<PAGE>
[OVERLAND EXPRESS LOGO]
Semi - Annual Report
......................................
JUNE 30, 1997
OVERLAND SWEEP FUND
OVERLAND EXPRESS FUNDS ARE NOT
FDIC INSURED AND ARE NOT OBLIGATIONS OF
OR GUARANTEED BY WELLS FARGO BANK.
<PAGE>
[LOGO]
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS......................................3
MANAGER COMMENTS............................................5
OVERLAND SWEEP FUND
Statement of Assets and Liabilities.......................7
Statement of Operations...................................8
Statements of Changes in Net Assets.......................9
Financial Highlights.....................................10
Notes to Financial Statements............................12
PORTFOLIO OF INVESTMENTS
Cash Investment Trust Master Portfolio...................15
CASH INVESTMENT TRUST
Statement of Assets and Liabilities......................18
Statement of Operations..................................19
Statements of Changes in Net Assets......................20
Notes to Financial Statements............................21
LIST OF ABBREVIATIONS......................................23
OVERLAND EXPRESS FUNDS ARE NOT FDIC INSURED, ARE NOT
OBLIGATIONS OF WELLS FARGO BANK, AND ARE NOT GUARANTEED BY
WELLS FARGO BANK. OVERLAND EXPRESS FUNDS INVOLVE
INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
OVERLAND EXPRESS MONEY MARKET FUNDS SEEK TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE; HOWEVER, THERE
CAN BE NO ASSURANCE THAT THE FUNDS WILL MEET THIS
OBJECTIVE. DURING THE PERIOD, WELLS FARGO BANK HAS
VOLUNTARILY WAIVED PORTIONS OF THEIR FEES OR ASSUMED
RESPONSIBILITY FOR OTHER EXPENSES, WHICH HAS REDUCED
OPERATING EXPENSES FOR SHAREHOLDERS. WITHOUT THESE
REDUCTIONS, THE FUNDS' RETURNS WOULD HAVE BEEN LOWER.
THE OVERLAND SWEEP FUND (THE "FEEDER") AND THE CASH
INVESTMENT TRUST (THE "MASTER") ARE ORGANIZED AS A
"MASTER-FEEDER" STRUCTURE. INSTEAD OF INVESTING DIRECTLY
IN INDIVIDUAL PORTFOLIO SECURITIES, THE FEEDER FUND, WHICH
IS OFFERED TO THE PUBLIC, HOLDS INTERESTS IN THE MASTER
WHICH INVESTS IN INDIVIDUAL SECURITIES. REFERENCES TO THE
FUND ARE TO THE FEEDER OR MASTER AS THE CONTEXT REQUIRES.
THE MASTER PORTFOLIO IS ADVISED BY WELLS FARGO BANK.
WELLS FARGO BANK PROVIDES INVESTMENT ADVISORY SERVICES,
ADMINISTRATIVE SERVICES, SHAREHOLDER SERVICES AND CERTAIN
OTHER SERVICES FOR THE OVERLAND EXPRESS FUNDS. THE FUNDS
ARE SPONSORED, DISTRIBUTED AND CO-ADMINISTERED BY STEPHENS
INC., MEMBER NYSE/SIPC.
1
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2
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TO OUR SHAREHOLDERS:
WELCOME TO THE 1997 OVERLAND EXPRESS FUNDS
SEMI-ANNUAL REPORT.
Short-term market volatility reinforces the benefit of a long-term perspective.
Markets have ups and downs. They sometimes behave in very unpredictable ways,
but, over the long haul, history has shown the financial markets have delivered
growth. 1997 has been an example of short-term setbacks attracting more
attention than generally solid overall performance.
For the bond markets, the recently completed reporting period saw market
volatility and the long-expected increase in the federal funds target rate.
After months of debate on the rate of economic growth and the potential for
increased rates of inflation, the Federal Reserve acted in March to raise the
federal funds target rate by 0.25%. The bond market had begun to slide in
February in anticipation of a potential increase and did not begin to recover
until the beginning of May. Bonds rallied somewhat in June and showed a modest
2.09% gain at the halfway point in 1997, as measured by the Lehman Brothers
20+Year Treasury Index.
Equity market volatility was even more pronounced. After climbing steadily from
January into late March, the stock market fell precipitously until near the end
of April. Stocks rallied again, however, and, as measured by the Standard &
Poor's 500 Index, enjoyed a 1997 year-to-date return as of June 30 of 20.61%.
Of course, equity issues do not rise and fall in unison. Large company stocks
have fared well recently as investors sought greater security and shunned
volatility. In contrast to recent years, various sectors such as technology and
financial services have fluctuated in recent months.
It is all too easy to be confused by such a variety of returns and apparently
conflicting information. That's why it is so important to truly understand the
investment philosophies and long-range goals that govern your Fund. We have
always felt that the more you understand your investment, the less likely you
are to be unduly concerned with short-term developments.
The following pages contain discussions about some of the relevant market
conditions and other factors that affected the performance of the Overland
Express Funds during the reporting period. These commentaries were written for
you--our shareholders--as part of the Overland Express Funds' commitment to
education, information and service, as we help you meet your financial goals.
We are pleased to tell you that, pending shareholder approval, we plan to bring
together the strengths of Overland Express and Stagecoach Funds, another family
of mutual funds advised by Wells Fargo Bank. We plan to consolidate Overland
Express Funds into similar corresponding Stagecoach Funds, in some instances
into new Stagecoach Funds created expressly for this purpose. The Stagecoach
Funds have several additional Funds with
3
<PAGE>
investment objectives that complement the Overland Express product line. The
result will be a Fund Family with over thirty Funds and over $20 billion in
assets. You will find full details of this proposed merger in proxy materials
that will be sent to you separately.
OVERLAND EXPRESS FUNDS, AUGUST 1997
THE S&P 500 INDEX IS AN UNMANAGED INDEX OF 500 WIDELY HELD COMMON STOCKS
REPRESENTING, AMONG OTHERS, INDUSTRIAL, FINANCIAL, UTILITY AND TRANSPORTATION
COMPANIES LISTED OR TRADED ON NATIONAL EXCHANGES OR OVER-THE-COUNTER MARKETS.
THE LEHMAN BROTHERS 20+YEAR TREASURY INDEX IS AN UNMANAGED INDEX COMPOSED OF
U.S. TREASURY ISSUES WITH 20-YEAR OR LONGER MATURITIES.
4
<PAGE>
OVERLAND SWEEP FUND
(CASH INVESTMENT TRUST MASTER PORTFOLIO)
Q. WHAT WAS THE SEVEN-DAY YIELD AS OF JUNE 30, 1997?
A. The seven-day yield for the Fund as of June 30, 1997 was 4.55%. The yield as
of December 31, 1996 was 4.22%.
Q. WAS THE HIGHER YIELD THE RESULT OF THE FEDERAL RESERVE'S ACTION IN RAISING
THE FEDERAL FUNDS TARGET RATE?
A. Only in part. Yields change daily as notes are sold on the open market. It is
important to keep an eye on the general trend in yields rather than draw
conclusions based on a single-day "snapshot" of current returns. The Wall Street
Journal's Market Diary section, for example, publishes a useful graph tracking
interest rates for investors interested in following this sort of information.
The graph indicates that there are frequent spikes and valleys in interest
rates--and therefore in money market fund returns--based on market pressures
even without Fed action.
Q. WHAT ARE SOME OF THE MARKET PRESSURES THAT AFFECT YIELDS?
A. There are a number of influences. If the economy is expected to grow rapidly,
interest rates usually move higher in anticipation of a Fed rate hike. Cash
flows into money market mutual funds are another important factor. The dynamics
of supply and demand as managers invest shareholders' cash can drive yields
higher or drag them lower, particularly for variable rate securities.
Q. WHAT DOES "WEIGHTED AVERAGE MATURITY" TELL US ABOUT THE FUND? HOW HAS IT
CHANGED DURING THE PERIOD?
A. Weighted average maturity is a measure of the average length of time before
securities in a portfolio mature on a dollar for dollar basis. It is one of the
measures of a fund's sensitivity to interest rate changes. Funds with longer
maturities generally are more sensitive to interest rate fluctuations.
Typically, for a money market mutual fund, managers will increase maturity to
lock in higher rates or shorten maturity if they anticipate higher rates being
available soon. Market forces may also make one range relatively more attractive
than another. For the most part, the weighted average maturity for the Fund has
been fairly steady and in the short-to-intermediate range of 45 to 60 days.
Q. SINCE THE FEDERAL RESERVE RAISED THE FEDERAL FUNDS TARGET RATE IN MARCH, DO
YOU EXPECT FURTHER ACTION?
A. The Federal Reserve has rarely effected a single increase when changing
monetary policy, so additional increases seem likely. However, the federal funds
target rate is relatively high compared to the Consumer Price Index (the prime
measure of inflation), so we believe that substantial increases are unlikely.
Recent comments by Federal Reserve Chairman Alan Greenspan, however, have
increased optimism that we may finish the year without seeing another increase.
ALTHOUGH THE FUND SEEKS TO MAINTAIN A $1.00 PER SHARE NET ASSET VALUE, THERE IS
NO ASSURANCE THAT IT WILL MEET THIS OBJECTIVE.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT OR ANY GOVERNMENT AGENCY, NOR BY WELLS FARGO BANK.
THE SEVEN-DAY YIELD IS FOR THE SEVEN-DAY PERIOD ENDED JUNE 30, 1997. YIELD
REFLECTS FLUCTUATIONS IN INTEREST RATES ON PORTFOLIO INVESTMENTS AND FUND
EXPENSES. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
5
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6
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) -
JUNE 30, 1997
<TABLE>
<CAPTION>
OVERLAND SWEEP
FUND
<S> <C>
...........................................................
ASSETS
INVESTMENTS:
In interests of Cash Investment Trust $2,076,044,158
Receivables:
Interest 8,561,144
Prepaid expenses 24,137
TOTAL ASSETS 2,084,629,439
LIABILITIES
Payables:
Distribution to shareholders 7,045,893
Due to sponsor and distributor (Note
2) 1,091,032
Due to WFB (Note 2) 292,704
Other 63,246
TOTAL LIABILITIES 8,492,875
TOTAL NET ASSETS $2,076,136,564
NET ASSETS CONSIST OF:
Paid-in capital $2,076,699,371
Undistributed net realized gain (loss)
on investments (562,807)
TOTAL NET ASSETS $2,076,136,564
COMPUTATION OF NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets $2,076,136,564
Shares outstanding 2,076,710,024
Net asset value per share and offering
price per share $1.00
</TABLE>
................................................................................
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
STATEMENT OF OPERATIONS (UNAUDITED) -
FOR THE SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
OVERLAND
SWEEP FUND
<S> <C>
........................................................
INVESTMENT INCOME
Interest income allocated from Cash
Investment Trust $52,039,691
Gross expenses allocated from Cash
Investment Trust (2,843,297)
Waived expenses allocated from Cash
Investment Trust 60,972
TOTAL INVESTMENT INCOME 49,257,366
EXPENSES (NOTE 2):
Administration fees 422,951
Shareholder servicing fees 2,558,412
Transfer agency fees 715,466
Distribution fees 5,157,314
Legal and audit fees 54,631
Registration fees 9,652
Directors' fees 2,480
Shareholder reports 14,875
Other 17,842
TOTAL EXPENSES 8,953,623
Less:
Waived fees and reimbursed expenses (77,552)
NET EXPENSES 8,876,071
NET INVESTMENT INCOME 40,381,295
REALIZED GAIN (LOSS) ON INVESTMENTS
ALLOCATED FROM CASH INVESTMENT TRUST (7,340)
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $40,373,955
</TABLE>
................................................................................
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
OVERLAND SWEEP FUND
...................................
(Unaudited)
For the
Six Months For the
Ended Year Ended
June 30, 1997 Dec. 31, 1996
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income $ 40,381,295 $ 55,913,517
Realized gain (loss) on investments
allocated from
Cash Investment Trust (7,340) 136,401
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 40,373,955 56,049,918
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (40,381,295) (55,913,517)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 2,488,499,619 4,856,143,166
Reinvestment of dividends 2,546 4,923
Cost of shares sold (2,415,083,666) (4,062,742,186)
NET INCREASE IN NET ASSETS RESULTING
FROM CAPITAL SHARE TRANSACTIONS 73,418,499 793,405,903
INCREASE IN NET ASSETS 73,411,159 793,542,304
NET ASSETS:
Beginning net assets 2,002,725,405 1,209,183,101
ENDING NET ASSETS $ 2,076,136,564 $ 2,002,725,405
SHARES ISSUED AND REDEEMED:
Shares sold 2,488,499,619 4,856,835,054
Shares issued in reinvestment of
dividends 2,546 4,923
Shares redeemed (2,415,083,666) (4,062,731,553)
NET INCREASE IN SHARES OUTSTANDING 73,418,499 794,108,424
</TABLE>
................................................................................
The accompanying notes are an integral part of these financial statements.
9
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FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
OVERLAND SWEEP FUND
..............................
(Unaudited)
Six Months
Ended Year Ended
June 30, 1997 Dec. 31, 1996
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.02 0.04
----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income (0.02) (0.04)
----- -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
------ ------
------ ------
TOTAL RETURN (NOT ANNUALIZED) 2.15% 4.29%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $2,076,137 $2,002,725
Number of shares outstanding, end of period (000) 2,076,710 2,003,292
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)(1):
Ratio of expenses to average net assets 1.25% 1.24%
Ratio of net investment income to average net assets 4.31% 4.20%
...........................................................................................................
Ratio of expenses to average net assets prior to waived fees and reimbursed
expenses(1) 1.26% 1.26%
Ratio of net investment income to average net assets prior to waived fees
and reimbursed expenses(1) 4.30% 4.18%
</TABLE>
................................................................................
(1) RATIOS INCLUDE EXPENSES CHARGED TO CIT. PRIOR YEAR RATIOS HAVE BEEN
ADJUSTED FOR COMPARABILITY PURPOSES.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
OVERLAND SWEEP FUND (CONT.)
..............................................................
Year Ended Year Ended Year Ended Year Ended
Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.05 0.03 0.02 0.03
----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.05) (0.03) (0.02) (0.03)
----- ----- ----- -----
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------
------ ------ ------ ------
TOTAL RETURN (NOT
ANNUALIZED) 4.80% 3.11% 1.97% 2.31%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $1,209,183 $812,559 $528,072 $253,617
Number of shares
outstanding, end of
period (000) 1,209,183 812,559 528,072 253,628
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED)(1):
Ratio of expenses to
average net assets 1.25% 1.25% 1.25% 1.24%
Ratio of net investment
income to average net
assets 4.70% 2.92% 1.67% 2.20%
............................................................................................................................
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses(1) 1.28% 1.33% 1.31% 1.51%
Ratio of net investment
income to average net assets
prior to waived fees and
reimbursed expenses(1) 4.67% 2.84% 1.61% 1.93%
</TABLE>
................................................................................
(1) RATIOS INCLUDE EXPENSES CHARGED TO CIT. PRIOR YEAR RATIOS HAVE BEEN
ADJUSTED FOR COMPARABILITY PURPOSES.
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
OVERLAND SWEEP FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The Overland Sweep Fund (the "Fund") is a series of Overland Express Funds, Inc.
(the "Company"), which is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end series management investment
company. The Company commenced operations on April 7, 1988, and consists of
twelve separate diversified funds: the Index Allocation, Money Market, Municipal
Income, National Tax-Free Institutional Money Market, Overland Sweep, Short-Term
Government-Corporate Income, Short-Term Municipal Income, Small Cap Strategy,
Strategic Growth, U.S. Government Income, U.S. Treasury Money Market and
Variable Rate Government Funds, and two non-diversified funds: the California
Tax-Free Bond and California Tax-Free Money Market Funds. These financial
statements represent only the Overland Sweep Fund.
The following significant accounting policies are consistently followed by the
Company in the preparation of its financial statements, and such policies are in
conformity with generally accepted accounting principles ("GAAP") for investment
companies. The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. These estimates should not be
considered an indication of actual or expected figures; actual results may
differ.
INVESTMENT POLICY AND SECURITY VALUATION
The Fund invests only in beneficial interests ("Interests") of the Cash
Investment Trust Master Portfolio ("CIT") of the Master Investment Trust (the
"Trust"). CIT has the same investment objective as the Fund. The value of the
Fund's investment in CIT reflects the Fund's Interest in CIT. As of June 30,
1997, the Fund owned approximately 99.99% of the outstanding Interests of CIT.
CIT invests only in securities with remaining maturities not exceeding 397 days
(thirteen months). Certain floating- and variable-rate instruments in the
portfolio may have maturities in excess of 397 days, but carry a demand feature
that permits the holder to tender the instruments back to the issuer at par
value prior to maturity.
CIT uses the amortized cost method to value its portfolio securities. The
amortized cost method involves valuing a security at its cost, plus accretion of
discount or minus amortization of premium over the period until maturity, which
approximates market value. CIT seeks to maintain a constant net asset value of
$1.00 per share, although there is no assurance that it will be able to do so.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are recorded no later than one business day after trade
date. Interest income is accrued daily. Realized gains or losses are reported on
the basis of identified cost of securities delivered. Bond discounts are
accreted and premiums amortized as required by the Internal Revenue Code of
1986, as amended (the "Code").
12
<PAGE>
OVERLAND SWEEP FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell such
securities ("repurchase agreements") are treated as collateralized financing
transactions and are recorded at their contracted resale amounts. These
repurchase agreements, if any, are detailed in CIT's Portfolio of Investments.
CIT may participate in pooled repurchase agreement transactions with other funds
advised by Wells Fargo Bank, N.A. ("WFB"). The repurchase agreements must be
fully collateralized based on values that are marked to market daily. The
collateral may be held by an agent bank under a tri-party agreement. It is the
custodian's responsibility to value the collateral daily and to take action to
obtain additional collateral as necessary to maintain market value equal to or
greater than the resale price. Repurchase agreements held in CIT are
collateralized by instruments such as U.S. Treasury or federal agency
obligations.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income, if any, are declared daily and distributed
monthly. Any distributions to shareholders from net realized capital gains are
declared and distributed annually.
FEDERAL INCOME TAXES
The Fund is treated as a separate entity for federal income tax purposes. It is
the policy of the Fund to continue to qualify as a regulated investment company
by complying with the provisions applicable to regulated investment companies,
as defined in the Code, and to make distributions of substantially all of its
investment company taxable income and any net realized capital gains (after
reduction for capital loss carryforwards) sufficient to relieve it from all, or
substantially all, federal income taxes. Accordingly, no provisions for federal
income taxes was required at December 31, 1996. The Overland Sweep Fund has a
capital loss carryforward of $555,468 which will expire in the year 2003. The
Company's Board of Directors intends to offset net capital gains with the
capital loss carryforward, and no capital gain distribution shall be made until
the carryforward has been fully utilized or expires.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into a contract on behalf of the Fund with WFB, whereby
WFB will provide shareholder servicing functions for the Fund. Under the
contract, WFB is entitled to be compensated at an annual rate of 0.35% of the
average daily net assets of the Fund.
The Company has entered into a contract on behalf of the Fund with WFB, whereby
WFB provides transfer agency services for the Fund. Under the transfer agency
agreement, WFB is entitled to receive transfer agency fees at an annual rate of
0.02% of the average daily net assets of the Fund. Prior to February 1, 1997,
WFB was entitled to be paid a per account fee and other related costs with a
minimum monthly fee of $3,000.
WFB as administrator and Stephens Inc. ("Stephens") as co-administrator provide
the Fund with administration services. For these services, WFB and Stephens are
entitled to receive monthly fees at the annual rates of 0.04% and 0.02%,
respectively, of the Fund's average daily net assets. Prior to
13
<PAGE>
OVERLAND SWEEP FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
May 1, 1997, Stephens provided substantially the same services as sole
administrator to the Fund. Under the previous agreement, Stephens was entitled
to receive a monthly fee at the annual rate of 0.025% of the Fund's average
daily net assets.
The Company has adopted a Distribution Plan on behalf of the Fund pursuant to
Rule 12b-1 under the 1940 Act, whereby the Company pays Stephens, as
compensation for distribution-related services, a monthly fee at the annual rate
of up to 0.55% of the average daily net assets of the Fund. The actual fee
payable to Stephens is determined within such limit, from time to time, by
mutual agreement between the Company and Stephens.
Under the contracts and agreements described above, WFB and Stephens may each
voluntarily waive fees payable or reimburse expenses to the Fund. Waived fees
and reimbursed expenses continue at the discretion of WFB and Stephens.
Certain officers and one director of the Company are also officers of Stephens.
As of June 30, 1997, Stephens owned 120,723 shares of the Overland Sweep Fund.
3. CAPITAL SHARE TRANSACTIONS
As of June 30, 1997, the Overland Sweep Fund was authorized to issue 3 billion
shares of capital stock with a par value of $0.001 per share. Transactions in
capital shares for the six months ended June 30, 1997 and the year ended
December 31, 1996 are disclosed in detail in the Statements of Changes in Net
Assets.
4. REORGANIZATION OF OVERLAND EXPRESS FUNDS, INC.
At a meeting held on July 23, 1997, the Company's Board of Directors approved an
Agreement and Plan of Consolidation to reorganize Overland Express Funds, Inc.
into Stagecoach Funds, Inc. This Plan of Consolidation is subject to approval by
Overland Express Fund shareholders. The agreement provides, among other things,
for the transfer of assets and liabilities of each Overland Express Fund (each a
"Predecessor Fund") to a corresponding series of Stagecoach Funds, Inc. (each a
"Stagecoach Fund"). The Agreement provides that each Stagecoach Fund will assume
certain identified liabilities of the corresponding Predecessor Fund and will
deliver to that Predecessor Fund shares of common stock of the Stagecoach Fund
having an aggregate net asset value equivalent to the aggregate net asset value
of the assets transferred to the Stagecoach Fund by the Predecessor Fund
(collectively, the "Consolidation"). At the time of Consolidation, the Funds
that currently are structured as "feeder" Funds in a "master-feeder" structure
will be restructured to invest directly in a portfolio of securities, rather
than to invest in portfolio securities through a "master" Fund. The
Consolidation is expected to be a tax-free exchange.
Dividends from net investment income and net realized capital gains, if any, of
the Predecessor Funds will be distributed to Overland Express Fund shareholders
prior to the Consolidation. The Consolidation is expected to close in December,
1997. All of the expenses incurred in connection with the Consolidation will be
paid by Wells Fargo or Stephens.
14
<PAGE>
CASH INVESTMENT TRUST MASTER PORTFOLIO - JUNE 30, 1997 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
BANKERS ACCEPTANCE - 1.04%
$ 14,000,000 Bank of America N.A. 5.68 % 11/03/97 $ 13,723,889
8,000,000 Bank of America N.A. 5.68 11/04/97 7,840,960
------------
TOTAL BANKERS ACCEPTANCE $ 21,564,849
CERTIFICATES OF DEPOSITS - 17.73%
$ 50,000,000 Barclays Bank Plc 5.72 % 12/02/97 $ 50,002,051
50,000,000 Branch Banking & Trust Co 6.50 07/01/97 50,000,000
35,000,000 Commerzbank Finance Inc 5.80 01/15/98 35,005,454
40,000,000 Dresdner Bank AG 6.13 03/09/98 40,012,957
30,000,000 Huntington National Bank 6.05 01/06/98 30,000,000
18,000,000 Rabobank Nederland N.V. 6.05 03/27/98 17,995,055
20,000,000 Rabobank Nederland N.V. 6.07 03/26/98 19,997,186
40,000,000 Societe Generale 6.13 09/12/97 40,038,173
35,000,000 Societe Generale (Yankee) 5.72 10/20/97 35,002,388
50,000,000 Union Bank of California 5.50 08/21/97 50,000,000
------------
TOTAL CERTIFICATES OF DEPOSITS $368,053,264
COMMERCIAL PAPER - 51.64%
$ 40,000,000 ANZ Delaware Inc 5.70 %F 11/17/97 $ 39,119,667
36,000,000 Asset Securitization Cooperative Corp++ 5.56 F 07/14/97 35,927,720
50,000,000 Asset Securitization Cooperative Corp++ 5.57 F 07/28/97 49,791,125
35,000,000 Associates Corp 5.35 F 09/19/97 34,583,889
25,000,000 Bankers Trust New York Corp 5.47 F 11/25/97 24,441,604
50,000,000 Canadian Imperial Holding Inc 5.54 F 07/10/97 49,930,725
25,000,000 Ciesco LP 5.30 F 07/01/97 25,000,000
25,000,000 CIT Group Holdings Inc 5.54 F 07/07/97 24,976,917
50,000,000 Corporate Asset Funding Co Inc++ 5.55 F 08/21/97 49,606,875
40,000,000 Corporate Receivables Corp++ 5.54 F 07/07/97 39,963,067
37,235,000 Falcon Asset Securitization Corp++ 5.56 F 07/14/97 37,160,240
35,000,000 Ford Motor Corp 5.53 F 07/08/97 34,962,365
20,000,000 Ford Motor Corp 5.70 F 11/17/97 19,559,833
45,000,000 General Electric Capital Corp 5.63 F 01/09/98 43,648,800
</TABLE>
15
<PAGE>
CASH INVESTMENT TRUST MASTER PORTFOLIO - JUNE 30, 1997 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER - CONTINUED
$ 80,000,000 Goldman Sachs & Co 5.57 %F 07/02/97 $ 79,987,622
25,000,000 IBM Credit Corp 5.55 F 07/14/97 24,949,896
80,000,000 Merrill Lynch Corp 5.55 F 07/07/97 79,926,000
35,000,000 National Rural Utilities Cooperative Finance
Corp 5.55 F 08/11/97 34,778,771
50,000,000 Preferred Receivables Funding Corp 6.20 F 07/01/97 50,000,000
75,000,000 Prudential Funding Corp 5.55 F 07/18/97 74,803,438
26,950,000 Receivables Capital Corp++ 5.55 F 07/25/97 26,850,285
24,248,000 Receivables Capital Corp++ 5.55 F 07/30/97 24,139,591
15,000,000 Receivables Capital Corp++ 5.59 F 07/21/97 14,953,417
25,000,000 Sweden Kingdom Corp 5.43 F 10/10/97 24,619,146
20,000,000 Sweden Kingdom Corp 5.47 F 12/01/97 19,535,050
35,000,000 Sweden Kingdom Corp 5.60 F 12/05/97 34,145,222
50,000,000 Unifunding Corp 5.55 F 07/07/97 49,953,750
25,000,000 Union Commercial Funding Corp 5.35 F 08/20/97 24,814,236
------------
TOTAL COMMERCIAL PAPER $1,072,129,251
VARIABLE AND FLOATING RATE BONDS - 22.05%
$ 25,000,000 Abbey National North America 5.71 % 07/17/97 $ 24,999,247
30,000,000 American Express Co 5.66 05/08/98 30,000,000
60,000,000 Bank of America N.A. 5.65 04/16/98 59,977,007
60,000,000 Bankers Trust Corp 5.37 12/10/97 59,986,685
50,000,000 CC USA Inc 5.67 02/18/98 50,000,000
53,000,000 CIT Group Holdings Inc 5.67 05/22/98 52,968,103
80,000,000 FCC National Bank 5.60 06/11/98 79,941,594
25,000,000 Federal Home Loan Bank 5.28 08/08/97 24,998,244
25,000,000 Huntington National Bank 5.86 11/10/97 25,000,000
50,000,000 PHH Corp 5.37 09/22/97 50,000,000
------------
TOTAL VARIABLE AND FLOATING RATE BONDS $457,870,880
</TABLE>
16
<PAGE>
CASH INVESTMENT TRUST MASTER PORTFOLIO - JUNE 30, 1997 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - 7.42%
$ 27,988,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.85 % 07/01/97 $ 27,988,000
21,000,000 HSBC Securities Inc Repurchase Agreement - 102%
Collateralized by U.S. Government Securities 5.80 07/01/97 21,000,000
79,000,000 JP Morgan Securities Inc Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.95 07/01/97 79,000,000
26,000,000 Morgan Stanley & Co Repurchase Agreement - 102%
Collateralized by U.S. Government Securities 6.00 07/01/97 26,000,000
------------
TOTAL REPURCHASE AGREEMENTS $153,988,000
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $2,073,606,244)* (Note 1) 99.88 % 2,073,606,244
Other Assets and Liabilities, Net 0.12 2,497,674
------- ------------
TOTAL NET ASSETS 100.00 % $2,076,103,918
------- ------------
------- ------------
..........................................................................................................
</TABLE>
F YIELD TO MATURITY.
++ THESE SECURITIES ARE NOT REGISTERED UNDER THE SECURITIES ACT OF 1933.
RULE 144A UNDER THAT ACT PERMITS THESE SECURITIES TO BE RESOLD IN
TRANSACTIONS EXEMPT FROM REGISTRATION TO QUALIFIED INSTITUTIONAL
BUYERS. THESE SECURITIES WERE DEEMED LIQUID BY THE INVESTMENT ADVISER
IN ACCORDANCE WITH PROCEDURES APPROVED BY THE TRUST'S BOARD OF
TRUSTEES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) -
JUNE 30, 1997
<TABLE>
<CAPTION>
CASH
INVESTMENT
TRUST
MASTER
PORTFOLIO
<S> <C>
...........................................................
ASSETS
INVESTMENTS:
In securities, at market value and
identified cost $2,073,606,244
Cash 2,252
Receivables:
Interest 11,610,446
TOTAL ASSETS 2,085,218,942
LIABILITIES
Distribution to beneficial interest
holders 8,561,400
Due to advisor (Note 2) 478,344
Other 75,280
TOTAL LIABILITIES 9,115,024
TOTAL NET ASSETS
$2,076,103,918
</TABLE>
................................................................................
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
STATEMENT OF OPERATIONS (UNAUDITED) -
FOR THE SIX MONTHS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
CASH
INVESTMENT
TRUST
MASTER
PORTFOLIO
<S> <C>
........................................................
INVESTMENT INCOME
Interest $52,041,316
TOTAL INVESTMENT INCOME 52,041,316
EXPENSES (NOTE 2)
Advisory fees 2,345,999
Administration fees 80,780
Custody fees 159,760
Portfolio accounting fees 218,173
Legal and audit fees 29,122
Other 9,550
TOTAL EXPENSES 2,843,384
Less:
Waived fees and reimbursed expenses (60,972)
NET EXPENSES 2,782,412
NET INVESTMENT INCOME 49,258,904
REALIZED GAIN (LOSS) ON INVESTMENTS (7,358)
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $49,251,546
</TABLE>
................................................................................
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CASH INVESTMENT TRUST MASTER
PORTFOLIO
.................................
(Unaudited)
For the Six For the
Months Ended Year Ended
June 30, 1997 Dec. 31, 1996
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income $ 49,258,904 $ 68,378,409
Net realized gain (loss) on sale of
investments (7,358) 136,408
NET INCREASE RESULTING FROM OPERATIONS 49,251,546 68,514,817
NET INCREASE IN NET ASSETS RESULTING
FROM BENEFICIAL INTEREST
TRANSACTIONS 23,931,527 725,092,321
INCREASE IN NET ASSETS 73,183,073 793,607,138
NET ASSETS:
Beginning net assets 2,002,920,845 1,209,313,707
ENDING NET ASSETS $2,076,103,918 $2,002,920,845
</TABLE>
................................................................................
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
CASH INVESTMENT TRUST MASTER PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The Cash Investment Trust Master Portfolio ("CIT") is a series of Master
Investment Trust (the "Trust"), a business trust organized under the laws of
Delaware on August 14, 1991. The Trust is registered as an investment company
under the Investment Company Act of 1940, as amended. The Declaration of Trust
permits the issuance of an unlimited number of beneficial interests
("Interests"). Substantially all of CIT's outstanding Interests are owned by
Overland Sweep Fund, a series of Overland Express Funds, Inc. The Trust
currently issues nine series of investment portfolios: the Asset Allocation,
Capital Appreciation, Cash Investment Trust, Corporate Stock, Tax-Free Money
Market, Short-Term Government-Corporate Income, Short-Term Municipal Income,
Small Cap and U.S. Government Allocation Master Portfolios. These financial
statements represent only CIT.
The following significant accounting policies are consistently followed by CIT
in the preparation of its financial statements, and such policies are in
conformity with generally accepted accounting principles ("GAAP") for investment
companies. The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. These estimates should not be
considered an indication of actual or expected figures; actual results may
differ.
INVESTMENT POLICY AND SECURITY VALUATION
CIT invests only in securities with remaining maturities not exceeding 397 days
(thirteen months). Certain floating- and variable-rate instruments in the
portfolios may have maturities in excess of 397 days, but carry a demand feature
that permits the holder to tender the instruments back to the issuer at par
value prior to maturity.
CIT uses the amortized cost method to value its portfolio securities. The
amortized cost method involves valuing a security at its cost, plus accretion of
discount or minus amortization of premium over the period until maturity, which
approximates market value. CIT seeks to maintain a constant net asset value of
$1.00 per share, although there is no assurance that it will be able to do so.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are recorded no later than one business day after trade
date. Interest income is accrued daily. Realized gains or losses are reported on
the basis of identified cost of securities delivered. Bond discounts are
accreted and premiums are amortized as required by the Internal Revenue Code of
1986, as amended (the "Code").
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell such
securities ("repurchase agreements") are treated as collateralized financing
transactions and are recorded at
21
<PAGE>
CASH INVESTMENT TRUST MASTER PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
their contracted resale amounts. These repurchase agreements, if any, are
detailed in CIT's Portfolio of Investments. CIT may participate in pooled
repurchase agreement transactions with other funds advised by Wells Fargo Bank,
N.A. ("WFB"). The repurchase agreements must be fully collateralized based on
values that are marked to market daily. The collateral may be held by an agent
bank under a tri-party agreement. It is the custodian's responsibility to value
the collateral daily and to take action to obtain additional collateral as
necessary to maintain market value equal to or greater than the resale price.
Repurchase agreements held in CIT are collateralized by instruments such as U.S.
Treasury or federal agency obligations.
FEDERAL INCOME TAXES
CIT intends to qualify for federal income tax purposes as a partnership.
Management, therefore, believes that CIT will not be subject to any federal or
state income tax on its income and net capital gains (if any). However, each
investor in CIT will be taxed on its distributive share of the partnership's
income for purposes of determining its federal and state income tax liabilities.
The determination of such share will be made in accordance with the Code, and
the regulations promulgated thereunder.
It is intended that CIT's assets, income gain/loss and distributions will be
managed in such a way that a regulated investment company investing in CIT will
be able to satisfy the requirements of Subchapter M of the Code, assuming that
the investment company invested all of its assets in CIT.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into an advisory contract on behalf of CIT with WFB.
Pursuant to the contract, WFB has agreed to provide CIT with daily portfolio
management. Under the contract, WFB is entitled to receive a monthly advisory
fee at an annual rate of 0.25% of the average daily net assets of CIT. For the
six months ended June 30, 1997, WFB waived $60,972 in advisory fees payable to
it under the advisory contract.
The Trust has entered into a contract with WFB on behalf of CIT, whereby WFB is
responsible for providing custody and portfolio accounting services to CIT.
Pursuant to the contract, WFB is entitled to certain transaction charges plus a
custody fee at the annual rate of 0.0167% of the average daily net assets of
CIT. For providing portfolio accounting services WFB is entitled to receive a
monthly base fee of $2,000 plus an annual fee of 0.07% of the first $50 million
of CIT's average daily net assets, 0.045% of the next $50 million, and 0.02% of
CIT's average daily net assets in excess of $100 million.
The Trust's Board of Trustees has approved a change in fund administration
duties. Effective May 1, 1997, WFB became administrator and Stephens Inc.
("Stephens") became co-administrator to the Trust on behalf CIT. Under the new
agreement, administrative fees are not charged to CIT. Prior to May 1, 1997,
Stephens provided substantially the same services as sole administrator to CIT
and was entitled to receive a monthly fee at the annual rate of 0.025% of the
average daily net assets of CIT.
22
<PAGE>
LIST OF ABBREVIATIONS
The following is a list of common abbreviations for terms and entities which may
have appeared in this report.
<TABLE>
<S> <C> <C>
ABAG -- Association of Bay Area Governments
ADR -- American Depository Receipts
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
ARM -- Adjustable Rate Mortgages
BART -- Bay Area Rapid Transit
CDA -- Community Development Authority
CDSC -- Contingent Deferred Sales Charge
CGIC -- Capital Guaranty Insurance Company
CGY -- Capital Guaranty Corporation
CMT -- Constant Maturity Treasury
COFI -- Cost of Funds Index
CONNIE LEE -- Connie Lee Insurance Company
COP -- Certificate of Participation
CP -- Commercial Paper
DW&P -- Department of Water & Power
DWR -- Department of Water Resources
EDFA -- Education Finance Authority
FGIC -- Financial Guaranty Insurance Corporation
FHA -- Federal Housing Authority
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance, Incorporated
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
HFFA -- Health Facilities Financing Authority
IDA -- Industrial Development Authority
LIBOR -- London Interbank Offered Rate
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MUD -- Municipal Utility District
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PFA -- Public Finance Authority
PSFG -- Public School Fund Guaranty
RAW -- Revenue Anticipation Warrants
RDA -- Redevelopment Authority
RDFA -- Redevelopment Finance Authority
R&D -- Research & Development
SFMR -- Single Family Mortgage Revenue
TBA -- To Be Announced
TRAN -- Tax Revenue Anticipation Notes
USD -- Unified School District
V/R -- Variable Rate
</TABLE>
23
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
24
<PAGE>
OVERLAND EXPRESS FUNDS, INC.
SUPPLEMENT DATED AUGUST 15, 1997
TO THE PROSPECTUSES DATED MAY 1, 1997
DESCRIBING THE FOLLOWING FUNDS
<TABLE>
<S> <C> <C>
CALIFORNIA TAX-FREE BOND SHORT-TERM GOVERNMENT-CORPORATE
CALIFORNIA TAX-FREE MONEY MARKET INCOME
INDEX ALLOCATION SHORT-TERM MUNICIPAL INCOME
MONEY MARKET SMALL CAP STRATEGY
MUNICIPAL INCOME STRATEGIC GROWTH
NATIONAL TAX-FREE INSTITUTIONAL U.S. TREASURY MONEY MARKET
MONEY MARKET U.S. GOVERNMENT INCOME
OVERLAND SWEEP VARIABLE RATE GOVERNMENT
</TABLE>
On July 23, 1997 the Board of Directors of Overland Express Funds, Inc.
("Overland") approved an Agreement and Plan of Consolidation with Stagecoach
Funds, Inc. ("Stagecoach"), another open-end management investment company
advised by Wells Fargo Bank, to consolidate each Overland Fund with and into
certain new or existing Stagecoach Funds which have (except as described below)
the same or similar investment objectives and policies (the "Consolidation"). If
the Consolidation is approved by shareholders of the Overland Funds, they will
become shareholders of a corresponding Stagecoach Fund, as indicated in the
chart below. At closing, they will receive shares of the designated class of the
corresponding Stagecoach Fund having a total value equal to the total value of
the shares of the Overland Fund held by the shareholder immediately before the
closing. The Consolidation is expected to close on or about December 15, 1997.
OVERLAND/STAGECOACH FUNDS CONSOLIDATION MAP
<TABLE>
<CAPTION>
Existing Stagecoach Funds -
Overland Express Funds - Classes Existing or New Classes
- -------------------------------------- --------------------------------------
<S> <C>
California Tax-Free Bond - A and D California Tax-Free Bond - A and C
California Tax-Free Money Market California Tax-Free Money Market
Mutual
Money Market - A and Institutional Prime Money Market Mutual - A and
Administrative
Municipal Income - A and D National Tax-Free Fund - A and C
National Tax-Free Institutional Money National Tax-Free Money Market Mutual
Market - Institutional
Small Cap Strategy - A and D Small Cap - A and C
Strategic Growth - A and D Aggressive (Strategic) Growth - A and
C
U.S. Government Income - A and D Ginnie Mae (U.S. Government Income) -
A and C
U.S. Treasury Money Market - A and Treasury Money Market Mutual - A and
Institutional Administrative
</TABLE>
i
<PAGE>
OVERLAND EXPRESS FUNDS, INC.
SUPPLEMENT DATED AUGUST 15, 1997
TO THE PROSPECTUSES DATED MAY 1, 1997 -- (CONTINUED)
<TABLE>
<CAPTION>
Overland Express Funds - Classes New Stagecoach Funds Classes
- -------------------------------------- --------------------------------------
<S> <C>
Index Allocation - A and D Index Allocation - A and C
Overland Sweep Overland Sweep
Short-Term Municipal Income Short-Term Municipal Income
Short-Term Government-Corporate Income Short-Term Government-Corporate Income
Variable Rate Government - A and D Variable Rate Government - A and C
</TABLE>
If the Consolidation is approved, shareholders of Overland's Municipal
Income and U.S. Government Income Funds will become shareholders of the
Stagecoach National Tax-Free and Ginnie Mae Funds, respectively. Investors
should be aware of the following differences in these Funds. Although the
Municipal Income Fund and National Tax-Free Fund each invests a significant
portion of its assets in securities exempt from federal income taxes, the
Municipal Income Fund generally invests at least 80% of its assets in securities
that may be subject to the alternative minimum tax, and the National Tax-Free
Fund generally invests no more than 20% of its assets in such securities. The
Ginnie Mae Fund currently invests primarily in Ginnie Mae securities. If the
Consolidation is approved, the Ginnie Mae Fund will pursue an investment policy
of investing primarily in a broader array of mortgage pass-through securities
issued or guaranteed by the U.S. Government.
At the July 23, 1997 meeting, the Overland Board of Directors, subject to
the approval of Class D shareholders of the Overland California Tax-Free Bond,
Municipal Income and U.S. Government Income Funds, approved an increase in the
Rule 12b-1 distribution fee payable under the Class C Rule 12b-1 Plan of the
corresponding Stagecoach Funds, from 0.50% to 0.75% of the average daily net
assets of the Class C shares of such Stagecoach Funds. The increase is intended
to encourage the Funds' selling agents to devote sufficient resources to
marketing the Funds' Class C shares. Although the Rule 12b-1 fee payable by the
Class C shares of the corresponding Stagecoach Funds will increase, Wells Fargo
Bank and Stephens Inc. have agreed to waive or reimburse certain other fees so
that the total operating expenses payable by the Class C shares will remain at
the current level paid by Class D shares of the corresponding Overland Funds
through December 31, 1998.
Overland shareholders on the record date (currently expected to be September
30, 1997) are eligible to vote on issues relating to the Consolidation and will
be sent additional information. Shareholders who make an initial investment
after the record date will not be eligible to vote, but may obtain additional
information by calling 1-800-572-7797.
In addition, if the Consolidation is completed as anticipated, any Fund that
currently is part of a master-feeder structure will be reorganized into a
stand-alone Fund. This means that each such Fund will withdraw its investment in
the corresponding Master Portfolio and instead will invest directly in a
portfolio of securities. Each such Fund will retain Wells Fargo Bank, the
investment adviser to the Master Portfolios, to manage its assets directly, in
substantially the same manner as Wells Fargo Bank currently manages each Master
Portfolio's assets and for the same advisory fee level.
ii
<PAGE>
OVERLAND EXPRESS FUNDS, INC.
SUPPLEMENT DATED AUGUST 15, 1997
TO THE PROSPECTUSES DATED MAY 1, 1997 -- (CONTINUED)
New Portfolio Managers
Mr. Kenneth Lee became a portfolio co-manager to the SMALL CAP MASTER
PORTFOLIO as of June 18, 1997 and is responsible for providing fundamental
security analysis and portfolio management. Mr. Lee joined Wells Fargo Bank in
1993 and went from Investment Operations to the Portfolio Management group in
1995. Prior to 1993 he worked as an associate at Wells Fargo Nikko Investment
Advisors and at Dean Witter Reynolds (Morgan Stanley Dean Witter Discover) and
has over 8 years experience in the industry. He holds bachelor degrees both in
economics and in organizational studies from the University of California at
Davis and is working toward his chartered financial analyst designation.
Mr. Chris Greene joined Wells Fargo Bank on April 1, 1997, to work as
portfolio co-manager of the CAPITAL APPRECIATION MASTER PORTFOLIO. Immediately
prior to joining Wells Fargo Bank, Mr. Greene worked for three years in the
Mergers & Acquisitions group for Hambrecht & Quist, an investment banking firm
focusing on growth companies. Before that he worked for two years at GB Capital
Management and prior to that worked at Wood Island Associates, firms focusing on
equity and fixed-income securities. He has over five years experience in the
industry. Mr. Greene received his B.A. in Economics from Claremont McKenna
College.
OEX P (SUPP 8/97)
iii
<PAGE>
NOTES
<PAGE>
[OVERLAND EXPRESS LOGO]
POST OFFICE BOX 63084
SAN FRANCISCO, CA 94163
This report and the financial statements
contained herein are submitted for the general
information of the shareholders of the Overland
Express Funds. If this report is used for promotional
purposes, distribution of the report must be
accompanied or preceded by a current prospectus.
For a prospectus containing more complete
information, including charges and expenses,
call 1.800.552.9612. Read the prospectus
carefully before you invest.
THIS BOOKLET INCLUDES THE SEMI-ANNUAL REPORT AND A
PROSPECTUS SUPPLEMENT. THE PROSPECTUS SUPPLEMENT
APPEARS ON THREE PAGES FOLLOWING THE REPORT.
OEXSARSWP8/97
DATED MATERIAL - PLEASE EXPEDITE
