000 Hawaii State Harbor Capital Improvement Revenue
AMT MBIA Insured 7.00 07/01/17 504,915
3,000,000 Hawaii State SFMR AMT Multiple Credit
Enhancements 6.00 07/01/26 2,644,470
ILLINOIS - 7.66%
500,000 Chicago IL O'Hare International Airport Special
Facilities Revenue AMT LOC - Bayerische
Landesbank 7.13 05/01/18 499,925
1,900,000 Chicago IL O'Hare International Airport Special
Facilities Revenue AMT MBIA Insured 6.75 01/01/18 1,856,680
1,000,000 Onterie Centers IL Housing Finance Corp
Mortgage Revenue MBIA Insured 7.05 07/01/27 1,011,770
2,645,000 Saint Claire County IL AMT FGIC Insured 5.75 10/01/23 2,254,889
</TABLE>
71
<PAGE> 245
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 1,300,000 Spring Creek IL Housing Development Corporation
Mortgage Revenue 6.45 % 07/01/22 $ 1,216,241
INDIANA - 0.88%
900,000 Indianapolis IN Airport Authority Revenue AMT
MBIA Insured 6.00 01/01/23 790,146
IOWA - 2.98%
425,000 Iowa State Finance Authority SFMR Series B AMT
GNMA/FNMA Collateralized 7.45 07/01/23 434,911
440,000 Iowa State Finance Authority SFMR Series B AMT
Government Agency Collateralized 5.95 07/01/23 378,488
450,000 Iowa State Finance Authority SFMR Series F
AMBAC Insured GNMA/FNMA Collateralized 6.50 01/01/25 418,757
1,450,000 Iowa State Finance Authority Single Family
Revenue Series B AMT GNMA/FNMA Collateralized 6.95 07/01/24 1,426,786
KANSAS - 0.23%
200,000 Kansas City KS Mortgage Revenue AMT Multiple
Credit Enhancements 7.35 12/01/23 203,782
</TABLE>
72
<PAGE> 246
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
KENTUCKY - 5.36%
$ 1,100,000 Kenton County KY Cincinnati/Northern Kentucky
International Airport Revenue AMT FSA Insured 6.30 % 03/01/15 $ 1,036,541
925,000 Kentucky State Housing Corporation Housing
Revenue AMT Multiple Credit Enhancements 5.90 01/01/15 824,536
900,000 Kentucky State Housing Corporation MFHR Series
A MBIA Insured 5.65 07/01/22 745,974
820,000 Kentucky State Housing Corporation MFHR Series
D AMT FHA Collateralized 6.80 01/01/24 800,738
1,355,000 Kentucky State Housing Corporation MFHR Series
D AMT FHA Collateralized 7.45 01/01/23 1,381,409
LOUISIANA - 15.24%
750,000 Louisiana State HFA Multifamily Mortgage
Revenue FHA Collateralized 6.95 07/01/16 752,363
1,000,000 Louisiana State MFHR AMT FHA Collateralized 5.90 12/01/18 880,440
670,000 Louisiana State Public Facilities Authority
Student Loan Revenue AMT FSA Insured 6.85 01/01/09 674,007
1,500,000 New Orleans LA AMBAC Insured 7.15 (+) 09/01/17 329,475
10,000,000 New Orleans LA International Airport Revenue
Series A AMT FGIC Insured 8.88 08/01/17 10,980,500
</TABLE>
73
<PAGE> 247
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
MARYLAND - 1.00%
$ 1,000,000 Prince Georges County MD Housing Authority
Mortgage Revenue Series A FSA Insured 6.10 % 09/20/20 $ 897,570
MASSACHUSETTS - 3.56%
2,500,000 Massachusetts State HFA Housing Revenue Series
A AMT FSA Insured 6.10 06/01/26 2,192,625
1,000,000 Massachusetts State HFA Residential Development
FNMA Collateralized 6.90 11/15/21 989,040
MICHIGAN - 2.63%
2,480,000 Mount Clemens MI Housing Corporation MFHR
Series A FHA Collateralized 6.60 06/01/22 2,353,768
MINNESOTA - 3.25%
2,500,000 Dakota & Washington Counties MN AMT Escrowed to
Maturity 4.00 09/01/16 2,400,000
500,000 Minneapolis-St Paul MN Housing Finance Board
Revenue SFMR Phase IX AMT GNMA Collateralized 7.30 08/01/31 505,335
MISSOURI - 0.29%
275,000 Missouri State Housing Development Commission
Mortgage Revenue SFMR Series A AMT GNMA
Collateralized 6.75 06/01/24 262,182
</TABLE>
74
<PAGE> 248
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
NEVADA - 2.88%
$ 2,700,000 Washoe County NV Gas Facilities Sierra Pacific
Power AMT MBIA Insured 6.55 % 09/01/20 $ 2,577,339
NEW JERSEY - 1.93%
500,000 New Jersey State Housing & Mortgage Finance
Home Buyer Agency Revenue AMT MBIA Insured 6.30 04/01/25 462,040
1,250,000 New Jersey State Housing and Mortgage Agency
MFHR FHA Collateralized 7.00 05/01/30 1,263,750
NEW YORK - 2.81%
2,000,000 Babylon NY Individual Development Agency AMT
V/R LOC - Union Bank of Switzerland 5.90 12/01/24 2,000,000
500,000 New York State Energy R & D Authority Electric
Facilities Revenue Cons Edison Co New York
City AMT MBIA Insured 7.25 11/01/24 512,060
OKLAHOMA - 1.58%
200,000 Pryor Creek OK Economic Development Authority
Mortgage Revenue Series A 7.13 07/01/21 201,700
685,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.10 06/01/22 691,234
500,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.55 05/01/23 517,815
</TABLE>
75
<PAGE> 249
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA - 5.83%
$ 250,000 Allegheny County PA Airport Revenue Pittsburgh
International Airport Series C AMT FGIC
Insured 5.63 % 01/01/19 $ 210,055
2,000,000 Allegheny County PA Airport Revenue Pittsburgh
International Airport Series C AMT FSA
Insured 5.63 01/01/23 1,662,220
1,000,000 Allegheny County PA Residential Finance
Authority SFMR AMT GNMA/FNMA Collateralized 5.63 11/01/23 825,180
2,200,000 Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Series D AMT
AMBAC Insured 6.05 01/01/19 2,003,672
500,000 Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Series D AMT
AMBAC Insured 7.05 10/01/16 507,730
TENNESSEE - 2.93%
500,000 Dayton TN Housing Assistance FNMA
Collateralized 5.88 05/01/24 432,470
1,175,000 Morristown TN Housing Development Corporation
FNMA Collateralized 6.00 10/01/23 1,035,445
1,300,000 Morristown TN Housing Development Corporation
Multifamily Revenue FNMA Collateralized 6.00 12/01/22 1,150,032
</TABLE>
76
<PAGE> 250
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
TEXAS - 0.62%
$ 550,000 Travis County TX HFC Residential Mortgage
Revenue Series A AMT GNMA/FNMA Collateralized 7.00 % 12/01/11 $ 558,184
UTAH - 4.12%
2,295,000 Salt Lake City UT Airport Revenue Series A AMT
FGIC Insured 6.13 12/01/22 2,075,850
500,000 Utah State Board of Regents Student Loan
Revenue Series F AMT AMBAC Insured 7.45 11/01/08 522,805
1,100,000 Utah State Board of Regents Student Loan
Revenue Series H AMT AMBAC Insured 6.70 11/01/15 1,078,099
VIRGINIA - 1.28%
1,250,000 Virginia State Housing Development Authority
Commonwealth Mortgage Series B-5 AMT FSA
Insured 6.20 07/01/21 1,147,013
WASHINGTON - 2.92%
1,310,000 Washington State Housing Finance Commission
SFMR Series D AMT GNMA/FNMA Collateralized 6.15 01/01/26 1,163,765
1,440,000 Washington State Housing Finance Commission
SFMR Series D AMT GNMA/FNMA Collateralized 7.10 07/01/22 1,445,198
</TABLE>
77
<PAGE> 251
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
WEST VIRGINIA - 2.82%
$ 3,000,000 West Virginia State Housing Revenue AMT AMBAC
Insured 5.70 % 05/01/24 $ 2,519,758
------------
TOTAL MUNICIPAL BONDS $ 88,205,349
(Cost $93,022,171)
SHORT-TERM INSTRUMENTS - 0.03%
$ 26,412 National Municipal Fund $ 26,412
(Cost $26,412)
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $93,048,583)* 98.76% $ 88,231,761
(Notes 1 and 3)
Other Assets and 1.24% 1,104,082
Liabilities, Net
------ -------------
TOTAL NET ASSETS 100.00% $ 89,335,843
------ -------------
------ -------------
</TABLE>
- ---------------------------------------------------------------
+ YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION COSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 156,800
Gross Unrealized Depreciation (4,973,622)
-------------
NET UNREALIZED DEPRECIATION ($ 4,816,822)
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
78
<PAGE> 252
STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS - 96.80%
AUTOMOBILE & RELATED - 1.56%
25,000 Top Source Inc+ $ 168,725 $ 168,750
12,500 Wabash National Corp 400,213 487,500
------------ ------------
$ 568,938 $ 656,250
BASIC INDUSTRIES - 2.83%
30,000 J&L Specialty Steel Inc $ 509,863 $ 588,750
22,500 Material Sciences Corp+ 354,175 357,188
35,000 N-Viro International Corp+ 298,750 61,250
40,000 Quadrax Corp New+ 167,077 107,500
15,000 Repap Enterprises+ 77,444 76,875
------------ ------------
$ 1,407,309 $ 1,191,563
BIOTECHNOLOGY - 0.99%
10,000 Biogen Inc+ $ 482,969 $ 417,500
CAPITAL GOODS - 1.83%
13,000 Safety 1st Inc+ $ 305,833 $ 380,250
30,000 Seda Specialty Packaging Corp+ 574,290 352,500
3,000 Videonics Inc+ 33,000 38,250
------------ ------------
$ 913,123 $ 771,000
CAPITAL GOODS - TECHNICAL - 0.34%
10,000 Uniphase Corp+ $ 141,250 $ 145,000
COMPUTER SOFTWARE - 8.35%
12,500 Atria Software Inc+ $ 304,063 $ 359,375
17,500 Informix Corp+ 390,500 562,188
15,000 Intuit Inc+ 651,880 1,001,250
32,500 Metatec Corp+ 368,781 312,813
15,000 Microsoft Corp+ 636,187 916,874
3,500 Phamis Inc+ 55,125 63,000
</TABLE>
84
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STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
40,000 Seventh Level Inc+ $ 358,750 $ 210,000
2,000 Shiva Corp+ 30,000 79,750
------------ ------------
$ 2,795,286 $ 3,505,250
COMPUTER SYSTEMS - 14.53%
32,500 Adaptec Inc+ $ 577,500 $ 767,813
25,250 Chipcom Corp+ 795,888 1,262,500
27,500 Chips & Technologies Inc+ 165,313 192,500
38,500 Cisco Systems Inc+ 1,004,750 1,352,313
23,000 Digital Link Corp+ 488,126 618,125
25,000 Komag Inc+ 622,603 653,125
7,500 Merix Corp+ 74,063 190,312
25,000 MTI Technology Corp+ 178,750 87,500
36,000 Solectron Corp+ 851,935 990,000
------------ ------------
$ 4,758,928 $ 6,114,188
CONSUMER - GROWTH - 1.67%
15,000 Barnes & Noble+ $ 429,938 $ 468,750
10,000 Rite Aid Corp 233,925 233,750
------------ ------------
$ 663,863 $ 702,500
ELECTRICAL EQUIPMENT - 1.98%
13,500 Franklin Electronic Publishers Inc+ $ 213,330 $ 285,188
13,000 Integrated Device Technology Inc+ 334,375 383,500
7,000 Microtest Inc+ 119,875 166,250
------------ ------------
$ 667,580 $ 834,938
</TABLE>
85
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STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRONIC SEMICONDUCTORS - 5.00%
20,000 Applied Materials Inc+ $ 901,875 $ 845,000
29,500 Integrated Process Equipment Corp+ 413,188 490,438
5,000 Intel Corp 328,000 319,375
12,500 Mattson Technology Inc+ 183,437 240,625
17,500 VLSI Technology Inc+ 199,510 210,000
------------ ------------
$ 2,026,010 $ 2,105,438
ENERGY & RELATED - 5.41%
5,000 Anadarko Petroleum Corp $ 271,025 $ 192,500
25,000 KCS Energy 602,323 406,250
40,000 Offshore Pipeline Inc+ 816,740 905,000
15,000 Sun Co Inc 469,950 431,250
17,500 Trigen Energy Corp 300,850 343,438
------------ ------------
$ 2,460,888 $ 2,278,438
ENTERTAINMENT - 3.81%
20,000 Anchor Gaming+ $ 324,593 $ 305,000
25,000 Mirage Resorts Inc+ 537,897 512,500
70,000 Radica Games Ltd+ 674,375 341,250
7,500 Regal Cinemas Inc+ 181,250 191,250
37,500 Sports Club Inc+ 314,372 253,125
------------ ------------
$ 2,032,487 $ 1,603,125
ENVIRONMENTAL CONTROL - 1.62%
42,000 Molten Metal Technology Inc+ $ 946,095 $ 682,500
FINANCE & RELATED - 13.10%
10,000 Emphesys Financial Group $ 295,800 $ 317,500
55,000 Envoy Corp+ 938,938 1,127,500
15,000 First Financial Management Corp 816,325 924,375
30,500 Green Tree Financial Inc 757,948 926,438
30,000 Health System International Class A+ 665,034 911,250
10,000 Household International Inc 373,444 371,250
</TABLE>
86
<PAGE> 255
STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
19,500 Investment Technology Group+ $ 252,500 $ 131,625
21,500 Value Health Inc+ 837,570 800,875
------------ ------------
$ 4,937,559 $ 5,510,813
GENERAL BUSINESS & RELATED - 0.13%
2,000 NETCOM On-Line Communication Services Inc+ $ 26,000 $ 56,750
HEALTHCARE - 6.97%
30,000 Coram Healthcare+ $ 553,079 $ 495,000
40,000 Genesis Health Ventures Inc+ 909,602 1,265,000
20,000 Healthsouth Rehabilitation Corp+ 644,977 740,000
20,000 Renal Treatment Centers+ 355,125 435,000
------------ ------------
$ 2,462,783 $ 2,935,000
HOSPITAL & MEDICAL SUPPLIES - 3.18%
50,000 Bioject Medical Technologies+ $ 229,063 $ 150,000
25,000 Fresenius USA Inc+ 139,350 209,375
36,000 Heart Technology Inc+ 709,569 720,000
7,500 Sybron International Corp+ 263,787 258,750
------------ ------------
$ 1,341,769 $ 1,338,125
MANUFACTURING PROCESSING - 0.97%
12,500 Lydall Inc+ $ 371,040 $ 406,250
MERCHANDISE SPECIAL - 2.18%
40,500 Cellstar Corp+ $ 568,292 $ 916,313
MERCHANDISING FOOD - 1.36%
10,000 General Nutrition Co Inc+ $ 252,500 $ 290,000
27,500 Whole Foods Market Inc+ 531,750 281,875
------------ ------------
$ 784,250 $ 571,875
</TABLE>
87
<PAGE> 256
STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
PHARMACEUTICAL - 0.76%
10,000 Circa Pharmaceuticals Inc+ $ 123,300 $ 178,750
30,000 Seragen Inc+ 247,190 142,500
------------ ------------
$ 370,490 $ 321,250
FOOD SERVICES - 0.54%
25,000 Taco Cabana Inc+ $ 384,557 $ 228,121
TELECOMMUNICATIONS - 11.13%
10,000 Airtouch Communications+ $ 262,419 $ 291,250
50,000 LCI International Inc+ 811,124 1,337,500
5,000 Mobile Telecommunication Technologies Corp+ 93,000 97,500
40,000 Paging Network Inc+ 1,120,938 1,360,000
22,500 Telephone & Data Systems Inc 1,064,777 1,037,813
10,000 Tellabs Inc+ 490,470 557,500
------------ ------------
$ 3,842,728 $ 4,681,563
TRANSPORTATION - 2.99%
17,000 Greenbrier Companies Inc+ $ 256,233 $ 280,500
8,500 Knight Transportation Inc+ 102,000 121,125
37,500 Landair Services Inc+ 629,054 581,250
30,000 Mesa Airlines Inc+ 531,587 273,750
------------ ------------
$ 1,518,874 $ 1,256,625
AMERICAN DEPOSITORY SHARES - 2.07%
5,000 Nokia Corp ADR+ $ 324,855 $ 375,000
2,500 Perusahaan Perseroan P T Indonesian Satellite Corp ADR 80,125 89,375
10,000 Rhodia-Ster SA ADR+ 135,000 140,000
20,000 Usinas Siderurgicas de Minas Gerals ADR+ 265,600 265,000
------------ ------------
$ 805,580 $ 869,375
</TABLE>
88
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STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
RETAIL STORES - 1.50%
15,000 Corporate Express Inc+ $ 320,000 $ 292,500
4,000 Officemax Inc+ 76,000 106,000
15,000 Pacific Sunwear of California+ 149,063 232,500
------------ ------------
$ 545,063 $ 631,000
TOTAL COMMON STOCKS $ 37,823,711 $ 40,730,750
WARRANTS - 1.81%
WARRANTS - 1.81%
55,000 Intel Corp expire 3/14/1998 $ 824,625 763,125
MUTUAL FUNDS - 0.62%
CLOSED-END MUTUAL FUNDS - 0.62%
10,000 Emerging Markets Infrastructure Fund $ 146,100 $ 102,500
15,000 The India Fund Inc 213,750 159,375
------------ ------------
$ 359,850 $ 261,875
TOTAL MUTUAL FUNDS $ 359,850 $ 261,875
</TABLE>
89
<PAGE> 258
STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CORPORATE BONDS - 2.02%
CONVERTIBLE CORPORATE BONDS - 2.02%
$ 240,000 First Financial Management 5.00 % 12/15/99 $ 247,800
100,000 Genesis Health Ventures Inc 6.00 11/30/03 142,625
600,000 IDB Communications 5.00 08/15/03 457,500
------------
TOTAL CORPORATE BONDS $ 847,925
(Cost $951,121)
SHORT-TERM INSTRUMENTS - 2.21%
REPURCHASE AGREEMENTS - 2.21%
$ 931,000 Goldman Sachs Pooled Repurchase Agreements -
102% Collateralized by U.S. Government
Securities 5.50 01/03/95 $ 931,000
(Cost $931,000)
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $40,890,307)* 103.46% $ 43,534,675
(Notes 1 and 3)
Other Assets and (3.46% (1,455,517)
Liabilities, Net
------ -------------
TOTAL NET ASSETS 100.00% $ 42,079,158
------ -------------
------ -------------
</TABLE>
----------------------------------------------------------------------
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 6,348,256
Gross Unrealized Depreciation (3,703,888)
-------------
NET UNREALIZED APPRECIATION $ 2,644,368
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
90
<PAGE> 259
U.S. GOVERNMENT INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCIES - 48.30%
ADJUSTABLE RATE MORTGAGES - 0.95%
$ 24,381 GNMA #8109 (CMT) 5.75 % 03/20/16 $ 23,101
41,828 GNMA #8119 (CMT) 6.75 04/20/16 40,992
12,746 GNMA #8137 (CMT) 6.75 06/20/16 12,491
7,064 GNMA #8268 (CMT) 7.13 08/20/17 6,976
19,913 GNMA #8292 (CMT) 5.75 11/20/17 18,868
36,203 GNMA #8293 (CMT) 5.75 12/20/17 34,303
9,351 GNMA #8310 (CMT) 5.75 01/20/18 8,860
43,285 GNMA #8392 (CMT) 7.13 08/20/18 42,690
42,322 GNMA #8393 (CMT) 7.13 08/20/18 41,741
24,568 GNMA #8429 (CMT) 5.75 11/20/18 23,277
131,250 GNMA #8761 (CMT) 5.50 03/20/21 122,800
------------
$ 376,099
FIXED RATE MORTGAGES - 44.37%
$ 55,800 FHLMC #275825 9.50 % 08/01/16 $ 56,811
19,146 FHLMC #303953 9.00 10/01/17 19,110
50,697 FHLMC #304114 9.00 05/01/18 50,601
128,135 FHLMC #304398 9.00 06/01/18 128,127
48,117 FHLMC #305831 10.00 08/01/18 49,982
9,887 FHLMC #307323 9.50 09/01/18 10,067
77,481 FHLMC #307637 9.50 07/01/16 79,190
44,039 FHLMC #307915 9.50 10/01/18 44,879
9,425 FHLMC #308074 9.50 10/01/18 9,598
27,959 FHLMC #360020 10.00 01/01/18 29,042
38,943 FHLMC #360045 10.00 02/01/19 40,452
56,949 FHLMC #532468 9.50 04/01/19 57,980
22,759 GNMA #150499 10.50 03/15/16 24,310
145,562 GNMA #17087 9.00 09/15/16 147,343
207,981 GNMA #173055 9.00 09/15/16 210,527
114,927 GNMA #176892 9.00 10/15/16 116,576
572,726 GNMA #190848 9.00 01/15/17 579,736
223,670 GNMA #191961 9.00 02/15/20 225,627
60,334 GNMA #202624 9.00 11/15/19 60,915
117,438 GNMA #236877 9.00 04/15/18 118,677
</TABLE>
96
<PAGE> 260
U.S. GOVERNMENT INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCIES (CONTINUED)
$ 5,904,276 GNMA #278877 6.90 % 02/15/23 $ 5,185,667
81,578 GNMA #285963 9.00 01/15/20 82,363
20,121 GNMA #289319 9.00 11/15/20 20,297
219,991 GNMA #303235 9.00 05/15/21 221,916
228,705 GNMA #304653 9.00 09/15/21 230,707
9,274 GNMA #314150 9.00 10/15/21 9,355
2,121,154 GNMA #319413 7.25 12/15/18 1,908,041
19,357 GNMA #33080 9.00 08/15/22 19,526
46,048 GNMA #335400 9.00 12/15/22 46,451
1,949,045 GNMA #358863 7.25 01/15/24 1,752,426
2,988,337 GNMA #378973 7.13 01/15/34 2,664,192
1,218,705 GNMA II #1124 11.00 01/20/19 1,293,351
631,222 GNMA II #1221 11.00 07/20/19 669,884
191,546 GNMA II #1562 10.00 02/20/21 197,950
63,107 GNMA II #167269 10.00 04/20/16 65,581
127,398 GNMA II #194221 10.00 09/20/20 131,657
376,236 GNMA II #266120 10.00 08/20/19 388,814
11,725 GNMA II #272537 10.00 08/20/19 12,132
18,820 GNMA II #278055 10.00 07/20/19 19,558
83,578 GNMA II #289000 10.00 05/20/20 86,372
259,093 GNMA II #85 10.00 02/20/22 267,755
211,969 GNMA II #908 10.00 01/20/18 219,053
------------
$ 17,552,598
U.S. GOVERNMENT AGENCY NOTES - 2.98%
$ 1,700,000 FNMA Principal Strip 5.10 %(+) 03/09/22 $ 1,177,369
------------
TOTAL U.S. GOVERNMENT AGENCIES $ 19,106,066
(Cost $20,738,620)
</TABLE>
97
<PAGE> 261
U.S. GOVERNMENT INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. TREASURY SECURITIES - 49.14%
U.S. TREASURY BONDS - 36.34%
$ 6,500,000 U.S. Treasury Bonds 11.63 % 11/15/04 $ 8,141,250
4,500,000 U.S. Treasury Bonds 12.50 08/15/14 6,234,615
------------
$ 14,375,865
U.S. TREASURY NOTES - 12.80%
$ 5,000,000 U.S. Treasury Notes 8.25 % 07/15/98 $ 5,061,700
------------
TOTAL U.S. TREASURY SECURITIES $ 19,437,565
(Cost $21,690,546)
SHORT-TERM INSTRUMENTS - 1.75%
REPURCHASE AGREEMENTS - 1.75%
$ 694,000 Goldman Sachs Pooled Repurchase Agreements -
102% Collateralized by U.S. Government
Securities 5.00 % 01/03/95 $ 694,000
(Cost $694,000)
</TABLE>
98
<PAGE> 262
U.S. GOVERNMENT INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $43,123,167)* 99.19% $ 39,237,631
(Notes 1 and 3)
Other Assets and 0.81% 322,406
Liabilities, Net
------ -------------
TOTAL NET ASSETS 100.00 % $ 39,560,037
------ -------------
------ -------------
</TABLE>
----------------------------------------------------------------------
+ YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSIST OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 29,069
Gross Unrealized Depreciation (3,914,605)
-------------
NET UNREALIZED DEPRECIATION ($ 3,885,536)
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
99
<PAGE> 263
U.S. TREASURY MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. TREASURY NOTES - 0.50%
$ 1,000,000 U.S. Treasury Notes 3.88 % 02/28/95 $ 997,184
U.S. TREASURY BILLS - 98.81%
$ 9,295,000 U.S. Treasury Bills 2.76 %(+) 01/05/95 $ 9,289,905
13,500,000 U.S. Treasury Bills 3.58 (+) 01/26/95 13,452,201
12,825,000 U.S. Treasury Bills 4.25 (+) 01/12/95 12,805,777
22,880,000 U.S. Treasury Bills 4.72 (+) 02/02/95 22,774,105
31,000,000 U.S. Treasury Bills 4.85 (+) 02/09/95 30,850,042
5,000,000 U.S. Treasury Bills 4.98 (+) 02/16/95 4,967,640
15,935,000 U.S. Treasury Bills 5.17 (+) 02/23/95 15,811,351
14,750,000 U.S. Treasury Bills 5.52 (+) 01/19/95 14,713,276
17,425,000 U.S. Treasury Bills 5.54 (+) 03/09/95 17,248,903
15,375,000 U.S. Treasury Bills 5.54 (+) 03/16/95 15,201,177
10,000,000 U.S. Treasury Bills 5.59 (+) 03/23/95 9,876,306
15,000,000 U.S. Treasury Bills 5.66 (+) 03/30/95 14,797,356
15,000,000 U.S. Treasury Bills 5.81 (+) 04/06/95 14,780,707
------------
TOTAL U.S. TREASURY BILLS $196,568,746
TOTAL INVESTMENTS IN SECURITIES
(Cost $197,565,930)* (Note 1) 99.31% $197,565,930
Other Assets and Liabilities, Net 0.69% 1,363,372
------ ------------
TOTAL NET ASSETS 100.00% $198,929,302
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
101
<PAGE> 264
VARIABLE RATE GOVERNMENT FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCIES - 73.47%
ADJUSTABLE RATE MORTGAGES - 68.19%
$ 3,370,446 FHLMC #607289 (CMT) 7.61 % 09/01/22 $ 3,380,962
4,397,518 FHLMC #607480 (CMT) 7.47 10/01/22 4,416,735
6,852,158 FHLMC #607420 (CMT) 7.17 10/01/22 6,903,549
7,775,944 FHLMC #845014 (CMT) 7.13 06/01/00 7,970,342
13,224,700 FHLMC #845182 (CMT) 7.18 09/01/22 13,414,739
1,828,563 FHLMC #645006 (CMT) 6.87 12/01/15 1,799,983
6,053,866 FHLMC #608539 (CMT) 6.98 03/01/23 6,148,427
1,063,692 FHLMC #755033 (CMT) 6.78 02/01/19 1,074,988
20,000,000 FHLMC #849995 (CMT) 6.68 08/01/18 20,281,250
19,618,260 FHLMC #845996 (CMT) 6.64 10/01/24 18,784,484
20,872,170 FHLMC #845075 (CMT) 6.63 04/01/29 20,868,830
44,074,260 FHLMC #845790 (CMT) 6.57 05/01/24 45,027,146
2,824,442 FHLMC #755159 (CMT) 6.54 07/01/19 2,815,602
12,497,319 FHLMC #605870 (CMT) 6.81 12/01/17 12,622,292
32,664,445 FHLMC #845980 (CMT) 6.75 06/01/30 33,241,626
22,580,672 FHLMC #845985 (CMT) 6.56 11/01/24 23,071,124
2,654,683 FHLMC #640065 (CMT) 6.38 01/01/18 2,623,145
9,051,896 FHLMC #755102 (CMT) 6.36 06/01/18 8,633,246
57,765,862 FHLMC #845535 (CMT) 6.89 10/01/23 57,892,369
27,357,843 FHLMC #845986 (CMT) 6.49 11/01/24 27,918,953
20,717,836 FHLMC #845987 (CMT) 6.43 11/01/24 21,155,604
23,870,885 FHLMC #845913 (CMT) 6.68 07/01/30 24,402,490
3,462,900 FHLMC #406643 (CMT) 6.25 05/01/22 3,426,089
3,959,083 FHLMC #609039 (CMT) 6.55 07/01/22 3,983,828
12,467,963 FHLMC #845130 (CMT) 6.22 06/01/22 12,051,035
59,623 FHLMC #845410 (CMT) 6.05 07/01/23 59,474
28,720,570 FHLMC #845897 (CMT) 6.37 06/01/24 28,944,590
38,388,576 FHLMC #845916 (CMT) 6.14 09/01/24 38,938,684
29,124,890 FHLMC #845948 (CMT) 5.78 10/31/24 29,434,487
232,801 FHLMC #770400 (COFI) 5.75 11/01/18 224,506
220,967 FHLMC #770641 (COFI) 5.75 02/01/19 212,957
639,710 FHLMC #770663 (COFI) 5.75 04/01/19 626,117
776,187 FHLMC #775132 (COFI) 5.70 05/01/19 750,472
64,937 FHLMC #775488 (COFI) 5.70 04/01/19 62,461
2,121,887 FHLMC #406211 (CMT) 7.62 11/01/21 2,105,972
</TABLE>
106
<PAGE> 265
VARIABLE RATE GOVERNMENT FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCIES (CONTINUED)
$ 6,237,718 FHLMC #606539 (CMT) 5.94 % 03/01/18 $ 6,261,109
3,804,617 FHLMC #845475 (CMT) 5.98 10/01/23 3,697,022
2,994,865 FHLMC #350035 (CMT) 5.37 02/01/17 2,972,403
291,077 FHLMC #390208 (COFI) 5.19 07/01/19 281,981
1,195,792 FHLMC #395009 (COFI) 5.14 06/01/29 1,156,176
27,120 FHLMC #845613 (CMT) 4.23 01/01/24 27,418
9,739,977 FNMA #124598 (CMT) 7.44 12/01/22 9,879,940
6,072,436 FNMA #90031 (CMT) 7.36 01/01/20 6,140,751
43,594,052 FNMA #190726 (CMT) 6.95 03/01/33 44,411,440
22,665,699 FNMA #141414 (CMT) 6.85 12/01/31 22,977,353
13,759,848 FNMA #124011 (CMT) 6.96 01/01/30 13,940,377
4,379,648 FNMA #110933 (CMT) 6.80 09/01/18 4,409,736
3,387,333 FNMA #152205 (CMT) 6.77 01/01/19 3,349,226
4,673,554 FNMA #95407 (CMT) 6.73 03/01/20 4,734,871
5,020,545 FNMA #70176 (CMT) 6.67 08/01/27 5,036,209
3,854,354 FNMA #146952 (CMT) 6.71 10/01/20 3,902,534
7,678,366 FNMA #245414 (CMT) 6.79 07/01/20 7,769,508
4,137,128 FNMA #178071 (CMT) 6.49 09/01/22 4,124,179
10,640,379 FNMA #70186 (CMT) 6.52 05/01/21 10,480,774
25,630,220 FNMA #190864 (CMT) 6.57 02/01/23 25,470,032
9,833,413 FNMA #190095 (CMT) 6.34 10/01/23 9,751,992
26,994,746 FNMA #303035 (CMT) 6.39 10/20/24 27,454,197
8,605,475 FNMA #70009 (CMT) 6.44 04/01/18 8,605,475
9,158,312 FNMA #190033 (CMT) 6.25 09/01/23 9,106,751
6,794,436 FNMA #70087 (CMT) 6.23 08/01/18 6,802,929
5,221,096 FNMA #70485 (CMT) 6.31 04/01/27 5,090,568
10,871,620 FNMA #136014 (COFI) 6.18 05/01/18 11,250,713
5,536,085 FNMA #70541 (CMT) 6.43 06/01/19 5,536,085
6,633,979 FNMA #70374 (CMT) 6.22 12/01/14 6,613,214
11,245,911 FNMA #190826 (CMT) 6.28 03/01/24 11,330,255
14,992,206 FNMA #70652 (CMT) 6.32 07/01/20 15,001,501
2,200,567 FNMA #240724 (CMT) 6.00 10/01/23 2,160,671
1,305,033 FNMA #70947 (COFI) 5.93 12/01/28 1,268,320
11,446,668 FNMA #124764 (CMT) 6.38 03/01/23 11,396,531
4,139,998 FNMA #70614 (CMT) 5.92 10/01/18 4,132,215
674,230 FNMA #60588 (COFI) 5.75 01/01/18 658,217
</TABLE>
107
<PAGE> 266
VARIABLE RATE GOVERNMENT FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES (CONTINUED)
$ 1,674,481 FNMA #60590 (COFI) 5.75 % 02/01/18 $ 1,636,805
4,832,546 FNMA #70193 (CMT) 5.75 04/01/19 4,877,827
1,637,037 FNMA #60585 (COFI) 5.75 11/01/17 1,600,204
21,378,396 FNMA #303038 (CMT) 5.63 11/01/23 21,228,961
1,306,536 FNMA #64083 (COFI) 5.51 05/01/18 1,264,884
1,868,633 FNMA #70911 (COFI) 5.39 06/01/19 1,818,405
1,709,499 FNMA #123496 (COFI) 5.27 07/01/27 1,646,453
680,438 FNMA #57115 (COFI) 5.00 10/01/17 657,895
------------
$837,182,665
REAL ESTATE MORTGAGE INVESTMENT CONDUITS - 5.28%
$13,000,000 FHLMC 1650-PA 7.25 % 01/15/24 $ 11,260,600
12,759,902 FHLMC 1541KB 6.50 09/15/22 12,512,615
22,889,815 FHLMC G-18 B 6.25 10/25/17 21,130,046
19,155,926 FHLMC G-18 A 5.75 09/25/23 18,968,198
1,006,570 FNMA 1993-G19 7.25 04/25/23 935,164
------------
$ 64,806,623
TOTAL U.S. GOVERNMENT AGENCIES $901,989,288
(Cost $920,082,341)
U.S. TREASURY SECURITIES - 7.60%
U.S. TREASURY NOTES - 7.60%
$50,000,000 U.S. Treasury Notes 6.88 % 10/31/96 $ 49,328,000
45,000,000 U.S. Treasury Notes 6.13 07/31/96 44,029,800
------------
TOTAL U.S. TREASURY SECURITIES $ 93,357,800
(Cost $94,890,408)
SHORT-TERM INSTRUMENTS - 17.35%
U.S. TREASURY BILLS - 15.40%
$191,000,000 U.S. Treasury Bills 5.54 %(F) 03/09/95 $189,124,380
</TABLE>
108
<PAGE> 267
VARIABLE RATE GOVERNMENT FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS (CONTINUED)
REPURCHASE AGREEMENTS - 1.95%
$23,942,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.00 % 01/03/95 $ 23,942,000
------------
TOTAL SHORT-TERM INSTRUMENTS $213,066,380
(Cost $213,024,609)
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $1,227,997,358)* 98.42% $1,208,413,468
(Notes 1 and 3)
Other Assets and 1.58% 19,352,525
Liabilities, Net
------- --------------
TOTAL NET ASSETS 100.00% $1,227,765,993
------- --------------
------- --------------
</TABLE>
- -----------------------------------------------------------------------
+ YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSIST OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 110,268
Gross Unrealized Depreciation (19,694,158)
-------------
NET UNREALIZED DEPRECIATION ($ 19,583,890)
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
109
<PAGE> 268
(THIS PAGE INTENTIONALLY LEFT BLANK)
110
<PAGE> 269
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
<TABLE>
<CAPTION>
CALIFORNIA
ASSET CALIFORNIA TAX-FREE
ALLOCATION TAX-FREE MONEY
FUND BOND FUND MARKET FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below)
(Note 1) $53,015,150 $281,139,944 $287,655,543
Cash 150,858 0 483,906
RECEIVABLES:
Dividends and interest 523,513 5,494,398 1,817,661
Fund shares sold 42,971 12,016 0
Investment securities sold 988,203 0 0
Due from administrator
(Note 2) 0 0 0
Organization expenses, net
of amortization 15,127 3,674 0
Prepaid expenses 4,083 0 0
TOTAL ASSETS 54,739,905 286,650,032 289,957,110
LIABILITIES
Cash overdraft due to
custodian 0 0 0
PAYABLES:
Investment securities
purchased 711 0 0
Distributions to
shareholders 4,441,524 5,517,140 829,034
Fund shares redeemed 52,412 150,584 0
Due to sponsor and
distributor (Note 2) 54,349 219,143 322,656
Due to adviser (Note 2) 53,016 153,593 296,344
Other 32,304 158,583 99,683
TOTAL LIABILITIES 4,634,316 6,199,043 1,547,717
TOTAL NET ASSETS
$50,105,589 $280,450,989 $288,409,393
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $39,918,819 $272,581,402 $288,490,103
Paid-in capital, Class D
or I 11,266,422 8,449,153 0
Undistributed
(overdistributed) net
investment income 0 (15,019) 0
Undistributed net realized
gain(loss) on
investments 0 0 (80,710)
Net unrealized
appreciation
(depreciation) of
investments (1,079,652) (564,547) 0
TOTAL NET ASSETS $50,105,589 $280,450,989 $288,409,393
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
Net assets - Class A* $40,307,753 $273,105,024 $288,409,393
Shares outstanding - Class
A* 3,778,856 26,780,285 288,490,103
Net asset value per share -
Class A* $10.67 $10.20 $1.00
Maximum offering price per
share - Class A* $11.17+ $10.68+ $1.00
Net assets - Class D or I $9,797,836 $7,345,965 N/A
Shares outstanding - Class D
or I 739,045 551,635 N/A
Net asset value and offering
price per share - Class D
or I $13.26 $13.32 N/A
INVESTMENTS AT COST (NOTE 3) $54,094,802 $281,704,491 $287,655,543
</TABLE>
- ---------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
+ MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
111
<PAGE> 270
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
<TABLE>
<CAPTION>
MONEY MUNICIPAL STRATEGIC
MARKET INCOME GROWTH
FUND FUND FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below)
(Note 1) $320,181,824 $88,231,761 $43,534,675
Cash 187,038 0 2,854
RECEIVABLES:
Dividends and interest 615,585 1,749,635 19,761
Fund shares sold 0 108,703 279,212
Investment securities sold 0 0 227,007
Due from administrator
(Note 2) 0 170,726 65,419
Organization expenses, net
of amortization 17,857 50,250 50,525
Prepaid expenses 0 0 730
TOTAL ASSETS 321,002,304 90,311,075 44,180,183
LIABILITIES
Cash overdraft due to
custodian 0 43,051 0
PAYABLES:
Investment securities
purchased 0 0 479,833
Distributions to
shareholders 1,385,567 446,122 1,481,221
Fund shares redeemed 0 380,394 52,879
Due to sponsor and
distributor (Note 2) 259,875 53,085 48,468
Due to adviser (Note 2) 145,886 0 0
Other 96,213 52,580 38,624
TOTAL LIABILITIES 1,887,541 975,232 2,101,025
TOTAL NET ASSETS
$319,114,763 $89,335,843 $42,079,158
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $307,915,442 $79,978,992 $24,331,443
Paid-in capital, Class D
or I 11,237,512 17,774,604 15,136,259
Undistributed
(overdistributed) net
investment income 0 0 (32,912)
Undistributed net realized
gain(loss) on
investments (38,191) (3,600,931) 0
Net unrealized
appreciation
(depreciation) of
investments 0 (4,816,822) 2,644,368
TOTAL NET ASSETS $319,114,763 $89,335,843 $42,079,158
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
Net assets - Class A* $307,877,923 $73,791,119 $26,743,797
Shares outstanding - Class
A* 307,915,400 7,445,590 2,012,671
Net asset value per share -
Class A* $1.00 $9.91 $13.29
Maximum offering price per
share - Class A* $1.00 $10.22** $13.92+
Net assets - Class D or I $11,236,840 $15,544,724 $15,335,361
Shares outstanding - Class D
or I 11,237,511 1,158,200 927,153
Net asset value and offering
price per share - Class D
or I $1.00 $13.42 $16.54
INVESTMENTS AT COST (NOTE 3) $320,181,824 $93,048,583 $40,890,307
</TABLE>
- ---------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
+ MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
112
<PAGE> 271
<TABLE>
<CAPTION>
U.S. GOVERNMENT U.S. TREASURY VARIABLE RATE
INCOME MONEY MARKET GOVERNMENT
FUND FUND FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below)
(Note 1) $39,237,631 $197,565,930 $1,208,413,468
Cash 254 2,220,008 434,310
RECEIVABLES:
Dividends and interest 632,369 13,166 9,885,393
Fund shares sold 0 0 0
Investment securities sold 11,403 0 44,694,648
Due from administrator
(Note 2) 128,572 0 0
Organization expenses, net
of amortization 12,829 34,441 29,991
Prepaid expenses 8,836 1,292 0
TOTAL ASSETS 40,031,894 199,834,837 1,263,457,810
LIABILITIES
Cash overdraft due to
custodian 0 0 0
PAYABLES:
Investment securities
purchased 0 0 25,232,873
Distributions to
shareholders 241,890 669,312 5,658,233
Fund shares redeemed 193,125 0 2,713,651
Due to sponsor and
distributor (Note 2) 20,447 200,630 980,340
Due to adviser (Note 2) 0 15,385 692,371
Other 16,395 20,208 414,349
TOTAL LIABILITIES 471,857 905,535 35,691,817
TOTAL NET ASSETS
$39,560,037 $198,929,302 $1,227,765,993
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $39,797,072 $195,041,619 $1,378,345,742
Paid-in capital, Class D
or I 4,861,314 3,900,124 13,464,512
Undistributed
(overdistributed) net
investment income 0 0 0
Undistributed net realized
gain(loss) on
investments (1,212,813) (12,441) (144,460,371)
Net unrealized
appreciation
(depreciation) of
investments (3,885,536) 0 (19,583,890)
TOTAL NET ASSETS $39,560,037 $198,929,302 $1,227,765,993
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
Net assets - Class A* $35,838,284 $195,031,244 $1,215,545,665
Shares outstanding - Class
A* 3,710,564 195,041,619 132,255,622
Net asset value per share -
Class A* $9.66 $1.00 $9.19
Maximum offering price per
share - Class A* $10.12+ $1.00 $9.47**
Net assets - Class D or I $3,721,753 $3,898,058 $12,220,328
Shares outstanding - Class D
or I 281,880 3,900,123 889,475
Net asset value and offering
price per share - Class D
or I $13.20 $1.00 $13.74
INVESTMENTS AT COST (NOTE 3) $43,123,167 $197,565,930 $1,227,997,358
</TABLE>
- ---------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
113
<PAGE> 272
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
CALIFORNIA
ASSET CALIFORNIA TAX-FREE
ALLOCATION TAX-FREE MONEY
FUND BOND FUND MARKET FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $1,342,922 $ 0 $ 0
Interest 1,032,628 21,124,123 9,506,387
TOTAL INVESTMENT INCOME 2,375,550 21,124,123 9,506,387
EXPENSES (NOTE 2)
Advisory fees 424,899 1,645,335 1,493,881
Administration fees 66,524 431,734 334,128
Custody fees 59,998 60,811 63,312
Shareholder servicing fees 28,377 20,828 0
Portfolio accounting fees 0 127,846 128,324
Transfer agency fees 62,494 208,106 41,927
Distribution fees 206,954 203,357 167,064
Amortization of
organization expenses 4,074 1,146 0
Legal and audit fees 19,341 56,857 46,600
Registration fees 37,034 15,000 10,001
Directors' fees 4,830 5,000 5,001
Shareholder reports 37,049 80,000 42,578
Other 3,020 31,671 0
TOTAL EXPENSES 954,594 2,887,691 2,332,816
Less:
Waived fees (69,419) (1,166,246) (61,626)
Net Expenses 885,175 1,721,445 2,271,190
NET INVESTMENT INCOME (LOSS) 1,490,375 19,402,678 7,235,197
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments 3,975,711 4,054,017 (76,188)
Net change in unrealized
appreciation
(depreciation) of
investments (6,051,202) (39,374,337) 0
NET GAIN (LOSS) ON
INVESTMENTS (2,075,491) (35,320,320) (76,188)
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS ($585,116) ($15,917,642) $7,159,009
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
114
<PAGE> 273
<TABLE>
<CAPTION>
MONEY MUNICIPAL STRATEGIC U.S. GOVERNMENT U.S. TREASURY
MARKET INCOME GROWTH INCOME MONEY MARKET
FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 0 $ 0 $93,576 $ 0 $ 0
Interest 13,596,252 6,765,684 70,000 3,930,693 5,781,769
TOTAL INVESTMENT INCOME 13,596,252 6,765,684 163,576 3,930,693 5,781,769
EXPENSES (NOTE 2)
Advisory fees 777,719 542,075 207,239 259,491 350,980
Administration fees 311,088 109,157 62,623 51,898 141,170
Custody fees 58,355 19,250 10,835 18,132 28,098
Shareholder servicing fees 0 43,503 37,050 17,454 0
Portfolio accounting fees 123,512 83,858 53,132 60,164 89,828
Transfer agency fees 57,715 68,287 23,766 54,914 36,479
Distribution fees 774,391 224,638 178,458 57,366 346,635
Amortization of
organization expenses 14,698 28,369 14,872 3,476 8,867
Legal and audit fees 55,132 35,390 30,888 16,330 56,828
Registration fees 35,000 67,726 35,000 43,399 47,698
Directors' fees 5,000 5,000 5,000 5,001 5,020
Shareholder reports 22,999 46,918 79,616 19,997 14,026
Other 5,199 15,599 8,587 8,899 8,099
TOTAL EXPENSES 2,240,808 1,289,770 747,066 616,521 1,133,728
Less:
Waived fees (129,201) (549,664) (134,333) (179,536) (247,364)
Net Expenses 2,111,607 740,106 612,733 436,985 886,364
NET INVESTMENT INCOME (LOSS) 11,484,645 6,025,578 (449,157) 3,493,708 4,895,405
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments (36,799) (3,600,931) 1,481,221 (1,212,813) (12,441)
Net change in unrealized
appreciation
(depreciation) of
investments 0 (11,048,257) 336,969 (5,164,808) 0
NET GAIN (LOSS) ON
INVESTMENTS (36,799) (14,649,188) 1,818,190 (6,377,621) (12,441)
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS $11,447,846 ($8,623,610) $1,369,033 ($2,883,913) $4,882,964
</TABLE>
- --------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
115
<PAGE> 274
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
VARIABLE RATE
GOVERNMENT
FUND
- ----------------------------------------------
<S> <C>
INVESTMENT INCOME
Dividends $ 0
Interest 88,578,302
TOTAL INVESTMENT INCOME 88,578,302
EXPENSES (NOTE 2)
Advisory fees 8,552,459
Administration fees 1,810,492
Custody fees 293,921
Shareholder servicing fees 35,962
Portfolio accounting fees 403,597
Transfer agency fees 121,270
Distribution fees 4,312,202
Amortization of
organization expenses 19,348
Legal and audit fees 203,762
Registration fees 43,323
Directors' fees 5,000
Shareholder reports 65,000
Other 196,306
TOTAL EXPENSES 16,062,642
Less:
Waived fees (2,477,609)
Net Expenses 13,585,033
NET INVESTMENT INCOME (LOSS) 74,993,269
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments (125,280,826)
Net change in unrealized
appreciation
(depreciation) of
investments (11,149,757)
NET GAIN (LOSS) ON
INVESTMENTS (136,430,583)
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS ($61,437,314)
</TABLE>
- ----------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
116
<PAGE> 275
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993*
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $1,490,375 $1,276,274
Net realized gain (loss)
on sale of investments 3,975,711 3,276,537
Net change in unrealized
appreciation
(depreciation) of
investments (6,051,202) 1,186,951
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS (585,116) 5,739,762
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (1,253,254) (1,198,361)
CLASS D OR I (192,825) (48,177)
In excess of net
investment income
CLASS A** 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A** (3,165,196) (2,799,714)
CLASS D OR I (766,987) (476,823)
In excess of net realized
gain on sales of
investments
CLASS A** 0 (34,686)
CLASS D OR I 0 (6,122)
From tax return of capital
CLASS A** 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 5,857,662 13,213,202
Reinvestment of dividends
- Class A** 694,596 5,999,719
Cost of shares redeemed -
Class A** (14,543,493) (8,760,239)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** (7,991,235) 10,452,682
Proceeds from shares sold
- Class D or I 5,046,708 9,112,380
Reinvestment of dividends
- Class D or I 87,663 413,795
Cost of shares redeemed -
Class D or I (3,194,348) (199,776)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 1,940,023 9,326,399
INCREASE (DECREASE) IN NET
ASSETS (12,014,590) 20,954,960
NET ASSETS:
Beginning net assets 62,120,179 41,165,219
ENDING NET ASSETS $50,105,589 $62,120,179
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 497,697 1,081,974
Shares issued in
reinvestment of
dividends - Class A** 60,791 510,728
Shares redeemed - Class
A** (1,244,313) (724,118)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** (685,825) 868,584
Shares sold - Class D or I 344,653 594,680
Shares issued in
reinvestment of
dividends - Class D or I 6,181 28,015
Shares redeemed - Class D
or I (221,506) (12,978)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 129,328 609,717
</TABLE>
- ---------------------------------------------------------------------
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
** INCLUDES FUNDS WITH A SINGLE CLASS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
117
<PAGE> 276
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993*
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $19,402,678 $21,237,063
Net realized gain (loss)
on sale of investments 4,054,017 6,490,108
Net change in unrealized
appreciation
(depreciation) of
investments (39,374,337) 19,196,590
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS (15,917,642) 46,923,761
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (18,973,436) (21,134,567)
CLASS D OR I (429,242) (102,496)
In excess of net
investment income
CLASS A** 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A** (3,947,872) (6,355,898)
CLASS D OR I (106,145) (134,211)
In excess of net realized
gain on sales of
investments
CLASS A** 0 0
CLASS D OR I 0 0
From tax return of capital
CLASS A** 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 15,317,908 35,749,590
Reinvestment of dividends
- Class A** 14,574,219 13,080,113
Cost of shares redeemed -
Class A** (80,201,764) (81,716,776)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** (50,309,637) (32,887,073)
Proceeds from shares sold
- Class D or I 2,864,757 8,100,469
Reinvestment of dividends
- Class D or I 348,941 41,937
Cost of shares redeemed -
Class D or I (2,499,120) (407,831)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 714,578 7,734,575
INCREASE (DECREASE) IN NET
ASSETS (88,969,396) (5,955,909)
NET ASSETS:
Beginning net assets 369,420,385 375,376,294
ENDING NET ASSETS $280,450,989 $369,420,385
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 1,401,041 3,152,193
Shares issued in
reinvestment of
dividends - Class A** 1,315,610 1,157,210
Shares redeemed - Class
A** (7,464,971) (7,156,701)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** (4,748,320) (2,847,298)
Shares sold - Class D or I 197,191 533,988
Shares issued in
reinvestment of
dividends - Class D or I 24,268 2,757
Shares redeemed - Class D
or I (179,799) (26,770)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 41,660 509,975
</TABLE>
- ---------------------------------------------------------------------
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
** INCLUDES FUNDS WITH A SINGLE CLASS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
118
<PAGE> 277
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET
FUND MONEY MARKET FUND
---------------------------------- ----------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993 DEC. 31, 1994+ DEC. 31, 1993
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $7,235,197 $6,995,421 $11,484,645 $6,583,166
Net realized gain (loss)
on sale of investments (76,188) (2,884) (36,799) 8,843
Net change in unrealized
appreciation
(depreciation) of
investments 0 0 0 0
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 7,159,009 6,992,537 11,447,846 6,592,009
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (7,235,197) (6,995,421) (11,414,964) (6,583,166)
CLASS D OR I N/A N/A (69,681) N/A
In excess of net
investment income
CLASS A** 0 0 0 0
CLASS D OR I N/A N/A 0 N/A
From net realized gain on
sales of investments
CLASS A** 0 0 0 0
CLASS D OR I N/A N/A 0 N/A
In excess of net realized
gain on sales of
investments
CLASS A** 0 0 0 0
CLASS D OR I N/A N/A 0 N/A
From tax return of capital
CLASS A** 0 0 0 0
CLASS D OR I N/A N/A 0 N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 630,837,073 674,008,517 1,991,327,765 1,463,882,954
Reinvestment of dividends
- Class A** 2,663,580 3,132,891 4,615,464 2,954,701
Cost of shares redeemed -
Class A** (742,727,104) (642,493,442) (1,916,112,891) (1,507,186,695)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** (109,226,451) 34,647,966 79,830,338 (40,349,040)
Proceeds from shares sold
- Class D or I N/A N/A 19,768,852 N/A
Reinvestment of dividends
- Class D or I N/A N/A 26,043 N/A
Cost of shares redeemed -
Class D or I N/A N/A (8,557,384) N/A
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I N/A N/A 11,237,511 0
INCREASE (DECREASE) IN NET
ASSETS (109,302,639) 34,645,082 91,031,051 (40,340,197)
NET ASSETS:
Beginning net assets 397,712,032 363,066,950 228,083,712 268,423,909
ENDING NET ASSETS $288,409,393 $397,712,032 $319,114,763 $228,083,712
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 630,837,073 674,008,517 1,991,327,765 1,463,882,954
Shares issued in
reinvestment of
dividends - Class A** 2,663,580 3,132,891 4,615,464 2,954,701
Shares redeemed - Class
A** (742,727,100) (642,493,442) (1,916,112,891) (1,507,186,695)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** (109,226,447) 34,647,966 79,830,338 (40,349,040)
Shares sold - Class D or I N/A N/A 19,768,852 N/A
Shares issued in
reinvestment of
dividends - Class D or I N/A N/A 26,043 N/A
Shares redeemed - Class D
or I N/A N/A (8,557,384) N/A
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I N/A N/A 11,237,511 N/A
</TABLE>
- --------------------------------------------------------------------------------
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
+ CLASS I SHARES COMMENCED OPERATIONS ON AUGUST 18, 1994.
119
<PAGE> 278
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993*
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $6,025,578 $4,717,103
Net realized gain (loss)
on sale of investments (3,600,931) 20,206
Net change in unrealized
appreciation
(depreciation) of
investments (11,048,257) 4,905,853
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS (8,623,610) 9,643,162
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (5,151,955) (4,522,416)
CLASS D OR I (873,623) (194,687)
In excess of net
investment income
CLASS A** (137,633) (123,103)
CLASS D OR I (26,101) (5,300)
From net realized gain on
sales of investments
CLASS A** 0 (17,604)
CLASS D OR I 0 (2,484)
In excess of net realized
gain on sales of
investments
CLASS A** 0 0
CLASS D OR I 0 0
From tax return of capital
CLASS A** 0 0
CLASS D OR I N/A 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 14,853,144 60,726,515
Reinvestment of dividends
- Class A** 2,696,820 2,495,124
Cost of shares redeemed -
Class A** (35,965,725) (15,768,365)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** (18,415,761) 47,453,274
Proceeds from shares sold
- Class D or I 6,605,791 14,968,369
Reinvestment of dividends
- Class D or I 363,289 54,166
Cost of shares redeemed -
Class D or I (3,876,822) (333,738)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 3,092,258 14,688,797
INCREASE (DECREASE) IN NET
ASSETS (30,136,425) 66,919,639
NET ASSETS:
Beginning net assets 119,472,268 52,552,629
ENDING NET ASSETS $89,335,843 $119,472,268
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 1,375,339 5,518,326
Shares issued in
reinvestment of
dividends - Class A** 257,416 226,780
Shares redeemed - Class
A** (3,481,504) (1,426,633)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** (1,848,749) 4,318,473
Shares sold - Class D or I 447,121 986,710
Shares issued in
reinvestment of
dividends - Class D or I 25,788 3,560
Shares redeemed - Class D
or I (283,002) (21,977)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 189,907 968,293
</TABLE>
- ---------------------------------------------------------------------
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
** INCLUDES FUNDS WITH A SINGLE CLASS.
120
<PAGE> 279
<TABLE>
<CAPTION>
STRATEGIC GROWTH FUND U.S. GOVERNMENT INCOME FUND
---------------------------------- ----------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993* DEC. 31, 1994 DEC. 31, 1993*
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) ($449,157) ($32,912) $3,493,708 $3,271,325
Net realized gain (loss)
on sale of investments 1,481,221 1,185,766 (1,212,813) 273,721
Net change in unrealized
appreciation
(depreciation) of
investments 336,969 2,307,399 (5,164,808) 957,977
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 1,369,033 3,460,253 (2,883,913) 4,503,023
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** 0 0 (3,066,842) (3,158,009)
CLASS D OR I 0 0 (426,866) (113,316)
In excess of net
investment income
CLASS A** 0 0 0 0
CLASS D OR I 0 0 0 0
From net realized gain on
sales of investments
CLASS A** (655,929) (806,898) 0 (229,933)
CLASS D OR I (376,137) (378,868) 0 (43,788)
In excess of net realized
gain on sales of
investments
CLASS A** 0 0 0 0
CLASS D OR I 0 0 0 0
From tax return of capital
CLASS A** (278,477) (17,417) 0 0
CLASS D OR I (170,680) 0 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 11,769,539 30,071,208 11,812,017 18,850,522
Reinvestment of dividends
- Class A** 403,346 12,594 1,241,308 1,829,518
Cost of shares redeemed -
Class A** (10,877,764) (6,751,584) (22,062,966) (12,436,244)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** 1,295,121 23,332,218 (9,009,641) 8,243,796
Proceeds from shares sold
- Class D or I 6,859,821 12,523,699 1,463,572 9,926,918
Reinvestment of dividends
- Class D or I 175,834 0 271,695 33,601
Cost of shares redeemed -
Class D or I (3,485,125) (767,290) (6,683,335) (149,761)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 3,550,530 11,756,409 (4,948,068) 9,810,758
INCREASE (DECREASE) IN NET
ASSETS 4,733,461 37,345,697 (20,335,330) 19,012,531
NET ASSETS:
Beginning net assets 37,345,697 0 59,895,367 40,882,836
ENDING NET ASSETS $42,079,158 $37,345,697 $39,560,037 $59,895,367
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 890,673 2,481,668 1,143,944 1,726,172
Shares issued in
reinvestment of
dividends - Class A** 30,559 1,115 120,007 169,841
Shares redeemed - Class
A** (834,218) (557,126) (2,181,814) (1,138,467)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** 87,014 1,925,657 (917,863) 757,546
Shares sold - Class D or I 410,160 767,273 101,936 653,386
Shares issued in
reinvestment of
dividends - Class D or I 10,884 0 19,155 2,224
Shares redeemed - Class D
or I (214,855) (46,309) (485,093) (9,729)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 206,189 720,964 (364,002) 645,881
- ----------------------------------------------------------------------------------------------------
</TABLE>
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
** INCLUDES FUNDS WITH A SINGLE CLASS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
121
<PAGE> 280
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DEC. 31, 1994+ DEC. 31, 1993
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $4,895,405 $3,125,243
Net realized gain (loss)
on sale of investments (12,441) 20,501
Net change in unrealized
appreciation
(depreciation) of
investments 0 0
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 4,882,964 3,145,744
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (4,799,315) (3,125,243)
CLASS D OR I (96,090) N/A
In excess of net
investment income
CLASS A** 0 0
CLASS D OR I 0 N/A
From net realized gain on
sales of investments
CLASS A** 0 (17,138)
CLASS D OR I 0 N/A
In excess of net realized
gain on sales of
investments
CLASS A** 0 0
CLASS D OR I 0 N/A
From tax return of capital
CLASS A** 0 0
CLASS D OR I 0 N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 628,656,179 500,546,689
Reinvestment of dividends
- Class A** 1,652,082 1,544,750
Cost of shares redeemed -
Class A** (553,436,130) (521,337,487)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** 76,872,131 (19,246,048)
Proceeds from shares sold
- Class D or I 310,876,391 N/A
Reinvestment of dividends
- Class D or I 21,937 N/A
Cost of shares redeemed -
Class D or I (306,998,204) N/A
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 3,900,124 N/A
INCREASE (DECREASE) IN NET
ASSETS 80,759,814 (19,242,685)
NET ASSETS:
Beginning net assets 118,169,488 137,412,173
ENDING NET ASSETS $198,929,302 $118,169,488
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 628,656,178 500,546,689
Shares issued in
reinvestment of
dividends - Class A** 1,652,082 1,544,750
Shares redeemed - Class
A** (553,436,130) (521,337,487)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** 76,872,130 (19,246,048)
Shares sold - Class D or I 310,876,391 N/A
Shares issued in
reinvestment of
dividends - Class D or I 21,937 N/A
Shares redeemed - Class D
or I (306,998,204) N/A
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 3,900,124 N/A
</TABLE>
- ---------------------------------------------------------------------
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
** INCLUDES FUNDS WITH A SINGLE CLASS.
+ CLASS I SHARES COMMENCED OPERATIONS ON JUNE 20, 1994.
122
<PAGE> 281
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT FUND
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1994*
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $74,993,269 $99,969,107
Net realized gain (loss)
on sale of investments (125,280,826) 3,391,477
Net change in unrealized
appreciation
(depreciation) of
investments (11,149,757) 8,474,472
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS (61,437,314) 111,835,056
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (74,426,329) (99,880,831)
CLASS D OR I (566,940) (88,276)
In excess of net
investment income
CLASS A** 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A** 0 0
CLASS D OR I 0 0
In excess of net realized
gain on sales of
investments
CLASS A** 0 0
CLASS D OR I 0 0
From tax return of capital
CLASS A** 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 357,940,526 1,059,574,962
Reinvestment of dividends
- Class A** 24,395,946 40,686,979
Cost of shares redeemed -
Class A** (980,573,296) (1,722,521,869)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** (598,236,824) (622,259,928)
Proceeds from shares sold
- Class D or I 7,287,276 11,631,069
Reinvestment of dividends
- Class D or I 232,670 21,864
Cost of shares redeemed -
Class D or I (5,418,428) (289,936)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 2,101,518 11,362,997
INCREASE (DECREASE) IN NET
ASSETS (732,565,891) (599,030,982)
NET ASSETS:
Beginning net assets 1,960,331,884 2,559,362,866
ENDING NET ASSETS $1,227,765,993 $1,960,331,884
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 36,230,262 105,893,754
Shares issued in
reinvestment of
dividends - Class A** 2,505,413 4,065,691
Shares redeemed - Class
A** (101,611,784) (172,065,992)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** (62,876,109) (62,106,547)
Shares sold - Class D or I 495,723 775,911
Shares issued in
reinvestment of
dividends - Class D or I 16,111 1,459
Shares redeemed - Class D
or I (380,431) (19,298)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 131,403 758,072
</TABLE>
- ------------------------------------------------------------------
123
<PAGE> 282
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
--------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.90 $ 11.45 $ 11.95 $ 10.31 $ 10.39
Income From Investment Operations:
Net Investment Income 0.31 0.30 0.47 0.57 0.63
Net Realized and Unrealized Capital
Gain/(Loss) on Investments (0.39) 1.12 0.36 1.51 0.10
------------ ------------ ------------ ------------ ------------
Total From Investment Operations (0.08) 1.42 0.83 2.08 0.73
Less Distributions:
Dividends From Net Investment Income (0.31) (0.30) (0.63) (0.44) (0.61)
Distributions From Net Realized
Capital Gain (0.84) (0.67) (0.70) 0.00 (0.20)
------------ ------------ ------------ ------------ ------------
Total From Distributions (1.15) (0.97) (1.33) (0.44) (0.81)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 10.67 $ 11.90 $ 11.45 $ 11.95 $ 10.31
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Return (not annualized)+ (0.68)% 12.54% 7.44% 20.69% 7.08%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 40,308 $ 53,124 $ 41,165 $ 38,663 $ 27,689
Number of Shares Outstanding, End of
Period (000) 3,779 4,465 3,596 3,235 2,686
Ratios to Average Net Assets
(Annualized):
Ratio of Net Expenses to Average Net
Assets(1) 1.30% 1.36% 1.25% 1.38% 1.59%
Ratio of Net Investment Income to
Average Net Assets(2) 2.41% 2.64% 4.08% 5.23% 6.01%
Portfolio Turnover 50% 53% 38% 18% 94%
- ------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average
Net Assets Prior to Waived Fees
and Reimbursed Expenses 1.38% 1.47% 1.71% 1.56% 1.74%
(2) Ratio of Net Investment Income to
Average Net Assets Prior to Waived
Fees and Reimbursed Expenses 2.33% 2.53% 3.62% 5.05% 5.86%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
124
<PAGE> 283
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
----------------------------
CLASS D*
----------------------------
YEAR PERIOD
ENDED ENDED
DEC. 31, 1994 DEC. 31, 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 14.75 $ 15.00
Income From Investment Operations:
Net Investment Income 0.25 0.07
Net Realized and Unrealized Capital Gain/(Loss) on Investments (0.45) 0.61
------ ------
Total From Investment Operations (0.20) 0.68
Less Distributions:
Dividends From Net Investment Income (0.25) (0.10)
Distributions From Net Realized Capital Gain (1.04) (0.83)
------ ------
Total Distributions (1.29) (0.93)
------ ------
Net Asset Value, End of Period $ 13.26 $ 14.75
------ ------
------ ------
Total Return (not annualized)+ (1.38)% 4.56%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 9,798 $ 8,996
Number of Shares Outstanding, End of Period (000) 739 610
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 2.01% 0.96%
Ratio of Net Investment Income to Average Net Assets(2) 1.75% 0.53%
Portfolio Turnover 50% 53%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 2.20% 1.12%
(2) Ratio of Net Investment Income to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 1.56% 0.37%
- -----------------------------------------------------------------------------------------------------
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
+ TOTAL RETURNS DO NOT INCLUDE THE 1% CONTINGENT DEFERRED SALES CHARGE.
</TABLE>
125
<PAGE> 284
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND
--------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.47 $ 10.92 $ 10.73 $ 10.27 $ 10.35
Income From Investment Operations:
Net Investment Income 0.64 0.63 0.68 0.69 0.71
Net Realized and Unrealized Capital
Gain/(Loss) on Investments (1.13) 0.75 0.26 0.46 (0.08)
------------ ------------ ------------ ------------ ------------
Total From Investment Operations (0.49) 1.38 0.94 1.15 0.63
Less Distributions:
Dividends From Net Investment Income (0.64) (0.63) (0.68) (0.69) (0.71)
Distributions From Net Realized
Capital Gain (0.14) (0.20) (0.07) 0.00 0.00
------------ ------------ ------------ ------------ ------------
Total Distributions (0.78) (0.83) (0.75) (0.69) (0.71)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 10.20 $ 11.47 $ 10.92 $ 10.73 $ 10.27
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Return (not annualized)+ (4.32)% 12.98% 9.01% 11.62% 6.48%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 273,105 $ 361,779 $ 375,376 $ 332,845 $ 201,138
Number of Shares Outstanding, End of
Period (000) 26,780 31,529 34,376 31,008 19,576
Ratios to Average Net Assets
(annualized):
Ratio of Net Expenses to Average Net
Assets(1) 0.50% 0.69% 0.50% 0.45% 0.29%
Ratio of Net Investment Income to
Average Net Assets(2) 5.87% 5.54% 6.24% 6.56% 6.97%
Portfolio Turnover 4% 10% 24% 8% 35%
- ------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average
Net Assets Prior to Waived Fees
and Reimbursed Expenses 0.95% 0.85% 0.85% 0.87% 0.95%
(2) Ratio of Net Investment Income to
Average Net Assets Prior to Waived
Fees and Reimbursed Expenses 5.42% 5.38% 5.89% 6.14% 6.31%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
126
<PAGE> 285
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND
-----------------------------
CLASS D*
----------------------
YEAR
ENDED PERIOD
DEC. 31, ENDED
1994 DEC. 31,
1993
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 14.98 $ 15.00
Income From Investment Operations:
Net Investment Income 0.73 0.34
Net Realized and Unrealized Capital Gain/(Loss) on Investments (1.47) 0.24
------ ------
Total From Investment Operations (0.74) 0.58
Less Distributions:
Dividends From Net Investment Income (0.73) (0.34)
Distributions From Net Realized Capital Gain (0.19) (0.26)
------ ------
Total Distributions (0.92) (0.60)
------ ------
Net Asset Value, End of Period $ 13.32 $ 14.98
------ ------
------ ------
Total Return (not annualized)+ (5.00)% 3.92%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 7,346 $ 7,641
Number of Shares Outstanding, End of Period (000) 552 510
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 1.20% 1.32%
Ratio of Net Investment Income to Average Net Assets(2) 5.15% 4.50%
Portfolio Turnover 4% 10%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 1.82% 1.61%
(2) Ratio of Net Investment Income to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 4.53% 4.21%
- -----------------------------------------------------------------------------------------------------
</TABLE>
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
+ TOTAL RETURNS DO NOT INCLUDE THE 1% CONTINGENT DEFERRED SALES CHARGE.
127
<PAGE> 286
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET FUND
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From Investment Operations:
Net Investment Income 0.02 0.02 0.03 0.04 0.05
Less Distributions:
Dividends From Net Investment Income (0.02) (0.02) (0.03) (0.04) (0.05)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Return (not annualized) 2.22% 1.84% 2.54% 3.99% 5.20%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 288,409 $ 397,712 $ 363,067 $ 299,234 $ 312,023
Number of Shares Outstanding, End of
Period (000) 288,490 397,717 363,069 299,234 312,023
Ratios to Average Net Assets
(annualized):
Ratio of Net Expenses to Average Net
Assets(1) 0.68% 0.66% 0.66% 0.66% 0.65%
Ratio of Net Investment Income to
Average Net Assets(2) 2.17% 1.82% 2.50% 3.92% 5.07%
- ------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average
Net Assets Prior to Waived Fees
and Reimbursed Expenses 0.70% 0.70% 0.69% 0.70% 0.73%
(2) Ratio of Net Investment Income to
Average Net Assets Prior to Waived
Fees and Reimbursed Expenses 2.15% 1.68% 2.47% 3.88% 4.99%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
128
<PAGE> 287
FINANCIAL HIGHLIGHTS (Continued)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MONEY MARKET FUND
----------------------------------------------------------------------------------
CLASS A CLASS I*
-------------------------------------------------------------------- ------------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991 1990 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From Investment
Operations:
Net Investment Income 0.04 0.03 0.03 0.06 0.08 0.02
Less Distributions:
Dividends From Net
Investment Income (0.04) (0.03) (0.03) (0.06) (0.08) (0.02)
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of
Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
Total Return (not
annualized) 3.70% 2.57% 3.23% 5.65% 7.88% 4.46%
Ratios/Supplemental Data:
Net Assets, End of Period
(000) $ 307,878 $ 228,084 $ 268,424 $ 229,863 $ 198,187 $ 11,237
Number of Shares
Outstanding, End of
Period (000) 307,915 228,085 268,434 229,866 198,192 11,238
Ratios to Average Net
Assets (annualized):
Ratio of Net Expenses to
Average Net Assets(1) 0.68% 0.74% 0.75% 0.74% 0.68% 0.38%
Ratio of Net Investment
Income to Average Net
Assets(2) 3.71% 2.54% 3.17% 5.54% 7.55% 5.05%
- --------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses
to Average Net Assets
Prior to Waived Fees
and Reimbursed
Expenses 0.72% 0.74% 0.75% 0.75% 0.84% 0.55%
(2) Ratio of Net
Investment Income to
Average Net Assets
Prior to Waived Fees
and Reimbursed
Expenses 3.67% 2.54% 3.17% 5.53% 7.39% 4.88%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* THIS CLASS COMMENCED OPERATIONS ON AUGUST 18, 1994.
129
<PAGE> 288
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
------------------------------------------------------
CLASS A*
------------------------------------------------------
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.27 $ 10.56 $ 10.25 $ 10.00
Income From Investment Operations:
Net Investment Income 0.60 0.64 0.66 0.28
Net Realized and Unrealized Capital Gain/(Loss) on
Investments (1.36) 0.71 0.32 0.25
------------ ------------ ------------ ------------
Total From Investment Operations (0.76) 1.35 0.98 0.53
Less Distributions:
Dividends From Net Investment Income (0.60) (0.64) (0.66) (0.28)
Distributions From Net Realized Capital Gain 0.00 0.00 (0.01) 0.00
------------ ------------ ------------ ------------
Total Distributions (0.60) (0.64) (0.67) (0.28)
------------ ------------ ------------ ------------
Net Asset Value, End of period $ 9.91 $ 11.27 $ 10.56 $ 10.25
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total Return (not annualized)+ (6.82)% 13.11% 9.94% 5.81%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 73,791 $ 104,701 $ 52,553 $ 16,585
Number of Shares Outstanding, End of Period (000) 7,446 9,294 4,976 1,618
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 0.43% 0.39% 0.23% 0.00%
Ratio of Net Investment Income to Average Net
Assets(2) 5.77% 5.56% 6.05% 6.38%
Portfolio Turnover 32% 15% 67% 5%
- -----------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets
Prior to Waived Fees and Reimbursed Expenses 0.98% 1.09% 1.20% 3.02%
(2) Ratio of Net Investment Income to Average Net
Assets Prior to Waived Fees and Reimbursed
Expenses 5.22% 4.86% 5.08% 3.36%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THE FUND COMMENCED OPERATIONS ON JULY 15, 1991.
130
<PAGE> 289
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
--------------------------
CLASS D*
--------------------------
YEAR PERIOD
ENDED ENDED
DEC. 31, DEC. 31,
1994 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 15.26 $ 15.00
Income From Investment Operations:
Net Investment Income 0.73 0.36
Net Realized and Unrealized Capital Gain/(Loss) on Investments (1.84) 0.26
------------ ------------
Total From Investment Operations (1.11) 0.62
Less Distributions:
Dividends From Net Investment Income (0.73) (0.36)
Distributions From Net Realized Capital Gain 0.00 0.00
------------ ------------
Total Distributions (0.73) (0.36)
------------ ------------
Net Asset Value, End of Period $ 13.42 $ 15.26
------------ ------------
------------ ------------
Total Return (not annualized)+ (7.37)% 4.19%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 15,545 $ 14,771
Number of Shares Outstanding, End of Period (000) 1,158 968
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 1.02% 1.13%
Ratio of Net Investment Income to Average Net Assets(2) 5.17% 4.14%
Portfolio Turnover 32% 15%
- -------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets Prior to Waived Fees and
Reimbursed Expenses 1.74% 1.84%
(2) Ratio of Net Investment Income to Average Net Assets Prior to Waived
Fees and Reimbursed Expenses 4.45% 3.43%
- -------------------------------------------------------------------------------------------------------
</TABLE>
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
+ TOTAL RETURNS DO NOT INCLUDE THE 1% CONTINGENT DEFERRED SALES CHARGE.
131
<PAGE> 290
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
STRATEGIC GROWTH FUND
------------------------------------------------------
CLASS A* CLASS D**
-------------------------- --------------------------
YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1994 1993
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 13.20 $ 10.00 $ 16.55 $ 15.00
Income From Investment Operations:
Net Investment Loss (0.11) (0.03) (0.24) (0.43)
Net Realized and Unrealized Capital Gain/(Loss) on
Investments 0.67 3.68 0.81 2.51
------------ ------------ ------------ ------------
Total From Investment Operations 0.56 3.65 0.57 2.08
Less Distributions:
Dividends From Net Investment Income 0.00 (0.03) 0.00 0.00
Distributions From Net Realized Capital Gain (0.33) (0.41) (0.40) (0.53)
Tax Return of Capital (0.14) (0.01) (0.18) 0.00
------------ ------------ ------------ ------------
Total Distributions (0.47) (0.45) (0.58) (0.53)
------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 13.29 $ 13.20 $ 16.54 $ 16.55
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total Return (not annualized)+ 4.23% 36.56% 3.46% 13.84%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 26,744 $ 25,413 $ 15,335 $ 11,932
Number of Shares Outstanding, End of Period (000) 2,013 1,926 927 721
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 1.20% 0.66% 1.95% 0.61%
Ratio of Net Investment Loss to Average Net
Assets(2) (0.81)% (0.01)% (1.56)% (1.00)%
Portfolio Turnover 149% 182% 149% 182%
- -----------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets
Prior to Waived Fees and Reimbursed Expenses 1.55% 1.64% 2.23% 2.14
(2) Ratio of Net Investment Income (Loss) to
Average Net Assets Prior to Waived Fees and
Reimbursed Expenses (1.16)% (0.99)% (1.84)% (2.53)%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES OR THE 1% CONTINGENT
DEFERRED SALES CHARGE.
* THE FUND COMMENCED OPERATIONS ON JANUARY 20, 1993.
** THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
132
<PAGE> 291
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME FUND
--------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.87 $ 10.56 $ 10.97 $ 10.30 $ 10.22
Income From Investment Operations:
Net Investment Income 0.70 0.74 0.79 0.86 0.87
Net Realized and Unrealized Capital
Gain/(Loss) on Investments (1.21) 0.36 (0.14) 0.90 0.10
------------ ------------ ------------ ------------ ------------
Total From Investment Operations (0.51) 1.10 0.65 1.76 0.97
Less Distributions:
Dividends From Net Investment Income (0.70) (0.74) (0.79) (0.86) (0.89)
Distributions From Net Realized
Capital Gain 0.00 (0.05) (0.27) (0.23) 0.00
------------ ------------ ------------ ------------ ------------
Total Distributions (0.70) (0.79) (1.06) (1.09) (0.89)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 9.66 $ 10.87 $ 10.56 $ 10.97 $ 10.30
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Return (not annualized)+ (4.81)% 10.67% 6.27% 18.08% 10.17%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 35,838 $ 50,301 $ 40,883 $ 20,457 $ 11,116
Number of Shares Outstanding, End of
Period (000) 3,711 4,628 3,871 1,865 1,079
Ratios to Average Net Assets
(annualized):
Ratio of Net Expenses to Average Net
Assets(1) 0.76% 0.53% 0.47% 0.00% 0.07%
Ratio of Net Investment Income to
Average Net Assets(2) 6.84% 6.79% 6.26% 8.30% 8.65%
Portfolio Turnover 50% 115% 128% 100% 4%
- ------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average
Net Assets Prior to Waived Fees
and Reimbursed Expenses 1.08% 1.01% 1.13% 1.87% 2.72%
(2) Ratio of Net Investment Income to
Average Net Assets Prior to Waived
Fees and Reimbursed Expenses 6.52% 6.31% 5.60% 6.43% 6.00%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
133
<PAGE> 292
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME
FUND
--------------------------
CLASS D*
--------------------------
YEAR PERIOD
ENDED ENDED
DEC. 31, DEC. 31,
1994 1993
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 14.85 $ 15.00
Income From Investment Operations:
Net Investment Income 0.86 0.42
Net Realized and Unrealized Capital Gain/(Loss) on Investments (1.65) (0.08)
------------ ------------
Total From Investment Operations (0.79) 0.34
Less Distributions:
Dividends From Net Investment Income (0.76) (0.42)
Distributions From Net Realized Capital Gain 0.00 (0.07)
------------ ------------
Total Distributions (0.76) (0.49)
------------ ------------
Net Asset Value, End of Period $ 13.20 $ 14.85
------------ ------------
------------ ------------
Total Return (not annualized)+ (5.45)% 2.25%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 3,722 $ 9,594
Number of Shares Outstanding, End of Period (000) 282 646
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 1.37% 0.90%
Ratio of Net Investment Income to Average Net Assets(2) 6.14% 5.90%
Portfolio Turnover 50% 115%
- ------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets Prior to Waived Fees
and Reimbursed Expenses 1.87% 2.03%
(2) Ratio of Net Investment Income to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 5.64% 4.77%
- ------------------------------------------------------------------------------------------------
</TABLE>
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
+ TOTAL RETURNS DO NOT INCLUDE THE 1% CONTINGENT DEFERRED SALES CHARGE.
134
<PAGE> 293
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND
-------------------------------------------------------
CLASS A* CLASS I**
---------------------------------------- -------------
YEAR YEAR PERIOD PERIOD
ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1994
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From Investment Operations:
Net Investment Income 0.03 0.03 0.02 0.16
Less Distributions:
Dividends From Net Investment Income (0.03) (0.03) (0.02) (0.16)
------------ ------------ ------------ ------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------
------------ ------------ ------------ ------
Total Return (not annualized) 3.44% 2.56% 1.97% 4.05%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 195,031 $ 118,169 $ 137,412 $ 3,898
Number of Shares Outstanding, End of Period (000) 195,042 118,169 137,416 3,900
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 0.63% 0.52% 0.27% 0.23%
Ratio of Net Investment Income to Average Net
Assets(2) 3.47% 2.55% 3.12% 4.42%
- ------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets
Prior to Waived Fees and Reimbursed Expenses 0.80% 0.77% 0.79% 0.57%
(2) Ratio of Net Investment Income to Average Net
Assets Prior to Waived Fees and Reimbursed
Expenses 3.30% 2.30% 2.60% 4.08%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
* THE FUND COMMENCED OPERATIONS ON MAY 12, 1992.
** THIS CLASS COMMENCED OPERATIONS ON JUNE 20, 1994.
135
<PAGE> 294
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT FUND
---------------------------------------------------------------------
CLASS A*
---------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED PERIOD
DEC. 31, DEC. 31, DEC. 31, DEC. 31, ENDED
1994 1993 1992 1991 DEC. 31, 1990
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.99 $ 9.95 $ 10.13 $ 10.12 $ 10.00
Income From Investment Operations:
Net Investment Income 0.43 0.44 0.59 0.78 0.08
Net Realized and Unrealized Capital
Gain/(Loss) on Investments (0.80) 0.04 (0.18) 0.01 0.12
------------ ------------ ------------ ------------ ------
Total From Investment Operations (0.37) 0.48 0.41 0.79 0.20
Less Distributions:
Dividends From Net Investment Income (0.43) (0.44) (0.59) (0.78) (0.08)
Distributions From Net Realized
Capital Gain 0.00 0.00 0.00 0.00 0.00
------------ ------------ ------------ ------------ ------
Total Distributions (0.43) (0.44) (0.59) (0.78) (0.08)
------------ ------------ ------------ ------------ ------
Net Asset Value, End of Period $ 9.19 $ 9.99 $ 9.95 $ 10.13 $ 10.12
------------ ------------ ------------ ------------ ------
------------ ------------ ------------ ------------ ------
Total Return (not annualized)+ (3.81)% 4.87% 4.23% 8.60% 2.75%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 1,215,546 $ 1,949,013 $ 2,559,363 $ 566,840 $ 6,858
Number of Shares Outstanding, End of
Period (000) 132,256 195,132 257,238 55,933 678
Ratios to Average Net Assets
(annualized):
Ratio of Net Expenses to Average Net
Assets(1) 0.79% 0.76% 0.75% 0.50% 0.00%
Ratio of Net Investment Income to
Average Net Assets(2) 4.40% 4.37% 5.62% 7.36% 4.93%
Portfolio Turnover 164% 201% 197% 250% N/A**
- -------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average
Net Assets Prior to Waived Fees
and Reimbursed Expenses 0.94% 0.95% 0.94% 1.08% 5.48%
(2) Ratio of Net Investment Income
(loss) to Average Net Assets Prior
to Waived Fees and Reimbursed
Expenses 4.25% 4.18% 5.43% 6.78% (0.55)%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THE FUND COMMENCED OPERATIONS ON NOVEMBER 1, 1990.
** THE FUND SOLD NO SECURITIES DURING THE PERIOD.
136
<PAGE> 295
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT
FUND
--------------------------
CLASS D*
--------------------------
YEAR PERIOD
ENDED ENDED
DEC. 31, DEC. 31,
1994 1993
<S> <C> <C>
Net Asset Value, Beginning of Period $ 14.93 $ 15.00
Income From Investment Operations:
Net Investment Income 0.57 0.27
Net Realized and Unrealized Capital Gain/(Loss) on Investments (1.19) (0.07)
------------ ------------
Total From Investment Operations (0.62) 0.20
Less Distributions:
Dividends From Net Investment Income (0.57) (0.27)
Distributions From Net Realized Capital Gain 0.00 0.00
------------ ------------
Total Distributions (0.57) (0.27)
------------ ------------
Net Asset Value, End of Period $ 13.74 $ 14.93
------------ ------------
------------ ------------
Total Return (not annualized)+ (4.25)% 1.32%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 12,220 $ 11,319
Number of Shares Outstanding, End of Period (000) 889 758
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 1.29% 1.26%
Ratio of Net Investment Income to Average Net Assets(2) 3.94% 3.41%
Portfolio Turnover 164% 201%
- ------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets Prior to Waived Fees
and Reimbursed Expenses 1.55% 1.75%
(2) Ratio of Net Investment Income to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 3.68% 2.92%
- ------------------------------------------------------------------------------------------------
</TABLE>
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
+ TOTAL RETURNS DO NOT INCLUDE THE 1% CONTINGENT DEFERRED SALES CHARGE.
137
<PAGE> 296
NOTES TO THE FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION. Overland Express Funds, Inc. (the "Company") is registered
under the Investment Company Act of 1940, as amended, as an open-end series
investment company. The Company commenced operations on April 7, 1988 and
includes thirteen separate diversified Funds: the Asset Allocation Fund, the
Dividend Income Fund, the Growth and Income Fund, the Money Market Fund, the
Municipal Income Fund, the Overland Sweep Fund, the Short-Term U.S. Government
Portfolio Fund, the Strategic Growth Fund, the U.S. Government Income Fund, the
U.S. Treasury Money Market Fund, the Variable Rate Government Fund, the 1-3
Year Duration Full Faith and Credit Government Income, the 1-3 Year Duration
Municipal Income Fund, and two non-diversified funds: the California Tax-Free
Bond Fund and the California Tax-Free Money Market Fund. The financial
statements of the Dividend Income Fund, Growth and Income Fund, Short-Term U.S
Government Portfolio Fund, Overland Sweep Fund, 1-3 Year Duration Municipal
Income Fund, and 1-3 Year Duration Full Faith and Credit Fund are presented
separately from these financial statements.
Each of the Funds presented in this book (the "Funds"), with the exception
of the Money Market Fund, the California Tax-Free Money Market Fund and the
U.S. Treasury Money Market Fund, commenced offering Class D shares on July 1,
1993. The U.S. Treasury Money Market Fund and the Money Market Fund commenced
offering Class I shares on June 20, 1994 and August 18, 1994, respectively. The
three classes of shares differ principally in their respective sales charges,
shareholder servicing fees, and distribution fees. Shareholders of each class
also bear certain expenses that pertain to that particular class. All
shareholders bear the common expenses of the Fund, and earn income from the
portfolio, pro rata based on the average daily net assets of each class,
without distinction between share classes. Dividends are declared separately
for each class. Gains are allocated to each class pro rata based upon net
assets of each class on the date of distribution. No class has preferential
dividend rights; differences in per share dividend rates are generally due to
differences in separate class expenses, including distribution and shareholder
servicing fees and from the relative weightings of pro rata income and gain
allocations.
138
<PAGE> 297
NOTES TO THE FINANCIAL STATEMENTS
The following significant accounting policies are consistently followed by
the Company in the preparation of its financial statements, and such policies
are in conformity with generally accepted accounting principles for investment
companies.
SECURITY VALUATION
Investments in securities for which the primary market is a national
securities exchange or the NASDAQ National Market System are stated at the last
reported sales price on the day of valuation. U.S. Government obligations are
valued at stated mean between the last reported bid and ask prices. In the
absence of any sale of such securities on the valuation date and in the case of
other securities, excluding debt securities maturing in 60 days or less, the
valuations are based on latest quoted bid prices. Debt securities maturing in
60 days or less are valued at amortized cost. Debt securities other than those
maturing in 60 days or less and other than U.S. Government obligations are
valued at the latest quoted bid price. Securities for which quotations are not
readily available are valued at fair value as determined by policies set by the
board of directors.
The California Tax-Free Money Market Fund, the Money Market Fund and the
U.S. Treasury Money Market Fund use the amortized cost method to value their
portfolio securities and seek to maintain constant net asset values of $1.00
per share, there is no assurance the Funds will meet this objective. The
amortized cost method involves valuing a security at its cost and amortizing
any discount or premium over the period until maturity, which approximates
market value.
Cash equivalents relating to firm commitment purchase agreements are
segregated by the custodian and may not be sold without appropriate replacement
while the current commitment is outstanding.
SECURITY TRANSACTIONS AND REVENUE RECOGNITION
Securities transactions are accounted for on the date the securities are
purchased or sold (trade date). Dividend income is recognized on the
ex-dividend date, and interest income is recognized on a daily accrual basis.
Realized gains or losses are reported on the basis of identified cost of
securities delivered. Bond discounts and premiums are amortized as required by
the Internal Revenue Code.
139
<PAGE> 298
NOTES TO THE FINANCIAL STATEMENTS
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell
("repurchase agreements") are treated as collateralized financing transactions
and are recorded at their contracted resale amounts. These repurchase
agreements, if any, are detailed in each Fund's Portfolio of Investments. The
adviser to the Funds pools the Funds' cash and invests in repurchase agreements
entered into by the Funds. The prospectuses require that the cash investments
be fully collateralized based on values that are marked to market daily. The
collateral is held by an agent bank under a tri-party agreement. It is the
adviser's responsibility to value collateral daily and to obtain additional
collateral as necessary to maintain market value equal to or greater than the
resale price. The repurchase agreements held in the Funds at December 31, 1994
are collateralized by U.S. Treasury or federal agency obligations. The
repurchase agreements were entered into on December 30, 1994.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income of the Asset
Allocation Fund and the Strategic Growth Fund are declared and distributed
quarterly. Dividends to shareholders from net investment income are declared
daily and distributed monthly for the California Tax-Free Bond Fund, the
California Tax-Free Money Market Fund, the Money Market Fund, the Municipal
Income Fund, the U.S. Government Income Fund, the U.S. Treasury Money Market
Fund and the Variable Rate Government Fund. Any dividends to shareholders from
net realized capital gain are declared and distributed annually.
FEDERAL INCOME TAXES
The Company's policy is to comply with the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and to
distribute substantially all its net investment income and any net realized
capital gains to its shareholders. Therefore, no federal or state income tax
provision is required. The Money Market Fund has a net capital loss
carryforward of $1,392 which will expire in the year 2001 and $36,799 which
will expire in the year 2002. The Municipal Income Fund has a net capital loss
carryforward of $3,600,931 which will expire in the year 2002. The U.S.
Government Income Fund has a net capital loss carryforward of $1,212,813 which
will expire in the year 2002. The U.S. Treasury Money Market Fund has a net
capital loss carryforward of $12,241 which
140
<PAGE> 299
NOTES TO THE FINANCIAL STATEMENTS
will expire in the year 2002. The California Tax-Free Money Market Fund has a
net capital loss carryforward of $76,188, which will expire in the year 2002.
The Variable Rate Government Fund has a net capital loss carryforward of
$978,191 which will expire in 1999, $15,382,953 which will expire in 2000,
$2,818,400 which will expire in the year 2001 and $125,280,827 which will
expire in the year 2002. The Board intends to offset net capital gains with
each capital loss carryforward until each carryforward has been fully utilized
or expires. No capital gain distribution shall be made until the capital loss
carryforward has been fully utilized or expires.
Due to the timing of dividend distributions and the differences in
accounting for income and realized gains (losses) for financial statement and
federal income tax purposes, the fiscal year in which amounts are distributed
may differ from the year in which the income and realized gains (losses) were
recorded by the portfolio. The differences between the income or gains
distributed on a book versus tax basis are shown as excess distributions of net
investment income and net realized gain on sales of investments in the
accompanying Statements of Changes in Net Assets.
On the Statements of Assets and Liabilities, as a result of book-to-tax
differences due to current year and prior year tax returns of capital,
reclassification adjustments have been made to the Strategic Growth Fund to
decrease overdistributed net investment income and paid in capital by $449,157.
In addition, due to the fact that certain distribution fees for the Municipal
Income Fund are charged to capital for federal income tax purposes and expensed
for financial statement purposes book-to-tax differences exist and a
reclassification adjustment has been made to decrease overdistributed net
investment income and paid in capital by $163,734.
ORGANIZATION EXPENSES
Stephens Inc. ("Stephens"), the Funds' administrator, sponsor and
distributor, has incurred expenses in connection with the organization and
initial registration of the various funds. These expenses were charged to the
individual Funds and are being amortized by the Funds on a straightline basis
over 60 months from the date the Funds commenced operations.
141
<PAGE> 300
NOTES TO THE FINANCIAL STATEMENTS
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into separate advisory contracts on behalf of the
Funds with Wells Fargo Bank, N.A. ("WFB"). Pursuant to the contract, WFB
furnishes to the Funds investment guidance and policy direction in connection
with daily portfolio management. Under the contract with the Asset Allocation
Fund, WFB is entitled to be paid a monthly advisory fee at the annual rate of
0.70% of such Fund's average daily net assets up to $500 million and 0.60% of
average daily net assets in excess of $500 million. Under the contracts with
the California Tax-Free Bond Fund, the Municipal Income Fund, the Strategic
Growth Fund, the U.S. Government Income Fund and the Variable Rate Government
Fund, WFB entitled to be is paid a monthly advisory fee at the annual rate of
0.50% of the average daily net assets of each respective Fund. Under the
contract with the California Tax-Free Money Market Fund, WFB is entitled to be
paid a monthly advisory fee at the annual rate of 0.45% of average daily net
assets. Under the contracts with the Money Market Fund and the U.S. Treasury
Money Market Fund, WFB is entitled to be paid a monthly advisory fee based on
an annual rate of 0.25% of the average daily net assets.
The Company has entered into contracts on behalf of the Funds (except the
Asset Allocation Fund) with WFB whereby WFB is responsible for providing
custody and fund accounting services for the Funds. For all of these Funds WFB
is entitled to an annual fee for custody services based on a rate of 0.0167% of
the average daily net assets of the respective Fund. For fund accounting
services, WFB is entitled to a monthly base fee from each Fund of $2,000 plus
an annual fee of 0.07% of the first $50 million, 0.045% of the next $50 million
and 0.02% of the remaining average daily net assets.
In connection with the Asset Allocation Fund, formerly managed under a
license agreement, the Company has entered into a subadvisory contract with
Wells Fargo Nikko Investment Advisors ("WFNIA"). This subadvisory agreement was
approved by shareholder vote at a special meeting of the shareholders on August
15, 1994. WFNIA is an affiliate of Wells Fargo & Company. Pursuant to such
142
<PAGE> 301
NOTES TO THE FINANCIAL STATEMENTS
agreement WFB pays WFNIA a subadvisory fee. In addition, Wells Fargo
Institutional Trust Company N.A. ("WFITC"), a subsidiary of WFNIA, acts as
custodian for this Fund. Custody fees are paid to WFITC from the subadvisory
fee paid to WFNIA.
The Company has entered into a contract on behalf of the Funds with WFB
whereby WFB will provide transfer agent and shareholder services for the Funds.
Under the contract, WFB is paid a minimum monthly fee of $3,000 per fund unless
net assets of the fund are under $20 million. For as long as the assets remain
under $20 million the fund will not be charged any transfer agency fees by WFB.
The Funds may enter into servicing agreements with one or more servicing
agents on behalf of Class D shares of the Funds. Under such agreements,
servicing agents have agreed to provide shareholder liaison services, including
responding to customer inquiries and providing information on their
investments, and to provide such other related services as the Fund or a Class
D shareholder may reasonably request. For these services, a servicing agent
receives a fee, on an annualized basis for the Fund's then current fiscal year,
not to exceed 0.25% of the average daily net assets of the Class D shares of
the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER
SERVICE FEE
FUND CLASS D
<S> <C>
Asset Allocation Fund $ 28,377
California Tax-Free Bond Fund 20,828
Municipal Income Fund 43,503
Strategic Growth Fund 37,050
U.S. Government Income Fund 17,454
Variable Rate Government Fund 35,962
</TABLE>
The Company has entered into administration and distribution agreements on
behalf of the Funds with Stephens. Under the agreements, Stephens has agreed to
provide supervisory, administrative and distribution services to the Funds. For
providing supervisory and administrative services, the California Tax-Free Bond
Fund, the Strategic Growth Fund and the Variable Rate Government Fund have each
agreed to pay Stephens a monthly fee at the annual rate of 0.15% of each Funds'
average daily net assets up to $200 million and 0.10% of the average daily net
assets in excess of $200 million. For the Asset Allocation Fund, the California
Tax-Free Money Market Fund and the U.S. Government Income Fund, Stephens is
entitled to be compensated for administrative and services monthly at the
annual
143
<PAGE> 302
NOTES TO THE FINANCIAL STATEMENTS
rate of 0.10% of the average daily net assets of such Fund up to $200 million
and 0.05% of the average daily net assets in excess of $200 million. The Money
Market Fund, the Municipal Income Fund and the U.S. Treasury Money Market Fund
have agreed to pay Stephens a monthly administrative fee at the annual rate of
0.10% of each Funds' average daily net assets.
The Company has adopted separate Distribution Plans for Class A and Class D
shares pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The separate
Class A Distribution Plan for each of the California Tax-Free Bond Fund, the
California Tax-Free Money Market Fund and the U.S. Government Income Fund,
provides that each Fund may defray all or part of the cost of preparing,
printing and distributing prospectuses and other promotional materials by
paying on an annual basis up to the greater of $100,000 or 0.05% of the Class A
shares of a Fund's average daily net assets for costs incurred. Each of these
Funds may participate in joint distribution activities with the other Funds, in
which event, expenses reimbursed out of the assets of one of the Funds may be
attributable, in part, to the distribution-related activities of another Fund.
Generally, the expenses attributable to joint distribution activities will be
allocated among the Funds in proportion to their relative net asset sizes.
The Company has adopted separate distribution plans pursuant to Rule 12b-1
under the 1940 Act, whereby on behalf of Class A shares of the Asset Allocation
Fund, the Money Market Fund, the Municipal Income Fund, the Strategic Growth
Fund, the U.S. Treasury Money Market Fund and the Variable Rate Government
Fund, a Fund may pay Stephens, as compensation for distribution-related
services, a monthly fee at an annual rate of up to 0.25% of the average daily
net assets attributable to the Fund's Class A shares. The Class D Distribution
Plan of the Asset Allocation Fund and Strategic Growth Fund provide that Funds
may pay the Distributor a monthly fee at an annual rate of up to 0.75% of each
such Fund's average daily net assets attributable to Class D shares. In
addition, the Municipal Income Fund may pay, as compensation for
distribution-related services, a monthly fee at an annual rate of up to 0.15%
of the average daily net assets attributable to
144
<PAGE> 303
NOTES TO THE FINANCIAL STATEMENTS
both of its Class A and D shares. Until February 28, 1995, a portion of the
Municipal Income Fund distribution fee will be charged to net capital for
income tax purposes.
<TABLE>
<CAPTION>
DISTRIBUTION
FEES
FUND CLASS A
<S> <C>
Asset Allocation Fund $ 125,161
California Tax-Free Bond Fund 161,701
Municipal Income Fund 163,733
Strategic Growth Fund 67,308
U.S. Government Income Fund 22,458
Variable Rate Government Fund 4,240,278
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION
FEES
FUND CLASS D
<S> <C>
Asset Allocation Fund $ 81,793
California Tax-Free Bond Fund 41,656
Municipal Income Fund 60,905
Strategic Growth Fund 111,150
U.S. Government Income Fund 34,908
Variable Rate Government Fund 71,924
</TABLE>
WAIVED FEES
The following fees were waived for the year ended December 31, 1994:
<TABLE>
<CAPTION>
WAIVED
FUND FEES
<S> <C>
Asset Allocation $ 69,419
California Tax-Free Bond 1,166,246
California Tax-Free Money Market 61,626
Money Market 129,201
Municipal Income 549,664
Strategic Growth 134,333
U.S. Government Income 179,536
U.S. Treasury Money Market 247,364
Variable Rate Government 2,477,609
</TABLE>
Waived fees continue at the discretion of WFB.
Certain officers and directors of the Company are also officers of
Stephens. At December 31, 1994 Stephens owned 177,395 shares of Asset
Allocation Fund, 1,583 shares of California Tax-Free Bond Fund, 44,711 shares
of California Tax-Free Money
145
<PAGE> 304
NOTES TO THE FINANCIAL STATEMENTS
Market Fund, 1,281,101 shares of Money Market Fund, 12,371 shares of Municipal
Income Fund, 5,355 shares of Strategic Growth Fund, 2,681 shares of U.S.
Government Income Fund, 118,385 shares of U.S. Treasury Money Market Fund and
12,758 shares of Variable Rate Government Fund.
Stephens has retained $1,351,388 as sales charges from the proceeds of
capital shares sold by the Company for the year ended December 31, 1994. Wells
Fargo Securities Inc. a subsidiary of WFB, received $57,371 as sales charges
from the proceeds of capital shares sold by the Company for the year ended
December 31, 1994.
3. INVESTMENT PORTFOLIO TRANSACTIONS*
Purchases and sales of investments, exclusive of short-term securities, for
each fund for the year ended December 31, 1994 were as follows:
<TABLE>
<CAPTION>
ASSET CALIFORNIA MUNICIPAL
AGGREGATE PURCHASES ALLOCATION TAX-FREE INCOME
AND SALES OF: FUND BOND FUND FUND
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $ 26,402,377 $ 0 $ 0
Sales proceeds 4,308,938 0 0
OTHER SECURITIES:
Purchases at cost 3,195,419 12,490,288 33,316,994
Sales proceeds 30,947,639 74,618,595 47,275,276
</TABLE>
<TABLE>
<CAPTION>
U.S.
STRATEGIC GOVERNMENT VARIABLE RATE
AGGREGATE PURCHASES GROWTH INCOME GOVERNMENT
AND SALES OF: FUND FUND FUND
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $ 0 $ 10,393,380 $ 157,569,844
Sales proceeds 0 16,229,875 62,293,438
OTHER SECURITIES:
Purchases at cost 64,179,054 12,977,154 2,340,660,020
Sales proceeds 61,096,020 9,767,022 3,333,075,418
</TABLE>
- --------------------------------------------------------------------------------
* ALL FUNDS NOT REFLECTED IN THIS SCHEDULE TRADED EXCLUSIVELY IN SHORT-TERM
SECURITIES.
146
<PAGE> 305
NOTES TO THE FINANCIAL STATEMENTS
4. CAPITAL SHARES TRANSACTIONS
As of December 31, 1994, there were 20 billion shares of $.001 par value
capital stock authorized by the Company. As of December 31, 1994, each Fund was
authorized to issue 100 million shares of $.001 par value capital stock for
each class of shares, except the California Tax-Free Money Market Fund, the
Money Market Fund, the U.S. Treasury Money Market Fund, and the Variable Rate
Government Fund which are as follows:
<TABLE>
<CAPTION>
SHARES
FUND AUTHORIZED
<S> <C>
California Tax-Free Money Market Fund 3 billion
Money Market Fund 1 billion
U.S. Treasury Money Market Fund 1 billion
Variable Rate Government Fund 500 million
</TABLE>
Transactions in capital shares for the year ended December 31, 1994 are
disclosed in detail in the Statements of Changes in Net Assets.
147
<PAGE> 306
OVERLAND EXPRESS FUNDS, INC.
FILE NO. 33-16296; 811-8275
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
The following audited financial statements for the Company's Asset
Allocation, California Tax-Free Bond, California Tax-Free Money Market,
Money Market, Strategic Growth, U.S. Government Income, U.S. Treasury
Money Market and Variable Rate Government Fund are included in Part B,
Item 23:
Portfolio of Investments - December 31, 1994
Statement of Assets and Liabilities - December 31, 1994
Statement of Operations for the year ended December 31, 1994
Statement of Changes in Net Assets for the year ended December 31,
1994
Financial Highlights for the year ended December 31, 1994
Notes to Financial Statements - December 31, 1994
The following unaudited financial statements for the Company's
Asset Allocation, California Tax-Free Bond, California Tax-Free Money
Market, Money Market, Municipal Income, Short-Term Government-Corporate
Income, Short-Term Municipal Income, Strategic Growth, U.S.
Government Income, U.S. Treasury Money Market and Variable Rate
Government Fund, are included in Part B, Item 23:
Portfolio of Investments - June 30, 1995
Statement of Assets and Liabilities - June 30, 1995
Statement of Operations for the period ended June 30, 1995
Statement of Changes in Net Assets for the period ended June 30,
1995
Financial Highlights for the period ended June 30, 1995
Notes to Financial Statements - June 30, 1995
(b) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C> <C>
1 - Restated Articles of Incorporation, incorporated by reference to Post-
Effective Amendment No. 30 filed on November 29, 1995.
2 - By-Laws (as amended), incorporated by reference to the Registration
Statement on Form N-1A filed on August 5, 1987.
3 - Not Applicable.
4 - Specimen Stock Certificates, incorporated by reference to Post-
Effective Amendment No. 21 filed on March 3, 1993.
5(a)(i) - Form of Amended Advisory Contract on behalf of the Asset Allocation
Fund, incorporated by reference to Post-Effective Amendment No. 24
filed on April 29, 1994.
(ii) - Advisory Contract on behalf of the U.S. Government Income Fund,
incorporated by reference to Pre-Effective Amendment No. 2 filed on
April 4, 1988.
(iii) - Advisory Contract on behalf of the California Tax-Free Money Market
Fund, incorporated by reference to Post-Effective Amendment No. 6 filed
on August 2, 1989.
(iv) - Advisory Contract on behalf of the California Tax-Free Bond Fund,
incorporated by reference to Post-Effective Amendment No. 6 filed on
August 2, 1989.
(v) - Advisory Contract on behalf of the Money Market Fund, incorporated by
reference to Post-Effective Amendment No. 6 filed on August 2, 1989.
</TABLE>
C-1
<PAGE> 307
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C> <C>
(vi) - Advisory Contract on behalf of the Variable Rate Government Fund,
incorporated by reference to Post-Effective Amendment No. 8 filed on
August 6, 1990.
(vii) - Advisory Contract on behalf of the Municipal Income Fund, incorporated
by reference to Post-Effective Amendment No. 16 filed on January 17,
1992.
(viii) - Advisory Contract on behalf of the U.S. Treasury Money Market Fund,
incorporated by reference to Post-Effective Amendment No. 22 filed on
May 28, 1993.
(ix) - Advisory Contract on behalf of the Strategic Growth Fund, incorporated
by reference to Post-Effective Amendment No. 22 filed on May 28, 1993.
(x) - Sub-Advisory Contract with Wells Fargo Nikko Investment Advisors on
behalf of the Asset Allocation Fund, incorporated by reference to Post-
Effective Amendment No. 30 filed on November 29, 1995.
5(b)(i) - Administration Agreement on behalf of the Asset Allocation Fund,
incorporated by reference to Pre-Effective Amendment No. 2 filed on
April 4, 1988.
(ii) - Administration Agreement on behalf of the U.S. Government Income Fund,
incorporated by reference to Pre-Effective Amendment No. 2 filed on
April 4, 1988.
(iii) - Administration Agreement on behalf of the California Tax-Free Money
Market Fund (as amended), incorporated by reference to Pre-Effective
Amendment No. 2 filed on April 4, 1988.
(iv) - Administration Agreement on behalf of the California Tax-Free Bond
Fund, incorporated by reference to Post-Effective Amendment No. 3 filed
on October 3, 1988.
(v) - Administration Agreement on behalf of the Money Market Fund,
incorporated by reference to Post-Effective Amendment No. 6 filed on
August 2, 1989.
(vi) - Administration Agreement on behalf of the Variable Rate Government
Fund, incorporated by reference to Post-Effective Amendment No. 8 filed
on August 6, 1990.
(vii) - Administration Agreement on behalf of the Municipal Income Fund,
incorporated by reference to Post-Effective Amendment No. 16 filed on
January 17, 1992.
(viii) - Administration Agreement on behalf of the Overland Sweep Fund, Short-
Term Municipal Income Fund (formerly, the 1-3 Year Duration Municipal
Income Fund), 1-3 Year Duration Government Income Fund (liquidated) and
Short-Term Government-Corporate Income Fund (formerly, the 1-3 Year
Duration Full Faith and Credit Government Income Fund), incorporated by
reference to Post-Effective Amendment No 30 filed on November 29, 1995.
(ix) - Administration Agreement on behalf of the U.S. Treasury Money Market
Fund, incorporated by reference to Post-Effective Amendment No. 30
filed on November 29, 1995.
</TABLE>
C-2
<PAGE> 308
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C> <C>
(x) - Administration Agreement on behalf of the Strategic Growth Fund,
incorporated by reference to Post-Effective Amendment No. 22 filed on
May 28, 1993.
(xi) - Form of Administration Agreement with Stephens Inc. on behalf of the
National Tax-Free Institutional Money Market Fund, incorporated by
reference to Post-Effective Amendment No. 30 filed on November 29,
1995.
6(a)(i) - Distribution Agreement with Stephens Inc. (as amended), incorporated by
reference to Post-Effective Amendment No. 18 filed on April 30, 1992.
(a)(ii) - Distribution Agreement on behalf of the Overland Sweep Fund,
incorporated by reference to Post-Effective Amendment No. 14 filed on
August 20, 1991.
(a)(iii) - Addendum to Form of Distribution Agreement with Stephens Inc.,
incorporated by reference to Post-Effective Amendment No. 24 filed on
April 29, 1994.
(a)(iv) - Amended and Restated Distribution Agreement with Stephens Inc., filed
herewith.
(b) - Dealer Contract (as revised), incorporated by reference to Post-
Effective Amendment No. 13 filed on July 16, 1991.
7 - Not Applicable.
8(a) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the Asset
Allocation Fund, incorporated by reference to the Registration
Statement on Form N-1A filed on August 5, 1987.
(b) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the U.S.
Government Income Fund, incorporated by reference to Post-Effective
Amendment No. 9 filed on February 7, 1991.
(c) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the
California Tax-Free Money Market Fund, incorporated by reference to
Post-Effective Amendment No. 9 filed on February 7, 1991.
(d) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the
California Tax-Free Bond Fund, incorporated by reference to Post-
Effective Amendment No. 9 filed on February 7, 1991.
(e) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the Money
Market Fund, incorporated by reference to Post-Effective Amendment
No. 9 filed on February 7, 1991.
(f) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the Variable
Rate Government Fund, incorporated by reference to Post-Effective
Amendment No. 9 filed on February 7, 1991.
(g) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the
Municipal Income Fund, incorporated by reference to Post-Effective
Amendment No. 16 filed on January 17, 1992.
</TABLE>
C-3
<PAGE> 309
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C> <C>
(h) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the U.S.
Treasury Money Market Fund, incorporated by reference to Post-Effective
Amendment No. 23 filed on March 2, 1994.
(i) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the
Strategic Growth Fund, incorporated by reference to Post-Effective
Amendment No. 23 filed on March 2, 1994.
(j) - Custody Agreement on behalf of the Overland Sweep Fund, the 1-3 Year
Duration Municipal Income Fund, the 1-3 Year Duration Government Income
Fund and the 1-3 Year Duration Full Faith and Credit Government Income
Fund, incorporated by reference to Post-Effective Amendment No. 30
filed on November 29, 1995.
(k) - Form of Custody Agreement with Wells Fargo Bank, N.A. on behalf of the
National Tax-Free Institutional Money Market Fund, incorporated by
reference to Post-Effective Amendment No. 30 filed on November 29,
1995.
9(a) - Agency Agreement between the Overland Sweep Fund, the 1-3 Year Duration
Municipal Income Fund, the 1-3 Year Duration Government Income Fund,
the 1-3 Year Duration Full Faith and Credit Government Income Fund and
Wells Fargo Bank, N.A., incorporated by reference to Post-Effective
Amendment No. 24 filed on April 29, 1994.
(a)(i) - Form of Agency Agreement with Wells Fargo Bank, N.A. on behalf of the
National Tax-Free Institutional Money Market Fund, incorporated by
reference to Post-Effective Amendment No. 30 filed on November 29,
1995.
(b) - License Agreement between Wells Fargo Bank, N.A. and Wells Fargo
Investment Advisors (renamed Wells Fargo Nikko Investment Advisors),
previously filed.
(c)(i) - Shareholder Servicing Agreement on behalf of the Overland Sweep Fund,
incorporated by reference to Post-Effective Amendment No. 22 filed on
May 28, 1993.
(c)(ii) - Form of Servicing Agreement on behalf of Class D Shares, incorporated
by reference to Post-Effective Amendment No. 21 filed on March 3, 1993.
(d)(i) - Servicing Plan on behalf of the Class D Shares of the Asset Allocation
Fund, incorporated by reference to Post-Effective Amendment No. 22
filed on May 28, 1993.
(d)(ii) - Servicing Plan on behalf of the Class D Shares of the U.S. Government
Income Fund, incorporated by reference to Post-Effective Amendment
No. 22 filed on May 28, 1993.
(d)(iii) - Servicing Plan on behalf of the Class D Shares of the California Tax-
Free Bond Fund, incorporated by reference to Post-Effective Amendment
No. 22 filed on May 28, 1993.
(d)(iv) - Servicing Plan on behalf of the Class D Shares of the Variable Rate
Government Fund, incorporated by reference to Post-Effective Amendment
No. 22 filed on May 28, 1993.
</TABLE>
C-4
<PAGE> 310
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C> <C>
(d)(v) - Servicing Plan on behalf of the Class D Shares of the Municipal Income
Fund, incorporated by reference to Post-Effective Amendment No. 22
filed on May 28, 1993.
(d)(vi) - Servicing Plan on behalf of the Class D Shares of the Strategic Growth
Fund, incorporated by reference to Post-Effective Amendment No. 22
filed on May 28, 1993.
10 - Opinion and Consent of Counsel, filed herewith.
11 - Consent of Auditors -- KPMG Peat Marwick LLP.
12(a) - None.
13 - Investment Letter, incorporated by reference to Pre-Effective Amendment
No. 2 filed on April 4, 1988.
14 - Not Applicable.
15(a) - Amended Distribution Plan on behalf of the Class A Shares of the Asset
Allocation Fund, incorporated by reference to Post-Effective Amendment
No. 22 filed on May 28, 1993.
(b) - Amended Distribution Plan on behalf of the Class A Shares of the U.S.
Government Income Fund, incorporated by reference to Post-Effective
Amendment No. 22 filed on May 28, 1993.
(c) - Distribution Plan on behalf of the California Tax-Free Money Market
Fund, incorporated by reference to Pre-Effective Amendment No. 2 filed
on April 4, 1988.
(d) - Amended Distribution Plan on behalf of the Class A Shares of the
California Tax-Free Bond Fund, incorporated by reference to Post-
Effective Amendment No. 22 filed on May 28, 1993.
(e) - Amended Distribution Plan on behalf of the Class A Shares of the Money
Market Fund, incorporated by reference to Post-Effective Amendment
No. 24 filed on April 29, 1994.
(f) - Amended Distribution Plan on behalf of the Class A Shares of the
Variable Rate Government Fund, incorporated by reference to Post-
Effective Amendment No. 22 filed on May 28, 1993.
(g) - Amended Distribution Plan on behalf of the Class A Shares of the
Municipal Income Fund, incorporated by reference to Post-Effective
Amendment No. 22 filed on May 28, 1993.
(h) - Distribution Plan on behalf of the Overland Sweep Fund, incorporated by
reference to Post-Effective Amendment No. 14 filed on August 20, 1991.
</TABLE>
C-5
<PAGE> 311
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C> <C>
(i) - Amended Distribution Plan on behalf of the Class A Shares of the U.S.
Treasury Money Market Fund, incorporated by reference to Post-Effective
Amendment No. 24 filed on April 29, 1994.
(j) - Amended Distribution Plan on behalf of the Class A Shares of the
Strategic Growth Fund, incorporated by reference to Post-Effective
Amendment No. 22 filed on May 28, 1993.
(k) - Distribution Plan on behalf of the Class D Shares of the Asset
Allocation Fund, incorporated by reference to Post-Effective Amendment
No. 23 filed on March 2, 1994.
(l) - Distribution Plan on behalf of the Class D Shares of the California
Tax-Free Bond Fund, incorporated by reference to Post-Effective
Amendment No. 23 filed on March 2, 1994.
(m) - Distribution Plan on behalf of the Class D Shares of the Municipal
Income Fund, incorporated by reference to Post-Effective Amendment
No. 23 filed on March 2, 1994.
(n) - Distribution Plan on behalf of the Class D Shares of the Strategic
Growth Fund, incorporated by reference to Post-Effective Amendment
No. 23 filed on March 2, 1994.
(o) - Distribution Plan on behalf of the Class D Shares of the U.S.
Government Income Fund ,incorporated by reference to Post-Effective
Amendment No. 23 filed on March 2, 1994.
(p) - Distribution Plan on behalf of the Class D Shares of the Variable Rate
Government Fund ,incorporated by reference to Post-Effective Amendment
No. 23 filed on March 2, 1994.
(q) - Distribution Plan on behalf of the Short-Term Municipal Income Fund
(formerly, the 1-3 Year Duration Municipal Income Fund), incorporated
by reference to Post-Effective Amendment No. 24 filed on April 29,
1994.
(r) - Distribution Plan of the Short-Term Government-Corporate Income Fund
(formerly, the 1-3 Year Duration Full Faith and Credit Government
Income Fund), incorporated by reference to Post-Effective Amendment
No. 24 filed on April 29, 1994.
16(a) - Schedules for Computation of Performance Quotations, incorporated by
reference to Post-Effective Amendment No. 3 filed on October 3, 1988.
(b) - Schedule of Computation of Performance data. (Previously filed)
17 - Powers of Attorney, incorporated by reference to Post-Effective
Amendment No. 14 to the Registration Statement filed on August 20,
1991.
18 - Rule 18f-3 Multi-Class Plan, incorporated by reference to Post-
Effective Amendment No. 28 to the Registration Statement filed on
April 4, 1995.
</TABLE>
C-6
<PAGE> 312
Item 25. Persons Controlled by or under Common Control with Registrant.
No person is controlled by or under common control with Registrant.
Item 26. Number of Holders of Securities.
As of October 31, 1995, the number of record holders of each class
of securities of the Registrant was as follows:
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
- -------------- ------------------------
<S> <C>
Asset Allocation Fund
Class A 1,041
Class D 389
California Tax-Free Bond Fund
Class A 3,979
Class D 61
California Tax-Free Money Market Fund 154
Money Market Fund
Class A 207
Institutional Class 242
Municipal Income Fund
Class A 1,253
Class D 262
Overland Sweep Fund 3
Short-Term Municipal Income Fund 26
Short-Term Government-Corporate Income Fund 11
Strategic Growth Fund
Class A 2,613
Class D 883
U.S. Government Income Fund
Class A 595
Class D 62
U.S. Treasury Money Market Fund
Class A 24
Institutional Class 71
Variable Rate Government Fund
Class A 1,496
Class D 87
National Tax-Free Institutional Money Market Fund 1
</TABLE>
C-7
<PAGE> 313
27. Indemnification.
Section 4 of Article VI of the Registrant's Articles of
Incorporation provides:
To the fullest extent permitted by Maryland statutory or
decisional law, as amended or interpreted, no person who is or was a
director or officer of this Corporation shall be personally liable to
the Corporation or its stockholders for money damages. No amendment of
the charter of the Corporation or repeal of any of its provisions shall
limit or eliminate the benefits provided to any person who is or was a
director or officer under this provision with respect to any act or
omission which occurred prior to such amendment or repeal. The rights
of indemnification under this provision shall neither be exclusive of,
nor be deemed in limitation of, any right to which any person may
otherwise be entitled or permitted by contract or otherwise. This
Section 4 shall not protect any person who is or was a director or
officer of the Corporation against any liability to the Corporation or
its stockholders to which he or she would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office.
Item 28. Business and Other Connections of Investment Adviser.
Wells Fargo Bank, N.A. ("Wells Fargo Bank"), a wholly owned
subsidiary of Wells Fargo & Company, serves as investment adviser to all of the
Registrant's investment portfolios, other than the Overland Sweep Fund, the
Short-Term Municipal Income Fund and the Short-Term Government-Corporate Income
Fund which currently do not retain an investment adviser, and to certain other
registered open-end management investment companies. Wells Fargo Bank's
business is that of a national banking association with respect to which it
conducts a variety of commercial banking and trust activities.
To the knowledge of Registrant, none of the directors or executive
officers of Wells Fargo Bank, except those set forth below, is or has been at
any time during the past two fiscal years engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
executive officers also hold various positions with and engage in business for
Wells Fargo & Company. Set forth below are the names and principal businesses
of the directors and executive officers of Wells Fargo Bank who are or during
the past two fiscal years have been engaged in any other business, profession,
vocation or employment of a substantial nature for their own account or in the
capacity of director, officer, employee, partner or trustee. All the directors
of Wells Fargo Bank also serve as directors of Wells Fargo & Company.
C-8
<PAGE> 314
<TABLE>
<CAPTION>
Name and Position Principal Business(es) and Address(es)
at Wells Fargo Bank During at Least the Last Two Fiscal Years
- ------------------- -----------------------------------------
<S> <C>
H. Jesse Arnelle Senior Partner of Arnelle & Hastie
Director 455 Market Street
San Francisco, CA 94105
Director of FPL Group, Inc.
700 Universe Blvd.
P.O. Box 14000
North Palm Beach, FL 33408
William R. Breuner General Partner in Breuner Associates, Breuner Properties and
Director Breuner-Pavarnick Real Estate Developers. Retired Chairman of
the Board of Directors of John Breuner Co.
2300 Clayton Road, Suite 1570
Concord, CA 94520
Vice Chairman of the California State Railroad
Museum Foundation.
111 I Street
Old Sacramento, CA 95814
William S. Davila President and Director of The Vons Companies, Inc.
Director 618 Michillinda Avenue
Arcadia, CA 91007
Officer of Western Association of Food Chains
825 Colorado Blvd. #203
Los Angeles, CA 90041
Rayburn S. Dezember Director of CalMat Co.
Director 3200 San Fernando Road
Los Angeles, CA 90065
Director of Tejon Ranch Co.
P.O. Box 1000
Lebec, CA 93243
Director of Turner Casting Corp.
P.O. Box 1099
Cudahy, CA 90201
Director of The Bakersfield Californian
P.O. Box 440
1707 I Street
Bakersfield, CA 93302
Director of Kern County Economic Development Corp.
P.O. Box 1229
2700 M Street, Suite 225
Bakersfield, CA 93301
</TABLE>
C-9
<PAGE> 315
<TABLE>
<S> <C>
Chairman of the Board of Trustees of Whittier College
13406 East Philadelphia Avenue
P.O. Box 634
Whittier, CA 90608
Paul Hazen Chairman of the Board of Directors of
Chairman of the Wells Fargo & Company
Board of Directors 420 Montgomery Street
San Francisco, CA 94105
Director of Pacific Telesis Group
130 Kearny Street
San Francisco, CA 94108
Director of Phelps Dodge Corp.
2600 North Central Avenue
Phoenix, AZ 85004
Director of Safeway Inc.
Fourth and Jackson Streets
Oakland, CA 94660
Robert K. Jaedicke Accounting Professor and Dean Emeritus of
Director Graduate School of Business, Stanford University
MBA Admissions Office
Stanford, CA 94305
Director of Homestake Mining Co.
650 California Street
San Francisco, CA 94108
Director of California Water Service Company
1720 North First Street
San Jose, CA 95112
Director of Boise Cascade Corp.
1111 West Jefferson Street
P.O. Box 50
Boise, ID 83728
Director of Enron Corp.
1400 Smith Street
Houston, TX 77002
Director of GenCorp, Inc.
175 Ghent Road
Fairlawn, OH 44333
Paul A. Miller Chairman of Executive Committee and Director of
Director Pacific Enterprises
633 West Fifth Street
Los Angeles, CA 90071
</TABLE>
C-10
<PAGE> 316
<TABLE>
<S> <C>
Trustee of Mutual Life Insurance Company of New York
1740 Broadway
New York, NY 10019
Director of Newhall Management Corporation
23823 Valencia Blvd.
Valencia, CA 91355
Trustee of University of Southern California
University Park TGF 200
665 Exposition Blvd.
Los Angeles, CA 90089
Ellen M. Newman President of Ellen Newman Associates
Director 323 Geary Street, Suite 507
San Francisco, CA 94102
Chair of Board of Trustees of
University of California at San Francisco Foundation
250 Executive Park Blvd., Suite 2000
San Francisco, CA 94143
Director of American Conservatory Theater
30 Grant Avenue
San Francisco, CA 94108
Director of California Chamber of Commerce
1201 K Street, 12th Floor
Sacramento, CA 95814
Philip J. Quigley Chairman, Chief Executive Officer and
Director Director of Pacific Telesis Group
130 Kearney Street, Rm. 3700
San Francisco, CA 94108
Director of Varian Associates
3050 Hansen Way
P.O. Box 10800
Palo Alto, CA 94303
Carl E. Reichardt Chairman and Chief Executive Officer of the
Director Board of Directors of Wells Fargo & Company
420 Montgomery Street
San Francisco, CA 94105
Director of Ford Motor Company
The American Road
Dearborn, MI 48121
Director of Hospital Corporation of America,
HCA-Hospital Corp. of America
One Park Plaza
Nashville, TN 37203
</TABLE>
C-11
<PAGE> 317
<TABLE>
<S> <C>
Director of Pacific Gas and Electric Company
77 Beale Street
San Francisco, CA 94105
Director of Newhall Management Corporation
23823 Valencia Blvd.
Valencia, CA 91355
Donald B. Rice President, Chief Operating Officer and Director of
Director Teledyne, Inc.
2049 Century Park East
Los Angeles, CA 90067
Director of Vulcan Materials Company
One Metroplex Drive
Birmingham, AL 35209
Retired Secretary of the Air Force
Susan G. Swenson President and Chief Executive Officer of Cellular One
Director 651 Gateway Blvd.
San Francisco, CA 94080
Chang-Lin Tien Chancellor of University of California at Berkeley
Director UC at Berkeley
Berkeley, CA 94720
John A. Young President, Director and Chief Executive Officer of
Director Hewlett-Packard Company
3000 Hanover Street
Palo Alto, CA 94304
Director of Chevron Corporation
225 Bush Street
San Francisco, CA 94104
William F. Zuendt Director of 3Com Corp.
President 5400 Bayfront Plaza
P.O. Box 58145
Santa Clara, CA 95052
Director of MasterCard International
888 Seventh Avenue
New York, NY 10106
Trustee of Golden Gate University
536 Mission Street
San Francisco, CA 94163
</TABLE>
C-12
<PAGE> 318
Wells Fargo Nikko Investment Advisors ("WFNIA") serves as the
sub-adviser to the Asset Allocation Fund of the Company and as adviser or
sub-adviser to various other open-end management investment companies. For
additional information, see "Advisory, Administration and Distribution
Arrangements" in the Prospectus describing the Asset Allocation Fund and
"Management" in the Statement of Additional Information of such Fund. For
information as to the business, profession, vocation or employment of a
substantial nature of each of the officers and management committees of WFNIA,
reference is made to WFNIA's Form ADV and Schedules A and D filed under the
Investment Advisers Act of 1940, File No. 801-36479, incorporated herein by
reference.
Item 29. Principal Underwriters.
(a) Stephens Inc., distributor for the Registrant, does not
presently act as investment adviser for any other registered investment
companies, but does act as principal underwriter for Stagecoach Funds, Inc.,
Stagecoach Inc., and Stagecoach Trust; and is the exclusive placement agent for
Master Investment Trust, Managed Series Investment Trust, Life & Annuity Trust
and Master Investment Portfolio, which are registered open-end management
investment companies, and has acted as principal underwriter for the Liberty
Term Trust, Inc., Nations Government Income Term Trust 2003, Inc., Nations
Government Income Term Trust 2004, Inc. and the Managed Balanced Target
Maturity Fund, Inc., which are closed-end management investment companies, and
Nations Fund Trust, Nations Fund, Inc., Nations Fund Portfolios, Inc. and the
Capitol Mutual Funds, which are open-end management investment companies.
(b) Information with respect to each director and officer of
the principal underwriter is incorporated by reference to Form ADV and
Schedules A and D filed by Stephens Inc. with the Securities and Exchange
Commission pursuant to The Investment Advisers Act of 1940 (file no.
501-15510).
(c) Not applicable.
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder
are maintained at one or more of the following offices: Overland Express
Funds, Inc. maintains those accounts, books and other documents required by
Rule 31a-1(b)(4) and (d), Rule 31a-2(a)(3) and (c) at 111 Center Street, Little
Rock, Arkansas 72201; Wells Fargo Bank maintains all other accounts, books or
other documents required by Rules 31a-1, 31a-2 and 31a-3 at 525 Market Street,
San Francisco, California 94163; and copies of such documents also are
maintained by Overland Express Funds, Inc. Original and/or copies of certain
of the accounts, books or other documents relating to the Asset Allocation Fund
may be retained by WFNIA in its capacity as sub-adviser and by Wells Fargo
Institutional Trust Company, N.A., in its capacity as custodian.
C-13
<PAGE> 319
Item 31. Management Services.
Other than as set forth under the captions "Management of the Fund
and the Master Portfolio" in the Prospectus constituting Part A of this
Registration Statement and "Management" in the Statement of Additional
Information constituting Part B of this Registration Statement, the Registrant
is not a party to any management-related service contract.
Item 32. Undertakings.
(a) Not Applicable.
(b) Not Applicable.
(c) Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant
to the provisions set forth above in response to Item 27,
or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in
such Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(d) Registrant undertakes to hold a special meeting of its
shareholders for the purpose of voting on the question of
removal of a director or directors if requested in writing
by the holders of at least 10W of the Company's outstanding
voting securities, and to assist in communicating with
other shareholders as required by Section 16(c) of the
Investment Company Act of 1940.
(e) Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of its most current
annual report to shareholders, upon request and without
charge.
C-14
<PAGE> 320
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to its Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereto duly authorized in the City of Little Rock, State of
Arkansas on the 14th day of December, 1995.
OVERLAND EXPRESS FUNDS, INC.
By /s/Richard H. Blank, Jr.
-------------------------------------
(Richard H. Blank, Jr.)
Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form N-1A has been signed below by the following
persons in the capacities and on the date indicated:
Signature Title
--------- -----
/s/R. Greg Feltus Director, Chairman and President
------------------------------------ (Principal Executive Officer)
(R. Greg Feltus)
/s/Richard H. Blank, Jr. Secretary and Treasurer (Chief
------------------------------------ Operating Officer)
(Richard H. Blank, Jr.)
/s/Jack S. Euphrat Director
------------------------------------
(Jack S. Euphrat)
/s/Thomas S. Goho Director
------------------------------------
(Thomas S. Goho)
/s/Zoe Ann Hines Director
------------------------------------
(Zoe Ann Hines)
/s/W. Rodney Hughes Director
------------------------------------
(W. Rodney Hughes)
/s/Robert M. Joses Director
------------------------------------
(Robert M. Joses)
/s/J. Tucker Morse Director
------------------------------------
(J. Tucker Morse)
*By: /s/Richard H. Blank, Jr.
------------------------------------
(Richard H. Blank, Jr.)
As Attorney-in-Fact
<PAGE> 321
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to the Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereto duly authorized in the City of Little Rock, State of
Arkansas on the 14th day of December, 1995.
MASTER INVESTMENT TRUST
By /s/Richard H. Blank, Jr.
-------------------------------------
(Richard H. Blank, Jr., Secretary)
Signature Title
--------- -----
/s/R. Greg Feltus Trustee, Chairman and President
------------------------------------ (Principal Executive Officer)
(R. Greg Feltus)
/s/Richard H. Blank, Jr. Secretary and Treasurer (Chief
------------------------------------ Operating Officer)
(Richard H. Blank, Jr.)
/s/Jack S. Euphrat Trustee
------------------------------------
(Jack S. Euphrat)
/s/Thomas S. Goho Trustee
------------------------------------
(Thomas S. Goho)
/s/Zoe Ann Hines Trustee
------------------------------------
(Zoe Ann Hines)
/s/W. Rodney Hughes Trustee
------------------------------------
(W. Rodney Hughes)
/s/Robert M. Joses Trustee
------------------------------------
(Robert M. Joses)
/s/J. Tucker Morse Trustee
------------------------------------
(J. Tucker Morse)
*By: /s/Richard H. Blank, Jr.
------------------------------------
(Richard H. Blank, Jr.)
As Attorney-in-Fact
<PAGE> 322
OVERLAND EXPRESS FUNDS, INC.
SEC FILE NOS. 33-16296; 811-8275
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
EX-99.B6(a)(iv) - Amended and Restated Distribution Agreement with
Stephens Inc.
EX-99.B10 - Opinion and Consent of Counsel
EX-99.B11 - Consent of Auditors -- KPMG Peat Marwick LLP
</TABLE>
<PAGE> 1
EX-99.B6(a)(iv)
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
OVERLAND EXPRESS FUNDS, INC.
111 Center Street
Little Rock, Arkansas 72201
December 15, 1995
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Company"), on behalf of each of its portfolios now or hereafter in effect
(each, a "Fund"), and you ("Distributor") as follows:
1. As the Company's agent, Distributor shall be the exclusive
distributor for the unsold portion of shares of each Fund that are registered
under the Securities Act of 1933 (the "1933 Act").
2. The Company shall sell through Distributor, as the Company's
agent, and deliver, upon the terms set forth herein, Fund shares that
Distributor orders from the Company and for which Distributor has received and
confirmed unconditional purchase orders. All orders from Distributor shall be
subject to acceptance and confirmation by the Company. The Company shall have
the right, at its election, to deliver either shares issued upon original issue
or treasury shares.
3. As the Company's agent, Distributor may sell and distribute
Fund shares in such manner not inconsistent with the provisions hereof as
Distributor may determine from time to time. In that connection Distributor
shall comply with all laws, rules and regulations applicable to it, including,
without limiting the generality of the foregoing, all applicable rules or
regulations under the Investment Company Act of 1940 (the "1940 Act") and of
any securities association registered under the Securities Exchange Act of 1934
(the "1934 Act").
4. The Company reserves the right to sell Fund shares to
purchasers to the extent that it or the transfer agent for Fund shares receives
purchase applications therefor. Distributor's right to accept purchase orders
for Fund shares or to make sales thereof shall not apply to Fund shares that
may be offered by the Company to shareholders for the reinvestment of cash
distributed to shareholders by the Company or Fund shares that may otherwise be
offered by the Company to shareholders, unless Distributor is otherwise
notified by the Company.
<PAGE> 2
5. All shares offered for sale and sold by Distributor shall be
offered for sale and sold by Distributor to or through securities dealers or
banks and other depository institutions having agreements with Distributor
("Selling Agents") upon the terms and conditions set forth in paragraph 7(b)
hereof or to investors at the price per share (the "offering price", which is
the net asset value per share plus the applicable sales charge, if any)
specified and determined as provided in the Prospectus for each Fund
(individually, the "Prospectus" and collectively, the "Prospectuses") included
in the Company's Registration Statement, as amended from time to time, under
the 1933 Act and the 1940 Act (the "Registration Statement"), relating to the
offering of its shares for sale. If the offering price is not an exact
multiple of one cent, it shall be adjusted to the nearest full cent. The
Company shall determine and furnish promptly to Distributor a statement of the
offering price at least once on each day on which the Registration Statement
states the Company is required to determine the Company's net asset value for
the purpose of pricing purchase orders. Each offering price shall become
effective at the time and shall remain in effect during the period specified in
the statement. Each such statement shall show the basis of its computation.
For purposes of establishing the offering price, the Company shall consider a
purchase order to have been presented to the Company at the time it was
originally entered by Distributor for transmission to it, provided the original
purchase order and Distributor's fulfilling order to the Company are
appropriately time stamped or evidenced to show the time of original entry and
that Distributor's fulfilling order to the Company is received by the Company
within a time deemed by it to be reasonable after the purchase order was
originally entered. Purchases of shares shall be made for full and fractional
shares, carried to the third decimal place.
6. If certificates for shares are requested by a purchaser, they
shall be delivered by the Company, through its transfer agent, as promptly as
practicable. Ownership of Fund shares sold hereunder shall be registered in
such names and denominations as are specified in writing to the Company or to
its agent designated for the purpose.
7. (a) Distributor shall from time to time employ or
associate with it such persons as it believes necessary to assist it in
carrying out its obligations under this agreement. The compensation of such
persons shall be paid by Distributor.
(b) Distributor shall have the right to enter into
selling agreements with Selling Agents of its choice for the sale or marketing
of Fund shares at the offering price and upon the terms and conditions set
forth in the Registration Statement. The initial form of selling agreement is
attached hereto as an Exhibit. Distributor may amend those agreements, or
modify the form of agreement, only upon approval of the Company.
(c) Distributor shall pay all expenses incurred in
connection with its qualification as a dealer or broker under federal or state
laws.
(d) Distributor shall pay all expenses incurred in
connection with: (i) printing and distributing such number of copies of the
Prospectuses as Distributor deems necessary for use in connection with offering
Fund shares to prospective investors, (ii) preparing, printing and distributing
any other literature and advertising deemed appropriate by Distributor for use
in connection with offering Fund shares for sale and (iii) all other expenses
incurred in connection with the sale of Fund shares as contemplated by this
agreement, except as otherwise specifically provided in this agreement. In
addition, it is understood and agreed that, so long as a plan of distribution
of a Fund adopted pursuant to Rule 12b-1 of the 1940 Act (a "Plan") continues
in effect, any expenses incurred by Distributor hereunder in connection with
such Fund may be paid from amounts received by it from such Fund under the
Plan. So long as a Plan continues in effect, Distributor shall be entitled to
receive reimbursement from the Company under the Plan for actual expenses
incurred in connection with the Fund to the extent such expenses are
reimbursable under the Plan. The Treasurer of the Company shall provide to the
Board of Directors of the Company
2
<PAGE> 3
and the Board of Directors shall review, at least quarterly, a written report
of the amounts so expended and the purposes for which such expenditures were
made.
(e) The Company shall pay all expenses incurred in
connection with (i) the preparation, printing and distribution to stockholders
of the Prospectuses and reports and other communications to Fund shareholders;
(ii) registrations of Fund shares under the 1933 Act and the Fund under the
1940 Act; (iii) amendments to the Registration Statement; (iv) qualification of
Fund shares for sale in jurisdictions designated by Distributor; (v)
qualification of the Company as a dealer or broker under the laws of
jurisdictions designed by Distributor; (vi) qualification of the Company as a
foreign corporation authorized to do business in any jurisdiction if
Distributor determines that such qualification is necessary or desirable for
the purpose of facilitating sales of Fund shares; (vii) maintaining facilities
for the issue and transfer of Fund shares; (viii) supplying information, prices
and other data to be furnished by the Company under this agreement; and (ix)
original issue taxes or transfer taxes applicable to the sale or delivery of
Fund shares or certificates therefor.
(f) The Company shall execute all documents and furnish
any information which may be reasonably necessary in connection with the
qualification of Fund shares of the Company for sale in a jurisdiction
designated by Distributor.
(g) The Company shall pay to the Distributor the amount
that is payable pursuant to, and in accordance with, the Distribution Plan
applicable to a Fund or class of shares of a Fund, or the maximum amount
payable under applicable laws, regulations and rules, whichever is less. The
actual amount payable with respect to such Fund in any month is to be
determined by mutual agreement.
8. The Company shall furnish to Distributor from time to time,
for use in connection with the sale of Fund shares, such written information
with respect to the Company as Distributor may reasonably request. In each
case such written information shall be signed by an authorized officer of the
Company. The Company represents and warrants that such information, when
signed by one of its officers, shall be true and correct. The Company shall
also furnish to Distributor copies of its reports to its stockholders and such
additional information regarding the Company's financial condition as
Distributor may reasonably request from time to time.
9. The Registration Statement and the Prospectuses have been or
will be, as the case may be, carefully prepared in conformity with the 1933
Act, the 1940 Act and the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "SEC"). The Company represents
and warrants to Distributor that the Registration Statement and the Prospectus
for each Fund contain or will contain all statements required to be stated
therein in accordance with the 1933 Act, the 1940 Act and the Rules and
Regulations, that all statements of fact contained or to be contained therein
are or will be true and correct at the time indicated or the effective date, as
the case may be, and that neither the Registration Statement nor the
Prospectuses, when such Registration Statement or Prospectuses shall become
effective under the 1933 Act or be authorized for use, shall include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading to a
purchaser of Fund shares. The Company shall from time to time file such
amendment or amendments to the Registration Statement and the Prospectuses as,
in the light of future developments, shall, in the opinion of the Company's
counsel, be necessary in order to have the Registration Statement and the
Prospectus for each Fund at all times contain all material facts required to be
stated therein or necessary to make the statements therein not misleading to a
purchaser of Fund shares. If the Company shall not file such amendment or
amendments within 15 days after receipt by the Company of a written request
from Distributor to do so, Distributor may, at its option, terminate this
agreement immediately. The Company shall not file any amendment to the
Registration Statement or a Prospectus without giving Distributor reasonable
3
<PAGE> 4
notice thereof in advance, provided that nothing in this agreement shall in any
way limit the Company's right to file at any time such amendments to the
Registration Statement or a Prospectus as the Company may deem advisable. The
Company represents and warrants to Distributor that any amendment to the
Registration Statement or a Prospectus filed hereafter by the Company will,
when it becomes effective under the 1933 Act, contain all statements required
to be stated therein in accordance with the 1933 Act, the 1940 Act and the
Rules and Regulations, that all statements of fact contained therein will, when
the same shall become effective, be true and correct, and that no such
amendment, when it becomes effective, will include an untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading to a
purchaser of Fund shares.
10. Subject to the provisions of paragraph 7, the Company shall
prepare and furnish to Distributor from time to time such number of copies of
the most recent form of the Prospectus for each Fund filed with the SEC as
Distributor may reasonably request. The Company authorizes Distributor and
Selling Agents to use each Prospectus, in the form furnished to Distributor
from time to time, in connection with the sale of Fund shares. The Company
shall indemnify, defend and hold harmless Distributor, its officers and
partners and any person who controls Distributor within the meaning of the 1933
Act, from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which
Distributor, its officers or partners or any such controlling person, may incur
under the 1933 Act, the 1940 Act, the common law or otherwise, arising out of
or based upon any alleged untrue statement of a material fact contained in the
Registration Statement or any Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either
thereof or necessary to make the statements in either thereof not misleading.
Notwithstanding the foregoing, this indemnity agreement, to the extent that it
might require indemnity of any person who is an officer or partner of
Distributor and who is also a director of the Company, shall not inure to the
benefit of such officer or partner unless a court of competent jurisdiction
shall determine, or it shall have been determined by controlling precedent,
that such result would not be against public policy as expressed in the 1933
Act or the 1940 Act, and in no event shall anything contained herein be so
construed as to protect Distributor against any liability to the Company or its
stockholders to which Distributor would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this agreement. This indemnity agreement is expressly conditioned upon
the Company's being notified of any action brought against Distributor, its
officers or partners or any such controlling person, which notification shall
be given by letter or by telegram addressed to the Company at its principal
office in Little Rock, Arkansas, and sent to the Company by the person against
whom such action is brought within 10 days after the summons or other first
legal process shall have been served. The failure to notify the Company of any
such action shall not relieve the Company from any liability which it may have
to the person against whom such action is brought by reason of any such alleged
untrue statement or omission otherwise than on account of the indemnity
agreement contained in this paragraph. The Company shall be entitled to assume
the defense of any suit brought to enforce any such claim, demand or liability,
but, in such case, the defense shall be conducted by counsel chosen by the
Company and approved by Distributor. If the Company elects to assume the
defense of any such suit and retain counsel approved by Distributor, the
defendant or defendants in such suit shall bear the fees and expenses of any
additional counsel retained by any of them, but in case the Company does not
elect to assume the defense of any such suit, or in case Distributor does not
approve of counsel chosen by the Company, the Company will reimburse
Distributor, its officers and partners or the controlling person or persons
named as defendant or defendants in such suit, for the fees and expenses of any
counsel retained by Distributor or them. In addition, Distributor shall have
the right to employ one separate counsel to represent it, its officers and
partners and any such controlling person who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by
Distributor against the Company hereunder if in the reasonable
4
<PAGE> 5
judgment of Distributor it is advisable because of actual or potential
differing interests between Distributor, its officers and partners or such
controlling person and the Company in the conduct of the defense of such
action, for Distributor, its officers and partners or such controlling person
to be represented by separate counsel, in which event the fees and expenses of
such separate counsel shall be borne by the Company. This indemnity agreement
and the Company's representations and warranties in this agreement shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of Distributor, its officers and partners or any such controlling
person and shall survive the delivery of any shares as provided in this
agreement. This indemnity agreement shall inure exclusively to the benefit of
Distributor and its successors, Distributor's officers and partners and their
respective estates and any such controlling persons and their successors and
estates. The Company shall promptly notify Distributor of the commencement of
any litigation or proceedings against it in connection with the issue and sale
of any Fund shares.
11. Distributor agrees to indemnify, defend and hold harmless
the Company, its officers and directors and any person who controls the Company
within the meaning of the 1933 Act, from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which the Company, its officers or directors or any such
controlling person, may incur under the 1933 Act, the 1940 Act, the common law
or otherwise, but only to the extent that such liability or expense incurred by
the Company, its officers or directors or such controlling person resulting
from such claims or demands shall arise out of or be based upon (a) any alleged
untrue statement of a material fact contained in information furnished in
writing by Distributor to the Company specifically for use in the Registration
Statement or each Prospectus or shall arise out of or be based upon any alleged
omission to state a material fact in connection with such information required
to be stated in the Registration Statement or the Prospectuses or necessary to
make such information not misleading and (b) any alleged act or omission on
Distributor's part as the Company's agent that has not been expressly
authorized by the Company in writing. This indemnity agreement is expressly
conditioned upon Distributor's being notified of any action brought against the
Company, its officers and directors or any such controlling person, which
notification shall be given by letter or telegram, addressed to Distributor at
its principal office in Little Rock, Arkansas, and sent to Distributor by the
person against whom such action is brought, within 10 days after the summons or
other first legal process shall have been served. The failure to notify
Distributor of any such action shall not relieve Distributor from any liability
which it may have to the Company, its officers or directors or such controlling
person by reason of any such alleged misstatement or omission on Distributor's
part otherwise than on account of the indemnity agreement contained in this
paragraph. Distributor shall have a right to control the defense of such
action with counsel of its own choosing and approved by the Company if such
action is based solely upon such alleged misstatement or omission on
Distributor's part, and in any other event the Company, its officers and
directors or such controlling person shall each have the right to participate
in the defense or preparation of the defense of any such action at their own
expense.
12. No Fund shares shall be sold through Distributor or by the
Company under this agreement and no orders for the purchase of Fund shares
shall be confirmed or accepted by the Company if and so long as the
effectiveness of the Registration Statement shall be suspended under any of the
provisions of the 1933 Act. Nothing contained in this paragraph 12 shall in
any way restrict, limit or have any application to or bearing upon the
Company's obligation to redeem Fund shares from any shareholder in accordance
with the provisions of its Articles of Incorporation. The Company will use its
best efforts at all times to have Fund shares effectively registered under the
1933 Act.
13. The Company agrees to advise Distributor immediately:
5
<PAGE> 6
(a) of any request by the SEC for amendments to the
Registration Statement or a Prospectus or for additional information;
(b) in the event of the issuance by the SEC of any stop
order suspending the effectiveness of the Registration Statement or a
Prospectus under the 1933 Act or the initiation of any proceedings for that
purpose;
(c) of the happening of any material event that makes
untrue any statement made in the Registration Statement or a Prospectus or that
requires the making of a change in either thereof in order to make the
statements therein not misleading; and
(d) of any action of the SEC with respect to any
amendments to the Registration Statement or a Prospectus that may from time to
time be filed with the SEC under the 1933 Act or the 1940 Act.
14. Insofar as they concern the Company, the Company shall
comply with all applicable laws, rules and regulations, including, without
limiting the generality of the foregoing, all rules or regulations made or
adopted pursuant to the 1933 Act, the 1940 Act or by any securities association
registered under the 1934 Act.
15. Distributor may, if it desires and at its own cost and
expense, appoint or employ agents to assist it in carrying out its obligations
under this agreement, but no such appointment or employment shall relieve
Distributor of any of its responsibilities or obligations to the Company under
this agreement.
16. Subject to the provisions of paragraph 9, this agreement
shall continue in effect until such time as there shall remain no unsold
balance of Fund shares registered under the 1933 Act, provided that this
agreement shall continue in effect for a period of more than one year from the
date hereof only so long as such continuance is specifically approved at least
annually in accordance with the 1940 Act and the rules thereunder. This
agreement shall terminate automatically in the event of its assignment (as
defined in the 1940 Act). This agreement may, in any event, be terminated at
any time, without the payment of any penalty, by the Company upon 60 days'
written notice to Distributor or by Distributor at any time after the second
anniversary of the effective date of this agreement on 60 days' written notice
to the Company.
17. This agreement shall be governed by and construed in
accordance with the laws of the State of Arkansas.
6
<PAGE> 7
If the foregoing correctly sets forth the agreement between the
Company and Distributor, please so indicate by signing and returning to the
Company the enclosed copy hereof.
Very truly yours,
OVERLAND EXPRESS FUNDS, INC.
By: /s/ Richard H. Blank, Jr.
------------------------
Name: Richard H. Blank, Jr.
---------------------
Title: Chief Operating Officer
-----------------------
ACCEPTED as of the date
set forth above:
STEPHENS INC.
By: /s/ Richard H. Blank, Jr.
------------------------
Name: Richard H. Blank, Jr.
---------------------
Title: Vice President
--------------
7
<PAGE> 1
EX-99.B10
December 18, 1995 (202) 887-1500
Overland Express Funds, Inc.
111 Center Street
Little Rock, Arkansas 72201
Re: Shares of Common Stock of the
Strategic Growth Fund of Overland Express Funds, Inc.
Ladies/Gentlemen:
We refer to Post-Effective Amendment No. 31 and Amendment No. 33
to the Registration Statement on Form N-1A (SEC File Nos. 33-16296 and
811-8275) (the "Registration Statement") of Overland Express Funds, Inc.(the
"Company") relating to the registration of an indefinite number of shares of
common stock of the Strategic Growth Fund of the Company (collectively, the
"Shares").
We have been requested by the Company to furnish this opinion as
Exhibit 10 to the Registration Statement.
We have examined such records, documents, instruments,
certificates of public officials and of the Company, made such inquiries of the
Company, and examined such questions of law as we have deemed necessary for the
purpose of rendering the opinion set forth herein. We have also verified with
the Company's transfer agent the maximum number of shares issued by the Company
during fiscal year 1994. We have assumed the genuineness of all signatures and
the authenticity of all items submitted to us as originals and the conformity
with originals of all items submitted to us as copies.
<PAGE> 2
Based upon and subject to the foregoing, we are of the opinion
that:
The issuance and sale of the Shares by the Company have been duly
and validly authorized by all appropriate action, and assuming delivery by sale
or in accord with the Fund's dividend reinvestment plan in accordance with the
description set forth in the Registration Statement, as amended, the Shares
will be legally issued, fully paid and nonassessable by the Company.
We consent to the inclusion of this opinion as an exhibit to the
Registration Statement.
In addition, we hereby consent to the use of our name and to the
reference to our firm under the caption "Legal Counsel" in the Prospectus and
the description of advice rendered by our firm under the heading "Management"
in the Statement of Additional Information, both of which are included as part
of the Registration Statement.
Very truly yours,
/s/ MORRISON & FOERSTER
MORRISON & FOERSTER
<PAGE> 1
EX-99.B11
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Shareholders
Overland Express Funds, Inc.:
We consent to the inclusion in the Overland Express Funds, Inc. Post-Effective
Amendment No. 31 to the Registration Statement Number 33-16296 on Form N-1A
under the Securities Act of 1933 and Amendment No. 33 to the Registration
Statement Number 811-8275 on Form N-1A under the Investment Company Act of 1940
of our report dated February 17, 1995, on the financial statements and
financial highlights of the Asset Allocation Fund, California Tax-Free Bond
Fund, California Tax-Free Money Market Fund, Money Market Fund, Municipal
Income Fund, Strategic Growth Fund, U.S. Government Income Fund, U.S. Treasury
Money Market Fund and Variable Rate Government Fund (nine of the funds
comprising Overland Express Funds, Inc.) for the year December 31, 1994, which
report has been included in the Statement of Additional Information.
We also consent to the reference to our firm under the heading "Financial
Highlights" in the prospectus and "Independent Auditors" in the Statement of
Additional Information incorporated by reference into the prospectus.
/s/ KPMG PEAT MARWICK LLP
San Francisco, California
December 15, 1995
