<PAGE>
[LOGO]
OVERLAND
EXPRESS-REGISTERED TRADEMARK-
ANNUAL REPORT
-----------------
DECEMBER 31, 1995
INSTITUTIONAL CLASS
Money Market Fund
U.S. Treasury Money Market Fund
[ART]
OVERLAND EXPRESS FUNDS ARE NOT
FDIC INSURED AND ARE NOT OBLIGATIONS OF
OR GUARANTEED BY WELLS FARGO BANK.
<PAGE>
TABLE OF CONTENTS
Letter to Shareholders 3
Manager Comments
Money Market Fund-Institutional Class 5
U.S. Treasury Money Market Fund-Institutional Class 6
Portfolio of Investments
Money Market Fund 7
U.S. Treasury Money Market Fund 9
Statement of Assets and Liabilities 10
Statement of Operations 11
Statements of Changes in Net Assets 12
Financial Highlights 15
Notes to Financial Statements 19
Independent Auditors' Report 23
OVERLAND EXPRESS FUNDS ARE NOT FDIC INSURED, ARE NOT OBLIGATIONS OF WELLS FARGO
BANK, AND ARE NOT GUARANTEED BY THE BANK. OVERLAND EXPRESS FUNDS INVOLVE
INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
OVERLAND EXPRESS MONEY MARKET FUNDS SEEK TO MAINTAIN A STABLE NET ASSET VALUE
OF $1.00 PER SHARE; HOWEVER, THERE CAN BE NO ASSURANCE THAT THE FUNDS WILL MEET
THIS OBJECTIVE.
WELLS FARGO BANK PROVIDES INVESTMENT ADVISORY AND CERTAIN OTHER SERVICES FOR
THE OVERLAND EXPRESS FUNDS. THE FUNDS ARE SPONSORED AND DISTRIBUTED BY
STEPHENS INC., MEMBER NYSE/SIPC.
1
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2
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TO OUR SHAREHOLDERS
A BANNER YEAR FOR BONDS & STOCKS
The year 1995 produced investment returns rarely captured in U.S. history.
Long-term bond returns were the third best results based on indices dating from
1950. The average U.S. government bond fund posted 1995 returns above 18%. The
stock market had its best gain since 1958, as measured by the Standard & Poor's
500 Index, with the average stock mutual fund generating total returns above
30%. While it is unlikely that 1996 will provide comparable returns, the
investment climate remains favorable for long-term investors.
THE BOND MARKET
For bond investors, 1995 was able to help offset their 1994 price erosion.
Short- and long-term interest rates fell sharply during 1995. The two-year
Treasury yield fell over 2.5% and 30-year rates dropped almost 2%.
Intermediate- and long-term interest rates responded to the combination of
moderating economic growth, subdued inflation and Federal Reserve easing by
moving still lower during the second half of 1995. The yield on 30-year Treasury
bonds dipped below 6% in late December for the first time in two years. In the
weeks leading up to the Federal Reserve's second cut in short-term rates on
December 19, 1995, yields on Treasury securities with maturities out to ten
years fell below the overnight rate for federal funds.
The investment outlook remains positive for fixed income markets in 1996.
Sluggish economic growth and low inflation should lead to further easing of
monetary policy early in the year, and both short- and long-term interest rates
have the potential to decline. Short-term rates are likely to be more affected
than long-term rates.
Several broad trends continue to support a declining interest rate environment.
An aging "baby boomer" population is increasingly focused on savings and
investments, not consumption. This has contributed to a slowdown in the consumer
sector of the economy. Further weakness in manufacturing activity and consumer
spending is expected to restrain overall growth. In addition, pricing pressures
should remain subdued by a variety of disinflationary trends, including weak
demand, intense foreign competition, and further gains in labor productivity.
Although any decline in interest rates in the months ahead is not expected to be
as impressive as the sharp drop seen over the past year, 1996 should reward bond
investors. The Federal Reserve will likely lower the target rate of federal
funds by 1/2% to 1% from the 1995 year-end 5.50% level.
THE STOCK MARKET
U.S. equities generated near record returns in 1995. The 33% rise in the Dow
Jones Industrial Average was the fourth largest since the end of World War II.
The ingredients were all there for a spectacular year: declining interest rates,
low inflation, increasing profit margins and a positive flow of funds into the
market. Technology stocks were winners in 1995, reflecting the strength of
earnings growth. Financial stocks were also leaders in the market, benefiting
from falling interest rates, industry consolidation and record profit levels.
Lastly, strength was seen in traditional consumer goods companies. Large
U.S.-based
3
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TO OUR SHAREHOLDERS
companies with global exposure and consistent positive financial results earned
strong recommendations from industry analysts.
It is important to remain focused on those companies working effectively to
enhance shareholder value. The low inflation environment expected in 1996 may
well support the generous valuations carried in the market today, but investors
will probably be less forgiving if profits should fall short. Currently, the
elements for attractive market returns are still present. A continual stream of
contributions into mutual funds, retirement plans and household savings suggests
that investors are taking a long-term approach to appreciation through equity
investment. A mild interest rate environment, corporate restructuring, merger
and acquisition activities and share repurchase programs should also contribute
to attractive market returns.
Over time, studies have shown the pitfalls of trying to time the peaks and
valleys of the stock market. Wise investors stay focused on their long-term
goals of capital growth and income generation. Concentrating on individual
issues or sectors that demonstrate potential for sustainable long-term growth
should ultimately reap the best rewards.
ENVIRONMENT REMAINS "FRIENDLY"
As we noted earlier, under the current economic environment, we expect the stock
and bond markets to continue to benefit from lower interest rates during 1996.
Modest growth and historically low inflation should set the stage for further
interest rate declines over the next several months. The inflation premium on
bond yields remains above its long-term average, and recent encouraging news on
plans to reduce the federal deficit should have a positive effect on investors.
Lower interest rates and an improved outlook for economic growth and corporate
earnings should help support the stock market as well. We do not foresee a
recession, but rather expect a sustained period of slow growth. Of course, the
financial markets are not without their risks and uncertainties. But with
sluggish economic growth and moderate inflation, the risk of interest rates
rising substantially appears to be low.
A COMMITMENT TO INVESTMENT QUALITY
We believe a conservative, straightforward approach to be the most effective
long-term investment strategy, and we offer a variety of Overland Express Funds
to meet a broad range of investment goals. On the following pages you will find
reports on each of the Funds from the investment adviser and portfolio managers,
offering insight into individual fund performance, strategies, portfolio
holdings and other helpful information.
We appreciate your participation in Overland Express Funds. We will continue
working diligently to help you realize your financial goals.
OVERLAND EXPRESS FUNDS, JANUARY 1996
THE DOW JONES INDUSTRIAL AVERAGE IS A REGISTERED TRADEMARK OF DOW JONES &
COMPANY, INC. AND IS AN UNMANAGED, PRICE-WEIGHTED INDEX COMPRISED OF 30 OF THE
LARGEST CAPITALIZATION, MOST WIDELY HELD INDUSTRIAL STOCKS THAT ARE TRADED ON
THE NEW YORK STOCK EXCHANGE.
THE S&P 500 INDEX OF STOCKS IS A TRADEMARK OF STANDARD AND POOR'S CORPORATION
AND IS AN UNMANAGED INDEX THAT TRACKS THE PERFORMANCE OF 500 COMPANIES,
INCLUDING INDUSTRIAL, TRANSPORTATION, UTILITY AND FINANCIAL COMPANIES.
4
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OVERLAND EXPRESS MONEY MARKET FUND-
INSTITUTIONAL CLASS
MARK KRASCHEL, LIQUIDITY MANAGEMENT SPECIALIST/PORTFOLIO MANAGER. MR. KRASCHEL
HAS SPECIALIZED IN BOND INVESTMENT APPLICATIONS FOR OVER A DECADE. HE JOINED
WELLS FARGO BANK IN 1988 AFTER FIVE YEARS IN FIXED-INCOME MANAGEMENT AT FIRST
BOSTON CORPORATION. MR. KRASCHEL HOLDS A B.S. IN BUSINESS ADMINISTRATION FROM
THE UNIVERSITY OF OREGON AND AN M.B.A. IN FINANCE FROM THE UNIVERSITY OF SAN
FRANCISCO. HE HAS CO-MANAGED THE FUND SINCE APRIL 7, 1988.
JEFF L. WEAVER, TAXABLE LIQUIDITY MANAGEMENT SPECIALIST/PORTFOLIO MANAGER. MR.
WEAVER JOINED WELLS FARGO BANK AFTER THREE YEARS AS A SHORT-TERM FIXED INCOME
TRADER AND PORTFOLIO MANAGER IN THE INVESTMENT MANAGEMENT GROUP OF BANKERS TRUST
COMPANY IN NEW YORK. HE HOLDS A B.A. IN ECONOMICS FROM THE UNIVERSITY OF
COLORADO AND IS A CHARTERED FINANCIAL ANALYST CANDIDATE. HE HAS CO-MANAGED THE
FUND SINCE MAY 1, 1994.
Q. HOW DID THE OVERLAND EXPRESS MONEY MARKET FUND-INSTITUTIONAL CLASS (THE
"FUND") PERFORM DURING 1995?
A. The Fund's seven day yield for the period ended December 31, 1995 was 5.45%.
The Fund achieved its goal of maintaining principal stability at a $1.00 per
share net asset value while providing competitive money market yields.
Q. THE FEDERAL RESERVE LOWERED THE FEDERAL FUNDS TARGET RATE BY 1/4% IN JULY AND
BY ANOTHER 1/4% IN DECEMBER. WHAT EFFECT DID THIS HAVE ON THE FUND?
A. After peaking in February, money market yields declined marginally over the
course of the year. As a result, the Fund's yield fell as well. In anticipation
of further Federal Reserve easings, average weighted maturity has been extended
in order to lock in current rates for a longer period of time.
Q. WHAT STEPS ARE YOU TAKING AS YOU LOOK AHEAD IN 1996 IN PURSUIT OF CONSISTENT
RETURNS IN LIGHT OF LOWER FEDERAL FUNDS RATES?
A. Under the current declining interest rate environment, we expect to maintain
the Fund's average weighted maturity in a longer range. This should enable the
Fund to take advantage of proper yield curve positioning and potentially
declining interest rates.
Q. HOW DID THE ATTENTION FOCUSED ON EXOTIC DERIVATIVES AFFECT THE FUND'S
PORTFOLIO?
A. Since the Fund neither purchases exotic derivative products nor leverages its
assets, the Fund's portfolio was not negatively impacted by these events.
Q. WHAT IS THE CURRENT COMPOSITION OF THE PORTFOLIO?
A. As of year-end, the Fund was composed of 61% commercial paper, 15% floating
rate notes, 16% U.S. Treasury bills, 3% repurchase agreements, 2% federal agency
discount notes and 3% bank notes. All commercial paper purchased by the Fund is
rated A1+/P1 or A1/P1 by Standard & Poor's and Moody's respectively.
DURING THE PERIOD, WELL FARGO BANK HAS VOLUNTARILY WAIVED PORTIONS OF ITS FEES
OR REIMBURSED OTHER EXPENSES, WHICH HAS REDUCED OPERATING EXPENSES FOR
SHAREHOLDERS. WITHOUT THIS REDUCTION, THE FUND'S YIELDS WOULD HAVE BEEN LOWER.
ALTHOUGH THE FUND SEEKS TO MAINTAIN A $1.00 PER SHARE NET ASSET VALUE, THERE IS
NO ASSURANCE THAT IT WILL BE ABLE TO DO SO.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT OR ANY GOVERNMENT AGENCY, NOR BY WELLS FARGO BANK.
5
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OVERLAND EXPRESS U.S. TREASURY MONEY MARKET FUND-
INSTITUTIONAL CLASS
MARK KRASCHEL, LIQUIDITY MANAGEMENT SPECIALIST/PORTFOLIO MANAGER. MR.
KRASCHEL HAS SPECIALIZED IN BOND INVESTMENT APPLICATIONS FOR OVER A DECADE.
HE JOINED WELLS FARGO BANK IN 1988 AFTER FIVE YEARS IN FIXED-INCOME
MANAGEMENT AT FIRST BOSTON CORPORATION. MR. KRASCHEL HOLDS A B.S. IN BUSINESS
ADMINISTRATION FROM THE UNIVERSITY OF OREGON AND AN M.B.A. IN FINANCE FROM
THE UNIVERSITY OF SAN FRANCISCO. HE HAS CO-MANAGED THE FUND SINCE MAY 12,
1992.
MARK GREEN, LIQUIDITY MANAGEMENT SPECIALIST/PORTFOLIO MANAGER. MR. GREEN
JOINED WELLS FARGO BANK IN 1990 AND SPECIALIZES IN MANAGING TAXABLE, FIXED
INCOME, LIQUIDITY ACCOUNTS. PRIOR TO JOINING THE INVESTMENT MANAGEMENT GROUP,
HE WORKED AS AN ECONOMIST IN THE BANK'S ECONOMICS DIVISION, ANALYZING AND
FORECASTING TRENDS IN THE U.S. ECONOMY AND FINANCIAL MARKETS. PRIOR TO
JOINING WELLS FARGO, HE SPENT THREE YEARS AT MONEY MARKET SERVICES
INTERNATIONAL, PROVIDING FIXED INCOME RESEARCH TO INSTITUTIONAL INVESTORS AND
PRIMARY DEALERS. MR. GREEN HOLDS A B.A. IN BOTH ECONOMICS AND INTERNATIONAL
RELATIONS, AS WELL AS AN M.A. IN ECONOMICS. HE IS ALSO A CHARTERED FINANCIAL
ANALYST CANDIDATE. HE HAS CO-MANAGED THE FUND SINCE MAY 12, 1992.
Q. HOW DID THE OVERLAND EXPRESS U.S. TREASURY MONEY MARKET FUND-INSTITUTIONAL
CLASS (THE "FUND") PERFORM DURING 1995?
A. The Fund's seven day yield for the period ended December 31, 1995 was 5.15%.
The Fund achieved its goal of maintaining principal stability at a $1.00 per
share net asset value while providing competitive money market yields.
Q. THE FEDERAL RESERVE LOWERED THE FEDERAL FUNDS TARGET RATE BY 1/4% IN JULY AND
BY ANOTHER 1/4% IN DECEMBER. WHAT EFFECT DID THIS HAVE ON THE FUND?
A. After peaking in February, money market yields declined marginally over the
course of the year. As a result, the Fund's yield fell as well. In anticipation
of further Federal Reserve easings, average maturity has been extended in order
to lock in current rates for a longer period of time.
Q. WHAT STEPS ARE YOU TAKING AS YOU LOOK AHEAD IN 1996 IN PURSUIT OF CONSISTENT
RETURNS IN LIGHT OF LOWER FEDERAL FUNDS RATES?
A. Currently we are extending the maturity of the Fund. This should enable the
Fund to take advantage of proper yield curve positioning and potentially
declining interest rates.
Q. HOW DID THE ATTENTION FOCUSED ON EXOTIC DERIVATIVES AFFECT THE FUND'S
PORTFOLIO?
A. Since the Fund neither purchases exotic derivative products nor leverages its
assets, the Fund's portfolio was not negatively impacted by these events.
Q. WHAT IS THE CURRENT COMPOSITION OF THE PORTFOLIO?
A. As of December 31, 1995 the Fund was composed of 100% U.S. Treasury bills.
DURING THE PERIOD, WELLS FARGO BANK HAS VOLUNTARILY WAIVED PORTIONS OF ITS FEES
OR REIMBURSED OTHER EXPENSES, WHICH HAS REDUCED OPERATING EXPENSES FOR
SHAREHOLDERS. WITHOUT THIS REDUCTION, THE FUND'S YIELDS WOULD HAVE BEEN LOWER.
ALTHOUGH THE FUND SEEKS TO MAINTAIN A $1.00 PER SHARE NET ASSET VALUE, THERE IS
NO ASSURANCE THAT IT WILL BE ABLE TO DO SO.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT OR ANY GOVERNMENT AGENCY, NOR BY WELLS FARGO BANK.
6
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MONEY MARKET FUND - DECEMBER 31, 1995
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
YIELD TO MATURITY
PRINCIPAL SECURITY NAME MATURITY DATE VALUE
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER - 60.89%
$ 27,500,000 Abbey National North America 5.72 % 01/31/96 $ 27,368,917
30,000,000 ANZ Delaware Inc 5.67 02/13/96 29,797,004
30,000,000 Associates Corp of North America 5.60 04/11/96 29,528,667
14,900,000 Corporate Asset Funding Co Inc++ 5.67 02/12/96 14,801,437
32,500,000 Corporate Receivables Corp++ 5.57 03/14/96 32,132,922
7,500,000 Daimler-Benz North America Corp 5.50 03/28/96 7,400,313
22,500,000 Den Danske Corp Inc 5.67 02/08/96 22,365,338
7,000,000 Den Danske Corp Inc 5.67 02/09/96 6,957,003
25,000,000 Glaxo Wellcome Plc++ 5.70 01/12/96 24,956,458
20,360,000 Greenwich Funding Corp++ 5.75 01/18/96 20,304,717
17,000,000 Hanson Finance Plc++ 5.66 02/21/96 16,863,688
12,500,000 Hanson Finance Plc++ 5.67 02/12/96 12,417,313
20,000,000 International Business Machines Credit Corp 5.66 02/02/96 19,899,378
30,000,000 Morgan (J P) & Co Inc 5.57 03/18/96 29,642,592
32,500,000 National Australia Funding Inc 5.57 03/15/96 32,127,893
32,500,000 New Center Asset Funding++ 5.60 03/15/96 32,125,889
22,000,000 Penney (J C) Co Inc 5.66 02/20/96 21,827,059
15,600,000 Pitney Bowes Credit Corp 5.70 01/02/96 15,597,530
30,000,000 Swedish Export Credit Corp 5.60 03/01/96 29,720,000
------------
TOTAL COMMERCIAL PAPER $425,834,118
SHORT TERM FEDERAL AGENCIES - 2.14%
$ 15,000,000 Federal Home Loan Mortgage Corp 5.57 % 01/05/96 $ 14,990,714
U.S. TREASURY BILLS - 15.97%
$ 115,000,000 U.S. Treasury Bills 5.19 % 07/25/96 $111,704,183
</TABLE>
7
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MONEY MARKET FUND - DECEMBER 31, 1995
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSITS - 2.86%
$ 20,000,000 Banque Nationale de Paris (Yankee) 5.81 % 01/30/96 $ 20,000,000
VARIABLE AND FLOATING RATE BONDS - 15.16%
$ 21,000,000 Chemical Banking Corp 6.08 % 08/19/96 21,027,737
20,000,000 Comerica Inc 5.25 08/12/96 19,987,698
20,000,000 FCC National Bank 5.59 10/31/96 19,990,356
15,000,000 First Bank N.A. 5.90 01/17/96 14,999,872
10,000,000 First Chicago Corp 6.22 02/23/96 10,004,977
20,000,000 PNC Bank Corp 5.64 07/29/96 19,994,162
------------
TOTAL VARIABLE AND FLOATING RATE BONDS $106,004,802
REPURCHASE AGREEMENTS - 3.39%
$ 23,731,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.75 01/02/96 $ 23,731,000
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $702,264,817)* (Note 1) 100.41 % $ 702,264,817
Other Assets and Liabilities, Net (0.41 ) (2,871,641)
---------- -------------
TOTAL NET ASSETS 100.00 % $ 699,393,176
---------- -------------
---------- -------------
................................................................................
</TABLE>
++ THESE SECURITIES ARE NOT REGISTERED UNDER THE SECURITIES ACT OF 1933.
RULE 144A UNDER THAT ACT PERMITS THESE SECURITIES TO BE RESOLD IN
TRANSACTIONS EXEMPT FROM REGISTRATION TO QUALIFIED INSTITUTIONAL
BUYERS. THESE SECURITIES WERE DEEMED LIQUID BY THE INVESTMENT ADVISER
IN ACCORDANCE WITH PROCEDURES APPROVED BY THE FUND'S BOARD OF
DIRECTORS.
* 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.
8
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U.S. TREASURY MONEY MARKET FUND - DECEMBER 31, 1995
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
YIELD TO MATURITY
PRINCIPAL SECURITY NAME MATURITY DATE VALUE
<C> <S> <C> <C> <C> <C>
U.S. TREASURY BILLS - 100.54%
$ 13,070,000 U.S. Treasury Bills 1.93 % 01/04/96 $ 13,064,240
14,875,000 U.S. Treasury Bills 4.06 01/11/96 14,853,032
20,000,000 U.S. Treasury Bills 4.49 01/25/96 19,929,933
19,190,000 U.S. Treasury Bills 4.54 01/18/96 19,142,523
17,870,000 U.S. Treasury Bills 4.58 02/01/96 17,788,924
18,280,000 U.S. Treasury Bills 4.71 02/15/96 18,158,520
28,595,000 U.S. Treasury Bills 4.74 02/08/96 28,443,045
13,355,000 U.S. Treasury Bills 4.78 02/29/96 13,238,935
22,585,000 U.S. Treasury Bills 4.81 02/22/96 22,411,480
18,995,000 U.S. Treasury Bills 5.02 03/21/96 18,775,924
26,035,000 U.S. Treasury Bills 5.03 03/07/96 25,792,503
14,139,000 U.S. Treasury Bills 5.06 03/14/96 13,987,787
18,590,000 U.S. Treasury Bills 5.07 04/18/96 18,315,613
19,650,000 U.S. Treasury Bills 5.12 04/04/96 19,386,012
------------
TOTAL U.S. TREASURY BILLS $263,288,471
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $263,288,471)* (Note 1) 100.54 % $ 263,288,471
Other Assets and Liabilities, Net (0.54 ) (1,402,110)
---------- -------------
TOTAL NET ASSETS 100.00 % $ 261,886,361
---------- -------------
---------- -------------
................................................................................
</TABLE>
* 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.
9
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES - DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY U.S. TREASURY
MARKET MONEY MARKET
FUND FUND
<S> <C> <C>
..............................................................................................
ASSETS
INVESTMENTS:
In securities, at market value
(see cost below) $ 702,264,817 $ 263,288,471
Cash 9,407 921
Receivables:
Dividends and interest 817,012 3,363
Organization expenses, net of amortization 35,220 23,582
Prepaid expenses 52,985 2,210
TOTAL ASSETS 703,179,441 263,318,547
LIABILITIES
Payables:
Distribution to shareholders 3,114,797 1,068,293
Due to sponsor and distributor (Note 2) 309,355 220,284
Due to adviser (Note 2) 318,503 107,584
Other 43,610 36,025
TOTAL LIABILITIES 3,786,265 1,432,186
TOTAL NET ASSETS
$ 699,393,176 $ 261,886,361
NET ASSETS CONSIST OF:
Paid-in capital, Class A $ 375,366,288 $ 198,782,464
Paid-in capital, Class D or I 324,220,168 63,129,720
Undistributed (overdistributed) net investment income 0 0
Undistributed net realized gain (loss) on investments (193,280) (25,823)
Net unrealized appreciation (depreciation) of
investments 0 0
TOTAL NET ASSETS $ 699,393,176 $ 261,886,361
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE (NOTE
4)
Net assets - Class A $ 375,217,777 $ 198,752,763
Shares outstanding - Class A 375,364,023 198,782,464
Net asset value per share - Class A $1.00 $1.00
Maximum offering price per share - Class A $1.00 $1.00
Net assets - Class D or I $ 324,175,399 $ 63,133,598
Shares outstanding - Class D or I 324,222,390 63,129,720
Net asset value and offering price per share - Class D
or I $1.00 $1.00
INVESTMENTS AT COST (NOTE 3) $ 702,264,817 $ 263,288,471
</TABLE>
................................................................................
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY U.S. TREASURY
MARKET MONEY MARKET
FUND FUND
<S> <C> <C>
..............................................................................................
INVESTMENT INCOME
Dividends $ 0 $ 0
Interest 29,280,765 12,944,520
TOTAL INVESTMENT INCOME 29,280,765 12,944,520
EXPENSES (NOTE 2)
Advisory fees 1,230,778 575,257
Administration fees 492,311 230,103
Custody fees 88,546 44,428
Portfolio accounting fees 158,791 107,519
Transfer agency fees 48,139 38,680
Distribution fees 866,432 492,571
Amortization of organization expenses 3,895 11,109
Legal and audit fees 44,287 41,586
Registration fees 21,302 41,946
Directors' fees 5,000 5,000
Shareholder reports 19,316 21,287
Other 8,699 5,600
TOTAL EXPENSES 2,987,496 1,615,086
Less:
Waived fees and reimbursed expenses (Note 2) (145,674) (203,631)
NET EXPENSES 2,841,822 1,411,455
NET INVESTMENT INCOME (LOSS) 26,438,943 11,533,065
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on sale of investments (155,089) (13,382)
Net change in unrealized appreciation (depreciation)
of investments 0 0
NET GAIN (LOSS) ON INVESTMENTS (155,089) (13,382)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 26,283,854 $ 11,519,683
</TABLE>
................................................................................
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
. For the MONEY MARKET FUND(1)
For the
Year Ended Year Ended
December 31, 1995 December 31, 1994
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 26,438,943 $ 11,484,645
Net realized (loss) on sale of investments (155,089) (36,799)
Net change in unrealized appreciation (depreciation) of
investments 0 0
NET INCREASE (DECREASE) RESULTING FROM OPERATIONS 26,283,854 11,447,846
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A (18,371,046) (11,414,964)
Class D or I (8,067,897) (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
From tax return of capital
Class A 0 0
Class D or I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 1,969,443,796 1,991,327,766
Reinvestment of dividends - Class A 8,012,050 4,615,464
Cost of shares redeemed - Class A (1,910,005,001) (1,916,112,891)
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 67,450,845 79,830,339
Proceeds from shares sold - Class D or I 918,045,967 19,768,852
Reinvestment of dividends - Class D or I 6,132,104 26,043
Cost of shares redeemed - Class D or I (611,195,414) (8,557,384)
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS D OR I 312,982,657 11,237,511
INCREASE (DECREASE) IN NET ASSETS 380,278,413 91,031,051
NET ASSETS:
Beginning net assets 319,114,763 228,083,712
ENDING NET ASSETS $ 699,393,176 $ 319,114,763
SHARES ISSUED AND REDEEMED:
Shares sold - Class A 1,969,427,483 1,991,327,765
Shares issued in reinvestment of dividends - Class A 8,012,052 4,615,464
Shares redeemed - Class A (1,909,990,912) (1,916,112,891)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS A 67,448,623 79,830,338
Shares sold - Class D or I 918,035,650 19,768,852
Shares issued in reinvestment of dividends - Class D or I 6,132,104 26,043
Shares redeemed - Class D or I (611,182,876) (8,557,384)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING - CLASS D OR I 312,984,878 11,237,511
</TABLE>
................................................................................
(1) CLASS I SHARES COMMENCED OPERATIONS ON AUGUST 18, 1994.
(2) CLASS I SHARES COMMENCED OPERATIONS ON JUNE 20, 1994.
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND(2)
. For the For the
Year Ended Year Ended
December 31, 1995 December 31, 1994
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 11,533,065 $ 4,895,405
Net realized (loss) on
sale of investments (13,382) (12,441)
Net change in unrealized
appreciation
(depreciation) of
investments 0 0
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 11,519,683 4,882,964
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
Class A (9,781,347) (4,799,315)
Class D or I (1,751,718) (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
From tax return of capital
Class A 0 0
Class D or I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A 746,154,757 628,656,179
Reinvestment of dividends
- Class A 4,323,454 1,652,082
Cost of shares redeemed -
Class A (746,737,367) (553,436,130)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A 3,740,844 76,872,131
Proceeds from shares sold
- Class D or I 496,751,048 310,876,391
Reinvestment of dividends
- Class D or I 1,309,335 21,937
Cost of shares redeemed -
Class D or I (438,830,786) (306,998,204)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS D OR I 59,229,597 3,900,124
INCREASE (DECREASE) IN NET
ASSETS 62,957,059 80,759,814
NET ASSETS:
Beginning net assets 198,929,302 118,169,488
ENDING NET ASSETS $ 261,886,361 $ 198,929,302
SHARES ISSUED AND REDEEMED:
Shares sold - Class A 746,154,757 628,656,178
Shares issued in
reinvestment of
dividends - Class A 4,323,454 1,652,082
Shares redeemed - Class A (746,737,367) (553,436,130)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS A 3,740,844 76,872,130
Shares sold - Class D or I 496,751,048 310,876,391
Shares issued in
reinvestment of
dividends - Class D or I 1,309,335 21,937
Shares redeemed - Class D
or I (438,830,787) (306,998,204)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS D
OR I 59,229,596 3,900,124
</TABLE>
................................................................................
(1) CLASS I SHARES COMMENCED OPERATIONS ON AUGUST 18, 1994.
(2) CLASS I SHARES COMMENCED OPERATIONS ON JUNE 20, 1994.
The accompanying notes are an integral part of these financial statements.
13
1
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
14
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MONEY MARKET FUND
..............................................
CLASS A
..............................................
Year Ended Year Ended Year Ended
Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.05 0.04 0.03
Net realized and unrealized gain (loss) on investments 0.00 0.00 0.00
----- ----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.04 0.03
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.04) (0.03)
Distributions from net realized gain 0.00 0.00 0.00
Tax return of capital 0.00 0.00 0.00
----- ----- -----
TOTAL FROM DISTRIBUTIONS (0.05) (0.04) (0.03)
------ ------ ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
------ ------ ------
------ ------ ------
TOTAL RETURN (NOT ANNUALIZED)(3) 5.44% 3.70% 2.57%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $375,218 $307,878 $228,084
Number of shares outstanding, end of period (000) 375,364 307,915 228,085
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 0.65% 0.68% 0.74%
Ratio of net investment income to average net assets(2) 5.43% 3.71% 2.54%
Portfolio turnover N/A N/A N/A
............................................................................................................
(1) Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 0.69% 0.72% 0.74%
(2) Ratio of net investment income to average net assets
prior to waived fees and reimbursed expenses 5.39% 3.67% 2.54%
</TABLE>
................................................................................
(3) TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MONEY MARKET FUND (CONT.)
..............................
CLASS A (CONT.)
..............................
Year Ended Year Ended
Dec. 31, 1992 Dec. 31, 1991
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.03 0.06
Net realized and unrealized gain (loss) on investments 0.00 0.00
----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.03 0.06
LESS DISTRIBUTIONS:
Dividends from net investment income (0.03) (0.06)
Distributions from net realized gain 0.00 0.00
Tax return of capital 0.00 0.00
----- -----
TOTAL FROM DISTRIBUTIONS (0.03) (0.06)
------ ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
------ ------
------ ------
TOTAL RETURN (NOT ANNUALIZED)(3) 3.23% 5.65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $268,424 $229,863
Number of shares outstanding, end of period (000) 268,434 229,866
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 0.75% 0.74%
Ratio of net investment income to average net assets(2) 3.17% 5.54%
Portfolio turnover N/A N/A
...........................................................................................................
(1) Ratio of expenses to average net assets prior to waived fees and
reimbursed expenses 0.75% 0.75%
(2) Ratio of net investment income to average net assets prior to waived
fees and reimbursed expenses 3.17% 5.53%
</TABLE>
................................................................................
(3) TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(4) THIS CLASS COMMENCED OPERATIONS ON AUGUST 18, 1994.
(5) THE FUND COMMENCED OPERATIONS ON MAY 12, 1992.
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND (CONT.) U.S. TREASURY MONEY MARKET FUND
.............................. ..............................................................
CLASS I(4) CLASS A(5)
.............................. ..............................................................
Year Ended Period Ended Year Ended Year Ended Year Ended Period Ended
Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992
<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
(loss) 0.06 0.02 0.05 0.03 0.03 0.02
Net realized and
unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00 0.00
----- ----- ----- ----- ----- -----
TOTAL FROM INVESTMENT
OPERATIONS 0.06 0.02 0.05 0.03 0.03 0.02
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.06) (0.02) (0.05) (0.03) (0.03) (0.02)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00
Tax return of capital 0.00 0.00 0.00 0.00 0.00 0.00
----- ----- ----- ----- ----- -----
TOTAL FROM DISTRIBUTIONS (0.06) (0.02) (0.05) (0.03) (0.03) (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) 5.71% 1.83% 5.09% 3.44% 2.56% 1.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $324,175 $11,237 $198,753 $195,031 $118,169 $137,412
Number of shares
outstanding, end of
period (000) 324,222 11,238 198,782 195,042 118,169 137,416
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 0.39% 0.38% 0.65% 0.63% 0.52% 0.27%
Ratio of net investment
income to average net
assets(2) 5.70% 5.05% 4.97% 3.47% 2.55% 3.12%
Portfolio turnover 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 0.45% 0.55% 0.73% 0.80% 0.77% 0.79%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 5.64% 4.88% 4.89% 3.30% 2.30% 2.60%
</TABLE>
................................................................................
(3) TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(4) THIS CLASS COMMENCED OPERATIONS ON AUGUST 18, 1994.
(5) THE FUND COMMENCED OPERATIONS ON MAY 12, 1992.
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET
FUND (CONT.)
..............................
CLASS I(4)
..............................
Year Ended Period Ended
Dec. 31, 1995 Dec. 31, 1994
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.05 0.02
Net realized and unrealized gain (loss) on investments 0.00 0.00
----- -----
TOTAL FROM INVESTMENT OPERATIONS 0.05 0.02
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.02)
Distributions from net realized gain 0.00 0.00
Tax return of capital 0.00 0.00
----- -----
TOTAL FROM DISTRIBUTIONS (0.05) (0.02)
------ ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
------ ------
------ ------
TOTAL RETURN (NOT ANNUALIZED)(3) 5.35% 2.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $63,134 $3,898
Number of shares outstanding, end of period (000) 63,130 3,900
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 0.39% 0.23%
Ratio of net investment income to average net assets(2) 5.16% 4.42%
Portfolio turnover N/A N/A
...........................................................................................................
(1) Ratio of expenses to average net assets prior to waived fees and
reimbursed expenses 0.49% 0.57%
(2) Ratio of net investment income to average net assets prior to waived
fees and reimbursed expenses 5.06% 4.08%
</TABLE>
................................................................................
(3) TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
(4) THIS CLASS COMMENCED OPERATIONS ON JUNE 20, 1994.
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
OVERLAND EXPRESS FUNDS, INC.
NOTES TO THE FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The Money Market Fund and the U.S. Treasury Money Market Fund (the "Funds") are
two series of Overland Express Funds, Inc. (the "Company"), which is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as an
open-end series investment company. The Company commenced operations on April 7,
1988 and consists of ten separate diversified funds: the Asset Allocation Fund,
the Money Market Fund, the Municipal Income Fund, the Short-Term
Government-Corporate Income Fund, the Short-Term Municipal Income Fund, the
Strategic Growth Fund, the Overland Sweep 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. These financial statements represent the Money
Market Fund and the U.S. Treasury Money Market Fund only.
The Money Market Fund and the U.S. Treasury Money Market Fund commenced offering
Class I shares on August 18, 1994, and June 20, 1994, respectively. The Class I
shares differ from each Fund's Class A shares principally in the applicable
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. Neither 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.
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.
The preparation of financial statements in conformity with Generally Accepted
Accounting Principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
INVESTMENT POLICY AND SECURITY VALUATION
The Funds invest in securities with remaining maturities not exceeding 397 days
(thirteen months), including obligations of the U.S. Government, bankers
acceptances, commercial paper and certain floating- and variable-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.
19
<PAGE>
OVERLAND EXPRESS FUNDS, INC.
NOTES TO THE FINANCIAL STATEMENTS
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 be
able to do so. 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.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on the date the securities are purchased
or sold (trade date). Interest income is recognized on a daily accrual basis.
Realized gains or losses are reported on the basis of identified cost of
securities delivered.
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
Fund's adviser pools the Funds' cash and invests in repurchase agreements
entered into by the Funds. The repurchase agreements must 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, 1995, are
collateralized by U.S. Treasury or federal agency obligations. The repurchase
agreements were entered into on December 29, 1995.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from each Fund's net investment income are declared daily and
distributed monthly to shareholders of the Money Market Fund and the U.S.
Treasury Money Market Fund. Any distributions to shareholders from net realized
capital gains are declared and distributed annually.
FEDERAL INCOME TAXES
The Company's policy with respect to each Fund is to comply with the
requirements of the Internal Revenue Code that are applicable to regulated
investment companies and to distribute substantially all of the Fund's 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 net capital loss carryforwards of $1,392 which will expire in
the year 2001, $36,799 which will expire in the year 2002 and $155,089 which
will expire in the year 2003. The U.S. Treasury Money Market Fund has net
capital loss carryforwards of $12,441 which will expire in the year 2002 and
$13,382 which will expire in the year 2003. 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 has expired.
20
<PAGE>
OVERLAND EXPRESS FUNDS, INC.
NOTES TO THE FINANCIAL STATEMENTS
ORGANIZATION EXPENSES
Stephens Inc. ("Stephens"), the Funds' administrator, sponsor and distributor,
has incurred expenses in connection with the organization and initial
registration of the Funds. These expenses were charged to the individual Fund or
class and are being amortized on a straightline basis over 60 months from the
date the Fund or class commenced operations.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into advisory contracts on behalf of each 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 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 each Fund's average daily net
assets.
The Company has entered into contracts on behalf of each Fund with WFB whereby
WFB is responsible for providing custody and portfolio accounting services for
the Funds. Pursuant to the contracts, WFB is entitled to an annual fee for
custody services at the 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 of each Fund.
The Company also has entered into a contract on behalf of the Funds with WFB
whereby WFB provides transfer agency services for the Funds. Under the contract,
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 a 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 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. The
Money Market 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 a Plan pursuant to Rule 12b-1 under the 1940 Act,
whereby Class A of the Money Market Fund, and the U.S. Treasury Money Market
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 Class A shares of each Fund.
21
<PAGE>
OVERLAND EXPRESS FUNDS, INC.
NOTES TO THE FINANCIAL STATEMENTS
WAIVED FEES
Waived fees for the year ended December 31, 1995 are as follows:
<TABLE>
<CAPTION>
WAIVED FEES BY
FUND WFB
<S> <C>
.................................................................................................................
Money Market $ 145,674
U.S. Treasury Money Market 203,631
</TABLE>
Waived fees continue at the discretion of WFB.
All of the officers and certain of the directors of the Company are also
officers of Stephens. As of December 31, 1995, Stephens owned 1,344,975 shares
of the Money Market Fund and 123,930 shares of the U.S. Treasury Money Market
Fund.
3. CAPITAL SHARES TRANSACTIONS
As of December 31, 1995, the Money Market Fund and the U.S. Treasury Money
Market Fund were each authorized to issue 1 billion shares of $.001 par value
capital stock for each class of shares. Transactions in capital shares for the
period ended December 31, 1995 and 1994 are disclosed in detail in the
Statements of Changes in Net Assets.
The Money Market Fund has two shareholders who own greater than 5% of the
outstanding share capital of the Fund. This concentration of ownership may
expose the Fund to the risks associated with significant redemptions.
4. ORANGE COUNTY CALIFORNIA DEBT OBLIGATIONS
During the year the Money Market Fund held obligations issued by Orange County,
California. Orange County filed for protection under Chapter 9 of the Federal
Bankruptcy Code on December 6, 1994 and defaulted on such obligations on July
10, 1995. The bankruptcy court trustee approved an extension of the obligations'
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 Orange County, the Company entered into a Credit
Enhancement Agreement (the "Agreement") with WFB, pursuant to which the Fund 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 provided support for a portion of the Orange County obligations such
that Bank of America would make certain payments to the Fund under defined
circumstances.
During the period from September 19, 1995 through October 17, 1995, the Money
Market Fund sold all of the Orange County obligations. Under the terms of the
Agreement, the sale of such obligations did not result in any payments from Bank
of America to the Money Market Fund.
22
<PAGE>
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OVERLAND EXPRESS FUNDS, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of the Money Market Fund and U.S. Treasury Money
Market Fund (two of the funds comprising Overland Express Funds, Inc.) as of
December 31, 1995, 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 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, 1995, 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 the
aforementioned funds of Overland Express Funds, Inc. as of December 31, 1995,
the results of their operations, the changes in their net assets and their
financial highlights for the periods indicated herein in conformity with
generally accepted accounting principles.
SAN FRANCISCO, CALIFORNIA
FEBRUARY 14, 1996
23
<PAGE>
OVERLAND EXPRESS FUNDS, INC.
SUPPLEMENT DATED JANUARY 2, 1996
TO THE CURRENT PROSPECTUS, AS PREVIOUSLY SUPPLEMENTED, AND STATEMENT OF
ADDITIONAL INFORMATION OF EACH FUND OF OVERLAND EXPRESS FUNDS, INC.
As of January 1, 1996, Wells Fargo Bank, N.A. provides investment advisory
services for approximately $33 billion of assets.
Each Fund's current Prospectus, as supplemented, and Statement of
Additional Information are hereby amended accordingly.
<PAGE>
[LOGO] BULK RATE
OVERLAND U.S. POSTAGE
EXPRESS-REGISTERED TRADEMARK- PAID
PERMIT NO 1933
POST OFFICE BOX 63084 FULLERTON CA
SAN FRANCISCO, CA 94163
This report and the financial statements
contained herein are submitted for the general
information of the shareholders of the Overland
Express Funds. If this report is used for promotional
purposes, distribution of the report must be
accompanied or preceded by a current prospectus.
For a prospectus containing more complete
information, including charges and expenses,
call 1-800-552-9612. Read the prospectus
carefully before you invest.
THIS BOOKLET INCLUDES THE ANNUAL REPORT AND A
PROSPECTUS SUPPLEMENT. THIS PROSPECTUS SUPPLEMENT
APPEARS ON THE INSIDE BACK COVER.
OEX AR2 2/96
DATED MATERIAL - PLEASE EXPEDITE
