OVERLAND EXPRESS FUNDS, INC.
Supplement dated August 15, 1997
to the Prospectuses dated May 1, 1997
describing the following Funds
<TABLE>
<S> <C>
California Tax-Free Bond Short-Term Government-Corporate Income
California Tax-Free Money Market Short-Term Municipal Income
Index Allocation Small Cap Strategy
Money Market Strategic Growth
Municipal Income U.S. Government Income
National Tax-Free Institutional Money Market U.S. Treasury Money Market
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
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<S> <C>
Existing Stagecoach Funds -
Overland Express Funds - Classes Existing or New Classes
- -------------------------------- -----------------------
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 Market National Tax-Free Money Market Mutual - 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 Institutional Treasury Money Market Mutual - A and Administrative
Overland Express Funds - Classes New Stagecoach Funds Classes
- -------------------------------- ----------------------------
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>
<PAGE>
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 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.
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)
