<PAGE> 1
OVERLAND EXPRESS FUNDS, INC.
ASSET ALLOCATION FUND
SUPPLEMENT DATED JANUARY 2, 1996
TO PROSPECTUS DATED MAY 1, 1995,
AS PREVIOUSLY SUPPLEMENTED, AND
STATEMENT OF ADDITIONAL INFORMATION
DATED MAY 1, 1995
Effective January 1, 1996, BZW Barclays Global Fund Advisors ("BGFA")
replaced Wells Fargo Nikko Investment Advisors ("WFNIA") as sub-investment
adviser to the Asset Allocation Fund (the "Fund") of Overland Express Funds,
Inc. BGFA was created by the reorganization of WFNIA with and into an
affiliate of Wells Fargo Institutional Trust Company, N.A. ("WFITC"). Pursuant
to a Sub-Advisory Contract with the Fund and subject to the overall supervision
of Wells Fargo Bank, the Fund's investment adviser, BGFA is responsible for the
day-to-day portfolio management of the Fund. BGFA will continue to employ
substantially the same personnel and will continue to use the computer-based
investment model developed and previously used by WFNIA to determine the
recommended mix of assets in the Fund's portfolio. BGFA is entitled to receive
from Wells Fargo an annual fee of $60,000 and monthly fees at the annual rate
of 0.20% of the Fund's average daily net assets as compensation for its
sub-advisory services. BGFA is an indirect subsidiary of Barclays Bank PLC and
is located at 45 Fremont Street, San Francisco, CA 94105. As of January 1,
1996, BGFA and its affiliates provide investment advisory services for over
$220 billion of assets under management. As of January 1, 1996, Wells Fargo
Bank provides investment advisory services for approximately $33 billion of
assets.
Effective January 1, 1996, WFITC, due to a change in control of its
outstanding voting securities, became a wholly owned subsidiary of BZW Barclays
Global Investors Holdings Inc. (formerly, The Nikko Building U.S.A., Inc.) and
WFITC was renamed BZW Barclays Global Investors, N.A. ("BGI"). BGI currently
acts as the Fund's custodian. BGFA is a subsidiary of BGI. BGI will not be
entitled to receive compensation for its services to the Fund so long as BGFA
is entitled to receive fees for providing investment advisory services to the
Fund. The principal business address of BGI is 45 Fremont Street, San
Francisco, California 94105.
The Prospectus and Statement of Additional Information describing the
Fund are hereby amended accordingly.
<PAGE> 2
LOGO
Telephone: (800) 552-9612
Stephens Inc. -- Sponsor, Administrator and Distributor
Wells Fargo Bank, N.A. -- Investment Adviser, Transfer and Dividend Disbursing
Agent
Wells Fargo Nikko Investment Advisors -- Sub-Investment Adviser
Wells Fargo Institutional Trust Company, N.A. -- Custodian
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 ASSET ALLOCATION
FUND (the "Fund").
The Asset Allocation Fund seeks to earn over the long term a high level of
total investment return (that is, income and capital appreciation combined),
consistent with the assumption of reasonable risk, by pursuing an "asset
allocation" strategy whereby its investments are allocated, based on changes in
market conditions, among three asset classes -- common stocks in the Standard &
Poor's Index of 500 Stocks (the "S&P Index"), U.S. Treasury bonds and money
market instruments.
This Prospectus describes two classes of shares of the Fund -- Class A
Shares and Class D Shares.
This Prospectus sets forth concisely the information a prospective investor
should know before investing in the Fund. A Statement of Additional Information
dated May 1, 1995, 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.
------------------------
INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
AND RETAIN IT FOR FUTURE REFERENCE.
------------------------
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 THE 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, 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 MAY 1, 1995
<PAGE> 3
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
Advisory, Administration and Distribution Arrangements...................................... 5
Determination of Net Asset Value............................................................ 8
Purchase of Shares.......................................................................... 9
Exchange Privileges......................................................................... 14
Redemption of Shares........................................................................ 16
Distribution Plans.......................................................................... 19
Servicing Plan.............................................................................. 19
Dividends and Distributions................................................................. 19
Taxes....................................................................................... 20
Custodian and Transfer and Dividend Disbursing Agent........................................ 21
Organization and Capital Stock.............................................................. 21
</TABLE>
i
<PAGE> 4
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
its investment objective.
Q. WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
A. The ASSET ALLOCATION FUND seeks to earn over the long term a high level
of total investment return (that is, income and capital appreciation
combined), consistent with the assumption of reasonable risk, by pursuing
an "asset allocation" strategy whereby its investments are allocated,
based on changes in market conditions, among three asset classes -- common
stocks in the S&P Index, U.S. Treasury bonds and money market instruments.
As with all mutual funds, there can be no assurance that the Fund will
achieve its investment objective.
Q. WHAT ARE PERMISSIBLE INVESTMENTS?
A. The Fund may invest in three asset classes: common stocks in the S&P
Index, U.S. Treasury bonds with maturities generally between 20 and 30
years and high-quality money market instruments. The Fund seeks to
maximize its long-term investment results by shifting its investments
periodically among the various asset classes to attempt to achieve a
return that is superior to an investment in any single asset class.
Q. WHO IS THE INVESTMENT ADVISER?
A. Wells Fargo Bank serves as the investment adviser of the Fund. Wells
Fargo Bank is entitled to receive a monthly advisory fee at the annual
rate of 0.70% of the average daily net assets of the Fund up to $500
million, and 0.60% of such assets in excess of $500 million. Wells Fargo
Nikko Investment Advisors ("WFNIA") serves as the sub-investment adviser
to the Fund and receives compensation for its services out of the fee paid
to Wells Fargo Bank. See "Advisory, Administration and Distribution
Arrangements."
Q. WHO IS THE SPONSOR, ADMINISTRATOR AND DISTRIBUTOR?
A. Stephens serves as the sponsor, administrator and distributor for the
Company. Stephens is entitled to receive a monthly administration fee at
the annual rate of 0.10% of the average daily net assets of the Fund;
decreasing to 0.05% of the average daily net assets of the Fund in excess
of $200 million. See "Advisory, Administration and Distribution
Arrangements."
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 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 purchases through the Systematic Purchase Plan
and $250 for purchases 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.
ii
<PAGE> 5
Purchases of shares of the Fund may be made by wire directly to the
Transfer Agent. The 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 quarterly and paid
quarterly. Dividends are automatically reinvested in additional shares of
the same class of the Fund unless you 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 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
your shares. However, the Company reserves the right to impose charges for
wiring your 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. When
the value of the securities that the Fund owns declines, so does the value
of your Fund shares. Therefore, you should be prepared to accept some risk
with the money you invest in the Fund. Because the Fund may shift its
investment allocations significantly from time to time, its performance
may differ from funds which invest in one asset class or from funds with a
stable mix of assets. Further, shifts among asset classes may result in
relatively high portfolio turnover rates, which may, in turn, result in
increased brokerage and transaction costs, and/or subject shareholders to
increased short-term capital gains or losses. The portfolio debt
securities of the Fund are subject to interest rate risk. Interest rate
risk is the risk that increases in market interest rates may adversely
affect the value of the debt securities in which the Fund invests and
hence the value of your investment in the Fund. The values of such
securities generally change inversely to changes in market interest rates.
During those periods in
iii
<PAGE> 6
which a high percentage of the Fund's portfolio is invested in long-term
bonds, the Fund's exposure to interest rate risk will be greater because
the longer maturity of such securities means they are generally more
sensitive to changes in market interest rates than shorter term
securities. The stock investments of the Fund are subject to equity market
risk. Equity market risk is the possibility that common stock prices will
fluctuate or decline over short or even extended periods. The U.S. stock
market tends to be cyclical, with periods when stock prices generally rise
and periods when prices generally decline. Additionally, the Fund may lend
its portfolio securities, which entails certain risks, although any such
loans will be fully collateralized. As with all mutual funds, there can be
no assurance that the Fund will achieve its investment objective. You
should be prepared to accept the risk that the Fund may under-perform
(over the short- and/or long-term) one or more of the three classes of
securities in which it invests.
iv
<PAGE> 7
SUMMARY OF EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
ASSET ALLOCATION
FUND
------------------
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................................................................ 0.70% 0.70%
12b-1 Fees..................................................................... 0.25% 0.75%
Total Other Expenses(1):
Servicing Fees............................................................... 0.00% 0.25%
Other Expenses............................................................... 0.35% 0.35%
------- -------
Total Fund Operating Expenses(1)**............................................. 1.30% 2.05%
</TABLE>
- ---------------
(1) After any waivers or reimbursements
v
<PAGE> 8
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............................. $ 58 $ 84 $ 113 $ 195
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............................. $ 31 $ 64 $ 110 $ 238
You would pay the following expenses on the same
investment in Class D Shares of the Fund, assuming no
redemption............................................. $ 21 $ 64 $ 110 $ 238
</TABLE>
- ------------
* See "Contingent Deferred Sales Charge."
** As further described in the Prospectus under the caption "Advisory,
Administration and Distribution Arrangements," Stephens and Wells Fargo Bank
each has agreed to waive 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 will reduce the total
expenses of the Fund.
The percentages shown above with respect to Class A Shares under "Total Other
Expenses" and "Total Fund Operating Expenses" reflect voluntary fee waivers
and expense reimbursements for the most recent fiscal year. Absent such
waivers and reimbursements, these percentages would have been 0.43% and
1.38%, respectively, for Class A Shares, and would have been 0.75% and 2.20%,
respectively for Class D Shares. 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"). Of course,
there can be no assurances that the foregoing voluntary fee waivers and
expense 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. 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. See Prospectus sections captioned "Advisory,
Administration and Distribution Arrangements," "Distribution Plans" and
"Purchase of Shares" for more complete descriptions of the various costs and
expenses applicable to the Fund.
------------------------
The S&P Index is an unmanaged index of stocks comprised of 500 industrial,
financial, utility and transportation companies. "Standard & Poor's(R)",
"S&P(R)", "S&P 500(R)", "Standard & Poor's 500", and "500" are trademarks of
McGraw-Hill, Inc. and have been licensed. The Fund is not sponsored, endorsed,
sold or promoted by Standard & Poor's and Standard & Poor's makes no
representation regarding the advisability of investing in the Fund.
vi
<PAGE> 9
FINANCIAL HIGHLIGHTS
The following information has been derived from the Financial Highlights in
the Fund's 1994 annual financial statements. The financial statements are
incorporated by reference into the SAI and have been audited by KPMG Peat
Marwick LLP, independent auditors, whose report dated February 17, 1995 also is
incorporated by reference in the SAI. This information should be read in
conjunction with the Fund's 1994 annual financial statements and the notes
thereto. The SAI has been incorporated by reference into this Prospectus.
ASSET ALLOCATION FUND
FOR A CLASS A SHARE OUTSTANDING AS SHOWN
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991 1990 1989 1988*
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................. $ 11.90 $ 11.45 $ 11.95 $ 10.31 $ 10.39 $ 10.17 $ 10.00
Income From Investment Operations:
Net Investment Income................................ 0.31 0.30 0.47 0.57 0.63 0.67 0.28
Net Realized and Unrealized Capital Gain/(Loss) on
Investments........................................ (0.39) 1.12 0.36 1.51 0.10 0.33 0.18
======== ======== ======== ======== ======== ======== ========
Total From Investment Operations..................... (0.08) 1.42 0.83 2.08 0.73 1.00 0.46
Less Distributions:
Dividends From Net Investment Income................. (0.31) (0.30) (0.63) (0.44) (0.61) (0.63) (0.27)
Distributions From Net Realized Capital Gain......... (0.84) (0.67) (0.70) 0.00 (0.20) (0.15) (0.02)
-------- -------- -------- -------- -------- -------- --------
Total From Distributions............................. (1.15) (0.97) (1.33) (0.44) (0.81) (0.78) (0.29)
Net Asset Value, End of Period....................... $ 10.67 $ 11.90 $ 11.45 $ 11.95 $ 10.31 $ 10.39 $ 10.17
======== ======== ======== ======== ======== ======== ========
Total Return (not annualized)+....................... (0.68)% 12.54% 7.44% 20.69% 7.08% 10.23% 4.60%
Ratios/Supplemental Data:
Net Assets, End of Period (000)...................... $40,308 $53,124 $41,165 $38,663 $27,689 $23,814 $13,220
Number of Shares Outstanding, End of Period (000).... 3,779 4,465 3,596 3,235 2,686 2,293 1,300
Ratios to Average Net Assets (annualized):
Ratio of Expenses to Average Net Assets(1)........... 1.30% 1.36% 1.25% 1.38% 1.59% 1.76% 1.76%
Ratio of Net Investment Income to Average Net
Assets(2).......................................... 2.41% 2.64% 4.08% 5.23% 6.01% 6.44% 4.69%
Portfolio Turnover................................... 50% 53% 38% 18% 94% 62% 200%
- ------------
(1) Ratio of Expenses to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses.............. 1.38% 1.47% 1.71% 1.56% 1.74% 2.37% 3.02%
(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% N/A N/A
</TABLE>
* The Fund commenced operations on April 7, 1988.
+ Total returns do not include any sales charges.
vii
<PAGE> 10
ASSET ALLOCATION FUND
FOR A CLASS D SHARE OUTSTANDING AS SHOWN
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
DEC. 31, DEC. 31,
1994 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 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 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%
</TABLE>
* This Class commenced operations on July 1, 1993.
+ Total returns do not include the 1% contingent deferred sales charge.
viii
<PAGE> 11
INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT OBJECTIVE. The Asset Allocation Fund seeks to earn over the long
term a high level of total investment return (that is, income and capital
appreciation combined), consistent with the assumption of reasonable risk, by
pursuing an "asset allocation" strategy whereby its investments are allocated,
based on changes in market conditions, among three asset classes -- common
stocks in the S&P Index, U.S. Treasury bonds and money market instruments. As
with all mutual funds, there can be no assurance that the Fund, which is a
diversified portfolio, will achieve its investment objective.
The asset allocation strategy is based upon the premise that, from time to
time, certain asset classes are more attractive long-term investments than
others and, accordingly, that timely shifts among common stocks, U.S. Treasury
bonds with maturities of 20 to 30 years and money market instruments, as
determined by their relative over-valuation or under-valuation, can produce
superior investment returns.
Subject to the direction of the Company's Board of Directors and the
overall supervision and control of Wells Fargo Bank and the Company, WFNIA, as
sub-investment adviser to the Fund, uses a proprietary investment model to make
recommendations regarding the investment and periodic readjustment of the Fund's
assets in accordance with the investment objective, policies and restrictions
set forth herein and in the Fund's SAI. The investment model has been developed
over the past 17 years, and investments totalling approximately $14 billion were
being managed by WFNIA and its divisions and affiliates using this investment
model as of December 31, 1994. The investment model analyzes extensive financial
data from numerous sources, and, based on such data, recommends percentage
allocations among common stocks, U.S. Treasury bonds and money-market
instruments.
The principal financial data used by WFNIA in connection with the
investment model currently are: (i) consensus estimates of the earnings,
dividends and payout ratios on a broad cross-section of common stocks as
reported by independent financial reporting services that survey over 1,000 Wall
Street analysts; (ii) the estimated current yield to maturity on new long-term
corporate bonds rated "AA" by Standard & Poor's Corporation ("S&P") or on
long-term U.S. Treasury bonds; (iii) the present yield on money market
instruments; (iv) the historical standard statistical deviation in investment
return for each class of assets; and (v) the historical standard statistical
correlation of investment return among the various asset classes.
Stocks. Common stocks purchased by the Fund generally will not be
individually selected. Rather, the goal will be to achieve a representative
holding of publicly traded common stocks by investing, to the extent permissible
under applicable law, in the stocks of the S&P Index on a capitalization
weighted basis (the same basis used by the S&P Index). If, and to the extent
that the common stock of Wells Fargo & Company, an affiliate of Wells Fargo
Bank, is contained in the S&P Index, the Fund is permitted to invest in such
securities with the stock portion of its portfolio. The S&P Index is an
unmanaged index of common stocks widely used as a measure of stock market price
movements. If a particular industry grows to represent more than 25% of the S&P
Index, the Fund may, consistent with its concentration policy (as set forth in
the SAI), continue to invest in all industry components of this index. When the
total of the Fund's assets allocated to stocks is less than the amount needed
for a full investment in round (100-share) lots, the Fund will either utilize
odd (less than 100-share) lots, which may increase transaction costs, or will
not purchase some stocks, with relatively low capitalizations, that make up the
S&P Index, or both. These factors will likely result in the performance of the
Fund's common stocks deviating from the performance of the stocks composing the
full S&P Index.
1
<PAGE> 12
Bonds. The Fund purchases U.S. Treasury bonds with maturities generally
ranging from 20 to 30 years. This form of debt instrument has been selected
because of the high quality of, and the relatively low cost of buying and
selling, U.S. Treasury bonds. The value of the bonds in which the Fund invests
varies inversely with changes in market interest rates. In general, the
variations in market value associated with bonds with remaining average
maturities of 20 to 30 years can be expected to be greater than variations in
the value of shorter term U.S. Treasury bonds, notes and bills.
Money Market Instruments. The money market instrument portion of the Fund's
portfolio will generally be invested in the following money market instruments
that have remaining maturities not exceeding one year: (i) obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities (including
government-sponsored enterprises); (ii) negotiable certificates of deposit,
bankers' acceptances, 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 Federal Deposit Insurance Corporation; (iii) commercial paper rated at
the date of purchase "P-1" by Moody's Investors Service, Inc. ("Moody's") or
"A-1" or "A-1 +" by S&P; (iv) certain repurchase agreements; and (v)
high-quality municipal obligations, the income from which may or may not be
exempt from federal income taxes. The Fund 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. The value of the money market instruments in
which the Fund may invest varies inversely with changes in market interest
rates.
How the Allocation Computer Model is Used by WFNIA. WFNIA compares the
Fund's portfolio investments to the investment model's recommended asset
allocation on a daily basis. The investment model recommends allocations among
each asset class in 10% increments only. Any recommended reallocation will be
implemented in accordance with trading policies that have been designed to take
advantage of market opportunities and to reduce transaction costs. Under current
trading policies employed by WFNIA, recommended reallocations may be implemented
promptly upon receipt of recommendations or may not be acted upon for as long as
two to three months thereafter depending on factors such as the percentage
change from previous recommendations and the consistency of recommended
reallocations over a period of time. In addition, the Fund generally will invest
the net proceeds from the sale of shares of the Fund and will liquidate existing
Fund investments to meet net redemption requirements in a manner that best
allows the Fund's existing asset allocation to follow that recommended by the
investment model. Notwithstanding any recommendation of the investment model to
the contrary, the Fund will generally maintain at least that portion of its
assets in money market instruments reasonably considered necessary to meet
redemption requirements. There is no requirement that the Fund maintain
positions in any particular asset class or classes.
WFNIA, as sub-investment adviser, intends generally to allocate investments
among the asset classes of the Fund in accordance with its trading policies used
in connection with implementing the investment model's recommendations. WFNIA
will, however, independently evaluate each recommended allocation and may under
certain circumstances vary the allocation from that recommended by the model.
For example, WFNIA may determine not to follow the model if to do so would
result in the Fund's ceasing to be qualified
2
<PAGE> 13
as a regulated investment company under the Internal Revenue Code of 1986, as
amended (the "Code"), if WFNIA believes that the Fund would incur unreasonable
transaction costs in reallocating among asset classes in a highly erratic market
environment, or if necessary to satisfy liquidity requirements.
ADDITIONAL PERMITTED INVESTMENT ACTIVITIES
FLOATING- AND VARIABLE-RATE INSTRUMENTS
Certain of the debt instruments that the Fund may purchase bear interest at
rates that are not fixed, but vary with changes in specified market rates or
indices or at specified intervals. Certain of these 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 floating- and variable-rate instruments that
the Fund may purchase include certificates of participation in floating- and
variable-rate obligations purchased from banks. Wells Fargo Bank, as investment
adviser, monitors on an ongoing basis the ability of an issuer of a demand
instrument to pay principal and interest on demand. Events occurring between the
date the Fund elects to demand payment and the date payment is due may affect
the ability of the issuer of the instrument to make payment when due, and unless
such demand instrument permits same-day settlement, may affect the Fund's right
to obtain payment at par. Demand instruments whose demand features cannot be
exercised within seven days may be treated as liquid, provided that an active
secondary market exists.
LOANS OF PORTFOLIO SECURITIES
The Fund may lend securities from its portfolio to brokers, dealers and
financial institutions (but not individuals) if cash, U.S. Government securities
or other high grade debt instruments equal to at least 100% of the current
market value of the securities loaned (including accrued interest thereon) plus
the interest payable to the Fund with respect to the loan is maintained with the
Fund. In determining whether to lend a security to a particular broker, dealer
or financial institution, the Fund's investment adviser will consider all
relevant facts and circumstances, including the creditworthiness of the broker,
dealer or financial institution. Any loans of portfolio securities will be fully
collateralized based on values that are marked to market daily. The Fund will
not enter into any portfolio security lending arrangement having a duration of
longer than one year. Any securities that the Fund may receive as collateral
will not become part of the Fund's portfolio at the time of the loan and, in the
event of a default by the borrower, the Fund will, if permitted by law, dispose
of such collateral except for such part thereof that is a security in which the
Fund is permitted to invest. During the time securities are on loan, the
borrower will pay the Fund any accrued income on those securities, and the Fund
may invest the cash collateral in U.S. Government securities or other high grade
debt obligations and earn additional income or receive an agreed-upon fee from a
borrower that has delivered cash-equivalent collateral. The Fund will not lend
securities having a value that exceeds one-third of the current value of its
total assets. Loans of securities by the Fund will be subject to termination at
the Fund's or the borrower's option. The Fund may pay reasonable administrative
and custodial fees in connection with a securities loan and may pay a negotiated
portion of the interest or fee earned with respect to the collateral to the
borrower or the placing broker. Borrowers and placing brokers may not be
affiliated, directly or indirectly, with the Company, its investment adviser, or
its distributor.
3
<PAGE> 14
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements wherein the seller of a
security to the Fund agrees to repurchase that security from the Fund 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 Fund may enter into repurchase agreements only with respect to U.S.
Government obligations and other securities that are permissible investments for
the Fund. All repurchase agreements will be fully collateralized based on values
that are marked to market daily. The maturities of the underlying securities in
a repurchase agreement transaction may be greater than one year. If the seller
defaults and the value of the underlying securities has declined, the Fund may
incur a loss. In addition, if bankruptcy proceedings are commenced with respect
to the seller of the security, the Fund's disposition of the security may be
delayed or limited.
The Fund may not enter into a repurchase agreement with a maturity of more
than seven days, if, as a result, more than 10% of the market value of the
Fund's total net assets would be invested in repurchase agreements with
maturities of more than seven days, restricted securities and illiquid
securities. The Fund 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 Fund
may participate in pooled repurchase agreement transactions with other funds
advised by Wells Fargo Bank.
INVESTMENT IN FOREIGN SECURITIES
The Fund may invest in securities of foreign governmental and private
issuers that are denominated in and pay interest in U.S. dollars. 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.
------------------------
The Fund's investment objective, as set forth in the first paragraph of the
section describing the Fund's objective and policies, is fundamental; that is,
the investment objective may not be changed without approval by the vote of the
holders of a majority of the Fund's outstanding voting securities, as described
under "Capital Stock" in the SAI. If the Board of Directors determines, however,
that the Fund's investment objective can best be achieved by a substantive
change in a non-fundamental investment policy or strategy, the Company may make
such change without shareholder approval and will disclose any such material
changes in the then current prospectus.
In addition, as matters of fundamental policy, the Fund may: (i) 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 borrowing exists); (ii) make
loans of portfolio securities; (iii) invest
4
<PAGE> 15
up to 10% of the current value of its net assets in repurchase agreements having
maturities of more than seven days, restricted securities and illiquid
securities; and (iv) invest up to 10% of the current value of its net assets in
fixed time deposits that are subject to withdrawal penalties and that have
maturities of more than seven days.
ADVISORY, ADMINISTRATION AND
DISTRIBUTION ARRANGEMENTS
The Board of Directors, in addition to supervising the actions of the
investment adviser, administrator and distributor, as set forth below, decides
upon matters of general policy.
INVESTMENT ADVISER
Pursuant to an Amended Advisory Contract, the Fund 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 ten
largest banks in the United States, was founded in 1852 and is the oldest bank
in the western United States. As of December 31, 1994, various divisions and
affiliates of Wells Fargo Bank (including WFNIA) provided investment advisory
services for approximately $200 billion of assets of individuals, trusts,
estates and institutions. As of December 31, 1994, WFNIA managed or advised over
$158 billion in assets. 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 seven other registered open-end management investment companies,
each of which consists of several separately managed investment portfolios.
The Amended Advisory Contract provides that Wells Fargo Bank shall furnish
to the Fund investment guidance and policy direction in connection with the
daily portfolio management of the Fund. Pursuant to the Amended Advisory
Contract, Wells Fargo Bank furnishes to the Board of Directors periodic reports
on the investment strategy and performance of the Fund.
Wells Fargo Bank, pursuant to a Sub-Advisory Contract between the Fund,
Wells Fargo Bank and WFNIA, has engaged WFNIA to provide sub-investment advisory
services to the Fund. WFNIA is located at 45 Fremont Street, San Francisco,
California 94105. WFNIA is a general partnership owned 50% by a wholly owned
subsidiary of Wells Fargo Bank and 50% by a subsidiary of The Nikko Securities
Co., Ltd. In mid-April 1995, it was announced that Wells Fargo Bank and The
Nikko Securities Co., Ltd. had begun considering a variety of potential
transactions which could result in a change of ownership or control of WFNIA. It
is not possible at the date of this Prospectus to predict whether any such
transaction will occur or if it does, what structure it would take.
Purchase and sale orders of the securities held by the Fund 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 Fund 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 Fund, 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.
5
<PAGE> 16
For its services under the Amended Advisory Contract, Wells Fargo Bank is
entitled to monthly advisory fees at the annual rate of 0.70% of the average
daily net assets of the Fund up to $500 million and 0.60% of average daily net
assets in excess of $500 million. From time to time Wells Fargo Bank may waive
such fees in whole or in part. Any such waiver would reduce expenses of the Fund
and, accordingly, have a favorable impact on the yield or return of the Fund.
Out of its fees received from the Fund pursuant to the Amended Advisory
Contract, Wells Fargo Bank pays WFNIA for its sub-advisory services an annual
fee equal to $60,000 plus a monthly fee at the annual rate of 0.20% of the
average daily net assets of the Fund.
For the year ended December 31, 1994, Wells Fargo Bank was paid 0.70% of
the average daily net assets of the Fund for its services as investment adviser.
SPONSOR, ADMINISTRATOR AND DISTRIBUTOR
Stephens, 111 Center Street, Little Rock, Arkansas 72201, has entered into
an agreement with the Fund under which Stephens acts as administrator for the
Fund. For these administrative services, Stephens is entitled to receive from
the Fund a monthly fee at the annual rate of 0.10% of its average daily net
assets; decreasing to 0.05% 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.
The Administration Agreement between Stephens and the Fund states that
Stephens shall provide as administrative services, among other things, general
supervision: (i) of the operation of the Fund, including coordination of the
services performed by the Fund's investment adviser, transfer agent, custodian,
independent auditors and legal counsel, (ii) in connection with regulatory
compliance, including the compilation of information for documents such as
reports to, and filings with, the SEC and state securities commissions and
preparation of proxy statements and shareholder reports for the Fund; 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. Stephens also furnishes office space and certain facilities
required for conducting the business of the Fund and pays the compensation of
the Company's directors, officers and employees who are affiliated with
Stephens.
Stephens, as the principal underwriter of the Fund within the meaning of
the Investment Company Act of 1940 (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.
Stephens bears the cost of printing and mailing prospectuses to potential
investors and any advertising expenses incurred by it in connection with the
distribution of Class A Shares and Class D Shares, subject to the terms of the
distribution plans described below.
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 based on the average daily
6
<PAGE> 17
net assets of Fund shares attributable to such agents. The principal sales
support service provided to the Fund are services provided by selling agents in
exchange for commissions and other payments to selling agents. Stephens may
retain any portion of the total distribution fee payable under the Distribution
Agreement to compensate it for distribution-related services provided by
Stephens 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 Act, which
regulates the manner in which an investment company may, directly or indirectly,
bear the expense of distributing its shares.
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
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.
------------------------
7
<PAGE> 18
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. 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.
The value of assets of the Fund (other than debt obligations maturing in 60
days or less) is determined 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. 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 Directors. 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 of a
class of shares is based on the historical earnings and performance of such
class of shares 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 of the class of
shares at the beginning of the period, from (ii) the net asset value of all
shares of the 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 the 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 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,
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.
8
<PAGE> 19
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 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 address or 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, currently five business days
after the order is placed. Effective June 7, 1995, settlement date normally will
be 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 domestic bank, 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 or a foreign bank may take substantially
longer to be converted into federal funds and, accordingly, may delay the
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.
9
<PAGE> 20
Sales loads relating to the purchase of Class A Shares in the Fund are as
follows:
<TABLE>
<CAPTION>
DEALER
CLASS A SHARES SALES LOAD SALES LOAD ALLOWANCE
-------------- AS % OF AS % OF AS % OF
AMOUNT OF OFFERING NET AMOUNT OFFERING
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 1.00% 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 also available to you based on the combined
dollar amount being invested in Class A Shares of the Fund or of Class A Shares
of other portfolios of the Company which assess a sales load (the "Load Funds").
Because Class D Shares are not subject 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 in the Fund with the total net asset value of Class A Shares
in any of the Load Funds to determine reduced sales loads in accordance with the
above sales load schedule. 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 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
10
<PAGE> 21
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 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
that 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 investment portfolio
to be acquired must be registered for sale in the shareholder's 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 the loss 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 "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 of 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.
Class A Shares of the Fund may be purchased at a purchase price equal to
the net asset value of such shares, 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,
11
<PAGE> 22
managed or advised by Wells Fargo Bank or Stephens or their affiliates. Class A
Shares also 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 a purchase price equal to
the net asset value of such shares, without a sales load, by the following types
of investors that place trades through an omnibus account maintained at the Fund
by a discount broker/dealer: trust companies; investment advisers and financial
planners on behalf of their clients; retirement and deferred compensation plans
and the trusts used to fund these plans.
By investing in the Fund, you appoint 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.
CONTINGENT DEFERRED SALES CHARGE -- CLASS D SHARES
Class D Shares which are redeemed within one year of the receipt of a
purchase order affecting 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 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.
12
<PAGE> 23
Shares of the Fund may be purchased by any of the methods described below.
INITIAL PURCHASES OF SHARES OF THE FUND BY WIRE
1. Telephone toll free (800) 572-7797. Give the name of the Fund in which
the investment is to be made, the class of shares to be purchased, and the
name(s) in which the shares are to be registered, 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.
2. Instruct the wiring bank 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 Asset Allocation 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 PURCHASES OF SHARES OF THE FUND 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 Asset Allocation Fund (designate Class A or D)" at 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 the 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 Asset Allocation Fund (designate Class A or D)" to the
above address. Write the Fund
13
<PAGE> 24
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 or 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 designated Fund on or about the fifth business day of
each month. There are no additional fees charged for participating in this plan.
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 in 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 this time. 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 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
14
<PAGE> 25
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 Fund you may subsequently re-exchange the acquired 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 investment
portfolio to be acquired must be registered for sale in your state of residence.
Investors should obtain, read and retain the Prospectus for the investment
portfolio which they 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 your 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 Funds, 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
15
<PAGE> 26
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.
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 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 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.
16
<PAGE> 27
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 account 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 the election to
participate, and are not also a participant in the Company's Systematic Purchase
Plan at any time while participating in this plan. To participate in the plan
you must 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 the 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 Purchases 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 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 institu-
17
<PAGE> 28
tion 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 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 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.
18
<PAGE> 29
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 the distributor 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 as compensation for
distribution-related services. The actual fee payable to the distributor shall,
within such limits, be determined from time to time by mutual agreement between
the Company and the distributor. Under the Plans, 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 Class A Shares and Class D Shares
attributable to them. The distributor may retain any portion of the total
distribution fee payable under the Plans to compensate it for distribution-
related services provided by it or to reimburse it for other
distribution-related expenses. The Fund may participate in joint distribution
activities with any other portfolio of the Company, in which event expenses
reimbursed out of the assets of the Fund may be attributable, in part, to the
distribution-related activities of another portfolio. Generally, the expenses
attributable to joint distribution activities will be allocated among the Fund
and any other portfolio of the Company in proportion to their relative net asset
sizes, although the Board of Directors may allocate such expenses in any other
manner that it deems fair and equitable.
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 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 quarterly to all 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 4.00% excise tax described in the SAI).
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 within 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.
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<PAGE> 30
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 their 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 the 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 such 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.
The Fund will inform you of the amount and nature of such dividends and
capital gains distributions. 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.
Foreign shareholders may be subject to different tax treatment, including a
withholding tax. See "Federal Income Taxes - 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.
20
<PAGE> 31
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT
Wells Fargo Bank has been retained to act as the Fund's transfer and
dividend disbursing agent. Its 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. Wells Fargo Institutional Trust Company, N.A. ("WFITC") serves as the
Fund's custodian. WFITC, located at 45 Fremont Street, San Francisco, California
94105, is a special purpose trust company that is owned 99.9% by WFNIA and 0.1%
by Wells Fargo & Company.
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 twelve series of shares, each representing an interest in one
of the funds in the Overland Express Family of Funds -- the Asset Allocation
Fund, the California Tax-Free Bond Fund, the California Tax-Free Money Market
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 and the Variable-Rate Government Fund. 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 or class is
required by law or where the matter involved affects only one series or class.
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. 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.
21
<PAGE> 32
<TABLE>
<C> <S>
OVERLAND EXPRESS FUNDS, INC. ASSET ALLOCATION FUND
C/O OVERLAND EXPRESS SHAREHOLDER SERVICES, WELLS FARGO BANK, N.A ACCOUNT APPLICATION
POST OFFICE BOX 63084, SAN FRANCISCO, CALIFORNIA 94163 PAGE 1 OF 5
FOR PERSONAL SERVICE PLEASE CALL
YOUR INVESTMENT SPECIALIST OR 1-800-572-7797
- ------------------------------------------------------------------------------------------------------------------------------------
1. ACCOUNT REGISTRATION / / NEW ACCOUNT / / ADDITIONAL INVESTMENT OR CHANGE TO ACCOUNT #
- ------------------------------------------------------------------------------------------------------------------------------------
/ / 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
USE LINES 1 & 2 --------------------------------- required for Joint Owners)
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 ------------------------------------------------------------------------------
USE LINE 3 to Minors Custodian's Name (only one) Minor's State of Residence
- -
----------------------------------------- ----------- ------- ------------
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).
- ------------------------------------------------------------------------------------------------------------------------------------
ADDRESS:
Number and Street Apartment No.
------------------------------------------------------------------------------ ------------------
City State Zip Code
------------------------------------------------------------------- ------------ ---------------------------
Telephone Numbers: (DAY) - - (EVENING) - -
----------- ----------- ------------------ ----------- ----------- ------------------
(Area Code) (Area Code)
- ------------------------------------------------------------------------------------------------------------------------------------
(CONTINUED)
</TABLE>
<PAGE> 33
<TABLE>
<S> <C>
ASSET ALLOCATION FUND
LOGO ACCOUNT APPLICATION
PAGE 2 OF 5
- ------------------------------------------------------------------------------------------------------------------------------------
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 Asset Allocation 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.
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3. BANK ACCOUNT INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Bank Name
---------------------------------------------------------------------------------------------------------------------------------
Address City State Zip
---------------------------------------------------------------------------------------------------------------------------------
Bank Account Number Bank Routing Number
- ------------------------------------------------------------------------------------------------------------------------------------
(CONTINUED)
</TABLE>
<PAGE> 34
<TABLE>
<S> <C>
ASSET ALLOCATION FUND
LOGO ACCOUNT APPLICATION
PAGE 3 OF 5
- ------------------------------------------------------------------------------------------------------------------------------------
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)
</TABLE>
<PAGE> 35
<TABLE>
<S> <C>
ASSET ALLOCATION FUND
LOGO ACCOUNT APPLICATION
PAGE 4 OF 5
- ------------------------------------------------------------------------------------------------------------------------------------
7. AUTHORIZATION FOR TRUSTS AND ORGANIZATIONS (If Applicable.)
- ------------------------------------------------------------------------------------------------------------------------------------
CORPORATIONS, TRUSTS, PARTNERSHIPS OR OTHER ORGANIZATIONS MUST COMPLETE THIS SECTION.
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.)
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:
Name Title Specimen Signature
---------------------------------- ---------------------------------- ----------------------------------
---------------------------------- ---------------------------------- ----------------------------------
---------------------------------- ---------------------------------- ----------------------------------
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
--- -------------------- --
------------------------------------------------
Secretary (Signature Guarantee or
Corporate Seal is Required)
FOR ALL OTHER ORGANIZATIONS: ------------------------------------------------
Certifying Trustee, General Partner, or Other
- ------------------------------------------------------------------------------------------------------------------------------------
(CONTINUED)
</TABLE>
<PAGE> 36
<TABLE>
<S> <C>
ASSET ALLOCATION 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
Joint Owner (if any) date institution," which includes a commercial bank
trust company, member firm of a domestic stock,
X
------------------------------------------------------- exchange, savings association, or credit union
Corporate Officer or Trustee date that is authorized by its charter to provide a
signature guarantee.
AFFIX SIGNATURE GUARANTEE STAMP
------------------------------------------------------- ----------------------------------------------
Title of Corporate Officer or Trustee Signature Guaranteed By
- ------------------------------------------------------------------------------------------------------------------------------------
DEALER INFORMATION
- ------------------------------------------ -------------------------
Dealer Name Branch ID #
----------------------------------------- ------------------------- --------------------------
Representative's Last Name Rep ID # Rep Phone #
X
-------------------------------------------------------------------------------------------------------------
Authorized signature of Broker/Dealer Title date
</TABLE>
<PAGE> 37
SPONSOR, ADMINISTRATOR AND DISTRIBUTOR
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
INVESTMENT ADVISER, TRANSFER AND
DIVIDEND DISBURSING AGENT
Wells Fargo Bank, N.A.
P.O. Box 63084
San Francisco, California 94163
SUB-INVESTMENT ADVISER
Wells Fargo Nikko Investment Advisors
45 Fremont Street
San Francisco, California 94105
CUSTODIAN
Wells Fargo Institutional
Trust Company, N.A.
45 Fremont Street
San Francisco, California 94105
LEGAL COUNSEL
Morrison & Foerster
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
INDEPENDENT AUDITOR
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
------------------------
Asset Allocation Fund
------------------------
May 1, 1995
------------------------
NOT FDIC INSURED
77P 5/95
