<PAGE> 1
As filed with the Securities and Exchange Commission
on December 18, 1995
Registration No. 33-42927; 811-6419
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Post-Effective Amendment No. 19 [X]
And
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 20 [X]
(Check appropriate box or boxes)
--------------------------------
STAGECOACH FUNDS, INC.
(Exact Name of Registrant as specified in Charter)
111 Center Street
Little Rock, Arkansas 72201
(Address of Principal Executive Offices, including Zip Code)
--------------------------------
Registrant's Telephone Number, including Area Code: (800) 643-9691
Richard H. Blank, Jr.
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
(Name and Address of Agent for Service)
With a copy to:
Robert M. Kurucza, Esq.
Marco E. Adelfio, Esq.
Morrison & Foerster
2000 Pennsylvania Ave., N.W.
Washington, D.C. 20006
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant [ ] on _________ pursuant
to Rule 485(b), or to Rule 485(b), or
[ ] 60 Days after filing pursuant [ ] on _________ pursuant
to Rule 485(a), or to Rule 485(a)
[ ] 75 days after filing pursuant [X] on March 4, 1996 pursuant
to paragraph (a)(2) paragraph (a)(2) of Rule 485
<PAGE> 2
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
The Registrant has registered an indefinite number of shares of its Common
Stock, $.001 par value, under the Securities Act of 1933, pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Rule 24f-2
Notice for the fiscal year ending December 31, 1995, will be filed with the
Securities and Exchange Commission on or about February 28, 1996.
This Post-Effective Amendment to the Registrant's Registration Statement also
has been executed by Master Investment Trust (a registered investment company
with separate series in which this series of the Registrant will invest
substantially all of its assets) and its trustees and principal officers.
<PAGE> 3
EXPLANATORY NOTE
This Post-Effective Amendment No. 19 to the Registration Statement
(the "Amendment") of Stagecoach Funds, Inc. (the "Company") is being filed to
register a new series of the Company, the Aggressive Growth Series (the
"Fund"). The Fund will invest substantially all of its assets in a new master
portfolio, the Capital Appreciation Master Portfolio, to be registered of
Master Investment Trust, a management investment company organized as a
Delaware business trust (SEC File No. 811-6415). This Amendment does not
affect the Registration Statement for the Company's Asset Allocation Fund,
California Tax-Free Bond Fund, California Tax-Free Income Fund, California
Tax-Free Money Market Mutual Fund, Corporate Stock Fund, Diversified Income
Fund, Ginnie Mae Fund, Growth and Income Fund, Money Market Mutual Fund,
National Tax-Free Money Market Mutual Fund, Short-Intermediate U.S. Government
Income Fund and U.S. Government Allocation Fund.
<PAGE> 4
Cross Reference Sheet
AGGRESSIVE GROWTH FUND
Form N-1A Item Number
<TABLE>
<CAPTION>
Part A Prospectus Captions
- ------ -------------------
<S> <C>
1 Cover Page
2 Prospectus Summary; Summary of Fund Expenses
3 Financial Highlights
4 The Fund, the Master Portfolio and Management; Prospectus Appendix
5 How the Fund Works; The Fund, the Master Portfolio and
Management; Management, Distribution and Servicing Fees
6 The Fund, the Master Portfolio and Management; Investing in the Fund
7 Investing in the Fund; Dividends; Taxes; Additional Shareholder Services
8 How to Redeem Shares
9 Not Applicable
Part B Statement of Additional Information Captions
- ------ --------------------------------------------
10 Cover Page
11 Table of Contents
12 Introduction
13 Investment Restrictions; Portfolio Transactions
14 Management
15 Management
16 Management; Distribution Plan; Custodian and Transfer and Dividend
Disbursing Agent; Independent Auditors
17 Portfolio Transactions
18 Capital Stock; Other
19 Determination of Net Asset Value
20 Federal Income Tax
21 Distribution Plan
22 Calculation of Yield and Total Return
23 Financial Information
Part C Other Information
- ------ -----------------
24-32 Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C of this Document.
</TABLE>
<PAGE> 5
[LOGO]
------------------------------
PROSPECTUS
------------------------------
AGGRESSIVE GROWTH FUND
March 4, 1996
<PAGE> 6
***************************************************************************
* *
* Information contained herein is subject to completion or amendment. A *
* registration statement relating to these securities has been filed *
* with the Securities and Exchange Commission. These securities may not *
* be sold nor may offers to buy be accepted prior to the time the *
* registration statement becomes effective. This prospectus shall not *
* constitute an offer to sell or the solicitation of an offer to buy *
* nor shall there be any sale of these securities in any State in which *
* such offer, solicitation or sale would be unlawful prior to *
* registration or qualification under the securities laws of any such *
* State. *
* *
***************************************************************************
SUBJECT TO COMPLETION DATED MARCH 4, 1996
STAGECOACH FUNDS(R)
AGGRESSIVE GROWTH FUND
Stagecoach Funds, Inc. (the "Company") is a professionally managed, open-end
series investment company. This Prospectus contains information about one fund
in the Stagecoach Family of Funds - the AGGRESSIVE GROWTH FUND (the "Fund"). Two
classes of shares of the Fund (each, a "Class") are described in this
Prospectus - Class A Shares and Class B Shares.
THE FUND INVESTS ALL OF ITS ASSETS IN A SEPARATE PORTFOLIO (AT TIMES, THE
"MASTER PORTFOLIO") OF MASTER INVESTMENT TRUST (THE "TRUST"), AN OPEN-END
MANAGEMENT INVESTMENT COMPANY, RATHER THAN IN A PORTFOLIO OF SECURITIES. THE
MASTER PORTFOLIO HAS THE SAME INVESTMENT OBJECTIVE AS THE FUND. THE FUND'S
INVESTMENT EXPERIENCE, THEREFORE, CORRESPONDS DIRECTLY WITH THE MASTER
PORTFOLIO'S INVESTMENT EXPERIENCE. SHARES OF THE MASTER PORTFOLIO MAY BE
PURCHASED ONLY BY OTHER INVESTMENT COMPANIES OR SIMILAR ACCREDITED INVESTORS.
The investment objective of the AGGRESSIVE GROWTH FUND is to provide investors
with an above-average level of capital appreciation. It seeks to achieve this
objective by investing all of its assets in the Trust's Capital Appreciation
Master Portfolio, which has the same investment objective as the Fund. The
Capital Appreciation Master Portfolio seeks to achieve its investment objective
through the active management of a broadly diversified portfolio of equity
securities expected to experience strong growth in revenues, earnings and
assets.
Please read this Prospectus before investing and retain it for future
reference. It is designed to provide you with important information and to help
you decide if the Fund's goal matches your own. A Statement of Additional
Information (the "SAI"), dated March 4, 1996, for the Fund has been filed with
the Securities and Exchange Commission ("SEC") and is incorporated by reference.
The SAI is available free of charge by writing to Stagecoach Funds, Inc., c/o
Stagecoach Shareholder Services, Wells Fargo Bank, N.A., P.O. Box 7066, San
Francisco, CA 94120-7066, or by calling the Company at 800-222-8222. If you hold
shares in an IRA, please call 1-800-BEST-IRA for information or assistance.
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 THESE AUTHORITIES PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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 OR GUARANTEED 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.
PROSPECTUS DATED MARCH 4, 1996
PROSPECTUS
<PAGE> 7
The Capital Appreciation Master Portfolio is advised by Wells Fargo Bank,
which also serves as the Fund's and Master Portfolio's transfer and dividend
disbursing agent and custodian. In addition, Wells Fargo Bank is a Shareholder
Servicing Agent (as defined below) and a Selling Agent (as defined below).
Stephens Inc. ("Stephens") is the Fund's sponsor and administrator and serves as
the distributor of the Fund's shares.
WELLS FARGO BANK IS THE INVESTMENT ADVISER AND PROVIDES CERTAIN OTHER SERVICES
TO THE FUND AND THE MASTER PORTFOLIO, FOR WHICH IT IS COMPENSATED. STEPHENS,
WHICH IS NOT AFFILIATED WITH WELLS FARGO BANK, IS THE SPONSOR AND DISTRIBUTOR
FOR THE FUND.
PROSPECTUS
<PAGE> 8
TABLE OF CONTENTS
PROSPECTUS SUMMARY 1
SUMMARY OF FUND EXPENSES 5
FINANCIAL HIGHLIGHTS 7
HOW THE FUND WORKS 10
THE FUND, THE MASTER PORTFOLIO AND MANAGEMENT 16
INVESTING IN THE FUND 20
DIVIDENDS 31
HOW TO REDEEM SHARES 32
ADDITIONAL SHAREHOLDER SERVICES 36
MANAGEMENT, DISTRIBUTION AND SERVICING FEES 39
TAXES 43
PROSPECTUS APPENDIX - ADDITIONAL INVESTMENT POLICIES A-1
PROSPECTUS
<PAGE> 9
PROSPECTUS SUMMARY
The Fund provides you with a convenient way to invest in a portfolio of
securities selected and supervised by professional management. The following
provides you with summary information about the Fund. For more information,
please refer specifically to the identified Prospectus sections and generally to
the Prospectus and SAI for the Fund.
Q. WHAT ARE THE FUND'S AND MASTER PORTFOLIO'S INVESTMENT OBJECTIVES AND
PERMISSIBLE INVESTMENTS?
A. The investment objective of the AGGRESSIVE GROWTH FUND is to provide
investors with an above-average level of capital appreciation. The Fund
seeks to achieve this objective by investing all of its assets in the
Trust's Capital Appreciation Master Portfolio, which is a professionally
managed, open-end series investment company. The Capital Appreciation Master
Portfolio has the same investment objective as the Fund. The Master
Portfolio seeks to achieve its investment objective through the active
management of a broadly diversified portfolio of equity securities of
companies expected to experience strong growth in revenues, earnings and
assets. The Fund and Master Portfolio are designed to provide above-average
capital growth for investors willing to assume above-average risk.
The Master Portfolio invests primarily in common stocks that are expected by
Wells Fargo Bank to have above-average prospects for appreciation. In
pursuing its investment objective, the Master Portfolio may invest in the
common stocks of companies with small- or medium-sized capitalizations and
in securities acquired through initial public offerings. The Master
Portfolio also may temporarily invest in preferred stock or investment-grade
debt securities. In addition, the Master Portfolio may purchase or sell
options on securities and on indices of securities, may purchase warrants,
and may purchase privately issued securities that may be resold only in
accordance with Rule 144A under the Securities Act of 1933. (See "How the
Fund Works -- Investment Objective and Policies" and "Additional Permitted
Investment Activities" below.)
As with all mutual funds, there can be no assurance that the Fund or Master
Portfolio will achieve its investment objective. (See "How the Fund Works"
and "Prospectus Appendix - Additional Investment Policies" for further
information on investments.)
Q. WHO MANAGES MY INVESTMENTS?
A. Wells Fargo Bank, as the Master Portfolio's investment adviser, manages the
investments of the Master Portfolio. Wells Fargo Bank is entitled to receive
a monthly advisory fee at the annual rate of 0.50% of the average daily net
assets of the Master Portfolio. The Company has not retained the services of
a separate investment adviser for the Fund because the Fund invests all of
its assets in the Master Portfolio. Wells Fargo Bank also provides transfer
agency, dividend disbursing agency and custodial services to the Fund and
Master Portfolio. In addition, Wells Fargo Bank is a Shareholder Servicing
Agent and a Selling Agent for the Fund under a Selling Agreement with
Stephens, the Funds' distributor. (See "The Fund, the Master
1 PROSPECTUS
<PAGE> 10
Portfolio and Management" and "Management and Servicing Fees" for further
information.)
Q. HOW DO I INVEST?
A. You may invest by purchasing shares of the Fund at its public offering
price, which is the net asset value plus any applicable sales charge. Class
A Shares are subject to a maximum front-end sales charge of 4.50%. Class B
Shares that are redeemed within four years of purchase are subject to a
maximum contingent deferred sales charge of 3.00% of the lesser of net asset
value at purchase or net asset value at redemption. In some cases, such as
for investments by certain fiduciary or retirement accounts, the front-end
sales charge may be waived. In particular, no front-end sales charge is
imposed on sales of Class A Shares made to various retirement plan customers
of Wells Fargo Bank, including IRAs, Simplified Employee Pension Plans and
other self-directed retirement plans for which Wells Fargo Bank serves as
trustee. In other cases, the front-end sales charge may be reduced. You may
open an account by investing at least $1,000 and may add to your account by
making additional investments of at least $100, although certain exceptions
to these minimums may be available. Shares may be purchased by wire, by mail
or by an automatic investment feature called the AutoSaver Plan on any day
the New York Stock Exchange is open. See "Investing in the Fund." For more
details, contact Stephens (the Fund's sponsor and distributor), a
Shareholder Servicing Agent or a Selling Agent (such as Wells Fargo Bank).
Q. HOW WILL I RECEIVE DIVIDENDS AND ANY CAPITAL GAINS?
A. Dividends from net investment income are declared and paid annually and are
automatically reinvested in shares of the same Class of the Fund at net
asset value without payment of a sales charge, unless you have elected to
receive dividends in cash. You may also elect to reinvest the dividends
earned by the Fund in shares of the same Class of another multi-class fund
or in shares of certain other funds in the Stagecoach Family of Funds with
which you have an established account that has met the applicable minimum
initial investment requirement. Any capital gains will be distributed at
least annually in the same manner. Each Fund's net investment income
available for distribution to holders of Class B Shares will be reduced by
the amount of the higher Rule 12b-1 Fee payable on behalf of the Class B
Shares. Class B Shares automatically convert into Class A Shares of the same
Fund six years after the end of the month in which they were acquired. (See
"Dividends" and "Additional Shareholder Services" for additional
information.)
Q. HOW MAY I REDEEM SHARES?
A. You may redeem your shares by telephone, by letter or by an automatic
feature called the Systematic Withdrawal Plan on any day the New York
Stock Exchange is open for business. The Company does not charge a fee for
redemption of Class A Shares. However, contingent deferred sales charges
may be imposed upon redemption of Class B Shares. In addition, the Company
reserves the right to impose charges for wiring redemption proceeds. (See
"How To Redeem Shares" and "How to Purchase Shares -- Contingent Deferred
Sales Charges -- Class B Shares".) For
PROSPECTUS 2
<PAGE> 11
more details, contact Stephens, a Shareholder Servicing Agent or a Selling
Agent (such as Wells Fargo Bank).
Q. WHAT ARE SOME OF THE POTENTIAL RISKS ASSOCIATED WITH THIS TYPE
OF INVESTMENT?
A. An investment in the Fund or Master Portfolio is not insured against loss of
principal. When the value of the securities that the Master Portfolio owns
declines, so does the value of your shares of the Fund. Therefore, you
should be prepared to accept some risk with the money you invest in the
Fund. The portfolio equity securities are subject to equity market risk.
Equity market risk is the risk that common stock prices will fluctuate or
decline over short or even extended periods. In addition, investments in the
Fund and Master Portfolio are not bank deposits or obligations of Wells
Fargo Bank and are not insured by the Federal Deposit Insurance Corporation
("FDIC"). Given the relatively novel nature of the master/feeder structure,
accounting and operational difficulties, although unlikely, could arise. The
Fund and Master Portfolio were newly formed in 1996 and, therefore, have
limited operational history as a master/feeder structure. As with all mutual
funds, there can be no assurance that the Fund or Master Portfolio will
achieve its investment objective.
Because the Master Portfolio engages in active portfolio management, the
Master Portfolio may experience relatively high turnover and transaction
(i.e., brokerage commission) costs. Portfolio turnover can also generate
short-term capital gain taxes. You should consult your individual tax
advisor with respect to your particular tax situation.
The Master Portfolio may invest a significant portion of its assets in the
securities of smaller and newer issuers. Investments in such companies may
present opportunities for capital appreciation because of high potential
earnings growth. Such investments, however, may present greater risks than
investments in larger-sized companies with more established operating
histories, diverse product lines and financial capacity. Securities of small
and new companies generally trade less frequently or in limited volume, or
only in the over-the-counter market or on a regional securities exchange. As
a result, the prices of such securities may be more volatile than those of
larger, more established companies and, as a group, these securities may
suffer more severe price declines during periods of generally declining
equity prices. (See "How the Fund Works -- Investment Objective and
Policies" and "How the Fund Works -- Additional Permitted Investment
Activities" for further information.)
Q. WHAT ARE DERIVATIVES AND DO THE FUND AND MASTER PORTFOLIO USE THEM?
A. Derivatives are financial instruments whose value is derived, at least in
part, from the price of another security or a specified asset, index or
rate. Some of the permissible investments described in this Prospectus, such
as variable-rate instruments which have an interest rate that is reset
periodically based on an index, can be considered derivatives. Some
derivatives may be more sensitive than direct securities
3 PROSPECTUS
<PAGE> 12
to changes in interest rates or sudden market moves. Some derivatives also
may be susceptible to fluctuations in yield or value due to their structure
or contract terms.
Q. WHAT STEPS ARE TAKEN TO CONTROL DERIVATIVES-RELATED RISKS?
A. Wells Fargo Bank, as investment adviser to the Master Portfolio, uses a
variety of internal risk management procedures to ensure that derivatives
use is consistent with the Fund's and the Master Portfolio's investment
objective, does not expose the Fund or Master Portfolio to undue risks and
is closely monitored. These procedures include providing periodic reports to
the Boards of Directors and Trustees concerning the use of derivatives.
Derivatives use also is subject to broadly applicable investment policies.
For example, neither the Fund nor the Master Portfolio may invest more than
a specified percentage of its assets in "illiquid securities," including
those derivatives that do not have active secondary markets. Nor may certain
derivatives be used without establishing adequate "cover" in compliance with
SEC rules limiting the use of leverage. For more information on the Fund's
and Master Portfolio's investment activities, see "Prospectus Appendix -
Additional Investment Policies".
PROSPECTUS 4
<PAGE> 13
SUMMARY OF FUND EXPENSES
This expense summary is a standard format required for all mutual funds to
help you understand the various costs and expenses you will bear directly or
indirectly as a shareholder of the Fund. As shown below, you are not charged
exchange fees. The expenses and fees set forth include the Fund's proportionate
share of the expenses of the Master Portfolio. You should consider this expense
information together with the important information in this Prospectus,
including the Fund's investment objective and policies.
AGGRESSIVE GROWTH FUND
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
<S> <C> <C>
Maximum Sales Charge Imposed
on Purchase (as a percentage
of offering price)................................ 4.50% None
Sales Charge Imposed
on Reinvested Dividends........................... None None
Maximum Sales Charge Imposed
on Redemptions(1)................................... None 3.00%
Exchange Fees......................................... None None
</TABLE>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
<S> <C> <C> <C> <C>
Management Fee(2)............................... 0.40% 0.40%
Rule 12b-1 Fee.................................. 0.10% 0.75%
Total Other Expenses(2):
Shareholder Servicing Fee(3)................ 0.25% 0.25%
Administrative Fee.......................... 0.03% 0.03%
Other Expenses(2)........................... 0.23% 0.23%
----- -----
0.51% 0.51%
----- -----
TOTAL FUND OPERATING
EXPENSES(2)................................... 1.01% 1.66%
</TABLE>
- -------------------------------
(1) The Company reserves the right to impose a charge for wiring
redemption proceeds.
(2) After any waivers or reimbursements.
(3) The Fund understands that a Shareholder Servicing Agent also
may impose certain conditions on its customers, subject to the
terms of this Prospectus, in addition to or different from
those imposed by the Fund, such as requiring a higher minimum
initial investment or payment of a separate fee for additional
services.
5 PROSPECTUS
<PAGE> 14
<TABLE>
<CAPTION>
EXAMPLE OF EXPENSES --
CLASS A SHARES 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 (A) a 5% annual return
and (B) redemption at the end of each time
period indicated:
Aggressive Growth Fund................. $ 55 $76 $98 $163
You would pay the following expenses on a
$1,000 investment in Class B Shares of the
Fund, assuming (A) a 5% annual return and
(B) redemption at the end of each time
period indicated:
Aggressive Growth Fund................. $ 47 $62 $90 $124
You would pay the following expenses on a
$1,000 investment in Class B Shares of the
Fund, assuming a 5% annual return and no
redemption:
Aggressive Growth Fund................. $ 15 $47 $90 $124
</TABLE>
EXPLANATION OF TABLES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell Fund
shares. You are subject to a front-end sales charge on purchases of Class A
Shares and may be subject to a contingent deferred sales charge on Class B
Shares if you redeem such shares within a specified period. See "Investing in
the Fund - Sales Charges." The Company reserves the right to impose a charge for
wiring redemption proceeds. In certain instances, you may qualify for a
reduction or waiver of the front-end sales charge. See "Investing in the
Fund - Sales Charges".
ANNUAL FUND OPERATING EXPENSES for the Class A Shares and Class B Shares are
based on the 1994 actual expenses of the Class A and Class D shares of the
predecessor operating investment company series, the Strategic Growth Fund of
Overland Express Funds, Inc., to the Master Portfolio (the "Predecessor Fund").
The Predecessor Fund became a feeder in the Master Portfolio by exchanging the
Predecessor Fund's assets for interests in the Master Portfolio. The figures
shown above are adjusted to reflect the applicable sales charges, account fees
and expenses, and any voluntary fee waivers or reimbursements projected for the
Aggressive Growth Fund's Class A Shares and Class B Shares. Wells Fargo Bank and
Stephens each has agreed to waive or reimburse all or a portion of their
respective fees if certain Fund expenses exceed limits set by state securities
laws or regulations. In addition, Wells Fargo Bank and Stephens at their sole
discretion may waive or reimburse all or a portion of their respective fees
charged to, or expenses paid by, the Fund or the Master Portfolio. Any waivers
or reimbursements would reduce the Fund's total expenses. Absent waivers and
reimbursements, the percentages shown above under "Total Other Expenses" and
"Total Fund Operating Expenses" would be 0.67% and 1.55%, respectively, for the
Class A Shares and 0.70% and 2.23%, respectively, for the Class B Shares of the
Aggressive Growth
PROSPECTUS 6
<PAGE> 15
Fund. There can be no assurance that waivers or reimbursements will continue.
The Company's Board of Directors believes that the aggregate per share expenses
of a class of shares of the Fund will be less than or approximately equal to the
expenses incurred by such class if the Fund directly acquired and managed the
type of securities held by the Master Portfolio. Long-term shareholders of the
Fund could pay more in sales 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 ("NASD"). For more complete
descriptions of the various costs and expenses you can expect to incur as an
investor in the Fund, please see the Prospectus sections under "Investing in the
Fund - How To Buy Shares" and "Management and Servicing Fees".
EXAMPLE OF EXPENSES is a hypothetical example which illustrates the expenses
associated with a $1,000 investment in shares of the Fund over stated periods
based on the expenses in the table above and an assumed annual rate of return of
5%. This rate of return should not be considered an indication of actual or
expected performance of the Fund. In addition, the example should not be
considered a representation of past or future expenses, and actual expenses may
be greater or lesser than those shown.
FINANCIAL HIGHLIGHTS
The financial information presented below is for informational purposes only
and should not be considered as a projection of the future performance of the
Fund. The Fund has been established as a new feeder fund into the Capital
Appreciation Master Portfolio, the master fund that is the successor fund to the
Predecessor Fund (the "Successor Fund"). The Fund proposes to assume the
financial history and performance from inception of the Predecessor Fund and the
Successor Fund through the Fund's commencement of operations, adjusted to
reflect applicable sales loads and any account fees imposed at the Fund level.
Performance information for the Fund will be calculated in accordance with the
published opinions of the SEC staff.
7 PROSPECTUS
<PAGE> 16
The following information has been derived from the Financial Highlights of
the Class A and Class D shares of the Predecessor Fund's 1994 financial
statements. The audited financial statements for the year ended December 31,
1994 are attached to the SAI and have been audited by KPMG Peat Marwick LLP,
independent auditors, whose report dated February 17, 1995 also is attached to
the SAI. The unaudited financial statements for the six months ended June 30,
1995 also are attached to the SAI. Because the master/feeder structure was
approved by Predecessor Fund's shareholders on [JANUARY 30, 1996], the financial
highlights for the periods presented refer only to the prior operating history
of the Predecessor Fund on a stand-alone basis. This information should be read
in conjunction with the Predecessor Fund's annual financial statements,
semi-annual financial statements and the respective notes thereto. The SAI has
been incorporated by reference into this Prospectus.
PREDECESSOR FUND
FOR A CLASS A SHARE OUTSTANDING AS SHOWN
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 1995 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1994 1993(1)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $ 13.29 $ 13.20 $ 10.00
Income from Investment Operations:
Net Investment Loss.......................... (0.03) (0.11) (0.03)
Net Realized and Unrealized Gain on
Investments................................ 3.80 0.67 3.68
----- ----- -----
Total from Investment Operations.............. 3.77 0.56 3.65
Less Distributions:
Dividends from Net Investment Income......... 0.00 0.00 (0.03)
Distributions from Net Realized Capital
Gain....................................... 0.00 (0.33) (0.41)
----- ----- -----
Tax Return of Capital........................ 0.00 (0.14) (0.01)
Total Distributions........................... (0.47) (0.45)
Net Asset Value, End of Period................ $ 17.06 $ 13.29 $ 13.20
======== ======== ========
Total Return (not annualized)(2).............. 28.37% 4.23% 36.56%
Ratios/Supplemental Data:
Net Assets, End of Period (000).............. $ 39,053 $ 26,744 $ 25,413
Number of Shares Outstanding, End of Period
(000)...................................... 2,289 2,013 1,926
Ratios to Average Net Assets (annualized):
Ratio of Expenses to Average Net Assets(3)... 1.25% 1.20% 0.66%
Ratio of Net Investment Loss to Average Net
Assets(4).................................. (0.60)% (0.81)% (0.01)%
Portfolio Turnover............................ 97% 149% 182%
- ------------
(1) The Predecessor Fund commenced operations on January 20,
1993.
(2) Total returns do not include any sales
charges or contingent deferred sales
charges.
(3) Ratio of Expenses to Average Net Assets
Prior to Waived Fees and Reimbursed
Expenses (not including expenses incurred
by the Master Portfolio).................. 1.40% 1.55% 1.64%
(4) Ratio of Net Investment Income (Loss) to
Average Net Assets Prior to Waived Fees
and Reimbursed Expenses (not including
expenses incurred by the Master
Portfolio)................................ (0.75)% (1.16)% (0.99)%
</TABLE>
PROSPECTUS 8
<PAGE> 17
PREDECESSOR FUND
FOR A CLASS D SHARE OUTSTANDING AS SHOWN
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 1995 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1994 1993(1)
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $ 16.54 $ 16.55 $ 15.00
Income from Investment Operations:
Net Investment Loss.......................... (0.13) (0.24) (0.43)
Net Realized and Unrealized Capital Gain on
Investments................................ 4.74 0.81 2.51
-------- -------- --------
Total from Investment Operations.............. 4.61 0.57 2.08
Less Distributions:
Dividends from Net Investment Income......... 0.00 0.00 0.00
Distributions from Net Realized Capital
Gain....................................... 0.00 (0.40) (0.53)
-------- -------- --------
Tax Return of Capital........................ 0.00 (0.18) 0.00
Total Distributions........................... (0.58) (0.53)
Net Asset Value, End of Period................ $ 21.15 $ 16.54 $ 16.55
======== ======== ========
Total Return (not annualized)(2).............. 27.87% 3.46% 13.84%
Ratios/Supplemental Data:
Net Assets, End of Period (000).............. $ 18,840 $ 15,335 $ 11,932
Number of Shares Outstanding, End of Period
(000)...................................... 891 927 721
Ratios to Average Net Assets (annualized):
Ratio of Expenses to Average Net Assets(3)... 2.00% 1.95% 0.61%
Ratio of Net Investment Loss to Average Net
Assets(4).................................. (1.34)% (1.56)% (1.00)%
Portfolio Turnover............................ 97% 149% 182%
- ------------
(1) This class commenced operations on July 1,
1993.
(2) Total returns do not include any sales
charges or contingent deferred sales
charges.
(3) Ratio of Expenses to Average Net Assets
Prior to Waived Fees and Reimbursed
Expenses (not including expenses incurred
by the Master Portfolio).................. 2.09% 2.23% 2.14%
(4) Ratio of Net Investment Income (Loss) to
Average Net Assets Prior to Waived Fees
and Reimbursed Expenses (not including
expenses incurred by the Master
Portfolio)................................ (1.44)% (1.84)% (2.53)%
</TABLE>
9 PROSPECTUS
<PAGE> 18
HOW THE FUND WORKS
INVESTMENT OBJECTIVE AND POLICIES
Set forth below is a description of the investment objective and related
policies of the Fund and the Master Portfolio. As with all mutual funds, there
can be no assurance that the Fund or Master Portfolio will achieve its
investment objective.
The Aggressive Growth Fund seeks to achieve its investment objective by
investing all of its assets in the Capital Appreciation Master Portfolio, which
has the same investment objective as the Fund. The Fund may withdraw its
investment in the Master Portfolio only if the Board of Directors of the Company
determines that such action is in the best interests of the Fund and its
shareholders. Upon such withdrawal, the Company's Board would consider
alternative investments, including investing all of the Fund's assets in another
investment company with the same investment objective as the Fund or hiring an
investment adviser to manage the Fund's assets in accordance with the investment
policies described below with respect to the Master Portfolio. The investment
objective and policies of the Master Portfolio are described in this section.
For a description of the management and expenses of the Master Portfolio, see
the Prospectus section "The Fund, the Master Portfolio and Management."
Investment Objective -- The investment objective of the Capital Appreciation
Master Portfolio is to provide investors with an above-average level of capital
appreciation. It seeks to achieve this objective through the active management
of a broadly-diversified portfolio of equity securities of companies expected to
experience strong growth in revenues, earnings and assets. The Master Portfolio
is designed to provide above-average capital growth for investors willing to
assume above-average risk.
EQUITY SECURITIES
The Master Portfolio invests primarily in common stocks that Wells Fargo Bank,
as the Master Portfolio's investment adviser, believes have better-than-average
prospects for appreciation. These stocks may have some of the following
characteristics:
- Low or no dividends
- Smaller market capitalizations
- Less market liquidity
- Relatively short operating histories
- Aggressive capitalization structures (including high debt levels)
- Involvement in rapidly growing/changing industries and/or new technologies
Under normal market conditions, the Master Portfolio will hold at least 20
common stock issues spread across multiple industry groups, with the majority of
these holdings
PROSPECTUS 10
<PAGE> 19
consisting of established growth companies, turnaround or acquisition
candidates, or attractive larger capitalization companies.
Additionally, it is expected that the Master Portfolio will from time to time
acquire securities through initial public offerings, and will acquire and hold
common stocks of smaller and newer issuers. It is expected that no more than 40%
of the Master Portfolio's assets will be invested in these highly aggressive
issues at one time. There may be some additional risks associated with
investments in smaller and/or newer companies because their shares tend to be
less liquid than securities of larger companies. Further, shares of small and
new companies are generally more sensitive to purchase and sale transactions and
changes in the issuer's financial condition and, therefore, the prices of such
stocks may be more volatile than those of larger company stocks.
From time to time Wells Fargo Bank may determine that conditions in the
securities markets make pursuing the Master Portfolio's basic investment
strategy inconsistent with the best interests of the Master Portfolio's
investors. At such times, Wells Fargo Bank may use temporary alternative
strategies, primarily designed to reduce fluctuations in the value of the Master
Portfolio's assets. In implementing these temporary "defensive" strategies, the
Master Portfolio may invest in preferred stock or investment-grade debt
securities that are convertible into common stock and in money market
securities. It is expected that these temporary "defensive" investments will not
exceed 30% of the Master Portfolio's total assets.
The Master Portfolio pursues an active trading investment strategy, and the
length of time the Master Portfolio has held a particular security is not
generally a consideration in investment decisions. Accordingly, the Master
Portfolio's portfolio turnover rate may be higher than that of other funds that
do not pursue an active trading investment strategy. Portfolio turnover
generally involves some expense to the Master Portfolio, including brokerage
commissions or dealer mark-ups and other transactions costs on the sale of
securities and the reinvestment in other securities. Portfolio turnover also can
generate short-term capital gains tax consequences.
Though the Master Portfolio will hold a number of larger capitalization
stocks, under normal market conditions, and subject to the additional risks
described above, more than 50% of the Master Portfolio's total assets will be
invested in companies with smaller to medium capitalizations. The Master
Portfolio will invest primarily in companies with a market capitalization of $50
million or greater, but may invest in companies with a market capitalization
under $50 million if the investment adviser to the Master Portfolio believes
such investments to be in the best interests of the Master Portfolio. It is
currently expected that the majority of the Master Portfolio's investments will
be in companies with market capitalizations, at the time of acquisition, of up
to $750 million.
Under ordinary market conditions, at least 65% of the value of the total
assets of the Master Portfolio will be invested in common stocks and in
securities which are convertible into common stocks that Wells Fargo Bank, as
investment adviser, believes
11 PROSPECTUS
<PAGE> 20
have better-than-average prospects for appreciation. The Master Portfolio also
may invest in convertible debt securities. At most, 5% of the Master Portfolio's
net assets will be invested in convertible debt securities that are not either
rated in the four highest rating categories by one or more nationally recognized
statistical rating organizations ("NRSROs"), such as Moody's Investor Service,
Inc. ("Moody's") or Standard & Poor's Corporation ("S&P"), or unrated securities
determined by Wells Fargo Bank to be of comparable quality. Securities rated in
the fourth lowest rating category (i.e., rated "BBB" by S&P or "Baa" by Moody's)
are regarded by S&P as having an adequate capacity to pay interest and repay
principal, but changes in economic conditions or other circumstances are more
likely to lead to a weakened capacity to make such repayments. Moody's considers
such securities as having speculative characteristics.
ADDITIONAL PERMITTED INVESTMENT ACTIVITIES
Privately Issued Securities (Rule 144A). The Master Portfolio may invest in
privately issued securities which may be resold in accordance with Rule 144A
under the Securities Act of 1933 ("Rule 144A Securities"). Rule 144A Securities
are restricted securities which are not publicly traded. Accordingly, the
liquidity of the market for specific Rule 144A Securities may vary. Wells Fargo
Bank, using guidelines approved by the Board of Directors of the Company, will
evaluate the liquidity characteristics of each Rule 144A Security proposed for
purchase by the Master Portfolio on a case-by-case basis and will consider the
following factors, among others, in their evaluation: (1) the frequency of
trades and quotes for the Rule 144A Security; (2) the number of dealers willing
to purchase or sell the Rule 144A Security and the number of other potential
purchasers; (3) dealer undertakings to make a market in the Rule 144A Security;
and (4) the nature of the Rule 144A Security and the nature of the marketplace
trades (e.g., the time needed to dispose of the Rule 144A Security, the method
of soliciting offers and the mechanics of transfer).
Corporate Reorganizations. The Master Portfolio may invest in securities for
which a tender or exchange offer has been made or announced, and in securities
of companies for which a merger, consolidation, liquidation or similar
reorganization proposal has been announced if, in the judgment of Wells Fargo
Bank, there is a reasonable prospect of capital appreciation significantly
greater than the added portfolio turnover expenses inherent in the short term
nature of such transactions. The principal risk associated with such investments
is that such offers or proposals may not be consummated within the time and
under the terms contemplated at the time of the investment, in which case,
unless such offers or proposals are replaced by equivalent or increased offers
or proposals which are consummated, the Master Portfolio may sustain a loss.
Options. The Master Portfolio may purchase or sell options on individual
securities and options on indices of securities as a means of achieving
additional return or of hedging the value of the Master Portfolio's portfolio.
If the Master Portfolio has sold an option, it may terminate its obligation by
effecting a closing purchase transaction. This is
PROSPECTUS 12
<PAGE> 21
accomplished by purchasing an option of the same series as the option previously
sold. There can be no assurance that a closing purchase transaction can be
effected when the Master Portfolio so desires.
The purchaser of an option risks a total loss of the premium paid for the
option if the price of the underlying security does not increase or decrease
sufficiently to justify exercise. The seller of an option, on the other hand,
will recognize the premium as income if the option expires unrecognized but
foregoes any capital appreciation in excess of the exercise price in the case of
a call option and may be required to pay a price in excess of current market
value in the case of a put option. Options purchased and sold other than on an
exchange in private transactions also impose on the Master Portfolio the credit
risk that the counterparty will fail to honor its obligations. All investments
by the Master Portfolio in off-exchange options will be treated as "illiquid"
and will therefore be subject to the Master Portfolio's policy of not investing
more than 15% of its net assets in illiquid securities. The Master Portfolio
will establish a segregated account with its Custodian in which it will maintain
liquid assets in an amount at least equal in value to the Master Portfolio's
commitments under off-exchange options.
Warrants. The Master Portfolio may invest no more than 5% of its net assets at
the time of purchase in warrants (other than those that have been acquired in
units or attached to other securities) and not more than 2% of its net assets in
warrants which are not listed on the New York or American Stock Exchange.
Warrants represent rights to purchase securities at a specific price valid for a
specific period of time. The prices of warrants do not necessarily correlate
with the prices of the underlying securities. The Master Portfolio may only
purchase warrants on securities in which the Master Portfolio may invest
directly.
Investment in Foreign Securities. The Master Portfolio may invest in
securities of foreign governmental and private issuers that are denominated in
and pay interest in U.S. dollars. These securities may take the form of American
Depositary Receipts ("ADRs") and European Depositary Receipts ("EDRs"). These
securities may not necessarily be denominated in the same currency as the
securities into which they may be converted. ADRs are receipts typically issued
by a United States bank or trust company which evidence ownership of underlying
securities issued by a foreign corporation. EDRs, which are sometimes referred
to as Continental Depositary Receipts ("CDRs"), are receipts issued in Europe
typically by non-United States banks and trust companies that evidence ownership
of either foreign or domestic securities. Generally, ADRs in registered form are
designed for use in the United States securities markets and EDRs and CDRs in
bearer form are designed for use in Europe. Investments in foreign securities
involve certain considerations that are not typically associated with investing
in domestic securities. There may be less publicly available information about a
foreign issuer than about a domestic issuer. Foreign issuers also are not
generally subject to the same accounting, auditing and financial reporting
standards or governmental
13 PROSPECTUS
<PAGE> 22
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 investment objective of the Master Portfolio and the Fund, as set forth in
the first paragraphs of the section describing the investment objective and
policies of the Master Portfolio and the Fund, is fundamental; that is, the
investment objective may not be changed without approval by the vote of the
holders of a majority of the outstanding voting securities of the Master
Portfolio or the Fund, as applicable, and, as described under "Capital Stock" in
the SAI. If the Board of Trustees determines, however, that the Master
Portfolio's investment objective can best be achieved by a substantive change in
a non-fundamental investment policy or strategy, the Trust may make such change
without shareholder approval, and the Company will disclose any such material
changes in the then current prospectus.
In addition, as matters of fundamental policy, the Master Portfolio may: (i)
not purchase securities of any issuer (except U.S. Government obligations as
defined below) if as a result, with respect to 75% of the Master Portfolio's
assets, more than 5% of the value of the Master Portfolio's total assets would
be invested in the securities of such issuer or the Master Portfolio would own
more than 10% of the outstanding voting securities of such issuer; (ii) borrow
from banks up to 10% of the current value of its net assets for temporary
purposes only in order to meet redemptions, and these borrowings may be secured
by the pledge of up to 10% of the current value of its net assets (but
investments may not be purchased while any such outstanding borrowings exceed 5%
of its net assets); (iii) make loans of portfolio securities in accordance with
its investment policies; and (iv) not invest 25% or more of its assets (i.e.,
concentrate) in any particular industry, except that the Master Portfolio may
invest 25% or more of its assets in U.S. Government obligations. With respect to
fundamental investment policy (iii) above, the Master Portfolio does not intend
to make loans of its portfolio securities during the coming year.
As a matter of non-fundamental policy, the Master Portfolio may invest up to
15% of the current value of its net assets in illiquid securities. For this
purpose, illiquid securities include, among others, (a) securities that are
illiquid by virtue of the absence of a readily available market or legal or
contractual restrictions on resale, (b) fixed time deposits that are subject to
withdrawal penalties and that have maturities of more than seven days, and (c)
repurchase agreements not terminable within seven days. Disposing of illiquid or
restricted securities may involve additional costs and require additional time.
PROSPECTUS 14
<PAGE> 23
A further description of certain of the Fund's and Master Portfolio's
investments and investment activities is contained in the "Prospectus
Appendix - Additional Investment Policies" and in the Fund's SAI.
PERFORMANCE
The performance of each Class of shares of the Fund may be advertised in terms
of average annual total return and yield. These performance figures are based on
historical results and are not intended to indicate future performance.
Average annual total return of the shares of a Class is based on the overall
dollar or percentage change in value of a hypothetical investment in such shares
and assumes that all Fund dividends and capital gain distributions are
reinvested in shares of that Class. The standardized average annual total return
is calculated for Class A Shares assuming you have paid the maximum sales
charge, and for Class B Shares assuming on a one-year investment you have paid
the maximum contingent deferred sales charge, on your hypothetical investment.
In addition to presenting a standardized total return, at times, the Fund also
may present nonstandardized total returns, yields and distribution rates for
purposes of sales literature. For example, the performance figure of the shares
of a Class may be calculated on the basis of an investment at the net asset
value per share or at net asset value per share plus a reduced sales charge (see
"Investing in the Fund - How To Buy Shares"), rather than the public offering
price per share. In this case, the figure might not reflect the effect of the
sales charge that you may have paid.
The yield of a Class of shares of the Fund is calculated by dividing the net
investment income per share earned during a specified period (usually 30 days)
for Class A Shares by its public offering price per share (which includes the
maximum sales charge), or for Class B Shares by its net asset value (which does
not include the maximum contingent deferred sales charge), on the last day of
such period and annualizing the result.
Because of differences in the fees and/or expenses borne by Class B Shares of
the Fund, the net performance quotations on such shares can be expected, at any
given time, to be lower than the net performance quotations on Class A Shares.
Performance quotations are computed separately for Class A Shares and Class B
Shares.
Additional information about the performance of each Class of shares of the
Fund will be contained in the Annual Report for the Fund. The Annual Reports may
be obtained free of charge by calling the Company at 800-222-8222.
15 PROSPECTUS
<PAGE> 24
THE FUND, THE MASTER PORTFOLIO
AND MANAGEMENT
The Fund is one of the funds in the Stagecoach Family of Funds. The Company
was organized as a Maryland corporation on September 9, 1991 and currently
offers shares of twelve other series: the Asset Allocation, the California
Tax-Free Bond, the California Tax-Free Income, the California Tax-Free Money
Market Mutual, the Corporate Stock, the Diversified Income, the Growth and
Income, the Ginnie Mae, the Money Market Mutual, the National Tax-Free Money
Market Mutual, the Short-Intermediate U.S. Government Income and the U.S.
Government Allocation Funds. The Board of Directors of the Company supervises
the funds' activities and monitors their contractual arrangements with various
service-providers. Although the Company is not required to hold annual
shareholder meetings, special meetings may be requested for purposes such as
electing or removing Directors, approving advisory contracts and distribution
plans, and changing the Fund's investment objectives or fundamental investment
policies. All shares of the Company have equal voting rights and will be voted
in the aggregate, rather than by series or Class, unless otherwise required by
law (such as when the voting matter affects only one series or Class). As a
shareholder of the Fund, you receive one vote for each share you own and
fractional votes for fractional shares owned. A more detailed description of the
voting rights and attributes of the shares is contained in the "Capital Stock"
section of the Fund's SAI.
The Company has retained the services of Stephens as administrator and
distributor for the Fund but has not retained the services of an investment
adviser for the Fund since the Company seeks to achieve the investment objective
of the Fund by investing all of the Fund's assets in the Master Portfolio of the
Trust. The Company's Board of Directors supervises the actions of the Fund's
administrator and distributor, as set forth below, and decides upon matters of
general policy. As noted above, the Fund may withdraw its investment in the
Master Portfolio only if the Board of Directors of the Company determines that
it is in the best interests of the Fund and its shareholders to do so. Upon any
such withdrawal, the Board of Directors of the Company would consider what
action might be taken, including the investment of all the assets of the Fund in
another pooled investment entity having the same investment objective as the
Fund or the hiring of an investment adviser to manage the Fund's assets in
accordance with the investment policies described above with respect to the
Master Portfolio.
The Master Portfolio has retained the services of Wells Fargo Bank as
investment adviser and Stephens as administrator and distributor. The Board of
Trustees of the Trust is responsible for the general management of the Master
Portfolio and supervising the actions of Wells Fargo Bank and Stephens in these
capacities. Additional information regarding the Officers and Directors of the
Company and the Officers and Trustees of the Trust is included in the Fund's SAI
under "Management."
PROSPECTUS 16
<PAGE> 25
MASTER/FEEDER STRUCTURE
The Fund, a series of the Company which is an open-end management investment
company, invests all of its assets in the Master Portfolio of the Trust which
has the same investment objective as the Fund. See "How the Fund
Works - Investment Objective and Policies." The Trust is organized as a trust
under the laws of the State of Delaware. In addition to selling its interests to
the Fund, the Master Portfolio may sell its interests to other mutual funds or
accredited investors. The expenses and, correspondingly, the returns of other
investment options in the Master Portfolio may differ from those of the Fund.
The Board of Directors believes that, if other mutual funds or accredited
investors invest their assets in the Master Portfolio, certain economies of
scale may be realized with respect to the Master Portfolio. For example, fixed
expenses that otherwise would have been borne solely by the Fund would be spread
among a larger asset base provided by more than one fund investing in the Master
Portfolio. The Fund and other entities investing in the Master Portfolio are
each liable for all obligations of the Master Portfolio. However, the risk of
the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance existed and the Trust itself is
unable to meet its obligations. Accordingly, the Company's Board of Directors
believes that the Fund and its shareholders will not be adversely affected by
investing Fund assets in the Master Portfolio. However, if a mutual fund or
institutional investor with a larger pro rata ownership of the Master
Portfolio's securities than the Fund withdraws its investment from the Master
Portfolio, the economies of scale (e.g., spreading fixed expenses among a larger
asset base) that the Company's Board believes should be available through
investment in the Master Portfolio may not be fully achieved. In addition, given
the relative novelty of the master/feeder structure, accounting or operational
difficulties, although unlikely, could arise.
The investment objective and other fundamental policies of the Master
Portfolio, which are identical to those of the Fund, cannot be changed without
approval by the holders of a majority (as defined in the 1940 Act) of the Master
Portfolio's outstanding interests. Whenever the Fund, as an interestholder of
the Master Portfolio is requested to vote on any matter submitted to
interestholders of the Master Portfolio, the Fund will hold a meeting of its
shareholders to consider such matters. The Fund will cast its votes in
proportion to the votes received from its shareholders. Shares for which the
Fund receives no voting instructions will be voted in the same proportion as the
votes received from the other Fund shareholders.
Certain policies of the Master Portfolio which are non-fundamental may be
changed by vote of a majority of the Trust's Trustees without interestholder
approval. If the Master Portfolio's investment objective or fundamental or
nonfundamental policies are changed, the Fund may elect to change its objective
or policies to correspond to those of the Master Portfolio. The Fund may also
elect to redeem its interests in the Master Portfolio and either seek a new
investment company with a matching objective in which
17 PROSPECTUS
<PAGE> 26
to invest or retain its own investment adviser to manage the Fund's portfolio in
accordance with its objective. In the latter case, the Find's inability to find
a substitute investment company in which to invest or equivalent management
services could adversely affect shareholders' investments in the Fund. The Fund
will provide shareholders with 30 days' written notice prior to the
implementation of any change in the investment objective of the Fund or the
Master Portfolio, to the extent possible. Information regarding additional
options, if any, for investment in the Master Portfolio is available from
Stephens and may be obtained by calling (800) 643-9691.
INVESTMENT ADVISER
Pursuant to an Investment Advisory Contract, the Master Portfolio is advised
by Wells Fargo Bank, 420 Montgomery Street, San Francisco, California 94163, a
wholly owned subsidiary of Wells Fargo & Company. Under the Investment Advisory
Contract with the Master Portfolio, Wells Fargo Bank has agreed to furnish to
the Master Portfolio investment guidance and policy direction in connection with
the daily portfolio management of the Master Portfolio. Pursuant to the
Investment Advisory Contract, Wells Fargo Bank also furnishes to the Board of
Directors periodic reports on the investment strategy and performance of the
Master Portfolio.
Purchase and sale orders of the securities held by the Master Portfolio may be
combined with those of other accounts that Wells Fargo Bank manages, and for
which it has brokerage placement authority, in the interest of seeking the most
favorable overall net results. When Wells Fargo Bank determines that a
particular security should be bought or sold for the Master Portfolio and other
accounts managed by Wells Fargo Bank, Wells Fargo Bank undertakes to allocate
those transactions among the participants equitably. From time to time, the
Master Portfolio, to the extent consistent with its investment objective,
policies and restrictions, may invest in securities of companies with which
Wells Fargo Bank has a lending relationship.
Mr. Jon Hickman is primarily responsible for the day-to-day management of the
Capital Appreciation Master Portfolio and has performed such duties since the
inception of the Predecessor Fund. In addition, he also manages equity and
balanced portfolios for individuals and employee benefit plans. He has
approximately ten years of experience in the investment management field and is
a member of Wells Fargo's Equity Strategy Committee. Mr. Hickman has a B.A. and
an M.B.A. in finance from Brigham Young University and has been with Wells Fargo
Bank since the merger with Crocker National Bank in 1986.
Mr. Robert Bissell is also primarily responsible for the day-to-day management
of the Capital Appreciation Master Portfolio and has performed such duties since
the inception of the Predecessor Fund. Mr. Bissell joined Wells Fargo Bank at
the time of the merger with Crocker Bank and has been with the combined
organization for over 20 years. Prior to joining Wells Fargo Bank, he was a vice
president and investment counselor with M.H. Edie Investment Counseling, where
he managed institutional and high-net-worth
PROSPECTUS 18
<PAGE> 27
portfolios. Mr. Bissell holds a finance degree from the University of Virginia.
He is a chartered financial analyst and a member of the Los Angeles Society of
Financial Analysts.
Mr. Steve Enos assists Mr. Jon Hickman and Mr. Robert Bissell with the
management of the Capital Appreciation Master Portfolio. Mr. Enos is a member of
the Wells Fargo Growth Equity Team. He began his career with First Interstate
Bank, where he was assistant vice president and portfolio manager. Prior to
joining Wells Fargo Bank, he was a principal at Dolan Capital Management where
he managed both personal and pension portfolios. Mr. Enos received his
undergraduate degree in economics from the University of California at Davis.
Mr. Enos is a Chartered Financial Analyst and a member of the Association for
Investment Management and Research.
Ms. Sandra Thornton also assists Jon Hickman and Robert Bissell with the
management of the Capital Appreciation Master Portfolio. Ms. Thornton manages
equity portfolios and is a member of the Wells Fargo Growth Equity Team. Prior
to joining Wells Fargo in 1993, she worked in the research department of RCM
Capital Management. She obtained her license as a Certified Public Accountant
from the State of California while performing tax/financial planning services at
Price Waterhouse. She holds a B.A. from Albertus Magnus College and is a
Chartered Financial Analyst.
Wells Fargo Bank is the Fund's transfer and dividend disbursing agent, and
custodian. In addition, Wells Fargo Bank is a Shareholder Servicing Agent of the
Fund and a Selling Agent under a Selling Agreement with the Fund's distributor.
Wells Fargo Bank, one of the largest banks in the United States, was founded in
1852 and is the oldest bank in the western United States. As of September 30,
1995, Wells Fargo Bank provided investment advisory services for approximately
$33.9 billion of assets of individuals, trusts, estates and institutions. Wells
Fargo Bank is the investment adviser to other separately managed series of the
Company, and to six other registered, open-end, management investment companies,
which consist of several separately managed investment portfolios. Wells Fargo
Bank, a wholly owned subsidiary of Wells Fargo & Company, is located at 420
Montgomery Street, San Francisco, California 94163.
SPONSOR, ADMINISTRATOR AND DISTRIBUTOR
Stephens, 111 Center Street, Little Rock, Arkansas 72201, has entered into
agreements with the Company and the Trust under which Stephens has agreed to act
as administrator for the Fund and the Master Portfolio. Under the respective
Administration Agreements with the Fund and the Master Portfolio, Stephens has
agreed to provide as administrative services, among other things, (i) general
supervision of the operation of the Fund and the Master Portfolio, including
coordination of the services performed by the investment adviser, transfer
agent, custodian, independent auditors and legal counsel; (ii) in connection
with regulatory compliance, compilation of information for documents such as
reports to, and filings with, the SEC and state securities commissions, and the
preparation of proxy statements and shareholder reports for the Fund and the
Master Portfolio; and (iii) general supervision relative to the compilation
19 PROSPECTUS
<PAGE> 28
of data required for the preparation of periodic reports distributed to the
Company's officers and Board of Directors and the Trust's Board of Trustees.
Stephens also furnishes office space and certain facilities required for
conducting the business of the Fund and the Master Portfolio and pays the
compensation of the directors, officers and employees of the Company and the
Trust who are affiliated with Stephens.
Stephens 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.
---------------------
INVESTING IN THE FUND
OPENING AN ACCOUNT
You can buy Fund shares in one of the several ways described below. You must
complete and sign an Account Application to open an account. Additional
documentation may be required from corporations, associations and certain
fiduciaries. Do not mail cash. If you have any questions or need extra forms,
you may call 800-222-8222.
After an application has been processed and an account has been established,
subsequent purchases of different funds of the Company under the same umbrella
account do not require the completion of additional applications. A separate
application must be processed for each different umbrella account number (even
if the registration is the same).
Call the number on your confirmation statement to obtain information about
what is required to change registration.
To invest in the Fund through tax-deferred retirement plans through which the
Fund is available, please contact a Shareholder Servicing Agent or a Selling
Agent to receive information and the required separate application. See
"Tax-Deferred Retirement Plans" below. The Company or Stephens may make the
Prospectus available in an electronic format. Upon receipt of a request from you
or your representative, the Company or
PROSPECTUS 20
<PAGE> 29
Stephens will transmit or cause to be transmitted promptly, without charge, a
paper copy of the electronic Prospectus.
SHARE VALUE
The value of a share of the Fund is its "net asset value," or NAV. The NAV of
a share of each Class of the Fund is the value of the total net assets
attributable to each such Class (i.e., the value of its investments in the
Master Portfolio and any cash instruments held for liquidity needs) divided by
the number of outstanding shares of that Class. The value of the 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 NAV of a share of each
Class is expected to fluctuate daily.
The Fund is open for business each day the New York Stock Exchange ("NYSE") is
open for trading (a "Business Day"). Currently, the NYSE 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 weekend, the NYSE is closed on the weekday immediately before or after such
Holiday. Wells Fargo Bank calculates the NAV of each Class of the Funds each
Business Day as of the close of regular trading on the NYSE (referred to
hereafter as "the close of the NYSE"), which is currently 1:00 p.m. (Pacific
time).
Except for debt obligations with remaining maturities of 60 days or less,
which are valued at amortized cost, the Master Portfolio's other 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 Trust's Board of Trustees. Prices
used for such valuations may be provided by independent pricing services.
HOW TO BUY SHARES
Shares of each Class of the Fund are offered continuously at the applicable
offering price (the NAV plus the applicable sales charge) next determined after
a purchase order is received in the form specified for the purchase method being
used, as described in the following sections. Payment for shares purchased
through a Selling Agent is not due from the Selling Agent until the settlement
date. The settlement date normally is three Business Days after the order is
placed. It is the responsibility of the Selling Agent to forward payment for
shares being purchased to the Fund promptly. Payment must accompany orders
placed directly through the Transfer Agent.
Payments for shares of each Class of the Fund are invested in full and
fractional shares of such Class at the applicable offering price. If shares are
purchased by a check that does not clear, the Company reserves the right to
cancel the purchase and hold the
21 PROSPECTUS
<PAGE> 30
investor responsible for any losses or fees incurred. In addition, the Fund may
hold payment on any redemption until reasonably satisfied that your investments
made by check have been collected (which may take up to 15 days). The Company
reserves the right to reject any purchase order or suspend sales at any time.
The minimum initial investment is $100 by the AutoSaver Plan purchase method
(described below), $250 for any tax-sheltered retirement account for which Wells
Fargo Bank serves as trustee or custodian under a prototype trust approved by
the Internal Revenue Service ("IRS") (a "Plan Account"), and $1,000 by all other
methods or for all other investors. All subsequent investments must be at least
$100. If you have questions regarding purchases of shares, please contact the
Company at 800-222-8222, or a Shareholder Servicing Agent or Selling Agent.
SALES CHARGES
Set forth below is a Front-end Sales Charge Schedule listing the front-end
sales charges applicable to purchases of Class A Shares of the Fund. As shown
below, reductions in the rate of front-end sales charges ("Volume Discounts")
are available as you purchase additional shares (other than Class B Shares). You
should consider the front-end sales charge information set forth below and the
other information contained in this Prospectus when making your investment
decisions.
The following is the Front-end Sales Charge Schedule for purchasing Class A
Shares of each Fund:
<TABLE>
<CAPTION>
FRONT-END FRONT-END
SALES CHARGE SALES CHARGE DEALER ALLOWANCE
AS % OF AS % OF NET AS % OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
- ------------------ -------------- --------------- ----------------
<S> <C> <C> <C>
Less than $50,000....... 4.50% 4.71% 4.00%
$50,000 up to $99,999... 4.00 4.17 3.55
$100,000 up to
$249,999.............. 3.50 3.63 3.125
$250,000 up to
$499,999.............. 3.00 3.09 2.65
$500,000 up to
$999,999.............. 2.00 2.04 1.75
$1,000,000 and over..... 1.00 1.01 0.85
</TABLE>
Class B Shares of the Fund are not subject to a front-end sales charge. Class
B Shares, however, that are redeemed within one, two, three or four years from
the receipt of a purchase order affecting such shares are subject to a
contingent deferred sales charge equal to 3.00%, 2.00%, 1.00% and 1.00%,
respectively, of the dollar amount equal to the lesser of the NAV at the time of
purchase of the shares being redeemed or the NAV of such shares at the time of
redemption (the "NAV Amount"). See "Investing in the Fund - Contingent Deferred
Sales Charges - Class B Shares."
PROSPECTUS 22
<PAGE> 31
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 B Shares of the
same fund.
If Class A Shares are purchased through a Selling Agent, Stephens reallows the
portion of the front-end sales charge shown above as the Dealer Allowance.
Stephens also compensates Selling Agents for sales of Class B Shares and is then
reimbursed out of Rule 12b-1 Fees and contingent deferred sales charges
applicable to such shares. When shares are purchased directly through the
Transfer Agent and no Selling Agent is involved with the purchase, the entire
sales charge is paid to Stephens. In addition, 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.
REDUCED SALES CHARGE - CLASS A SHARES
Volume Discounts
The Volume Discounts described in the Front-end Sales Charge Schedule are
available to you based on the combined dollar amount you invest in shares (other
than Class B Shares) of one or more of the Company's funds which assess a
front-end sales charge (the "Load Funds"). Because Class B Shares are not
subject to a front-end sales charge, the amount of Class B Shares you hold is
not considered in determining any Volume Discount.
Right of Accumulation
The Right of Accumulation allows you to combine the amount you invest in Class
A Shares of the Fund with the total NAV of shares (other than Class B Shares) in
any of the Load Funds to determine reduced front-end sales charges in accordance
with the above Front-end Sales Charge Schedule. In addition, you also may
combine the total NAV of shares (other than Class B Shares) which you currently
have invested in any other mutual fund that assesses a front-end sales charge
and is advised by Wells Fargo Bank and sponsored by Stephens. For example, if
you own Class A Shares of the Load Funds with an aggregate NAV of $90,000 and
you invest an additional $20,000 in Class A Shares of the Fund, the front-end
sales charge on the additional $20,000 investment would be 3.50% of the offering
price. To obtain such a discount, you must provide sufficient information at the
time of your purchase to verify that your purchase qualifies for the reduced
front-end sales charge. Confirmation of the order is subject to such
verification. The Right of Accumulation may be modified or discontinued at any
time without prior notice with respect to all subsequent shares purchased.
23 PROSPECTUS
<PAGE> 32
Letter of Intent
A Letter of Intent allows you to purchase Class A Shares of the Fund over a
13-month period at a reduced front-end sales charge based on the total amount of
Class A Shares you intend to purchase plus the total NAV of shares (other than
Class B Shares) in any of the Load Funds you already own. Each investment in
Class A Shares that you make during the period may be made at the reduced
front-end sales charge that is applicable to the total amount you intend to
invest. If you do not invest the total amount within the period, you must pay
the difference between the higher front-end sales charge rate that would have
been applied to the purchases you made and the reduced front-end sales charge
rate you have paid. The minimum initial investment for a Letter of Intent is 5%
of the total amount you intend to purchase, as specified in the Letter. Shares
of the Fund equal to 5% of the amount you intend to invest will be held in
escrow and, if you do not pay the difference within 20 days following the
mailing of a request, a sufficient amount of escrowed shares will be redeemed
for payment of the additional front-end sales charge. Dividends and capital
gains paid on such shares held in escrow will be reinvested in additional Fund
shares.
Reinvestment
You may reinvest proceeds from a redemption of Class A Shares in Class A
Shares of the Fund or shares of another of the Company's funds registered in
your state of residence at NAV, without payment of a front-end sales charge,
within 120 days after your redemption. However, if the other investment
portfolio imposes a front-end sales charge that is higher than the front-end
sales charge that you have paid in connection with the Class A Shares you have
redeemed, you must pay the difference between the dollar amount of the two
front-end sales charges. You may reinvest at this NAV price up to the total
amount of the redemption proceeds. A written purchase order for the shares must
be delivered to the Company, a Selling Agent, a Shareholder Servicing Agent, or
the Transfer Agent at the time of reinvestment.
If you realized a gain on your redemption, your reinvestment would not alter
the amount of any federal capital gains tax you pay on the gain. If you realized
a loss on your redemption, your reinvestment may cause some or all of the loss
to be disallowed as a tax deduction, depending on the number of shares you
purchase by reinvestment and the period of time that elapses after the
redemption, although for tax purposes, the amount disallowed is added to the
cost of the shares you acquire upon the reinvestment.
Reductions for Families or Fiduciaries
Reductions in front-end sales charges 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.
PROSPECTUS 24
<PAGE> 33
Waivers for Investments of Proceeds From Other Investments
Purchases may be made at NAV, without a front-end sales charge, to the extent
that: (i) you are investing proceeds from a redemption of (a) shares of another
open-end investment company, or (b) units of a unit investment trust, sold
through Wells Fargo Securities Inc. (ii) on which you paid a front-end sales
charge; and (iii) such redemption occurred within thirty (30) days prior to the
date of the purchase order. You must notify the Fund and/or the Transfer Agent
at the time you place such purchase order of your eligibility for the waiver of
front-end sales charges and provide satisfactory evidence thereof (e.g., a
confirmation of the redemption). Such purchases may not be made at net asset
value to the extent the proceeds are from a redemption of shares of another
open-end investment company that is affiliated with the Company on which you
paid a contingent deferred sales charge upon redemption.
Reductions for Qualified Groups
Reductions in front-end sales charges 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 Investment Company Act of 1940 (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 charge, 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 5% 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 5% or more of its
outstanding voting securities; (iii) any other company under common control with
such company; (iv) any executive officer, director or partner of such company or
of a related party; and (v) any partnership of which such company is a partner.
Investors seeking to rely on their membership in a qualified group to purchase
shares at a reduced sales load must provide evidence satisfactory to the
Transfer Agent of the existence of a bona fide qualified group and their
membership therein.
Waivers for Certain Parties
Class A Shares of the Fund may be purchased at NAV, without payment of a
front-end sales charge, by directors, officers and employees (and their spouses
and children under the age of 21) of the Company, Stephens, its affiliates and
Selling Agents. Class A Shares of the Fund also may be purchased at NAV, without
payment of a front-end sales charge, 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. Class A Shares of such Fund also may be purchased at NAV,
without payment of a front-end sales charge, by employee benefit and thrift
plans for such persons and to any investment advisory, trust or other fiduciary
account,
25 PROSPECTUS
<PAGE> 34
including a Plan Account, that is maintained, managed or advised by Wells Fargo
Bank or its affiliates ("Fiduciary Accounts"). In addition, you may purchase
Class A Shares of the Funds at NAV, without payment of a front-end sales charge,
with proceeds from a required minimum distribution from any Individual
Retirement Account ("IRA"), Simplified Employee Pension Plan or other
self-directed retirement plan for which Wells Fargo Bank serves as trustee,
provided that the proceeds are invested in the Funds within 30 days of such
distribution and such distribution is required as a result of reaching age
70 1/2.
CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES
Class B Shares of the Fund are not subject to front-end sales charges but may
be subject to contingent deferred sales charges. Class B Shares that are
redeemed within one, two, three or four years from the receipt of a purchase
order for such shares will be subject to a contingent deferred sales charge
equal to 3.00%, 2.00%, 1.00% and 1.00%, respectively, of the dollar amount equal
to the lesser of the NAV at the time of purchase of the shares being redeemed or
the NAV of such shares at the time of redemption. Contingent deferred sales
charges are not imposed on amounts representing increases in NAV above the NAV
at the time of purchase and are not assessed on Class B Shares purchased through
reinvestment of dividends or capital gains distributions. Class B Shares
automatically convert into Class A Shares of the same Fund six years after the
end of the month in which such Class B Shares were acquired.
The amount of a contingent deferred sales charge, if any, paid upon redemption
of Class B Shares is determined in a manner designed to result in the lowest
sales charge rate being assessed. When a redemption request is made, Class B
Shares acquired pursuant to the reinvestment of dividends and capital gain
distributions are considered to be redeemed first. After this, Class B Shares
are considered redeemed on a first-in, first-out basis so that Class B Shares
held for a longer period of time are considered redeemed prior to more recently
acquired Class B Shares. For a discussion of the interaction between the
optional Exchange Privilege and contingent deferred sales charges on Class B
Shares, see "Additional Shareholder Services - Exchange Privilege."
Contingent deferred sales charges are waived on redemptions of Class B Shares
of the Fund (i) following the death or disability (as defined in the Internal
Revenue Code of 1986, as amended (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 transaction.
PROSPECTUS 26
<PAGE> 35
In deciding whether to purchase Class A or Class B Shares, you should compare
the fees assessed on Class A Shares (including front-end sales charges) against
those assessed on Class B Shares (including potential contingent deferred sales
charges and higher Rule 12b-1 Fees than Class A Shares) in light of the amount
to be invested and the anticipated time that the shares will be owned.
You may buy shares of the Fund on any Business Day by any of the methods
described below.
INITIAL PURCHASES BY WIRE
1. Complete an Account Application.
2. Instruct the wiring bank to transmit the specified amount in federal funds
to:
Wells Fargo Bank, N.A.
San Francisco, California
Bank Routing Number: 121000248
Wire Purchase Account Number: 4068-000587
Attention: Stagecoach Funds (Name of Fund) (designate Class A or B)
Account Name(s): Name(s) in which to be registered
Account Number: (if investing into an existing account)
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.
Stagecoach Shareholder Services
P.O. Box 7066
San Francisco, California 94120-7066
Telefacsimile: 1-415-543-9538
4. Share purchases are effected at the public offering price or, in the case of
Class B Shares, at the NAV next determined, after the Account Application is
received and accepted.
INITIAL PURCHASES 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
"Stagecoach Funds (Name of Fund) (designate Class A or B)," to the address
set forth in "Initial Purchases by Wire."
27 PROSPECTUS
<PAGE> 36
3. Share purchases are effected at the public offering price or, in the case of
Class B Shares, at the NAV next determined after the Account Application is
received and accepted.
AUTOSAVER PLAN PURCHASES
The Company's AutoSaver Plan provides you with a convenient way to establish
and automatically add to a Fund account on a monthly basis. To participate in
the AutoSaver Plan, you must specify an amount ($100 or more) to be withdrawn
automatically by the Transfer Agent on a monthly basis from an account with a
bank, which is designated in your Account Application and which is approved by
the Transfer Agent ("Approved Bank"). Wells Fargo Bank is an Approved Bank. The
Transfer Agent withdraws and uses this amount to purchase specified Fund shares
on your behalf on or about the fifth Business Day of each month. There are no
separate fees charged to you by the Fund for participating in the AutoSaver
Plan.
You may change your investment amount, suspend purchases or terminate your
election at any time by providing notice to the Transfer Agent at least five
Business Days prior to any scheduled transaction.
TAX-DEFERRED RETIREMENT PLANS
You may be entitled to invest in the Fund through a Plan Account or other
tax-deferred retirement plan. Contact a Shareholder Servicing Agent or a Selling
Agent (such as Wells Fargo Bank) for materials describing Plan Accounts
available through it, and the benefits, provisions, and fees of such Plan
Accounts. The minimum initial investment amount for Fund shares acquired through
a Plan Account is $250.
Pursuant to the Code, individuals who are not active participants (and who do
not have a spouse who is an active participant) in certain types of retirement
plans ("qualified retirement plans") may deduct contributions to an IRA, up to
specified limits. Investment earnings in the IRA are tax-deferred until
withdrawn, at which time the individual may be in a lower tax bracket.
The maximum annual deductible contribution to an IRA for individuals under age
70 1/2 is 100% of includible compensation up to a maximum of (i) $2,000 for
single individuals; (ii) $4,000 for a married couple when both spouses earn
income; and (iii) $2,250 when one spouse earns, or elects for IRA purposes to be
treated as earning, no income (together the "IRA contribution limits").
The IRA deduction is also available for single individual taxpayers and
married couples who are active participants in qualified retirement plans but
who have adjusted gross incomes which do not exceed certain specified limits. If
their adjusted gross income exceeds these limits, the amount of the deductible
contribution may be phased down and eventually eliminated.
PROSPECTUS 28
<PAGE> 37
Any individual who works may make nondeductible contributions to an IRA in
addition to any deductible contributions. Total aggregate deductible and
nondeductible contributions are limited to the IRA contribution limits discussed
above. Nondeductible contributions in excess of the applicable IRA contribution
limit are "nondeductible excess contributions." In addition, contributions made
to an IRA for the year in which an individual attains the age of 70 1/2, or any
year thereafter, are also nondeductible excess contributions. Nondeductible
excess contributions are subject to a 6% excise tax penalty which is charged
each year that the nondeductible excess contribution remains in the IRA.
An employer also may contribute to an individual's IRA by establishing a
Simplified Employee Pension Plan through a Shareholder Servicing Agent or a
Selling Agent, known as a SEP-IRA. Participating employers may make an annual
contribution in an amount up to the lesser of 15% of earned income or $30,000,
subject to certain provisions of the Code. Investment earnings will be
tax-deferred until withdrawn.
The foregoing discussion regarding IRAs is based on the Code and regulations
in effect as of the date of this Prospectus and summarizes only some of the
important federal tax considerations generally affecting IRA contributions made
by individuals or their employers. It is not intended as a substitute for
careful tax planning. Investors should consult their tax advisors with respect
to their specific tax situations as well as with respect to state and local
taxes. Further federal tax information is contained under the heading "Taxes" in
this Prospectus and in the Fund's SAI.
A Shareholder Servicing Agent or Selling Agent also may offer other types of
tax-deferred or tax-advantaged plans, including a Keogh retirement plan for
self-employed professional persons, sole proprietors and partnerships.
Application materials for opening a tax-deferred retirement plan can be
obtained from a Shareholder Servicing Agent or a Selling Agent. Return your
completed tax-deferred retirement plan application to your Shareholder Servicing
Agent or a Selling Agent for approval and processing. If your tax-deferred
retirement plan application is incomplete or improperly filled out, there may be
a delay before a Fund account is opened. You should ask your Shareholder
Servicing Agent or Selling Agent about the investment options available to your
tax-deferred retirement plan, since some of the funds in the Stagecoach Family
of Funds may be unavailable as options. Moreover, certain features described
herein, such as the AutoSaver Plan and the Systematic Withdrawal Plan, may not
be available to individuals or entities who invest through a tax-deferred
retirement plan.
ADDITIONAL PURCHASES
You may make additional purchases of $100 or more by instructing the Funds'
Transfer Agent to debit an Approved Bank account designated in your Account
Application, by wire by instructing the wiring bank to transmit the specified
amount as directed above
29 PROSPECTUS
<PAGE> 38
for initial purchases, or by mail with a check payable to "Stagecoach Funds
(Name of Fund) (designate Class A or B)" to the address set forth under "Initial
Purchases by Wire." Write your Fund account number on the check and include the
detachable stub from your Statement of Account or a letter providing your Fund
account number.
PURCHASES THROUGH SELLING AGENTS
You may place a purchase order for shares of the Fund through a broker/dealer
or financial institution that has entered into a Selling Agreement with
Stephens, as the Funds' Distributor (each, a Selling Agent). If your order is
placed by the close of the NYSE, the purchase order generally is executed on the
same day if the order is received by the Transfer Agent before the close of
business. If your purchase order is received by a Selling Agent after the close
of the NYSE or by the Transfer Agent after the close of business, then your
purchase order is executed on the next Business Day following the day your order
is placed. The Selling Agent is responsible for the prompt transmission of your
purchase order to the Funds. Because payment for shares of the Fund is not due
until settlement date, the Selling Agent might benefit from the temporary use of
your payment. A financial institution that acts as a Selling Agent, Shareholder
Servicing Agent or in certain other capacities may be required to register as a
dealer pursuant to applicable state securities laws, which may differ from
federal law and any interpretations expressed herein.
PURCHASES THROUGH SHAREHOLDER SERVICING AGENTS
Purchase orders for shares of the Fund may be transmitted to the Transfer
Agent through any entity that has entered into a Shareholder Servicing Agreement
with the Funds ("Shareholder Servicing Agent"), such as Wells Fargo Bank. See
"Management, Distribution and Servicing Fees - Shareholder Servicing Agent."
The Shareholder Servicing Agent may transmit a purchase order to the Transfer
Agent, on your behalf, including a purchase order for which payment is to be
transferred from an account with an Approved Bank or wired from a financial
institution. If your order is transmitted by the Shareholder Servicing Agent, on
your behalf, to the Transfer Agent before the close of the NYSE, the purchase
order generally is executed on the same day. If your Shareholder Servicing Agent
transmits your purchase order to the Transfer Agent after the close of the NYSE,
then your order is executed on the next Business Day following the day your
order is received. The Shareholder Servicing Agent is responsible for the prompt
transmission of your purchase order to the Transfer Agent.
STATEMENTS AND REPORTS
The Fund, or a Shareholder Servicing Agent on their behalf, typically sends
you a confirmation or statement of your account after every transaction that
affects your share balance or your Fund account registration. The Fund does not
issue share certificates. A statement with tax information will be mailed to you
by January 31 of each year, and also will be filed with the IRS. At least twice
a year, you will receive financial statements.
PROSPECTUS 30
<PAGE> 39
DIVIDENDS
The Fund intends to declare annual dividends of substantially all of its net
investment income. The Fund will distribute any capital gains at least annually.
You have several options for receiving dividends and capital gain distributions.
They are discussed under "Additional Shareholder Services - Dividend and
Distribution Options."
Dividends and capital gain distributions have the effect of reducing the NAV
per share by the amount distributed. Although a distribution paid to you on
newly issued shares shortly after your purchase would represent, in substance, a
return of your capital, the distribution would consist of net investment income
and, accordingly, would be taxable to you as ordinary income.
Net investment income available for distribution to the holders of Class B
Shares is reduced by the amount of the higher Rule 12b-1 Fee payable on such
shares. Other expenses, such as state securities registration fees and transfer
agency fees, that are attributable to a particular class also may affect the
relative dividends and/or capital gains distributions of Class A and Class B
Shares.
31 PROSPECTUS
<PAGE> 40
HOW TO REDEEM SHARES
You may redeem all or a portion of your shares in the Fund on any Business
Day. Your shares are redeemed at the next NAV calculated after the Funds have
received your redemption request in proper form. Redemption proceeds 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. The Funds ordinarily
remit redemption proceeds, net of any contingent deferred sales charge
applicable with respect to Class B Shares (the "net redemption proceeds"),
within seven days after your redemption order is received in proper form, unless
the SEC permits a longer period under extraordinary circumstances. Such
extraordinary circumstances could include a period during which an emergency
exists as a result of which (a) disposal by a Fund of securities owned by it is
not reasonably practicable or (b) it is not reasonably practicable for a Fund
fairly to determine the value of its net assets, or a period during which the
SEC by order permits deferral of redemptions for the protection of security
holders of such Fund. In addition, a Fund may hold payment on your redemptions
until reasonably satisfied that your investments made by check have been
collected (which can take up to 15 days from the purchase date). To ensure
acceptance of your redemption request, please follow the procedures described
below. Although it is not the Fund's current intention, the Fund may make
payment of redemption proceeds in securities if conditions warrant, subject to
regulation by some state securities commissions. In addition, the Fund reserves
the right to impose charges for wiring redemption proceeds.
Due to the high cost of maintaining Fund accounts with small balances, the
Fund reserves the right to close your account and send you the proceeds if the
balance falls below the applicable minimum balance because of a redemption
(including a redemption of shares of a Fund after an investor has made only the
applicable minimum initial investment). However, you will be given 30 days'
notice to make an additional investment to increase your account balance to
$1,000 or more. Plan Accounts are not subject to minimum Fund account balance
requirements. For a discussion of applicable minimum balance requirements, see
"Investing in the Fund -- How To Buy Shares."
REDEMPTIONS BY TELEPHONE
Telephone redemption or exchange privileges are made available to you
automatically upon opening an account, unless you specifically decline the
privileges. Telephone redemption 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 requires the Transfer Agent to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that instructions are
genuine and, if it does not follow such procedures, the Company and the Transfer
Agent may be liable for any losses due to unauthorized or
PROSPECTUS 32
<PAGE> 41
fraudulent instructions. Neither the Company nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be genuine.
REDEMPTIONS BY MAIL
1. Write a letter of instruction. Indicate the Class and the dollar amount or
number of Fund shares you want to redeem. Refer to your Fund account number
and give your social security or taxpayer identification number (where
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. Signature guarantees are not required for redemption requests unless
redemption proceeds of $5,000 or more are to be paid to someone other than
yourself at your address of record or your designated Approved Bank account,
or other unusual circumstances exist that cause the Transfer Agent to
determine that a signature guarantee is necessary or prudent to protect
against unauthorized redemption requests. If required, a signature must be
guaranteed by an "eligible guarantor institution," which includes a
commercial bank that is an FDIC member, 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 may
be requested from corporations, administrators, executors, personal
representatives, trustees or custodians.
4. Mail your letter to the Transfer Agent at the mailing address set forth under
"Investing in the Fund - Initial Purchases by Wire."
Unless other instructions are given in proper form, a check for your net
redemption proceeds will be sent to your address of record.
EXPEDITED REDEMPTIONS BY MAIL OR TELEPHONE
You may request an expedited redemption of shares of the Fund by letter, in
which case your receipt of redemption proceeds, but not the Fund's receipt of
your redemption request, would be expedited. In addition, you also may request
an expedited redemption of shares of the Fund by telephone on any Business Day,
in which case both your receipt of redemption proceeds and the Fund's receipt of
your redemption request would be expedited. You may request expedited redemption
by telephone only if the total value of the shares redeemed is $100 or more.
You may request expedited redemption by telephone by calling the Transfer
Agent at the telephone number listed on your transaction confirmation or by
calling 800-222-8222.
33 PROSPECTUS
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You may request expedited redemption by mail by mailing your expedited
redemption request to the Transfer Agent at the mailing address set forth under
"Investing in the Funds - Initial Purchases by Wire."
Upon request, net redemption proceeds of your expedited redemptions of $5,000
or more will be wired or credited to an Approved Bank account designated in your
Account Application or wired to the Selling Agent designated in your Account
Application. The Company reserves the right to impose a charge for wiring
redemption proceeds. When proceeds of your expedited redemption are to be paid
to someone else, to an address other than that of record, or to an account with
an Approved Bank or Selling Agent that you have not predesignated in your
Account Application, your expedited redemption request must be made by letter
and the signature(s) on the letter may be required to be guaranteed, regardless
of the amount of the redemption. If your expedited redemption request is
received by the Transfer Agent by the close of the NYSE on a Business Day, your
redemption proceeds will be transmitted to your designated account with an
Approved Bank or Selling Agent on the next Business Day (assuming your
investment check has cleared as described above), absent extraordinary
circumstances. Such extraordinary circumstances could include those described
above as potentially delaying redemptions, and also could include situations
involving an unusually heavy volume of wire transfer orders on a national or
regional basis or communication or transmittal delays that could cause a brief
delay in the wiring or crediting of funds. A check for net redemption proceeds
will be mailed to your address of record or, at your election, credited to an
Approved Bank account designated in your Account Application.
During periods of drastic economic or market activity or changes, you may
experience problems implementing an expedited redemption by telephone. In the
event you are unable to reach the Transfer Agent by telephone, you should
consider using overnight mail to implement an expedited redemption. The Funds
reserve the right to modify or terminate the expedited telephone redemption
privilege at any time.
SYSTEMATIC WITHDRAWAL PLAN
The Company's Systematic Withdrawal Plan provides you with a convenient way to
have shares of the Fund redeemed from your account and the net redemption
proceeds distributed to you on a monthly basis. You may participate in the
Systematic Withdrawal Plan only if you have a Fund account valued at $10,000 or
more as of the date of your election to participate, your dividends and capital
gain distributions are being reinvested automatically and you are not
participating in the AutoSaver Plan at any time while participating in the
Systematic Withdrawal Plan. You specify an amount ($100 or more) to be
distributed by check to your address of record or deposited in your Approved
Bank account designated in the Account Application. The Transfer Agent redeems
sufficient shares and mails or deposits your net redemption proceeds as
instructed on or about the fifth Business Day prior to the end of each month.
There are no separate fees charged to you by the Fund for participating in the
Systematic Withdrawal Plan. However, you
PROSPECTUS 34
<PAGE> 43
should not participate in the Systematic Withdrawal Plan if you also are
purchasing shares of the same Fund that are subject to a sales charge.
You may change your withdrawal amount, suspend withdrawals or terminate your
election at any time by notifying the Transfer Agent at least ten Business Days
prior to any scheduled transaction. Your participation in the Systematic
Withdrawal Plan will be terminated automatically if your Fund account is closed,
or, in some cases, if your Approved Bank account is closed.
REDEMPTIONS THROUGH SELLING AGENTS
If your redemption order is received by a Selling Agent before the close of
the NYSE and received by the Transfer Agent before the close of business on the
same day, the order generally is executed at the NAV determined as of the close
of the NYSE on that day. If your redemption order is received by a Selling Agent
after the close of the NYSE, or not received by the Transfer Agent prior to the
close of business, your order is executed at the NAV determined as of the close
of the NYSE on the next Business Day. The Selling Agent is responsible for the
prompt transmission of your redemption order to the Funds.
Unless you have made other arrangements with the Selling Agent, and the
Transfer Agent has been informed of such arrangements, net redemption proceeds
of a redemption order made by you through a Selling Agent are credited to an
account with an Approved Bank that you have designated in your Account
Application. If no such account is designated, a check for the net redemption
proceeds is mailed to your address of record or, if such address is no longer
valid, the net proceeds are credited to your account with the Selling Agent. You
may request a check from the Selling Agent or may elect to retain the net
redemption proceeds in such account. The Selling Agent may charge you a service
fee. In addition, it may benefit from the use of your redemption proceeds until
the check it issues to you has cleared or until such proceeds have been
disbursed or reinvested on your behalf.
REDEMPTIONS THROUGH SHAREHOLDER SERVICING AGENTS
You may request a redemption of shares of the Fund through your Shareholder
Servicing Agent. Any redemption request made by telephone through your
Shareholder Servicing Agent must redeem shares with a total value equal to $100
or more. If your redemption order is transmitted by the Shareholder Servicing
Agent, on your behalf, to the Transfer Agent before the close of the NYSE, the
redemption order generally is executed at the NAV determined as of the close of
the NYSE on that day. If your Shareholder Servicing Agent transmits your
redemption order to the Transfer Agent after the close of the NYSE, then your
order is executed on the next Business Day following the date your order is
received. The Shareholder Servicing Agent is responsible for the prompt
transmission of your redemption order to the Funds.
35 PROSPECTUS
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Unless you have made other arrangements with your Shareholder Servicing Agent,
and the Transfer Agent has been informed of such arrangements, net redemption
proceeds of a redemption order made by you through your Shareholder Servicing
Agent are credited to an account with the Approved Bank that you have designated
in the Account Application. If no such account is designated, a check for the
net redemption proceeds is mailed to your address of record or, if such address
is no longer valid, the net redemption proceeds are credited to your account
with your Shareholder Servicing Agent or to another account designated in your
agreement with your Shareholder Servicing Agent.
ADDITIONAL SHAREHOLDER SERVICES
The Company offers you a number of optional services. As noted above, you can
take advantage of the AutoSaver Plan, Tax-Deferred Retirement Plans, the
Systematic Withdrawal Plan, and Expedited Redemptions by Letter and Telephone.
In addition, the Fund offers you several dividend and distribution payment
options and an exchange privilege, which are described below.
DIVIDEND AND DISTRIBUTION OPTIONS
When you fill out your Account Application, you can choose from the following
dividend and distribution options:
A. The Automatic Reinvestment Option provides for the reinvestment of your
dividends and capital gain distributions in additional shares of the same Class
of the Fund that paid such dividends or capital gain distributions. Dividends
and distributions declared in a month generally are reinvested in additional
shares at NAV on the last business day of such month. You are assigned this
option automatically if you make no choice on your Account Application.
B. The Fund Purchase Option lets you use your dividends and/or capital gain
distributions from the Fund to purchase, at NAV, shares of another fund in the
Stagecoach Family of Funds with which you have an established account that has
met the applicable minimum initial investment requirement. Dividends and
distributions paid on Class A or Class B Shares may be invested in Class A or
Class B Shares, respectively, of another fund, in Retail Shares of another fund,
in Class A Shares of the Money Market Mutual Fund or in shares of the California
Tax-Free Money Market Mutual Fund (the California Tax-Free Money Market Mutual
Fund and the Money Market Mutual Fund are, collectively, the "Money Market
Mutual Funds"). Dividends and distributions paid on Class A Shares may also be
invested in shares of a non-money market fund with a single
PROSPECTUS 36
<PAGE> 45
class of shares (a "single class fund"). Dividends and distributions paid on
Class B Shares may not be invested in shares of a single class fund.
C. The Automatic Clearing House Option permits you to have dividends and
capital gain distributions deposited in your Approved Bank account designated in
the Account Application. In the event your Approved Bank account is closed, your
distribution will be held in a non-interest-bearing omnibus bank account
established by the Fund's dividend disbursing agent on your behalf.
D. The Check Payment Option lets you receive a check for all dividends and
capital gain distributions, which generally is mailed either to your designated
address or your designated Approved Bank shortly following declaration. If the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, your distributions will be held in a
non-interest-bearing omnibus bank account established by the Fund's dividend
disbursing agent on your behalf.
EXCHANGE PRIVILEGE
Wells Fargo Bank advises a variety of other funds, each with its own
investment objective and policies. The exchange privilege is a convenient way to
buy shares in the other funds of the Stagecoach Family of Funds that are
registered in your state of residence, and allows you to respond to changes in
your investment and savings goals or in market conditions. Class A and Class B
Shares of the Fund may be exchanged for Class A and Class B Shares,
respectively, of another fund, for Class A Shares of the Money Market Mutual
Fund or for shares of the California Tax-Free Money Market Mutual Fund. Class A
Shares may also be exchanged for shares of a single class fund or for Retail
Shares of another fund.
Before making an exchange from the Fund into another fund of the Stagecoach
Family of Funds, please observe the following:
- Obtain and carefully read the prospectus of the fund into which you want to
exchange.
- If you exchange into another fund with a front-end sales charge, you must
pay the difference between that fund's sales charge and any sales charge
you already have paid in connection with the shares you are exchanging.
- If you exchange Class B Shares for Class B Shares of another fund, for
Class A Shares of the Money Market Mutual Fund or for shares of the
California Tax-Free Money Market Mutual Fund, a contingent deferred sales
charge is not imposed upon the exchange.
- Each exchange, in effect, represents the redemption of shares of one fund
and the purchase of shares of another, which may produce a gain or loss for
tax purposes. A confirmation of each exchange transaction will be sent to
you.
37 PROSPECTUS
<PAGE> 46
- The dollar amount of shares you exchange must meet the minimum initial
and/or subsequent investment amounts of the other fund.
- The Company reserves the right to limit the number of times shares may be
exchanged between funds, to reject any telephone exchange order, or
otherwise to modify or discontinue exchange privileges at any time. Under
SEC rules, subject to limited exceptions, the Company must notify you 60
days before it modifies or discontinues the exchange privilege.
- If you exchange Class B Shares for Class B Shares of another fund, for
Class A Shares of the Money Market Mutual Fund or for shares of the
California Tax-Free Money Market Mutual Fund, the remaining period of time
(if any) that the contingent deferred sales charge applicable to such
shares is in effect will be computed from the time of initial purchase of
the previously held shares. For example, if you exchange Class B Shares of
a Fund for shares of the California Tax-Free Money Market Mutual Fund and
redeem those shares of the California Tax-Free Money Market Mutual Fund
within four years of the purchase of the exchanged Class B Shares, you will
be required to pay a contingent deferred sales charge equal to the charge
which would have applied had you redeemed the original Class B Shares at
that time.
- If you exchange Class B Shares for shares of one of the Money Market Mutual
Funds as described above, you subsequently may re-exchange the acquired
shares only for Class B Shares of one of the Company's funds or for shares
of the other Money Market Mutual Fund.
The procedures applicable to Fund share redemptions also apply to Fund share
exchanges.
To exchange shares, write the Transfer Agent at the mailing address under
"Investing in the Fund - Initial Purchases by Wire" or (if you have authorized
telephone exchanges) call the Transfer Agent at the telephone number listed on
your transaction confirmation, or contact your Shareholder Servicing Agent or
Selling Agent. The procedures applicable to telephone redemptions, including the
discussion regarding the responsibility for the authenticity of telephone
instructions, are also applicable to telephone exchange requests. See "How to
Redeem Shares - Expedited Redemptions by Letter and Telephone."
CONVERSION
Class B Shares of the Fund that have been outstanding for six years after the
end of the month in which the shares were initially purchased automatically
convert to Class A Shares of such Fund and, consequently, are no longer subject
to the higher Rule 12b-1 Fees applicable to Class B Shares. Such conversion is
on the basis of the relative NAV of the two Classes, without the imposition of
any sales charge or other charge except that the lower Rule 12b-1 Fees
applicable to Class A Shares shall thereafter be applied to such
PROSPECTUS 38
<PAGE> 47
converted shares. Because the per share NAV of the Class A Shares may be higher
than that of the Class B Shares at the time of conversion, a shareholder may
receive fewer Class A Shares than the number of Class B Shares converted,
although the dollar value will be the same. Reinvestments of dividends and
distributions in Class B Shares are considered new purchases for purposes of the
conversion feature.
If a shareholder effects one or more exchanges among Class B Shares, Class A
Shares of the Money Market Mutual Fund or shares of the California Tax-Free
Money Market Mutual Fund during the six-year period, and exchanges back into
Class B Shares, the holding period for shares so exchanged will be counted
toward the six-year period, and any Class B Shares held at the end of six years
are converted into Class A Shares.
MANAGEMENT, DISTRIBUTION AND
SERVICING FEES
INVESTMENT ADVISER
Subject to the overall supervision of the Company's Board of Directors, Wells
Fargo Bank, as the Master Portfolio's investment adviser, provides investment
guidance and policy direction in connection with the management of the Fund's
assets. Wells Fargo Bank also furnishes the Trust's Board of Trustees with
periodic reports on the Master Portfolio's investment strategy and performance.
For these services, Wells Fargo Bank is entitled to a monthly investment
advisory fee at the annual rate of 0.50% of the Capital Appreciation Master
Portfolio's average daily net assets. From time to time, Wells Fargo Bank may
waive such fees in whole or in part. Any such waiver will reduce Fund expenses,
and, accordingly, have a favorable impact on the Fund's yield and total return.
From time to time, the Fund, consistent with its investment objective, policies
and restrictions, may invest in securities of companies with which Wells Fargo
Bank has a lending relationship.
CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT
Wells Fargo Bank serves as the Fund's custodian and transfer and dividend
disbursing agent. Pursuant to a Custody Agreement with Wells Fargo Bank, the
Fund may, at times, borrow money from Wells Fargo Bank as needed to satisfy
temporary liquidity needs. Wells Fargo Bank charges interest on such overdrafts
at a rate determined pursuant to the Fund's Custody Agreement. The transfer and
dividend disbursing agency activities are performed at 525 Market Street, San
Francisco, California 94163.
39 PROSPECTUS
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SHAREHOLDER SERVICING AGENT
The Fund has entered into Shareholder Servicing Agreements with Wells Fargo
Bank on behalf of each Class of the Fund, and may enter into similar agreements
with other entities. Under such agreements, Shareholder Servicing Agents
(including Wells Fargo Bank) agree to, as agent for their customers, among other
things: answer customer inquiries regarding account status and history, and the
manner in which purchases, redemptions and exchanges of Fund shares may be
effected; assist shareholders in designating and changing dividend options,
account designations and addresses; provide necessary personnel and facilities
to establish and maintain shareholder accounts and records; assist in processing
purchase, redemption and exchange transactions; arrange for the wiring of money;
transfer money in connection with customer orders to purchase or redeem shares;
verify shareholder signatures in connection with redemption and exchange orders
and transfers and changes in accounts with Approved Banks; furnish (either
separately or on an integrated basis with other reports sent to a shareholder by
the Shareholder Servicing Agent) monthly and year-end statements and
confirmations of purchases, redemptions and exchanges; furnish, on behalf of the
Fund, proxy statements, annual reports, updated prospectuses and other
communications to shareholders; receive, tabulate and send to the Fund proxies
executed by shareholders; and provide such other related services as the Fund or
a shareholder may reasonably request. For these services, a Shareholder
Servicing Agent receives a fee, which may be paid periodically, determined by a
formula based upon the number of accounts serviced by the Shareholder Servicing
Agent during the period for which payment is being made, the level of activity
in such accounts during such period and the expenses incurred by the Shareholder
Servicing Agent. In no event will the shareholder servicing fees charged to each
Class, as calculated on an annualized basis for each Fund's then current fiscal
year, exceed the lesser of (1) 0.25% of the average daily net assets
attributable to Class A or Class B Shares, as the case may be, owned during the
period for which payment is being made by investors with whom the Shareholder
Servicing Agent maintains a servicing relationship, or (2) an amount which
equals the maximum amount payable to the Shareholder Servicing Agent under
applicable laws, regulations or rules, including the Rules of Fair Practice of
the NASD ("NASD Rules"). In no event will the portion of such fees that
constitutes a "service fee," as that term is used by the NASD, exceed 0.25% of
the average net asset value attributable to the Class A and Class B Shares of
the Fund.
Shareholder Servicing Agents also may impose certain conditions on their
customers, subject to the terms of this Prospectus, in addition to or different
from those imposed by the Fund, such as requiring a higher minimum initial
investment or payment of a separate fee for additional services. Each
Shareholder Servicing Agent is required to agree to disclose any fees it may
directly charge its customers who are shareholders of the Fund and to notify
them in writing at least 30 days before it imposes any transaction fees.
PROSPECTUS 40
<PAGE> 49
SPONSOR, ADMINISTRATOR AND DISTRIBUTOR
Subject to the overall supervision of the Company's Board of Directors,
Stephens provides the Fund and Master Portfolio with administrative services,
including general supervision of the Fund's and Master Portfolio's operation,
coordination of the other services provided to the Fund and Master Portfolio,
compilation of information for reports to the SEC and the state securities
commissions, preparation of proxy statements and shareholder reports, and
general supervision of data compilation in connection with preparing periodic
reports to the Company's Directors and officers. Stephens also furnishes office
space and certain facilities to conduct the Fund's and Master Portfolio's
business, and compensates the Company's Directors, officers and employees who
are affiliated with Stephens. For these services, Stephens is entitled to
receive from the Fund a monthly fee at the annual rate of 0.03% of the Fund's
average daily net assets. From time to time, Stephens may waive its fees from
the Fund in whole or in part. Any such waiver will reduce the Fund's expenses
and, accordingly, have a favorable impact on such Fund's yield and total return.
Under the agreement with the Trust, Stephens is not entitled to receive a fee
for providing administrative services to the Master Portfolio so long as
Stephens is entitled to be compensated for providing administrative services to
another mutual fund that invests all of its assets in the Master Portfolio.
Stephens, as the principal underwriter of the Fund within the meaning of the
1940 Act, has also entered into a Distribution Agreement with the Company
pursuant to which Stephens has the responsibility for distributing Class A
Shares and Class B Shares of the Fund. The Distribution Agreement provides that
Stephens shall act as agent for the Fund for the sale of its Class A Shares and
Class B Shares and may enter into selling agreements with broker/dealers or
financial institutions to market and make available Class A Shares and Class B
Shares to their respective customers ("Selling Agents").
The Company's Board of Directors has adopted a plan of distribution on behalf
of each class of shares of the Fund (each, a "Plan" and, collectively, the
"Plans"). Under the Plans and pursuant to Distribution Agreement, Stephens is
entitled to receive from the Fund a monthly fee at an annual rate of up to 0.10%
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 B 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. Compensation paid by Stephens to
Selling Agents may include, but is not limited to, commissions or other payments
for expenses incurred and distribution-related services provided that are
primarily intended to result in the sale of shares. Services provided by Selling
Agents in exchange for commissions and other payments to Selling Agents are the
principal sales support services provided to the Fund. Stephens may retain any
portion of the total distribution
41 PROSPECTUS
<PAGE> 50
fee payable under the Distribution Agreement to compensate it for
distribution-related services provided by it or to reimburse it for other
distribution-related expenses. Since the Distribution Agreement provides for
fees that are used by Stephens to pay for distribution services, the Plans and
the Distribution Agreement are approved and reviewed in accordance with Rule
12b-1 under the 1940 Act, which regulates the manner in which an investment
company may, directly or indirectly, bear the expense of distributing its
shares.
In addition, the Plans contemplate that, to the extent any fees payable
pursuant to a Shareholder Servicing Agreement (discussed above) are deemed to be
for distribution-related services, such payments are approved and payable
pursuant to the Plans, subject to any limits under applicable law, regulations
or rules, including the NASD Rules. Financial institutions acting as Selling
Agents, Shareholder Servicing Agents or in certain other capacities may be
required to register as dealers pursuant to applicable state securities laws
which may differ from federal law and any interpretations expressed herein.
FUND EXPENSES
The Master Portfolio's Investment Advisory Contract and the Administration
Agreements with the Master Portfolio and the Fund provide that, if in any fiscal
year, the total aggregate expenses of the Master Portfolio and the Fund incurred
by, or allocated to, the Master Portfolio and the Fund (excluding taxes,
interest, brokerage commissions and other portfolio transaction expenses,
expenditures that are capitalized in accordance with generally accepted
accounting principles, extraordinary expenses and amounts accrued or paid under
a Plan) exceed the most restrictive expense limitation applicable to the Fund
imposed by the securities laws or regulations of the states in which the Fund's
shares are registered for sale, Wells Fargo Bank and Stephens shall waive their
fees proportionately under the Investment Advisory Contract and the
Administration Agreements, respectively, for the fiscal year to the extent of
the excess, or reimburse the excess, but only to the extent of their respective
fees. The Investment Advisory Contract and the Administration Agreements further
provide that the total expenses shall be reviewed monthly so that, to the extent
the annualized expenses for such month exceed the most restrictive applicable
annual expense limitation, the monthly fees under the Investment Advisory
Contract and the Administration Agreements shall be reduced as necessary.
Currently, the most stringent applicable state expense ratio limitation is 2.50%
of the first $30 million of the Fund's average net assets for its current fiscal
year, 2% of the next $70 million of such assets, and 1.50% of such assets in
excess of $100 million.
Except for the expenses borne by Wells Fargo Bank and Stephens, the Company
and the Trust bear all costs of their respective operations, including the
compensation of the Company's directors and the Trust's trustees who are not
officers or employees of Wells Fargo Bank or Stephens or any of their
affiliates; advisory (in the case of the Master Portfolio), shareholder
servicing (in the case of the Fund), and administration fees;
PROSPECTUS 42
<PAGE> 51
payments pursuant to any Plans (in the case of the Fund); interest charges;
taxes; fees and expenses of independent auditors; legal counsel, transfer agent
and dividend disbursing agent; expenses of redeeming Fund shares or interests in
the Master Portfolio; expenses of preparing and printing prospectuses (except
the expense of printing and mailing prospectuses used for promotional purposes,
unless otherwise payable pursuant to a Plan), shareholders' or investors'
reports, notices, proxy statements and reports to regulatory agencies; insurance
premiums and certain expenses relating to insurance coverage; trade association
membership dues; brokerage and other expenses connected with the execution of
portfolio transactions; fees and expenses of the custodian, including those of
keeping books and accounts and calculating the net asset value of the Fund and
the Master Portfolio; expenses of shareholders' or investors' meetings; expenses
relating to the issuance, registration and qualification of shares of the Fund;
pricing services; organizational expenses; and any extraordinary expenses.
Expenses attributable to the Fund and/or the Master Portfolio are charged
against the respective assets of the Fund and/or the Master Portfolio.
TAXES
By complying with the applicable provisions of the Code, the Fund will not be
subject to federal income taxes with respect to net investment income and net
realized capital gains distributed to its shareholders. Dividends from
investment income (including 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 such dividend payments in cash or have them automatically
reinvested in additional shares, they will be taxable as ordinary income.
Generally, dividends and distributions are taxable to shareholders at the time
they are paid. However, dividends and distributions 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 or distributions 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-deferred retirement plan. See "Investing in the
Fund - Tax-Deferred Retirement Plans" above. The Fund intends to pay out
substantially all of its net investment income and net realized capital gains
(if any) for each year. Corporate shareholders of the Fund may be eligible for
the dividends-received deduction on the dividends (excluding the net capital
gains dividends) paid by the Fund to the extent the Fund's income is derived
from certain dividends received from domestic corporations. In order to qualify
for the dividends-received deduction a corporate shareholder must hold shares of
the Fund paying the dividends upon which such deduction is based for at least 46
days.
43 PROSPECTUS
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Portions of the Fund's investment income may be subject to foreign taxes
withheld at the source; however, the Fund does not expect to be able to pass
through any portion of the foreign taxes to its shareholders.
The Fund, or your Shareholder Servicing Agent on its behalf, will inform you
of the amount and nature of such dividends and capital gains. You should keep
all statements you receive to assist in your personal record keeping. The
Company is required by federal law to withhold, subject to certain exemptions,
at a rate of 31% on dividends paid and redemption proceeds (including proceeds
from exchanges) paid or credited to individual shareholders of the Fund if a
correct taxpayer identification number, certified when required, is not on file
with the Company or the Transfer Agent. In connection with this withholding
requirement, you will be asked to certify on your Account Application that the
social security or taxpayer identification number you provide is correct and
that you are not subject to 31% backup withholding for previous underreporting
to the IRS.
The Fund seeks to comply with the applicable provisions of the Code by
investing all of its assets in the Master Portfolio. The Trust intends to
qualify for federal income tax purposes as a partnership. As such, the Fund will
be deemed to own directly its proportionate share of the Trust's assets.
Therefore, any interest, dividends and gains or losses of a Master Portfolio
will be deemed to have been "passed through" to the Fund and other investors in
the Master Portfolio, regardless of whether such interest, dividends, gains or
losses have been distributed by the Master Portfolio or losses have been
realized by the Fund and other investors. Accordingly, if the Master Portfolio
were to accrue but not distribute any interest, dividends or gains, the Fund
would be deemed to have realized and recognized its proportionate share of
interest, dividends, gains or losses without receipt of any corresponding
distribution. However, each Master Portfolio will seek to minimize recognition
by investors of interest, dividends, gains or losses without a corresponding
distribution.
Foreign shareholders may be subject to different tax treatment, including a
withholding tax. See "Federal Income Tax - Foreign Shareholders" in the Fund's
SAI.
Further federal tax considerations are discussed in the SAI. All investors
should consult their individual tax advisors with respect to their particular
tax situations as well as the state and local tax status of investments in
shares of the Fund.
PROSPECTUS 44
<PAGE> 53
PROSPECTUS APPENDIX --
ADDITIONAL INVESTMENT POLICIES
FUND INVESTMENTS
Temporary Investments
From time to time, for temporary defensive purposes, the Master Portfolio may
hold assets in cash or make short-term investments, to the extent appropriate,
to maintain adequate liquidity for redemption requests or other cash management
needs or for temporary defensive purposes. The short-term investments that the
Funds may purchase for liquidity purposes include: U.S. Treasury bills, shares
of other mutual funds and repurchase agreements (as discussed below). Other
permissible investments include: (i) obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities (including
government-sponsored enterprises) ("U.S. Government obligations"); (ii)
negotiable certificates of deposit, bankers' acceptances and fixed time deposits
and other obligations of domestic banks (including foreign branches) that have
more than $1 billion in total assets at the time of investment and are members
of the Federal Reserve System or are examined by the Comptroller of the Currency
or whose deposits are insured by the FDIC; (iii) commercial paper rated at the
date of purchase "P-1" by Moody's or "A-1+" or "A-1" by S&P, or, if unrated, of
comparable quality as determined by Wells Fargo Bank, as investment adviser; and
(iv) short-term, U.S. dollar-denominated obligations of foreign banks (including
U.S. branches) that, at the time of investment: (a) have more than $10 billion,
or the equivalent in other currencies, in total assets; (b) are among the 75
largest foreign banks in the world as determined on the basis of assets; (c)
have branches or agencies in the United States; and (d) in the opinion of Wells
Fargo Bank, as investment adviser, are of comparable quality to obligations of
U.S. banks which may be purchased by the Fund.
Repurchase Agreements
The Master Portfolio may enter into repurchase agreements wherein the seller
of a security to the Master Portfolio agrees to repurchase that security from
the Master Portfolio at a mutually agreed-upon time and price. The period of
maturity is usually quite short, often overnight or a few days, although it may
extend over a number of months. The Master Portfolio may enter into repurchase
agreements only with respect to obligations and other securities that could
otherwise be purchased by the Funds. 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 entered into
by the Master Portfolio may be greater than one year. If the seller defaults and
the value of the underlying securities has declined, the Master Portfolio may
incur a loss. In addition, if bankruptcy proceedings are commenced with respect
to
A-1 PROSPECTUS
<PAGE> 54
the seller of the security, the Master Portfolio's disposition of the security
may be delayed or limited. The Master Portfolio will enter into repurchase
agreements only with registered broker/dealers and commercial banks that meet
guidelines established by the Trust's Board of Trustees and are not affiliated
with the investment adviser, Wells Fargo Bank. The Master Portfolio may
participate in pooled repurchase agreement transactions with other funds advised
by Wells Fargo Bank.
Money Market Instruments
The Master Portfolio may invest in the following types of money market
instruments that have remaining maturities not exceeding one year: (i) U.S.
Government obligations; (ii) negotiable certificates of deposit, bankers'
acceptances and fixed time deposits and other obligations of domestic banks
(including foreign branches) that have more than $1 billion in total assets at
the time of investment and are members of the Federal Reserve System or are
examined by the Comptroller of the Currency or whose deposits are insured by the
FDIC; and (iii) commercial paper rated at the date of purchase "P-1" by Moody's
or "A-1" or "A-1+" by S&P. The Master Portfolio also may invest in short-term
U.S. dollar-denominated obligations of foreign banks (including U.S. branches)
that at the time of investment: (i) have more than $10 billion, or the
equivalent in other currencies, in total assets; (ii) are among the 75 largest
foreign banks in the world as determined on the basis of assets; and (iii) have
branches or agencies in the United States.
Other Investment Companies
The Master Portfolio may invest in shares of other open-end, management
investment companies, subject to the limitations of Section 12(d)(1) of the 1940
Act, provided that any such purchases will be limited to temporary investments
in shares of unaffiliated investment companies and Wells Fargo Bank will waive
its advisory fees for that portion of the Master Portfolio's assets so invested,
except when such purchase is part of a plan of merger, consolidation,
reorganization or acquisition. Notwithstanding any other investment policy or
limitation (whether or not fundamental), as a matter of fundamental policy, the
Aggressive Growth Fund may invest all of its assets in the securities of a
single open-end, management investment company with substantially the same
fundamental investment objective, policies and limitations as the Fund. Subject
to the limitations of the 1940 Act, the Funds may purchase shares of
exchange-listed, closed-end funds consistent with pursuing their investment
objectives.
INVESTMENT POLICY
The Fund's investment objective, as set forth under "How the Fund
Works - Investment Objective and Policies," is fundamental; that is, it 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 for the Fund. If the Board of
PROSPECTUS A-2
<PAGE> 55
Directors determines, however, that the Fund's investment objective can best be
achieved by a substantive change in a nonfundamental 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.
As matters of fundamental policy: (i) the Fund may not purchase securities of
any issuer (except U.S. Government obligations) if as a result, more than 5% of
the value of the Fund's total assets would be invested in the securities of such
issuer or the Fund would own more than 10% of the outstanding voting securities
of such issuer; (ii) the Fund may borrow from banks up to 10% of the current
value of its net assets for temporary purposes only in order to meet
redemptions, and these borrowings may be secured by the pledge of up to 10% of
the current value of its net assets (but investments may not be purchased by the
Fund while any such outstanding borrowings exceed 5% of the Fund's net assets);
(iii) the Fund may make loans of portfolio securities in accordance with its
investment policies; and (iv) the Fund may not invest 25% or more of its assets
(i.e., concentrate) in any particular industry, except that a Fund may invest
25% or more of its assets in U.S. Government obligations. With respect to
fundamental investment policy (i) above, the Fund is subject to this restriction
only with respect to 75% of the Fund's assets, and it may be possible that the
Company would own more than 10% of the outstanding voting securities of the
issuer.
As a matter of nonfundamental policy, the Fund may invest up to 15% of the
current value of its net assets in illiquid securities. For this purpose,
illiquid securities include, among others, (a) securities that are illiquid by
virtue of the absence of a readily available market or legal or contractual
restrictions on resale, (b) fixed time deposits that are subject to withdrawal
penalties and that have maturities of more than seven days and (c) repurchase
agreements not terminable within seven days.
A-3 PROSPECTUS
<PAGE> 56
- --------------------------------------------------------------------------------
Advised by WELLS FARGO BANK, N.A. - Sponsored/Distributed by
Stephens Inc., Member NYSE/SIPC
NOT FDIC INSURED
<PAGE> 57
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE> 58
SPONSOR, DISTRIBUTOR AND ADMINISTRATOR
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
TRANSFER AND DIVIDEND
DISBURSING AGENT AND
CUSTODIAN
Wells Fargo Bank, N.A.
P.O. Box 7066
San Francisco, California 94120-7066
LEGAL COUNSEL
Morrison & Foerster
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
For more information about the Fund,
simply call 1-800-222-8222, or write:
Stagecoach Funds, Inc.
c/o Stagecoach Shareholder Services
Wells Fargo Bank, N.A.
P.O. Box 7066
San Francisco, California 94120-7066
STAGECOACH FUNDS:
- --------------------------------------------------------------------------------
- are NOT FDIC insured
- are NOT guaranteed by Wells Fargo Bank
- are NOT deposits or obligations of the Bank (FDIC LOGO)
- involve investment risk, including possible loss
of principal
(Recycle LOGO) SC 1019 (12/95)
Printed on Recycled Paper
<PAGE> 59
STAGECOACH FUNDS(R)
P.O. Box 7066
San Francisco, CA 94120-7066
STAGECOACH FUNDS:
- --------------------------------------------------------------------------------
- are NOT FDIC insured
- are NOT guaranteed by Wells Fargo Bank
- are NOT deposits or obligations of the Bank (FDIC LOGO)
- involve investment risk, including possible loss
of principal
(Recycle LOGO) SC 1019 (12/95)
Printed on Recycled Paper
<PAGE> 60
STAGECOACH FUNDS, INC.
Telephone: 1-800-222-8222
STATEMENT OF ADDITIONAL INFORMATION
DATED MARCH 4, 1996
AGGRESSIVE GROWTH FUND
__________________________________
Stagecoach Funds, Inc. (the "Company") is a professionally
managed, open-end, series investment company, commonly referred to as a "mutual
fund." This Statement of Additional Information ("SAI") contains information
about one of the funds in the Stagecoach Family of Funds -- the AGGRESSIVE
GROWTH FUND (the "Fund"). The Fund offers two classes of shares -- Class A
Shares and Class B Shares. This SAI relates to both such classes of shares.
The investment objective of the Fund is described in its Prospectus under the
section entitled "How the Fund Works -- Investment Objectives and Policies."
The Fund seeks to achieve its investment objective by investing all of its
assets in the Capital Appreciation Master Portfolio (at times, the "Master
Portfolio") of Master Investment Trust (the "Trust"), which has the same
investment objective as the Fund. The Fund may withdraw its investment in the
Capital Appreciation Master Portfolio at any time, if the Board of Directors of
the Company determines that such action is in the best interests of the Fund
and its shareholders. Upon such withdrawal, the Company's Board would consider
alternative investments, including investing all of the Fund's assets in
another investment company with the same investment objective as the Fund or
hiring an investment adviser to manage the Fund's assets in accordance with the
investment policies and restrictions described in the Prospectus and below with
respect to the Trust.
This SAI is not a prospectus and should be read in conjunction
with the Fund's Prospectus, dated March 4, 1996. All terms used in this SAI
that are defined in the Prospectus have the meanings assigned in the
Prospectus. A copy of the Prospectus for the Fund may be obtained without
charge by writing Stephens Inc., the Company's sponsor, administrator and
distributor, at 111 Center Street, Little Rock, Arkansas 72201 or by calling
the Transfer Agent at the telephone number indicated above.
__________________________________
<PAGE> 61
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Distribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Calculation of Yield and Total Return . . . . . . . . . . . . . . . . . . . . . . 11
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . 13
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Federal Income Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Custodian and Transfer and Dividend Disbursing Agent . . . . . . . . . . . . . . 20
Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
2
<PAGE> 62
INVESTMENT RESTRICTIONS
The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "Investment Objectives
and Policies." The Fund and the Master Portfolio are subject to the following
investment restrictions, all of which are fundamental policies. These
restrictions cannot be changed, as to either the Fund or the Master Portfolio
without approval by the holders of a majority (as defined by the 1940 Act) of
the outstanding voting securities of the Fund or the Master Portfolio, as
appropriate. Whenever the Fund is requested to vote on a fundamental policy of
the Master Portfolio, the Fund will hold a meeting of Fund shareholders and it
will cast its votes as instructed by such shareholders.
The Fund may not:
(1) purchase the securities of issuers conducting their
principal business activity in the same industry if, immediately after the
purchase and as a result thereof, the value of the Fund's investments in that
industry would be 25% or more of the current value of the Fund's total assets,
provided that there is no limitation with respect to investments in securities
issued or guaranteed by the U.S. Government, its agencies or instrumentalities;
and provided further, that the Fund may invest all its assets in a diversified,
open-end management investment company, or a series thereof, with substantially
the same investment objective, policies and restrictions as such Fund, without
regard to the limitations set forth in this paragraph (1);
(2) purchase or sell real estate or real estate limited
partnerships (other than securities secured by real estate or interests therein
or securities issued by companies that invest in real estate or interests
therein), commodities or commodity contracts, or interests in oil, gas, or
other mineral exploration or development programs;
(3) purchase securities on margin (except for short-term
credits necessary for the clearance of transactions) or make short sales of
securities;
(4) underwrite securities of other issuers, except to the
extent that the purchase of permitted investments directly from the issuer
thereof or from an underwriter for an issuer and the later disposition of such
securities in accordance with the Fund's investment program may be deemed to be
an underwriting; and provided further, that the purchase by the Fund of
securities issued by a diversified, open-end management investment company, or
a series thereof, with substantially the same investment objective, policies
and restrictions as such Fund shall not constitute an underwriting for purposes
of this paragraph (4);
(5) make investments for the purpose of exercising control or
management; provided that the Fund may invest all its assets in a diversified
open-end management company, or a series thereof, with substantially the same
investment objective, policies and restrictions as such Fund, without regard to
the limitations set forth in this paragraph (5);
3
<PAGE> 63
(6) issue senior securities except that the Fund may borrow
from banks up to 10% of the current value of its net assets for temporary
purposes only in order to meet redemptions, and these borrowings may be secured
by the pledge of up to 10% of the current value of its net assets (but
investments may not be purchased while any such outstanding borrowings exceed
5% of its net assets);
(7) make loans of portfolio securities having a value that
exceeds 50% of the current value of its total assets, provided that, this
restriction does not apply to the purchase of fixed time deposits, repurchase
agreements, commercial paper and other types of debt instruments commonly sold
in a public or private offering; nor
(8) purchase securities of any issuer (except securities issued
by the U.S. Government, its agencies or instrumentalities ) if, as a result,
with respect to 75% of its total assets, more than 5% of the value of its total
assets would be invested in the securities of any one issuer or, with respect
to 100% of its total assets the Fund's ownership would be more than 10% of the
outstanding voting securities of such issuer; provided that the Fund may invest
all its assets in a diversified, open-end management investment company, or a
series thereof, with substantially the same investment objective, policies and
restrictions as such Fund, without regard to the limitations set forth in this
paragraph (8).
With respect to fundamental investment policy (7), the Fund and the Master
Portfolio do not intend to loan their portfolio securities during the coming
year.
The Fund and the Master Portfolio are subject to the following
non-fundamental policies. These restrictions may be changed by a vote of a
majority of the Directors of the Company or the Trustees of the Trust, as the
case may be, at any time.
The Fund may not:
(1) purchase or retain securities of any issuer if the officers
or directors of the Fund or its investment adviser owning beneficially more
than one-half of one percent (0.5%) of the securities of the issuer together
owned beneficially more than 5% of such securities;
(2) purchase or sell real estate limited partnership interests;
(3) write, purchase or sell puts, calls or options or any
combination thereof, except to the extent described in the Prospectus and
except that the Fund may purchase securities with put rights in order to
maintain liquidity;
(4) invest in securities of issuers who, with their
predecessors, have been in existence less than three years, unless the
securities are fully guaranteed or insured by the U.S. Government if, by reason
thereof, the value of its aggregate investment in such securities will exceed
5% of its total assets;
4
<PAGE> 64
(5) purchase securities of any issuer (except securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) if, as
a result, more than 5% of the value of the Fund's total assets would be
invested in the securities of any one issuer; nor
(6) invest more than 15% of the Fund's net assets in illiquid
securities. For this purpose, illiquid securities include, among others, (a)
securities that are illiquid by virtue of the absence of a readily available
market or legal or contractual restrictions on resale, (b) fixed time deposits
that are subject to withdrawal penalties and that have maturities of more than
seven days, and (c) repurchase agreements not terminable within seven days.
(7) In addition, as a matter of non-fundamental policy, the
Fund may invest in shares of other open-end, management investment companies,
subject to the limitations of Section 12(d)(1) of the Act, provided that any
such purchases will be limited to temporary investments in shares of
unaffiliated investment companies and the investment adviser will waive its
advisory fees for that portion of the Fund's assets so invested, except when
such purchase is part of a plan of merger, consolidation, reorganization or
acquisition. The Fund does not intend to invest more than 5% of its net assets
in such securities during the coming year. Notwithstanding any other
investment policy or limitation (whether or not fundamental), as a matter of
fundamental policy, the Fund may invest all of its assets in the securities of
a single open-end management investment company with substantially the same
fundamental investment objective, policies and limitations as the Fund.
MANAGEMENT
The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "Management of the Fund
and the Master Portfolio." The principal occupations during the past five
years of the Directors and principal executive Officer of the Company are
listed below. The address of each, unless otherwise indicated, is 111 Center
Street, Little Rock, Arkansas 72201. Directors deemed to be "interested
persons" of the Company for purposes of the 1940 Act are indicated by an
asterisk.
<TABLE>
<CAPTION>
Principal Occupations
Name, Address and Age Position During Past 5 Years
- --------------------- -------- ---------------------
<S> <C> <C>
Jack S. Euphrat, 73 Director Private Investor.
415 Walsh Road
Atherton, CA 94027.
</TABLE>
5
<PAGE> 65
<TABLE>
<S> <C> <C>
*R. Greg Feltus, 44 Director, Senior Vice President
Chairman and of Stephens; Manager
President of Financial Services
Group; President of
Stephens
Insurance Services
Inc.; Senior Vice
President of Stephens
Sports Management
Inc.; and President of
Investor Brokerage
Insurance Inc.
Thomas S. Goho, 53 Director T.B. Rose Faculty
321 Beechcliff Court Fellow-Business,
Winston-Salem, NC 27104 Wake Forest University
Calloway School, of
Business and
Accountancy: Associate
Professor of Finance of the
School of Business and
Accounting at Wake Forest
University since 1983.
*Zoe Ann Hines, 46 Director Senior Vice President
of Stephens and
Director of Brokerage
Accounting; and
Secretary of Stephens
Resource
Management.
*W. Rodney Hughes, 69 Director Private Investor.
31 Dellwood Court
San Rafael, CA 94901
Robert M. Joses, 77 Director Private Investor.
47 Dowitcher Way
San Rafael, CA 94901
*J. Tucker Morse, 51 Director Private, Investor; Real Estate
10 Legrae Street Developer; Chairman
Charleston, SC 29401 of Renaissance
Properties Ltd.;
President of Morse
Investment
Corporation; and Co-
Managing Partner of
Main Street Ventures.
</TABLE>
6
<PAGE> 66
<TABLE>
<S> <C> <C>
Richard H. Blank, Jr., 39 Chief Associate of
Operating Financial Services
Officer, Group of Stephens;
Secretary and Director of Stephens
Treasurer Sports Management
Inc.; and Director of
Capo Inc.
</TABLE>
COMPENSATION TABLE
For the Fiscal Year Ended December 31, 1994
<TABLE>
<CAPTION>
Total Compensation
Aggregate Compensation from Registrant
Name and Position from Registrant and Fund Complex
- ----------------- ---------------------- ------------------
<S> <C> <C>
Jack S. Euphrat $8,500 $34,188
Director
*R. Greg Feltus 0 0
Director
Thomas S. Goho 8,500 34,188
Director
*Zoe Ann Hines 0 0
Director
*W. Rodney Hughes 8,500 32,188
Director
Robert M. Joses 8,500 34,188
Director
*J. Tucker Morse 8,500 32,188
Director
</TABLE>
Directors of the Company are compensated annually by the Company
and by all the registrants in the fund complex for their services as indicated
above and also are reimbursed for all out-of-pocket expenses relating to
attendance at board meetings. Each of the Directors and Officer of the Company
serves in the identical capacity as Officer and Directors of Overland Express
Funds, Inc. and Stagecoach Inc., and as Trustees and/or Officer of Stagecoach
Trust, Master Investment Portfolio, Life & Annuity Trust, Master Investment
Trust and Managed Series Investment Trust, each of which is a registered
open-end management investment company and each of which is considered to be in
the same "fund complex," as such term is defined in Form N-1A under the 1940
Act, as the
7
<PAGE> 67
Company. The Directors are compensated by other Companies and Trusts within
the fund complex for their services as Directors/Trustees to such Companies and
Trusts. Currently the Directors do not receive any retirement benefits or
deferred compensation from the Company or any other member of the fund complex.
As of the date of this SAI, the Directors and Principal Officer
of the Company as a group beneficially owned less than 1% of the outstanding
shares of the Company.
Investment Adviser. The Fund has not engaged an investment
adviser. The Master Portfolio (which has the same investment objective as the
Fund, and in which the Fund invests all its assets) is advised by Wells Fargo
Bank. The Advisory Contract provides that Wells Fargo Bank shall furnish to
the Master Portfolio investment guidance and policy direction in connection
with the daily portfolio management of the Master Portfolio. Pursuant to the
Advisory Contract, Wells Fargo Bank furnishes to the Board of Trustees periodic
reports on the investment strategy and performance of the Master Portfolio.
Wells Fargo Bank has agreed to provide to the Master Portfolio,
among other things, money market and fixed- income research, analysis and
statistical and economic data and information concerning interest rate and
security market trends, portfolio composition, credit conditions and average
maturities of the portfolio of the Master Portfolio.
The Advisory Contract will continue in effect for more than two
years provided the continuance is approved annually (i) by the holders of a
majority of the Master Portfolio's outstanding voting securities or by the
Trust's Board of Trustees and (ii) by a majority of the Trustees of the Trust
who are not parties to the Advisory Contract or "interested persons" (as
defined in the 1940 Act) of any such party. The Advisory Contract may be
terminated on 60 days' written notice by either party and will terminate
automatically if assigned.
Wells Fargo Bank also serves as Custodian and Transfer and
Dividend Disbursing Agent for the Fund and the Master Portfolio. See
"Custodian and Transfer and Dividend Disbursing Agent".
Morrison & Foerster, counsel to the Company and the Trust and
special counsel to Wells Fargo Bank, has advised Wells Fargo Bank, the Trust
and the Company that Wells Fargo Bank should be able to perform the services
contemplated by the Advisory Contract, the Selling Agent Agreement, the Agency
Agreement, the Custodian Agreement, the Shareholder Servicing Agreement and the
Prospectus, without violation of the Glass-Steagall Act. Such counsel has
pointed out, however, that there are no controlling judicial or administrative
interpretations or decisions and that future judicial or administrative
interpretations of, or decisions relating to, present federal or state statutes
and regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, as well as future changes in federal or state
statutes and regulations and judicial or administrative decisions or
interpretations thereof, could prevent Wells Fargo Bank from continuing to
8
<PAGE> 68
perform, in whole or in part, such services. If Wells Fargo Bank were
prohibited from performing any of such services, it is expected that new
agreements would be proposed or entered into with another entity or entities
qualified to perform such services.
Administrator and Distributor. The Company has retained Stephens
as administrator and distributor on behalf of the Fund. In addition, the Trust
has retained Stephens as administrator on behalf of the Master Portfolio.
Under the respective Administration Agreements with the Company and the Trust,
Stephens furnishes the Company and the Trust with office facilities, together
with those ordinary clerical and bookkeeping services that are not furnished by
Wells Fargo Bank. Stephens also has entered into a Distribution Agreement with
the Company pursuant to which Stephens has the responsibility of distributing
shares of the Fund.
DISTRIBUTION PLAN
The following information supplements and should be read in
conjunction with the Prospectus section entitled "Distribution Plans." As
indicated in the Prospectus, the Fund has adopted a distribution plan (a
"Plan") under Section 12(b) of the 1940 Act and Rule 12b-1 thereunder (the
"Rule") for each class of shares of the Fund. The Plan for the Class A Shares
and the Plan for the Class B Shares were each adopted by the Board of Directors
on November 15, 1995, including a majority of the Directors who were not
"interested persons" (as defined in the 1940 Act) of the Fund and who had no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan (the "Non-Interested Directors").
Under the Plan and pursuant to the Distribution Agreement, the
Fund may pay the Distributor, as reimbursement for distribution-related
expenses and compensation for distribution-related services, a monthly fee at
an annual rate of up to 0.10% of the average daily net assets attributable to
Class A Shares and up to 0.75% of the average daily net assets attributable to
the Class B Shares of the Fund. The actual fee payable to the Distributor is
determined, within such limits, from time to time by mutual agreement between
the Company and the Distributor and will not exceed the maximum sales charges
payable by mutual funds sold by members of the National Association of
Securities Dealers, Inc. ("NASD") under the NASD Rules of Fair Practice. The
Distributor may enter into selling agreements with one or more selling agents
under which such agents may receive compensation for distribution-related
services from the Distributor, including, but not limited to, commissions or
other payments to such agents based on the average daily net assets of Fund
shares attributable to them. The Distributor may retain any portion of the
total distribution fee payable thereunder to compensate it for
distribution-related services provided by it or to reimburse it for other
distribution-related expenses.
Each Plan will continue in effect from year to year if such
continuance is approved by a majority vote of both the Directors of the Company
and the Non-Interested Directors. Agreements related to the Plans also must be
approved by such vote of the
9
<PAGE> 69
directors and the Non-Interested Directors. Such Agreements will terminate
automatically if assigned, and may be terminated at any time, without payment
of any penalty, by a vote of a majority of the outstanding voting securities of
the relevant class of the Fund or by vote of a majority of the Non-Interested
Directors on not more than 60 days' written notice. Each Plan may not be
amended to increase materially the amounts payable thereunder without the
approval of a majority of the outstanding voting securities of the relevant
class of the Fund, and no material amendment to the Plans may be made except by
a majority of both the Directors of the Company and the Non-Interested
Directors.
Each Plan requires that the Company shall provide to the
Directors, and the directors shall review, at least quarterly, a written report
of the amounts expended (and purposes therefor) under the Plan. The Rule also
requires that the selection and nomination of Directors who are not "interested
persons" of the Company be made by such disinterested directors.
As indicated in the Fund's Prospectus, the Fund has adopted a
Servicing Plan ("Servicing Plan") with respect to its Class A and Class B
Shares. The Board of Directors adopted each Servicing Plan on November 15,
1995. The Board of Directors included a majority of the Directors who were not
"interested persons" (as defined in the Act) of the Fund and who had no direct
or indirect financial interest in the operation of the Servicing Plan or in any
agreement related to the Servicing Plan (the "Servicing Plan Non-Interested
Directors").
Under the Servicing Plan and pursuant to the Servicing Agreements
for the Class A Shares, the Fund may pay one or more servicing agents, as
compensation for performing certain services, a fee at an annual rate of up to
0.25% of the average daily net assets of the Fund attributable to its Class A
Shares. Under the Servicing Plan and pursuant to the Servicing Agreements for
the Class B Shares, the Fund may pay one or more servicing agents, as
compensation for performing certain services, a fee at an annual rate of up to
0.25% of the average daily net assets of the Fund attributable to the Class B
Shares. The actual fee payable to servicing agents is determined, within such
limits, from time to time by mutual agreement between the Company and each
servicing agent and will not exceed the maximum service fees payable by mutual
funds sold by members of the NASD under the NASD Rules of Fair Practice.
Each Servicing Plan will continue in effect from year to year if
such continuance is approved by a majority vote of both the Directors of the
Company and the Servicing Plan Non-Interested Directors. Any form of Servicing
Agreement related to the Servicing Plan also must be approved by such vote of
the Directors and the Servicing Plan Non- Interested Directors. Servicing
Agreements will terminate automatically if assigned, and may be terminated at
any time, without payment of any penalty, by a vote of a majority of the
Servicing Plan Non-Interested Directors. No material amendment to the
Servicing Plans may be made except by a majority of both the Directors of the
Company and the Servicing Plan Non-Interested Directors.
10
<PAGE> 70
Each Servicing Plan requires that the Treasurer of the Company
shall provide to the Directors, and the Directors shall review, at least
quarterly, a written report of the amounts expended (and purposes therefor)
under the Servicing Plan.
CALCULATION OF YIELD AND TOTAL RETURN
The following information supplements and should be read in
conjunction with the sections in the Prospectus entitled "Determination of Net
Asset Value" and "Performance Data."
As indicated in the Prospectus, the Fund may advertise certain
total return information computed in the manner described in the Prospectus.
As and to the extent required by the SEC, an average annual compound rate of
return ("T") will be computed by using the redeemable value at the end of a
specified period ("ERV") of a hypothetical initial investment ("P") over a
period of years ("n") according to the following formula: P(1+T)n = ERV. In
addition, as indicated in the Prospectus, the Fund also may, at times,
calculate total return based on net asset value per share (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, or based on the
assumption that a sales charge other than the maximum sales charge (reflecting
a Volume Discount) was assessed, provided that total return data derived
pursuant to the calculation described above also are presented.
From time to time and only to the extent the comparison is
appropriate for a class of Shares of the Fund, the Company may quote
performance or price-earning ratios of a class of Shares of the Fund in
advertising and other types of literature as compared to the performance of the
Lehman Brothers Municipal Bond Index, 1-Year Treasury Bill Rate, S&P Index, the
Dow Jones Industrial Average, the Lehman Brothers 20+ Years Treasury Index, the
Lehman Brothers 5-7 Year Treasury Index, IBC/Donoghue's Money Fund Averages,
Real Estate Investment Averages (as reported by the National Association of
Real Estate Investment Trusts), Gold Investment Averages (provided by the World
Gold Council), Bank Averages (which is calculated from figures supplied by the
U.S. League of Savings Institutions based on effective annual rates of interest
on both passbook and certificate accounts), average annualized certificate of
deposit rates (from the Federal Reserve G-13 Statistical Releases or the Bank
Rate Monitor), the Salomon One Year Treasury Benchmark Index, the Consumer
Price Index (as published by the U.S. Bureau of Labor Statistics), Ten Year
U.S. Government Bond Average, S&P's Corporate Bond Yield Averages, Schabacter
Investment Management Indices, Salomon Brothers High Grade Bond Index, Lehman
Brothers Long-Term High Quality Government/Corporate Bond Index, other managed
or unmanaged indices or performance data of bonds, stocks or government
securities (including data provided by Ibbotson Associates), or by other
services, companies, publications or persons who monitor mutual funds on
overall performance or other criteria. The S&P Index and the Dow Jones
Industrial Average are unmanaged indices of selected common stock prices. The
performance of a class of shares of the Fund also may be compared to the
performance of other mutual funds having similar
11
<PAGE> 71
objectives. This comparative performance could be expressed as a ranking
prepared by Lipper Analytical Services, Inc., CDA Investment Technologies,
Inc., Bloomberg Financial Markets or Morningstar, Inc., independent services
which monitor the performance of mutual funds. The performance of a class of
shares the Fund is calculated by relating net asset value per share at the
beginning of a stated period to the net asset value of the investment, assuming
reinvestment of all gains distributions and dividends paid, at the end of the
period. Any such comparisons may be useful to investors who wish to compare
the Fund's past performance with that of its competitors. Of course, past
performance cannot be a guarantee of future results. The Company also may
include, from time to time, a reference to certain marketing approaches of the
Distributor, including, for example, a reference to a potential shareholder
being contacted by a selected broker or dealer. General mutual fund statistics
provided by the Investment Company Institute may also be used.
In addition, the Company also may use, in advertisements and other
types of literature, information and statements: (1) showing that bank savings
accounts offer a guaranteed return of principal and a fixed rate of interest,
but no opportunity for capital growth; and (2) describing Wells Fargo Bank, and
its affiliates and predecessors, as one of the first investment managers to
advise investment accounts using asset allocation and index strategies. The
Company also may include in advertising and other types of literature
information and other data from reports and studies prepared by the Tax
Foundation, including information regarding federal and state tax levels and
the related "Tax Freedom Day."
The Company also may use the following information in
advertisements and other types of literature, only to the extent the
information is appropriate for a class of shares of the Fund: (i) the Consumer
Price Index may be used to assess the real rate of return from an investment in
a class of shares of the Fund; (ii) other government statistics, including, but
not limited to, The Survey of Current Business, may be used to illustrate
investment attributes of a class of shares of the Fund or the general economic,
business, investment, or financial environment in which the Fund operates;
(iii) the effect of tax-deferred compounding on the investment returns of a
class of shares of the Fund, or on returns in general, may be illustrated by
graphs, charts, etc., where such graphs or charts would compare, at various
points in time, the return from an investment in a class of shares of the Fund
(or returns in general) on a tax-deferred basis (assuming reinvestment of
capital gains and dividends and assuming one or more tax rates) with the return
on a taxable basis; and (iv) the sectors or industries in which the Fund or the
Master Portfolio invests may be compared to relevant indices of stocks or
surveys (e.g., S&P Industry Surveys) to evaluate the historical performance of
the Fund or the Master Portfolio or current or potential value with respect to
the particular industry or sector.
The Company also may discuss in advertising and other types of
literature that the Fund has been assigned a rating by a nationally recognized
statistical rating organization ("NRSRO"), such as S&P or Moody's. Such
rating would assess the creditworthiness of the investments held by the Fund.
The assigned rating would not be a recommendation to
12
<PAGE> 72
purchase, sell or hold any class of the Fund's shares since the rating would
not comment on the market price of the Fund's shares or the suitability of the
Fund for a particular investor. In addition, the assigned rating would be
subject to change, suspension or withdrawal as a result of changes in, or
unavailability of, information relating to the Fund or its investments. The
Company may compare the Fund's performance with other investments which are
assigned ratings by NRSROs. Any such comparisons may be useful to investors
who wish to compare the Fund's past performance with other rated investments.
The Company also may disclose, in advertising and other types of
literature, information and statements that the Company's investment adviser,
Wells Fargo Bank, is listed in Nelson Publications' ("Nelson's") "Top 20"
performance rankings as published in the 1994 edition of "America's Best Money
Managers." The Nelson survey ranks the performance of money managers in over
30 asset/style categories and is based on analysis of performance composites
and surveys of institutional money managers. The Company may also disclose in
advertising and other types of sales literature the assets and categories of
assets under management by the Company's investment adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the Prospectus section entitled "Purchase of Shares." Net
asset value per share for each class of the Fund and net asset value per unit
of the Master Portfolio are each determined by the Custodian of the Fund on
each day the Exchange is open for trading as of the close of regular trading on
the Exchange, which is currently 4:00 p.m. New York time.
Securities of the Master Portfolio for which market quotations are
available are valued at latest prices. Any security for which the primary
market is an exchange is valued at the last sale price on such exchange on the
day of valuation or, if there was no sale on such day, the latest bid price
quoted on such day. In the case of other securities, including U.S. Government
securities but excluding money market instruments maturing in 60 days or less,
the valuations are based on latest quoted bid prices. Money market instruments
maturing in 60 days or less are valued at amortized cost. The assets of the
Master Portfolio other than money market instruments maturing in 60 days or
less are valued at latest quoted bid prices. Prices may be furnished by a
reputable independent pricing service approved by the Board of Trustees.
Prices provided by an independent pricing service may be determined without
exclusive reliance on quoted prices and may take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data. All other securities and other assets of the Master
Portfolio for which current market quotations are not readily available are
valued at fair value as determined in good faith by the Trust's Trustees and in
accordance with procedures adopted by the Trustees.
Expenses and fees, including advisory fees, are accrued daily and
are taken into account for the purpose of determining the net asset value of
the Master Portfolio's interest and the Fund's shares.
13
<PAGE> 73
PORTFOLIO TRANSACTIONS
Purchases and sales of securities by the Master Portfolio usually
are principal transactions. Portfolio securities normally are purchased or
sold from or to dealers serving as market makers for the securities at a net
price. The Master Portfolio also may purchase portfolio securities in
underwritten offerings and may purchase securities directly from the issuer.
The cost of executing the Master Portfolio's portfolio securities transactions
consists primarily of dealer spreads and underwriting commissions. Under the
1940 Act, persons affiliated with the Trust are prohibited from dealing with
the Trust as a principal in the purchase and sale of securities unless an
exemptive order allowing such transactions is obtained from the SEC or an
exemption is otherwise available. The Master Portfolio may purchase securities
from underwriting syndicates of which Stephens or Wells Fargo Bank is a member
under certain conditions in accordance with the provisions of a rule adopted
under the 1940 Act and in compliance with procedures adopted by the Board of
Trustees.
Wells Fargo Bank, as the investment adviser of the Master
Portfolio, may, in circumstances in which two or more dealers are in a position
to offer comparable results for the Master Portfolio's portfolio transaction,
give preference to a dealer that has provided statistical or other research
services to Wells Fargo Bank. By allocating transactions in this manner, Wells
Fargo Bank is able to supplement its research and analysis with the views and
information of securities firms. Information so received is in addition to,
and not in lieu of, the services required to be performed by Wells Fargo Bank
under the Advisory Contract, and the expenses of Wells Fargo Bank are not
necessarily reduced as a result of the receipt of this supplemental research
information. Furthermore, research services furnished by dealers through which
Wells Fargo Bank places securities transactions for the Master Portfolio may be
used by Wells Fargo Bank in servicing its other accounts, and not all of these
services may be used by Wells Fargo Bank in connection with advising the Master
Portfolio.
The Trust has no obligation to deal with any dealer or group of
dealers in the execution of transactions in portfolio securities. Subject to
policies established by the Trust's Board of Trustees, Wells Fargo Bank is
responsible for the Master Portfolio's portfolio decisions and the placing of
portfolio transactions. In placing orders, it is the policy of the Company and
Trust to obtain the best results taking into account the dealer's general
execution and operational facilities, the type of transaction involved and
other factors such as the dealer's risk in positioning the securities involved.
While Wells Fargo Bank generally seeks reasonably competitive spreads or
commissions, the Master Portfolio does not necessarily pay the lowest spread or
commission available.
On June 30, 1995, the Predecessor Fund to the Master Portfolio
owned securities of its "regular brokers or dealers" or their parents, as
defined in the 1940 Act, as follows: $2,582,000 of Goldman Sachs & Co. Pooled
Repurchase Agreement.
14
<PAGE> 74
Portfolio Turnover. Portfolio turnover generally involves some
expenses to the Master Portfolio, including brokerage commissions or dealer
mark-ups and other transaction costs on the sale of securities and the
reinvestment in other securities. A high portfolio turnover rate should not
result in the Master Portfolio paying substantially more brokerage commissions,
since most transactions in government securities and municipal securities are
effected on a principal basis. Portfolio turnover can generate short-term
capital gain tax consequences. The portfolio turnover rate will not be a
limiting factor when Wells Fargo Bank deems portfolio changes appropriate.
FEDERAL INCOME TAXES
The following information supplements and should be read in
conjunction with the Prospectus sections entitled "Dividends and Distributions"
and "Taxes." The Prospectus of the Fund describes generally the tax treatment
of distributions by the Company. This section of the SAI includes additional
information concerning federal income tax.
Qualification of the Fund as a regulated investment company under
the Code requires, among other things, that (i) the Fund derive (a) at least
90% of its annual gross income from interest, payments with respect to
securities loans, dividends and gains from the sale or other disposition of
securities or options thereon; (ii) the Fund derive less than 30% of its gross
income from gains from the sale or other disposition of securities or options
thereon held for less than three months; and (iii) the Fund diversify its
holdings so that, at the end of each quarter of the taxable year, (a) at least
50% of the market value of the Fund's assets is represented by cash, government
securities and other securities limited in respect of any one issuer to an
amount not greater than 5% of the Fund's assets and 10% of the outstanding
voting securities of such issuer, and (b) not more than 25% of the value of its
assets is invested in the securities of any one issuer (other than U.S.
Government securities and the securities of other regulated investment
companies), or in two or more issuers which the Fund controls and which are
determined to be engaged in the same or similar trades or businesses. As a
regulated investment company, the Fund will not be subject to federal income
tax on its net investment income and net capital gains distributed to its
shareholders, provided that the it distributes to its stockholders at least 90%
of the sum of its net investment income and net tax-exempt income earned in
each year.
A 4% nondeductible excise tax will be imposed on the Fund to the
extent it does not meet certain minimum distribution requirements by the end of
each calendar year. For this purpose, any income or gain retained by the Fund
that is subject to income tax will be considered to have been distributed by
year-end. In addition, dividends and distributions of taxable income and
capital gains declared payable as of a record date in October, November or
December of any calendar year are deemed under the Code to have been
distributed by the Fund and received by the shareholders on December 31 of that
calendar year if the dividend is actually paid no later than January 31 of the
following year. Such dividends will, accordingly, be taxable to the recipient
shareholders in the year in which the
15
<PAGE> 75
record date falls. The Fund intends to distribute substantially all of its net
investment income and net capital gains and, thus, expects not to be subject to
the excise tax.
Income and dividends received by the Fund from sources within
foreign countries may be subject to withholding and other taxes (generally at
rates from 10% to 40%) imposed by such countries. Tax conventions between
certain countries and the United States may reduce or eliminate such taxes.
Because the Fund does not expect to hold more than 50% of the value of its
total assets in securities of foreign issuers, the Fund does not expect to be
eligible to elect to "pass through" foreign tax credits to shareholders.
The Master Portfolio will be treated as a non-publicly traded
partnership rather than as a regulated investment company or a corporation
under the Code. As a non-publicly traded partnership under the Code, any
interest, dividends and gains or losses of the Master Portfolio will be deemed
to have been "passed through" to the Fund and other investors in the Master
Portfolio, regardless of whether such interest, dividends or gains have been
distributed by the Master Portfolio or losses have been realized by the Fund
and other investors. Therefore, to the extent the Master Portfolio were to
accrue but not distribute any interest, dividends or gains, or accrue losses,
the Fund would be deemed to have realized and recognized its proportionate
share of interest, dividends, gains or losses without receipt of any
corresponding distribution. However, the Trust will seek to minimize
recognition by investors of interest, dividends, gains or losses without a
corresponding distribution.
Gains or losses on sales of portfolio securities by the Master
Portfolio will generally be long-term capital gains or losses if the securities
have been held by it for more than one year, except in certain cases such as
where the Master Portfolio acquires a put or writes a call thereon. Other
gains or losses on the sale of securities will be short-term capital gains or
losses. To the extent that the Fund recognizes long-term capital gains, such
gains will be distributed at least annually and these distributions will be
taxable to shareholders as long-term capital gains, regardless of how long a
shareholder has held Fund shares. Such distributions will be designated as
capital gain distributions in a written notice mailed by the Fund to
shareholders not later than 60 days after the close of the Fund's taxable year.
If a shareholder receives such a designated capital gain distribution (to be
treated by the shareholder as a long-term capital gain) with respect to any
Fund share and such Fund share is held for six months or less, then (unless
otherwise disallowed) any loss on the sale or exchange of that Fund share will
be treated as a long-term capital loss to the extent of the designated capital
gain distribution. Gains recognized on the disposition of a debt obligation
(including tax-exempt obligations purchased after April 30, 1993) purchased by
the Fund at a market discount (generally, at a price less than its principal
amount) will be treated as ordinary income to the extent of the portion of the
market discount which accrued during the period of time the Master Portfolio
held the debt obligation.
As of the printing of this SAI, the maximum individual marginal
tax rate applicable to ordinary income is 39.60% (effective rates may be higher
for some individuals
16
<PAGE> 76
due to phase out of exemptions and elimination of deductions); the maximum
individual marginal tax rate applicable to net capital gains is 28.00%; and the
maximum marginal corporate tax rate applicable to ordinary income and net
capital gains is 35.00% (except that to eliminate the benefit of lower marginal
corporate income tax rates, corporations which have taxable income in excess of
$100,000 for a taxable year will be required to pay an additional amount of
income tax of up to $11,750 and corporations which have taxable income in
excess of $15,000,000 for a taxable year will be required to pay an additional
amount of tax of up to $100,000). Naturally, the amount of tax payable by an
individual or corporation will be affected by a combination of tax laws
covering, for example, deductions, credits, deferrals, exemptions, sources of
income and other matters.
If a shareholder exchanges or otherwise disposes of shares of the
Fund within 90 days of having acquired such shares and if, as a result of
having acquired those shares, the shareholder subsequently pays a reduced sales
charge for shares of the Fund or of a different fund, the sales charge
previously incurred acquiring the Fund's shares shall not be taken into account
(to the extent such previous sales charges do not exceed the reduction in sales
charges) for the purpose of determining the amount of gain or loss on the
exchange, but will be treated as having been incurred in the acquisition of
such other shares.
Also, any loss realized on a redemption or exchange of shares of
the Fund will be disallowed to the extent that substantially identical shares
are reacquired within the 61-day period beginning 30 days before and ending 30
days after the shares are disposed of.
If, in the opinion of the Company, ownership of its shares has or
may become concentrated to an extent that could cause the Company to be deemed
a personal holding company within the meaning of the Code, the Company may
require the redemption of shares or reject any order for the purchase of shares
in an effort to prevent such concentration.
Foreign Shareholders. Under the Code, distributions of net
investment income by the Fund to a nonresident alien individual, nonresident
alien fiduciary of a trust or estate, foreign corporation, or foreign
partnership (a "foreign shareholder") will be subject to U.S. withholding tax
(at a rate of 30% or a lower treaty rate). Withholding will not apply if a
dividend paid by the Fund to a foreign shareholder is "effectively connected"
with a U.S. trade or business, in which case the reporting and withholding
requirements applicable to U.S. citizens, U.S. residents or domestic
corporations will apply. Distributions of net long-term capital gains are not
subject to tax withholding, but in the case of a foreign shareholder who is a
nonresident alien individual, such distributions ordinarily will be subject to
U.S. income tax at a rate of 30% if the individual is physically present in the
U.S. for more than 182 days during the taxable year.
Other Matters. Investors should be aware that the investments to
be made by the Master Portfolio may involve sophisticated tax rules such as
mark to market rules that would result in income or gain recognition by the
Master Portfolio without corresponding
17
<PAGE> 77
current cash receipts. Although the Master Portfolio will seek to avoid
significant noncash income, such noncash income could be recognized by the
Master Portfolio, in which case the Portfolio may distribute cash derived from
other sources in order to meet the minimum distribution requirements described
above.
CAPITAL STOCK
The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "the Fund, the Master
Portfolio and Management Capital Stock."
The Company, an open-end management investment company, was
incorporated in Maryland on September 9, 1991. The authorized capital stock of
the Company consists of 17,000,000,000 shares having a par value of $.001 per
share. As of the date of this SAI, the Company's Board of Directors has
authorized the issuance of thirteen series of shares, each representing an
interest in one portfolio -- the Asset Allocation, California Tax-Free Bond,
California Tax-Free Income, California Tax-Free Money Market Mutual, Corporate
Stock, Diversified Income, Ginnie Mae, Growth and Income, Money Market Mutual,
National Tax-Free Money Market Mutual, Short-Intermediate U.S. Government
Income, U.S. Government Allocation and Variable Rate Government Funds -- and
the Board of Directors may, in the future, authorize the issuance of other
series of capital stock representing shares of additional investment
portfolios.
The Fund is comprised of two classes of shares, Class A Shares and
Class B Shares. With respect to matters that affect one class but not another,
shareholders vote as a class; for example, the approval of a Plan. Subject to
the foregoing, on any matter submitted to a vote of shareholders, all shares
then entitled to vote will be voted separately by series unless otherwise
required by the Act, in which case all shares will be voted in the aggregate.
For example, a change in a series' fundamental investment policy affects only
one series and would be voted upon only by shareholders of the series and not
by shareholders of the Company's other series. Additionally, approval of an
advisory contract is a matter to be determined separately by each series.
Approval by the shareholders of one series is effective as to that series
whether or not sufficient votes are received from the shareholders of the other
series to approve the proposal as to those series. As used in the Prospectus
and in this SAI, the term "majority" when referring to approvals to be obtained
from shareholders of a class of the Fund, means the vote of the lesser of (i)
67% of the shares of such class the Fund represented at a meeting if the
holders of more than 50% of the outstanding shares such class of the Fund are
present in person or by proxy, or (ii) more than 50% of the outstanding shares
of such class the Fund. The term "majority," when referring to the approvals
to be obtained from shareholders of the Company as a whole, means the vote of
the lesser of (i) 67% of the Company's shares represented at a meeting if the
holders of more than 50% of the Company's outstanding shares are present in
person or by proxy, or (ii) more than 50% of the Company's outstanding shares.
Shareholders are entitled to one vote for each full share held and fractional
votes for fractional shares held.
18
<PAGE> 78
The Company may dispense with an annual meeting of shareholders in
any year in which it is not required to elect directors under the Act.
However, the Company has undertaken to hold a special meeting of its
shareholders for the purpose of voting on the question of removal of a director
or directors if requested in writing by the holders of at least 10% of the
Company's outstanding voting securities, and to assist in communicating with
other shareholders as required by Section 16(c) of the 1940 Act.
Each share of a class of the Fund represents an equal proportional
interest in the Fund with each other share in the same class and is entitled to
such dividends and distributions out of the income earned on the assets
belonging to the Fund as are declared in the discretion of the Directors. In
the event of the liquidation or dissolution of the Company, shareholders of the
Fund are entitled to receive the assets attributable to the relevant class of
shares of the Fund that are available for distribution, and a distribution of
any general assets not attributable to a particular investment portfolio that
are available for distribution in such manner and on such basis as the
Directors in their sole discretion may determine.
Shareholders are not entitled to any preemptive rights. All
shares, when issued for the consideration described in the Prospectus, will be
fully paid and non-assessable by the Company.
The Trust is a business trust organized under the laws of
Delaware. In accordance with Delaware law and in connection with the tax
treatment sought by the Trust, the Trust's Declaration of Trust provides that
its investors would be personally responsible for Trust liabilities and
obligations, but only to the extent the Trust property is insufficient to
satisfy such liabilities and obligations. The Declaration of Trust also
provides that the Trust shall maintain appropriate insurance (for example,
fidelity bonding and errors and omissions insurance) for the protection of the
Trust, its investors, Trustees, officers, employees and agents covering
possible tort and other liabilities, and that investors will be indemnified to
the extent they are held liable for a disproportionate share of Trust
obligations. Thus, the risk of an investor incurring financial loss on account
of investor liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.
The Declaration of Trust further provides that obligations of the
Trust are not binding upon the Trustees individually but only upon the property
of the Trust and that the Trustees will not be liable for any action or failure
to act. However, nothing in the Declaration of Trust protects a Trustee
against any liability to which the Trustee would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of the Trustee's office.
The interests in the Master Portfolio have substantially identical
voting and other rights as those rights enumerated above for Fund shares. The
Trust also intends to dispense with annual meetings, but will hold a special
meeting and assist investor communications under the circumstances described
above with respect to the Company in
19
<PAGE> 79
accord with provisions under Section 16(c) of the Act. Whenever the Fund is
requested to vote on a matter with respect to the Master Portfolio, the Fund
will hold a meeting of Fund shareholders and will cast its votes as instructed
by such shareholders. In a situation where the Fund does not receive
instruction from certain of its shareholders on how to vote the corresponding
shares of the Master Portfolio, the Fund will vote such shares in the same
proportion as the shares for which the Fund does receive voting instructions.
As of February 28, 1996, no shareholders were known by the Company
to own more than 5% of the outstanding shares of any class of the Fund.
OTHER
The Registration Statement of the Trust and the Company, including
the Fund's Prospectus, the SAI and the exhibits filed therewith, may be
examined at the office of the SEC in Washington, D.C. Statements contained in
the Prospectus or the SAI as to the contents of any contract or other document
referred to herein or in the Prospectus are not necessarily complete, and, in
each instance, reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. The Annual Report will be sent
free of charge to any shareholder who requests it.
CUSTODIAN AND TRANSFER AND
DIVIDEND DISBURSING AGENT
The following information supplements and should be read in
conjunction with the section of the Prospectus entitled "Custodian, Transfer
and Dividend Disbursing Agent." Wells Fargo Bank has been retained to act as
Custodian and Transfer and Dividend Disbursing Agent for the Fund and the
Master Portfolio. The Custodian, among other things, maintains a custody
account or accounts in the name of the Fund and the Master Portfolio; receives
and delivers all assets for the Fund and the Master Portfolio upon purchase and
upon sale or maturity; collects and receives all income and other payments and
distributions on account of the assets of the Fund and the Master Portfolio and
pays all expenses of the Fund and the Master Portfolio. For its services as
Custodian, Wells Fargo Bank receives an asset-based fee and transaction charge
from the Master Portfolio; and for its services as transfer and dividend and
disbursing agent, it receives a base fee and per-account fees from the Fund.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP has been selected as the independent
auditors for the Company and the Trust. KPMG Peat Marwick LLP provides audit
services, tax return preparation and assistance and consultation in connection
with review of certain SEC
20
<PAGE> 80
filings. KPMG Peat Marwick LLP's address is Three Embarcadero Center, San
Francisco, California 94111.
FINANCIAL INFORMATION
The audited financial statements and portfolio of investments
contained in the Annual Reports for the Company for the most recent fiscal year
are hereby incorporated by reference in this SAI. The Annual Report will be
sent free of charge with this SAI to any shareholder who requests the SAI.
21
<PAGE> 81
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS - 98.90%
11,919 Abbott Laboratories $ 372,911 $ 482,720
1,591 Advanced Micro Devices+ 50,365 57,873
1,723 Aetna Life & Casualty Co 100,839 108,334
1,790 Ahmanson (H F) & Co 36,364 39,380
1,637 Air Products & Chemicals Inc 74,866 91,263
7,411 Airtouch Communications+ 178,297 211,214
457 Alberto-Culver Co Class B 11,837 13,824
3,840 Albertson's Inc 107,294 114,240
3,343 Alcan Aluminium Ltd 76,881 101,126
774 Alco Standard Corp 44,759 61,823
681 Alexander & Alexander Services 16,178 16,259
964 Allergan Inc 23,582 26,149
4,254 Allied Signal Inc 161,395 189,303
2,867 Alltel Corp 82,927 72,750
2,695 Aluminum Co of America 105,890 135,087
1,200 ALZA Corp+ 26,680 28,050
1,736 Amdahl Corp+ 13,247 19,313
1,359 Amerada Hess Corp 69,979 66,421
2,771 American Brands Inc 97,298 110,147
2,819 American Electric Power Inc 102,069 99,017
7,432 American Express Corp 229,520 261,049
3,058 American General Corp 101,179 103,208
1,125 American Greetings Corp Class A 32,604 33,047
4,580 American Home Products Corp 311,125 354,378
4,678 American International Group Inc 465,052 533,292
2,236 American Stores Co 52,893 62,888
8,280 Ameritech Corp 350,406 364,320
1,931 Amgen Inc+ 96,306 155,325
7,356 Amoco Corp 441,654 490,094
3,122 AMP Inc 110,610 131,905
1,140 AMR Corp+ 75,184 85,073
557 Andrew Corp+ 13,421 32,236
3,814 Anheuser-Busch Inc 196,350 216,921
1,818 Apple Computer Inc 64,041 84,423
1,237 Applied Materials Inc+ 69,977 107,155
7,691 Archer-Daniels-Midland Co 123,673 143,245
</TABLE>
22
<PAGE> 82
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,590 Armco Inc+ $ 10,584 $ 10,733
506 Armstrong World Industries Inc 22,391 25,363
652 ASARCO Inc 14,978 19,886
936 Ashland Inc 31,383 32,877
23,629 AT & T Corp 1,322,764 1,255,291
2,381 Atlantic Richfield Corp 271,671 261,315
726 Autodesk Inc 21,245 31,218
2,180 Automatic Data Processing 120,616 137,068
757 Avery Dennison Corp 23,610 30,280
969 Avon Products Inc 57,200 64,923
2,147 Baker Hughes Inc 51,709 44,014
487 Ball Corp 15,271 16,984
738 Bally Entertainment Corp+ 6,816 9,041
2,193 Baltimore Gas & Electric Co 55,990 54,825
5,914 Banc One Corp 210,737 190,727
1,653 Bank of Boston Corp 46,292 61,988
2,848 Bank of New York Inc+ 98,806 114,988
5,538 BankAmerica Corp 264,679 291,437
1,138 Bankers Trust N Y Corp 81,206 70,556
794 Bard (C R) Inc 20,592 23,820
1,423 Barnett Banks Inc 65,365 72,929
5,284 Barrick Gold Corp 147,736 133,421
176 Bassett Furniture Industries 5,740 4,928
900 Bausch & Lomb Inc 39,722 37,350
4,145 Baxter International Inc 119,974 150,774
1,028 Becton Dickenson & Co 45,182 59,881
6,540 Bell Atlantic Corp 381,784 366,240
7,440 BellSouth Corp 439,237 472,440
797 Bemis Co Inc 19,186 20,722
812 Beneficial Corp 32,255 35,728
1,609 Bethlehem Steel Corp+ 25,254 26,146
1,304 Beverly Enterprises+ 14,810 16,137
1,772 Biomet Inc+ 20,760 27,466
1,239 Black & Decker Corp 29,519 38,254
1,590 Block (H & R) Inc 62,435 65,389
1,898 Boatmen's Bancshares Inc 59,504 66,905
</TABLE>
23
<PAGE> 83
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
5,045 Boeing Co $ 229,092 $ 315,943
736 Boise Cascade Corp 20,525 29,808
2,224 Boston Scientific Corp+ 50,583 70,890
404 Briggs & Stratton Corp 14,438 13,938
7,543 Bristol-Myers Squibb Co 451,161 513,867
272 Brown Group Inc 8,340 6,188
1,050 Brown-Forman Corp Class B 30,426 35,044
3,169 Browning-Ferris Industries Inc 91,691 114,480
1,170 Bruno's Inc 13,185 13,601
1,397 Brunswick Corp 24,334 23,749
1,340 Burlington Northern Inc 74,064 84,923
1,923 Burlington Resources Inc 83,000 70,911
1,063 Cabletron Systems Inc+ 56,328 56,605
3,677 Campbell Soup Co 156,012 180,173
2,270 Capital Cities/ABC Inc 150,151 245,160
2,305 Carolina Power & Light Co 71,689 69,726
3,025 Caterpillar Inc 141,007 194,356
941 CBS Inc 54,624 63,047
407 Centex Corp 14,383 11,498
2,861 Central & South West Corp 84,061 75,101
694 Ceridian Corp+ 16,759 25,591
1,391 Champion International Corp 50,594 72,506
1,533 Charming Shoppes Inc 15,160 8,048
2,641 Chase Manhattan Corp 99,842 124,127
3,592 Chemical Banking Corp Class A 149,749 169,722
9,668 Chevron Corp 449,318 450,771
5,475 Chrysler Corp 243,372 262,116
1,281 Chubb Corp 110,467 102,640
1,081 CIGNA Corp 71,941 83,913
462 Cincinnati Milacron Inc 10,765 12,474
2,312 Cinergy Corp 56,342 60,690
1,400 Circuit City Stores Inc 37,016 44,275
4,018 Cisco Systems Inc+ 146,614 203,160
5,921 Citicorp 235,946 342,678
824 Clorox Co 45,200 53,766
1,524 Coastal Corp 43,839 46,292
</TABLE>
24
<PAGE> 84
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
18,887 Coca-Cola Co $ 929,390 $ 1,204,046
2,129 Colgate-Palmolive Co 127,432 155,683
800 Columbia Gas System Inc+ 21,132 25,400
6,638 Columbia HCA Healthcare Corp 273,658 287,094
3,619 Comcast Corp Class A 70,874 67,178
612 Community Psychiatric Centers+ 7,110 6,885
3,895 Compaq Computer Corp+ 99,204 176,736
2,381 Computer Associates International Inc 103,620 161,313
837 Computer Sciences Corp+ 33,747 47,604
3,693 ConAgra Inc 103,927 128,793
1,192 Conrail Inc 65,140 66,305
3,504 Consolidated Edison Co 115,909 103,368
600 Consolidated Freightways 11,744 13,275
1,351 Consolidated Natural Gas Co 64,042 51,000
1,776 Cooper Industries Inc 81,018 70,152
1,235 Cooper Tire & Rubber Co 32,053 30,103
533 Coors (Adolph) Co Class B 9,770 8,728
2,132 CoreStates Financial Corp 62,358 74,354
3,375 Corning Inc 109,096 110,531
2,207 CPC International Inc 110,215 136,282
402 Crane Co 12,044 14,573
376 Cray Research Inc+ 8,418 9,165
1,387 Crown Cork & Seal Co+ 55,396 69,523
1,546 CSX Corp 119,290 116,143
1,736 CUC International Inc+ 68,453 72,912
581 Cummins Engine Co Inc 25,888 25,346
1,433 Cyprus Amax Minerals 38,475 40,841
1,537 Dana Corp 41,530 43,997
2,356 Darden Restaurants Inc+ 26,005 25,622
513 Data General Corp+ 4,859 4,938
1,093 Dayton-Hudson Corp 75,356 78,423
2,530 Dean Witter Discover & Co 104,189 118,910
1,262 Deere & Co 95,762 108,059
778 Delta Air Lines Inc 45,032 57,378
1,194 Deluxe Corp 41,227 39,551
2,170 Detroit Edison Co 70,474 64,015
</TABLE>
25
<PAGE> 85
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,366 Dial Corp $ 29,348 $ 33,809
2,228 Digital Equipment Corp+ 89,101 90,791
1,729 Dillard Department Stores Inc Class A 57,150 50,789
7,754 Disney (Walt) Co 354,061 431,316
2,558 Dominion Resources Inc 109,841 93,367
2,280 Donnelley (R R) & Sons Co 72,658 82,080
888 Dover Corp 50,585 64,602
4,151 Dow Chemical Co 264,113 298,353
1,427 Dow Jones & Co Inc 47,737 52,621
2,775 Dresser Industries Inc 61,776 61,744
1,718 DSC Communications Corp+ 58,024 79,887
3,083 Duke Power Co 126,902 127,945
2,503 Dun & Bradstreet Corp 146,411 131,408
8,222 DuPont (E I) de Nemours 456,608 565,263
297 Eastern Enterprises 8,123 8,873
1,240 Eastman Chemical Co 64,315 73,780
5,114 Eastman Kodak Co 259,993 310,036
1,125 Eaton Corp 56,833 65,391
919 Echlin Inc 28,860 31,935
1,693 Echo Bay Mines Ltd 16,434 15,237
988 Ecolab Inc 22,300 24,206
779 EG & G Inc 14,420 13,048
3,446 Emerson Electric Co 216,480 246,389
1,418 Engelhard Corp 43,653 60,797
3,745 Enron Corp 128,985 131,543
1,007 Enserch Corp 18,731 17,245
3,411 Entergy Corp 109,023 82,290
18,552 Exxon Corp 1,241,909 1,310,235
855 Federal Express Corp+ 51,854 51,941
2,671 Federal Home Loan Mortgage Corp 153,722 183,631
4,019 Federal National Mortgage Association 333,167 379,293
680 Federal Paper Board Co 18,121 24,055
1,339 First Chicago Corp 65,513 80,173
1,777 First Data Corp 92,939 101,067
1,213 First Fidelity Bancorp 57,734 71,567
1,085 First Interstate Bancorp 79,253 87,071
</TABLE>
26
<PAGE> 86
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
304 First Mississippi Corp $ 4,353 $ 10,374
2,604 First Union Corp 119,735 117,831
2,132 Fleet Financial Group Inc 70,162 79,151
663 Fleetwood Enterprises Inc 14,492 13,094
605 Fleming Co Inc 17,262 16,033
1,239 Fluor Corp 57,228 64,428
584 FMC Corp+ 31,683 39,274
15,358 Ford Motor Co 415,262 456,901
582 Foster Wheeler Corp 19,406 20,516
2,741 FPL Group Inc 104,851 105,871
1,119 Fruit of the Loom Inc Class A+ 30,184 23,639
2,090 Gannett Co Inc 109,299 113,383
2,160 Gap Inc 67,633 75,330
981 General Dynamics Corp 42,550 43,532
25,235 General Electric Co 1,309,884 1,422,623
2,356 General Mills Inc 120,771 121,040
11,153 General Motors Corp 519,594 522,797
1,761 General Public Utilities 52,599 52,390
1,197 General Re Corp 152,873 160,248
746 General Signal Corp 25,903 29,654
1,793 Genuine Parts Co 67,542 67,910
1,300 Georgia-Pacific Corp 91,510 112,775
901 Giant Food Inc Class A 22,179 25,566
564 Giddings & Lewis Inc 11,794 10,082
6,598 Gillette Co 216,976 294,436
834 Golden West Financial 36,060 39,302
366 Goodrich (B F) Co 16,886 19,627
2,252 Goodyear Tire & Rubber Co 92,899 92,895
1,355 Grace (W R) & Co 64,281 83,163
794 Grainger (W W) Inc 46,185 46,648
548 Great Atlantic & Pacific Tea Co 14,174 14,454
963 Great Lakes Chemical Corp 63,732 58,021
2,040 Great Western Financial Corp 38,568 42,075
14,440 GTE Corp 510,091 492,765
1,664 Halliburton Co 62,839 59,488
454 Handleman Co 5,543 4,370
</TABLE>
27
<PAGE> 87
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,062 Harcourt General Inc $ 39,899 $ 45,135
506 Harland (John H) Co 12,582 11,575
639 Harnischfeger Industries Inc 15,685 22,125
625 Harris Corp 27,835 32,266
1,271 Hasbro Inc 44,666 40,354
3,651 Heinz (H J) Co 142,997 162,013
419 Helmerich & Payne Inc 13,400 12,361
1,768 Hercules Inc 65,365 86,190
1,253 Hershey Foods Corp 61,794 69,228
7,571 Hewlett Packard Co 363,786 564,040
755 Hilton Hotels Corp 42,462 53,039
6,746 Home Depot Inc 281,397 274,056
2,108 Homestake Mining Co 37,544 34,782
1,942 Honeywell Inc 72,141 83,749
1,436 Household International Inc 57,820 71,082
2,003 Houston Industries Inc 88,510 84,376
1,655 Illinois Tool Works Inc 71,189 91,025
1,707 Inco Ltd 39,521 48,223
1,532 Ingersoll-Rand Co 55,763 58,599
732 Inland Steel Industries Inc 20,585 22,326
12,406 Intel Corp 481,813 785,455
725 Intergraph Corp+ 8,110 8,066
8,664 International Business Machines Corp 537,871 831,744
1,620 International Flavors & Fragrances 67,848 80,595
1,855 International Paper Co 130,730 159,066
1,161 Interpublic Group Cos Inc 36,677 43,538
1,569 ITT Corp 144,540 184,358
1,191 James River Corp 26,953 32,901
670 Jefferson-Pilot Corp 35,923 36,683
9,615 Johnson & Johnson 476,906 650,214
633 Johnson Controls Inc 34,896 35,765
652 Jostens Inc 13,670 13,855
6,810 K Mart Corp 131,034 99,596
524 Kaufman & Broad Home Corp 9,252 7,598
3,246 Kellogg Co 182,065 231,683
786 Kerr-McGee Corp 41,446 42,149
</TABLE>
28
<PAGE> 88
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
3,584 KeyCorp $ 108,776 $ 112,448
2,380 Kimberly-Clark Corp 123,636 142,503
584 King World Productions+ 22,716 23,652
734 Knight-Ridder Inc 40,402 41,746
1,680 Kroger Co+ 36,908 45,150
4,156 Laidlaw Inc Class B 36,938 40,002
4,390 Lilly (Eli) & Co 257,961 344,615
5,385 Limited Inc 114,270 118,470
1,390 Lincoln National Corp 60,183 60,813
1,095 Liz Claiborne Inc 24,783 23,269
2,993 Lockheed Martin Corp 143,441 188,933
891 Loews Corp 99,174 107,811
300 Longs Drug Stores Corp 10,100 11,250
1,220 Loral Corp 44,924 63,135
722 Lotus Development Corp+ 28,921 46,028
535 Louisiana Land & Exploration Co 22,447 21,333
1,641 Louisiana-Pacific Corp 52,824 43,076
2,388 Lowe's Co Inc 58,516 71,342
374 Luby's Cafeterias Inc 8,290 7,527
379 M/A-Com Inc+ 2,981 4,453
1,114 Mallinckrodt Group Inc 35,599 39,547
923 Manor Care Inc 22,150 26,882
1,797 Marriott International 50,792 64,467
1,125 Marsh & McLennan Companies Inc 95,477 91,266
2,398 Masco Corp 71,888 64,746
3,327 Mattel Inc 69,809 86,502
3,667 May Co Department Stores Co 144,767 152,639
1,602 Maytag Corp 26,257 25,632
2,212 MBNA Corp 56,135 74,655
850 McDermott International Inc 23,767 20,506
10,383 McDonald's Corp 314,183 406,235
1,719 McDonnell Douglas Corp 69,029 131,933
767 McGraw-Hill Inc 53,600 58,196
10,206 MCI Communications 247,389 224,532
803 Mead Corp 38,175 47,678
1,762 Medtronic Inc 84,971 135,894
</TABLE>
29
<PAGE> 89
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
2,184 Mellon Bank Corp $ 85,858 $ 90,909
1,517 Melville Corp 61,930 51,957
497 Mercantile Stores Co Inc 19,326 23,111
18,472 Merck & Co Inc 693,184 905,128
421 Meredith Corp 9,219 10,683
2,573 Merrill Lynch & Co Inc 119,862 135,083
3,056 Micron Technology Inc 81,692 167,698
8,627 Microsoft Corp+ 546,445 779,665
343 Millipore Corp 14,001 23,153
6,233 Minnesota Mining & Manufacturing Co 345,425 356,839
5,912 Mobil Corp 498,605 567,552
1,662 Monsanto Co 116,592 149,788
1,452 Moore Corp Ltd 28,088 32,126
2,747 Morgan (J P) & Co Inc 197,685 192,633
451 Morrison Knudsen Corp 8,763 3,044
2,233 Morton International Inc 64,845 65,315
8,785 Motorola Inc 453,161 589,693
134 NACCO Industries Inc Class A 6,310 8,023
1,011 Nalco Chemical Co 35,860 36,775
2,206 National City Corp 62,091 64,801
1,887 National Semiconductor+ 36,613 52,364
688 National Service Industries Inc 18,201 19,866
4,028 NationsBank 207,939 216,002
1,166 Navistar International Corp+ 23,350 17,636
2,422 NBD Bancorp Inc 77,459 77,504
1,441 New York Times Co Class A 35,012 33,864
2,339 Newell Co 48,019 57,306
1,254 Newmont Mining Corp 51,019 52,511
2,178 Niagara Mohawk Power Corp 43,812 32,126
785 NICOR Inc 21,242 21,097
1,078 Nike Inc Class B 67,686 90,552
1,836 NorAm Energy Corp 14,286 11,934
1,191 Nordstrom Inc 40,930 49,278
1,930 Norfolk Southern Corp 128,995 130,034
1,020 Northern States Power Co 46,789 47,048
3,758 Northern Telecom Ltd 115,780 137,167
</TABLE>
30
<PAGE> 90
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
754 Northrop Grumman Corp $ 31,326 $ 39,302
4,867 Norwest Corp 129,972 139,926
5,504 Novell Inc+ 108,877 109,736
1,261 Nucor Corp 60,152 67,464
6,350 NYNEX Corp 273,571 255,588
4,754 Occidental Petroleum Corp 101,764 108,748
780 Ogden Corp 17,364 17,063
2,253 Ohio Edison Co 52,407 50,974
445 ONEOK Inc 9,018 9,512
6,443 Oracle Systems Corp+ 150,610 248,861
1,560 Oryx Energy Co 29,062 21,450
349 Outboard Marine Corp 7,098 6,849
685 Owens Corning Fiberglass+ 27,677 25,259
614 PACCAR Inc 31,452 28,705
1,192 Pacific Enterprises 30,327 29,204
6,455 Pacific Gas & Electric Co 208,562 187,195
6,360 Pacific Telesis Group 196,260 170,130
4,249 PacifiCorp 81,529 79,669
1,764 Pall Corp 34,383 39,249
2,238 Panhandle Eastern Corp 54,115 54,551
1,088 Parker Hannifin Corp 29,731 39,440
3,301 PECO Energy Co 98,398 91,190
3,439 Penney (J C) Co Inc 155,614 165,072
706 Pennzoil Co 41,088 33,270
476 Peoples Energy Corp 14,663 12,317
932 Pep Boys-Manny Moe & Jack 23,627 24,931
11,753 Pepsico Inc 479,225 536,231
577 Perkin-Elmer Corp 19,004 20,484
4,672 Pfizer Inc 338,313 431,576
1,084 Phelps Dodge Corp 54,291 63,956
12,589 Philip Morris Co Inc 715,810 936,307
3,935 Phillips Petroleum Co 129,860 131,331
1,236 Pioneer Hi Bred International Inc 45,916 51,912
2,222 Pitney Bowes Inc 88,067 85,269
658 Pittston Services Group 14,284 15,792
3,554 Placer Dome Inc 78,485 92,848
</TABLE>
31
<PAGE> 91
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
3,409 PNC Bank Corp $ 97,219 $ 89,912
635 Polaroid Corp 22,608 25,876
475 Potlatch Corp 20,520 19,831
3,064 PPG Industries Inc 110,762 131,752
2,071 Praxair Inc 38,570 51,775
877 Premark International Inc 32,027 45,494
2,918 Price/Costco Inc+ 50,393 47,418
10,221 Procter & Gamble Co 587,904 734,634
1,498 Promus Co Inc+ 61,438 58,422
1,415 Providian Corp 54,936 51,294
3,708 Public Services Enterprise Group 119,918 102,897
405 Pulte Corp 12,877 11,340
2,024 Quaker Oats Co 69,034 66,539
1,544 Ralston-Purina Group 62,736 78,744
687 Raychem Corp 26,371 26,364
1,876 Raytheon Co 125,660 145,625
1,181 Reebok International Ltd 34,279 40,154
942 Reynolds Metals Co 46,948 48,749
1,254 Rite Aid Corp 25,112 32,134
626 Roadway Services Inc 34,289 29,579
3,192 Rockwell International Corp 122,640 146,034
1,044 Rohm & Haas Co 58,027 57,290
1,255 Rowan Co Inc+ 10,869 10,197
7,975 Royal Dutch Petroleum Co 865,795 971,953
2,404 Rubbermaid Inc 74,906 66,711
615 Russell Corp 17,733 17,681
765 Ryan's Family Steak House+ 6,286 6,024
1,205 Ryder System Inc 29,868 28,769
973 SAFECO Corp 58,952 55,887
880 Safety-Kleen Corp 14,342 14,190
1,532 Salomon Inc 66,918 61,472
1,332 Santa Fe Energy Resources Inc 13,142 12,654
2,316 Santa Fe Pacific Corp 41,756 59,058
1,953 Santa Fe Pacific Gold Corp 26,969 23,680
7,136 Sara Lee Corp 187,033 203,376
9,066 SBC Communication Inc 392,848 431,768
</TABLE>
32
<PAGE> 92
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
6,690 SCEcorp $ 141,546 $ 114,566
5,510 Schering-Plough Corp 188,044 243,129
3,622 Schlumberger Ltd 229,859 225,017
1,115 Scientific-Atlanta Inc 20,587 24,530
2,228 Scott Paper Co 62,470 110,286
5,543 Seagram Co Ltd 151,438 191,926
5,755 Sears Roebuck & Co 301,358 344,581
1,441 Service Corp International 37,630 45,572
336 Shared Medical System Corp 8,810 13,482
1,935 Shawmut National Corp 48,578 61,678
1,247 Sherwin Williams Co 42,805 44,424
582 Shoney's Inc+ 10,707 6,839
789 Sigma Aldrich Corp 31,338 38,760
2,371 Silicon Graphics Inc+ 83,086 94,544
153 Skyline Corp 2,924 2,773
586 Snap-On Inc 23,203 22,708
1,311 Sonat Inc 42,285 39,986
9,983 Southern Co 214,327 223,370
2,181 Southwest Airlines Co 56,722 52,071
264 Springs Industries Inc Class A 10,066 9,834
5,222 Sprint Corp 179,454 175,590
205 SPX Corp 3,284 2,332
729 St Jude Medical Inc 26,981 36,541
1,214 St Paul Co Inc 55,868 59,790
710 Stanley Works 29,317 26,891
1,352 Stone Container Corp+ 19,316 28,730
764 Stride Rite Corp 10,512 7,927
1,649 Sun Co Inc 47,900 45,141
1,462 Sun Microsystems Inc+ 47,650 70,907
1,718 SunTrust Banks Inc 82,946 100,074
1,075 Super Value Inc 34,697 31,309
2,712 Sysco Corp 76,539 80,004
1,694 Tandem Computers Inc+ 19,764 27,316
1,047 Tandy Corp 42,381 54,313
491 Tektronix Inc 16,161 24,182
9,800 Tele-Communication Inc Class A+ 228,025 229,688
</TABLE>
33
<PAGE> 93
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
872 Teledyne Inc+ $ 21,128 $ 21,364
848 Temple-Inland Inc 37,758 40,386
2,958 Tenet Healthcare Corp+ 39,914 42,521
2,668 Tenneco Inc 131,566 122,728
3,825 Texaco Inc 251,865 251,016
1,386 Texas Instruments Inc 122,180 185,551
3,375 Texas Utilities Co 142,543 116,016
1,228 Textron Inc 68,391 71,378
289 Thomas & Betts Corp 18,464 19,760
5,651 Time Warner Inc 222,355 232,397
1,707 Times Mirror Co Class A 37,584 40,755
447 Timken Co 15,621 20,618
1,123 TJX Companies Inc 25,448 14,880
1,095 Torchmark Corp 54,287 41,336
4,142 Toys R Us Inc+ 137,061 121,154
1,065 Transamerica Corp 61,798 62,036
4,756 Travelers Inc 202,254 208,075
1,015 Tribune Co 55,441 62,296
413 Trinova Corp 12,112 14,455
989 TRW Inc 67,091 78,996
1,106 Tyco International Inc 53,983 59,724
1,439 U.S. Bancorp 36,553 34,626
2,360 U.S. Healthcare Inc 98,984 72,275
382 U.S. Life Corp 15,153 15,376
7,044 U.S. West Inc 310,445 293,207
3,214 Unicom Corp 90,568 85,573
2,362 Unilever NV 271,231 307,355
1,074 Union Camp Corp 51,554 62,158
2,027 Union Carbide Corp 45,888 67,651
1,493 Union Electric Co 60,700 55,614
3,065 Union Pacific Corp 184,097 169,724
2,579 Unisys Corp+ 28,214 28,047
2,535 United Healthcare Corp 109,906 104,886
870 United States Surgical 20,719 18,161
1,876 United Technologies Corp 118,807 146,563
3,630 Unocal Corp 104,719 100,279
</TABLE>
34
<PAGE> 94
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,078 UNUM Corp $ 55,938 $ 50,531
2,564 Upjohn Co 79,205 97,112
929 USAir Group Inc+ 11,881 10,800
1,440 USF & G Corp 23,466 23,400
2,940 UST Inc 83,084 87,465
4,409 USX - Marathon Group 84,061 87,078
1,157 USX - US Steel Group 38,134 39,772
593 Varity Corp+ 24,297 26,092
984 VF Corp 47,022 52,890
5,333 Viacom Inc Class B+ 222,924 247,318
2,532 Wachovia Corp 95,318 90,519
34,200 Wal Mart Stores Inc 871,745 914,850
1,796 Walgreen Co 74,852 90,025
1,988 Warner Lambert Co 145,664 171,714
699 Wells Fargo & Co 91,787 125,995
1,570 Wendy's International Inc 24,258 28,064
818 Western Atlas Inc+ 32,453 36,299
5,359 Westinghouse Electric Corp 80,637 78,375
1,024 Westvaco Corp 39,024 45,312
3,087 Weyerhaeuser Co 129,265 145,475
1,131 Whirlpool Corp 67,150 62,205
1,577 Whitman Corp 25,486 30,554
1,485 Williams Co Inc 45,421 51,789
1,081 Winn-Dixie Stores Inc 62,944 62,428
7,281 WMX Technologies Inc 212,709 206,598
1,946 Woolworth Corp 42,280 29,433
1,331 Worthington Industries Inc 26,004 27,202
1,687 Wrigley (Wm) Jr Co 70,894 78,235
1,639 Xerox Corp 150,259 192,173
386 Yellow Corp 8,661 6,996
714 Zenith Electronic Corp+ 5,377 5,266
192 Zurn Industries Inc 5,527 3,840
------------ ------------
TOTAL COMMON STOCKS $ 52,823,373 $ 59,607,495
</TABLE>
35
<PAGE> 95
ASSET ALLOCATION FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
YIELD TO MATURITY
PRINCIPAL SECURITY NAME MATURITY DATE VALUE
<S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 1.73%
$ 16,000 U.S. Treasury Bills 5.19 % 07/06/95 $ 15,986
61,000 U.S. Treasury Bills 5.25 07/27/95 60,755
102,000 U.S. Treasury Bills 5.42 08/10/95 101,376
57,000 U.S. Treasury Bills 5.48 08/24/95 56,550
21,000 U.S. Treasury Bills 5.49 08/17/95 20,852
244,000 U.S. Treasury Bills 5.54 09/07/95 241,584
552,000 U.S. Treasury Bills 5.56 09/21/95 545,352
------------
TOTAL SHORT-TERM INSTRUMENTS $ 1,042,455
(Cost $1,042,242)
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $53,865,615)*(Notes 1 and 3) 100.63% $60,649,950
Other Assets and Liabilities, Net (0.63)% (378,906)
------ ------------
TOTAL NET ASSETS 100.00% $60,271,044
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------------------
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 8,065,683
Gross Unrealized Depreciation (1,281,348)
-------------
NET UNREALIZED APPRECIATION $ 6,784,335
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
36
<PAGE> 96
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS - 95.97%
$ 1,000,000 ABAG Finance Authority for Nonprofit
Corporations COP CA State Insured 7.10 % 12/01/20 $ 1,031,260
1,000,000 Alameda CA USD AMBAC Insured 6.05 07/01/11 1,010,470
1,000,000 Alameda CA USD MBIA Insured 5.70 12/01/14 965,670
1,000,000 Alameda County CA Public Facilities Corp COP 6.25 06/01/06 1,015,720
1,000,000 Alameda County CA Water District Revenue COP
Water System Project MBIA Insured 6.20 06/01/13 1,008,610
100,000 Albany CA Public Facilities Finance Authority
Lease Revenue Capital Improvement Project 6.90 09/01/12 102,639
500,000 Albany CA Public Facilities Finance Authority
Lease Revenue Capital Improvement Project 7.85 09/01/09 533,520
1,000,000 Antioch CA Development Agency Tax Allocation
Project 1 FGIC Insured 6.40 09/01/17 1,023,670
1,000,000 Berryessa CA USD Series A 6.80 03/01/12 1,036,680
1,000,000 Buena Park CA Community RDA Tax Allocation
Central Business District Project 7.10 09/01/14 1,016,770
3,550,000 California State Department of Water Resources
Central Valley Project Revenue Series L 5.75 12/01/14 3,424,650
1,000,000 California State Department of Water Resources
Central Valley Project Revenue Series L MBIA
Insured 5.50 12/01/09 963,050
</TABLE>
37
<PAGE> 97
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
$ 2,000,000 California State Educational Facilites
Authority Revenue Chapman College Refunding
Pending 7.30 % 01/01/02 $ 2,180,260
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
1,000,000 California State Educational Facilities
Authority Revenue Claremont Colleges Pooled
Facilities 6.38 05/01/22 1,014,460
350,000 California State Educational Facilities
Authority Revenue Loyola Marymount University 6.00 10/01/14 341,719
710,000 California State Educational Facilities
Authority Revenue Loyola Marymount University
Series B 6.55 10/01/12 736,405
1,200,000 California State Educational Facilities
Authority Revenue University of San Diego
Project 6.50 10/01/08 1,259,520
700,000 California State Health Facilities Financing
American Baptist Homes West State Insured 7.65 04/01/14 733,859
1,000,000 California State Health Facilities Financing
Authority Cedar Knoll Insured Series B State
Insured 7.50 08/01/20 1,053,480
1,000,000 California State Health Facilities Financing
Authority Episcopal Homes Foundation Project
State Insured 7.75 07/01/18 1,026,110
400,000 California State Health Facilities Financing
Authority Episcopal Homes Foundation Project
State Insured 7.85 07/01/15 410,440
</TABLE>
38
<PAGE> 98
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 California State Health Facilities Financing
Authority Gould Medical Foundation Escrowed
to Maturity 7.25 % 04/01/10 $ 1,116,410
1,250,000 California State Health Facilities Financing
Authority Gould Medical Foundation Escrowed
to Maturity 7.30 04/01/20 1,374,075
2,855,000 California State Health Facilities Financing
Authority Kaiser Permanente Series A 6.50 12/01/20 2,904,648
1,745,000 California State Health Facilities Financing
Authority Kaiser Permanente Series A 7.00 12/01/10 1,873,013
1,000,000 California State Health Facilities Financing
Authority Kaiser Permanente Series A 7.00 10/01/18 1,062,620
2,000,000 California State Health Facilities Financing
Authority Revenue Catholic Healthcare West
AMBAC Insured 5.75 07/01/15 1,897,340
1,000,000 California State Health Facilities Financing
Authority Revenue Insured Health Facilities
Valleycare Series State Insured 6.50 05/01/05 1,040,830
1,750,000 California State Health Facilities Financing
Authority Revenue Small Insured Health
Facilities Series A 6.75 03/01/20 1,756,685
1,000,000 California State Health Facilities Financing
Authority San Diego Hospital Association MBIA
Insured 6.20 08/01/12 1,006,270
</TABLE>
39
<PAGE> 99
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 525,000 California State HFA Home Mortgage Revenue AMT
Series B Multiple Credit Enhancements 8.00 % 08/01/29 $ 547,717
1,455,000 California State HFA Home Mortgage Revenue AMT
Series D Multiple Credit Enhancements 7.75 08/01/10 1,533,745
360,000 California State HFA Home Mortgage Revenue AMT
Series G Multiple Credit Enhancements 8.15 08/01/19 375,829
1,535,000 California State HFA Home Mortgage Revenue
Series A Multiple Credit Enhancements 7.35 08/01/11 1,624,061
560,000 California State HFA Home Mortgage Revenue
Series B Multiple Credit Enhancements 7.25 08/01/10 589,187
140,000 California State HFA Home Mortgage Revenue
Series F Multiple Credit Enhancements 7.75 08/01/08 147,288
140,000 California State HFA Insured Housing Revenue
AMT Series C MBIA Insured 7.00 08/01/23 144,463
1,575,000 California State HFA Multi-Unit Rental Housing
Revenue AMT Series A 5.50 08/01/15 1,420,272
1,000,000 California State PCR San Diego Gas & Electric
Co AMT 6.80 06/01/15 1,099,520
1,000,000 California State PCR Southern California Edison
AMT 6.90 09/01/06 1,054,390
1,500,000 California State PCR Southern California Edison
Series B 6.85 12/01/08 1,584,705
</TABLE>
40
<PAGE> 100
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,500,000 California State Pollution Control Financing
Authority Resource Recovery Revenue Waste
Management AMT Series A 7.15 % 02/01/11 $ 2,677,000
180,000 California State Public Capital Improvements
Financing Authority Revenue Joint Powers
Agency Pooled Projects Series 8.25 03/01/98 193,466
1,000,000 California State Public Works Board Lease
Revenue University Of California Project
Series A AMBAC Insured 6.30 12/01/09 1,036,720
1,500,000 California State Public Works Board Lease
Revenue University Of California Project
Series B MBIA Insured 5.38 12/01/19 1,362,645
1,500,000 California Statewide Communities Development
Authority Revenue COP Hospital Cedars Sinai
Medical Center 6.50 08/01/12 1,572,300
1,500,000 California Statewide Development Motion Picture
and TV AMBAC Insured 5.25 01/01/14 1,367,220
1,590,000 California Statewide Motion Picture Development
and TV AMBAC Insured 5.25 01/01/13 1,453,499
1,000,000 Cerritos CA Public Financing Authority
Redevelopment Los Cerritos Redevelopment
Project Revenue AMBAC Insured 5.75 11/01/22 953,660
870,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/11 844,318
</TABLE>
41
<PAGE> 101
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 4,000,000 Contra Costa CA Transportation Authority Sales
Tax Revenue Series A FGIC Insured 5.50 % 03/01/08 $ 3,933,840
3,000,000 Contra Costa CA Water District Water Revenue
Series G MBIA Insured 5.75 10/01/14 2,897,730
1,200,000 Contra Costa County CA COP Public Facilities
Merrithew Memorial Hospital Replacement 6.60 11/01/12 1,231,308
500,000 Contra Costa County CA COP Public Facilities
Merrithew Memorial Hospital Replacement 6.63 11/01/22 507,895
270,000 Contra Costa County CA Home Mortgage Revenue
Mortgaged Backed Securities Project AMT
Escrowed to Maturity 7.75 05/01/22 326,030
750,000 Contra Costa County CA Public Financing
Authority Tax Allocation Revenue Series A 7.10 08/01/22 761,520
755,000 Contra Costa County CA Transportation Authority
Sales Tax Revenue Series A Escrowed to
Maturity 6.50 03/01/09 814,471
1,000,000 Covina CA COP Water System Improvement Project 7.30 04/01/16 1,039,790
1,500,000 Cupertino CA COP Series A AMBAC Insured 5.75 07/01/16 1,438,140
745,000 Danville CA COP 6.50 11/01/06 767,566
525,000 Danville CA COP 6.60 11/01/07 540,845
2,675,000 East Bay CA MUD Water System Revenue MBIA
Insured 6.00 06/01/12 2,660,207
3,655,000 East Bay CA Regional Park District Series B 5.75 09/01/13 3,545,313
</TABLE>
42
<PAGE> 102
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 500,000 Eastern Municipal Water District CA Water &
Sewer Revenue Certificates FGIC Insured 6.30 % 07/01/20 $ 504,355
2,500,000 El Dorado County CA Bond Authority Lease
Revenue Capital Facilities Project 7.40 11/01/09 2,666,850
1,000,000 Emeryville CA Public Financing Authority
Housing Increment Revenue Series A 6.35 05/01/10 1,009,050
2,000,000 Emeryville CA Public Financing Authority
Housing Increment Revenue Series A 7.88 02/01/15 2,122,620
2,000,000 Escondido CA Joint Powers Financing Authority
Lease Revenue Center for the Arts AMBAC
Insured 6.00 09/01/18 1,962,940
500,000 Escondido CA USD COP Series B 6.50 09/01/13 511,315
750,000 Escondido CA USD COP Series B 6.50 09/01/14 766,973
1,725,000 Escondido Joint Powers Financing Authority
Lease Revenue Center for the Arts AMBAC
Insured 5.80 09/01/09 1,711,183
1,410,000 Fairfield CA Public Finance Authority CGIC
Insured 5.20 08/01/08 1,322,792
700,000 Fontana CA USD Series B AMBAC Insured 5.40 07/01/08 678,160
3,000,000 Fontana CA USD Series C FGIC Insured 6.11 + 05/01/20 2,587,980
1,000,000 Fresno CA COP Street Improvement Project 6.63 12/01/11 1,027,020
2,000,000 Fresno CA USD Series A MBIA Insured 5.70 08/01/15 1,932,440
3,840,000 Hayward CA COP Capital Improvement Projects 6.80 08/01/17 3,895,795
</TABLE>
43
<PAGE> 103
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,800,000 Huntington Beach CA Public Finance Authority
Revenue Bond 7.00 % 08/01/10 $ 2,736,748
500,000 Industry CA Agency Project 6.70 11/01/03 528,705
1,080,000 Industry CA Urban Development Agency 6.85 11/01/04 1,145,826
1,250,000 Industry CA Urban Development Agency 7.30 05/01/06 1,292,463
500,000 Industry CA Urban Development Agency Project 3 6.60 11/01/02 528,395
1,000,000 Industry CA Urban Development Agency Tax
Allocation MBIA Insured 5.80 05/01/09 1,001,480
1,500,000 Inglewood CA COP Civic Center Improvement
Project Public Finance Authority 7.00 08/01/19 1,530,390
485,000 Inglewood CA Public Finance Authority Revenue
Series C 7.00 05/01/22 495,195
450,000 Irvine Ranch CA Water District Joint Powers
Agency Local Pool Revenue 7.80 02/15/08 470,898
2,000,000 Kern County CA COP 7.10 12/01/07 2,102,500
1,600,000 Lincoln CA RDA Tax Allocation 7.60 08/01/16 1,683,616
1,000,000 Lincoln CA USD Special Tax Community District
Number 1B 7.20 09/01/21 1,061,280
1,000,000 Long Beach CA Finance Authority Revenue AMBAC
Insured 6.00 11/01/17 993,770
7,600,000 Los Angeles CA Airport Revenue Series A FGIC
Insured 5.50 05/15/08 7,439,108
750,000 Los Angeles CA Community College District COP
Prerefunded 7.00 08/15/10 846,623
</TABLE>
44
<PAGE> 104
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Los Angeles CA Community College District COP
Series A CGIC Insured 6.00 % 08/15/08 $ 1,025,600
1,000,000 Los Angeles CA Community RDA Financing
Authority Revenue AMT 5.90 12/01/13 896,290
4,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue 5.38 09/01/23 3,616,720
1,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue 6.38 02/01/20 1,029,610
1,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue Second Issue 6.00 08/15/32 966,940
2,775,000 Los Angeles CA Harbor Revenue AMT Series B 6.50 08/01/13 2,877,148
100,000 Los Angeles CA Harbor Revenue Escrowed to
Maturity 7.60 10/01/18 110,163
120,000 Los Angeles CA SFMR AMT Series A Multiple
Credit Enhancements 7.55 12/01/23 124,580
7,250,000 Los Angeles CA Wastewater System Revenue Series
A 5.70 06/01/20 6,880,323
1,500,000 Los Angeles County CA COP Capital Appreciation
Disney Parking Project 8.05 + 03/01/08 651,285
1,000,000 Los Angeles County CA TRAN Multiple LOC's 4.50 07/01/96 1,006,920
1,000,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B 5.75 07/01/18 954,590
4,275,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B 6.50 07/01/13 4,400,899
</TABLE>
45
<PAGE> 105
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 480,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B FGIC Insured 6.50 % 07/01/15 $ 494,750
2,395,000 Lucia Mar CA USD COP Prerefunded 6.90 05/01/15 2,476,526
1,550,000 Madera CA COP 7.38 05/01/20 1,605,118
1,000,000 Menlo Park CA Community Development Agency Tax
Allocation Las Pulgas Community Project AMBAC
Insured 6.70 10/01/22 1,052,060
665,000 Mid Peninsula CA Regional Open Space District
Promissory Notes 6.30 07/10/10 679,504
2,000,000 Mid Peninsula Regional Open Space District CA
Promissory Notes 7.00 09/01/14 2,081,300
2,110,000 Modesto CA COP Recreational Facilities CA
Public Agency Leasing Corp 7.25 07/01/11 2,190,961
520,000 Mojave CA Water Agency Improvement District M
Morongo Basin 6.25 09/01/02 538,070
500,000 Mojave CA Water Agency Improvement District M
Morongo Basin 6.60 09/01/12 506,010
1,000,000 Montclair CA RDA Project Three 7.15 12/01/15 1,024,380
1,000,000 Mountain View CA Shoreline Regional Park
Community Tax Allocation Series A 5.60 08/01/09 929,600
1,450,000 Nevada County CA COP Solid Waste Western Nevada
County 6.50 10/01/06 1,498,851
</TABLE>
46
<PAGE> 106
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 345,000 Nevada County CA COP Solid Waste Western Nevada
County 7.00 % 06/01/98 $ 349,102
345,000 Nevada County CA COP Solid Waste Western Nevada
County 7.10 06/01/99 350,344
1,000,000 Nevada County CA COP Solid Waste Western Nevada
County 7.50 06/01/21 991,860
1,035,000 Northridge CA Water District AMBAC Insured 5.40 02/01/11 977,382
1,000,000 Nuview CA USD COP 7.25 02/01/16 1,015,870
1,500,000 Ontario CA RDA Revenue Project One MBIA Insured 6.00 08/01/15 1,465,545
1,000,000 Orange County CA CFD Special Tax Series A
Prerefunded 7.45 08/15/04 1,146,690
1,000,000 Orange County CA CFD Special Tax Series A
Prerefunded 7.50 08/15/05 1,148,940
1,945,000 Orange County CA Transit District COP Business
Acquisition Project 6.75 12/01/05 1,853,079
1,000,000 Orange County CA Water District COP Series A 5.50 08/15/10 924,190
1,000,000 Otay CA Municipal Water District GO Improvement
District No. 27 6.70 09/01/22 998,730
1,000,000 Palm Springs CA COP Municipal Golf Course
Expansion Project 7.40 11/01/18 1,031,130
1,500,000 Pittsburg CA RDA Tax Allocation CA Avenue
Community Facilities 90-1 Subordinated 7.40 08/15/20 1,554,105
2,400,000 Pittsburg CA RDA Tax Allocation Los Medanos
Community Development Project FGIC Insured 5.50 08/01/07 2,382,264
</TABLE>
47
<PAGE> 107
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,250,000 Pittsburg CA RDA Tax Allocation Los Medanos
Community Development Project FGIC Insured 5.50 % 08/01/15 $ 2,106,855
1,000,000 Port of Oakland CA Special Facilities Revenue
Mitsui OSK Lines Limited AMT Series A LOC -
Industrial Bank of Japan Ltd 6.70 01/01/07 1,054,630
1,500,000 Rancho CA Water District Financial Authority
Revenue FGIC Insured 6.25 08/01/12 1,527,510
1,000,000 Rancho Cucamonga CA Redevelopment Agency Tax
Allocation MBIA Insured 5.50 09/01/23 919,670
685,000 Rancho Mirage CA Joint Powers 7.50 04/01/09 719,654
1,350,000 Richmond CA Joint Powers Finance Authority
Revenue Series B 7.25 05/15/13 1,383,372
100,000 Richmond CA RDA Tax Allocation Harbour
Redevelopment Project CGIC Insured 7.00 07/01/09 110,646
1,055,000 Riverside CA Sewer Revenue FGIC Insured 5.00 08/01/10 960,683
1,750,000 Riverside County CA Asset Leasing Corporation
Leasehold Revenue Riverside County Hospital
Project A 6.38 06/01/09 1,764,018
3,000,000 Riverside County CA COP Series A 6.88 11/01/09 3,106,230
410,000 Riverside County CA SFMR AMT Project A GNMA
Collateralized 6.85 10/01/16 430,672
1,250,000 Riverside County CA Transportation Commission
Sales Tax Revenue Series A 6.50 06/01/09 1,287,213
</TABLE>
48
<PAGE> 108
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,370,000 Rosemead CA RDA Tax Allocation Redevelopment
Project Area 1-A 5.50 % 10/01/18 $ 1,157,376
1,335,000 Roseville CA Joint Unified High School District
Capital Appreciation Series A 8.00 + 08/01/06 720,366
1,900,000 Sacramento CA COP Light Rail Transportation
Project 6.75 07/01/07 2,049,853
3,600,000 Sacramento CA MUD Electric Revenue Series E
MBIA-IBC Insured 5.70 05/15/12 3,485,340
1,000,000 Sacramento CA MUD Electric Revenue Series Y
MBIA Insured 6.75 09/01/09 1,070,970
500,000 Sacramento CA MUD Electric Revenue Series Z
FGIC Insured 6.45 07/01/10 520,230
850,000 Saint Helena CA COP Series C 7.88 06/01/11 901,213
1,000,000 San Bernardino CA Municipal Water Department
COP FGIC Insured 6.25 02/01/12 1,005,270
2,000,000 San Buenaventura CA Capital Improvement Project
COP 6.85 08/01/16 2,016,180
230,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/01 245,146
250,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/02 267,173
225,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/03 240,577
235,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/04 250,014
235,000 San Carlos CA RDA Tax Allocation Series A 7.10 09/01/05 250,583
1,520,000 San Diego CA COP 6.90 07/15/16 1,580,937
</TABLE>
49
<PAGE> 109
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 San Diego CA Regional Building Authority Lease
Revenue San Miguel Consolidated Fire
Protection District MBIA Insured 5.65 % 01/01/20 $ 943,110
1,230,000 San Diego County CA COP East Mesa Detention
Facilities Project 7.00 10/01/09 1,268,930
500,000 San Diego County CA Regional Transportation
Community Sales Tax Revenue Series A Escrowed
to Maturity 6.00 04/01/08 529,060
2,250,000 San Francisco CA BART Sales Tax Revenue FGIC
Insured 5.50 07/01/15 2,107,238
1,000,000 San Francisco CA City & County Public Utilities
Commission Water Revenue Series A 6.50 11/01/09 1,058,090
2,000,000 San Francisco CA City & County Public Utilities
Commission Water Revenue Series A 6.75 11/01/10 2,150,940
1,800,000 San Joaquin County CA COP North County Landfill
Project 7.00 04/01/11 1,842,498
2,000,000 San Joaquin Hills CA Transportation Corridor
Agency Toll Road Revenue Capital Appreciation 4.55 + 01/01/10 1,322,580
1,000,000 San Jose CA RDA Tax Allocation Park Center
Redevelopment Project 7.00 10/01/05 1,033,020
1,000,000 San Jose CA RDA Tax Allocation Park Center
Redevelopment Project 7.00 10/01/06 1,028,530
1,935,000 San Mateo County CA Board of Education COP 7.10 05/01/21 1,980,318
2,400,000 Santa Clara CA Electric Revenue Series A MBIA
Insured 6.25 07/01/13 2,436,120
</TABLE>
50
<PAGE> 110
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,700,000 Santa Clara County CA COP Multiple Facilities
Project AMBAC Insured 6.00 % 05/15/12 $ 1,690,582
100,000 Santa Clara County CA COP Public Facilities
Corporation 7.75 11/01/08 108,421
1,260,000 Santa Cruz County CA Public Financing Authority
Series C 7.10 08/01/05 1,340,035
750,000 Santa Maria CA RDA Town Center West Side
Parking Facilities FSA Insured 5.25 06/01/11 692,603
1,195,000 Santa Rosa CA High School District FGIC Insured 5.90 05/01/13 1,182,990
1,000,000 Shasta CA Dam Area Public Utility District COP 7.25 03/01/12 1,033,630
350,000 Shasta CA Joint Powers Financing Authority
Landfill Revenue Series A 7.20 07/01/09 366,405
500,000 Shasta CA Joint Powers Financing Authority
Landfill Revenue Series A 7.20 07/01/10 522,680
1,500,000 Snowline CA Joint USD COP 6.40 07/01/18 1,418,850
520,000 Sonoma County CA COP 6.75 10/01/06 552,427
1,000,000 South County CA Regional Wastewater Authority
Revenue Regional Wastewater Facilities &
Capital Improvement FGIC Insured 5.75 08/01/10 984,840
1,000,000 South San Francisco CA Capital Improvements
Financing Authority Revenue South Conference
Center 6.13 09/01/18 924,850
1,105,000 Southern California State HFA SFMR AMT Series A
GNMA Collateralized 7.63 10/01/22 1,155,222
</TABLE>
51
<PAGE> 111
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 540,000 Southern California State HFA SFMR AMT Series A
GNMA Collateralized 7.63 % 10/01/23 $ 566,714
670,000 Southern California State HFA SFMR AMT Series A
GNMA/FNMA Collateralized 6.75 09/01/22 689,021
2,800,000 Southern California State Metropolitan Water
District 5.50 07/01/19 2,573,032
600,000 Southern California State Public Power Agency
Electrical Improvements 7.00 07/01/09 630,282
2,750,000 Southern California State Public Power
Authority Transmission Project Revenue
Southern Transmission Project 6.13 07/01/18 2,728,083
1,450,000 Southern California State Public Power
Authority Transmission Revenue Project 5.75 07/01/21 1,368,017
695,000 Southern California State UHFA SFMR AMT Series
A GNMA/FNMA Collateralized 7.35 09/01/24 721,181
2,000,000 Stanislaus County CA COP Series A 6.85 06/01/12 2,040,220
750,000 Stockton CA Port District Revenue Series A 8.10 01/01/14 807,833
20,000 Stockton CA SFMR Series Government Agency
Collateralized 7.50 02/01/23 21,165
265,000 Sulphur Springs CA USD COP AMBAC Insured 7.15 02/01/11 284,417
5,690,000 Sulphur Springs CA USD Series A MBIA Insured 8.34 + 09/01/13 1,861,199
1,000,000 Sunnyvale CA Financing Authority Utilities
Revenue Solid Waste Materials AMT Series B
MBIA Insured 6.00 10/01/08 1,014,930
</TABLE>
52
<PAGE> 112
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Temecula Valley CA USD Series D FGIC Insured 6.00 % 09/01/14 $ 989,670
1,000,000 Twentynine Palms CA Water District CA COP 7.00 08/01/17 1,013,400
3,000,000 University of California Revenue Multiple
Purpose Project C AMBAC Insured 5.25 09/01/11 2,768,220
2,300,000 University of California Revenue Multiple
Purpose Projects Series C AMBAC Insured 5.25 09/01/12 2,116,023
1,750,000 University of California Revenue Seismic Safety
Project MBIA Insured 5.50 11/01/10 1,679,388
1,095,000 University of California Revenues Multiple
Purpose Projects Series B MBIA Insured 6.00 09/01/13 1,088,737
990,000 Upland CA Housing Authority Revenue Issue A 7.85 07/01/20 1,030,768
1,000,000 Vacaville CA Public Financing Authority Tax
Allocation Redevelopment Project MBIA Insured 6.35 09/01/22 1,013,540
1,135,000 Walnut Valley CA USD Series C FGIC Insured 5.75 08/01/15 1,090,418
1,000,000 West & Central Basin CA Financing Authority
Redevelopment AMBAC Insured 6.13 08/01/12 1,004,560
500,000 West End CA Water Development Treatment &
Conservation Joint Powers Authority 7.00 10/01/04 528,390
</TABLE>
53
<PAGE> 113
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 2,000,000 West End CA Water Development Treatment &
Conservation Joint Powers Authority 7.00 % 10/01/05 $ 2,108,000
1,000,000 Yolo County CA Housing Authority Mortgage
Revenue AMT FHA Collateralized 7.20 08/01/33 1,044,050
------------
TOTAL CALIFORNIA MUNICIPAL BONDS $273,919,020
(Cost $268,060,381)
SHORT-TERM INSTRUMENTS - 3.35%
CALIFORNIA MUNICIPAL VARIABLE RATE
SECURITIES - 3.24%
$ 1,000,000 California State Health Facilities Financing
Authority Sutter Hospital V/R LOC - Morgan
Guaranty Trust 4.10 % 03/01/20 $ 1,000,000
2,100,000 Irvine CA IDA Improvement Bond V/R LOC -
National Westminster Bank PLC 4.30 09/02/15 2,100,000
1,450,000 Los Angeles County CA IDA COE & DRU V/R AMT LOC
- Dai-Ichi Kangyo Bank Ltd 4.50 12/01/06 1,450,000
950,000 Los Angeles County CA IDA Komax System Inc V/R
AMT LOC - Dai-Ichi Kangyo Bank Ltd 4.50 12/01/06 950,000
1,000,000 Los Angeles County CA V/R 4.40 12/01/05 1,000,000
1,140,000 Orange County CA Improvement Bond V/R Multiple
LOC's 4.60 09/02/18 1,140,000
1,600,000 Orange County CA Sanitation V/R Multiple Credit
Enhancements 4.20 08/01/16 1,600,000
------------
$ 9,240,000
</TABLE>
54
<PAGE> 114
CALIFORNIA TAX-FREE BOND FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME VALUE
<S> <C> <C> <C>
SHORT-TERM INSTRUMENTS (CONTINUED)
MONEY MARKET FUNDS - 0.11%
$ 318,271 Arbor Fund CA Tax-Exempt Portfolio $ 318,271
------------
TOTAL SHORT-TERM INSTRUMENTS $ 9,558,271
(Cost $9,558,265)
TOTAL INVESTMENTS IN SECURITIES
(Cost $277,618,646)*(Notes 1 and 3) 99.32% $283,477,291
Other Assets and Liabilities, Net 0.68% 1,943,229
------ ------------
TOTAL NET ASSETS 100.00% $285,420,520
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
+ YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL STATEMENT
PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 8,557,614
Gross Unrealized Depreciation (2,698,969)
-------------
NET UNREALIZED APPRECIATION $ 5,858,645
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
55
<PAGE> 115
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES - 104.24%
$ 1,900,000 ABAG CA Finance Authority for Nonprofit
Corporations COP Lucile Salter Packard
Project V/R AMBAC Insured 3.95 % 08/01/23 $ 1,900,000
1,700,000 Alhambra CA IDA Sunclipse V/R LOC - Bank of
America 3.65 05/01/07 1,700,000
5,200,000 Big Bear Lake CA Industrial Revenue Southwest
Gas Corp AMT V/R Series A LOC - Union Bank of
Switzerland 4.10 12/01/28 5,200,000
9,055,000 California State Depatment of Water Resources
Central Valley Project V/R 4.15 12/01/05 9,055,000
2,600,000 California State Health Facilities Financing
Authority Adventist Health System V/R LOC -
Toronto Dominion Bank 3.80 08/01/21 2,600,000
4,900,000 California State HFFA Kaiser Permanente V/R 3.90 05/01/28 4,900,000
900,000 California State PCR Burney Forest Products V/R
AMT LOC - National Westminster Bank PLC 4.35 09/01/20 900,000
965,000 California State PCR Chevron Project V/R 4.10 11/15/01 965,000
2,900,000 California State PCR Financing Authority Solid
Waste Disposal Revenue Shell Oil Co Martinez
Project V/R AMT AMBAC Insured 4.30 12/01/24 2,900,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
56
<PAGE> 116
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 7,300,000 California State PCR Wadham Project V/R AMT LOC
- Banque Paribas 4.35 % 11/01/17 $ 7,300,000
1,000,000 California State PCR Western Waste Industries
Project V/R LOC - Citibank 4.38 12/01/00 1,000,000
1,200,000 California State Pollution Control Financing
Authority PCR Southern California Edison V/R
Series A 4.50 02/28/08 1,200,000
4,000,000 California State Pollution Control Financing
Authority PCR V/R San Diego Gas & Electric Co
V/R Series A 4.25 12/01/07 4,000,000
5,000,000 California State Pollution Control Financing
Authority Solid Waste Disposal Revenue Colmac
Energy Project Series B V/R AMT LOC - Swiss
Bank 4.10 12/01/16 5,000,000
1,400,000 California State Pollution Control Financing
Authority Solid Waste Disposal Revenue Shell
Oil Co Martinez Project Series A V/R AMT 4.30 10/01/24 1,400,000
5,000,000 California State RAW Series C 5.75 04/25/96 5,041,821
3,000,000 California State School Cash Flow 1994 Pooled
Bond 4.50 07/05/95 3,000,237
2,300,000 California Statewide CDA St Joseph Health
System V/R 3.90 07/01/08 2,300,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
57
<PAGE> 117
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 2,500,000 California Statewide Communities Development
Authority Apartment Development Revenue
Series A-6 V/R FNMA Collateralized 4.20 % 05/15/25 $ 2,500,000
3,090,000 California Statewide Community Development
Authority Solid Waste Facilities Revenue
Chevron USA Inc Project V/R AMT 4.30 12/15/24 3,090,000
1,355,000 Chino CA USD V/R LOC - National Westminster
Bank PLC 4.05 09/01/08 1,355,000
4,000,000 Chula Vista CA IDA Revenue San Diego Gas &
Electric V/R AMT 4.25 09/11/95 4,000,000
5,100,000 Colton CA RDA Las Palomas Associates Project
V/R LOC - Bank of America 4.15 11/01/15 5,100,000
1,000,000 Colton CA RDA MFHR V/R LOC - Federal Home Loan
Bank of San Francisco 3.90 05/01/10 1,000,000
1,100,000 Concord CA MFHR Bel Air Apartments V/R AMT LOC
- Bank of America 3.90 12/01/16 1,100,000
2,000,000 Duarte CA RDA COP Johnson Duarte Partners
Project V/R Series B LOC - Bank of America 4.05 12/01/14 2,000,000
8,100,000 Eagle Trust V/R Series 94 MBIA Insured 4.30 09/01/03 8,100,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
58
<PAGE> 118
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 2,250,000 Elk Grove CA USD TRAN 5.00 % 09/14/95 $ 2,254,307
4,400,000 Escondido CA Community Development Commission
COP V/R AMT LOC - Bank of America 4.25 10/01/16 4,400,000
7,000,000 Escondido CA MFHR Morning View Terrace V/R LOC
- Bank of America 3.60 02/15/07 7,000,000
4,400,000 Foothill / Eastern Transportation Corridor
Agency CA Toll Road Revenue V/R LOC - Banque
National de Paris 4.25 01/02/35 4,400,000
3,800,000 Huntington Beach CA MFHR Seabridge Villas V/R
LOC - Bank of America 3.75 02/01/10 3,800,000
3,740,000 Independent Cities Various Pooled Projects V/R
LOC - National Westminster Bank PLC 4.05 06/01/98 3,740,000
4,100,000 Industry CA IDR Helene Curtis Inc Project V/R
LOC - Harris Trust & Savings Bank 4.05 10/01/06 4,100,000
2,400,000 Irvine CA IDA Improvement Bond V/R LOC -
National Westminster Bank PLC 4.30 09/02/15 2,400,000
1,900,000 Irvine CA IDA Irvine East Investment Co V/R LOC
- Bank of America 4.15 12/01/05 1,900,000
2,000,000 Irwindale CA IDR Toys R Us V/R LOC - Bankers
Trust 5.25 12/01/19 2,000,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
59
<PAGE> 119
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<C> <S> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 1,000,000 Loma Linda CA Medical Center V/R Series 851-C
LOC - Industrial Bank of Japan Ltd 4.00 % 12/15/15 $ 1,000,000
5,000,000 Long Beach CA Harbor Revenue CP AMT 4.10 09/14/95 5,000,000
6,500,000 Long Beach CA Health Facilities Memorial Health
Services V/R 3.90 10/01/16 6,500,000
9,055,000 Long Beach CA TRAN 4.75 09/20/95 9,067,717
2,600,000 Los Angeles CA Local Educational Agencies
Pooled TRAN V/R 4.50 07/06/95 2,600,257
2,000,000 Los Angeles CA MFHR Series B V/R AMT LOC -
Federal Home Loan Bank of San Francisco 4.20 12/01/26 2,000,000
1,700,000 Los Angeles CA Multifamily Revenue V/R AMT LOC
- Federal Home Loan Bank of San Francisco 4.20 08/01/26 1,700,000
1,000,000 Los Angeles County CA COP Van Nuys Courthouse
Project Prerefunded 9.00 06/01/15 1,066,624
1,200,000 Los Angeles County CA Housing Authority MFHR
Harbor Cove Project V/R LOC - Citibank 3.90 10/01/06 1,200,000
4,500,000 Los Angeles County CA Housing Authority MFHR
Riverpark Apartments V/R AMT LOC - Dai-Ichi
Kangyo Bank Ltd 4.35 09/01/10 4,500,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
60
<PAGE> 120
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 5,000,000 Los Angeles County CA Metropolitan
Transportation Authority CP V/R Multiple
LOC's 3.00 % 09/06/95 $ 5,000,000
3,600,000 Los Angeles County CA Metropolitan
Transportation Authority CP V/R Multiple
LOC's 3.20 10/25/95 3,600,000
7,700,000 Los Angeles County CA Metropolitan
Transportation Authority CP V/R Multiple
LOC's 3.90 08/08/95 7,700,000
1,000,000 Los Angeles County CA Metropolitan
Transportation Authority CP V/R Multiple
LOC's 4.05 07/21/95 1,000,000
6,000,000 Los Angeles County CA TRAN Multiple LOC's 4.50 07/01/96 6,040,200
5,000,000 Los Angeles County CA Transportation Authority
Revenue Union Station Gateway V/R Series A
FSA Insured 4.05 07/01/25 5,000,000
2,900,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue V/R FGIC Insured 3.95 07/01/12 2,900,000
2,900,000 Montebello CA V/R LOC - Bank of America 3.65 04/01/05 2,900,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
61
<PAGE> 121
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 6,000,000 Ontario CA MFHR Park Centre V/R LOC - Bank of
New York 3.80 % 08/01/07 $ 6,000,000
2,100,000 Ontario CA MFHR Vineyard Village V/R LOC -
Industrial Bank of Japan Ltd 4.05 12/01/05 2,100,000
1,500,000 Ontario CA RDA MFHR Daisy Apartments V/R LOC -
Bank of America 3.60 11/01/04 1,500,000
5,000,000 Orange CA Apartment Development Revenue Harbor
Pointe V/R Issue D LOC - Citibank 3.95 12/01/06 5,000,000
2,000,000 Orange County CA Apartment Development Vintage
Woods V/R LOC - Mitsubishi Bank Ltd 4.75 11/01/08 2,000,000
7,000,000 Orange County CA Improvement Bond V/R Multiple
LOC's 4.60 09/02/18 7,000,000
460,000 Orange County CA Municipal Water District COP
V/R Series 89A LOC - National Westminster
Bank PLC 4.45 07/01/97 460,000
325,000 Orange County CA Municipal Water District COP
V/R Series 89A LOC - National Westminster
Bank PLC 4.45 07/01/99 325,000
235,000 Orange County CA Municipal Water District COP
V/R Series 89B LOC - National Westminster
Bank PLC 4.45 07/01/96 235,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
62
<PAGE> 122
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 255,000 Orange County CA Municipal Water District COP
V/R Series 89B LOC - National Westminster
Bank PLC 4.45 % 07/01/97 $ 255,000
250,000 Orange County CA Municipal Water District COP
V/R Series 89B LOC - National Westminster
Bank PLC 4.45 07/01/98 250,000
1,825,000 Orange County CA Municipal Water District COP
V/R Series 89B LOC - National Westminster
Bank PLC 4.45 07/01/08 1,825,000
765,000 Orange County CA Municipal Water District COP
V/R Series 89B LOC - National Westminster
Bank PLC 4.45 07/16/16 765,000
1,000,000 Riverside County CA Transportation Commission
Sales Tax Revenue CP LOC - Industrial Bank of
Japan Ltd 4.15 08/21/95 1,000,000
2,637,000 Sacramento CA MUD CP Multiple LOC's 3.20 10/25/95 2,637,000
4,524,000 Sacramento CA MUD CP Multiple LOC's 3.30 10/17/95 4,524,000
2,000,000 Sacramento CA MUD CP Multiple LOC's 3.60 09/11/95 2,000,000
1,496,000 Sacramento CA MUD CP Multiple LOC's 4.10 08/24/95 1,496,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
63
<PAGE> 123
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 2,780,000 Salinas CA MFHR Brentwood Gardens V/R LOC -
Bank of America 3.60 % 03/01/05 $ 2,780,000
5,000,000 San Bernardino CA Alta Loma Apartments V/R LOC
- Federal Home Loan Bank of Atlanta 4.15 02/01/23 5,000,000
1,600,000 San Bernardino County CA IDA C&M Fine Pack Inc
V/R LOC - Sanwa Bank 4.15 12/01/95 1,600,000
2,185,000 San Bernardino County CA MFHR V/R LOC - Federal
Home Loan Bank of San Francisco 4.15 05/01/17 2,185,000
7,000,000 San Bernardino County CA TRAN 4.50 07/05/96 7,036,820
2,500,000 San Diego CA IDA Revenue San Diego Gas &
Electric CP 3.05 09/11/95 2,500,000
2,000,000 San Diego CA MFHR Los Serano V/R LOC - Citibank 3.60 02/01/09 2,000,000
9,600,000 San Diego CA MFHR Lusk Mira Mesa Apartments V/R
LOC - Bank of America 3.60 04/01/07 9,600,000
3,600,000 San Francisco CA City & County V/R LOC -
Industrial Bank of Japan Ltd 4.15 12/01/05 3,600,000
1,200,000 San Francisco CA MFHR Winterland Project V/R
LOC - Citibank 3.90 06/01/06 1,200,000
5,000,000 San Joaquin County CA TRAN 4.75 10/18/95 5,008,601
2,200,000 San Joaquin County CA Transportation Authority
Sales Tax Revenue V/R LOC - Sumitomo Bank Ltd 4.05 04/01/11 2,200,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
64
<PAGE> 124
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 700,000 San Jose CA IDA Centrifugal Pumps V/R LOC -
Citibank 4.30 % 09/01/95 $ 700,000
1,300,000 San Jose CA MFHR Kimberly Woods Apartments V/R
LOC - Bank of America 3.60 11/01/08 1,300,000
6,500,000 Santa Clara CA Housing Authority MFHR Benton
Park Center V/R LOC - Citibank 3.90 12/01/07 6,500,000
1,400,000 Santa Clara CA Transit System V/R LOC -
Sumitomo Bank Ltd 4.20 06/01/15 1,400,000
1,000,000 Santa Clara County CA HFA MFHR Foxchase
Apartments V/R Series E FGIC Insured 3.90 11/01/07 1,000,000
2,575,000 Santa Clara County CA MFHR Grove Garden
Apartments V/R LOC - Citibank 3.90 03/01/17 2,575,000
4,900,000 Southern California State Public Power
Authority Southern Transmission Project V/R
LOC - Swiss Bank 3.90 07/01/19 4,900,000
1,000,000 Southern California State Rapid Transit
District COP V/R MBIA Insured 4.05 07/01/99 1,000,000
3,000,000 Stockton CA TRAN 5.25 12/08/95 3,006,904
2,300,000 Tracy CA MFHR Sycamore Village Apartments V/R
LOC - Bank of America 3.90 05/01/15 2,300,000
</TABLE>
- --------------------------------------------------------------------
+SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
65
<PAGE> 125
CALIFORNIA TAX-FREE MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 1,770,000 Turlock CA Irrigation District Revenue V/R
Series A LOC - Canadian Imperial Bank of
Commerce 3.65 % 01/01/14 $ 1,770,000
2,000,000 Vacaville CA MFHR Western Properties Sycamores
Project V/R LOC - Bank of America 3.90 04/01/05 2,000,000
2,600,000 Walnut Creek CA MFHR Creekside Drive Apartments
V/R LOC - Bank of America 3.90 04/01/07 2,600,000
5,000,000 West & Central Basin CA Finance Authority CP 3.10 10/12/95 5,000,000
------------
TOTAL SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES $313,510,488
MONEY MARKET FUNDS - 1.33%
$ 4,000,000 Arbor Fund CA Tax-Exempt Portfolio $ 4,000,000
TOTAL INVESTMENTS IN SECURITIES
(Cost $317,510,488)*(Note 1) 105.57% $317,510,488
Other Assets and Liabilities, Net (5.57)% (16,750,607)
------ ------------
TOTAL NET ASSETS 100.00% $300,759,881
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
66
<PAGE> 126
MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
YIELD TO MATURITY
PRINCIPAL SECURITY NAME MATURITY DATE VALUE
<S> <C> <C> <C> <C>
COMMERCIAL PAPER - 54.70%
$18,000,000 Abbey National North America 5.86 % 09/15/95 $ 17,777,320
5,000,000 American Express Credit Corp 5.70 12/20/95 4,863,833
15,000,000 Asset Securitization Cooperative Corp+ 5.99 07/05/95 14,990,017
18,000,000 Bank of New York Co Inc 5.90 07/05/95 17,988,200
18,000,000 Canadian Imperial Bank of Commerce 5.88 08/30/95 17,823,600
20,000,000 CIT Group Holdings Inc 5.82 09/07/95 19,780,133
9,000,000 Daimler-Benz North America Corp 5.90 11/13/95 8,800,875
4,000,000 Daimler-Benz North America Corp 5.90 11/27/95 3,902,322
15,000,000 Ford Motor Credit Corp 5.82 09/08/95 14,832,675
18,000,000 General Electric Co 5.78 08/02/95 17,907,520
17,500,000 Greenwich Funding Corp 5.97 07/27/95 17,424,546
15,000,000 Hanson Finance (U K) PLC 6.00 07/19/95 14,955,000
11,185,000 International Business Machines Credit Corp 5.87 08/25/95 11,084,692
18,000,000 National Rural Utilities Cooperative Finance
Corp 5.95 08/17/95 17,860,175
18,000,000 New Center Asset Trust 5.94 08/01/95 17,907,930
18,000,000 Siemens Corp 5.94 07/17/95 17,952,480
15,000,000 Southwestern Bell Telephone Co 6.04 07/10/95 14,977,331
9,500,000 Transamerica Finance Corp 5.70 12/07/95 9,260,838
------------
TOTAL COMMERCIAL PAPER $260,089,487
</TABLE>
67
<PAGE> 127
MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT - 3.15%
$15,000,000 Societe Generale 5.95 % 08/15/95 $ 14,999,872
CORPORATE MEDIUM TERM NOTES - 3.79%
$18,000,000 Wachovia Corp 5.94 % 09/13/95 $ 18,000,000
U.S. GOVERNMENT AGENCY DISCOUNT
NOTES - 17.82%
$14,000,000 Federal Home Loan Bank 5.85 %(F) 07/26/95 $ 13,943,125
10,000,000 Federal Home Loan Bank 5.87 (F) 07/05/95 9,993,478
15,990,000 Federal Home Loan Mortgage Corp 5.87 (F) 08/04/95 15,901,353
10,000,000 Federal Home Loan Mortgage Corp 5.91 (F) 07/06/95 9,991,792
35,000,000 Federal Home Loan Mortgage Corp 5.91 (F) 07/20/95 34,891,463
------------
TOTAL U.S. GOVERNMENT AGENCY DISCOUNT NOTES $ 84,721,211
VARIABLE AND FLOATING RATE
NOTES - 17.77%
$ 7,000,000 Beta Finance Inc+ 6.08 % 08/17/95 $ 7,000,000
15,000,000 Boatmen's Bancshares Inc 6.03 09/20/95 14,998,274
15,000,000 First Bank N.A. 6.03 01/17/96 14,998,396
6,000,000 Orange County CA Taxable Note++ 0.00 07/10/95 5,998,310
15,000,000 PNC Funding Corp 6.12 07/26/95 14,998,973
17,500,000 Student Loan Marketing Assoc 5.59 10/12/95 17,500,000
5,000,000 Sweden (Kingdom of) 6.06 10/08/95 4,998,697
4,000,000 U.S. West Financial 6.26 09/05/95 4,001,106
------------
TOTAL VARIABLE AND FLOATING RATE NOTES $ 84,493,756
</TABLE>
68
<PAGE> 128
MONEY MARKET FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - 3.13%
$14,908,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.10% 07/03/95 $ 14,908,000
TOTAL INVESTMENTS IN SECURITIES
(Cost $477,212,326)*(Note 1) $477,212,326
100.36
Other Assets and Liabilities, Net (0.36)% (1,692,162)
------ ------------
TOTAL NET ASSETS 100.00% $475,520,164
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
(F) YIELD TO MATURITY.
+ THESE SECURITIES ARE EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE
SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS
EXEMPT FROM REGISTRATION TO QUALIFIED INSTITUTIONAL BUYERS. THESE
SECURITIES WERE DEEMED LIQUID BY THE INVESTMENT ADVISER IN ACCORDANCE WITH
POLICIES APPROVED BY THE FUND'S BOARD OF DIRECTORS.
++ SEE NOTE 6 TO THE FINANCIAL STATEMENTS.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
69
<PAGE> 129
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS - 99.05%
ALABAMA - 0.21%
$ 160,000 Alabama State HFA SFMR Series B AMT Multiple
Credit Enhancements 7.40 % 04/01/22 $ 167,629
ALASKA - 1.34%
390,000 Alaska State Housing Finance Corporation Second
Series AMT Government Agency Collateralized 6.70 12/01/25 394,988
670,000 Alaska State Housing Finance Corporation Second
Series AMT Government Agency Collateralized 7.10 06/01/22 689,604
CALIFORNIA - 20.58%
145,000 California State HFA Insured Housing Revenue
AMT Series C MBIA Insured 7.00 08/01/23 149,623
2,000,000 Contra Costa County CA Mortgage Revenue Cedar
Point Apartments Project A FHA Collateralized 6.15 09/01/25 1,989,340
135,000 Riverside County CA SFMR AMT Project A GNMA
Collateralized 6.85 10/01/16 141,807
9,750,000 Riverside County CA SFMR Series B AMT GNMA
Collateralized 8.35 06/01/13 12,292,898
1,055,000 Sacramento CA SFMR AMT Escrowed to Maturity 7.25 10/01/23 1,208,112
830,000 Southern California State HFA SFMR Series A AMT
GNMA/FNMA Collateralized 6.90 10/01/24 860,511
COLORADO - 0.99%
775,000 Pueblo County CO SFMR Series A GNMA/FNMA
Collateralized 6.85 12/01/25 801,707
</TABLE>
70
<PAGE> 130
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
DISTRICT OF COLUMBIA - 0.41%
$ 320,000 District of Columbia HFA SFMR AMT GNMA
Collateralized 7.10 % 12/01/24 $ 331,872
FLORIDA - 0.40%
310,000 Brevard County FL HFA SFMR Refunded Series B
FSA Insured 7.00 03/01/13 321,458
HAWAII - 5.10%
725,000 Hawaii State Airports Systems Revenue AMT FGIC
Insured 7.00 07/01/20 785,907
500,000 Hawaii State Harbor Capital Improvement Revenue
AMT MBIA Insured 7.00 07/01/17 540,685
3,000,000 Hawaii State SFMR AMT Multiple Credit
Enhancements 6.00 07/01/26 2,801,040
IDAHO - 1.84%
1,500,000 Idaho State HFA SFMR Series C-2 AMT 6.35 07/01/15 1,489,500
ILLINOIS - 5.54%
500,000 Chicago IL O'Hare International Airport Special
Facilities Revenue AMT LOC - Bayerische
Landesbank 7.13 05/01/18 521,025
1,900,000 Chicago IL O'Hare International Airport Special
Facilities Revenue AMT MBIA Insured 6.75 01/01/18 1,990,003
1,000,000 Onterie Centers IL Housing Finance Corp
Mortgage Revenue MBIA Insured 7.05 07/01/27 1,041,790
1,000,000 Saint Claire County IL AMT FGIC Insured 5.75 10/01/23 930,210
</TABLE>
71
<PAGE> 131
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
INDIANA - 4.14%
$ 2,500,000 Indiana State HFA Series A-2 AMT FHA
Collateralized 6.45 % 07/01/14 $ 2,472,125
900,000 Indianapolis IN Airport Authority Revenue AMT
MBIA Insured 6.00 01/01/23 872,937
IOWA - 3.36%
420,000 Iowa State Finance Authority SFMR Series B AMT
GNMA/FNMA Collateralized 7.45 07/01/23 438,442
365,000 Iowa State Finance Authority SFMR Series B AMT
Government Agency Collateralized 5.95 07/01/23 338,351
450,000 Iowa State Finance Authority SFMR Series F
AMBAC Insured GNMA/FNMA Collateralized 6.50 01/01/25 452,030
1,450,000 Iowa State Finance Authority Single Family
Revenue Series B AMT GNMA/FNMA Collateralized 6.95 07/01/24 1,485,279
KANSAS - 0.25%
195,000 Kansas City KS Mortgage Revenue AMT Multiple
Credit Enhancements 7.35 12/01/23 206,105
</TABLE>
72
<PAGE> 132
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
KENTUCKY - 5.15%
$ 1,100,000 Kenton County KY Cincinnati/Northern Kentucky
International Airport Revenue AMT FSA Insured 6.30 % 03/01/15 $ 1,110,923
925,000 Kentucky State Housing Corporation Housing
Revenue AMT Multiple Credit Enhancements 5.90 01/01/15 884,476
820,000 Kentucky State Housing Corporation MFHR Series
D AMT FHA Collateralized 6.80 01/01/24 834,571
1,295,000 Kentucky State Housing Corporation MFHR Series
D AMT FHA Collateralized 7.45 01/01/23 1,337,321
LOUISIANA - 2.98%
750,000 Louisiana State HFA Multifamily Mortgage
Revenue FHA Collateralized 6.95 07/01/16 762,810
1,000,000 Louisiana State MFHR AMT FHA Collateralized 5.90 12/01/18 947,630
670,000 Louisiana State Public Facilities Authority
Student Loan Revenue AMT FSA Insured 6.85 01/01/09 701,604
MARYLAND - 1.21%
1,000,000 Prince Georges County MD Housing Authority
Mortgage Revenue Series A FSA Insured 6.10 09/20/20 978,470
MASSACHUSETTS - 4.27%
2,500,000 Massachusetts State HFA Housing Revenue Series
A AMT FSA Insured 6.10 06/01/26 2,415,950
1,000,000 Massachusetts State HFA Residential Development
FNMA Collateralized 6.90 11/15/21 1,036,960
MICHIGAN - 3.10%
</TABLE>
73
<PAGE> 133
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 2,480,000 Mount Clemens MI Housing Corporation MFHR
Series A FHA Collateralized 6.60 % 06/01/22 $ 2,505,941
MINNESOTA - 0.59%
460,000 Minneapolis-St Paul MN Housing Finance Board
Revenue SFMR Phase IX AMT GNMA Collateralized 7.30 08/01/31 480,470
MISSOURI - 0.35%
275,000 Missouri State Housing Development Commission
Mortgage Revenue SFMR Series A AMT GNMA
Collateralized 6.75 06/01/24 282,436
NEVADA - 7.30%
1,340,000 Nevada State Housing Division SFMR Series A-2
AMT FHA Collateralized 6.55 10/01/15 1,343,002
1,825,000 Nevada State Housing Division SFMR Series C AMT
FHA Collateralized 6.35 10/01/13 1,798,866
2,700,000 Washoe County NV Gas Facilities Sierra Pacific
Power AMT MBIA Insured 6.55 09/01/20 2,761,047
NEW JERSEY - 2.21%
500,000 New Jersey State Housing & Mortgage Finance
Home Buyer Agency Revenue AMT MBIA Insured 6.30 04/01/25 494,700
1,250,000 New Jersey State Housing and Mortgage Agency
MFHR FHA Collateralized 7.00 05/01/30 1,296,150
</TABLE>
74
<PAGE> 134
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
NEW YORK - 2.62%
$ 1,600,000 Babylon NY Individual Development Agency V/R
AMT LOC - Union Bank of Switzerland 4.40 % 12/01/24 $ 1,600,000
500,000 New York State Energy R & D Authority Electric
Facilities Revenue Cons Edison Co New York
City AMT MBIA Insured 7.25 11/01/24 522,145
OKLAHOMA - 1.79%
200,000 Pryor Creek OK Economic Development Authority
Mortgage Revenue Series A 7.13 07/01/21 207,016
685,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.10 06/01/22 711,763
500,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.55 05/01/23 526,790
PENNSYLVANIA - 4.41%
990,000 Allegheny County PA Residential Finance
Authority SFMR AMT GNMA/FNMA Collateralized 5.63 11/01/23 877,091
2,200,000 Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Series D AMT
AMBAC Insured 6.05 01/01/19 2,159,256
500,000 Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Series D AMT
AMBAC Insured 7.05 10/01/16 527,420
TEXAS - 0.70%
540,000 Travis County TX HFC Residential Mortgage
Revenue Series A AMT GNMA/FNMA Collateralized 7.00 12/01/11 567,859
</TABLE>
75
<PAGE> 135
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
UTAH - 9.89%
$ 2,295,000 Salt Lake City UT Airport Revenue Series A AMT
FGIC Insured 6.13 % 12/01/22 $ 2,228,193
500,000 Utah State Board of Regents Student Loan
Revenue Series F AMT AMBAC Insured 7.45 11/01/08 535,985
1,100,000 Utah State Board of Regents Student Loan
Revenue Series H AMT AMBAC Insured 6.70 11/01/15 1,142,713
2,000,000 Utah State HFA SFMR Series B-2 AMT FHA
Collateralized 6.50 07/01/15 1,990,520
1,360,000 Utah State HFA SFMR Series C-2 AMT FHA
Collateralized 6.50 07/01/15 1,349,052
750,000 Utah State HFA SFMR Series D-2 AMT FHA
Collateralized 6.45 01/01/11 750,525
VIRGINIA - 1.52%
1,250,000 Virginia State Housing Development Authority
Commonwealth Mortgage Series B-5 AMT FSA
Insured 6.20 07/01/21 1,226,263
WASHINGTON - 3.44%
1,310,000 Washington State Housing Finance Commission
SFMR Series D AMT GNMA/FNMA Collateralized 6.15 01/01/26 1,290,704
1,440,000 Washington State Housing Finance Commission
SFMR Series D AMT GNMA/FNMA Collateralized 7.10 07/01/22 1,484,361
WEST VIRGINIA - 3.36%
3,000,000 West Virginia State Housing Revenue AMT AMBAC
Insured 5.70 05/01/24 2,717,460
------------
TOTAL MUNICIPAL BONDS $ 80,103,421
(Cost $79,535,903)
</TABLE>
76
<PAGE> 136
MUNICIPAL INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
PRINCIPAL SECURITY NAME VALUE
<S> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
SHORT-TERM INSTRUMENTS - 0.10%
$ 84,627 National Municipal Fund $ 84,627
(Cost $84,627)
TOTAL INVESTMENTS IN SECURITIES
(Cost $79,620,530)*(Notes 1 and 3) 99.15% $ 80,188,048
Other Assets and Liabilities, Net 0.85% 683,917
------ ------------
TOTAL NET ASSETS 100.00% $ 80,871,965
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 1,751,483
Gross Unrealized Depreciation (1,183,965)
-------------
NET UNREALIZED APPRECIATION $ 567,518
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
77
<PAGE> 137
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS - 89.06%
BASIC INDUSTRIES - 1.50%
11,500 Minerals Technologies Inc $ 344,270 $ 414,000
35,000 N-Viro International Corp+ 298,750 56,875
10,000 OM Group Inc 254,250 285,000
55,000 Quadrax Corp New+ 212,492 113,438
------------ ------------
$ 1,109,762 $ 869,313
BIOTECHNOLOGY - 0.56%
30,000 Liposome Co Inc+ $ 341,728 $ 326,250
BUILDING MATERIALS & SERVICES - 0.76%
20,000 J Ray McDermott SA+ $ 408,370 $ 442,500
COMPUTER SOFTWARE - 12.72%
6,500 ArcSys Inc+ $ 144,375 $ 221,000
10,000 Atria Software Inc+ 443,593 485,000
8,794 First Data Corp 590,201 500,159
48,500 IKOS Systems Inc+ 397,989 442,563
35,000 Metatec Corp Class A+ 394,719 450,625
9,000 Microsoft Corp+ 395,438 813,375
17,000 NETCOM On-Line Communication Services Inc+ 405,063 433,500
19,000 Open Environment Corp+ 344,750 389,500
23,500 Oracle Systems Corp+ 806,563 907,688
30,000 Rational Software Corp+ 367,500 408,750
45,000 Sanctuary Woods Multimedia+ 216,081 230,625
40,000 Seventh Level Inc+ 358,750 570,000
5,000 Sierra On-Line Inc+ 91,250 125,000
3,000 Spyglass Inc+ 51,000 85,875
25,000 Veritas Software Corp+ 342,555 556,250
30,000 Viasoft Inc+ 269,688 393,750
9,000 VideoServer Inc+ 199,875 351,000
------------ ------------
$ 5,819,390 $ 7,364,660
</TABLE>
78
<PAGE> 138
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
COMPUTER SYSTEMS - 11.39%
35,000 Adaptec Inc+ $ 803,064 $ 1,295,000
7,750 Chipcom Corp+ 309,250 184,063
30,000 Cisco Systems Inc+ 797,250 1,516,875
34,500 Komag Inc+ 900,874 1,794,000
12,000 Merix Corp+ 265,000 363,000
20,000 Plaintree Systems Inc+ 221,875 210,000
36,000 Solectron Corp+ 851,938 1,228,500
------------ ------------
$ 4,149,251 $ 6,591,438
CONSUMER - GROWTH - 1.39%
15,000 Barnes & Noble+ $ 429,938 $ 510,000
3,500 Nike Inc Class B 295,155 294,000
------------ ------------
$ 725,093 $ 804,000
ELECTRICAL EQUIPMENT - 6.11%
6,000 Anadigics Inc+ $ 104,500 $ 117,000
10,000 Franklin Electronic Publishers Inc+ 260,800 256,250
25,000 Integrated Device Technology Inc+ 875,125 1,156,250
45,000 Interlink Electronics Inc+ 225,000 618,750
20,000 Nokia Corp ADR Class A 708,380 1,192,500
10,000 Recoton Corp+ 206,250 195,000
------------ ------------
$ 2,380,055 $ 3,535,750
ELECTRONIC SEMICONDUCTORS - 4.52%
30,000 Genus Inc+ $ 413,334 $ 406,875
14,000 Intel Corp 486,750 886,375
25,000 Semtech Corp+ 407,032 418,750
30,000 VLSI Technology Inc+ 883,750 903,750
------------ ------------
$ 2,190,866 $ 2,615,750
ENERGY & RELATED - 3.83%
5,000 Anadarko Petroleum Corp $ 271,025 $ 215,625
15,000 Ensco International Inc+ 250,367 238,125
25,000 KCS Energy 602,323 534,375
20,000 Ranger Oil Ltd 131,400 125,000
</TABLE>
79
<PAGE> 139
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
15,000 Sun Co Inc $ 469,950 $ 410,625
12,000 Tosco Corp 433,807 382,500
17,500 Trigen Energy Corp 300,850 308,438
------------ ------------
$ 2,459,722 $ 2,214,688
ENTERTAINMENT - 5.62%
22,500 Anchor Gaming+ $ 367,093 $ 500,625
34,500 Children's Discovery Centers of
America Inc+ 506,583 577,875
25,000 Circus Circus Entertainment Inc+ 853,359 881,250
5,000 Jacor Communications Inc+ 83,750 80,000
55,000 Radica Games Ltd+ 509,375 178,750
25,000 Regal Cinemas Inc+ 551,740 800,000
45,900 Sports Club Inc+ 370,356 235,238
------------ ------------
$ 3,242,256 $ 3,253,738
ENVIRONMENTAL CONTROL - 2.84%
47,000 Molten Metal Technology Inc+ $ 1,017,970 $ 1,092,750
17,500 Sanifill Inc+ 478,243 549,063
------------ ------------
$ 1,496,213 $ 1,641,813
FINANCE & RELATED - 7.11%
30,000 Countrywide Credit & Industries Inc $ 606,307 $ 630,000
30,000 Emphesys Financial Group 918,213 708,750
8,000 FelCor Suite Hotels Inc 201,500 204,000
30,000 Mid Atlantic Medical Services+ 650,238 555,000
60,000 New Envoy Inc+ 284,846 510,000
15,000 Student Loan Marketing Assoc 564,198 703,125
25,000 Value Health Inc+ 960,761 806,250
------------ ------------
$ 4,186,063 $ 4,117,125
FOOD & RELATED - 1.70%
15,000 General Nutrition Co Inc+ $ 378,750 $ 526,875
30,000 Whole Foods Market Inc+ 566,125 457,500
------------ ------------
$ 944,875 $ 984,375
</TABLE>
80
<PAGE> 140
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
GENERAL BUSINESS & RELATED - 2.11%
12,200 La Quinta Inns Inc $ 343,850 $ 329,400
15,000 Sitel Corp+ 227,009 268,125
10,000 Synopsys Inc+ 471,000 626,250
------------ ------------
$ 1,041,859 $ 1,223,775
HEALTHCARE - 7.37%
30,000 Coram Healthcare+ $ 574,594 $ 423,750
40,000 Genesis Health Ventures Inc+ 909,602 1,185,000
50,000 Healthsouth Corp+ 991,649 868,750
25,000 Renal Treatment Centers+ 474,875 615,625
25,000 Vencor Inc+ 805,118 787,500
55,000 Work Recovery Inc+ 183,874 388,438
------------ ------------
$ 3,939,712 $ 4,269,063
HOSPITAL & MEDICAL SUPPLIES - 4.45%
50,000 Bioject Medical Technologies+ $ 229,063 $ 75,000
40,000 Heart Technology Inc+ 777,569 775,000
25,000 I-Stat Corp+ 604,003 912,500
7,500 ICU Medical Inc+ 90,000 105,938
30,000 Innerdyne Inc+ 143,725 86,250
25,000 Sola International Inc+ 438,304 621,875
------------ ------------
$ 2,282,664 $ 2,576,563
MANUFACTURING PROCESSING - 2.51%
50,000 Endosonics Corp+ $ 410,156 $ 556,250
25,000 Lydall Inc+ 371,040 550,000
15,500 Pall Corp 359,570 344,875
------------ ------------
$ 1,140,766 $ 1,451,125
PHARMACEUTICALS - 0.43%
40,000 Seragen Inc+ $ 305,315 $ 250,000
</TABLE>
81
<PAGE> 141
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
RETAIL STORES - 0.98%
20,000 Pacific Sunwear of California+ $ 187,688 $ 135,000
15,000 PetSmart Inc+ 383,125 431,250
------------ ------------
$ 570,813 $ 566,250
TELECOMMUNICATIONS - 8.12%
20,000 California Microwave Inc+ $ 656,125 $ 501,250
17,500 DSC Communications Corp+ 633,750 813,750
33,000 DSP Communications Inc+ 435,415 684,750
15,000 Geotek Communications Inc+ 132,188 129,375
20,000 Harmonic Lightwaves Inc+ 358,750 335,000
45,000 LCI International Inc+ 729,874 1,378,125
25,000 Paging Network Inc+ 662,785 856,250
------------ ------------
$ 3,608,887 $ 4,698,500
TRANSPORTATION - 3.04%
20,000 Greenbrier Companies Inc $ 307,323 $ 262,500
40,000 Landair Services Inc+ 666,866 540,000
10,000 Marten Transportation Ltd+ 196,250 195,000
30,000 Mesa Airlines Inc+ 531,588 273,750
10,000 Wisconsin Central Transport+ 536,271 490,000
------------ ------------
$ 2,238,298 $ 1,761,250
TOTAL COMMON STOCKS $ 44,581,958 $51,557,926
MUTUAL FUNDS - 0.44%
10,000 Emerging Markets Infrastructure Fund $ 146,100 $ 102,500
15,000 The India Fund Inc 213,750 153,750
------------ ------------
TOTAL MUTUAL FUNDS $ 359,850 $ 256,250
WARRANTS - 3.69%
70,000 Intel Corp expire 3/14/1998 $ 527,688 $ 2,117,500
3,000 Interlink Electronics Inc expire 06/07/1996 0 17,063
------------ ------------
TOTAL WARRANTS $ 527,688 $ 2,134,563
</TABLE>
82
<PAGE> 142
STRATEGIC GROWTH FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CONVERTIBLE CORPORATE BONDS - 0.94%
$ 240,000 First Financial Management 5.00% 12/15/99 $ 316,800
100,000 Genesis Health Ventures Inc 6.00 11/30/03 133,750
100,000 LDDS Communications Inc Convertible 5.00 08/15/03 94,750
------------
TOTAL LONG-TERM BONDS $ 545,300
(Cost $414,405)
SHORT-TERM INSTRUMENTS - 7.87%
U.S. TREASURY BILLS - 3.41%
$ 2,000,000 U.S. Treasury Bills 5.56%(F) 09/21/95 $ 1,975,815
REPURCHASE AGREEMENTS - 4.46%
$ 2,582,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.10 07/03/95 $ 2,582,000
------------
TOTAL SHORT-TERM INSTRUMENTS $ 4,557,815
(Cost $4,557,451)
TOTAL INVESTMENTS IN SECURITIES
(Cost $50,441,352)* (Notes 1 and 3) 102.00% $59,051,854
Other Assets and Liabilities, Net (2.00)% (1,159,568)
------ ------------
TOTAL NET ASSETS 100.00% $57,892,286
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
+ NON-INCOME EARNING SECURITIES.
(F) YIELD TO MATURITY.
*COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 12,319,316
Gross Unrealized Depreciation (3,708,814)
-------------
NET UNREALIZED APPRECIATION $ 8,610,502
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
83
<PAGE> 143
U.S. GOVERNMENT INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES - 51.56%
ADJUSTABLE RATE MORTGAGES - 0.92%
$ 22,768 GNMA #8109 (CMT) 6.75 % 03/20/16 $ 23,223
39,766 GNMA #8119 (CMT) 6.75 04/20/16 40,760
12,016 GNMA #8137 (CMT) 6.75 06/20/16 12,316
7,005 GNMA #8268 (CMT) 7.13 08/20/17 7,193
19,079 GNMA #8292 (CMT) 6.75 11/20/17 19,448
34,966 GNMA #8293 (CMT) 6.75 12/20/17 35,709
9,254 GNMA #8310 (CMT) 6.75 01/20/18 9,457
40,387 GNMA #8392 (CMT) 7.13 08/20/18 41,372
39,543 GNMA #8393 (CMT) 7.13 08/20/18 40,531
23,315 GNMA #8429 (CMT) 6.75 11/20/18 23,825
124,779 GNMA #8761 (CMT) 6.50 03/20/21 126,884
------------
$ 380,718
FEDERAL AGENCY - OTHER - 23.79%
$10,000,000 Tennessee Valley Authority 6.38 % 06/15/05 $ 9,893,700
FIXED RATE MORTGAGES - 23.50%
$ 49,067 FHLMC #275825 9.50 % 08/01/16 $ 51,578
19,040 FHLMC #303953 9.00 10/01/17 19,700
48,449 FHLMC #304114 9.00 05/01/18 50,129
126,984 FHLMC #304398 9.00 06/01/18 132,597
47,735 FHLMC #305831 10.00 08/01/18 51,642
9,694 FHLMC #307323 9.50 09/01/18 10,184
75,023 FHLMC #307637 9.50 07/01/16 78,799
43,589 FHLMC #307915 9.50 10/01/18 45,838
6,476 FHLMC #308074 9.50 10/01/18 6,812
26,844 FHLMC #360020 10.00 01/01/18 29,041
36,290 FHLMC #360045 10.00 02/01/19 39,035
56,489 FHLMC #532468 9.50 04/01/19 59,380
22,508 GNMA #150499 10.50 03/15/16 24,830
135,852 GNMA #17087 9.00 09/15/16 143,696
176,241 GNMA #173055 9.00 09/15/16 186,418
112,551 GNMA #176892 9.00 10/15/16 119,447
546,789 GNMA #190848 9.00 01/15/17 578,360
</TABLE>
84
<PAGE> 144
U.S. GOVERNMENT INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES (CONTINUED)
$ 204,190 GNMA #191961 9.00 % 02/15/20 $ 215,172
58,354 GNMA #202624 9.00 11/15/19 61,554
116,730 GNMA #236877 9.00 04/15/18 123,250
81,057 GNMA #285963 9.00 01/15/20 85,416
19,348 GNMA #289319 9.00 11/15/20 20,388
197,390 GNMA #303235 9.00 05/15/21 207,321
223,231 GNMA #304653 9.00 09/15/21 234,461
9,081 GNMA #314150 9.00 10/15/21 9,538
2,105,346 GNMA #319413 7.25 12/15/18 2,096,251
19,220 GNMA #33080 9.00 08/15/22 20,187
45,854 GNMA #335400 9.00 12/15/22 48,161
1,942,746 GNMA #358863 7.25 01/15/24 1,934,295
1,071,328 GNMA II #1124 11.00 01/20/19 1,162,723
531,688 GNMA II #1221 11.00 07/20/19 577,046
170,037 GNMA II #1562 10.00 02/20/21 181,672
62,725 GNMA II #167269 10.00 04/20/16 67,135
91,763 GNMA II #194221 10.00 09/20/20 98,042
372,495 GNMA II #266120 10.00 08/20/19 398,823
11,617 GNMA II #272537 10.00 08/20/19 12,433
18,691 GNMA II #278055 10.00 07/20/19 20,005
83,118 GNMA II #289000 10.00 05/20/20 88,806
251,256 GNMA II #85 10.00 02/20/22 268,449
198,315 GNMA II #908 10.00 01/20/18 211,886
------------
$ 9,770,500
U.S. GOVERNMENT AGENCY NOTES - 3.36%
$ 1,700,000 FNMA Principal Strip 7.58 %(F) 03/09/22 $ 1,396,295
------------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES $ 21,441,213
(Cost $21,284,705)
</TABLE>
85
<PAGE> 145
U.S. GOVERNMENT INCOME FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. TREASURY SECURITIES - 44.50%
U.S. TREASURY BONDS - 41.96%
$ 2,000,000 U.S. Treasury Bonds 7.63 % 02/15/25 $ 2,258,740
6,000,000 U.S. Treasury Bonds 11.63 11/15/04 8,248,140
4,500,000 U.S. Treasury Bonds 12.50 08/15/14 6,940,530
$ 17,447,410
U.S. TREASURY NOTES - 2.54%
$ 1,000,000 U.S. Treasury Notes 7.50 % 10/31/99 $ 1,056,090
------------
TOTAL U.S. TREASURY SECURITIES $ 18,503,500
(Cost $19,022,502)
SHORT-TERM INSTRUMENTS - 3.46%
REPURCHASE AGREEMENTS - 3.45%
$ 1,438,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.10 % 07/03/95 $ 1,438,000
(Cost $1,438,000)
TOTAL INVESTMENTS IN SECURITIES
(Cost $41,745,207)* (Notes 1 and 3) 99.52% 41,382,713
Other Assets and Liabilities, Net 0.48% 198,377
------ ------------
TOTAL NET ASSETS 100.00% $ 41,581,090
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
(F) YIELD TO MATURITY.
*COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 379,808
Gross Unrealized Depreciation (742,302)
-------------
NET UNREALIZED DEPRECIATION ($ 362,494)
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
86
<PAGE> 146
VARIABLE RATE GOVERNMENT FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES - 108.69%
ADJUSTABLE RATE MORTGAGES - 90.10%
$ 1,190,065 FHLMC #395009 (COFI) 6.03 % 06/01/29 $ 1,187,089
3,175,120 FHLMC #607289 (CMT) 7.61 09/01/22 3,256,467
5,909,632 FHLMC #607420 (CMT) 7.39 10/01/22 6,035,211
4,190,881 FHLMC #607480 (CMT) 7.47 10/01/22 4,264,221
3,334,763 FHLMC #607635 (CMT) 7.58 12/01/22 3,426,469
2,917,116 FHLMC #607726 (CMT) 7.68 01/01/23 3,000,983
14,317,424 FHLMC #607785 (CMT) 7.75 02/01/23 14,621,669
2,614,295 FHLMC #640065 (CMT) 7.37 01/01/18 2,663,313
8,468,864 FHLMC #755102 (CMT) 6.86 06/01/18 8,570,986
218,840 FHLMC #770641 (COFI) 6.00 02/01/19 216,240
7,590,783 FHLMC #845014 (CMT) 8.13 06/01/00 7,941,857
11,317,685 FHLMC #845130 (CMT) 7.06 06/01/22 11,531,703
56,706 FHLMC #845410 (CMT) 7.04 07/01/23 57,379
53,172,219 FHLMC #845535 (CMT) 7.44 10/01/23 55,008,256
24,896 FHLMC #845613 (CMT) 5.62 01/01/24 25,274
40,415,931 FHLMC #845752 (CMT) 6.00 05/01/24 40,674,997
40,794,560 FHLMC #845790 (CMT) 7.10 05/01/24 41,847,060
26,530,172 FHLMC #845897 (CMT) 7.45 06/01/24 26,848,003
36,181,396 FHLMC #845916 (CMT) 6.66 09/01/24 36,851,114
24,872,939 FHLMC #845969 (6 month LIBOR) 6.38 12/01/24 25,552,965
520,353 FHLMC #845980 (CMT) 7.51 06/01/30 531,723
21,267,982 FHLMC TBA (CMT) 7.28 07/25/95 21,892,729
38,943,521 FHLMC-Giant #846101 (CMT) 7.47 05/01/25 39,892,770
3,916,834 FNMA #110933 (CMT) 7.57 09/01/18 4,036,767
1,625,709 FNMA #123496 (COFI) 5.42 07/01/27 1,609,451
33,542,935 FNMA #124764 (CMT) 7.60 03/01/23 34,360,377
8,762,152 FNMA #124862 (CMT) 7.87 05/01/23 8,893,584
7,844,053 FNMA #124972 (CMT) 6.85 08/01/23 7,927,357
</TABLE>
88
<PAGE> 147
VARIABLE RATE GOVERNMENT FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES (CONTINUED)
$10,434,574 FNMA #136014 (COFI) 5.41 % 05/01/18 $ 10,842,044
31,173,250 FNMA #190166 (CMT) 5.77 11/01/23 31,874,648
56,925,268 FNMA #190726 (CMT) 7.93 03/01/33 58,668,319
10,583,102 FNMA #190826 (CMT) 7.40 03/01/24 10,893,928
25,408,215 FNMA #190878 (CMT) 6.10 06/01/24 25,805,091
36,841,058 FNMA #303336 (CMT) 7.50 05/31/25 37,692,823
24,785,955 FNMA #303349 (CMT) 6.36 05/01/24 25,173,111
11,086,669 FNMA #303386 (CMT) 5.91 06/01/25 11,228,717
1,619,555 FNMA #60585 (COFI) 6.50 11/01/17 1,589,188
667,788 FNMA #60588 (COFI) 6.50 01/01/18 654,432
1,653,505 FNMA #60590 (COFI) 6.50 02/01/18 1,622,502
1,167,436 FNMA #64083 (COFI) 5.51 05/01/18 1,165,241
8,128,652 FNMA #70009 (CMT) 7.30 04/01/18 8,265,783
10,070,308 FNMA #70186 (CMT) 7.52 05/01/21 10,208,775
4,920,099 FNMA #70485 (CMT) 6.81 04/01/27 4,987,750
1,835,435 FNMA #70911 (COFI) 6.36 06/01/19 1,846,906
1,261,051 FNMA #70947 (COFI) 5.93 12/01/28 1,248,441
5,481,956 FNMA #90031 (CMT) 7.94 01/01/20 5,584,743
6,600,000 FNMA TBA (CMT) 6.59 07/28/95 6,583,500
10,000,000 FNMA TBA (COFI) 6.31 07/25/25 10,081,200
178,198 GNMA II #8623 (CMT) 7.50 04/20/25 182,569
2,842,098 GNMA II #8633 (CMT) 7.50 05/20/25 2,979,762
1,960,000 GNMA II #8644 (CMT) 7.50 06/20/25 2,053,345
1,522,183 GNMA II #8998 (CMT) 6.50 06/20/22 1,552,383
10,000,000 GNMA TBA (CMT) 7.00 07/25/25 9,884,375
------------
$695,395,590
</TABLE>
89
<PAGE> 148
VARIABLE RATE GOVERNMENT FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES (CONTINUED)
REAL ESTATE MORTGAGE INVESTMENT
CONDUITS - 18.60%
$ 4,029,016 FHLMC 1421SA 6.36 % 11/15/22 $ 3,957,178
12,759,902 FHLMC 1541KB 6.50 09/15/22 13,038,961
8,749,072 FHLMC 1556 FA 6.01 08/15/13 8,266,998
18,845,126 FHLMC 1609LA 5.91 11/15/23 18,283,353
14,924,601 FHLMC 1614VA 6.06 05/15/23 13,901,818
18,709,658 FHLMC G-18 A 5.75 09/25/23 18,604,510
9,294,421 FNMA 1993-198FA 6.06 10/25/23 9,053,881
18,000,000 FNMA 1993-199FA 6.64 10/25/23 17,437,320
20,576,740 FNMA 1994-15 F 6.74 02/25/24 20,231,462
8,344,327 FNMA 1995-210 FL 6.01 09/25/23 8,261,468
13,149,999 FNMA 94-36 FB 6.36 03/25/24 12,504,071
------------
$143,541,020
TOTAL U.S. GOVERNMENT AGENCY SECURITIES $838,936,610
(Cost $841,419,840)
SHORT-TERM INSTRUMENTS - 5.62%
U.S. TREASURY BILLS - 4.02%
$23,000,000 U.S. Treasury Bills 5.64 %(F) 12/21/95 $ 22,406,830
9,000,000 U.S. Treasury Bills 5.64 (F) 04/04/96 8,626,680
------------
$ 31,033,510
</TABLE>
90
<PAGE> 149
VARIABLE RATE GOVERNMENT FUND -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHORT-TERM INSTRUMENTS (CONTINUED)
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS - 1.60%
$12,372,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.10 07/03/95 $ 12,372,000
------------
TOTAL SHORT-TERM INSTRUMENTS $ 43,405,510
(Cost $43,397,467)
TOTAL INVESTMENTS IN SECURITIES
(Cost $884,817,307)* (Notes 1 and 3) 114.32 % $882,342,120
Other Assets and Liabilities, Net (14.32)% (110,503,396)
------ ------------
TOTAL NET ASSETS 100.00% $771,838,724
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------
(F) YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 4,729,526
Gross Unrealized Depreciation (7,204,713)
-------------
NET UNREALIZED DEPRECIATION ($ 2,475,187)
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
91
<PAGE> 150
STATEMENT OF ASSETS AND LIABILITIES (unaudited)
June 30, 1995
<TABLE>
<CAPTION>
CALIFORNIA
ASSET CALIFORNIA TAX-FREE
ALLOCATION TAX-FREE MONEY
FUND BOND FUND MARKET FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below) $60,649,950 $283,477,291 $317,510,488
Cash 2,247 28 408,379
Receivables:
Dividends and Interest 113,607 4,933,672 2,426,194
Fund shares sold 1,000 24,214 0
Investment securities sold 0 0 0
Due from administrator
(Note 2) 0 0 0
Organization expenses, net
of amortization 13,034 3,095 0
Prepaid expenses 8,240 0 86
TOTAL ASSETS 60,788,078 288,438,300 320,345,147
LIABILITIES
Payables:
Investment securities
purchased 0 1,006,700 18,277,020
Distribution to
shareholders 323,049 1,288,182 703,805
Fund shares redeemed 75,481 157,281 0
Due to sponsor and
distributor (Note 2) 61,595 264,659 440,452
Due to advisor (Note 2) 37,466 119,059 67,183
Other 19,443 181,899 96,806
TOTAL LIABILITIES 517,034 3,017,780 19,585,266
TOTAL NET ASSETS
$60,271,044 $285,420,520 $300,759,881
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $40,742,876 $264,363,073 $300,855,579
Paid-in capital, Class D
or I 11,658,231 7,987,422 0
Undistributed
(overdistributed) net
investment income 0 (15,018) 0
Undistributed net realized
gain(loss) on
investments 1,085,602 7,226,398 (95,698)
Net unrealized
appreciation
(depreciation) of
investments 6,784,335 5,858,645 0
TOTAL NET ASSETS $60,271,044 $285,420,520 $300,759,881
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
(NOTE 4)
Net assets - Class A* $48,329,397 $278,174,555 $300,759,881
Shares outstanding - Class
A* 3,870,248 26,015,928 300,855,583
Net asset value per share -
Class A* $12.49 $10.69 $1.00
Maximum offering price per
share - Class A* $13.08+ $11.19+ $1.00
Net assets - Class D or I $11,941,647 $7,245,965 N/A
Shares outstanding - Class D
or I 769,581 518,969 N/A
Net asset value and offering
price per share - Class D
or I $15.52 $13.96 N/A
INVESTMENTS AT COST (NOTE 3) $53,865,615 $277,618,646 $317,510,488
</TABLE>
- --------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
+ MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
92
<PAGE> 151
<TABLE>
<CAPTION>
SHORT-TERM SHORT-TERM
MONEY MUNICIPAL GOVERNMENT- MUNICIPAL STRATEGIC
MARKET INCOME CORPORATE INCOME GROWTH
FUND FUND INCOME FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below) $477,212,326 $80,188,048 $491,326 $14,851,046 $59,051,854
Cash 10,657 413 0 0 370
Receivables:
Dividends and Interest 641,347 1,309,204 2,290 54,962 7,485
Fund shares sold 0 98 0 0 247,472
Investment securities sold 0 0 0 0 346,250
Due from administrator
(Note 2) 0 0 0 0 0
Organization expenses, net
of amortization 15,940 36,187 69,930 57,952 43,137
Prepaid expenses 9,423 1,321 2,118 5,590 10,120
TOTAL ASSETS 477,889,693 81,535,271 565,664 14,969,550 59,706,688
LIABILITIES
Payables:
Investment securities
purchased 0 0 0 0 1,498,888
Distribution to
shareholders 1,906,650 359,681 2,178 50,412 0
Fund shares redeemed 0 91,900 0 0 184,373
Due to sponsor and
distributor (Note 2) 269,026 100,010 78,600 85,085 57,059
Due to advisor (Note 2) 97,957 25,670 2,331 864 27,303
Other 95,896 86,045 30,665 25,245 46,779
TOTAL LIABILITIES 2,369,529 663,306 113,774 161,606 1,814,402
TOTAL NET ASSETS $475,520,164 $80,871,965 $451,890 $14,807,944 $57,892,286
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $347,948,557 $68,425,170 $450,543 $14,683,264 $28,745,805
Paid-in capital, Class D
or I 127,609,753 15,907,232 N/A N/A 14,730,909
Undistributed
(overdistributed) net
investment income 0 (36,071) 0 0 (699,968)
Undistributed net realized
gain(loss) on
investments (38,146) (3,991,884) 1,054 (1,339) 6,505,038
Net unrealized
appreciation
(depreciation) of
investments 0 567,518 293 126,019 8,610,502
TOTAL NET ASSETS $475,520,164 $80,871,965 $451,890 $14,807,944 $57,892,286
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
(NOTE 4)
Net assets - Class A* $347,910,986 $66,310,085 $451,890 $14,807,944 $39,052,509
Shares outstanding - Class
A* 347,948,514 6,336,396 90,149 2,967,662 2,289,399
Net asset value per share -
Class A* $1.00 $10.46 $5.01 $4.99 $17.06
Maximum offering price per
share - Class A* $1.00 $10.78** $5.16** $5.14** $17.86+
Net assets - Class D or I $127,609,178 $14,561,880 N/A N/A $18,839,777
Shares outstanding - Class D
or I 127,609,753 1,027,527 N/A N/A 890,580
Net asset value and offering
price per share - Class D
or I $1.00 $14.17 N/A N/A $21.15
INVESTMENTS AT COST (NOTE 3) $477,212,326 $79,620,530 N/A N/A $50,441,352
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
93
<PAGE> 152
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
U.S. GOVERNMENT U.S. TREASURY VARIABLE RATE
INCOME MONEY MARKET GOVERNMENT
FUND FUND FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below) $41,382,713 $212,716,383 $882,342,120
Cash 316 4,264 4,357
Receivables:
Dividends and Interest 464,855 0 6,856,308
Fund shares sold 27,851 0 0
Investment securities sold 1,828 0 11,161,161
Due from administrator
(Note 2) 0 4,586 0
Organization expenses, net
of amortization 11,092 29,056 20,383
Prepaid expenses 13,619 1,276 0
TOTAL ASSETS 41,902,274 212,755,565 900,384,329
LIABILITIES
Payables:
Investment securities
purchased 0 0 120,484,085
Distribution to
shareholders 230,263 861,605 3,837,280
Fund shares redeemed 36,192 0 2,507,219
Due to sponsor and
distributor (Note 2) 24,310 273,734 592,443
Due to advisor (Note 2) 11,719 0 291,133
Other 18,700 33,384 833,445
TOTAL LIABILITIES 321,184 1,168,723 128,545,605
TOTAL NET ASSETS $41,581,090 $211,586,842 $771,838,724
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $39,344,194 $187,768,219 $911,660,298
Paid-in capital, Class D
or I 4,160,199 23,870,597 11,081,488
Undistributed
(overdistributed) net
investment income (12,644) 0 0
Undistributed net realized
gain(loss) on
investments (1,548,165) (51,974) (148,427,875)
Net unrealized
appreciation
(depreciation) of
investments (362,494) 0 (2,475,187)
TOTAL NET ASSETS $41,581,090 $211,586,842 $771,838,724
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
(NOTE 4)
Net assets - Class A* $38,286,316 $187,718,276 $761,846,888
Shares outstanding - Class
A* 3,664,054 187,768,220 81,790,651
Net asset value per share -
Class A* $10.45 $1.00 $9.31
Maximum offering price per
share - Class A* $10.94+ $1.00 $9.60**
Net assets - Class D or I $3,294,774 $23,868,566 $9,991,836
Shares outstanding - Class D
or I 230,651 23,870,597 717,578
Net asset value and offering
price per share - Class D
or I $14.28 $1.00 $13.92
INVESTMENTS AT COST (NOTE 3) $41,745,207 $212,716,383 $884,817,307
</TABLE>
- --------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
+ MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
94
<PAGE> 153
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
CALIFORNIA
ASSET CALIFORNIA TAX-FREE
ALLOCATION TAX-FREE MONEY
FUND BOND FUND MARKET FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 556,430 $ 0 $ 0
Interest 594,678 9,145,445 5,386,764
TOTAL INVESTMENT INCOME
(NOTE 5) 1,151,108 9,145,445 5,386,764
EXPENSES (NOTE 2)
Advisory fees 197,388 715,790 612,243
Administration fees 28,194 193,312 137,280
Custody fees 0 26,033 26,154
Service fees 13,811 9,413 0
Portfolio accounting fees 0 59,242 57,958
Transfer agency fees 24,987 83,249 20,453
Distribution fees 98,109 65,045 68,641
Amortization of
organization expenses 2,092 580 0
Legal and audit fees 16,315 22,915 22,521
Registration fees 27,280 10,783 4,959
Directors' fees 2,975 2,480 2,480
Shareholder reports 7,438 30,739 3,223
Other 3,138 27,023 8,450
TOTAL EXPENSES 421,727 1,246,604 964,362
Less:
Waived fees and reimbursed
expenses (Note 2) (14,400) (571,370) (17,234)
NET EXPENSES 407,327 675,234 947,128
NET INVESTMENT INCOME (LOSS) 743,781 8,470,211 4,439,636
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments 1,085,602 7,226,398 (14,988)
Net change in unrealized
appreciation
(depreciation) of
investments 7,863,987 6,423,193 0
NET GAIN (LOSS) ON
INVESTMENTS 8,949,589 13,649,591 (14,988)
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $9,693,370 $22,119,802 $4,424,648
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
95
<PAGE> 154
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
SHORT-TERM
MONEY MUNICIPAL GOVERNMENT-
MARKET INCOME CORPORATE
FUND FUND INCOME FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 0 $ 0 $ 0
Interest 11,399,083 2,716,643 7,342
TOTAL INVESTMENT INCOME
(NOTE 5) 11,399,083 2,716,643 7,342
EXPENSES (NOTE 2)
Advisory fees 468,085 217,637 0
Administration fees 187,234 43,741 178
Custody fees 34,825 7,745 0
Service fees 0 19,115 0
Portfolio accounting fees 67,456 37,783 0
Transfer agency fees 25,580 26,813 0
Distribution fees 402,810 91,210 297
Amortization of
organization expenses 1,915 14,064 7,756
Legal and audit fees 20,361 16,626 19,780
Registration fees 12,479 35,075 34,712
Directors' fees 2,480 2,480 1,339
Shareholder reports 7,439 17,452 4,960
Other 5,871 7,393 1,488
TOTAL EXPENSES 1,236,535 537,134 70,510
Less:
Waived fees and reimbursed
expenses (Note 2) (83,519) (227,674) (70,152)
NET EXPENSES 1,153,016 309,460 358
NET INVESTMENT INCOME (LOSS) 10,246,067 2,407,183 6,984
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments* 45 (390,953) 1,054
Net change in unrealized
appreciation
(depreciation) of
investments* 0 5,384,340 1,670
NET GAIN (LOSS) ON
INVESTMENTS 45 4,993,387 2,724
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $10,246,112 $7,400,570 $9,708
</TABLE>
- --------------------------------------------------------------------
* FOR THE SHORT-TERM GOVERNMENT-CORPORATE INCOME FUND AND THE SHORT-TERM
MUNICIPAL INCOME FUND THE REALIZED AND UNREALIZED GAINS AND LOSSES ARE
ALLOCATED FROM THEIR CORRESPONDING MASTER PORTFOLIO.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
96
<PAGE> 155
<TABLE>
<CAPTION>
SHORT-TERM
MUNICIPAL STRATEGIC U.S. GOVERNMENT U.S. TREASURY VARIABLE RATE
INCOME GROWTH INCOME MONEY MARKET GOVERNMENT
FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 0 $ 90,762 $ 0 $ 0 $ 0
Interest 296,472 61,604 1,601,367 5,917,639 29,713,693
TOTAL INVESTMENT INCOME
(NOTE 5) 296,472 152,366 1,601,367 5,917,639 29,713,693
EXPENSES (NOTE 2)
Advisory fees 0 116,310 99,975 257,510 2,247,438
Administration fees 9,052 35,083 19,995 103,004 499,076
Custody fees 0 9,500 12,621 20,177 84,525
Service fees 0 20,163 4,362 0 13,634
Portfolio accounting fees 0 28,273 27,098 51,097 120,394
Transfer agency fees 0 17,419 27,168 18,893 43,507
Distribution fees 15,087 98,798 14,702 240,231 1,137,352
Amortization of
organization expenses 9,695 7,389 1,736 5,385 9,608
Legal and audit fees 19,682 13,154 9,414 20,519 91,933
Registration fees 30,438 19,712 21,521 22,411 50,088
Directors' fees 1,339 2,480 2,480 2,480 2,480
Shareholder reports 4,959 12,397 9,917 11,205 21,630
Other 1,488 3,454 6,005 2,453 72,429
TOTAL EXPENSES 91,740 384,132 256,994 755,365 4,394,094
Less:
Waived fees and reimbursed
expenses (Note 2) (70,442) (31,286) (66,764) (104,184) (713,542)
NET EXPENSES 21,298 352,846 190,230 651,181 3,680,552
NET INVESTMENT INCOME (LOSS) 275,174 (200,480) 1,411,137 5,266,458 26,033,141
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments* (264) 6,505,038 (335,352) (39,534) (3,967,504)
Net change in unrealized
appreciation
(depreciation) of
investments* 154,399 5,966,134 3,523,042 0 17,108,703
NET GAIN (LOSS) ON
INVESTMENTS 154,135 12,471,172 3,187,690 (39,534) 13,141,199
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $429,309 $12,270,692 $4,598,827 $5,226,924 $39,174,340
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
97
<PAGE> 156
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
----------------------------------
FOR THE
(UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $ 743,781 $1,490,375
Net realized gain (loss)
on sale of investments 1,085,602 3,975,711
Net change in unrealized
appreciation
(depreciation) of
investments 7,863,987 (6,051,202)
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 9,693,370 (585,116)
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (631,711) (1,253,254)
CLASS D OR I (112,070) (192,825)
In excess of net
investment income
CLASS A* 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A* 0 (3,165,196)
CLASS D OR I 0 (766,987)
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 1,876,897 5,857,662
Reinvestment of dividends
- Class A* 3,583,022 694,596
Cost of shares redeemed -
Class A* (4,635,861) (14,543,493)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* 824,058 (7,991,235)
Proceeds from shares sold
- Class D or I 1,671,125 5,046,708
Reinvestment of dividends
- Class D or I 755,270 87,663
Cost of shares redeemed -
Class D or I (2,034,587) (3,194,348)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 391,808 1,940,023
INCREASE (DECREASE) IN NET
ASSETS 10,165,455 (12,014,590)
NET ASSETS:
Beginning net assets 50,105,589 62,120,179
ENDING NET ASSETS $60,271,044 $50,105,589
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 162,322 497,697
Shares issued in
reinvestment of
dividends - Class A* 333,830 60,791
Shares redeemed - Class A* (404,760) (1,244,313)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* 91,392 (685,825)
Shares sold - Class D or I 116,143 344,653
Shares issued in
reinvestment of
dividends - Class D or I 56,685 6,181
Shares redeemed - Class D
or I (142,292) (221,506)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 30,536 129,328
</TABLE>
- --------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
98
<PAGE> 157
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET
CALIFORNIA TAX-FREE BOND FUND FUND
---------------------------------- ----------------------------------
FOR THE FOR THE
(UNAUDITED) YEAR ENDED (UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31, SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994 JUNE 30, 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $8,470,211 $19,402,678 $4,439,636 $7,235,197
Net realized gain (loss)
on sale of investments 7,226,398 4,054,017 (14,988) (76,188)
Net change in unrealized
appreciation
(depreciation) of
investments 6,423,193 (39,374,337) 0 0
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 22,119,802 (15,917,642) 4,424,648 7,159,009
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (8,274,628) (18,973,436) (4,439,636) (7,235,197)
CLASS D OR I (195,583) (429,242) N/A N/A
In excess of net
investment income
CLASS A* 0 0 0 0
CLASS D OR I 0 0 N/A N/A
From net realized gain on
sales of investments
CLASS A* 0 (3,947,872) 0 0
CLASS D OR I 0 (106,145) N/A N/A
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0 0 0
CLASS D OR I 0 0 N/A N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 6,730,172 15,317,908 278,813,656 630,837,073
Reinvestment of dividends
- Class A* 6,967,983 14,574,219 1,434,791 2,663,580
Cost of shares redeemed -
Class A* (21,916,484) (80,201,764) (267,882,971) (742,727,104)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* (8,218,329) (50,309,637) 12,365,476 (109,226,451)
Proceeds from shares sold
- Class D or I 972,595 2,864,757 N/A N/A
Reinvestment of dividends
- Class D or I 184,156 348,941 N/A N/A
Cost of shares redeemed -
Class D or I (1,618,482) (2,499,120) N/A N/A
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I (461,731) 714,578 N/A N/A
INCREASE (DECREASE) IN NET
ASSETS 4,969,531 (88,969,396) 12,350,488 (109,302,639)
NET ASSETS:
Beginning net assets 280,450,989 369,420,385 288,409,393 397,712,032
ENDING NET ASSETS $285,420,520 $280,450,989 $300,759,881 $288,409,393
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 632,348 1,401,041 278,813,656 630,837,073
Shares issued in
reinvestment of
dividends - Class A* 669,329 1,315,610 1,434,791 2,663,580
Shares redeemed - Class A* (2,066,034) (7,464,971) (267,882,971) (742,727,100)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* (764,357) (4,748,320) 12,365,476 (109,226,447)
Shares sold - Class D or I 70,148 197,191 N/A N/A
Shares issued in
reinvestment of
dividends - Class D or I 13,534 24,268 N/A N/A
Shares redeemed - Class D
or I (116,348) (179,799) N/A N/A
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I (32,666) 41,660 N/A N/A
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
99
<PAGE> 158
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONEY MARKET FUND
----------------------------------
FOR THE
(UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $10,246,067 $11,484,645
Net realized gain (loss)
on sale of investments 45 (36,799)
Net change in unrealized
appreciation
(depreciation) of
investments 0 0
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 10,246,112 11,447,846
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (8,728,806) (11,414,964)
CLASS D OR I (1,517,261) (69,681)
In excess of net
investment income
CLASS A* 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A* 0 0
CLASS D OR I 0 0
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 887,095,686 1,991,327,766
Reinvestment of dividends
- Class A* 3,851,757 4,615,464
Cost of shares redeemed -
Class A* (850,914,329) (1,916,112,891)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* 40,033,114 79,830,339
Proceeds from shares sold
- Class D or I 241,919,895 19,768,852
Reinvestment of dividends
- Class D or I 1,015,908 26,043
Cost of shares redeemed -
Class D or I (126,563,561) (8,557,384)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 116,372,242 11,237,511
INCREASE (DECREASE) IN NET
ASSETS 156,405,401 91,031,051
NET ASSETS:
Beginning net assets 319,114,763 228,083,712
ENDING NET ASSETS $475,520,164 $319,114,763
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 887,095,686 1,991,327,765
Shares issued in
reinvestment of
dividends - Class A* 3,851,757 4,615,464
Shares redeemed - Class A* (850,914,329) (1,916,112,891)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* 40,033,114 79,830,338
Shares sold - Class D or I 241,919,895 19,768,852
Shares issued in
reinvestment of
dividends - Class D or I 1,015,908 26,043
Shares redeemed - Class D
or I (126,563,561) (8,557,384)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 116,372,242 11,237,511
</TABLE>
- --------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** THE FUND COMMENCED OPERATIONS ON SEPTEMBER 19, 1994.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
100
<PAGE> 159
<TABLE>
<CAPTION>
SHORT-TERM GOVERNMENT- CORPORATE
MUNICIPAL INCOME FUND INCOME FUND
---------------------------------- ----------------------------------
FOR THE FOR THE
(UNAUDITED) YEAR ENDED (UNAUDITED) PERIOD ENDED
SIX MONTHS ENDED DECEMBER 31, SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994 JUNE 30, 1995 1994**
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $2,407,183 $6,025,578 $6,984 $1,538
Net realized gain (loss)
on sale of investments (390,953) (3,600,931) 1,054 (1,534)
Net change in unrealized
appreciation
(depreciation) of
investments 5,384,340 (11,048,257) 1,670 157
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 7,400,570 (8,623,610) 9,708 161
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (2,021,606) (5,151,955) (6,984) (1,538)
CLASS D OR I (385,577) (873,623) N/A N/A
In excess of net
investment income
CLASS A* (16,850) (137,633) 0 0
CLASS D OR I (3,614) (26,101) N/A N/A
From net realized gain on
sales of investments
CLASS A* 0 0 0 0
CLASS D OR I 0 0 N/A N/A
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0 0 0
CLASS D OR I 0 0 N/A N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 1,905,703 14,853,144 349,018 97,090
Reinvestment of dividends
- Class A* 1,013,537 2,696,820 3,866 564
Cost of shares redeemed -
Class A* (14,502,350) (35,965,725) 0 0
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* (11,583,110) (18,415,761) 352,884 97,654
Proceeds from shares sold
- Class D or I 302,181 6,605,791 N/A N/A
Reinvestment of dividends
- Class D or I 148,369 363,289 N/A N/A
Cost of shares redeemed -
Class D or I (2,304,241) (3,876,822) N/A N/A
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I (1,853,691) 3,092,258 N/A N/A
INCREASE (DECREASE) IN NET
ASSETS (8,463,878) (30,136,425) 355,608 96,277
NET ASSETS:
Beginning net assets 89,335,843 119,472,268 96,282 5
ENDING NET ASSETS $80,871,965 $89,335,843 $451,890 $96,282
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 184,628 1,375,339 69,843 19,418
Shares issued in
reinvestment of
dividends - Class A* 98,386 257,416 774 114
Shares redeemed - Class A* (1,392,208) (3,481,504) 0 0
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* (1,109,194) (1,848,749) 70,617 19,532
Shares sold - Class D or I 21,463 447,121 N/A N/A
Shares issued in
reinvestment of
dividends - Class D or I 10,638 25,788 N/A N/A
Shares redeemed - Class D
or I (162,774) (283,002) N/A N/A
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I (130,673) 189,907 N/A N/A
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
STATEMENTS.
101
<PAGE> 160
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT-TERM MUNICIPAL INCOME FUND
----------------------------------
FOR THE
(UNAUDITED) PERIOD ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994**
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $275,174 $68,324
Net realized gain (loss)
on sale of investments (264) (33,634)
Net change in unrealized
appreciation
(depreciation) of
investments 154,399 4,179
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 429,309 38,869
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (275,174) (68,324)
CLASS D OR I N/A N/A
In excess of net
investment income
CLASS A* 0 0
CLASS D OR I N/A N/A
From net realized gain on
sales of investments
CLASS A* 0 0
CLASS D OR I N/A N/A
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0
CLASS D OR I N/A N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 4,378,358 12,358,144
Reinvestment of dividends
- Class A* 260,422 30,765
Cost of shares redeemed -
Class A* (1,763,316) (581,114)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* 2,875,464 11,807,795
Proceeds from shares sold
- Class D or I N/A N/A
Reinvestment of dividends
- Class D or I N/A N/A
Cost of shares redeemed -
Class D or I N/A N/A
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I N/A N/A
INCREASE (DECREASE) IN NET
ASSETS 3,029,599 11,778,340
NET ASSETS:
Beginning net assets 11,778,345 5
ENDING NET ASSETS $14,807,944 $11,778,345
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 880,018 2,502,660
Shares issued in
reinvestment of
dividends - Class A* 52,499 6,232
Shares redeemed - Class A* (356,574) (117,174)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* 575,943 2,391,718
Shares sold - Class D or I N/A N/A
Shares issued in
reinvestment of
dividends - Class D or I N/A N/A
Shares redeemed - Class D
or I N/A N/A
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I N/A N/A
</TABLE>
- --------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** THE FUND COMMENCED OPERATIONS ON JUNE 3, 1994.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
102
<PAGE> 161
<TABLE>
STRATEGIC GROWTH FUND U.S. GOVERNMENT INCOME FUND
---------------------------------- ----------------------------------
FOR THE FOR THE
(UNAUDITED) YEAR ENDED (UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31, SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994 JUNE 30, 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) ($200,480) ($449,157) $1,411,137 $3,493,708
Net realized gain (loss)
on sale of investments 6,505,038 1,481,221 (335,352) (1,212,813)
Net change in unrealized
appreciation
(depreciation) of
investments 5,966,134 336,969 3,523,042 (5,164,808)
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 12,270,692 1,369,033 4,598,827 (2,883,913)
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* 0 0 (1,298,703) (3,066,842)
CLASS D OR I 0 0 (112,434) (426,866)
In excess of net
investment income
CLASS A* 0 0 0 0
CLASS D OR I 0 0 0 0
From net realized gain on
sales of investments
CLASS A* 0 (655,929) 0 0
CLASS D OR I 0 (376,137) 0 0
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 (278,477) 0 0
CLASS D OR I 0 (170,680) 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 10,792,880 11,769,539 3,190,486 11,812,017
Reinvestment of dividends
- Class A* 589,218 403,346 315,675 1,241,308
Cost of shares redeemed -
Class A* (7,263,632) (10,877,764) (3,970,308) (22,062,966)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* 4,118,466 1,295,121 (464,147) (9,009,641)
Proceeds from shares sold
- Class D or I 2,749,766 6,859,821 36,814 1,463,572
Reinvestment of dividends
- Class D or I 286,085 175,834 68,611 271,695
Cost of shares redeemed -
Class D or I (3,611,881) (3,485,125) (807,915) (6,683,335)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I (576,030) 3,550,530 (702,490) (4,948,068)
INCREASE (DECREASE) IN NET
ASSETS 15,813,128 4,733,461 2,021,053 (20,335,330)
NET ASSETS:
Beginning net assets 42,079,158 37,345,697 39,560,037 59,895,367
ENDING NET ASSETS $57,892,286 $42,079,158 $41,581,090 $39,560,037
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 731,361 890,673 319,252 1,143,944
Shares issued in
reinvestment of
dividends - Class A* 44,336 30,559 31,746 120,007
Shares redeemed - Class A* (498,970) (834,218) (397,508) (2,181,814)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* 276,727 87,014 (46,510) (917,863)
Shares sold - Class D or I 147,875 410,160 2,692 101,936
Shares issued in
reinvestment of
dividends - Class D or I 17,296 10,884 5,052 19,155
Shares redeemed - Class D
or I (201,744) (214,855) (58,973) (485,093)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I (36,573) 206,189 (51,229) (364,002)
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
103
<PAGE> 162
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND
----------------------------------
FOR THE
(UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $5,266,458 $4,895,405
Net realized gain (loss)
on sale of investments (39,534) (12,441)
Net change in unrealized
appreciation
(depreciation) of
investments 0 0
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 5,226,924 4,882,964
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (4,860,840) (4,799,315)
CLASS D OR I (405,618) (96,090)
In excess of net
investment income
CLASS A* 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A* 0 0
CLASS D OR I 0 0
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 339,405,239 628,656,179
Reinvestment of dividends
- Class A* 2,154,524 1,652,082
Cost of shares redeemed -
Class A* (348,833,162) (553,436,130)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* (7,273,399) 76,872,131
Proceeds from shares sold
- Class D or I 250,095,108 310,876,391
Reinvestment of dividends
- Class D or I 258,576 21,937
Cost of shares redeemed -
Class D or I (230,383,211) (306,998,204)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 19,970,473 3,900,124
INCREASE (DECREASE) IN NET
ASSETS 12,657,540 80,759,814
NET ASSETS:
Beginning net assets 198,929,302 118,169,488
ENDING NET ASSETS $211,586,842 $198,929,302
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 339,405,239 628,656,178
Shares issued in
reinvestment of
dividends - Class A* 2,154,524 1,652,082
Shares redeemed - Class A* (348,833,162) (553,436,130)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* (7,273,399) 76,872,130
Shares sold - Class D or I 250,095,108 310,876,391
Shares issued in
reinvestment of
dividends - Class D or I 258,576 21,937
Shares redeemed - Class D
or I (230,383,211) (306,998,204)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 19,970,473 3,900,124
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
104
<PAGE> 163
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT FUND
----------------------------------
FOR THE
(UNAUDITED) YEAR ENDED
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $26,033,141 $74,993,269
Net realized gain (loss)
on sale of investments (3,967,504) (125,280,826)
Net change in unrealized
appreciation
(depreciation) of
investments 17,108,703 (11,149,757)
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 39,174,340 (61,437,314)
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A* (25,741,615) (74,426,329)
CLASS D OR I (291,526) (566,940)
In excess of net
investment income
CLASS A* 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A* 0 0
CLASS D OR I 0 0
In excess of net realized
gain on sales of
investments
From tax return of capital
CLASS A* 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A* 8,783,795 357,940,526
Reinvestment of dividends
- Class A* 6,629,248 24,395,946
Cost of shares redeemed -
Class A* (482,098,487) (980,573,296)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A* (466,685,444) (598,236,824)
Proceeds from shares sold
- Class D or I 236,169 7,287,276
Reinvestment of dividends
- Class D or I 126,500 232,670
Cost of shares redeemed -
Class D or I (2,745,693) (5,418,430)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I (2,383,024) 2,101,516
INCREASE (DECREASE) IN NET
ASSETS (455,927,269) (732,565,891)
NET ASSETS:
Beginning net assets 1,227,765,993 1,960,331,884
ENDING NET ASSETS $771,838,724 $1,227,765,993
SHARES ISSUED AND REDEEMED:
Shares sold - Class A* 945,059 36,230,262
Shares issued in
reinvestment of
dividends - Class A* 715,304 2,505,413
Shares redeemed - Class A* (52,125,334) (101,611,784)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A* (50,464,971) (62,876,109)
Shares sold - Class D or I 16,969 495,723
Shares issued in
reinvestment of
dividends - Class D or I 9,131 16,111
Shares redeemed - Class D
or I (197,997) (380,431)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I (171,897) 131,403
</TABLE>
- --------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
105
<PAGE> 164
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
--------------------------------------------------
CLASS A
--------------------------------------------------
(UNAUDITED)
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.67 $11.90 $11.45 $11.95
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.16 0.31 0.30 0.47
Net realized and unrealized gain (loss) on
investments 1.82 (0.39) 1.12 0.36
----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 1.98 (0.08) 1.42 0.83
LESS DISTRIBUTIONS:
Dividends from net investment income (0.16) (0.31) (0.30) (0.63)
Distributions from net realized gain 0.00 (0.84) (0.67) (0.70)
----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.16) (1.15) (0.97) (1.33)
----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $12.49 $10.67 $11.90 $11.45
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 18.65% (0.68)% 12.54% 7.44%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $48,329 $40,308 $53,124 $41,165
Number of shares outstanding, end of period
(000) 3,870 3,779 4,465 3,596
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 1.30% 1.30% 1.36% 1.25%
Ratio of net investment income to average net
assets(2) 2.79% 2.41% 2.64% 4.08%
Portfolio turnover 43% 50% 53% 38%
- --------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 1.34% 1.38% 1.47% 1.71%
(2) Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses 2.75% 2.33% 2.53% 3.62%
- --------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
106
<PAGE> 165
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND (CONT.) CALIFORNIA TAX FREE BOND FUND
--------------------------------------------------------------- -------------------------------------
CLASS A (CONT.) CLASS D CLASS A
------------------------ ------------------------------------- ------------------------------------
(UNAUDITED) (UNAUDITED)
YEAR YEAR SIX MONTHS YEAR PERIOD SIX MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31,
1991 1990 1995 1994 1993* 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $10.31 $10.39 $13.26 $14.75 $15.00 $10.20 $11.47 $10.92
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.57 0.63 0.14 0.25 0.07 0.31 0.64 0.63
Net realized and
unrealized gain (loss)
on investments 1.51 0.10 2.26 (0.45) 0.61 0.49 (1.13) 0.75
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT
OPERATIONS 2.08 0.73 2.40 (0.20) 0.68 0.80 (0.49) 1.38
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.44) (0.61) (0.14) (0.25) (0.10) (0.31) (0.64) (0.63)
Distributions from net
realized gain 0.00 (0.20) 0.00 (1.04) (0.83) 0.00 (0.14) (0.20)
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.44) (0.81) (0.14) (1.29) (0.93) (0.31) (0.78) (0.83)
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF
PERIOD $11.95 $10.31 $15.52 $13.26 $14.75 $10.69 $10.20 $11.47
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT
ANNUALIZED)+ 20.69% 7.08% 18.21% (1.38)% 4.56% 7.94% (4.32)% 12.98%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $38,663 $27,689 $11,942 $9,798 $8,996 $278,175 $273,105 $361,779
Number of shares
outstanding, end of
period (000) 3,235 2,686 770 739 610 26,016 26,780 31,529
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 1.38% 1.59% 2.05% 2.01% 0.96% 0.45% 0.50% 0.69%
Ratio of net investment
income to average net
assets(2) 5.23% 6.01% 2.03% 1.75% 0.53% 5.91% 5.87% 5.54%
Portfolio turnover 18% 94% 43% 50% 53% 23% 4% 10%
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 1.56% 1.74% 2.17% 2.20% 1.12% 0.85% 0.95% 0.85%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 5.05% 5.86% 1.91% 1.56% 0.37% 5.51% 5.42% 5.38%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
107
<PAGE> 166
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX FREE BOND FUND (CONT.)
-------------------------------------
CLASS A (CONT.)
-------------------------------------
YEAR YEAR YEAR
ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31,
1992 1991 1990
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.73 $10.27 $10.35
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.68 0.69 0.71
Net realized and unrealized gain (loss) on investments 0.26 0.46 (0.08)
----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 0.94 1.15 0.63
LESS DISTRIBUTIONS:
Dividends from net investment income (0.68) (0.69) (0.71)
Distributions from net realized gain (0.07) 0.00 0.00
----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.75) (0.69) (0.71)
----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $10.92 $10.73 $10.27
----------- ----------- -----------
----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 9.01% 11.62% 6.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $375,376 $332,845 $201,138
Number of shares outstanding, end of period (000) 34,376 31,008 19,576
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 0.50% 0.45% 0.29%
Ratio of net investment income to average net assets(2) 6.24% 6.56% 6.97%
Portfolio turnover 24% 8% 35%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 0.85% 0.87% 0.95%
(2) Ratio of net investment income to average net assets prior
to waived fees and reimbursed expenses 5.89% 6.14% 6.31%
- ---------------------------------------------------------------------------------------------------
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
</TABLE>
108
<PAGE> 167
<TABLE>
<CAPTION>
CALIFORNIA TAX FREE BOND FUND (CONT.) CALIFORNIA TAX FREE MONEY MARKET FUND
------------------------------------- --------------------------------------------------
CLASS D
-------------------------------------
(UNAUDITED) (UNAUDITED)
SIX MONTHS YEAR PERIOD SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993* 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $13.32 $14.98 $15.00 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.36 0.73 0.34 0.02 0.02 0.02 0.03
Net realized and
unrealized gain (loss)
on investments 0.64 (1.47) 0.24 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT
OPERATIONS 1.00 (0.74) 0.58 0.02 0.02 0.02 0.03
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.36) (0.73) (0.34) (0.02) (0.02) (0.02) (0.03)
Distributions from net
realized gain 0.00 (0.19) (0.26) 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.36) (0.92) (0.60) (0.02) (0.02) (0.02) (0.03)
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF
PERIOD $13.96 $13.32 $14.98 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT
ANNUALIZED)+ 7.56% (5.00)% 3.92% 1.63% 2.22% 1.84% 2.54%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $7,246 $7,346 $7,641 $300,760 $288,409 $397,712 $363,067
Number of shares
outstanding, end of
period (000) 519 552 510 300,856 288,409 397,717 363,069
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 1.16% 1.20% 1.32% 0.69% 0.68% 0.66% 0.66%
Ratio of net investment
income to average net
assets(2) 5.20% 5.15% 4.50% 3.23% 2.17% 1.82% 2.50%
Portfolio turnover 23% 4% 10% N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 1.59% 1.82% 1.61% 0.70% 0.70% 0.70% 0.69%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 4.77% 4.53% 4.21% 3.22% 2.15% 1.68% 2.47%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
109
<PAGE> 168
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX FREE MONEY MARKET FUND
MONEY MARKET FUND -------------------------------------
(CONT.) CLASS A
------------------------ -------------------------------------
(UNAUDITED)
YEAR YEAR SIX MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31,
1991 1990 1995 1994 1993
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.04 0.05 0.03 0.04 0.03
Net realized and unrealized gain
(loss) on investments 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 0.04 0.05 0.03 0.04 0.03
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.04) (0.05) (0.03) (0.04) (0.03)
Distributions from net realized
gain 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.04) (0.05) (0.03) (0.04) (0.03)
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 3.99% 5.20% 2.75% 3.70% 2.57%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $299,234 $312,023 $347,911 $307,878 $228,084
Number of shares outstanding, end
of period (000) 299,234 312,023 347,949 307,915 228,085
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to average net
assets(1) 0.66% 0.65% 0.65% 0.68% 0.74%
Ratio of net investment income to
average net assets(2) 3.92% 5.07% 5.43% 3.71% 2.54%
Portfolio turnover N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net
assets prior to waived fees and
reimbursed expenses 0.70% 0.73% 0.69% 0.72% 0.74%
(2) Ratio of net investment income to
average net assets prior to waived
fees and reimbursed expenses 3.88% 4.99% 5.39% 3.67% 2.54%
- ---------------------------------------------------------------------------------------------------
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THIS CLASS COMMENCED OPERATIONS ON AUGUST 18, 1994.
</TABLE>
110
<PAGE> 169
<TABLE>
<CAPTION>
MONEY MARKET FUND (CONT.) MUNICIPAL INCOME FUND
--------------------------------------------------------------- ------------------------
CLASS A (CONT.) CLASS I CLASS A
------------------------------------- ------------------------ ------------------------
(UNAUDITED) (UNAUDITED)
YEAR YEAR YEAR SIX MONTHS PERIOD SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31,
1992 1991 1990 1995 1994* 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $9.91 $11.27
----------- ----------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.03 0.06 0.08 0.03 0.02 0.29 0.60
Net realized and
unrealized gain (loss)
on investments 0.00 0.00 0.00 0.00 0.00 0.55 (1.36)
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT
OPERATIONS 0.03 0.06 0.08 0.03 0.02 0.84 (0.76)
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.03) (0.06) (0.08) (0.03) (0.02) (0.29) (0.60)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.03) (0.06) (0.08) (0.03) (0.02) (0.29) (0.60)
----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF
PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $10.46 $9.91
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT
ANNUALIZED)+ 3.23% 5.65% 7.88% 2.89% 1.83% 8.50% (6.82)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $268,424 $229,863 $198,187 $127,609 $11,237 $66,310 $73,791
Number of shares
outstanding, end of
period (000) 268,434 229,866 198,192 127,610 11,238 6,336 7,446
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 0.75% 0.74% 0.68% 0.39% 0.38% 0.60% 0.43%
Ratio of net investment
income to average net
assets(2) 3.17% 5.54% 7.55% 5.70% 5.05% 5.62% 5.77%
Portfolio turnover N/A N/A N/A N/A N/A 13% 32%
- -----------------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 0.75% 0.75% 0.84% 0.45% 0.55% 1.05% 0.98%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 3.17% 5.53% 7.39% 5.64% 4.88% 5.16% 5.22%
- ---------------------------------------------------------------------------------------------------
</TABLE>
111
<PAGE> 170
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND (CONT.)
-------------------------------------
CLASS A (CONT.)
-------------------------------------
YEAR YEAR PERIOD
ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31,
1993 1992 1991*
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.56 $10.25 $10.00
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.64 0.66 0.28
Net realized and unrealized gain (loss) on investments 0.71 0.32 0.25
----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 1.35 0.98 0.53
LESS DISTRIBUTIONS:
Dividends from net investment income (0.64) (0.66) (0.28)
Distributions from net realized gain 0.00 (0.01) 0.00
----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.64) (0.67) (0.28)
----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $11.27 $10.56 $10.25
----------- ----------- -----------
----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 13.11% 9.94% 5.81%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $104,701 $52,553 $16,585
Number of shares outstanding, end of period (000) 9,294 4,976 1,618
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 0.39% 0.23% 0.00%
Ratio of net investment income to average net assets(2) 5.56% 6.05% 6.38%
Portfolio turnover 15% 67% 5%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.09% 1.20% 3.02%
(2) Ratio of net investment income to average net assets prior
to waived fees and reimbursed expenses 4.86% 5.08% 3.36%
- ---------------------------------------------------------------------------------------------------
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THE FUND COMMENCED OPERATIONS ON JULY 15, 1991.
** THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
</TABLE>
112
<PAGE> 171
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND (CONT.) STRATEGIC
------------------------------------- SHORT-TERM GOVERNMENT- SHORT-TERM MUNICIPAL GROWTH FUND
CLASS D CORPORATE INCOME FUND INCOME FUND -----------
------------------------------------- ------------------------ ------------------------ CLASS A
FROM FROM -----------
SEPT. 19, JUNE 3,
(UNAUDITED) (UNAUDITED) 1994 (UNAUDITED) 1994 (UNAUDITED)
SIX MONTHS YEAR PERIOD SIX MONTHS (INCEPTION) SIX MONTHS (INCEPTION) SIX MONTHS
ENDED ENDED ENDED ENDED TO ENDED TO ENDED
JUNE 30, DEC. 31, DEC. 31, JUNE 30, DEC. 31, JUNE 30, DEC. 31, JUNE 30,
1995 1994 1993** 1995 1994 1995 1994 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $13.42 $15.26 $15.00 $4.93 $5.00 $4.92 $5.00 $13.29
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.35 0.73 0.36 0.14 0.08 0.11 0.09 (0.03)
Net realized and
unrealized gain (loss)
on investments 0.75 (1.84) 0.26 0.08 (0.07) 0.07 (0.08) 3.80
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
TOTAL FROM INVESTMENT
OPERATIONS 1.10 (1.11) 0.62 0.22 0.01 0.18 0.01 3.77
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.35) (0.73) (0.36) (0.14) (0.08) (0.11) (0.09) 0.00
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
TOTAL FROM DISTRIBUTIONS (0.35) (0.73) (0.36) (0.14) (0.08) (0.11) (0.09) 0.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
NET ASSET VALUE, END OF
PERIOD $14.17 $13.42 $15.26 $5.01 $4.93 $4.99 $4.92 $17.06
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
----------- ----------- ----------- ----------- ----------- ----------- ----------- --------
TOTAL RETURN (NOT
ANNUALIZED)+ 8.22% (7.37)% 4.19% 4.67% 0.28% 3.77% 0.13% 28.37%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $14,562 $15,545 $14,771 $452 $96 $14,808 $11,778 $39,053
Number of shares
outstanding, end of
period (000) 1,028 1,158 968 90 20 2,968 2,392 2,289
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 1.21% 1.02% 1.13% 0.30% 0.30% 0.35% 0.27% 1.25%
Ratio of net investment
income to average net
assets(2) 5.00% 5.17% 4.14% 5.83% 5.77% 4.56% 3.67% (0.60)%
Portfolio turnover 13% 32% 15% N/A N/A N/A N/A 97%
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 1.78% 1.74% 1.84% 58.86% 67.89% 1.52% 1.98% 1.40%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 4.43% 4.45% 3.43% (52.73)% (61.82)% 3.39% 1.96% (0.75)%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
113
<PAGE> 172
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
STRATEGIC GROWTH FUND (CONT.)
-------------------------------------
CLASS A (CONT.) CLASS D
------------------------ -----------
(UNAUDITED)
YEAR PERIOD SIX MONTHS
ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30,
1994 1993* 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $13.20 $10.00 $16.54
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.11) (0.03) (0.13)
Net realized and unrealized gain (loss) on investments 0.67 3.68 4.74
----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 0.56 3.65 4.61
LESS DISTRIBUTIONS:
Dividends from net investment income (0.33) (0.03) 0.00
Distributions from net realized gain (0.14) (0.42) 0.00
----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.47) (0.45) 0.00
----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $13.29 $13.20 $21.15
----------- ----------- -----------
----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 4.23% 36.56% 27.87%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $26,744 $25,413 $18,840
Number of shares outstanding, end of period (000) 2,013 1,926 891
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 1.20% 0.66% 2.00%
Ratio of net investment income to average net assets(2) (0.81)% (0.01)% (1.34)%
Portfolio turnover 149% 182% 97%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.55% 1.64% 2.09%
(2) Ratio of net investment income to average net assets prior
to waived fees and reimbursed expenses (1.16)% (0.99)% (1.44)%
- --------------------------------------------------------------------------------------------------------
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THE FUND COMMENCED OPERATIONS ON JANUARY 20, 1993.
** THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
</TABLE>
114
<PAGE> 173
<TABLE>
<CAPTION> STRATEGIC GROWTH FUND
(CONT.) U.S. GOVERNMENT INCOME FUND
--------------------------------------------------------------------------
CLASS D (CONT.) CLASS A
--------------------------------------------------------------------------
(UNAUDITED)
PERIOD SIX MONTHS YEAR YEAR YEAR
YEAR ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31, DEC. 31,
1994 1993** 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $16.55 $15.00 $9.66 $10.87 $10.56 $10.97
----------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) (0.24) (0.43) 0.35 0.70 0.74 0.79
Net realized and
unrealized gain (loss)
on investments 0.81 2.51 0.79 (1.21) 0.36 (0.14)
----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT
OPERATIONS 0.57 2.08 1.14 (0.51) 1.10 0.65
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.40) 0.00 (0.35) (0.70) (0.74) (0.79)
Distributions from net
realized gain (0.18) (0.53) 0.00 0.00 (0.05) (0.27)
----------- ----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.58) (0.53) (0.35) (0.70) (0.79) (1.06)
----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF
PERIOD $16.54 $16.55 $10.45 $9.66 $10.87 $10.56
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT
ANNUALIZED)+ 3.46% 13.84% 12.03% (4.81)% 10.67% 6.27%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $15,335 $11,932 $38,286 $35,838 $50,301 $40,883
Number of shares
outstanding, end of
period (000) 927 721 3,664 3,711 4,628 3,871
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 1.95% 0.61% 0.89% 0.76% 0.53% 0.47%
Ratio of net investment
income to average net
assets(2) (1.56)% (1.00)% 7.11% 6.84% 6.79% 6.26%
Portfolio turnover 149% 182% 80% 50% 115% 128%
- ----------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 2.23% 2.14% 1.20% 1.08% 1.01% 1.13%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses (1.84)% (2.53)% 6.80% 6.52% 6.31% 5.60%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
115
<PAGE> 174
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME FUND (CONT.)
-------------------------------------
CLASS A (CONT.) CLASS D
------------------------ -----------
(UNAUDITED)
YEAR YEAR SIX MONTHS
ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30,
1991 1990 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.30 $10.22 $13.20
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.86 0.87 0.44
Net realized and unrealized gain (loss) on investments 0.90 0.10 1.08
----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 1.76 0.97 1.52
LESS DISTRIBUTIONS:
Dividends from net investment income (0.86) (0.89) (0.44)
Distributions from net realized gain (0.23) 0.00 0.00
----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (1.09) (0.89) (0.44)
----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $10.97 $10.30 $14.28
----------- ----------- -----------
----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 18.08% 10.17% 11.65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $20,457 $11,116 $3,295
Number of shares outstanding, end of period (000) 1,865 1,079 231
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 0.00% 0.07% 1.61%
Ratio of net investment income to average net assets(2) 8.30% 8.65% 6.45%
Portfolio turnover 100% 4% 80%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior to waived
fees and reimbursed expenses 1.87% 2.72% 2.17%
(2) Ratio of net investment income to average net assets prior
to waived fees and reimbursed expenses 6.43% 6.00% 5.90%
- ---------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THE FUND COMMENCED OPERATIONS ON MAY 12, 1992.
** THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
++ THE CLASS COMMENCED OPERATIONS ON JUNE 20, 1994.
116
<PAGE> 175
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME
FUND (CONT.)
U.S. TREASURY MONEY MARKET FUND
------------------------ ----------------------------------------------------------------------------
CLASS D (CONT.) CLASS A CLASS I
------------------------ -------------------------------------------------- ------------------------
(UNAUDITED) (UNAUDITED)
YEAR PERIOD SIX MONTHS YEAR YEAR PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31, DEC. 31, JUNE 30, DEC. 31,
1994 1993** 1995 1994 1993 1992* 1995 1994++
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $14.85 $15.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.86 0.42 0.03 0.03 0.03 0.02 0.03 0.16
Net realized and
unrealized gain (loss)
on investments (1.65) (0.08) 0.00 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
TOTAL FROM INVESTMENT
OPERATIONS (0.79) 0.34 0.03 0.03 0.03 0.02 0.03 0.16
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.86) (0.42) (0.03) (0.03) (0.03) (0.02) (0.03) (0.16)
Distributions from net
realized gain 0.00 (0.07) 0.00 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
TOTAL FROM DISTRIBUTIONS (0.86) (0.49) (0.03) (0.03) (0.03) (0.02) (0.03) (0.16)
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
NET ASSET VALUE, END OF
PERIOD $13.20 $14.85 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
TOTAL RETURN (NOT
ANNUALIZED)+ (5.45)% 2.25% 2.58% 3.44% 2.56% 1.97% 2.71% 2.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $3,722 $9,594 $187,718 $195,031 $118,169 $137,412 $23,869 $3,898
Number of shares
outstanding, end of
period (000) 282 646 187,768 195,042 118,169 137,416 23,871 3,900
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 1.37% 0.90% 0.65% 0.63% 0.52% 0.27% 0.36% 0.23%
Ratio of net investment
income to average net
assets(2) 6.14% 5.90% 5.09% 3.47% 2.55% 3.12% 5.42% 4.42%
Portfolio turnover 50% 115% N/A N/A N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 1.87% 2.03% 0.75% 0.80% 0.77% 0.79% 0.52% 0.57%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 5.64% 4.77% 4.99% 3.30% 2.30% 2.60% 5.25% 4.08%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
117
<PAGE> 176
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT FUND
--------------------------------------------------
CLASS A
--------------------------------------------------
(UNAUDITED)
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
JUNE 30, DEC. 31, DEC. 31, DEC. 31,
1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.19 $9.99 $9.95 $10.13
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.27 0.43 0.44 0.59
Net realized and unrealized gain (loss) on
investments 0.12 (0.80) 0.04 (0.18)
----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT OPERATIONS 0.39 (0.37) 0.48 0.41
LESS DISTRIBUTIONS:
Dividends from net investment income (0.27) (0.43) (0.44) (0.59)
Distributions from net realized gain 0.00 0.00 0.00 0.00
----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.27) (0.43) (0.44) (0.59)
----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $9.31 $9.19 $9.99 $9.95
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
TOTAL RETURN (NOT ANNUALIZED)+ 4.31% (3.81)% 4.87% 4.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $761,847 $1,215,546 $1,949,013 $2,559,363
Number of shares outstanding, end of period
(000) 81,791 132,256 195,132 257,238
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets(1) 0.82% 0.79% 0.76% 0.75%
Ratio of net investment income to average net
assets(2) 5.82% 4.40% 4.37% 5.62%
Portfolio turnover 162% 164% 201% 197%
- ------------------------------------------------------------------------------------------------------
(1) Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses 0.97% 0.94% 0.95% 0.94%
(2) Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses 5.67% 4.25% 4.18% 5.43%
- ---------------------------------------------------------------------------------------------------
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
++ THE FUND COMMENCED OPERATIONS ON NOVEMBER 1, 1990.
</TABLE>
118
<PAGE> 177
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT FUND (CONT.)
---------------------------------------------------------------
CLASS A (CONT.) CLASS D
------------------------ -------------------------------------
(UNAUDITED)
YEAR PERIOD SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, JUNE 30, DEC. 31, DEC. 31,
1991 1990++ 1995 1994 1993*
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $10.12 $10.00 $13.74 $14.93 $15.00
----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.78 0.08 0.37 0.57 0.27
Net realized and
unrealized gain (loss)
on investments 0.01 0.12 0.18 (1.19) (0.07)
----------- ----------- ----------- ----------- -----------
TOTAL FROM INVESTMENT
OPERATIONS 0.79 0.20 0.55 (0.62) 0.20
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.78) (0.08) (0.37) (0.57) (0.27)
Distributions from net
realized gain 0.00 0.00 0.00 0.00 0.00
----------- ----------- ----------- ----------- -----------
TOTAL FROM DISTRIBUTIONS (0.78) (0.08) (0.37) (0.57) (0.27)
----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF
PERIOD $10.13 $10.12 $13.92 $13.74 $14.93
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
TOTAL RETURN (NOT
ANNUALIZED)+ 8.60% 2.75% 4.05% (4.25)% 1.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000) $566,840 $6,858 $9,992 $12,220 $11,319
Number of shares
outstanding, end of
period (000) 55,933 678 718 889 758
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets(1) 0.50% 0.00% 1.33% 1.29% 1.26%
Ratio of net investment
income to average net
assets(2) 7.36% 4.93% 5.35% 3.94% 3.41%
Portfolio turnover 250% N/A 162% 164% 201%
- ---------------------------------------------------------------------------------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses 1.08% 5.48% 1.63% 1.55% 1.75%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 6.78% (0.55)% 5.06% 3.68% 2.92%
- ---------------------------------------------------------------------------------------------------
</TABLE>
119
<PAGE> 178
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Overland Express Funds, Inc. (the "Company") is registered under the
Investment Company Act of 1940 (the "1940 Act"), as amended, as an open-end
series investment company. The Company commenced operations on April 7, 1988
and includes ten separate diversified funds: the Asset Allocation Fund, the
Money Market Fund, the Municipal Income Fund, the Overland Sweep Fund, the
Short-Term Government-Corporate Income Fund, the Short-Term Municipal Income
Fund, the Strategic Growth Fund, the U.S. Government Income Fund, the U.S.
Treasury Money Market Fund, the Variable Rate Government Fund, and two
non-diversified funds: the California Tax-Free Bond Fund and the California
Tax-Free Money Market Fund. The financial statements for the Overland Sweep
Fund are presented separately.
Each of the funds presented in this book (the "Funds"), with the exception
of the Money Market Fund, the California Tax-Free Money Market Fund, the Short-
Term Government-Corporate Income Fund, the Short-Term Municipal Income Fund,
and the U.S. Treasury Money Market Fund, commenced offering Class D shares on
July 1, 1993. The U.S. Treasury Money Market Fund and the Money Market Fund
commenced offering Class I shares on June 20, 1994 and August 18, 1994,
respectively. The three classes of shares differ principally in their
respective sales charges, service fees, and distribution fees. Shareholders of
each class also bear certain expenses that pertain to that particular class.
All shareholders bear the common expenses of the Fund, and earn income from the
portfolio, pro rata based on the average daily net assets of each class,
without distinction between share classes. Dividends are declared separately
for each class. Gains are allocated to each class pro rata based upon net
assets of each class on the date of distribution. No class has preferential
dividend rights; differences in per share dividend rates are generally due to
differences in separate class expenses, including distribution and service fees
and from the relative weightings of pro rata income and gain allocations.
120
<PAGE> 179
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
The following significant accounting policies are consistently followed by
the Company in the preparation of its financial statements, and such policies
are in conformity with generally accepted accounting principles for investment
companies.
SECURITY VALUATION
Investments in securities for which the primary market is a national
securities exchange or the NASDAQ National Market System are stated at the last
reported sales price on the day of valuation. U.S. Government obligations are
valued at stated mean between the last reported bid and ask prices. In the
absence of any sale of such securities on the valuation date and in the case of
other securities, excluding debt securities maturing in 60 days or less, the
valuations are based on latest quoted bid prices. Debt securities maturing in
60 days or less are valued at amortized cost. Debt securities other than those
maturing in 60 days or less and other than U.S. government obligations are
valued at the latest quoted bid price. Securities for which quotations are not
readily available are valued at fair value as determined by policies set by the
Board of Directors.
The California Tax-Free Money Market Fund, the Money Market Fund and the
U.S. Treasury Money Market Fund use the amortized cost method to value their
portfolio securities and seek to maintain constant net asset values of $1.00
per share. There is no assurance the Funds will meet this objective. The
amortized cost method involves valuing a security at its cost and amortizing
any discount or premium over the period until maturity, which approximates
market value.
The Short-Term Government-Corporate Income Fund invests only in shares of
the Short-Term Government-Corporate Income Master Portfolio of Master
Investment Trust (the "Trust"). The Short-Term Municipal Income Fund invests
only in shares of the Short-Term Municipal Income Master Portfolio (together
with the Short-Term Government-Corporate Income Master Portfolio, the "Master
Portfolios") of the Trust. The Trust's investments include fixed-, variable-,
and floating-rate instruments. Certain of these floating- and variable-rate
instruments may carry a demand feature that would permit the holder to tender
them back to the issuer at par value prior to maturity. The value of the assets
of each Master Portfolio (other than debt obligations maturing in 60 days or
less) is determined as of the close of regular trading on the New York Stock
Exchange, which is currently 4:00 p.m. New
121
<PAGE> 180
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
York time. Except for debt obligations with remaining maturities of 60 days or
less, which are valued at amortized cost, assets are valued at current market
prices, or if such prices are not readily available, at fair value as
determined by procedures approved by the Board of Trustees.
Cash equivalents relating to firm commitment purchase agreements are
segregated by the custodian and may not be sold without appropriate replacement
while the current commitment is outstanding.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Dividend income is recognized on the
ex-dividend date, and interest income is accrued daily. Realized gains or
losses are reported on the basis of identified cost of securities delivered.
Bond discounts and premiums are amortized as required by the Internal Revenue
Code.
TBA PURCHASE COMMITMENTS
The Overland Express Variable Rate Government Fund enters into "TBA" (to be
announced) purchase commitments to purchase securities for a fixed price at a
future date beyond customary settlement time. Although the unit price has been
established, the principal value has not been finalized. However, the amount of
the commitment will not flucuate more than 2.00% from the principal amount. The
Fund holds, and maintains until the settlement date, cash or high-grade debt
obligations in an amount sufficient to meet the purchase price. TBA purchase
commitments may be considered securities in themselves, and involve a risk of
loss if the value of the security to be purchased declines prior to the
settlement date. This risk is in addition to the risk of decline in the value
of the Fund's other assets. Unsettled TBA purchase commitments are valued at
the current market value of the underlying securities, generally acording to
the procedures described under "Security Valuation" above.
Although the Fund will generally enter into TBA purchase commitments with
the intention of acquiring securities for its portfolio, the Fund may dispose
of a commitment prior to settlement if the Fund's advisor deems it appropriate
to do so.
122
<PAGE> 181
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
TBA purchase commitments at June 30, 1995 were as follows:
<TABLE>
<CAPTION>
DELIVERY COUPON MARKET
AGENCY SHARES/PAR MONTH RATE VALUE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Federal Home Loan Mortgage Corp. 21,267,982 July 7.28% $21,892,729
Federal National Mortgage Assoc. 6,600,000 July 6.59% $6,583,500
Federal National Mortgage Assoc. 10,000,000 July 6.31% $10,081,200
Government National Mortgage Assoc. 10,000,000 July 7.00% $9,884,375
</TABLE>
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell
("repurchase agreements") are treated as collateralized financing transactions
and are recorded at their contracted resale amounts. These repurchase
agreements, if any, are detailed in each Fund's Portfolio of Investments. The
adviser to the Funds pools the Funds' cash and invests in repurchase agreements
entered into by the Funds. The prospectuses require that the cash investments
be fully collateralized based on values that are marked to market daily. The
collateral is held by an agent bank under a tri-party agreement. It is the
adviser's responsibility to value collateral daily and to obtain additional
collateral as necessary to maintain market value equal to or greater than the
resale price. The repurchase agreements held in the Funds at June 30, 1995 are
collateralized by U.S. Treasury or federal agency obligations. The repurchase
agreements were entered into on June 30, 1995.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income of the Asset
Allocation Fund are declared and distributed quarterly. Dividends to
shareholders from net investment income of the Strategic Growth Fund, if any,
are declared and distributed annually. Dividends to shareholders from net
investment income are declared daily and distributed monthly for the California
Tax-Free Bond Fund, the California Tax-Free Money Market Fund, the Money Market
Fund, the Municipal Income Fund, the Short-Term Government-Corporate Income
Fund, the Short-Term Municipal Income Fund, the U.S. Government Income Fund,
the U.S. Treasury Money Market Fund and the Variable Rate Government Fund. Any
dividends to shareholders from net realized capital gain are declared and
distributed annually.
123
<PAGE> 182
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
FEDERAL INCOME TAXES
The Company's policy is to comply with the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and to
distribute substantially all its net investment income and any net realized
capital gains to its shareholders. Therefore, no federal or state income tax
provision is required. The Money Market Fund has a net capital loss
carryforward of $1,392 which will expire in the year 2001 and $36,799 which
will expire in the year 2002. The Municipal Income Fund has a net capital loss
carryforward of $3,600,931 which will expire in the year 2002. The Short-Term
Government-Corporate Income Fund has a net capital loss carryforward of $1,534
which will expire in the year 2002. The Short-Term Municipal Income Fund has a
net capital loss carryforward of $33,634 which will expire in the year 2002.
The U.S. Government Income Fund has a net capital loss carryforward of
$1,212,813 which will expire in the year 2002. The U.S. Treasury Money Market
Fund has a net capital loss carryforward of $12,241 which will expire in the
year 2002. The California Tax-Free Money Market Fund has a net capital loss
carryforward of $76,188, which will expire in the year 2002. The Variable Rate
Government Fund has a net capital loss carryforward of $978,191 which will
expire in 1999, $15,382,953 which will expire in 2000, $2,818,400 which will
expire in the year 2001 and $125,280,827 which will expire in the year 2002.
The Board intends to offset net capital gains with each capital loss
carryforward until each carryforward has been fully utilized or expires. No
capital gain distribution shall be made until the capital loss carryforward has
been fully utilized or expires.
Due to the timing of dividend distributions and the differences in
accounting for income and realized gains (losses) for financial statement and
federal income tax purposes, the fiscal year in which amounts are distributed
may differ from the year in which the income and realized gains (losses) were
recorded by the portfolio. The differences between the income or gains
distributed on a book versus tax basis are shown as excess distributions of net
investment income and net realized gain on sales of investments in the
accompanying Statements of Changes in Net Assets.
ORGANIZATION EXPENSES
Stephens Inc. ("Stephens"), the Funds' administrator, sponsor and
distributor, has incurred expenses in connection with the organization and
initial registration of
124
<PAGE> 183
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
the various funds. These expenses were charged to the individual Funds and are
being amortized by the Funds on a straightline basis over 60 months from the
date the Funds commenced operations.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into separate advisory contracts on behalf of the
Funds, except the Short-Term Government-Corporate Income Fund and the
Short-Term Municipal Income Fund, with Wells Fargo Bank, N.A. ("WFB"). Pursuant
to the contracts, WFB has agreed to provide the Funds with investment guidance
and policy direction in connection with daily portfolio management. Under the
contract with the Asset Allocation Fund, WFB is entitled to be paid a monthly
advisory fee at the annual rate of 0.70% of the Fund's average daily net assets
up to $500 million and 0.60% of the remaining average daily net assets. Under
the contracts with the California Tax-Free Bond Fund, the Municipal Income
Fund, the Strategic Growth Fund, the U.S. Government Income Fund and the
Variable Rate Government Fund, WFB is entitled to be paid a monthly advisory
fee at the annual rate of 0.50% of the average daily net assets of each Fund.
Under the contract with the California Tax-Free Money Market Fund, WFB is
entitled to be paid a monthly advisory fee at the annual rate of 0.45% of the
average daily net assets. Under the contracts with the Money Market Fund and
the U.S. Treasury Money Market Fund, WFB is entitled to be paid a monthly
advisory fee at the annual rate of 0.25% of the average daily net assets.
The Company has entered into contracts on behalf of each Fund, except the
Asset Allocation Fund, with WFB whereby WFB is responsible for providing
custody and portfolio accounting services for the Funds. For all of these
Funds, WFB is entitled to an annual fee for custody services at the annual rate
of 0.0167% of the average daily net assets of each Fund. For portfolio
accounting services, WFB is entitled to a monthly base fee from each Fund of
$2,000 plus an annual fee of 0.07% of the first $50 million, 0.045% of the next
$50 million and 0.02% of the remaining average daily net assets.
In connection with the Asset Allocation Fund, the Company has entered into
a subadvisory contract with Wells Fargo Nikko Investment Advisors ("WFNIA").
125
<PAGE> 184
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
WFNIA is an affiliate of Wells Fargo & Company. Pursuant to the agreement WFB
pays WFNIA a subadvisory fee. Wells Fargo Institutional Trust Company N.A.
("WFITC"), a subsidiary of WFNIA, acts as custodian for this Fund. Custody fees
are paid to WFITC from the sub-advisory fee paid to WFNIA.
On June 21, 1995, Wells Fargo & Co. and the Nikko Securities Co., Ltd.
signed a definitive agreement to sell their joint venture interest in WFNIA to
Barclays PLC ("Barclays") of the U.K. The sale, which is subject to the
approval of appropriate regulatory authorities, is expected to close in the
fourth quarter of 1995.
Barclays is the largest clearing bank in the U.K. with $259 billion in
total assets. Barclays has announced its intention to combine WFNIA with the
quantitative group of BZW Asset Management ("BZWAM"), its international asset
management arm. BZWAM is the largest quantitative fund manager in Europe, with
approximately $32 billion of quantitative funds under management, as of March
31, 1995. The BZW Division of Barclays, of which BZWAM forms a part, is the
investment banking arm of Barclays and offers a full range of investment
banking, capital markets and asset management services.
Under the Investment Company Act of 1940, this proposed change of control
of WFNIA would result in an assignment and termination of the current Sub-
Investment Advisory Agreements between WFNIA, Wells Fargo Bank and the Funds.
Subject to approval of the Company's Board of Directors, it is contemplated
that a special meeting of shareholders of the Funds will be convened to
consider a new Sub-Investment Advisory Agreement with the new sub-advisor,
which will become effective only upon the change of control of WFNIA. It is not
anticipated that the proposed change of control will change the investment
objective or overall investment strategy of the Funds.
The Company has entered into a contract on behalf of the Funds with WFB
whereby WFB provides transfer agent services for the Funds. Under the transfer
agency agreement, WFB is paid a per account fee and other related costs with a
minimum monthly fee of $3,000 per fund unless net assets of the fund are under
$20 million. For as long as the assets remain under $20 million the fund will
not be charged any transfer agency fees by WFB.
126
<PAGE> 185
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
The Funds, except the California Tax-Free Money Market Fund, the Money
Market Fund, the Short-Term Government-Corporate Income Fund, the Short-Term
Municipal Income Fund and the U.S. Treasury Money Market Fund, may enter into
service agreements with one or more servicing agents on behalf of Class D
shares of the Funds. Under such agreements, servicing agents have agreed to
provide shareholder liaison services, including responding to customer
inquiries and providing information on their investments, and to provide such
other related services as the Fund or a Class D shareholder may reasonably
request. For these services, a servicing agent receives a fee, on an annualized
basis for the Fund's then-current fiscal year, not to exceed 0.25% of the
average daily net assets of the Class D shares of the Fund.
<TABLE>
<CAPTION>
SERVICE
FEE
FUND CLASS D
- ---------------------------------------------------------------------------------------------------
<S> <C>
Asset Allocation Fund $13,811
California Tax-Free Bond Fund 9,413
Municipal Income Fund 19,115
Strategic Growth Fund 20,163
U.S. Government Income Fund 4,362
Variable Rate Government Fund 13,634
</TABLE>
The Company has entered into administration and distribution agreements on
behalf of the Funds with Stephens. Under the agreements, Stephens has agreed to
provide supervisory, administrative and distribution services to the Funds. For
providing supervisory and administrative services, the California Tax-Free Bond
Fund, the Short-Term Government-Corporate Income Fund, the Short-Term Municipal
Income Fund, the Strategic Growth Fund and the Variable Rate Government Fund
have each agreed to pay Stephens a monthly fee at the annual rate of 0.15% of
each Fund's average daily net assets up to $200 million and 0.10% of the
average daily net assets in excess of $200 million. For the Asset Allocation
Fund, the California Tax-Free Money Market Fund and the U.S. Government Income
Fund, Stephens is entitled to be compensated for administrative services
monthly at the annual rate of 0.10% of the average daily net assets of such
Fund up to $200 million and 0.05% of the average daily net assets in excess of
$200 million.
127
<PAGE> 186
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
The Money Market Fund, the Municipal Income Fund and the U.S. Treasury Money
Market Fund have each agreed to pay Stephens a monthly administrative fee at
the annual rate of 0.10% of each Fund's average daily net assets.
The Company has adopted separate Distribution Plans for Class A and Class D
shares pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The separate
Class A Distribution Plan for the California Tax-Free Bond Fund, the California
Tax-Free Money Market Fund and the U.S. Government Income Fund provides that
each Fund may defray all or part of the cost of preparing, printing and
distributing prospectuses and other promotional materials by paying on an
annual basis up to the greater of $100,000 or 0.05% of the Class A shares of a
Fund's average daily net assets for costs incurred. Each of these Funds may
participate in joint distribution activities with the other Funds, in which
event expenses reimbursed out of the assets of one of the Funds may be
attributable, in part, to the distribution-related activities of another Fund.
Generally, the expenses of joint distribution activities will be allocated
among the Funds in proportion to their relative net asset sizes.
The Company also has adopted separate distribution plans pursuant to Rule
12b-1 under the 1940 Act, whereby on behalf of Class A shares of the Asset
Allocation Fund, the Money Market Fund, the Municipal Income Fund, the
Strategic Growth Fund, the U.S. Treasury Money Market Fund and the Variable
Rate Government Fund, a Fund may pay Stephens, as compensation for
distribution- related services, a monthly fee at an annual rate of up to 0.25%
of the average daily net assets attributable to the Fund's Class A shares. The
Class D Distribution Plan of the Asset Allocation Fund and Strategic Growth
Fund provide that the Funds may pay the Distributor a monthly fee at an annual
rate of up to 0.75% of each such Fund's average daily net assets attributable
to Class D shares. In addition, the Municipal Income Fund may pay, as
compensation for distribution-related services, a monthly fee at an annual rate
of up to 0.15% of the average daily net assets
128
<PAGE> 187
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
attributable to both of its Class A and D shares. Through February 28, 1995, a
portion of the Municipal Income Fund distribution fee was charged to net
capital for income tax purposes.
<TABLE>
<CAPTION>
DISTRIBUTION
FEES
FUND CLASS A
- ---------------------------------------------------------------------------------------------------
<S> <C>
Asset Allocation Fund $56,675
California Tax-Free Bond Fund 46,219
Municipal Income Fund 56,442
Strategic Growth Fund 38,308
U.S. Government Income Fund 5,977
Variable Rate Government Fund 1,110,085
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION
FEES
FUND CLASS D
- ---------------------------------------------------------------------------------------------------
<S> <C>
Asset Allocation Fund $41,434
California Tax-Free Bond Fund 18,826
Municipal Income Fund 34,768
Strategic Growth Fund 60,490
U.S. Government Income Fund 8,725
Variable Rate Government Fund 27,267
</TABLE>
For the Short-Term Government-Corporate Income Fund and the Short-Term
Municipal Income Fund, the Company has adopted a plan pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "Plan") on behalf of each Fund,
whereby each such Fund has agreed to pay Stephens, as compensation for
distribution-related services, a monthly fee at an annual rate of up to 0.25%
of the average daily net assets of such Fund or the maximum amount payable
under applicable laws, regulations and rules, whichever is less. The actual fee
payable to Stephens is determined within such limit, from time to time by
mutual agreement between the Company and Stephens.
129
<PAGE> 188
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
WAIVED FEES AND REIMBURSED EXPENSES
The following fees/expenses were waived/reimbursed for the six months ended
June 30, 1995:
<TABLE>
<CAPTION>
WAIVED REIMBURSED
FUND FEES EXPENSES
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Asset Allocation $14,400 $0
California Tax-Free Bond 571,370 0
California Tax-Free Money Market 17,234 0
Money Market 83,519 0
Municipal Income 227,674 0
Short-Term Government-Corporate Income 178 69,974
Short-Term Municipal Income 9,052 61,390
Strategic Growth 31,286 0
U.S. Government Income 66,764 0
U.S. Treasury Money Market 104,184 0
Variable Rate Government 713,542 0
</TABLE>
Waived fees and reimbursed expenses continue at the discretion of WFB and
the administrator.
Certain officers and directors of the Company are also officers of
Stephens. At June 30, 1995, Stephens owned 179,807 shares of the Asset
Allocation Fund, 1,631 shares of the California Tax-Free Bond Fund, 45,441
shares of the California Tax-Free Money Market Fund, 1,316,356 shares of the
Money Market Fund, 12,718 shares of the Municipal Income Fund, 5,355 shares of
the Strategic Growth Fund, 2,776 shares of the U.S. Government Income Fund,
121,451 shares of the U.S. Treasury Money Market Fund and 13,136 shares of the
Variable Rate Government Fund.
Stephens has retained $493,044 as sales charges from the proceeds of
capital shares sold by the Company for the six months ended June 30, 1995.
Wells Fargo Securities Inc., a subsidiary of WFB, received $17,432 as sales
charges from the proceeds of capital shares sold by the Company for the six
months ended June 30, 1995.
130
<PAGE> 189
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities, for
each fund for the six months ended June 30, 1995, were as follows:
<TABLE>
<CAPTION>
ASSET CALIFORNIA MUNICIPAL
AGGREGATE PURCHASES ALLOCATION TAX-FREE INCOME
AND SALES OF: FUND BOND FUND FUND
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $1,925,625 $0 $0
Sales proceeds 24,476,791 0 0
OTHER SECURITIES:
Purchases at cost 22,316,766 64,878,557 11,275,000
Sales proceeds 2,124,842 75,272,783 23,838,337
</TABLE>
<TABLE>
<CAPTION>
U.S.
STRATEGIC GOVERNMENT VARIABLE RATE
AGGREGATE PURCHASES GROWTH INCOME GOVERNMENT
AND SALES OF: FUND FUND FUND
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $0 $11,215,234 $0
Sales proceeds 0 14,093,594 93,558,594
OTHER SECURITIES:
Purchases at cost 44,630,807 19,955,747 1,159,920,711
Sales proceeds 45,220,132 18,894,685 1,464,957,941
</TABLE>
- ---------------------------------------------------------------
All funds not reflected in this schedule traded exclusively in short-term
securities.
4. CAPITAL SHARES TRANSACTIONS
As of June 30, 1995, there were 20 billion shares of $.001 par value
capital stock authorized by the Company. As of June 30, 1995, each Fund was
authorized to issue 100 million shares of $.001 par value capital stock for
each class of shares,
131
<PAGE> 190
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
except the California Tax-Free Money Market Fund, the Money Market Fund, the
U.S. Treasury Money Market Fund, and the Variable Rate Government Fund which
are as follows:
<TABLE>
<CAPTION>
SHARES
FUND AUTHORIZED
- ---------------------------------------------------------------------------------------------------
<S> <C>
California Tax-Free Money Market Fund 3 billion
Money Market Fund 1 billion
U.S. Treasury Money Market Fund 1 billion
Variable Rate Government Fund 500 million
</TABLE>
Transactions in capital shares for the six months ended June 30, 1995 are
disclosed in detail in the Statements of Changes in Net Assets.
5. INCOME ALLOCATIONS
The Short-Term Government Corporate-Income Fund and the Short-Term
Municipal Income Fund each are allocated net investment income from their
corresponding Master Portfolio. The detail of allocated net investment income
for the six months ended June 30, 1995 are as follows:
<TABLE>
<CAPTION>
NET
INVESTMENT
INTEREST DIVIDENDS EXPENSES INCOME
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Government-Corporate Income Fund $7,342 $0 $0 $7,342
Short-Term Municipal Income Fund 296,472 $0 $0 296,472
</TABLE>
6. ORANGE COUNTY CALIFORNIA DEBT SECURITIES
As of June 30, 1995, the Money Market Fund held securities issued by Orange
County, California, with a principal amount of $6,000,000 and an estimated fair
value of $4,582,500, with an original maturity date of July 10, 1995. Orange
County filed for protection under Chapter 9 of the Federal Bankruptcy Code on
December 6, 1994, and defaulted on such securities on July 10, 1995. The
bankruptcy court trustee approved an extension of the securities' maturity to
June 30, 1996, and modification of certain other terms, including increasing
the interest rate and providing for some portion of interest to accrue until
the maturity date rather than being due and payable monthly. Concurrent with
the default by
132
<PAGE> 191
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
Orange County, the Money Market Fund entered into a Credit Enhancement
Agreement (the "Agreement") with WFB, pursuant to which it was named as a
beneficiary of an irrevocable letter of credit issued by Bank of America
National Trust and Savings Association ("Bank of America"). The Agreement
provides support for a portion of the Orange County securities held by the Fund
such that Bank of America will make certain payments to the Money Market Fund
under defined circumstances, including failure by Orange County to make any
payment of principal when due.
The Money Market Fund is not obligated to reimburse Bank of America for any
amount drawn under the letter of credit. However, the letter of credit does not
ensure that the Money Market Fund will receive payments equal to the aggregate
amount of Orange County securities. Accordingly, although the Money Market
Fund's Board of Directors has determined that the Orange County securities
subject to the letter of credit currently present minimal credit risks, the
Money Market Fund could incur losses as a result of its Orange County holdings.
A letter of credit fee of $19,383 was paid by WFB on behalf of the Money
Market Fund and was recorded as a contribution of capital on July 10, 1995. The
Money Market Fund initially recorded the credit enhancement as an asset and a
contribution of capital in the amount of the letter of credit fee. Any
subsequent change in the value of the credit enhancement will be recorded as an
adjustment in unrealized securities appreciation (depreciation). Since December
6, 1994, the Orange County securities have been placed on non-accrual status,
with interest income being recognized when received. The Agreement provides for
a draw on the letter of credit on June 30, 1996, for interest unpaid to which
the Money Market Fund is entitled.
7. VARIABLE RATE GOVERNMENT FUND LITIGATION
A purported class action lawsuit was filed on March 14, 1995 in the United
States District Court for the Southern District of California by Conrad D.
Schaefer and Diane L. Schaefer, Trustees for the Schaefer Family Trust of 1992
against the Overland Express Family of Funds "Variable Rate Government Fund,"
Wells Fargo Bank and Wells Fargo & Company. The plaintiffs seek to sue on
behalf of persons
133
<PAGE> 192
OVERLAND EXPRESS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
who bought the fund between January 1, 1991 and March 10, 1995, and allege that
defendants violated the Securities Act of 1933, the Securities Exchange Act of
1934, the Investment Company Act of 1940 and common law by, among other things,
failing to disclose adequately the objectives and risks of the Fund,
specifically, the risks involved in investing in Support Class Bonds, and that
the Fund's prospectuses, annual reports and other documents filed with the
Securities and Exchange Commission contained false and misleading statements
relating thereto. The named plaintiffs allege that the Class as a whole
suffered substantial, but unspecified damages, including interest, in
connection with the purchase of securities covered by the Fund's offering
documents over the course of the specified period. Management of the Company
believes that the case is without merit and intends to vigorously defend
against the action.
134
<PAGE> 193
SHORT-TERM GOVERNMENT-CORPORATE INCOME MASTER
PORTFOLIO -- JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. TREASURY SECURITIES - 81.79%
U.S. TREASURY NOTES - 81.79%
$ 400,000 U.S. Treasury Notes
(Cost $401,679) 6.25 % 08/31/96 $401,812
SHORT-TERM INSTRUMENTS - 15.94%
U.S. TREASURY BILLS - 12.68%
$ 65,000 U.S. Treasury Bills 5.64 %(F) 04/04/96 $ 62,304
REPURCHASE AGREEMENTS - 3.26%
$ 16,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 6.10 % 07/03/95 $ 16,000
------------
TOTAL SHORT-TERM INSTRUMENTS $ 78,304
(Cost $78,187)
TOTAL INVESTMENTS IN SECURITIES
(Cost $479,866)*(Notes 1 and 3) 97.73% $ 480,116
Other Assets and Liabilities, Net 2.27% 11,172
------ ------------
TOTAL NET ASSETS 100.00% $ 491,288
------ ------------
------ ------------
</TABLE>
- ---------------------------------------------------------------
(F) YIELD TO MATURITY.
*COSTS FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 784
Gross Unrealized Depreciation (534)
-------------
NET UNREALIZED APPRECIATION $ 250
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
135
<PAGE> 194
SHORT-TERM MUNICIPAL INCOME MASTER PORTFOLIO--
JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS - 79.75%
ARIZONA - 1.38%
$ 200,000 Arizona State Transportation Board Excise Tax
Revenue Maricopa County Regional Area Road
Funding MBIA Insured 6.70 % 07/01/96 $ 204,622
CALIFORNIA - 16.21%
1,000,000 California State RAW Series C 5.75 04/25/96 1,015,840
500,000 Los Angeles CA COP Van Nuys Courthouse Project
Prerefunded 8.90 06/01/06 531,680
500,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue Second Issue 9.00 11/15/97 550,350
300,000 Modesto CA Irrigation District COP 86 Geysers
Geothermal Power Project Series A 6.60 10/01/97 309,429
ILLINOIS - 8.45%
200,000 Chicago IL AMBAC Insured 6.00 01/01/98 207,028
500,000 Illinois State Municipal Electric Agency Power
Supply System Revenue Series A 5.70 02/01/96 503,510
500,000 Illinois State Sales Tax Revenue Series E
Prerefunded 8.10 06/15/10 544,905
INDIANA - 3.40%
500,000 Indiana State Bond Bank Advance Funding Notes
Series A-2 5.75 01/10/96 505,090
LOUISIANA - 3.80%
500,000 East Baton Rouge LA Community Sewer Revenue 9.25 09/01/12 564,230
</TABLE>
136
<PAGE> 195
SHORT-TERM MUNICIPAL INCOME MASTER PORTFOLIO--
JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
MARYLAND - 1.57%
$ 225,000 Prince George County MD Series A 6.60 % 02/01/97 $ 232,589
MASSACHUSETTS - 3.38%
500,000 Massachusetts State Education Loan Authority
Revenue Issue E Series B AMT AMBAC Insured 5.25 07/01/99 502,130
MINNESOTA - 3.23%
200,000 Minneapolis MN Special School District No. One
COP Prerefunded 7.38 02/01/15 214,800
255,000 Minnesota State Convention Center Prerefunded 6.75 04/01/12 265,062
MISSOURI - 1.34%
200,000 Branson MO Tax Allocation Revenue Street
Improvement Project CGIC Insured 4.95 10/01/97 198,650
NEW JERSEY - 1.54%
225,000 New Jersey State Wastewater Revenue Series B 6.50 05/15/96 228,845
</TABLE>
137
<PAGE> 196
SHORT-TERM MUNICIPAL INCOME MASTER PORTFOLIO--
JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
NEW YORK - 7.02%
$ 250,000 New York State Mortgage Agency Revenue
Homeowner Mortgage Series 44 AMT FHA
Collateralized 6.00 % 04/01/99 $ 253,218
250,000 New York State Power Authority Revenue &
General Purpose Series T Prerefunded 7.40 01/01/06 259,140
500,000 United Nations Development Corp Revenue Phase
Two & Three Series B Prerefunded 8.13 07/01/06 529,960
OREGON - 2.06%
300,000 Lane County OR School District No. 52 FGIC
Insured 5.20 12/01/97 305,400
PENNSYLVANIA - 1.53%
200,000 Montgomery County PA Higher Education & Health
Authority Hospital Revenue Bryn Manor
Hospital Project Prerefunded 9.38 12/01/19 226,878
TEXAS - 14.21%
250,000 Brazos TX Higher Education Authority AMT Series
C-1 6.00 11/01/99 256,805
200,000 Dallas TX Waterworks & Sewer System Revenue
Prerefunded 8.40 10/01/01 202,196
275,000 Dallas TX Waterworks & Sewer System Revenue
Series A 9.00 10/01/97 299,789
500,000 Northside TX Independent School District PSFG
Insured 8.60 08/01/97 543,560
275,000 Port of Houston Authority TX AMT 8.50 10/01/98 306,523
500,000 Texas State TRAN 5.00 08/31/95 501,020
</TABLE>
138
<PAGE> 197
SHORT-TERM MUNICIPAL INCOME MASTER PORTFOLIO--
JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
WASHINGTON - 6.92%
$ 200,000 Southern Columbia Basin WA Irrigation District 5.50 % 12/01/98 $ 205,410
200,000 Tacoma WA Sewer Revenue Series B FGIC Insured 5.00 12/01/96 200,338
300,000 Washington State Healthcare Financing
Facilities Authority Revenue Highline
Community Hospital LOC - Bank of Tokyo Ltd 7.40 08/15/09 316,506
300,000 Washington State Public Power Supply System
Nuclear Project Number Three Revenue Series B 6.70 07/01/96 305,625
WEST VIRGINIA - 0.28%
40,000 West Virginia State Hospital Financing
Authority West Virginia Hospital Inc MBIA
Insured 7.20 06/01/16 41,894
WISCONSIN - 3.43%
500,000 Wisconsin State Transportation Series A 6.50 07/01/96 509,485
------------
TOTAL MUNICIPAL BONDS $ 11,842,507
(Cost $11,718,629)
</TABLE>
139
<PAGE> 198
SHORT-TERM MUNICIPAL INCOME MASTER PORTFOLIO--
JUNE 30, 1995 (UNAUDITED)
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS - 14.86%
MUNICIPAL BONDS - 11.45%
$ 500,000 Irvine Ranch CA V/R LOC - Dai-Ichi Kangyo Bank
Ltd 4.30 % 09/02/20 $ 500,000
300,000 Platte County WY Pollution Control Revenue
Tri-State G&T V/R Series B LOC - Societe
Generale 4.30 07/01/14 300,000
400,000 Salt Lake City UT Airport Revenue V/R AMT
Series A LOC - Credit Suisse 4.30 06/01/98 400,000
500,000 Uinta County WY PCR Chevron USA Inc Project V/R 4.05 08/18/20 500,000
------------
TOTAL MUNICIPAL BONDS $ 1,700,000
MONEY MARKET FUNDS - 3.41%
$ 461,866 Arbor Institutional Tax Free Portfolio $ 461,866
44,000 National Municipal Fund 44,000
------------
TOTAL MONEY MARKET FUNDS $ 505,866
TOTAL SHORT-TERM INSTRUMENTS $ 2,205,866
(Cost $2,205,866)
TOTAL INVESTMENTS IN SECURITIES
(Cost $13,924,495)*(Notes 1 and 3) 94.6% $14,048,373
Other Assets and Liabilities, Net 5.39% 800,543
------ ------------
TOTAL NET ASSETS 100.00% $ 14,848,916
------ ------------
------ ------------
</TABLE>
- ---------------------------------------------------------------
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 127,339
Gross Unrealized Depreciation (3,461)
-------------
NET UNREALIZED APPRECIATION $ 123,878
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
140
<PAGE> 199
STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
JUNE 30, 1995
<TABLE>
<CAPTION>
SHORT-TERM SHORT-TERM
GOVERNMENT- MUNICIPAL
CORPORATE INCOME
INCOME MASTER MASTER
PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market value (see cost
below) $480,116 $14,048,373
Cash 313 47,246
Receivables:
Dividends and Interest 8,359 295,974
Investment securities sold 0 500,000
Due from administrator (Note 2) 1,995 2,204
Organization expenses, net of amortization 3,059 0
Prepaid expenses 4,287 13,135
TOTAL ASSETS 498,129 14,906,932
LIABILITIES
Payables:
Allocations to beneficial interest holders 2,289 54,962
Due to sponsor and distributor (Note 2) 3,423 526
Accrued expenses 1,129 2,528
TOTAL LIABILITIES 6,841 58,016
TOTAL NET ASSETS
$491,288 $14,848,916
INVESTMENTS AT COST (NOTE 3) $479,866 $13,924,495
- --------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
141
<PAGE> 200
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
SHORT-TERM SHORT-TERM
GOVERNMENT- MUNICIPAL
CORPORATE INCOME
INCOME MASTER MASTER
PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest $7,342 $296,473
TOTAL INVESTMENT INCOME 7,342 296,473
EXPENSES (NOTE 2)
Advisory fees 592 28,931
Custody fees 20 997
Amortization of organization expenses 340 478
Legal and audit fees 10,711 10,593
Other 992 2,207
TOTAL EXPENSES 12,655 43,206
Less:
Waived and reimbursed fees (Note 2) (12,655) (43,206)
NET EXPENSES 0 0
NET INVESTMENT INCOME 7,342 296,473
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments 1,053 (264)
Net change in unrealized appreciation
(depreciation) of investments 1,786 152,737
NET GAIN ON INVESTMENTS 2,839 152,473
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $10,181 $448,946
- --------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
142
<PAGE> 201
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT-TERM GOVERNMENT-CORPORATE INCOME
MASTER PORTFOLIO
------------------------------------------
(UNAUDITED) FROM SEPT. 19, 1994
SIX MONTHS ENDED (INCEPTION) TO
JUNE 30, 1995 DECEMBER 31, 1994
- --------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income $7,342 $1,617
Net realized gain on sale of investments 1,053 0
Net change in unrealized appreciation
(depreciation) of investments 1,786 (1,536)
NET INCREASE RESULTING FROM OPERATIONS 10,181 81
NET INCREASE IN NET ASSETS RESULTING FROM
CAPITAL SHARE TRANSACTIONS 384,929 96,092
INCREASE IN NET ASSETS 395,110 96,173
NET ASSETS:
Beginning net assets 96,178 5
ENDING NET ASSETS $491,288 $96,178
- --------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
143
<PAGE> 202
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT-TERM MUNICIPAL
INCOME MASTER PORTFOLIO
----------------------------------
FROM JUNE 3,
1994
(UNAUDITED) (INCEPTION) TO
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1995 1994
- -----------------------------------------------------------------
<S> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS:
Net investment income $296,473 $73,315
Net realized gain on sale
of investments (264) (1,075)
Net change in unrealized
appreciation
(depreciation) of
investments 152,737 (28,859)
NET INCREASE RESULTING FROM
OPERATIONS 448,946 43,381
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS 2,620,833 11,735,751
INCREASE IN NET ASSETS 3,069,779 11,779,132
NET ASSETS:
Beginning net assets 11,779,137 5
ENDING NET ASSETS $14,848,916 $11,779,137
- ----------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
144
<PAGE> 203
MASTER INVESTMENT TRUST
SHORT-TERM MASTER PORTFOLIOS (UNAUDITED)
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The Short-Term Municipal Income Master Portfolio and the Short-Term
Government-Corporate Income Master Portfolio (the "Master Portfolios") are two
series of the Master Investment Trust (the "Trust"), a business trust organized
under the laws of Delaware on August 14, 1991. The Declaration of Trust permits
the issuance of beneficial interests ("interests"). The Trust currently issues
three series of portfolios: the Cash Investment Trust Master Portfolio, the
Short-Term Government-Corporate Income Master Portfolio and the Short-Term
Municipal Income Master Portfolio. The following significant accounting
policies are consistently followed by the Trust in the preparation of its
financial statements, and such policies are in conformity with generally
accepted accounting principles for investment companies. These financials are
representative of only the Short-Term Government-Corporate Income Master
Portfolio and the Short-Term Municipal Income Master Portfolio.
INVESTMENT POLICY AND SECURITY VALUATION
Each Master Portfolio's investments include fixed-, variable- and
floating-rate instruments. Except during temporary defensive periods, each
Master Portfolio seeks to maintain an average weighted maturity of 90 days to 2
years. The value of assets of each Master Portfolio (other than debt
obligations maturing in 60 days or less) is determined as of the close of
regular trading on the New York Stock Exchange, which is currently 4:00 p.m.
New York time. Except for debt obligations with remaining maturities of 60 days
or less, which are valued at amortized cost, assets are valued at current
market prices, or if such prices are not readily available, at fair value as
determined in accordance with procedures adopted by the Board of Trustees.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Interest income is accrued daily. Realized
gains and losses are reported on the basis of identified cost of securities
delivered. Bond discounts and premiums are amortized as required by the
Internal Revenue Code.
145
<PAGE> 204
MASTER INVESTMENT TRUST
SHORT-TERM MASTER PORTFOLIOS (UNAUDITED)
NOTES TO FINANCIAL STATEMENTS
FEDERAL INCOME TAXES
Each Master Portfolio intends to qualify for federal income tax purposes as
a partnership. Each Master Portfolio therefore believes that it will not be
subject to any federal or state income tax on its income and net capital gains
(if any). However, each investor in a Master Portfolio will be taxed on its
distributive share of the partnership's income for purposes of determining its
federal and state income tax liabilities. The determination of such share will
be made in accordance with the Internal Revenue Code of 1986, as amended
("Code"), and the regulations promulgated thereunder.
It is intended that the Master Portfolios' assets, income and allocations
will be managed in such a way that a regulated investment company investing in
the Master Portfolio will be able to satisfy the requirements of Subchapter M
of the Code, assuming that the investment company invested all of its assets in
the Master Portfolio.
ORGANIZATION EXPENSES
Costs incurred in connection with organization and initial registration as
an investment company under the Investment Company Act of 1940 were advanced by
Stephens Inc. ("Stephens"). Organization expenses are being amortized on a
straight line basis over 60 months from the date the Trust commenced operation.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into separate advisory contracts with WFB on behalf
of each Master Portfolio. Pursuant to the contract, WFB furnishes investment
guidance and policy direction in connection with daily portfolio management of
each Master Portfolio. Under the contract, WFB is entitled to receive a monthly
advisory fee based on an annual rate of 0.50% of the average daily net assets.
The Trust has also entered into a contract with WFB whereby WFB has agreed
to provide custody servicing functions for each Master Portfolio. For providing
this service, WFB is entitled to be compensated for custody services based on a
rate of 0.0167% of the average daily net assets of each Master Portfolio.
146
<PAGE> 205
MASTER INVESTMENT TRUST
SHORT-TERM MASTER PORTFOLIOS (UNAUDITED)
NOTES TO FINANCIAL STATEMENTS
WAIVED FEES AND REIMBURSED EXPENSES
Waived fees and reimbursed expenses for the six months ended June 30, 1995,
were as follows:
<TABLE>
<CAPTION>
WAIVED REIMBURSED
FEES EXPENSES
MASTER PORTFOLIO BY WFB BY STEPHENS
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Short-Term Government-Corporate Income $ 612 $12,043
Short-Term Municipal Income 29,928 13,278
</TABLE>
Waived fees and reimbursed expenses continue at the discretion of WFB and
Stephens.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments exclusive of short-term securities for
the Short-Term Government-Corporate Income Master Portfolio and the Short-Term
Municipal Income Master Portfolio, respectively, for the six months ending June
30, 1995, were as follows:
<TABLE>
<CAPTION>
SHORT-TERM
GOVERNMENT - SHORT-TERM
CORPORATE MUNICIPAL
INCOME INCOME
MASTER MASTER
AGGREGATE PURCHASES AND SALES OF: PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $89,585 $0
Sales proceeds 0 0
OTHER LONG-TERM SECURITIES:
Purchases at cost 0 7,621,398
Sales proceeds 0 165,219
</TABLE>
4. FINANCIAL HIGHLIGHTS
The portfolio turnover rates, excluding short-term securities, for the
Master Portfolio for the six months ended June 30, 1995 are as follows:
<TABLE>
<CAPTION>
SHORT-TERM
GOVERNMENT- SHORT-TERM
CORPORATE INCOME MUNICIPAL INCOME
MASTER PORTFOLIO MASTER PORTFOLIO
FROM
SEPTEMBER 19, FROM
(UNAUDITED) 1994 (UNAUDITED) JUNE 3, 1994
SIX MONTHS (INCEPTION) SIX MONTHS (INCEPTION)
ENDED TO ENDED TO
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1995 1994 1995 1994
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PORTFOLIO TURNOVER 0% 0% 0% 8%
</TABLE>
147
<PAGE> 206
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OVERLAND EXPRESS FUNDS, INC.:
We have audited the accompanying statement of assets and liabilities,
including the portfolios of investments, of the Asset Allocation Fund,
California Tax-Free Bond Fund, California Tax-Free Money Market Fund, Money
Market Fund, Municipal Income Fund, Strategic Growth Fund, U.S. Government
Income Fund, U.S. Treasury Money Market Fund and Variable Rate Government Fund
(nine of the funds comprising Overland Express Funds, Inc.) as of December 31,
1994, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period
then ended, except for Strategic Growth Fund which is for the period from
January 20, 1993 (date of inception) to December 31, 1993, and financial
highlights for the periods indicated herein. These financial statements and
financial highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
December 31, 1994, by examination and other appropriate audit procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the aforementioned funds of Overland Express Funds, Inc. as of December
31, 1994, the results of their operations, the changes in their net assets and
their financial highlights for the periods indicated herein, except as noted
above, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
SAN FRANCISCO, CALIFORNIA
FEBRUARY 17, 1995
148
<PAGE> 207
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS - 64.66%
7,818 Abbott Laboratories $ 207,580 $ 255,062
920 Advanced Micro Devices+ 24,274 22,885
1,096 Aetna Life & Casualty Co 63,488 51,649
1,144 Ahmanson (H F) & Co 22,321 18,447
1,111 Air Products & Chemicals Inc 47,750 49,578
4,769 Airtouch Communications+ 107,194 138,897
292 Alberto-Culver Co Class B 6,443 7,957
2,465 Albertsons Inc 65,299 71,485
2,192 Alcan Aluminium Ltd 44,602 55,622
552 Alco Standard Corp 26,236 34,638
446 Alexander & Alexander Services 10,736 8,251
595 Allergan Inc 13,402 16,809
2,753 Allied Signal Inc 99,606 93,602
1,818 Alltel Corp 56,158 54,767
871 Aluminum Co of America 64,318 75,450
805 ALZA Corp+ 18,905 14,490
1,136 Amdahl Corp 6,036 12,496
915 Amerada Hess Corp 47,346 41,747
3,397 American Barrick Corp 103,275 75,583
1,958 American Brands Inc 63,550 73,425
1,784 American Electric Power Inc 67,565 58,649
4,926 American Express Corp 137,389 145,317
1,998 American General Corp 65,517 56,444
708 American Greetings Corp 20,750 19,116
2,981 American Home Products Corp 187,763 187,058
3,041 American International Group Inc 280,906 298,018
1,368 American Stores Co 30,002 36,765
5,344 Ameritech Corp 218,261 215,764
1,264 Amgen+ 47,780 74,576
4,799 Amoco Corp 268,965 283,741
1,018 AMP Inc 64,303 74,060
718 AMR Corp+ 46,918 38,234
260 Andrew Corp+ 5,490 13,585
2,517 Anheuser-Busch Inc 120,932 128,052
1,159 Apple Computer Inc 37,560 45,201
5,007 Archer-Daniels-Midland Co 71,969 103,269
</TABLE>
8
<PAGE> 208
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,038 Armco Inc+ $ 6,910 $ 6,877
347 Armstrong World Industries Inc 13,057 13,360
426 ASARCO Inc 8,733 12,141
577 Ashland Oil Inc 18,461 19,907
15,111 AT & T Corp 887,375 759,328
1,551 Atlantic Richfield Corp 176,913 157,814
478 Autodesk Inc 11,124 18,941
1,382 Automatic Data Processing 69,154 80,847
526 Avery Dennison Corp 14,164 18,673
671 Avon Products Inc 37,713 40,092
1,345 Baker Hughes Inc 34,600 24,546
263 Ball Corp 7,996 8,285
438 Bally Entertainment Corp+ 3,919 2,683
1,419 Baltimore Gas & Electric Co 37,421 31,395
3,944 Banc One Corp 150,991 100,079
1,051 Bank of Boston Corp 25,496 27,195
3,607 BankAmerica Corp 168,378 142,477
760 Bankers Trust N Y Corp 58,834 42,085
525 Bard (C R) Inc 12,882 14,175
961 Barnett Banks Inc 43,513 36,878
118 Bassett Furniture Industries 4,143 3,363
550 Bausch & Lomb Inc 26,264 18,631
2,748 Baxter International Inc 71,345 77,631
691 Becton Dickenson & Co 25,279 33,168
4,240 Bell Atlantic Corp 255,932 210,940
4,787 BellSouth Corp 275,568 259,096
480 Bemis Co Inc 10,490 11,520
490 Beneficial Corp 18,552 19,110
1,042 Bethlehem Steel Corp+ 16,967 18,756
836 Beverly Enterprises+ 8,707 12,018
1,131 Biomet Inc+ 11,013 15,834
831 Black & Decker Corp 16,678 19,736
1,000 Block (H & R) Inc 39,393 37,125
1,035 Boatmens Bancshares Inc 31,212 28,074
3,299 Boeing Co 126,866 154,228
350 Boise Cascade Corp 7,481 9,363
</TABLE>
9
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PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
280 Briggs & Stratton Corp $ 10,879 $ 9,170
4,928 Bristol-Myers Squibb Co 277,307 285,208
192 Brown Group Inc 6,120 6,144
656 Brown-Forman Corp Class B 17,322 20,008
1,917 Browning-Ferris Industries Inc 46,972 54,395
738 Bruno's Inc 8,243 6,181
943 Brunswick Corp 14,650 17,799
858 Burlington Northern Inc 46,318 41,291
1,236 Burlington Resources Inc 56,246 43,260
2,422 Campbell Soup Co 93,977 106,871
1,470 Capital Cities/ABC Inc 77,510 125,318
1,544 Carolina Power & Light Co 50,369 41,109
1,975 Caterpillar Inc 78,485 108,872
580 CBS Inc 30,605 32,118
284 Centex Corp 10,925 6,461
1,858 Central & South West Corp 60,130 42,037
456 Ceridian Corp+ 7,835 12,255
893 Champion International Corp 28,644 32,595
993 Charming Shoppes Inc 12,441 6,579
1,736 Chase Manhattan Corp 59,110 59,675
2,360 Chemical Banking Corp 96,539 84,665
6,304 Chevron Corp 282,827 281,316
3,428 Chrysler Corp 154,049 167,972
862 Chubb Corp 76,348 66,697
693 CIGNA Corp 43,459 44,092
319 Cincinnati Milacron Inc 7,122 7,536
1,416 CINergy Corp 33,272 33,099
943 Circuit City Stores Inc 24,759 20,982
2,495 Cisco Systems Inc+ 81,806 87,637
3,806 Citicorp 128,077 157,473
180 Clark Equipment Co+ 6,296 9,765
498 Clorox Co 25,905 29,320
1,030 Coastal Corp 28,795 26,523
12,449 Coca-Cola Co 532,380 641,124
1,420 Colgate-Palmolive Co 75,165 89,993
484 Columbia Gas System Inc+ 11,905 11,374
</TABLE>
10
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ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
3,492 Columbia/HCA Healthcare Corp $ 142,146 $ 127,458
2,308 Comcast Corp Class A 51,594 36,207
425 Community Psychiatric Centers 4,829 4,675
2,494 Compaq Computer Corp+ 44,720 98,513
1,552 Computer Associates International Inc 47,491 75,272
517 Computer Sciences Corp+ 15,003 26,367
2,390 ConAgra Inc 59,895 74,688
756 Conrail Inc 42,000 38,178
2,257 Consolidated Edison Co 80,651 58,118
328 Consolidated Freightways+ 5,463 7,339
908 Consolidated Natural Gas Co 47,262 32,234
522 Continental Corp 16,353 9,918
1,132 Cooper Industries Inc 56,966 38,630
831 Cooper Tire & Rubber Co 22,137 19,632
369 Coors (Adolph) Co Class B 7,067 6,181
1,373 CoreStates Financial Corp 37,736 35,698
2,210 Corning Inc 70,274 66,024
1,433 CPC International Inc 64,159 76,307
275 Crane Co 7,854 7,391
264 Cray Research Inc+ 6,360 4,158
862 Crown Cork & Seal Co+ 31,260 32,541
1,024 CSX Corp 79,638 71,296
403 Cummins Engine Co Inc 17,748 18,236
893 Cyprus Amax Minerals 23,858 23,330
969 Dana Corp 26,598 22,650
356 Data General Corp+ 3,653 3,560
687 Dayton-Hudson Corp 47,452 48,605
1,655 Dean Witter Discover & Co 64,520 56,063
847 Deere & Co 60,086 56,114
465 Delta Air Lines Inc 24,925 23,483
798 Deluxe Corp 29,899 21,147
1,406 Detroit Edison Co 48,904 36,732
872 Dial Corp 17,202 18,530
1,364 Digital Equipment Corp+ 53,391 45,353
1,101 Dillard Department Stores Inc 41,459 29,452
5,163 Disney (Walt) Co 207,149 238,143
</TABLE>
11
<PAGE> 211
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,676 Dominion Resources Inc $ 77,394 $ 59,917
1,484 Donnelley (R R) & Sons Co 44,742 43,778
544 Dover Corp 28,288 28,084
2,679 Dow Chemical Co 160,307 180,163
962 Dow Jones & Co Inc 30,776 29,822
1,803 Dresser Industries Inc 40,846 34,032
1,090 DSC Communications Corp+ 33,432 39,104
1,964 Duke Power Co 82,204 74,878
1,634 Dun & Bradstreet Corp 100,395 89,870
6,580 DuPont (EI) de Nemours 315,936 370,125
307 E-Systems Inc 13,933 12,779
207 Eastern Enterprises 5,561 5,434
788 Eastman Chemical Co 38,768 39,794
3,274 Eastman Kodak Co 150,847 156,334
749 Eaton Corp 34,791 37,076
566 Echlin Inc 16,286 16,980
1,108 Echo Bay Mines Ltd 11,008 11,773
605 Ecolab Inc 13,287 12,705
541 EG & G Inc 10,556 7,642
2,156 Emerson Electric Co 127,372 134,750
911 Engelhard Corp 24,599 20,270
2,472 Enron Corp 83,861 75,396
624 Enserch Corp 12,347 8,190
2,195 Entergy Corp 81,835 48,016
11,992 Exxon Corp 783,835 728,514
518 Federal Express Corp+ 30,774 31,210
1,754 Federal Home Loan Mortgage Corp 91,141 88,577
2,660 Federal National Mortgage Association 212,378 193,848
400 Federal Paper Board Co 9,356 11,600
901 First Chicago Corp 40,743 43,023
1,081 First Data Corp 53,780 51,212
766 First Fidelity Bancorp 35,408 34,374
761 First Interstate Bancorp 48,063 51,463
214 First Mississippi Corp 2,158 5,350
1,707 First Union Corp 77,780 70,627
1,295 Fleet Financial Group Inc 41,983 42,088
</TABLE>
12
<PAGE> 212
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
463 Fleetwood Enterprises Inc $ 10,472 $ 8,681
347 Fleming Cos Inc 11,099 8,068
787 Fluor Corp 34,416 33,939
331 FMC Corp+ 16,013 19,115
9,874 Ford Motor Co 263,310 276,472
331 Foster Wheeler Corp 10,783 9,847
1,799 FPL Group Inc 70,076 63,190
1,350 Gannett Co Inc 68,942 71,888
1,397 Gap Inc 42,540 42,609
611 General Dynamics Corp 25,569 26,579
16,525 General Electric Co 798,879 842,775
1,536 General Mills Inc 96,889 87,552
7,308 General Motors Corp 348,341 308,763
802 General Re Corp 99,671 99,248
445 General Signal Corp 14,824 14,184
1,170 Genuine Parts Co 43,112 42,120
871 Georgia-Pacific Corp 55,970 62,277
551 Giant Food Inc 12,822 11,984
319 Giddings & Lewis Inc 7,417 4,705
2,162 Gillette Co 118,959 161,610
576 Golden West Financial 24,152 20,304
255 Goodrich (B F) Co 11,760 11,061
1,461 Goodyear Tire & Rubber Co 61,177 49,126
909 Grace (W R) & Co 35,208 35,110
478 Grainger (W W) Inc 27,317 27,605
382 Great Atlantic & Pacific Tea Co 10,277 6,924
682 Great Lakes Chemical Corp 48,574 38,874
1,320 Great Western Financial Corp 23,406 21,120
9,317 GTE Corp 339,547 283,004
1,129 Halliburton Co 42,369 37,398
312 Handleman Co 3,964 3,549
745 Harcourt General Inc 27,202 26,261
278 Harland (John H) Co 7,416 5,560
443 Harnischfeger Industries Inc 9,890 12,459
360 Harris Corp 14,965 15,300
304 Hartmarx Corp+ 2,006 1,786
</TABLE>
13
<PAGE> 213
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
852 Hasbro Inc $ 31,182 $ 24,921
2,363 Heinz (H J) Co 89,145 86,840
216 Helmerich & Payne Inc 7,419 5,535
358 Hercules Inc 31,599 41,304
839 Hershey Foods Corp 40,445 40,587
2,458 Hewlett Packard Co 181,219 245,493
452 Hilton Hotels Corp 20,661 30,454
4,377 Home Depot Inc 182,692 201,342
1,320 Homestake Mining Co 24,509 22,605
1,247 Honeywell Inc 45,384 39,281
924 Household International Inc 34,507 34,304
1,294 Houston Industries Inc 60,138 46,099
1,122 Illinois Tool Works Inc 43,159 49,088
1,109 Inco Ltd 24,486 31,745
1,035 Ingersoll-Rand Co 37,944 32,603
440 Inland Steel Industries Inc+ 12,578 15,455
4,000 Intel Corp 244,293 255,500
434 Intergraph Corp+ 4,782 3,526
5,677 International Business Machines Corp 262,935 417,260
1,097 International Flavors & Fragrances 40,925 50,736
1,230 International Paper Co 80,456 92,711
733 Interpublic Group Cos Inc 21,440 23,548
1,015 ITT Corp 86,048 89,954
797 James River Corp 16,311 16,139
464 Jefferson-Pilot Corp 24,360 24,070
6,244 Johnson & Johnson 252,678 341,859
413 Johnson Controls Inc 22,493 20,237
455 Jostens Inc 9,563 8,474
4,423 K Mart Corp 100,262 57,499
289 Kaufman & Broad Home Corp 5,758 3,721
2,151 Kellogg Co 114,128 125,027
519 Kerr-McGee Corp 26,978 23,874
2,363 KeyCorp 74,777 59,075
1,546 Kimberly-Clark Corp 76,774 78,073
380 King World Productions+ 13,857 13,110
506 Knight-Ridder Inc 28,094 25,553
</TABLE>
14
<PAGE> 214
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
1,136 Kroger Co+ $ 22,362 $ 27,406
2,849 Lilly (Eli) & Co 140,470 186,966
3,466 Limited Inc 75,994 62,821
937 Lincoln National Corp 40,838 32,795
761 Liz Claiborne Inc 18,833 12,842
594 Lockheed Corp 37,314 43,139
210 Longs Drug Stores Corp 7,077 6,668
815 Loral Corp 25,497 30,868
473 Lotus Development Corp+ 17,039 19,393
346 Louisiana Land & Exploration Co 15,607 12,586
1,064 Louisiana-Pacific Corp 37,431 28,994
1,559 Lowes Cos Inc 32,284 54,175
265 Lubys Cafeterias Inc 6,083 5,929
265 M/A-Com Inc+ 1,824 1,921
742 Mallinckrodt Group Inc 22,389 22,167
611 Manor Care Inc 12,707 16,726
1,219 Marriott International 30,200 34,284
710 Marsh & McLennan Companies Inc 62,596 56,268
942 Martin Marietta Inc 38,379 41,801
1,567 Masco Corp 49,319 35,453
1,745 Mattel Inc 41,582 43,843
1,283 Maxus Energy Corp+ 10,191 4,330
2,415 May Co Department Stores Co 98,139 81,506
1,041 Maytag Corp 17,078 15,615
1,433 MBNA Corp 31,197 33,496
519 McDermott International Inc 14,810 12,845
6,773 McDonalds Corp 181,540 198,110
405 McDonnell Douglas Corp 32,437 57,510
458 McGraw-Hill Inc 30,939 30,629
6,579 MCI Communications 171,225 120,889
557 Mead Corp 25,156 27,084
1,124 Medtronic Inc 37,668 62,523
1,412 Mellon Bank Corp 54,236 43,243
1,022 Melville Corp 46,594 31,554
342 Mercantile Stores Co Inc 11,132 13,509
12,195 Merck & Co Inc 400,805 464,934
</TABLE>
15
<PAGE> 215
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
155 Meredith Corp $ 5,364 $ 7,227
1,857 Merrill Lynch & Co Inc 86,117 66,388
995 Micron Technology Inc 35,835 43,904
5,660 Microsoft Corp+ 307,724 345,968
242 Millipore Corp 7,958 11,707
4,048 Minnesota Mining & Manufacturing Co 217,176 216,062
3,831 Mobil Corp 293,066 322,762
1,121 Monsanto Co 70,499 79,031
980 Moore Corp Ltd 18,337 18,498
1,848 Morgan (J P) & Co Inc 136,055 103,488
310 Morrison Knudsen Corp 7,649 3,953
1,453 Morton International Inc 39,745 41,411
5,698 Motorola Inc 262,990 329,772
95 NACCO Industries Inc Class A 4,187 4,596
674 Nalco Chemical Co 23,707 22,579
1,430 National City Corp 39,861 37,001
262 National Education Corp+ 1,762 1,081
1,602 National Medical Enterprises 17,376 22,628
1,211 National Semiconductor+ 19,883 23,615
477 National Service Industries Inc 12,282 12,223
2,659 NationsBank 135,952 119,987
742 Navistar International Corp+ 17,203 11,223
1,500 NBD Bancorp Inc 48,868 41,063
971 New York Times Co 24,401 21,483
1,521 Newell Co 27,858 31,941
841 Newmont Mining Corp 33,874 30,276
1,415 Niagara Mohawk Power Corp 33,155 20,164
517 NICOR Inc 14,585 11,762
722 Nike Inc Class B 39,873 53,879
1,208 NorAm Energy Corp 10,419 6,493
796 Nordstrom Inc 24,731 33,432
1,309 Norfolk Southern Corp 88,743 79,358
635 Northern States Power Co 29,238 27,940
2,434 Northern Telecom Ltd 68,812 81,235
497 Northrop Grumman Corp 18,041 20,874
3,008 Norwest Corp 78,362 70,312
</TABLE>
16
<PAGE> 216
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
3,598 Novell Inc+ $ 70,105 $ 61,616
844 Nucor Corp 39,542 46,842
4,110 NYNEX Corp 183,002 151,043
3,028 Occidental Petroleum Corp 62,755 58,289
417 Ogden Corp 9,791 7,819
1,459 Ohio Edison Co 36,167 26,992
234 ONEOK Inc 4,876 4,212
2,781 Oracle Systems Corp+ 70,944 122,712
938 Oryx Energy Co 20,849 11,139
154 Oshkosh B'Gosh Inc 2,575 2,156
168 Outboard Marine Corp 3,334 3,297
450 Owens Corning Fiberglass+ 19,502 14,400
401 PACCAR Inc 21,690 17,744
797 Pacific Enterprises 20,368 16,936
4,175 Pacific Gas & Electric Co 148,157 101,766
4,113 Pacific Telesis Group 130,097 117,221
2,745 PacifiCorp 52,719 49,753
1,124 Pall Corp 20,074 21,075
1,405 Panhandle Eastern Corp 34,381 27,749
452 Parker Hannifin Corp 15,331 20,566
2,163 PECO Energy Co 68,106 52,994
2,256 Penney (J C) Co Inc 102,363 100,674
463 Pennzoil Co 30,036 20,430
328 Peoples Energy Corp 10,898 8,569
572 Pep Boys-Manny Moe & Jack 13,424 17,732
7,648 Pepsico Inc 296,821 277,240
399 Perkin-Elmer Corp 13,467 10,224
992 Pet Inc 15,687 19,592
3,040 Pfizer Inc 191,647 234,840
682 Phelps Dodge Corp 32,047 42,199
8,324 Philip Morris Co Inc 422,035 478,630
2,528 Phillips Petroleum Co 80,431 82,792
829 Pioneer Hi Bred International Inc 30,854 28,601
1,511 Pitney Bowes Inc 62,265 47,974
382 Pittston Services Group 7,798 10,123
2,292 Placer Dome Inc 47,160 49,851
</TABLE>
17
<PAGE> 217
ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
2,261 PNC Financial Corp $ 68,006 $ 47,764
438 Polaroid Corp 16,023 14,235
304 Potlatch Corp 13,589 11,324
2,082 PPG Industries Inc 71,305 77,294
1,339 Praxair Inc 21,314 27,450
609 Premark International Inc 19,247 27,253
1,897 Price/Costco Inc+ 36,433 24,424
6,613 Procter & Gamble Co 326,908 410,006
1,013 Promus Co Inc+ 41,233 31,403
954 Providian Corp 39,160 29,455
2,373 Public Services Enterprise Group 82,662 62,885
285 Pulte Corp 9,938 6,555
1,306 Quaker Oats Co 44,185 40,160
971 Ralston-Purina Group 34,172 43,331
403 Raychem Corp 15,750 14,357
1,297 Raytheon Co 79,844 82,846
790 Reebok International Ltd 20,885 31,205
579 Reynolds Metals Co 29,121 28,371
795 Rite Aid Corp 13,952 18,583
360 Roadway Services Inc 21,930 20,430
2,116 Rockwell International Corp 73,978 75,647
654 Rohm & Haas Co 35,207 37,360
595 Rollins Environmental Services 4,105 2,901
796 Rowan Co Inc+ 7,752 4,876
5,204 Royal Dutch Petroleum Co 512,330 559,430
1,571 Rubbermaid Inc 50,701 45,166
399 Russell Corp 11,651 12,519
533 Ryan's Family Steak House+ 4,592 3,998
767 Ryder System Inc 19,746 16,874
604 SAFECO Corp 37,645 31,408
536 Safety-Kleen Corp 8,391 7,906
1,034 Salomon Inc 48,302 38,775
850 Santa Fe Energy Resources Inc 8,501 6,800
1,824 Santa Fe Pacific Corp 18,285 31,920
1,288 Santa Fe Pacific Gold Corp+ 18,325 16,583
4,653 Sara Lee Corp 120,275 117,488
</TABLE>
18
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ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
4,341 SCE Corp $ 103,526 $ 63,487
1,863 Schering-Plough Corp 114,778 137,862
2,341 Schlumberger Ltd 149,281 117,928
744 Scientific-Atlanta Inc 12,016 15,624
752 Scott Paper Co 26,439 51,982
3,617 Seagram Co Ltd 96,642 106,702
3,402 Sears Roebuck & Co 173,559 156,492
847 Service Corp International 20,415 23,504
236 Shared Medical System Corp 5,289 7,729
1,166 Shawmut National Corp 26,634 19,093
838 Sherwin Williams Co 28,000 27,759
404 Shoneys Inc+ 8,678 5,151
476 Sigma Aldrich Corp 17,594 15,708
105 Skyline Corp 2,058 2,021
404 Snap-On Inc 16,689 13,433
838 Sonat Inc 27,488 23,464
6,313 Southern Co 137,097 126,260
1,370 Southwest Airlines Co 39,054 22,948
5,822 Southwestern Bell Corp 245,831 235,063
186 Springs Industries Inc 6,958 6,882
3,396 Sprint Corp 120,833 93,815
147 SPX Corp 2,453 2,444
432 St Jude Medical Inc 14,131 17,172
811 St Paul Co Inc 35,629 36,292
420 Stanley Works 17,649 15,015
866 Stone Container Corp+ 9,420 14,939
455 Stride Rite Corp 6,846 5,062
1,046 Sun Co Inc 29,343 30,073
913 Sun Microsystems Inc+ 23,986 32,412
1,117 SunTrust Banks Inc 49,244 53,337
673 Super Value Inc 23,750 16,489
1,784 Sysco Corp 50,098 45,938
1,101 Tandem Computers Inc+ 10,917 18,855
598 Tandy Corp 19,474 29,975
314 Tektronix Inc 7,777 10,755
5,545 Tele-Communication Inc Class A+ 139,471 120,604
</TABLE>
19
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ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
535 Teledyne Inc $ 13,138 $ 10,767
563 Temple-Inland Inc 24,989 25,405
1,649 Tenneco Inc 84,823 70,083
2,525 Texaco Inc 162,676 151,184
896 Texas Instruments Inc 65,472 67,088
2,167 Texas Utilities Co 103,304 69,344
851 Textron Inc 47,145 42,869
203 Thomas & Betts Corp 12,940 13,626
3,694 Time Warner Inc 147,056 129,752
1,260 Times Mirror Co 40,140 39,533
313 Timken Co 10,282 11,033
712 TJX Companies Inc 20,286 11,125
689 Torchmark Corp 38,265 24,029
2,757 Toys R Us Inc+ 101,859 84,089
666 Transamerica Corp 38,795 33,134
380 Transco Energy Co 6,294 6,318
3,098 Travelers Inc 133,250 100,685
632 Tribune Co 33,072 34,602
288 Trinova Corp 8,102 8,460
613 TRW Inc 39,452 40,458
692 Tyco International Inc 32,013 32,870
572 U.S. Air Group Inc+ 9,139 2,503
972 U.S. Bancorp 25,001 21,992
1,534 U.S. Healthcare Inc 72,072 63,278
239 U.S. Life Corp 9,696 8,335
4,407 U.S. West Inc 204,283 156,999
2,056 Unicom Corp 60,592 49,344
1,536 Unilever N V 163,081 178,944
675 Union Camp Corp 30,683 31,809
1,446 Union Carbide Corp 27,345 42,476
1,009 Union Electric Co 43,132 35,693
1,997 Union Pacific Corp 127,501 91,113
1,646 Unisys Corp+ 18,447 14,197
1,655 United Healthcare Corp 76,340 74,682
530 United States Surgical 13,612 10,070
1,204 United Technologies Corp 68,561 75,702
</TABLE>
20
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ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
2,346 Unocal Corp $ 67,212 $ 63,929
721 UNUM Corp 41,281 27,218
1,679 Upjohn Co 46,962 51,629
843 USF & G Corp 14,176 11,486
1,937 UST Inc 53,500 53,752
2,791 USX - Marathon Group 53,677 45,703
732 USX- US Steel Group 24,763 25,986
409 Varity Corp+ 16,808 14,826
609 VF Corp 27,438 29,613
3,472 Viacom Inc Class B+ 135,725 141,050
1,656 Wachovia Corp 63,754 53,406
22,263 Wal Mart Stores Inc 590,625 473,089
1,172 Walgreen Co 45,119 51,275
1,322 Warner Lambert Co 90,826 101,794
504 Wells Fargo & Co 58,621 73,080
991 Wendy's International Inc 14,570 14,246
494 Western Atlas Inc+ 18,001 18,587
3,448 Westinghouse Electric Corp 51,491 42,238
638 Westvaco Corp 22,789 25,042
1,966 Weyerhaeuser Co 81,507 73,725
711 Whirlpool Corp 44,214 36,083
1,024 Whitman Corp 15,197 17,664
867 Williams Co Inc 25,481 21,783
719 Winn-Dixie Stores Inc 43,888 36,939
4,679 WMX Technologies Inc 142,304 122,824
1,279 Woolworth Corp 32,260 19,185
896 Worthington Industries Inc 17,308 17,920
1,143 Wrigley (Wm) Jr Co 44,405 56,436
1,040 Xerox Corp 78,773 102,960
266 Yellow Corp 6,306 6,351
333 Zenith Electronic Corp+ 2,383 3,835
137 Zurn Industries Inc 4,452 2,466
------------ ------------
TOTAL COMMON STOCKS $ 32,379,792 $ 32,396,536
</TABLE>
21
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ASSET ALLOCATION FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. TREASURY SECURITIES - 41.15%
$ 2,500,000 U.S. Treasury Bonds 6.25 % 08/15/23 $ 2,030,465
2,300,000 U.S. Treasury Bonds 7.25 05/15/16 2,124,625
2,100,000 U.S. Treasury Bonds 7.88 02/15/21 2,071,778
3,500,000 U.S. Treasury Bonds 8.00 11/15/21 3,510,938
2,600,000 U.S. Treasury Bonds 8.13 08/15/19 2,632,500
2,800,000 U.S. Treasury Bonds 8.50 02/15/20 2,947,871
3,700,000 U.S. Treasury Bonds 8.75 05/15/17 3,979,813
1,000,000 U.S. Treasury Bonds 11.25 02/15/15 1,320,624
------------
TOTAL U.S. TREASURY SECURITIES $ 20,618,614
(Cost $21,715,010)
TOTAL INVESTMENTS IN SECURITIES
(Cost $54,094,802)* 105.81% $ 53,015,150
(Notes 1 and 3)
Other Assets and Liabilities, Net (5.81)% (2,909,561)
------ ------------
TOTAL NET ASSETS 100.00% $ 50,105,589
------ ------------
------ ------------
</TABLE>
- -----------------------------------------------------------
+ NON-INCOME EARNING SECURITIES
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 2,663,232
Gross Unrealized Depreciation (3,742,884)
-------------
NET UNREALIZED DEPRECIATION ($ 1,079,652)
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 222
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS - 96.12%
$ 1,000,000 ABAG Finance Authority for Nonprofit
Corporations COP CA State Insured 7.10 % 12/01/20 $ 996,390
2,125,000 Alameda CA USD 7.00 07/01/13 2,248,059
1,000,000 Alameda CA USD AMBAC Insured 6.05 07/01/11 945,190
1,000,000 Alameda CA USD Principal 6.95 07/01/11 1,055,950
2,000,000 Alameda County CA Public Facilities Corp COP 6.25 06/01/06 1,988,580
1,000,000 Alameda County CA Water District Revenue COP
Water System Project MBIA Insured 6.20 06/01/13 955,090
100,000 Albany CA Public Facilities Finance Authority
Lease Revenue Capital Improvement Project 6.90 09/01/12 100,222
500,000 Albany CA Public Facilities Finance Authority
Lease Revenue Capital Improvement Project 7.85 09/01/09 517,630
1,000,000 Antioch CA Development Agency Tax Allocation
Project 1 FGIC Insured 6.40 09/01/17 968,540
260,000 Baldwin Park CA COP Civic Projects Prerefunded 7.75 08/01/97 278,281
1,000,000 Berryessa CA USD Series A 6.80 03/01/12 997,850
1,000,000 Buena Park CA Community RDA Tax Allocation
Central Business District Project 7.10 09/01/14 866,990
2,000,000 California Educational Facilites Authority
Revenue Chapman College Refunding Pending 7.30 01/01/02 2,110,640
2,700,000 California Educational Facilites Authority
Revenue Saint Marys College of CA Project
Prerefunded 7.50 10/01/20 2,979,747
</TABLE>
28
<PAGE> 223
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 California Educational Facilities Authority
Revenue Claremont Colleges Pooled Facilities 6.38 % 05/01/22 $ 910,140
350,000 California Educational Facilities Authority
Revenue Loyola Marymount University 6.00 10/01/14 315,214
710,000 California Educational Facilities Authority
Revenue Loyola Marymount University Series B 6.55 10/01/12 685,384
1,200,000 California Educational Facilities Authority
Revenue University of San Diego Project 6.50 10/01/08 1,194,444
700,000 California Health Facilities Financing American
Baptist Homes West State Insured 7.65 04/01/14 731,262
1,000,000 California Health Facilities Financing
Authority CA Lutheran Homes Prerefunded 7.50 10/01/11 1,102,050
1,000,000 California Health Facilities Financing
Authority Cedar Knoll Insured Series B State
Insured 7.50 08/01/20 1,000,000
1,000,000 California Health Facilities Financing
Authority Episcopal Homes Foundation Project
State Insured 7.75 07/01/18 1,031,340
400,000 California Health Facilities Financing
Authority Episcopal Homes Foundation Project
State Insured 7.85 07/01/15 412,676
200,000 California Health Facilities Financing
Authority Eskaton Properties Inc Prerefunded 7.38 05/01/08 218,548
</TABLE>
29
<PAGE> 224
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 California Health Facilities Financing
Authority Eskaton Properties Inc Prerefunded 7.50 % 05/01/20 $ 1,098,430
1,000,000 California Health Facilities Financing
Authority Gould Medical Foundation Escrowed
to Maturity 7.25 04/01/10 1,031,580
1,250,000 California Health Facilities Financing
Authority Gould Medical Foundation Escrowed
to Maturity 7.30 04/01/20 1,335,763
2,855,000 California Health Facilities Financing
Authority Kaiser Permanente Series A 6.50 12/01/20 2,634,080
1,745,000 California Health Facilities Financing
Authority Kaiser Permanente Series A 7.00 12/01/10 1,734,931
1,000,000 California Health Facilities Financing
Authority Kaiser Permanente Series A 7.00 10/01/18 987,310
1,000,000 California Health Facilities Financing
Authority Revenue Insured Health Facilities
Valleycare Series State Insured 6.50 05/01/05 998,390
1,750,000 California Health Facilities Financing
Authority Revenue Small Insured Health
Facilities Series A 6.75 03/01/20 1,630,108
1,000,000 California Health Facilities Financing
Authority San Diego Hospital Association MBIA
Insured 6.20 08/01/12 957,660
1,535,000 California HFA Home Mortgage Revenue Series A
Multiple Credit Enhancements 7.35 08/01/11 1,579,008
</TABLE>
30
<PAGE> 225
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 525,000 California HFA Home Mortgage Revenue Series B
AMT Multiple Credit Enhancements 8.00 % 08/01/29 $ 544,714
560,000 California HFA Home Mortgage Revenue Series B
Multiple Credit Enhancements 7.25 08/01/10 572,690
1,455,000 California HFA Home Mortgage Revenue Series D
AMT Multiple Credit Enhancements 7.75 08/01/10 1,529,132
140,000 California HFA Home Mortgage Revenue Series F
Multiple Credit Enhancements 7.75 08/01/08 145,751
360,000 California HFA Home Mortgage Revenue Series G
AMT Multiple Credit Enhancements 8.15 08/01/19 375,797
1,575,000 California HFA Multi-Unit Rental Housing
Revenue AMT Series A 5.50 08/01/15 1,294,083
630,000 California PCR Pacific Gas & Electric Co Series
A 8.20 12/01/18 663,755
1,000,000 California PCR San Diego Gas & Electric Co AMT 6.80 06/01/15 1,005,410
500,000 California PCR Southern California Edison
Series AMT 6.90 09/01/06 509,380
1,500,000 California PCR Southern California Edison
Series B 6.85 12/01/08 1,519,275
2,500,000 California Pollution Control Financing
Authority Resource Recovery Revenue Waste
Management Series A AMT 7.15 02/01/11 2,533,050
225,000 California Public Capital Improvements
Financing Authority Revenue Joint Powers
Agency Pooled Projects Series 8.25 03/01/98 241,378
</TABLE>
31
<PAGE> 226
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 225,000 California State HFA Insured Housing Revenue
Series C AMT MBIA Insured 7.00 % 08/01/23 $ 225,578
150,000 California State Public Works Board High
Technology Facilities Lease Revenue
University of California Prerefunding 7.60 03/01/98 161,639
1,000,000 California State Public Works Board Lease
Revenue University Of California Project
Series A AMBAC Insured 6.30 12/01/09 986,620
1,500,000 California State Public Works Board Lease
Revenue University Of California Project
Series B MBIA Insured 5.38 12/01/19 1,235,655
500,000 California State University Revenue San Jose
State University Student Series B 7.50 11/01/13 516,930
1,500,000 California Statewide Communities Development
Authority Revenue COP Hospital Cedars Sinai
Medical Center 6.50 08/01/12 1,431,945
1,500,000 California Statewide Development Motion Picture
and TV AMBAC Insured 5.25 01/01/14 1,255,455
1,590,000 California Statewide Motion Picture Development
and TV AMBAC Insured 5.25 01/01/13 1,334,885
2,255,000 Castaic Lake CA Water Agency COP Water Systerm
Improvement Project Prerefunded 7.35 08/01/20 2,466,993
</TABLE>
32
<PAGE> 227
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Cerritos CA Public Financing Authority
Redevelopment Los Cerritos Redevelopment
Project Revenue AMBAC Insured 5.75 % 11/01/22 $ 868,360
870,000 Chula Vista CA COP Town Centre II Package
Project RDA 6.00 09/01/11 793,858
1,415,000 Clayton CA RDA Tax Allocation Revenue AMBAC
Insured 7.00 08/01/20 1,444,078
1,200,000 Contra Costa County CA COP Public Facilities
Merrithew Memorial Hospital Replacement 6.60 11/01/12 1,138,512
500,000 Contra Costa County CA COP Public Facilities
Merrithew Memorial Hospital Replacement 6.63 11/01/22 460,540
270,000 Contra Costa County CA Home Mortgage Revenue
Mortgaged Backed Securities Project AMT
Escrowed to Maturity 7.75 05/01/22 304,549
750,000 Contra Costa County CA Public Financing
Authority Tax Allocation Revenue Series A 7.10 08/01/22 721,073
755,000 Contra Costa County CA Transportation Authority
Sales Tax Revenue Series A Escrowed to
Maturity 6.50 03/01/09 759,772
1,000,000 Covina CA COP Water System Improvement Project 7.30 04/01/16 1,015,270
3,350,000 Cupertino CA COP Open Space Acquisition Project
Prerefunded 6.75 04/01/10 3,563,094
</TABLE>
33
<PAGE> 228
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,475,000 Cupertino CA COP Open Space Acquisition Project
Prerefunded 7.13 % 04/01/06 $ 1,596,688
745,000 Danville CA COP 6.50 11/01/06 746,721
525,000 Danville CA COP 6.60 11/01/07 526,523
3,025,000 East Bay CA MUD Wastewater Treatment System
Revenue Prerefunded 7.20 06/01/20 3,284,212
1,585,000 East Bay CA MUD Wastewater Treatment System
Revenue Prerefunded 7.38 06/01/04 1,733,610
3,655,000 East Bay CA Regional Park District Series B 5.75 09/01/13 3,316,693
500,000 Eastern Municipal Water District CA Water &
Sewer Revenue Certificates FGIC Insured 6.30 07/01/20 474,540
2,500,000 El Dorado County CA Bond Authority Lease
Revenue Capital Facilities Project 7.40 11/01/09 2,575,225
1,000,000 Emeryville CA Public Financing Authority
Housing Increment Revenue Series A 6.35 05/01/10 966,660
2,000,000 Emeryville CA Public Financing Authority
Housing Increment Revenue Series A 7.88 02/01/15 2,096,400
500,000 Escondido CA USD COP Series B 6.50 09/01/13 505,645
750,000 Escondido CA USD COP Series B 6.50 09/01/14 757,110
200,000 Eureka CA Public Financing Authority Tax
Allocation Revenue Eureka RDA Projects
Prerefunded 7.40 11/01/12 215,984
1,410,000 Fairfield CA Public Finance Authority CGIC
Insured 5.20 08/01/08 1,219,805
</TABLE>
34
<PAGE> 229
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 950,000 Fontana CA Public Financing Authority Tax
Allocation Revenue Fontana Redevelopment
Project A Prerefunded 7.55 % 12/01/05 $ 1,058,642
1,025,000 Fontana CA Public Financing Authority Tax
Allocation Revenue Fontana Redevelopment
Project A Prerefunded 7.60 12/01/06 1,145,110
700,000 Fontana CA USD Series B AMBAC Insured 5.40 07/01/08 627,424
1,000,000 Fresno CA COP Street Improvement Project 6.63 12/01/11 975,140
3,840,000 Hayward CA COP Capital Improvement Projects 6.80 08/01/17 3,686,016
2,800,000 Huntington Beach CA Public Finance Authority
Revenue Bond 7.00 08/01/10 2,334,192
500,000 Industry CA Agency Project 6.70 11/01/03 501,585
1,080,000 Industry CA Urban Development Agency 6.85 11/01/04 1,095,163
1,250,000 Industry CA Urban Development Agency 7.30 05/01/06 1,253,563
500,000 Industry CA Urban Development Agency Project 3 6.60 11/01/02 509,720
1,000,000 Industry CA Urban Development Agency Tax
Allocation MBIA Insured 5.80 05/01/09 932,610
1,500,000 Inglewood CA COP Civic Center Improvement
Project Public Finance Authority 7.00 08/01/19 1,445,475
490,000 Inglewood CA Public Finance Authority Revenue
Series C 7.00 05/01/22 465,980
</TABLE>
35
<PAGE> 230
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 450,000 Irvine Ranch CA Water District Joint Powers
Agency Local Pool Revenue 7.80 % 02/15/08 $ 445,572
2,000,000 Kern County CA COP 7.10 12/01/07 2,037,300
1,200,000 Lemoore CA Union High School District CGIC
Insured 7.35 02/01/15 1,250,184
1,600,000 Lincoln CA RDA Tax Allocation 7.60 08/01/16 1,625,968
1,000,000 Lincoln CA USD Special Tax Community District
Number 1B 7.20 09/01/21 992,810
250,000 Local Government Finance Authority CA Revenue
Fullerton RDA Prerefunded 7.70 02/01/99 273,283
585,000 Loma Linda CA COP Prerefunded 7.00 12/01/15 613,987
1,000,000 Long Beach CA Finance Authority Revenue AMBAC
Insured 6.00 11/01/17 929,620
1,550,000 Long Beach CA Harbor Revenue AMT Series A 7.25 05/15/19 1,562,106
750,000 Los Angeles CA Community College District COP
Prerefunded 7.00 08/15/10 808,710
1,000,000 Los Angeles CA Community College District COP
Series A CGIC Insured 6.00 08/15/08 963,030
1,000,000 Los Angeles CA Community RDA Financing
Authority Revenue AMT 5.90 12/01/13 882,680
4,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue 5.38 09/01/23 3,212,600
1,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue 6.38 02/01/20 943,370
</TABLE>
36
<PAGE> 231
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 555,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue 6.88 % 01/15/10 $ 586,757
450,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue Principal 7.90 05/01/98 485,712
1,000,000 Los Angeles CA Department of Water & Power
Electric Plant Revenue Second Issue 6.00 08/15/32 873,670
100,000 Los Angeles CA Harbor Revenue Escrowed to
Maturity 7.60 10/01/18 108,348
500,000 Los Angeles CA Municipal Improvement Corp Lease
Revenue Central Library Project Series A
Prerefunded 7.10 06/01/15 536,790
130,000 Los Angeles CA SFMR Series A AMT Multiple
Credit Enhancements 7.55 12/01/23 134,297
3,320,000 Los Angeles CA Wastewater System Revenue Series
B Prerefunded 7.15 06/01/20 3,596,855
1,500,000 Los Angeles County CA COP Capital Appreciation
Disney Parking Project 6.74 (F) 03/01/08 589,410
1,000,000 Los Angeles County CA COP Multiple Capital
Facilities Project III 6.25 11/01/04 984,770
1,000,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series A 7.40 07/01/09 1,039,580
1,000,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B 5.75 07/01/18 849,770
4,275,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B 6.50 07/01/13 4,102,076
</TABLE>
37
<PAGE> 232
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 480,000 Los Angeles County CA Transportation Commission
Sales Tax Revenue Series B FGIC Insured 6.50 % 07/01/15 $ 472,531
2,395,000 Lucia Mar CA USD COP Prerefunded 6.90 05/01/15 2,402,856
1,550,000 Madera CA COP 7.38 05/01/20 1,554,790
1,000,000 Menlo Park CA Community Development Agency Tax
Allocation Las Pulgas Community Project AMBAC
Insured 6.70 10/01/22 997,350
1,100,000 Mid Peninsula CA Regional Open Space District
CA COP Prerefunded 7.55 09/01/10 1,203,422
665,000 Mid Peninsula CA Regional Open Space District
Promissory Notes 6.30 07/10/10 645,815
2,110,000 Modesto CA COP Recreational Facilities CA
Public Agency Leasing Corporation 7.25 07/01/11 2,174,545
520,000 Mojave CA Water Agency Improvement District M
Morongo Basin 6.25 09/01/02 512,803
500,000 Mojave CA Water Agency Improvement District M
Morongo Basin 6.60 09/01/13 463,600
1,000,000 Montclair CA RDA Project Three 7.15 12/01/15 950,000
1,500,000 Mountain View CA School District Community
Facility District Special Tax Series B CGIC
Insured 7.00 10/01/13 1,529,595
1,000,000 Mountain View CA Shoreline Regional Park
Community Tax Allocation Series A 5.60 08/01/09 869,960
</TABLE>
38
<PAGE> 233
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,450,000 Nevada County CA COP Solid Waste Western Nevada
County 6.50 % 10/01/06 $ 1,420,696
345,000 Nevada County CA COP Solid Waste Western Nevada
County 7.00 06/01/98 337,531
345,000 Nevada County CA COP Solid Waste Western Nevada
County 7.10 06/01/99 334,219
1,000,000 Nevada County CA COP Solid Waste Western Nevada
County 7.50 06/01/21 918,730
1,035,000 Northridge CA Water District AMBAC Insured 5.40 02/01/11 887,264
1,000,000 Nuview CA USD COP 7.25 02/01/16 970,540
400,000 Oceanside CA Community Downtown RDA Prerefunded 7.00 05/01/11 432,880
1,000,000 Orange County CA CFD Special Tax Series A
Prerefunded 7.45 08/15/04 1,098,170
1,000,000 Orange County CA CFD Special Tax Series A
Prerefunded 7.50 08/15/05 1,100,540
1,945,000 Orange County CA Transit District COP Business
Acquisition Project 6.75 12/01/05 1,705,220
1,000,000 Orange County CA Water District COP Series A 5.50 08/15/10 743,070
1,000,000 Otay CA Municipal Water District GO Improvement
District No. 27 6.70 09/01/22 911,410
1,150,000 Oxnard CA Unified High School District COP
Series B Prerefunded 7.70 11/01/19 1,267,990
1,000,000 Palm Springs CA COP Municipal Golf Course
Expansion Project 7.40 11/01/18 991,000
500,000 Pasadena CA COP Capital Project 6.00 01/01/04 486,475
1,000,000 Pasadena CA COP Prerefunded 7.00 12/01/99 1,075,520
</TABLE>
39
<PAGE> 234
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,500,000 Pittsburg CA RDA Tax Allocation CA Avenue
Community Facilities 90-1 Subordinated 7.40 % 08/15/20 $ 1,491,285
2,400,000 Pittsburg CA RDA Tax Allocation Los Medanos
Community Development Project FGIC Insured 5.50 08/01/07 2,211,168
2,000,000 Pittsburg CA RDA Tax Allocation Los Medanos
Community Development Project Prerefunded 7.15 08/01/21 2,191,660
715,000 Port of Oakland CA Port Revenue Series A AMT
BIG Insured 7.60 11/01/09 743,836
500,000 Port of Oakland CA Port Revenue Series A AMT
BIG Insured 7.60 11/01/16 514,160
1,000,000 Port of Oakland CA Special Facilities Revenue
Mitsui OSK Lines Limited Series A AMT LOC -
Industrial Bank of Japan Ltd 6.70 01/01/07 983,840
2,500,000 Ramona CA Municipal Water District COP AMBAC
Insured 7.20 10/01/10 2,615,850
1,500,000 Rancho CA Water District Financial Authority
Revenue FGIC Insured 6.25 08/01/12 1,450,260
1,000,000 Rancho Cucamonga CA Redevelopment Agency Tax
Allocation MBIA Insured 5.50 09/01/23 836,820
685,000 Rancho Mirage CA Joint Powers 7.50 04/01/09 703,488
2,315,000 Rancho Mirage CA Joint Powers Prerefunded 7.50 04/01/09 2,556,084
1,350,000 Richmond CA Joint Powers Finance Authority
Revenue Series B 7.25 05/15/13 1,355,157
</TABLE>
40
<PAGE> 235
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 100,000 Richmond CA RDA Tax Allocation Harbour
Redevelopment Project CGIC Insured 7.00 % 07/01/09 $ 103,860
1,750,000 Riverside County CA Asset Leasing Corporation
Leasehold Revenue Riverside County Hospital
Project A 6.38 06/01/09 1,663,725
3,000,000 Riverside County CA COP Series A 6.88 11/01/09 3,028,200
735,000 Riverside County CA SFMR Project A AMT GNMA
Collateralized 6.85 10/01/16 734,067
1,250,000 Riverside County CA Transportation Commission
Sales Tax Revenue Series A 6.50 06/01/09 1,231,550
1,370,000 Rosemead CA RDA Tax Allocation Redevelopment
Project Area 1-A 5.50 10/01/18 1,111,947
1,335,000 Roseville CA Joint Unified High School District
Capital Appreciation Series A 6.30 (F) 08/01/06 633,498
1,900,000 Sacramento CA COP Light Rail Transportation
Project 6.75 07/01/07 1,920,767
1,000,000 Sacramento CA MUD Electric Revenue Series Y
MBIA Insured 6.75 09/01/09 1,015,570
500,000 Sacramento CA MUD Electric Revenue Series Z
FGIC Insured 6.45 07/01/10 497,095
850,000 Saint Helena CA COP Series C 7.88 06/01/11 873,273
1,000,000 San Bernardino CA Municipal Water Department
COP FGIC Insured 6.25 02/01/12 961,900
2,000,000 San Buenaventura CA Capital Improvement Project
COP 6.85 08/01/16 1,947,160
1,525,000 San Buenaventura CA COP Prerefunded 7.45 10/01/08 1,679,315
$ 230,000 San Carlos CA RDA Tax Allocation Series A 7.00 % 09/01/01 $ 239,642
250,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/02 260,328
225,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/03 233,847
235,000 San Carlos CA RDA Tax Allocation Series A 7.00 09/01/04 243,476
235,000 San Carlos CA RDA Tax Allocation Series A 7.10 09/01/05 244,231
1,520,000 San Diego CA COP 6.90 07/15/16 1,520,714
600,000 San Diego CA IDR Gas & Electric Company Series
B AMT 7.38 12/01/21 607,518
1,000,000 San Diego CA Regional Building Authority Lease
Revenue San Miguel Consolidated Fire
Protection District MBIA Insured 5.65 01/01/20 862,660
500,000 San Diego CA Regional Building Authority Lease
Revenue San Miguel Consolidated Fire
Protection District Prerefunded 7.25 01/01/20 541,760
1,230,000 San Diego County CA COP East Mesa Detention
Facilities Project 7.00 10/01/09 1,244,932
750,000 San Diego County CA Regional Transportation
Community Sales Tax Revenue Series A Escrowed
to Maturity 6.00 04/01/08 724,673
1,000,000 San Francisco CA City & County Public Utilities
Commission Water Revenue Series A 6.50 11/01/09 1,004,200
2,000,000 San Francisco CA City & County Public Utilities
Commission Water Revenue Series A 6.75 11/01/10 2,016,260
</TABLE>
41
<PAGE> 236
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,800,000 San Joaquin County CA COP North County Landfill
Project 7.00 % 04/01/11 $ 1,809,090
2,000,000 San Joaquin Hills CA Transportation Corridor
Agency Toll Road Revenue Capital Appreciation 4.34 (F) 01/01/10 1,021,300
1,000,000 San Jose CA RDA Tax Allocation Park Center
Redevelopment Project 7.00 10/01/05 1,014,920
1,000,000 San Jose CA RDA Tax Allocation Park Center
Redevelopment Project 7.00 10/01/06 1,010,660
1,935,000 San Mateo County CA Board of Education COP 7.10 05/01/21 1,942,527
1,000,000 San Mateo County CA Transportation District
Sales Tax Revenue Series A MBIA Insured 6.70 06/01/10 1,043,130
1,000,000 Santa Ana CA Community RDA Tax Allocation
Series A 7.25 09/01/09 952,200
1,335,000 Santa Clara CA Electric Revenue Refunding
Crossover Series B 7.80 07/01/10 1,375,170
2,400,000 Santa Clara CA Electric Revenue Series A MBIA
Insured 6.25 07/01/13 2,303,592
1,700,000 Santa Clara County CA COP Multiple Facilities
Project AMBAC Insured 6.00 05/15/12 1,593,648
100,000 Santa Clara County CA COP Public Facilities
Corporation 7.75 11/01/08 105,587
605,000 Santa Clara County CA COP Public Facilities
Corporation 7.80 11/01/13 635,686
1,260,000 Santa Cruz County CA Public Financing Authority
Series C 7.10 08/01/05 1,294,045
750,000 Santa Maria CA RDA Town Center West Side
Parking Facilities FSA Insured 5.25 06/01/11 641,985
</TABLE>
42
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CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Shasta CA Dam Area Public Utility District COP 7.25 % 03/01/12 $ 1,001,170
350,000 Shasta CA Joint Powers Financing Authority
Landfill Revenue Series A 7.20 07/01/09 356,654
500,000 Shasta CA Joint Powers Financing Authority
Landfill Revenue Series A 7.20 07/01/10 512,490
1,500,000 Snowline CA Joint USD COP 6.40 07/01/18 1,347,810
520,000 Sonoma County CA COP 6.75 10/01/06 539,854
1,000,000 South County CA Regional Wastewater Authority
Revenue Regional Wastewater Facilities &
Capital Improvement FGIC Insured 5.75 08/01/10 910,700
1,000,000 South Gate CA Public Finance Authority Tax
Allocation Revenue South Gate Revenue South
Gate Redevelopment Prerefunded 7.38 09/01/09 1,085,630
1,000,000 South San Francisco CA Capital Improvements
Financing Authority Revenue South Conference
Center 6.13 09/01/18 863,390
1,160,000 Southern California HFA SFMR Series A AMT GNMA
Collateralized 7.63 10/01/22 1,200,484
555,000 Southern California HFA SFMR Series A AMT GNMA
Collateralized 7.63 10/01/23 575,385
670,000 Southern California HFA SFMR Series A AMT
GNMA/FNMA Collateralized 6.75 09/01/22 648,748
</TABLE>
43
<PAGE> 238
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 695,000 Southern California HFA SFMR Series A AMT
GNMA/FNMA Collateralized 7.35 % 09/01/24 $ 707,677
2,800,000 Southern California Metropolitan Water District 5.50 07/01/19 2,357,012
600,000 Southern California Public Power Agency
Electrical Improvements 7.00 07/01/09 611,526
2,150,000 Southern California Public Power Authority 6.75 07/01/10 2,158,170
2,750,000 Southern California Public Power Authority
Transmission Project Revenue Southern
Transmission Project 6.13 07/01/18 2,518,698
1,450,000 Southern California Public Power Authority
Transmission Revenue Project 5.75 07/01/21 1,243,694
2,000,000 Stanislaus County CA COP 7.40 04/01/04 2,053,940
2,000,000 Stanislaus County CA COP Series A 6.85 06/01/12 1,956,140
750,000 Stockton CA Port District Revenue Series A 8.10 01/01/14 773,700
20,000 Stockton CA SFMR Series Government Agency
Collateralized 7.50 02/01/23 21,531
1,750,000 Suisun City CA RDA Tax Allocation Prerefunded 7.50 10/01/19 1,920,363
265,000 Sulphur Springs CA USD COP AMBAC Insured 7.15 02/01/11 272,945
5,690,000 Sulphur Springs CA USD Series A MBIA Insured 6.90 (F) 09/01/13 1,633,087
1,000,000 Sunnyvale CA Financing Authority Utilities
Revenue Solid Waste Materials Series B AMT
MBIA Insured 6.00 10/01/08 956,620
</TABLE>
44
<PAGE> 239
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 1,000,000 Temecula Valley CA USD Series D FGIC Insured 6.00 % 09/01/14 $ 933,280
1,000,000 Turlock CA Irrigation District COP 7.25 01/01/05 1,023,460
1,000,000 Twentynine Palms CA Water District CA COP 7.00 08/01/17 954,210
2,000,000 University of California Revenue Multiple
Purpose Project C AMBAC Insured 5.25 09/01/11 1,693,460
990,000 Upland CA Housing Authority Revenue Issue A 7.85 07/01/20 971,824
325,000 Vacaville CA COP Prerefunded 7.20 12/01/13 349,580
1,000,000 Vacaville CA Public Financing Authority Tax
Allocation Redevelopment Project MBIA Insured 6.35 09/01/22 952,460
370,000 Victorville CA RDA Tax Allocation Bear Valley
Road Redevelopment Project Prerefunded 7.50 11/01/06 411,140
1,000,000 Victorville CA RDA Tax Allocation Bear Valley
Road Redevelopment Project Prerefunded 7.50 11/01/16 1,111,190
1,000,000 West & Central Basin CA Financing Authority
Redevelopment AMBAC Insured 6.13 08/01/12 952,920
1,000,000 West Basin CA Municipal Water District COP
Prerefunded 7.00 08/01/11 1,077,960
580,000 West Covina CA Public Financing Authority Water
Revenue Water System Capital Improvements
Project Prerefunded 7.50 09/01/99 633,604
</TABLE>
45
<PAGE> 240
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS (CONTINUED)
$ 500,000 West End CA Water Development Treatment &
Conservation Joint Powers Authority 7.00 % 10/01/04 $ 515,465
2,000,000 West End CA Water Development Treatment &
Conservation Joint Powers Authority 7.00 10/01/05 2,056,620
1,000,000 Yolo County CA Housing Authority Mortgage
Revenue AMT FHA Collateralized 7.20 08/01/33 992,146
------------
TOTAL CALIFORNIA MUNICIPAL BONDS $269,550,964
(Cost $270,115,511)
VARIABLE RATE MUNICIPAL BONDS - 3.99%
$ 1,000,000 California Health Facilities Financing
Authority Sutter Hospital V/R LOC - Morgan
Guaranty Trust 6.15 % 03/01/20 $ 1,000,000
1,000,000 California State Pollution Control Financing
Authority PCR Shell Oil Company Project V/R
Series C 6.15 10/01/00 1,000,000
900,000 California State Pollution Control Financing
Authority PCR Southern California Edison V/R
Series C 5.00 02/28/08 900,000
900,000 California State Pollution Control Financing
Authority PCR Southern California Edison V/R
Series D 5.00 02/28/08 900,000
900,000 Irvine Ranch CA Water District V/R LOC -
Sumitomo Bank Ltd 6.88 10/01/04 900,000
</TABLE>
46
<PAGE> 241
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
VARIABLE RATE MUNICIPAL BONDS (CONTINUED)
$ 650,000 Los Angeles County CA IDA 353 Properties
Limited Partnership V/R LOC - Dai-Ichi Kangyo
Bank Ltd 6.15 % 12/01/05 $ 650,000
1,450,000 Los Angeles County CA IDA COE & DRU AMT V/R LOC
- Dai-Ichi Kangyo Bank Ltd 6.15 12/01/06 1,450,000
450,000 Los Angeles County CA IDA Gregor H Kloenne &
Son V/R LOC - Dai-Ichi Kangyo Bank Ltd 6.15 12/01/05 450,000
950,000 Los Angeles County CA IDA Komax System Inc V/R
AMT LOC - Dai-Ichi Kangyo Bank Ltd 6.15 12/01/06 950,000
1,000,000 Los Angeles County CA V/R 6.15 12/01/05 1,000,000
2,000,000 Orange County CA Improvement Bond V/R LOC -
Fuji Bank and Industrial Bank of Japan Ltd 6.88 09/02/18 2,000,000
------------
TOTAL VARIABLE RATE MUNICIPAL BONDS $ 11,200,000
(Cost $11,200,000)
MONEY MARKET FUNDS - 0.14%
$ 12,056 Arbor Fund CA Tax-Exempt Portfolio $ 12,056
30,722 Dreyfus General CA Municipal Money Market Fund 30,722
346,202 Nuveen Institutional CA Tax-Exempt Fund 346,202
------------
TOTAL MONEY MARKET FUNDS $ 388,980
(Cost $388,980)
</TABLE>
47
<PAGE> 242
CALIFORNIA TAX-FREE BOND FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $281,704,491)* 100.25 % $281,139,944
(Notes 1 and 3)
Other Assets and (0.25)% (688,955)
Liabilities, Net
------ ------------
TOTAL NET ASSETS 100.00 % $280,450,989
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------
+ YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 7,432,752
Gross Unrealized Depreciation (7,997,299)
-------------
NET UNREALIZED DEPRECIATION $( 564,547)
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
48
<PAGE> 243
(THIS PAGE INTENTIONALLY LEFT BLANK)
49
<PAGE> 244
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES - 93.67%
$ 1,700,000 Alhambra CA IDA Sunclipse LOC - Bank of America 3.50 % 05/01/07 $ 1,700,000
2,800,000 California Health Facilities Finance Authority
St Joseph's Health Systems Series B V/R 6.15 07/01/09 2,800,000
2,600,000 California Health Facilities Financing
Authority V/R Adventist Health System LOC -
Toronto Dominion Bank 5.30 08/01/21 2,600,000
1,000,000 California Health Facilities Financing
Authority V/R Childrens Hospital MBIA Insured 5.40 11/01/21 1,000,000
1,000,000 California Health Facilities Financing
Authority Kaiser V/R Permanente 5.30 05/01/28 1,000,000
4,900,000 California Health Facilities Financing
Authority Kaiser Permanente V/R 5.30 05/01/28 4,900,000
7,000,000 California Health Facilities Financing
Authority V/R Memorial Health Services 5.40 10/01/24 7,000,000
4,280,000 California Health Facilities Financing
Authority V/R St. Joseph's Health Systems 6.15 07/01/13 4,280,000
2,410,000 California Housing Finance Authority Home
Mortgage Revenue V/R MBIA Insured 5.51 08/01/10 2,410,000
965,000 California PCR Chevron Project V/R 2.85 11/15/01 965,000
300,000 California PCR Finance Authority Southdown Inc
LOC - Societe Generale 4.35 09/15/98 300,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
53
<PAGE> 245
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 1,500,000 California PCR North County Recycling Center
Series B V/R LOC - Union Bank of Switzerland 5.75 % 07/01/17 $ 1,500,000
2,000,000 California PCR Southern California Edison
Series D 3.55 02/09/95 2,000,000
5,100,000 California PCR Stanislaus Project V/R LOC -
Swiss Bank 6.10 12/01/17 5,100,000
7,300,000 California PCR Wadham Project V/R LOC - Banque
Paribas 5.60 11/01/17 7,300,000
1,000,000 California PCR Western Waste Industries Project
V/R LOC - Citibank 5.87 12/01/00 1,000,000
3,000,000 California School Cash Flow 1994 Pooled Bond 4.50 07/05/95 3,010,978
9,055,000 California State Depatment of Water Resources
Central Valley Project V/R 5.65 12/01/05 9,055,000
4,000,000 California State GO V/R MBIA Insured 4.00 09/01/03 4,000,000
2,000,000 California State Housing Finance Authority AMT
FHA Collateralized 4.30 08/01/26 2,000,696
200,000 California State Pollution Control Financing
Authority PCR Southern California Edison V/R
Series A 5.00 02/28/08 200,000
300,000 California State Pollution Control Financing
Authority PCR Southern California Edison V/R
Series C 5.00 02/28/08 300,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
54
<PAGE> 246
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 4,000,000 California State Pollution Control Financing
Authority PCR V/R San Diego Gas & Electric Co
Series A 4.25 % 12/01/07 $ 4,000,000
5,000,000 California State Pollution Control Financing
Authority Solid Waste Disposal Revenue Colmac
Energy Project Series B V/R LOC - Swiss Bank 5.00 12/01/16 5,000,000
1,500,000 California State RANS Series A 5.00 06/28/95 1,506,303
4,300,000 California State School Board Cash Flow
Contingency LOC - Industrial Bank of Japan
Ltd 4.50 06/28/95 4,313,127
2,300,000 California Statewide CDA V/R St Joseph Health
System 5.40 07/01/08 2,300,000
1,355,000 Chino CA USD V/R LOC - National Westminster
Bank PLC 4.90 09/01/08 1,355,000
5,100,000 Colton CA RDA Las Palomas Associates Project
V/R LOC - Bank of America 6.25 11/01/15 5,100,000
1,000,000 Colton CA RDA MFHR V/R LOC - Federal Home Loan
Bank of San Francisco 5.25 05/01/10 1,000,000
1,100,000 Concord CA MFHR V/R Bel Air Apartments LOC -
Bank of America 5.65 12/01/16 1,100,000
2,000,000 Duarte CA RDA COP Johnson Duarte Partners
Project Series B V/R LOC - Bank of America 4.90 12/01/14 2,000,000
8,100,000 Eagle Trust Series 94 V/R MBIA Insured 5.73 09/01/03 8,100,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
55
<PAGE> 247
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 3,500,000 East Bay CA MUD 3.05 % 01/06/95 $ 3,500,000
2,250,000 Elk Grove CA USD TRAN 5.00 09/14/95 2,264,701
4,400,000 Escondido CA Community Development Commission
COP V/R LOC - Bank of America 6.25 10/01/16 4,400,000
7,000,000 Escondido CA MFHR Morning View Terrace V/R LOC
- Bank of America 5.60 02/15/07 7,000,000
3,900,000 Huntington Beach CA MFHR Seabridge Villas V/R
LOC - Bank of America 3.75 02/01/10 3,900,000
4,590,000 Independent Cities Various Pooled Projects V/R
LOC - National Westminster Bank PLC 4.90 06/01/98 4,590,000
4,100,000 Industry CA IDR Helene Curtis Inc Project V/R
LOC - Harris Trust & Savings Bank 5.40 10/01/06 4,100,000
2,265,000 Irvine CA IDA Improvement Bond V/R LOC -
National Westminster Bank PLC 6.62 09/02/15 2,265,000
2,000,000 Irvine CA IDA Irvine East Investment Co V/R LOC
- Bank of America 6.75 12/01/05 2,000,000
2,000,000 Irwindale CA IDR Toys R Us V/R LOC - Bankers
Trust 5.63 12/01/19 2,000,000
3,000,000 Long Beach CA Health Facilities Memorial Health
Services 5.40 10/01/16 3,000,000
9,055,000 Long Beach CA TRAN 4.75 09/20/95 9,096,133
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
56
<PAGE> 248
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 900,000 Los Angeles CA Community RDA MFHR V/R Skyline
at Southpark Phase II LOC - Industrial Bank
of Japan Ltd 5.35 % 12/01/05 $ 900,000
2,600,000 Los Angeles CA Local Educational Agencies
Pooled TRAN 4.50 07/06/95 2,609,566
300,000 Los Angeles CA MFHR V/R Masselin Manor LOC -
Bank of America 5.45 07/01/15 300,000
300,000 Los Angeles CA V/R LOC - Bank of America 6.00 11/01/09 300,000
1,200,000 Los Angeles County CA Housing Authority MFHR
V/R Harbor Cove Project LOC - Citibank 5.40 10/01/06 1,200,000
4,500,000 Los Angeles County CA Housing Authority MFHR
V/R Riverpark Apartments LOC - Dai-Ichi
Kangyo Bank Ltd 5.55 09/01/10 4,500,000
5,500,000 Los Angeles County CA TRAN 4.50 06/30/95 5,516,442
2,900,000 Montebello CA V/R LOC - Bank of America 3.50 04/01/05 2,900,000
200,000 Monterey CA Peninsula Water Management District
COP Wastewater Reclamation Project V/R LOC -
Sumitomo Bank Ltd 5.40 07/01/22 200,000
6,000,000 Ontario CA MFHR Park Centre V/R LOC - Bank of
New York 5.50 08/01/07 6,000,000
2,100,000 Ontario CA MFHR Vineyard Village V/R LOC -
Industrial Bank of Japan Ltd 5.35 12/01/05 2,100,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
57
<PAGE> 249
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 1,500,000 Ontario CA RDA MFHR Daisy Apartments LOC V/R -
Bank of America 5.50 % 11/01/04 $ 1,500,000
2,000,000 Orange County CA Apartment Development Vintage
Woods V/R LOC - Mitsubishi Bank Ltd 6.50 11/01/08 2,000,000
12,000,000 Orange County CA Improvement Bond V/R LOC -
Fuji Bank and Industrial Bank of Japan Ltd 6.88 09/02/18 12,000,000
460,000 Orange County CA Municipal Water District COP
Series 89A V/R LOC - National Westminster
Bank PLC 6.10 07/01/97 460,000
325,000 Orange County CA Municipal Water District COP
Series 89A V/R LOC - National Westminster
Bank PLC 6.10 07/01/99 325,000
235,000 Orange County CA Municipal Water District COP
Series 89B V/R LOC - National Westminster
Bank PLC 6.10 07/01/96 235,000
255,000 Orange County CA Municipal Water District COP
Series 89B V/R LOC - National Westminster
Bank PLC 6.10 07/01/97 255,000
250,000 Orange County CA Municipal Water District COP
Series 89B V/R LOC - National Westminster
Bank PLC 6.10 07/01/98 250,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
58
<PAGE> 250
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 1,825,000 Orange County CA Municipal Water District COP
Series 89B V/R LOC - National Westminster
Bank PLC 6.10 % 07/01/08 $ 1,825,000
765,000 Orange County CA Municipal Water District COP
Series 89B V/R LOC - National Westminster
Bank PLC 6.10 07/16/16 765,000
1,000,000 Orange County CA Water District 3.35 01/26/95 1,000,000
4,000,000 Orange County CA Water District 3.50 01/13/95 4,000,000
1,400,000 Orange County CA Water District 3.80 01/09/95 1,400,000
2,500,000 Sacramento CA MUD LOC - Morgan Guaranty Trust 3.50 03/08/95 2,500,000
2,780,000 Salinas CA MFHR Brentwood Gardens V/R LOC -
Bank of America 5.50 03/01/05 2,780,000
5,000,000 San Bernardino CA Alta Loma Apartments V/R LOC
- Federal Home Loan Bank of Atlanta 5.45 02/01/23 5,000,000
1,600,000 San Bernardino County CA IDA C & M Fine Pack
Inc V/R LOC - Sanwa Bank 5.05 12/01/95 1,600,000
2,185,000 San Bernardino County CA MFHR LOC - Federal
Home Loan Bank of San Francisco 5.45 05/01/17 2,185,000
2,000,000 San Diego CA MFHR Los Serano LOC - Citibank 6.75 02/01/09 2,000,000
9,600,000 San Diego CA MFHR Lusk Mira Mesa Apartments V/R
LOC - Bank of America 6.50 04/01/07 9,600,000
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
59
<PAGE> 251
CALIFORNIA TAX-FREE MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 3,600,000 San Francisco CA City & County V/R LOC -
Industrial Bank of Japan Ltd 5.15 % 12/01/05 $ 3,600,000
4,815,000 San Francisco CA MFHR Sutter/Post Apartments
V/R LOC - Dai-Ichi Kangyo Bank Ltd 5.60 03/01/18 4,815,000
1,200,000 San Francisco CA MFHR Winterland Project V/R
LOC - Citibank 5.40 06/01/06 1,200,000
5,000,000 San Joaquin County CA 4.75 10/18/95 5,022,882
2,200,000 San Joaquin County CA Transportation Authority
Sales Tax Revenue V/R LOC - Sumitomo Bank Ltd 5.30 04/01/11 2,200,000
700,000 San Jose CA IDA Centrifugal Pumps V/R LOC -
Citibank 5.75 09/01/95 700,000
1,300,000 San Jose CA MFHR Kimberly Woods Apartments V/R
LOC - Bank of America 5.50 11/01/08 1,300,000
500,000 San Luis CA Coastal USD COP V/R LOC - Credit
Suisse 5.25 12/01/08 500,000
2,395,000 San Mateo County CA COP V/R LOC - Swiss Bank 5.00 07/01/98 2,395,000
6,500,000 Santa Clara CA Housing Authority MFHR Benton
Park Center LOC - Citibank 5.40 12/01/07 6,500,000
2,575,000 Santa Clara County CA MFHR Grove Garden
Apartments V/R LOC - Citibank 5.40 03/01/17 2,575,000
1,000,000 Southern California Rapid Transit District COP
V/R MBIA Insured 5.50 07/01/99 1,000,000
3,000,000 Stockton CA 5.25 12/08/95 3,014,715
</TABLE>
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
60
<PAGE> 252
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE+ VALUE
<S> <C> <C> <C> <C>
SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES (CONTINUED)
$ 2,300,000 Tracy CA MFHR Sycamore Village Apartments V/R
LOC - Bank of America 6.00 % 05/01/15 $ 2,300,000
1,915,000 Turlock CA Irrigation District Revenue Series
V/R A LOC - Canadian Imperial Bank of
Commerce 5.63 01/01/14 1,915,000
2,000,000 Vacaville CA MFHR Western Properties The
Sycamores Project V/R LOC - Bank of America 6.00 04/01/05 2,000,000
2,600,000 Walnut Creek CA MFHR Creekside Drive Apartments
V/R LOC - Bank of America 6.00 04/01/07 2,600,000
------------
TOTAL SHORT-TERM CALIFORNIA MUNICIPAL SECURITIES $270,155,543
MONEY MARKET FUNDS - 6.07%
$ 8,500,000 Arbor Fund CA Tax-Exempt Portfolio $ 8,500,000
9,000,000 Dreyfus General CA Municipal Money Market Fund 9,000,000
------------
TOTAL MONEY MARKET FUNDS $ 17,500,000
TOTAL INVESTMENTS IN SECURITIES
(Cost $287,655,543)* (Note 1) 99.74% $287,655,543
Other Assets and Liabilities, Net 0.26% 753,850
------ ------------
TOTAL NET ASSETS 100.00% $288,409,393
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------
+ SECURITIES WITH MATURITIES IN EXCESS OF 397 DAYS ARE SUBJECT TO A DEMAND
FEATURE WHICH REDUCES THE REMAINING MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
61
<PAGE> 253
MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT - 4.70%
$15,000,000 Banque Nationale de Paris 5.19 % 03/06/95 $ 14,999,981
COMMERCIAL PAPER - 37.32%
$15,000,000 Associates Corp of North America 5.50 %(+) 01/26/95 $ 14,942,708
10,000,000 Canadian Imperial Bank of Commerce 6.03 (+) 03/01/95 9,901,175
15,000,000 Ciesco LP 5.65 (+) 02/07/95 14,912,896
5,000,000 Daimler-Benz North America Corp 5.50 (+) 01/09/95 4,993,889
14,675,000 Falcon Asset Securitization Corp+ 5.68 (+) 02/14/95 14,573,123
10,000,000 General Electric Credit Corp 5.40 (+) 01/11/95 9,984,722
5,000,000 Greenwich Asset Funding Inc 5.50 (+) 01/24/95 4,982,431
10,000,000 Greenwich Asset Funding Inc 5.85 (+) 02/24/95 9,912,250
15,000,000 Morgan (J P) & Co Inc 5.40 (+) 01/24/95 14,948,250
5,000,000 Siemens Corp 5.63 (+) 02/06/95 4,971,850
15,000,000 Transamerica Financial Corp 5.46 (+) 01/17/95 14,963,600
------------
TOTAL COMMERCIAL PAPER $119,086,894
U.S. GOVERNMENT AGENCY DISCOUNT NOTES - 35.81%
$10,000,000 Federal Home Loan Bank 5.07 %(+) 02/10/95 $ 9,943,667
24,600,000 Federal Home Loan Bank 5.94 (+) 01/19/95 24,526,938
20,000,000 Federal Home Loan Mortgage Corp 5.82 (+) 01/12/95 19,964,433
10,000,000 Federal Home Loan Mortgage Corp 5.95 (+) 01/23/95 9,963,578
20,000,000 Federal National Mortgage Association 5.77 (+) 01/23/95 19,929,478
15,000,000 Federal National Mortgage Association 5.93 (+) 01/09/95 14,980,233
15,000,000 Federal National Mortgage Association 5.94 (+) 01/19/95 14,955,375
------------
TOTAL U.S. GOVERNMENT AGENCY DISCOUNT NOTES $114,263,702
</TABLE>
64
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MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C>
VARIABLE AND FLOATING RATE NOTES - 21.22%
$ 5,000,000 American Express Centurion Bank 5.94 % 05/26/95 $ 5,000,000
7,500,000 American Express Centurion Bank 5.94 05/23/95 7,499,014
3,250,000 AT & T Corp 5.69 05/04/95 3,250,557
7,000,000 Beta Finance Inc(D) 5.76 08/17/95 7,000,000
15,000,000 Boatman's Bancshares Inc 6.10 09/20/95 14,994,418
6,000,000 Orange County CA Taxable Note(FF) 0.00 07/10/95 5,998,269
15,000,000 PNC Funding Corp 5.66 07/26/95 14,991,534
5,000,000 Sweden (Kingdom of) 5.50 10/08/95 4,996,315
4,000,000 U.S. West Financial 6.45 09/05/95 4,004,140
------------
TOTAL VARIABLE AND FLOATING RATE NOTES $ 67,734,247
REPURCHASE AGREEMENTS - 1.28%
$ 4,097,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.00 01/03/95 $ 4,097,000
65
MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
TOTAL INVESTMENTS IN SECURITIES
(Cost $320,181,824)*
(Note 1) 100.33 % $320,181,824
Other Assets and Liabilities, Net (0.33)% (1,067,061)
------ ------------
TOTAL NET ASSETS 100.00% $319,114,763
------ ------------
------ ------------
</TABLE>
- ------------------------------------------------------------
+ YIELD TO MATURITY.
(FF) WELLS FARGO BANK HAS CHOSEN TO PUT THESE SECURITIES ON A NON-ACCRUAL
STATUS FOR INCOME, BUT THEY ARE NEITHER DELINQUENT NOR IN DEFAULT AS OF
DECEMBER 31, 1994. INCOME IS RECOGNIZED WHEN RECEIVED.
(D) THE SECURITIES ACT OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS
EXEMPT FROM REGISTRATION TO QUALIFIED INSTITUTIONAL BUYERS. THESE
SECURITIES WERE DEEMED LIQUID BY THE INVESTMENT ADVISER IN ACCORDANCE WITH
POLICIES APPROVED BY THE FUND'S BOARD OF DIRECTORS.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
66
<PAGE> 255
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS - 98.73%
ALABAMA - 0.18%
$ 160,000 Alabama State HFA SFMR Series B AMT Multiple
Credit Enhancements 7.40 % 04/01/22 $ 163,632
ALASKA - 1.20%
405,000 Alaska State Housing Finance Corporation Second
Series AMT Government Agency Collateralized 6.70 12/01/25 378,574
700,000 Alaska State Housing Finance Corporation Second
Series AMT Government Agency Collateralized 7.10 06/01/22 695,758
CALIFORNIA - 18.61%
225,000 California State HFA Insured Housing Revenue
Series C AMT MBIA Insured 7.00 08/01/23 225,578
2,000,000 Contra Costa County CA Mortgage Revenue Cedar
Point Apartments Project A FHA Collateralized 6.15 09/01/25 1,797,860
245,000 Riverside County CA SFMR Project A AMT GNMA
Collateralized 6.85 10/01/16 244,689
9,750,000 Riverside County CA SFMR Series B AMT GNMA
Collateralized 8.35 06/01/13 11,598,990
1,055,000 Sacramento CA SFMR AMT Escrowed to Maturity 7.25 10/01/23 1,093,982
830,000 Southern California HFA SFMR Series A AMT
GNMA/FNMA Collateralized 6.90 10/01/24 824,688
1,000,000 Vallejo CA MFHR FHA Collateralized 5.65 05/01/27 811,730
</TABLE>
70
<PAGE> 256
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
COLARADO - 0.86%
$ 775,000 Pueblo County CO SFMR Series A GNMA/FNMA
Collateralized 6.85 % 12/01/25 $ 764,166
DISTRICT OF COLUMBIA - 0.36%
320,000 District of Columbia HFA SFMR AMT GNMA
Collateralized 7.10 12/01/24 322,486
FLORIDA - 0.38%
335,000 Brevard County FL HFA SFMR Refunded Series B
FSA Insured 7.00 03/01/13 341,486
HAWAII - 4.34%
725,000 Hawaii State Airports Systems Revenue AMT FGIC
Insured 7.00 07/01/20 730,053
500,000 Hawaii State Harbor Capital Improvement Revenue
AMT MBIA Insured 7.00 07/01/17 504,915
3,000,000 Hawaii State SFMR AMT Multiple Credit
Enhancements 6.00 07/01/26 2,644,470
ILLINOIS - 7.66%
500,000 Chicago IL O'Hare International Airport Special
Facilities Revenue AMT LOC - Bayerische
Landesbank 7.13 05/01/18 499,925
1,900,000 Chicago IL O'Hare International Airport Special
Facilities Revenue AMT MBIA Insured 6.75 01/01/18 1,856,680
1,000,000 Onterie Centers IL Housing Finance Corp
Mortgage Revenue MBIA Insured 7.05 07/01/27 1,011,770
2,645,000 Saint Claire County IL AMT FGIC Insured 5.75 10/01/23 2,254,889
</TABLE>
71
<PAGE> 257
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 1,300,000 Spring Creek IL Housing Development Corporation
Mortgage Revenue 6.45 % 07/01/22 $ 1,216,241
INDIANA - 0.88%
900,000 Indianapolis IN Airport Authority Revenue AMT
MBIA Insured 6.00 01/01/23 790,146
IOWA - 2.98%
425,000 Iowa State Finance Authority SFMR Series B AMT
GNMA/FNMA Collateralized 7.45 07/01/23 434,911
440,000 Iowa State Finance Authority SFMR Series B AMT
Government Agency Collateralized 5.95 07/01/23 378,488
450,000 Iowa State Finance Authority SFMR Series F
AMBAC Insured GNMA/FNMA Collateralized 6.50 01/01/25 418,757
1,450,000 Iowa State Finance Authority Single Family
Revenue Series B AMT GNMA/FNMA Collateralized 6.95 07/01/24 1,426,786
KANSAS - 0.23%
200,000 Kansas City KS Mortgage Revenue AMT Multiple
Credit Enhancements 7.35 12/01/23 203,782
</TABLE>
72
<PAGE> 258
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
KENTUCKY - 5.36%
$ 1,100,000 Kenton County KY Cincinnati/Northern Kentucky
International Airport Revenue AMT FSA Insured 6.30 % 03/01/15 $ 1,036,541
925,000 Kentucky State Housing Corporation Housing
Revenue AMT Multiple Credit Enhancements 5.90 01/01/15 824,536
900,000 Kentucky State Housing Corporation MFHR Series
A MBIA Insured 5.65 07/01/22 745,974
820,000 Kentucky State Housing Corporation MFHR Series
D AMT FHA Collateralized 6.80 01/01/24 800,738
1,355,000 Kentucky State Housing Corporation MFHR Series
D AMT FHA Collateralized 7.45 01/01/23 1,381,409
LOUISIANA - 15.24%
750,000 Louisiana State HFA Multifamily Mortgage
Revenue FHA Collateralized 6.95 07/01/16 752,363
1,000,000 Louisiana State MFHR AMT FHA Collateralized 5.90 12/01/18 880,440
670,000 Louisiana State Public Facilities Authority
Student Loan Revenue AMT FSA Insured 6.85 01/01/09 674,007
1,500,000 New Orleans LA AMBAC Insured 7.15 (+) 09/01/17 329,475
10,000,000 New Orleans LA International Airport Revenue
Series A AMT FGIC Insured 8.88 08/01/17 10,980,500
</TABLE>
73
<PAGE> 259
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
MARYLAND - 1.00%
$ 1,000,000 Prince Georges County MD Housing Authority
Mortgage Revenue Series A FSA Insured 6.10 % 09/20/20 $ 897,570
MASSACHUSETTS - 3.56%
2,500,000 Massachusetts State HFA Housing Revenue Series
A AMT FSA Insured 6.10 06/01/26 2,192,625
1,000,000 Massachusetts State HFA Residential Development
FNMA Collateralized 6.90 11/15/21 989,040
MICHIGAN - 2.63%
2,480,000 Mount Clemens MI Housing Corporation MFHR
Series A FHA Collateralized 6.60 06/01/22 2,353,768
MINNESOTA - 3.25%
2,500,000 Dakota & Washington Counties MN AMT Escrowed to
Maturity 4.00 09/01/16 2,400,000
500,000 Minneapolis-St Paul MN Housing Finance Board
Revenue SFMR Phase IX AMT GNMA Collateralized 7.30 08/01/31 505,335
MISSOURI - 0.29%
275,000 Missouri State Housing Development Commission
Mortgage Revenue SFMR Series A AMT GNMA
Collateralized 6.75 06/01/24 262,182
</TABLE>
74
<PAGE> 260
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
NEVADA - 2.88%
$ 2,700,000 Washoe County NV Gas Facilities Sierra Pacific
Power AMT MBIA Insured 6.55 % 09/01/20 $ 2,577,339
NEW JERSEY - 1.93%
500,000 New Jersey State Housing & Mortgage Finance
Home Buyer Agency Revenue AMT MBIA Insured 6.30 04/01/25 462,040
1,250,000 New Jersey State Housing and Mortgage Agency
MFHR FHA Collateralized 7.00 05/01/30 1,263,750
NEW YORK - 2.81%
2,000,000 Babylon NY Individual Development Agency AMT
V/R LOC - Union Bank of Switzerland 5.90 12/01/24 2,000,000
500,000 New York State Energy R & D Authority Electric
Facilities Revenue Cons Edison Co New York
City AMT MBIA Insured 7.25 11/01/24 512,060
OKLAHOMA - 1.58%
200,000 Pryor Creek OK Economic Development Authority
Mortgage Revenue Series A 7.13 07/01/21 201,700
685,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.10 06/01/22 691,234
500,000 Tulsa County OK HFA Mortgage Revenue Series B
Remarket AMT GNMA Collateralized 7.55 05/01/23 517,815
</TABLE>
75
<PAGE> 261
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
PENNSYLVANIA - 5.83%
$ 250,000 Allegheny County PA Airport Revenue Pittsburgh
International Airport Series C AMT FGIC
Insured 5.63 % 01/01/19 $ 210,055
2,000,000 Allegheny County PA Airport Revenue Pittsburgh
International Airport Series C AMT FSA
Insured 5.63 01/01/23 1,662,220
1,000,000 Allegheny County PA Residential Finance
Authority SFMR AMT GNMA/FNMA Collateralized 5.63 11/01/23 825,180
2,200,000 Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Series D AMT
AMBAC Insured 6.05 01/01/19 2,003,672
500,000 Pennsylvania State Higher Education Assistance
Agency Student Loan Revenue Series D AMT
AMBAC Insured 7.05 10/01/16 507,730
TENNESSEE - 2.93%
500,000 Dayton TN Housing Assistance FNMA
Collateralized 5.88 05/01/24 432,470
1,175,000 Morristown TN Housing Development Corporation
FNMA Collateralized 6.00 10/01/23 1,035,445
1,300,000 Morristown TN Housing Development Corporation
Multifamily Revenue FNMA Collateralized 6.00 12/01/22 1,150,032
</TABLE>
76
<PAGE> 262
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
TEXAS - 0.62%
$ 550,000 Travis County TX HFC Residential Mortgage
Revenue Series A AMT GNMA/FNMA Collateralized 7.00 % 12/01/11 $ 558,184
UTAH - 4.12%
2,295,000 Salt Lake City UT Airport Revenue Series A AMT
FGIC Insured 6.13 12/01/22 2,075,850
500,000 Utah State Board of Regents Student Loan
Revenue Series F AMT AMBAC Insured 7.45 11/01/08 522,805
1,100,000 Utah State Board of Regents Student Loan
Revenue Series H AMT AMBAC Insured 6.70 11/01/15 1,078,099
VIRGINIA - 1.28%
1,250,000 Virginia State Housing Development Authority
Commonwealth Mortgage Series B-5 AMT FSA
Insured 6.20 07/01/21 1,147,013
WASHINGTON - 2.92%
1,310,000 Washington State Housing Finance Commission
SFMR Series D AMT GNMA/FNMA Collateralized 6.15 01/01/26 1,163,765
1,440,000 Washington State Housing Finance Commission
SFMR Series D AMT GNMA/FNMA Collateralized 7.10 07/01/22 1,445,198
</TABLE>
77
<PAGE> 263
MUNICIPAL INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
WEST VIRGINIA - 2.82%
$ 3,000,000 West Virginia State Housing Revenue AMT AMBAC
Insured 5.70 % 05/01/24 $ 2,519,758
------------
TOTAL MUNICIPAL BONDS $ 88,205,349
(Cost $93,022,171)
SHORT-TERM INSTRUMENTS - 0.03%
$ 26,412 National Municipal Fund $ 26,412
(Cost $26,412)
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $93,048,583)* 98.76% $ 88,231,761
(Notes 1 and 3)
Other Assets and 1.24% 1,104,082
Liabilities, Net
------ -------------
TOTAL NET ASSETS 100.00% $ 89,335,843
------ -------------
------ -------------
</TABLE>
- ---------------------------------------------------------------
+ YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION COSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 156,800
Gross Unrealized Depreciation (4,973,622)
-------------
NET UNREALIZED DEPRECIATION ($ 4,816,822)
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
78
<PAGE> 264
STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS - 96.80%
AUTOMOBILE & RELATED - 1.56%
25,000 Top Source Inc+ $ 168,725 $ 168,750
12,500 Wabash National Corp 400,213 487,500
------------ ------------
$ 568,938 $ 656,250
BASIC INDUSTRIES - 2.83%
30,000 J&L Specialty Steel Inc $ 509,863 $ 588,750
22,500 Material Sciences Corp+ 354,175 357,188
35,000 N-Viro International Corp+ 298,750 61,250
40,000 Quadrax Corp New+ 167,077 107,500
15,000 Repap Enterprises+ 77,444 76,875
------------ ------------
$ 1,407,309 $ 1,191,563
BIOTECHNOLOGY - 0.99%
10,000 Biogen Inc+ $ 482,969 $ 417,500
CAPITAL GOODS - 1.83%
13,000 Safety 1st Inc+ $ 305,833 $ 380,250
30,000 Seda Specialty Packaging Corp+ 574,290 352,500
3,000 Videonics Inc+ 33,000 38,250
------------ ------------
$ 913,123 $ 771,000
CAPITAL GOODS - TECHNICAL - 0.34%
10,000 Uniphase Corp+ $ 141,250 $ 145,000
COMPUTER SOFTWARE - 8.35%
12,500 Atria Software Inc+ $ 304,063 $ 359,375
17,500 Informix Corp+ 390,500 562,188
15,000 Intuit Inc+ 651,880 1,001,250
32,500 Metatec Corp+ 368,781 312,813
15,000 Microsoft Corp+ 636,187 916,874
3,500 Phamis Inc+ 55,125 63,000
</TABLE>
84
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STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
40,000 Seventh Level Inc+ $ 358,750 $ 210,000
2,000 Shiva Corp+ 30,000 79,750
------------ ------------
$ 2,795,286 $ 3,505,250
COMPUTER SYSTEMS - 14.53%
32,500 Adaptec Inc+ $ 577,500 $ 767,813
25,250 Chipcom Corp+ 795,888 1,262,500
27,500 Chips & Technologies Inc+ 165,313 192,500
38,500 Cisco Systems Inc+ 1,004,750 1,352,313
23,000 Digital Link Corp+ 488,126 618,125
25,000 Komag Inc+ 622,603 653,125
7,500 Merix Corp+ 74,063 190,312
25,000 MTI Technology Corp+ 178,750 87,500
36,000 Solectron Corp+ 851,935 990,000
------------ ------------
$ 4,758,928 $ 6,114,188
CONSUMER - GROWTH - 1.67%
15,000 Barnes & Noble+ $ 429,938 $ 468,750
10,000 Rite Aid Corp 233,925 233,750
------------ ------------
$ 663,863 $ 702,500
ELECTRICAL EQUIPMENT - 1.98%
13,500 Franklin Electronic Publishers Inc+ $ 213,330 $ 285,188
13,000 Integrated Device Technology Inc+ 334,375 383,500
7,000 Microtest Inc+ 119,875 166,250
------------ ------------
$ 667,580 $ 834,938
</TABLE>
85
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STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRONIC SEMICONDUCTORS - 5.00%
20,000 Applied Materials Inc+ $ 901,875 $ 845,000
29,500 Integrated Process Equipment Corp+ 413,188 490,438
5,000 Intel Corp 328,000 319,375
12,500 Mattson Technology Inc+ 183,437 240,625
17,500 VLSI Technology Inc+ 199,510 210,000
------------ ------------
$ 2,026,010 $ 2,105,438
ENERGY & RELATED - 5.41%
5,000 Anadarko Petroleum Corp $ 271,025 $ 192,500
25,000 KCS Energy 602,323 406,250
40,000 Offshore Pipeline Inc+ 816,740 905,000
15,000 Sun Co Inc 469,950 431,250
17,500 Trigen Energy Corp 300,850 343,438
------------ ------------
$ 2,460,888 $ 2,278,438
ENTERTAINMENT - 3.81%
20,000 Anchor Gaming+ $ 324,593 $ 305,000
25,000 Mirage Resorts Inc+ 537,897 512,500
70,000 Radica Games Ltd+ 674,375 341,250
7,500 Regal Cinemas Inc+ 181,250 191,250
37,500 Sports Club Inc+ 314,372 253,125
------------ ------------
$ 2,032,487 $ 1,603,125
ENVIRONMENTAL CONTROL - 1.62%
42,000 Molten Metal Technology Inc+ $ 946,095 $ 682,500
FINANCE & RELATED - 13.10%
10,000 Emphesys Financial Group $ 295,800 $ 317,500
55,000 Envoy Corp+ 938,938 1,127,500
15,000 First Financial Management Corp 816,325 924,375
30,500 Green Tree Financial Inc 757,948 926,438
30,000 Health System International Class A+ 665,034 911,250
10,000 Household International Inc 373,444 371,250
</TABLE>
86
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STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
19,500 Investment Technology Group+ $ 252,500 $ 131,625
21,500 Value Health Inc+ 837,570 800,875
------------ ------------
$ 4,937,559 $ 5,510,813
GENERAL BUSINESS & RELATED - 0.13%
2,000 NETCOM On-Line Communication Services Inc+ $ 26,000 $ 56,750
HEALTHCARE - 6.97%
30,000 Coram Healthcare+ $ 553,079 $ 495,000
40,000 Genesis Health Ventures Inc+ 909,602 1,265,000
20,000 Healthsouth Rehabilitation Corp+ 644,977 740,000
20,000 Renal Treatment Centers+ 355,125 435,000
------------ ------------
$ 2,462,783 $ 2,935,000
HOSPITAL & MEDICAL SUPPLIES - 3.18%
50,000 Bioject Medical Technologies+ $ 229,063 $ 150,000
25,000 Fresenius USA Inc+ 139,350 209,375
36,000 Heart Technology Inc+ 709,569 720,000
7,500 Sybron International Corp+ 263,787 258,750
------------ ------------
$ 1,341,769 $ 1,338,125
MANUFACTURING PROCESSING - 0.97%
12,500 Lydall Inc+ $ 371,040 $ 406,250
MERCHANDISE SPECIAL - 2.18%
40,500 Cellstar Corp+ $ 568,292 $ 916,313
MERCHANDISING FOOD - 1.36%
10,000 General Nutrition Co Inc+ $ 252,500 $ 290,000
27,500 Whole Foods Market Inc+ 531,750 281,875
------------ ------------
$ 784,250 $ 571,875
</TABLE>
87
<PAGE> 268
STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
PHARMACEUTICAL - 0.76%
10,000 Circa Pharmaceuticals Inc+ $ 123,300 $ 178,750
30,000 Seragen Inc+ 247,190 142,500
------------ ------------
$ 370,490 $ 321,250
FOOD SERVICES - 0.54%
25,000 Taco Cabana Inc+ $ 384,557 $ 228,121
TELECOMMUNICATIONS - 11.13%
10,000 Airtouch Communications+ $ 262,419 $ 291,250
50,000 LCI International Inc+ 811,124 1,337,500
5,000 Mobile Telecommunication Technologies Corp+ 93,000 97,500
40,000 Paging Network Inc+ 1,120,938 1,360,000
22,500 Telephone & Data Systems Inc 1,064,777 1,037,813
10,000 Tellabs Inc+ 490,470 557,500
------------ ------------
$ 3,842,728 $ 4,681,563
TRANSPORTATION - 2.99%
17,000 Greenbrier Companies Inc+ $ 256,233 $ 280,500
8,500 Knight Transportation Inc+ 102,000 121,125
37,500 Landair Services Inc+ 629,054 581,250
30,000 Mesa Airlines Inc+ 531,587 273,750
------------ ------------
$ 1,518,874 $ 1,256,625
AMERICAN DEPOSITORY SHARES - 2.07%
5,000 Nokia Corp ADR+ $ 324,855 $ 375,000
2,500 Perusahaan Perseroan P T Indonesian Satellite Corp ADR 80,125 89,375
10,000 Rhodia-Ster SA ADR+ 135,000 140,000
20,000 Usinas Siderurgicas de Minas Gerals ADR+ 265,600 265,000
------------ ------------
$ 805,580 $ 869,375
</TABLE>
88
<PAGE> 269
STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
RETAIL STORES - 1.50%
15,000 Corporate Express Inc+ $ 320,000 $ 292,500
4,000 Officemax Inc+ 76,000 106,000
15,000 Pacific Sunwear of California+ 149,063 232,500
------------ ------------
$ 545,063 $ 631,000
TOTAL COMMON STOCKS $ 37,823,711 $ 40,730,750
WARRANTS - 1.81%
WARRANTS - 1.81%
55,000 Intel Corp expire 3/14/1998 $ 824,625 763,125
MUTUAL FUNDS - 0.62%
CLOSED-END MUTUAL FUNDS - 0.62%
10,000 Emerging Markets Infrastructure Fund $ 146,100 $ 102,500
15,000 The India Fund Inc 213,750 159,375
------------ ------------
$ 359,850 $ 261,875
TOTAL MUTUAL FUNDS $ 359,850 $ 261,875
</TABLE>
89
<PAGE> 270
STRATEGIC GROWTH FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
CORPORATE BONDS - 2.02%
CONVERTIBLE CORPORATE BONDS - 2.02%
$ 240,000 First Financial Management 5.00 % 12/15/99 $ 247,800
100,000 Genesis Health Ventures Inc 6.00 11/30/03 142,625
600,000 IDB Communications 5.00 08/15/03 457,500
------------
TOTAL CORPORATE BONDS $ 847,925
(Cost $951,121)
SHORT-TERM INSTRUMENTS - 2.21%
REPURCHASE AGREEMENTS - 2.21%
$ 931,000 Goldman Sachs Pooled Repurchase Agreements -
102% Collateralized by U.S. Government
Securities 5.50 01/03/95 $ 931,000
(Cost $931,000)
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $40,890,307)* 103.46% $ 43,534,675
(Notes 1 and 3)
Other Assets and (3.46% (1,455,517)
Liabilities, Net
------ -------------
TOTAL NET ASSETS 100.00% $ 42,079,158
------ -------------
------ -------------
</TABLE>
----------------------------------------------------------------------
+ NON-INCOME EARNING SECURITIES.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 6,348,256
Gross Unrealized Depreciation (3,703,888)
-------------
NET UNREALIZED APPRECIATION $ 2,644,368
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
90
<PAGE> 271
U.S. GOVERNMENT INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCIES - 48.30%
ADJUSTABLE RATE MORTGAGES - 0.95%
$ 24,381 GNMA #8109 (CMT) 5.75 % 03/20/16 $ 23,101
41,828 GNMA #8119 (CMT) 6.75 04/20/16 40,992
12,746 GNMA #8137 (CMT) 6.75 06/20/16 12,491
7,064 GNMA #8268 (CMT) 7.13 08/20/17 6,976
19,913 GNMA #8292 (CMT) 5.75 11/20/17 18,868
36,203 GNMA #8293 (CMT) 5.75 12/20/17 34,303
9,351 GNMA #8310 (CMT) 5.75 01/20/18 8,860
43,285 GNMA #8392 (CMT) 7.13 08/20/18 42,690
42,322 GNMA #8393 (CMT) 7.13 08/20/18 41,741
24,568 GNMA #8429 (CMT) 5.75 11/20/18 23,277
131,250 GNMA #8761 (CMT) 5.50 03/20/21 122,800
------------
$ 376,099
FIXED RATE MORTGAGES - 44.37%
$ 55,800 FHLMC #275825 9.50 % 08/01/16 $ 56,811
19,146 FHLMC #303953 9.00 10/01/17 19,110
50,697 FHLMC #304114 9.00 05/01/18 50,601
128,135 FHLMC #304398 9.00 06/01/18 128,127
48,117 FHLMC #305831 10.00 08/01/18 49,982
9,887 FHLMC #307323 9.50 09/01/18 10,067
77,481 FHLMC #307637 9.50 07/01/16 79,190
44,039 FHLMC #307915 9.50 10/01/18 44,879
9,425 FHLMC #308074 9.50 10/01/18 9,598
27,959 FHLMC #360020 10.00 01/01/18 29,042
38,943 FHLMC #360045 10.00 02/01/19 40,452
56,949 FHLMC #532468 9.50 04/01/19 57,980
22,759 GNMA #150499 10.50 03/15/16 24,310
145,562 GNMA #17087 9.00 09/15/16 147,343
207,981 GNMA #173055 9.00 09/15/16 210,527
114,927 GNMA #176892 9.00 10/15/16 116,576
572,726 GNMA #190848 9.00 01/15/17 579,736
223,670 GNMA #191961 9.00 02/15/20 225,627
60,334 GNMA #202624 9.00 11/15/19 60,915
117,438 GNMA #236877 9.00 04/15/18 118,677
</TABLE>
96
<PAGE> 272
U.S. GOVERNMENT INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCIES (CONTINUED)
$ 5,904,276 GNMA #278877 6.90 % 02/15/23 $ 5,185,667
81,578 GNMA #285963 9.00 01/15/20 82,363
20,121 GNMA #289319 9.00 11/15/20 20,297
219,991 GNMA #303235 9.00 05/15/21 221,916
228,705 GNMA #304653 9.00 09/15/21 230,707
9,274 GNMA #314150 9.00 10/15/21 9,355
2,121,154 GNMA #319413 7.25 12/15/18 1,908,041
19,357 GNMA #33080 9.00 08/15/22 19,526
46,048 GNMA #335400 9.00 12/15/22 46,451
1,949,045 GNMA #358863 7.25 01/15/24 1,752,426
2,988,337 GNMA #378973 7.13 01/15/34 2,664,192
1,218,705 GNMA II #1124 11.00 01/20/19 1,293,351
631,222 GNMA II #1221 11.00 07/20/19 669,884
191,546 GNMA II #1562 10.00 02/20/21 197,950
63,107 GNMA II #167269 10.00 04/20/16 65,581
127,398 GNMA II #194221 10.00 09/20/20 131,657
376,236 GNMA II #266120 10.00 08/20/19 388,814
11,725 GNMA II #272537 10.00 08/20/19 12,132
18,820 GNMA II #278055 10.00 07/20/19 19,558
83,578 GNMA II #289000 10.00 05/20/20 86,372
259,093 GNMA II #85 10.00 02/20/22 267,755
211,969 GNMA II #908 10.00 01/20/18 219,053
------------
$ 17,552,598
U.S. GOVERNMENT AGENCY NOTES - 2.98%
$ 1,700,000 FNMA Principal Strip 5.10 %(+) 03/09/22 $ 1,177,369
------------
TOTAL U.S. GOVERNMENT AGENCIES $ 19,106,066
(Cost $20,738,620)
</TABLE>
97
<PAGE> 273
U.S. GOVERNMENT INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. TREASURY SECURITIES - 49.14%
U.S. TREASURY BONDS - 36.34%
$ 6,500,000 U.S. Treasury Bonds 11.63 % 11/15/04 $ 8,141,250
4,500,000 U.S. Treasury Bonds 12.50 08/15/14 6,234,615
------------
$ 14,375,865
U.S. TREASURY NOTES - 12.80%
$ 5,000,000 U.S. Treasury Notes 8.25 % 07/15/98 $ 5,061,700
------------
TOTAL U.S. TREASURY SECURITIES $ 19,437,565
(Cost $21,690,546)
SHORT-TERM INSTRUMENTS - 1.75%
REPURCHASE AGREEMENTS - 1.75%
$ 694,000 Goldman Sachs Pooled Repurchase Agreements -
102% Collateralized by U.S. Government
Securities 5.00 % 01/03/95 $ 694,000
(Cost $694,000)
</TABLE>
98
<PAGE> 274
U.S. GOVERNMENT INCOME FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $43,123,167)* 99.19% $ 39,237,631
(Notes 1 and 3)
Other Assets and 0.81% 322,406
Liabilities, Net
------ -------------
TOTAL NET ASSETS 100.00 % $ 39,560,037
------ -------------
------ -------------
</TABLE>
----------------------------------------------------------------------
+ YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSIST OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 29,069
Gross Unrealized Depreciation (3,914,605)
-------------
NET UNREALIZED DEPRECIATION ($ 3,885,536)
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
99
<PAGE> 275
U.S. TREASURY MONEY MARKET FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. TREASURY NOTES - 0.50%
$ 1,000,000 U.S. Treasury Notes 3.88 % 02/28/95 $ 997,184
U.S. TREASURY BILLS - 98.81%
$ 9,295,000 U.S. Treasury Bills 2.76 %(+) 01/05/95 $ 9,289,905
13,500,000 U.S. Treasury Bills 3.58 (+) 01/26/95 13,452,201
12,825,000 U.S. Treasury Bills 4.25 (+) 01/12/95 12,805,777
22,880,000 U.S. Treasury Bills 4.72 (+) 02/02/95 22,774,105
31,000,000 U.S. Treasury Bills 4.85 (+) 02/09/95 30,850,042
5,000,000 U.S. Treasury Bills 4.98 (+) 02/16/95 4,967,640
15,935,000 U.S. Treasury Bills 5.17 (+) 02/23/95 15,811,351
14,750,000 U.S. Treasury Bills 5.52 (+) 01/19/95 14,713,276
17,425,000 U.S. Treasury Bills 5.54 (+) 03/09/95 17,248,903
15,375,000 U.S. Treasury Bills 5.54 (+) 03/16/95 15,201,177
10,000,000 U.S. Treasury Bills 5.59 (+) 03/23/95 9,876,306
15,000,000 U.S. Treasury Bills 5.66 (+) 03/30/95 14,797,356
15,000,000 U.S. Treasury Bills 5.81 (+) 04/06/95 14,780,707
------------
TOTAL U.S. TREASURY BILLS $196,568,746
TOTAL INVESTMENTS IN SECURITIES
(Cost $197,565,930)* (Note 1) 99.31% $197,565,930
Other Assets and Liabilities, Net 0.69% 1,363,372
------ ------------
TOTAL NET ASSETS 100.00% $198,929,302
------ ------------
------ ------------
</TABLE>
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
101
<PAGE> 276
VARIABLE RATE GOVERNMENT FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCIES - 73.47%
ADJUSTABLE RATE MORTGAGES - 68.19%
$ 3,370,446 FHLMC #607289 (CMT) 7.61 % 09/01/22 $ 3,380,962
4,397,518 FHLMC #607480 (CMT) 7.47 10/01/22 4,416,735
6,852,158 FHLMC #607420 (CMT) 7.17 10/01/22 6,903,549
7,775,944 FHLMC #845014 (CMT) 7.13 06/01/00 7,970,342
13,224,700 FHLMC #845182 (CMT) 7.18 09/01/22 13,414,739
1,828,563 FHLMC #645006 (CMT) 6.87 12/01/15 1,799,983
6,053,866 FHLMC #608539 (CMT) 6.98 03/01/23 6,148,427
1,063,692 FHLMC #755033 (CMT) 6.78 02/01/19 1,074,988
20,000,000 FHLMC #849995 (CMT) 6.68 08/01/18 20,281,250
19,618,260 FHLMC #845996 (CMT) 6.64 10/01/24 18,784,484
20,872,170 FHLMC #845075 (CMT) 6.63 04/01/29 20,868,830
44,074,260 FHLMC #845790 (CMT) 6.57 05/01/24 45,027,146
2,824,442 FHLMC #755159 (CMT) 6.54 07/01/19 2,815,602
12,497,319 FHLMC #605870 (CMT) 6.81 12/01/17 12,622,292
32,664,445 FHLMC #845980 (CMT) 6.75 06/01/30 33,241,626
22,580,672 FHLMC #845985 (CMT) 6.56 11/01/24 23,071,124
2,654,683 FHLMC #640065 (CMT) 6.38 01/01/18 2,623,145
9,051,896 FHLMC #755102 (CMT) 6.36 06/01/18 8,633,246
57,765,862 FHLMC #845535 (CMT) 6.89 10/01/23 57,892,369
27,357,843 FHLMC #845986 (CMT) 6.49 11/01/24 27,918,953
20,717,836 FHLMC #845987 (CMT) 6.43 11/01/24 21,155,604
23,870,885 FHLMC #845913 (CMT) 6.68 07/01/30 24,402,490
3,462,900 FHLMC #406643 (CMT) 6.25 05/01/22 3,426,089
3,959,083 FHLMC #609039 (CMT) 6.55 07/01/22 3,983,828
12,467,963 FHLMC #845130 (CMT) 6.22 06/01/22 12,051,035
59,623 FHLMC #845410 (CMT) 6.05 07/01/23 59,474
28,720,570 FHLMC #845897 (CMT) 6.37 06/01/24 28,944,590
38,388,576 FHLMC #845916 (CMT) 6.14 09/01/24 38,938,684
29,124,890 FHLMC #845948 (CMT) 5.78 10/31/24 29,434,487
232,801 FHLMC #770400 (COFI) 5.75 11/01/18 224,506
220,967 FHLMC #770641 (COFI) 5.75 02/01/19 212,957
639,710 FHLMC #770663 (COFI) 5.75 04/01/19 626,117
776,187 FHLMC #775132 (COFI) 5.70 05/01/19 750,472
64,937 FHLMC #775488 (COFI) 5.70 04/01/19 62,461
2,121,887 FHLMC #406211 (CMT) 7.62 11/01/21 2,105,972
</TABLE>
106
<PAGE> 277
VARIABLE RATE GOVERNMENT FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCIES (CONTINUED)
$ 6,237,718 FHLMC #606539 (CMT) 5.94 % 03/01/18 $ 6,261,109
3,804,617 FHLMC #845475 (CMT) 5.98 10/01/23 3,697,022
2,994,865 FHLMC #350035 (CMT) 5.37 02/01/17 2,972,403
291,077 FHLMC #390208 (COFI) 5.19 07/01/19 281,981
1,195,792 FHLMC #395009 (COFI) 5.14 06/01/29 1,156,176
27,120 FHLMC #845613 (CMT) 4.23 01/01/24 27,418
9,739,977 FNMA #124598 (CMT) 7.44 12/01/22 9,879,940
6,072,436 FNMA #90031 (CMT) 7.36 01/01/20 6,140,751
43,594,052 FNMA #190726 (CMT) 6.95 03/01/33 44,411,440
22,665,699 FNMA #141414 (CMT) 6.85 12/01/31 22,977,353
13,759,848 FNMA #124011 (CMT) 6.96 01/01/30 13,940,377
4,379,648 FNMA #110933 (CMT) 6.80 09/01/18 4,409,736
3,387,333 FNMA #152205 (CMT) 6.77 01/01/19 3,349,226
4,673,554 FNMA #95407 (CMT) 6.73 03/01/20 4,734,871
5,020,545 FNMA #70176 (CMT) 6.67 08/01/27 5,036,209
3,854,354 FNMA #146952 (CMT) 6.71 10/01/20 3,902,534
7,678,366 FNMA #245414 (CMT) 6.79 07/01/20 7,769,508
4,137,128 FNMA #178071 (CMT) 6.49 09/01/22 4,124,179
10,640,379 FNMA #70186 (CMT) 6.52 05/01/21 10,480,774
25,630,220 FNMA #190864 (CMT) 6.57 02/01/23 25,470,032
9,833,413 FNMA #190095 (CMT) 6.34 10/01/23 9,751,992
26,994,746 FNMA #303035 (CMT) 6.39 10/20/24 27,454,197
8,605,475 FNMA #70009 (CMT) 6.44 04/01/18 8,605,475
9,158,312 FNMA #190033 (CMT) 6.25 09/01/23 9,106,751
6,794,436 FNMA #70087 (CMT) 6.23 08/01/18 6,802,929
5,221,096 FNMA #70485 (CMT) 6.31 04/01/27 5,090,568
10,871,620 FNMA #136014 (COFI) 6.18 05/01/18 11,250,713
5,536,085 FNMA #70541 (CMT) 6.43 06/01/19 5,536,085
6,633,979 FNMA #70374 (CMT) 6.22 12/01/14 6,613,214
11,245,911 FNMA #190826 (CMT) 6.28 03/01/24 11,330,255
14,992,206 FNMA #70652 (CMT) 6.32 07/01/20 15,001,501
2,200,567 FNMA #240724 (CMT) 6.00 10/01/23 2,160,671
1,305,033 FNMA #70947 (COFI) 5.93 12/01/28 1,268,320
11,446,668 FNMA #124764 (CMT) 6.38 03/01/23 11,396,531
4,139,998 FNMA #70614 (CMT) 5.92 10/01/18 4,132,215
674,230 FNMA #60588 (COFI) 5.75 01/01/18 658,217
</TABLE>
107
<PAGE> 278
VARIABLE RATE GOVERNMENT FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES (CONTINUED)
$ 1,674,481 FNMA #60590 (COFI) 5.75 % 02/01/18 $ 1,636,805
4,832,546 FNMA #70193 (CMT) 5.75 04/01/19 4,877,827
1,637,037 FNMA #60585 (COFI) 5.75 11/01/17 1,600,204
21,378,396 FNMA #303038 (CMT) 5.63 11/01/23 21,228,961
1,306,536 FNMA #64083 (COFI) 5.51 05/01/18 1,264,884
1,868,633 FNMA #70911 (COFI) 5.39 06/01/19 1,818,405
1,709,499 FNMA #123496 (COFI) 5.27 07/01/27 1,646,453
680,438 FNMA #57115 (COFI) 5.00 10/01/17 657,895
------------
$837,182,665
REAL ESTATE MORTGAGE INVESTMENT CONDUITS - 5.28%
$13,000,000 FHLMC 1650-PA 7.25 % 01/15/24 $ 11,260,600
12,759,902 FHLMC 1541KB 6.50 09/15/22 12,512,615
22,889,815 FHLMC G-18 B 6.25 10/25/17 21,130,046
19,155,926 FHLMC G-18 A 5.75 09/25/23 18,968,198
1,006,570 FNMA 1993-G19 7.25 04/25/23 935,164
------------
$ 64,806,623
TOTAL U.S. GOVERNMENT AGENCIES $901,989,288
(Cost $920,082,341)
U.S. TREASURY SECURITIES - 7.60%
U.S. TREASURY NOTES - 7.60%
$50,000,000 U.S. Treasury Notes 6.88 % 10/31/96 $ 49,328,000
45,000,000 U.S. Treasury Notes 6.13 07/31/96 44,029,800
------------
TOTAL U.S. TREASURY SECURITIES $ 93,357,800
(Cost $94,890,408)
SHORT-TERM INSTRUMENTS - 17.35%
U.S. TREASURY BILLS - 15.40%
$191,000,000 U.S. Treasury Bills 5.54 %(F) 03/09/95 $189,124,380
</TABLE>
108
<PAGE> 279
VARIABLE RATE GOVERNMENT FUND -- DECEMBER 31, 1994
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<S> <C> <C> <C> <C>
SHORT-TERM INSTRUMENTS (CONTINUED)
REPURCHASE AGREEMENTS - 1.95%
$23,942,000 Goldman Sachs Pooled Repurchase Agreement -
102% Collateralized by U.S. Government
Securities 5.00 % 01/03/95 $ 23,942,000
------------
TOTAL SHORT-TERM INSTRUMENTS $213,066,380
(Cost $213,024,609)
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
(Cost $1,227,997,358)* 98.42% $1,208,413,468
(Notes 1 and 3)
Other Assets and 1.58% 19,352,525
Liabilities, Net
------- --------------
TOTAL NET ASSETS 100.00% $1,227,765,993
------- --------------
------- --------------
</TABLE>
- -----------------------------------------------------------------------
+ YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS THE SAME AS FOR FINANCIAL
STATEMENT PURPOSES AND NET UNREALIZED DEPRECIATION CONSIST OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $ 110,268
Gross Unrealized Depreciation (19,694,158)
-------------
NET UNREALIZED DEPRECIATION ($ 19,583,890)
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
109
<PAGE> 280
(THIS PAGE INTENTIONALLY LEFT BLANK)
110
<PAGE> 281
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
<TABLE>
<CAPTION>
CALIFORNIA
ASSET CALIFORNIA TAX-FREE
ALLOCATION TAX-FREE MONEY
FUND BOND FUND MARKET FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below)
(Note 1) $53,015,150 $281,139,944 $287,655,543
Cash 150,858 0 483,906
RECEIVABLES:
Dividends and interest 523,513 5,494,398 1,817,661
Fund shares sold 42,971 12,016 0
Investment securities sold 988,203 0 0
Due from administrator
(Note 2) 0 0 0
Organization expenses, net
of amortization 15,127 3,674 0
Prepaid expenses 4,083 0 0
TOTAL ASSETS 54,739,905 286,650,032 289,957,110
LIABILITIES
Cash overdraft due to
custodian 0 0 0
PAYABLES:
Investment securities
purchased 711 0 0
Distributions to
shareholders 4,441,524 5,517,140 829,034
Fund shares redeemed 52,412 150,584 0
Due to sponsor and
distributor (Note 2) 54,349 219,143 322,656
Due to adviser (Note 2) 53,016 153,593 296,344
Other 32,304 158,583 99,683
TOTAL LIABILITIES 4,634,316 6,199,043 1,547,717
TOTAL NET ASSETS
$50,105,589 $280,450,989 $288,409,393
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $39,918,819 $272,581,402 $288,490,103
Paid-in capital, Class D
or I 11,266,422 8,449,153 0
Undistributed
(overdistributed) net
investment income 0 (15,019) 0
Undistributed net realized
gain(loss) on
investments 0 0 (80,710)
Net unrealized
appreciation
(depreciation) of
investments (1,079,652) (564,547) 0
TOTAL NET ASSETS $50,105,589 $280,450,989 $288,409,393
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
Net assets - Class A* $40,307,753 $273,105,024 $288,409,393
Shares outstanding - Class
A* 3,778,856 26,780,285 288,490,103
Net asset value per share -
Class A* $10.67 $10.20 $1.00
Maximum offering price per
share - Class A* $11.17+ $10.68+ $1.00
Net assets - Class D or I $9,797,836 $7,345,965 N/A
Shares outstanding - Class D
or I 739,045 551,635 N/A
Net asset value and offering
price per share - Class D
or I $13.26 $13.32 N/A
INVESTMENTS AT COST (NOTE 3) $54,094,802 $281,704,491 $287,655,543
</TABLE>
- ---------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
+ MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
111
<PAGE> 282
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
<TABLE>
<CAPTION>
MONEY MUNICIPAL STRATEGIC
MARKET INCOME GROWTH
FUND FUND FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below)
(Note 1) $320,181,824 $88,231,761 $43,534,675
Cash 187,038 0 2,854
RECEIVABLES:
Dividends and interest 615,585 1,749,635 19,761
Fund shares sold 0 108,703 279,212
Investment securities sold 0 0 227,007
Due from administrator
(Note 2) 0 170,726 65,419
Organization expenses, net
of amortization 17,857 50,250 50,525
Prepaid expenses 0 0 730
TOTAL ASSETS 321,002,304 90,311,075 44,180,183
LIABILITIES
Cash overdraft due to
custodian 0 43,051 0
PAYABLES:
Investment securities
purchased 0 0 479,833
Distributions to
shareholders 1,385,567 446,122 1,481,221
Fund shares redeemed 0 380,394 52,879
Due to sponsor and
distributor (Note 2) 259,875 53,085 48,468
Due to adviser (Note 2) 145,886 0 0
Other 96,213 52,580 38,624
TOTAL LIABILITIES 1,887,541 975,232 2,101,025
TOTAL NET ASSETS
$319,114,763 $89,335,843 $42,079,158
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $307,915,442 $79,978,992 $24,331,443
Paid-in capital, Class D
or I 11,237,512 17,774,604 15,136,259
Undistributed
(overdistributed) net
investment income 0 0 (32,912)
Undistributed net realized
gain(loss) on
investments (38,191) (3,600,931) 0
Net unrealized
appreciation
(depreciation) of
investments 0 (4,816,822) 2,644,368
TOTAL NET ASSETS $319,114,763 $89,335,843 $42,079,158
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
Net assets - Class A* $307,877,923 $73,791,119 $26,743,797
Shares outstanding - Class
A* 307,915,400 7,445,590 2,012,671
Net asset value per share -
Class A* $1.00 $9.91 $13.29
Maximum offering price per
share - Class A* $1.00 $10.22** $13.92+
Net assets - Class D or I $11,236,840 $15,544,724 $15,335,361
Shares outstanding - Class D
or I 11,237,511 1,158,200 927,153
Net asset value and offering
price per share - Class D
or I $1.00 $13.42 $16.54
INVESTMENTS AT COST (NOTE 3) $320,181,824 $93,048,583 $40,890,307
</TABLE>
- ---------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
+ MAXIMUM OFFERING PRICE IS COMPUTED AS 100/95.5 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
112
<PAGE> 283
<TABLE>
<CAPTION>
U.S. GOVERNMENT U.S. TREASURY VARIABLE RATE
INCOME MONEY MARKET GOVERNMENT
FUND FUND FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market
value (see cost below)
(Note 1) $39,237,631 $197,565,930 $1,208,413,468
Cash 254 2,220,008 434,310
RECEIVABLES:
Dividends and interest 632,369 13,166 9,885,393
Fund shares sold 0 0 0
Investment securities sold 11,403 0 44,694,648
Due from administrator
(Note 2) 128,572 0 0
Organization expenses, net
of amortization 12,829 34,441 29,991
Prepaid expenses 8,836 1,292 0
TOTAL ASSETS 40,031,894 199,834,837 1,263,457,810
LIABILITIES
Cash overdraft due to
custodian 0 0 0
PAYABLES:
Investment securities
purchased 0 0 25,232,873
Distributions to
shareholders 241,890 669,312 5,658,233
Fund shares redeemed 193,125 0 2,713,651
Due to sponsor and
distributor (Note 2) 20,447 200,630 980,340
Due to adviser (Note 2) 0 15,385 692,371
Other 16,395 20,208 414,349
TOTAL LIABILITIES 471,857 905,535 35,691,817
TOTAL NET ASSETS
$39,560,037 $198,929,302 $1,227,765,993
NET ASSETS CONSIST OF:
Paid-in capital, Class A* $39,797,072 $195,041,619 $1,378,345,742
Paid-in capital, Class D
or I 4,861,314 3,900,124 13,464,512
Undistributed
(overdistributed) net
investment income 0 0 0
Undistributed net realized
gain(loss) on
investments (1,212,813) (12,441) (144,460,371)
Net unrealized
appreciation
(depreciation) of
investments (3,885,536) 0 (19,583,890)
TOTAL NET ASSETS $39,560,037 $198,929,302 $1,227,765,993
COMPUTATION OF NET ASSET
VALUE AND OFFERING PRICE
Net assets - Class A* $35,838,284 $195,031,244 $1,215,545,665
Shares outstanding - Class
A* 3,710,564 195,041,619 132,255,622
Net asset value per share -
Class A* $9.66 $1.00 $9.19
Maximum offering price per
share - Class A* $10.12+ $1.00 $9.47**
Net assets - Class D or I $3,721,753 $3,898,058 $12,220,328
Shares outstanding - Class D
or I 281,880 3,900,123 889,475
Net asset value and offering
price per share - Class D
or I $13.20 $1.00 $13.74
INVESTMENTS AT COST (NOTE 3) $43,123,167 $197,565,930 $1,227,997,358
</TABLE>
- ---------------------------------------------------------------------
* INCLUDES FUNDS WITH A SINGLE CLASS.
** MAXIMUM OFFERING PRICE IS COMPUTED AS 100/97 OF NET ASSET VALUE. ON
INVESTMENTS OF $100,000 OR MORE THE OFFERING PRICE IS REDUCED.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
113
<PAGE> 284
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
CALIFORNIA
ASSET CALIFORNIA TAX-FREE
ALLOCATION TAX-FREE MONEY
FUND BOND FUND MARKET FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $1,342,922 $ 0 $ 0
Interest 1,032,628 21,124,123 9,506,387
TOTAL INVESTMENT INCOME 2,375,550 21,124,123 9,506,387
EXPENSES (NOTE 2)
Advisory fees 424,899 1,645,335 1,493,881
Administration fees 66,524 431,734 334,128
Custody fees 59,998 60,811 63,312
Shareholder servicing fees 28,377 20,828 0
Portfolio accounting fees 0 127,846 128,324
Transfer agency fees 62,494 208,106 41,927
Distribution fees 206,954 203,357 167,064
Amortization of
organization expenses 4,074 1,146 0
Legal and audit fees 19,341 56,857 46,600
Registration fees 37,034 15,000 10,001
Directors' fees 4,830 5,000 5,001
Shareholder reports 37,049 80,000 42,578
Other 3,020 31,671 0
TOTAL EXPENSES 954,594 2,887,691 2,332,816
Less:
Waived fees (69,419) (1,166,246) (61,626)
Net Expenses 885,175 1,721,445 2,271,190
NET INVESTMENT INCOME (LOSS) 1,490,375 19,402,678 7,235,197
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments 3,975,711 4,054,017 (76,188)
Net change in unrealized
appreciation
(depreciation) of
investments (6,051,202) (39,374,337) 0
NET GAIN (LOSS) ON
INVESTMENTS (2,075,491) (35,320,320) (76,188)
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS ($585,116) ($15,917,642) $7,159,009
</TABLE>
- ---------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
114
<PAGE> 285
<TABLE>
<CAPTION>
MONEY MUNICIPAL STRATEGIC U.S. GOVERNMENT U.S. TREASURY
MARKET INCOME GROWTH INCOME MONEY MARKET
FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 0 $ 0 $93,576 $ 0 $ 0
Interest 13,596,252 6,765,684 70,000 3,930,693 5,781,769
TOTAL INVESTMENT INCOME 13,596,252 6,765,684 163,576 3,930,693 5,781,769
EXPENSES (NOTE 2)
Advisory fees 777,719 542,075 207,239 259,491 350,980
Administration fees 311,088 109,157 62,623 51,898 141,170
Custody fees 58,355 19,250 10,835 18,132 28,098
Shareholder servicing fees 0 43,503 37,050 17,454 0
Portfolio accounting fees 123,512 83,858 53,132 60,164 89,828
Transfer agency fees 57,715 68,287 23,766 54,914 36,479
Distribution fees 774,391 224,638 178,458 57,366 346,635
Amortization of
organization expenses 14,698 28,369 14,872 3,476 8,867
Legal and audit fees 55,132 35,390 30,888 16,330 56,828
Registration fees 35,000 67,726 35,000 43,399 47,698
Directors' fees 5,000 5,000 5,000 5,001 5,020
Shareholder reports 22,999 46,918 79,616 19,997 14,026
Other 5,199 15,599 8,587 8,899 8,099
TOTAL EXPENSES 2,240,808 1,289,770 747,066 616,521 1,133,728
Less:
Waived fees (129,201) (549,664) (134,333) (179,536) (247,364)
Net Expenses 2,111,607 740,106 612,733 436,985 886,364
NET INVESTMENT INCOME (LOSS) 11,484,645 6,025,578 (449,157) 3,493,708 4,895,405
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments (36,799) (3,600,931) 1,481,221 (1,212,813) (12,441)
Net change in unrealized
appreciation
(depreciation) of
investments 0 (11,048,257) 336,969 (5,164,808) 0
NET GAIN (LOSS) ON
INVESTMENTS (36,799) (14,649,188) 1,818,190 (6,377,621) (12,441)
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS $11,447,846 ($8,623,610) $1,369,033 ($2,883,913) $4,882,964
</TABLE>
- --------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
115
<PAGE> 286
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
VARIABLE RATE
GOVERNMENT
FUND
- ----------------------------------------------
<S> <C>
INVESTMENT INCOME
Dividends $ 0
Interest 88,578,302
TOTAL INVESTMENT INCOME 88,578,302
EXPENSES (NOTE 2)
Advisory fees 8,552,459
Administration fees 1,810,492
Custody fees 293,921
Shareholder servicing fees 35,962
Portfolio accounting fees 403,597
Transfer agency fees 121,270
Distribution fees 4,312,202
Amortization of
organization expenses 19,348
Legal and audit fees 203,762
Registration fees 43,323
Directors' fees 5,000
Shareholder reports 65,000
Other 196,306
TOTAL EXPENSES 16,062,642
Less:
Waived fees (2,477,609)
Net Expenses 13,585,033
NET INVESTMENT INCOME (LOSS) 74,993,269
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss)
on sale of investments (125,280,826)
Net change in unrealized
appreciation
(depreciation) of
investments (11,149,757)
NET GAIN (LOSS) ON
INVESTMENTS (136,430,583)
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS ($61,437,314)
</TABLE>
- ----------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
116
<PAGE> 287
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993*
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $1,490,375 $1,276,274
Net realized gain (loss)
on sale of investments 3,975,711 3,276,537
Net change in unrealized
appreciation
(depreciation) of
investments (6,051,202) 1,186,951
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS (585,116) 5,739,762
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (1,253,254) (1,198,361)
CLASS D OR I (192,825) (48,177)
In excess of net
investment income
CLASS A** 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A** (3,165,196) (2,799,714)
CLASS D OR I (766,987) (476,823)
In excess of net realized
gain on sales of
investments
CLASS A** 0 (34,686)
CLASS D OR I 0 (6,122)
From tax return of capital
CLASS A** 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 5,857,662 13,213,202
Reinvestment of dividends
- Class A** 694,596 5,999,719
Cost of shares redeemed -
Class A** (14,543,493) (8,760,239)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** (7,991,235) 10,452,682
Proceeds from shares sold
- Class D or I 5,046,708 9,112,380
Reinvestment of dividends
- Class D or I 87,663 413,795
Cost of shares redeemed -
Class D or I (3,194,348) (199,776)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 1,940,023 9,326,399
INCREASE (DECREASE) IN NET
ASSETS (12,014,590) 20,954,960
NET ASSETS:
Beginning net assets 62,120,179 41,165,219
ENDING NET ASSETS $50,105,589 $62,120,179
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 497,697 1,081,974
Shares issued in
reinvestment of
dividends - Class A** 60,791 510,728
Shares redeemed - Class
A** (1,244,313) (724,118)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** (685,825) 868,584
Shares sold - Class D or I 344,653 594,680
Shares issued in
reinvestment of
dividends - Class D or I 6,181 28,015
Shares redeemed - Class D
or I (221,506) (12,978)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 129,328 609,717
</TABLE>
- ---------------------------------------------------------------------
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
** INCLUDES FUNDS WITH A SINGLE CLASS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
117
<PAGE> 288
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993*
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $19,402,678 $21,237,063
Net realized gain (loss)
on sale of investments 4,054,017 6,490,108
Net change in unrealized
appreciation
(depreciation) of
investments (39,374,337) 19,196,590
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS (15,917,642) 46,923,761
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (18,973,436) (21,134,567)
CLASS D OR I (429,242) (102,496)
In excess of net
investment income
CLASS A** 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A** (3,947,872) (6,355,898)
CLASS D OR I (106,145) (134,211)
In excess of net realized
gain on sales of
investments
CLASS A** 0 0
CLASS D OR I 0 0
From tax return of capital
CLASS A** 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 15,317,908 35,749,590
Reinvestment of dividends
- Class A** 14,574,219 13,080,113
Cost of shares redeemed -
Class A** (80,201,764) (81,716,776)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** (50,309,637) (32,887,073)
Proceeds from shares sold
- Class D or I 2,864,757 8,100,469
Reinvestment of dividends
- Class D or I 348,941 41,937
Cost of shares redeemed -
Class D or I (2,499,120) (407,831)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 714,578 7,734,575
INCREASE (DECREASE) IN NET
ASSETS (88,969,396) (5,955,909)
NET ASSETS:
Beginning net assets 369,420,385 375,376,294
ENDING NET ASSETS $280,450,989 $369,420,385
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 1,401,041 3,152,193
Shares issued in
reinvestment of
dividends - Class A** 1,315,610 1,157,210
Shares redeemed - Class
A** (7,464,971) (7,156,701)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** (4,748,320) (2,847,298)
Shares sold - Class D or I 197,191 533,988
Shares issued in
reinvestment of
dividends - Class D or I 24,268 2,757
Shares redeemed - Class D
or I (179,799) (26,770)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 41,660 509,975
</TABLE>
- ---------------------------------------------------------------------
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
** INCLUDES FUNDS WITH A SINGLE CLASS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
118
<PAGE> 289
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET
FUND MONEY MARKET FUND
---------------------------------- ----------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993 DEC. 31, 1994+ DEC. 31, 1993
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $7,235,197 $6,995,421 $11,484,645 $6,583,166
Net realized gain (loss)
on sale of investments (76,188) (2,884) (36,799) 8,843
Net change in unrealized
appreciation
(depreciation) of
investments 0 0 0 0
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 7,159,009 6,992,537 11,447,846 6,592,009
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (7,235,197) (6,995,421) (11,414,964) (6,583,166)
CLASS D OR I N/A N/A (69,681) N/A
In excess of net
investment income
CLASS A** 0 0 0 0
CLASS D OR I N/A N/A 0 N/A
From net realized gain on
sales of investments
CLASS A** 0 0 0 0
CLASS D OR I N/A N/A 0 N/A
In excess of net realized
gain on sales of
investments
CLASS A** 0 0 0 0
CLASS D OR I N/A N/A 0 N/A
From tax return of capital
CLASS A** 0 0 0 0
CLASS D OR I N/A N/A 0 N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 630,837,073 674,008,517 1,991,327,765 1,463,882,954
Reinvestment of dividends
- Class A** 2,663,580 3,132,891 4,615,464 2,954,701
Cost of shares redeemed -
Class A** (742,727,104) (642,493,442) (1,916,112,891) (1,507,186,695)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** (109,226,451) 34,647,966 79,830,338 (40,349,040)
Proceeds from shares sold
- Class D or I N/A N/A 19,768,852 N/A
Reinvestment of dividends
- Class D or I N/A N/A 26,043 N/A
Cost of shares redeemed -
Class D or I N/A N/A (8,557,384) N/A
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I N/A N/A 11,237,511 0
INCREASE (DECREASE) IN NET
ASSETS (109,302,639) 34,645,082 91,031,051 (40,340,197)
NET ASSETS:
Beginning net assets 397,712,032 363,066,950 228,083,712 268,423,909
ENDING NET ASSETS $288,409,393 $397,712,032 $319,114,763 $228,083,712
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 630,837,073 674,008,517 1,991,327,765 1,463,882,954
Shares issued in
reinvestment of
dividends - Class A** 2,663,580 3,132,891 4,615,464 2,954,701
Shares redeemed - Class
A** (742,727,100) (642,493,442) (1,916,112,891) (1,507,186,695)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** (109,226,447) 34,647,966 79,830,338 (40,349,040)
Shares sold - Class D or I N/A N/A 19,768,852 N/A
Shares issued in
reinvestment of
dividends - Class D or I N/A N/A 26,043 N/A
Shares redeemed - Class D
or I N/A N/A (8,557,384) N/A
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I N/A N/A 11,237,511 N/A
</TABLE>
- --------------------------------------------------------------------------------
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
+ CLASS I SHARES COMMENCED OPERATIONS ON AUGUST 18, 1994.
119
<PAGE> 290
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993*
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $6,025,578 $4,717,103
Net realized gain (loss)
on sale of investments (3,600,931) 20,206
Net change in unrealized
appreciation
(depreciation) of
investments (11,048,257) 4,905,853
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS (8,623,610) 9,643,162
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (5,151,955) (4,522,416)
CLASS D OR I (873,623) (194,687)
In excess of net
investment income
CLASS A** (137,633) (123,103)
CLASS D OR I (26,101) (5,300)
From net realized gain on
sales of investments
CLASS A** 0 (17,604)
CLASS D OR I 0 (2,484)
In excess of net realized
gain on sales of
investments
CLASS A** 0 0
CLASS D OR I 0 0
From tax return of capital
CLASS A** 0 0
CLASS D OR I N/A 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 14,853,144 60,726,515
Reinvestment of dividends
- Class A** 2,696,820 2,495,124
Cost of shares redeemed -
Class A** (35,965,725) (15,768,365)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** (18,415,761) 47,453,274
Proceeds from shares sold
- Class D or I 6,605,791 14,968,369
Reinvestment of dividends
- Class D or I 363,289 54,166
Cost of shares redeemed -
Class D or I (3,876,822) (333,738)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 3,092,258 14,688,797
INCREASE (DECREASE) IN NET
ASSETS (30,136,425) 66,919,639
NET ASSETS:
Beginning net assets 119,472,268 52,552,629
ENDING NET ASSETS $89,335,843 $119,472,268
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 1,375,339 5,518,326
Shares issued in
reinvestment of
dividends - Class A** 257,416 226,780
Shares redeemed - Class
A** (3,481,504) (1,426,633)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** (1,848,749) 4,318,473
Shares sold - Class D or I 447,121 986,710
Shares issued in
reinvestment of
dividends - Class D or I 25,788 3,560
Shares redeemed - Class D
or I (283,002) (21,977)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 189,907 968,293
</TABLE>
- ---------------------------------------------------------------------
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
** INCLUDES FUNDS WITH A SINGLE CLASS.
120
<PAGE> 291
<TABLE>
<CAPTION>
STRATEGIC GROWTH FUND U.S. GOVERNMENT INCOME FUND
---------------------------------- ----------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993* DEC. 31, 1994 DEC. 31, 1993*
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) ($449,157) ($32,912) $3,493,708 $3,271,325
Net realized gain (loss)
on sale of investments 1,481,221 1,185,766 (1,212,813) 273,721
Net change in unrealized
appreciation
(depreciation) of
investments 336,969 2,307,399 (5,164,808) 957,977
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 1,369,033 3,460,253 (2,883,913) 4,503,023
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** 0 0 (3,066,842) (3,158,009)
CLASS D OR I 0 0 (426,866) (113,316)
In excess of net
investment income
CLASS A** 0 0 0 0
CLASS D OR I 0 0 0 0
From net realized gain on
sales of investments
CLASS A** (655,929) (806,898) 0 (229,933)
CLASS D OR I (376,137) (378,868) 0 (43,788)
In excess of net realized
gain on sales of
investments
CLASS A** 0 0 0 0
CLASS D OR I 0 0 0 0
From tax return of capital
CLASS A** (278,477) (17,417) 0 0
CLASS D OR I (170,680) 0 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 11,769,539 30,071,208 11,812,017 18,850,522
Reinvestment of dividends
- Class A** 403,346 12,594 1,241,308 1,829,518
Cost of shares redeemed -
Class A** (10,877,764) (6,751,584) (22,062,966) (12,436,244)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** 1,295,121 23,332,218 (9,009,641) 8,243,796
Proceeds from shares sold
- Class D or I 6,859,821 12,523,699 1,463,572 9,926,918
Reinvestment of dividends
- Class D or I 175,834 0 271,695 33,601
Cost of shares redeemed -
Class D or I (3,485,125) (767,290) (6,683,335) (149,761)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 3,550,530 11,756,409 (4,948,068) 9,810,758
INCREASE (DECREASE) IN NET
ASSETS 4,733,461 37,345,697 (20,335,330) 19,012,531
NET ASSETS:
Beginning net assets 37,345,697 0 59,895,367 40,882,836
ENDING NET ASSETS $42,079,158 $37,345,697 $39,560,037 $59,895,367
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 890,673 2,481,668 1,143,944 1,726,172
Shares issued in
reinvestment of
dividends - Class A** 30,559 1,115 120,007 169,841
Shares redeemed - Class
A** (834,218) (557,126) (2,181,814) (1,138,467)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** 87,014 1,925,657 (917,863) 757,546
Shares sold - Class D or I 410,160 767,273 101,936 653,386
Shares issued in
reinvestment of
dividends - Class D or I 10,884 0 19,155 2,224
Shares redeemed - Class D
or I (214,855) (46,309) (485,093) (9,729)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 206,189 720,964 (364,002) 645,881
- ----------------------------------------------------------------------------------------------------
</TABLE>
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
** INCLUDES FUNDS WITH A SINGLE CLASS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
121
<PAGE> 292
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DEC. 31, 1994+ DEC. 31, 1993
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $4,895,405 $3,125,243
Net realized gain (loss)
on sale of investments (12,441) 20,501
Net change in unrealized
appreciation
(depreciation) of
investments 0 0
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS 4,882,964 3,145,744
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (4,799,315) (3,125,243)
CLASS D OR I (96,090) N/A
In excess of net
investment income
CLASS A** 0 0
CLASS D OR I 0 N/A
From net realized gain on
sales of investments
CLASS A** 0 (17,138)
CLASS D OR I 0 N/A
In excess of net realized
gain on sales of
investments
CLASS A** 0 0
CLASS D OR I 0 N/A
From tax return of capital
CLASS A** 0 0
CLASS D OR I 0 N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 628,656,179 500,546,689
Reinvestment of dividends
- Class A** 1,652,082 1,544,750
Cost of shares redeemed -
Class A** (553,436,130) (521,337,487)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** 76,872,131 (19,246,048)
Proceeds from shares sold
- Class D or I 310,876,391 N/A
Reinvestment of dividends
- Class D or I 21,937 N/A
Cost of shares redeemed -
Class D or I (306,998,204) N/A
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 3,900,124 N/A
INCREASE (DECREASE) IN NET
ASSETS 80,759,814 (19,242,685)
NET ASSETS:
Beginning net assets 118,169,488 137,412,173
ENDING NET ASSETS $198,929,302 $118,169,488
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 628,656,178 500,546,689
Shares issued in
reinvestment of
dividends - Class A** 1,652,082 1,544,750
Shares redeemed - Class
A** (553,436,130) (521,337,487)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** 76,872,130 (19,246,048)
Shares sold - Class D or I 310,876,391 N/A
Shares issued in
reinvestment of
dividends - Class D or I 21,937 N/A
Shares redeemed - Class D
or I (306,998,204) N/A
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 3,900,124 N/A
</TABLE>
- ---------------------------------------------------------------------
* CLASS D SHARES COMMENCED OPERATIONS ON JULY 1, 1993.
** INCLUDES FUNDS WITH A SINGLE CLASS.
+ CLASS I SHARES COMMENCED OPERATIONS ON JUNE 20, 1994.
122
<PAGE> 293
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT FUND
----------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1994*
- ----------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income
(loss) $74,993,269 $99,969,107
Net realized gain (loss)
on sale of investments (125,280,826) 3,391,477
Net change in unrealized
appreciation
(depreciation) of
investments (11,149,757) 8,474,472
NET INCREASE (DECREASE)
RESULTING FROM OPERATIONS (61,437,314) 111,835,056
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income
CLASS A** (74,426,329) (99,880,831)
CLASS D OR I (566,940) (88,276)
In excess of net
investment income
CLASS A** 0 0
CLASS D OR I 0 0
From net realized gain on
sales of investments
CLASS A** 0 0
CLASS D OR I 0 0
In excess of net realized
gain on sales of
investments
CLASS A** 0 0
CLASS D OR I 0 0
From tax return of capital
CLASS A** 0 0
CLASS D OR I 0 0
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
- Class A** 357,940,526 1,059,574,962
Reinvestment of dividends
- Class A** 24,395,946 40,686,979
Cost of shares redeemed -
Class A** (980,573,296) (1,722,521,869)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
A** (598,236,824) (622,259,928)
Proceeds from shares sold
- Class D or I 7,287,276 11,631,069
Reinvestment of dividends
- Class D or I 232,670 21,864
Cost of shares redeemed -
Class D or I (5,418,428) (289,936)
NET INCREASE IN NET ASSETS
RESULTING FROM CAPITAL
SHARE TRANSACTIONS - CLASS
D OR I 2,101,518 11,362,997
INCREASE (DECREASE) IN NET
ASSETS (732,565,891) (599,030,982)
NET ASSETS:
Beginning net assets 1,960,331,884 2,559,362,866
ENDING NET ASSETS $1,227,765,993 $1,960,331,884
SHARES ISSUED AND REDEEMED:
Shares sold - Class A** 36,230,262 105,893,754
Shares issued in
reinvestment of
dividends - Class A** 2,505,413 4,065,691
Shares redeemed - Class
A** (101,611,784) (172,065,992)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
A** (62,876,109) (62,106,547)
Shares sold - Class D or I 495,723 775,911
Shares issued in
reinvestment of
dividends - Class D or I 16,111 1,459
Shares redeemed - Class D
or I (380,431) (19,298)
NET INCREASE (DECREASE) IN
SHARES OUTSTANDING - CLASS
D OR I 131,403 758,072
</TABLE>
- ------------------------------------------------------------------
123
<PAGE> 294
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
--------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.90 $ 11.45 $ 11.95 $ 10.31 $ 10.39
Income From Investment Operations:
Net Investment Income 0.31 0.30 0.47 0.57 0.63
Net Realized and Unrealized Capital
Gain/(Loss) on Investments (0.39) 1.12 0.36 1.51 0.10
------------ ------------ ------------ ------------ ------------
Total From Investment Operations (0.08) 1.42 0.83 2.08 0.73
Less Distributions:
Dividends From Net Investment Income (0.31) (0.30) (0.63) (0.44) (0.61)
Distributions From Net Realized
Capital Gain (0.84) (0.67) (0.70) 0.00 (0.20)
------------ ------------ ------------ ------------ ------------
Total From Distributions (1.15) (0.97) (1.33) (0.44) (0.81)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 10.67 $ 11.90 $ 11.45 $ 11.95 $ 10.31
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Return (not annualized)+ (0.68)% 12.54% 7.44% 20.69% 7.08%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 40,308 $ 53,124 $ 41,165 $ 38,663 $ 27,689
Number of Shares Outstanding, End of
Period (000) 3,779 4,465 3,596 3,235 2,686
Ratios to Average Net Assets
(Annualized):
Ratio of Net Expenses to Average Net
Assets(1) 1.30% 1.36% 1.25% 1.38% 1.59%
Ratio of Net Investment Income to
Average Net Assets(2) 2.41% 2.64% 4.08% 5.23% 6.01%
Portfolio Turnover 50% 53% 38% 18% 94%
- ------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average
Net Assets Prior to Waived Fees
and Reimbursed Expenses 1.38% 1.47% 1.71% 1.56% 1.74%
(2) Ratio of Net Investment Income to
Average Net Assets Prior to Waived
Fees and Reimbursed Expenses 2.33% 2.53% 3.62% 5.05% 5.86%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
124
<PAGE> 295
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
----------------------------
CLASS D*
----------------------------
YEAR PERIOD
ENDED ENDED
DEC. 31, 1994 DEC. 31, 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 14.75 $ 15.00
Income From Investment Operations:
Net Investment Income 0.25 0.07
Net Realized and Unrealized Capital Gain/(Loss) on Investments (0.45) 0.61
------ ------
Total From Investment Operations (0.20) 0.68
Less Distributions:
Dividends From Net Investment Income (0.25) (0.10)
Distributions From Net Realized Capital Gain (1.04) (0.83)
------ ------
Total Distributions (1.29) (0.93)
------ ------
Net Asset Value, End of Period $ 13.26 $ 14.75
------ ------
------ ------
Total Return (not annualized)+ (1.38)% 4.56%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 9,798 $ 8,996
Number of Shares Outstanding, End of Period (000) 739 610
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 2.01% 0.96%
Ratio of Net Investment Income to Average Net Assets(2) 1.75% 0.53%
Portfolio Turnover 50% 53%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 2.20% 1.12%
(2) Ratio of Net Investment Income to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 1.56% 0.37%
- -----------------------------------------------------------------------------------------------------
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
+ TOTAL RETURNS DO NOT INCLUDE THE 1% CONTINGENT DEFERRED SALES CHARGE.
</TABLE>
125
<PAGE> 296
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND
--------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.47 $ 10.92 $ 10.73 $ 10.27 $ 10.35
Income From Investment Operations:
Net Investment Income 0.64 0.63 0.68 0.69 0.71
Net Realized and Unrealized Capital
Gain/(Loss) on Investments (1.13) 0.75 0.26 0.46 (0.08)
------------ ------------ ------------ ------------ ------------
Total From Investment Operations (0.49) 1.38 0.94 1.15 0.63
Less Distributions:
Dividends From Net Investment Income (0.64) (0.63) (0.68) (0.69) (0.71)
Distributions From Net Realized
Capital Gain (0.14) (0.20) (0.07) 0.00 0.00
------------ ------------ ------------ ------------ ------------
Total Distributions (0.78) (0.83) (0.75) (0.69) (0.71)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 10.20 $ 11.47 $ 10.92 $ 10.73 $ 10.27
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Return (not annualized)+ (4.32)% 12.98% 9.01% 11.62% 6.48%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 273,105 $ 361,779 $ 375,376 $ 332,845 $ 201,138
Number of Shares Outstanding, End of
Period (000) 26,780 31,529 34,376 31,008 19,576
Ratios to Average Net Assets
(annualized):
Ratio of Net Expenses to Average Net
Assets(1) 0.50% 0.69% 0.50% 0.45% 0.29%
Ratio of Net Investment Income to
Average Net Assets(2) 5.87% 5.54% 6.24% 6.56% 6.97%
Portfolio Turnover 4% 10% 24% 8% 35%
- ------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average
Net Assets Prior to Waived Fees
and Reimbursed Expenses 0.95% 0.85% 0.85% 0.87% 0.95%
(2) Ratio of Net Investment Income to
Average Net Assets Prior to Waived
Fees and Reimbursed Expenses 5.42% 5.38% 5.89% 6.14% 6.31%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
126
<PAGE> 297
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE BOND FUND
-----------------------------
CLASS D*
----------------------
YEAR
ENDED PERIOD
DEC. 31, ENDED
1994 DEC. 31,
1993
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 14.98 $ 15.00
Income From Investment Operations:
Net Investment Income 0.73 0.34
Net Realized and Unrealized Capital Gain/(Loss) on Investments (1.47) 0.24
------ ------
Total From Investment Operations (0.74) 0.58
Less Distributions:
Dividends From Net Investment Income (0.73) (0.34)
Distributions From Net Realized Capital Gain (0.19) (0.26)
------ ------
Total Distributions (0.92) (0.60)
------ ------
Net Asset Value, End of Period $ 13.32 $ 14.98
------ ------
------ ------
Total Return (not annualized)+ (5.00)% 3.92%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 7,346 $ 7,641
Number of Shares Outstanding, End of Period (000) 552 510
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 1.20% 1.32%
Ratio of Net Investment Income to Average Net Assets(2) 5.15% 4.50%
Portfolio Turnover 4% 10%
- -----------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 1.82% 1.61%
(2) Ratio of Net Investment Income to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 4.53% 4.21%
- -----------------------------------------------------------------------------------------------------
</TABLE>
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
+ TOTAL RETURNS DO NOT INCLUDE THE 1% CONTINGENT DEFERRED SALES CHARGE.
127
<PAGE> 298
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
CALIFORNIA TAX-FREE MONEY MARKET FUND
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From Investment Operations:
Net Investment Income 0.02 0.02 0.03 0.04 0.05
Less Distributions:
Dividends From Net Investment Income (0.02) (0.02) (0.03) (0.04) (0.05)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Return (not annualized) 2.22% 1.84% 2.54% 3.99% 5.20%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 288,409 $ 397,712 $ 363,067 $ 299,234 $ 312,023
Number of Shares Outstanding, End of
Period (000) 288,490 397,717 363,069 299,234 312,023
Ratios to Average Net Assets
(annualized):
Ratio of Net Expenses to Average Net
Assets(1) 0.68% 0.66% 0.66% 0.66% 0.65%
Ratio of Net Investment Income to
Average Net Assets(2) 2.17% 1.82% 2.50% 3.92% 5.07%
- ------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average
Net Assets Prior to Waived Fees
and Reimbursed Expenses 0.70% 0.70% 0.69% 0.70% 0.73%
(2) Ratio of Net Investment Income to
Average Net Assets Prior to Waived
Fees and Reimbursed Expenses 2.15% 1.68% 2.47% 3.88% 4.99%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
128
<PAGE> 299
FINANCIAL HIGHLIGHTS (Continued)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MONEY MARKET FUND
----------------------------------------------------------------------------------
CLASS A CLASS I*
-------------------------------------------------------------------- ------------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991 1990 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From Investment
Operations:
Net Investment Income 0.04 0.03 0.03 0.06 0.08 0.02
Less Distributions:
Dividends From Net
Investment Income (0.04) (0.03) (0.03) (0.06) (0.08) (0.02)
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value, End of
Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
Total Return (not
annualized) 3.70% 2.57% 3.23% 5.65% 7.88% 4.46%
Ratios/Supplemental Data:
Net Assets, End of Period
(000) $ 307,878 $ 228,084 $ 268,424 $ 229,863 $ 198,187 $ 11,237
Number of Shares
Outstanding, End of
Period (000) 307,915 228,085 268,434 229,866 198,192 11,238
Ratios to Average Net
Assets (annualized):
Ratio of Net Expenses to
Average Net Assets(1) 0.68% 0.74% 0.75% 0.74% 0.68% 0.38%
Ratio of Net Investment
Income to Average Net
Assets(2) 3.71% 2.54% 3.17% 5.54% 7.55% 5.05%
- --------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses
to Average Net Assets
Prior to Waived Fees
and Reimbursed
Expenses 0.72% 0.74% 0.75% 0.75% 0.84% 0.55%
(2) Ratio of Net
Investment Income to
Average Net Assets
Prior to Waived Fees
and Reimbursed
Expenses 3.67% 2.54% 3.17% 5.53% 7.39% 4.88%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
* THIS CLASS COMMENCED OPERATIONS ON AUGUST 18, 1994.
129
<PAGE> 300
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
------------------------------------------------------
CLASS A*
------------------------------------------------------
YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 11.27 $ 10.56 $ 10.25 $ 10.00
Income From Investment Operations:
Net Investment Income 0.60 0.64 0.66 0.28
Net Realized and Unrealized Capital Gain/(Loss) on
Investments (1.36) 0.71 0.32 0.25
------------ ------------ ------------ ------------
Total From Investment Operations (0.76) 1.35 0.98 0.53
Less Distributions:
Dividends From Net Investment Income (0.60) (0.64) (0.66) (0.28)
Distributions From Net Realized Capital Gain 0.00 0.00 (0.01) 0.00
------------ ------------ ------------ ------------
Total Distributions (0.60) (0.64) (0.67) (0.28)
------------ ------------ ------------ ------------
Net Asset Value, End of period $ 9.91 $ 11.27 $ 10.56 $ 10.25
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total Return (not annualized)+ (6.82)% 13.11% 9.94% 5.81%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 73,791 $ 104,701 $ 52,553 $ 16,585
Number of Shares Outstanding, End of Period (000) 7,446 9,294 4,976 1,618
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 0.43% 0.39% 0.23% 0.00%
Ratio of Net Investment Income to Average Net
Assets(2) 5.77% 5.56% 6.05% 6.38%
Portfolio Turnover 32% 15% 67% 5%
- -----------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets
Prior to Waived Fees and Reimbursed Expenses 0.98% 1.09% 1.20% 3.02%
(2) Ratio of Net Investment Income to Average Net
Assets Prior to Waived Fees and Reimbursed
Expenses 5.22% 4.86% 5.08% 3.36%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THE FUND COMMENCED OPERATIONS ON JULY 15, 1991.
130
<PAGE> 301
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
MUNICIPAL INCOME FUND
--------------------------
CLASS D*
--------------------------
YEAR PERIOD
ENDED ENDED
DEC. 31, DEC. 31,
1994 1993
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 15.26 $ 15.00
Income From Investment Operations:
Net Investment Income 0.73 0.36
Net Realized and Unrealized Capital Gain/(Loss) on Investments (1.84) 0.26
------------ ------------
Total From Investment Operations (1.11) 0.62
Less Distributions:
Dividends From Net Investment Income (0.73) (0.36)
Distributions From Net Realized Capital Gain 0.00 0.00
------------ ------------
Total Distributions (0.73) (0.36)
------------ ------------
Net Asset Value, End of Period $ 13.42 $ 15.26
------------ ------------
------------ ------------
Total Return (not annualized)+ (7.37)% 4.19%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 15,545 $ 14,771
Number of Shares Outstanding, End of Period (000) 1,158 968
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 1.02% 1.13%
Ratio of Net Investment Income to Average Net Assets(2) 5.17% 4.14%
Portfolio Turnover 32% 15%
- -------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets Prior to Waived Fees and
Reimbursed Expenses 1.74% 1.84%
(2) Ratio of Net Investment Income to Average Net Assets Prior to Waived
Fees and Reimbursed Expenses 4.45% 3.43%
- -------------------------------------------------------------------------------------------------------
</TABLE>
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
+ TOTAL RETURNS DO NOT INCLUDE THE 1% CONTINGENT DEFERRED SALES CHARGE.
131
<PAGE> 302
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
STRATEGIC GROWTH FUND
------------------------------------------------------
CLASS A* CLASS D**
-------------------------- --------------------------
YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1994 1993
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 13.20 $ 10.00 $ 16.55 $ 15.00
Income From Investment Operations:
Net Investment Loss (0.11) (0.03) (0.24) (0.43)
Net Realized and Unrealized Capital Gain/(Loss) on
Investments 0.67 3.68 0.81 2.51
------------ ------------ ------------ ------------
Total From Investment Operations 0.56 3.65 0.57 2.08
Less Distributions:
Dividends From Net Investment Income 0.00 (0.03) 0.00 0.00
Distributions From Net Realized Capital Gain (0.33) (0.41) (0.40) (0.53)
Tax Return of Capital (0.14) (0.01) (0.18) 0.00
------------ ------------ ------------ ------------
Total Distributions (0.47) (0.45) (0.58) (0.53)
------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 13.29 $ 13.20 $ 16.54 $ 16.55
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Total Return (not annualized)+ 4.23% 36.56% 3.46% 13.84%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 26,744 $ 25,413 $ 15,335 $ 11,932
Number of Shares Outstanding, End of Period (000) 2,013 1,926 927 721
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 1.20% 0.66% 1.95% 0.61%
Ratio of Net Investment Loss to Average Net
Assets(2) (0.81)% (0.01)% (1.56)% (1.00)%
Portfolio Turnover 149% 182% 149% 182%
- -----------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets
Prior to Waived Fees and Reimbursed Expenses 1.55% 1.64% 2.23% 2.14
(2) Ratio of Net Investment Income (Loss) to
Average Net Assets Prior to Waived Fees and
Reimbursed Expenses (1.16)% (0.99)% (1.84)% (2.53)%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES OR THE 1% CONTINGENT
DEFERRED SALES CHARGE.
* THE FUND COMMENCED OPERATIONS ON JANUARY 20, 1993.
** THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
132
<PAGE> 303
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME FUND
--------------------------------------------------------------------
CLASS A
--------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1991 1990
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.87 $ 10.56 $ 10.97 $ 10.30 $ 10.22
Income From Investment Operations:
Net Investment Income 0.70 0.74 0.79 0.86 0.87
Net Realized and Unrealized Capital
Gain/(Loss) on Investments (1.21) 0.36 (0.14) 0.90 0.10
------------ ------------ ------------ ------------ ------------
Total From Investment Operations (0.51) 1.10 0.65 1.76 0.97
Less Distributions:
Dividends From Net Investment Income (0.70) (0.74) (0.79) (0.86) (0.89)
Distributions From Net Realized
Capital Gain 0.00 (0.05) (0.27) (0.23) 0.00
------------ ------------ ------------ ------------ ------------
Total Distributions (0.70) (0.79) (1.06) (1.09) (0.89)
------------ ------------ ------------ ------------ ------------
Net Asset Value, End of Period $ 9.66 $ 10.87 $ 10.56 $ 10.97 $ 10.30
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total Return (not annualized)+ (4.81)% 10.67% 6.27% 18.08% 10.17%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 35,838 $ 50,301 $ 40,883 $ 20,457 $ 11,116
Number of Shares Outstanding, End of
Period (000) 3,711 4,628 3,871 1,865 1,079
Ratios to Average Net Assets
(annualized):
Ratio of Net Expenses to Average Net
Assets(1) 0.76% 0.53% 0.47% 0.00% 0.07%
Ratio of Net Investment Income to
Average Net Assets(2) 6.84% 6.79% 6.26% 8.30% 8.65%
Portfolio Turnover 50% 115% 128% 100% 4%
- ------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average
Net Assets Prior to Waived Fees
and Reimbursed Expenses 1.08% 1.01% 1.13% 1.87% 2.72%
(2) Ratio of Net Investment Income to
Average Net Assets Prior to Waived
Fees and Reimbursed Expenses 6.52% 6.31% 5.60% 6.43% 6.00%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
133
<PAGE> 304
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
U.S. GOVERNMENT INCOME
FUND
--------------------------
CLASS D*
--------------------------
YEAR PERIOD
ENDED ENDED
DEC. 31, DEC. 31,
1994 1993
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 14.85 $ 15.00
Income From Investment Operations:
Net Investment Income 0.86 0.42
Net Realized and Unrealized Capital Gain/(Loss) on Investments (1.65) (0.08)
------------ ------------
Total From Investment Operations (0.79) 0.34
Less Distributions:
Dividends From Net Investment Income (0.76) (0.42)
Distributions From Net Realized Capital Gain 0.00 (0.07)
------------ ------------
Total Distributions (0.76) (0.49)
------------ ------------
Net Asset Value, End of Period $ 13.20 $ 14.85
------------ ------------
------------ ------------
Total Return (not annualized)+ (5.45)% 2.25%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 3,722 $ 9,594
Number of Shares Outstanding, End of Period (000) 282 646
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 1.37% 0.90%
Ratio of Net Investment Income to Average Net Assets(2) 6.14% 5.90%
Portfolio Turnover 50% 115%
- ------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets Prior to Waived Fees
and Reimbursed Expenses 1.87% 2.03%
(2) Ratio of Net Investment Income to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 5.64% 4.77%
- ------------------------------------------------------------------------------------------------
</TABLE>
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
+ TOTAL RETURNS DO NOT INCLUDE THE 1% CONTINGENT DEFERRED SALES CHARGE.
134
<PAGE> 305
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET FUND
-------------------------------------------------------
CLASS A* CLASS I**
---------------------------------------- -------------
YEAR YEAR PERIOD PERIOD
ENDED ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992 1994
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From Investment Operations:
Net Investment Income 0.03 0.03 0.02 0.16
Less Distributions:
Dividends From Net Investment Income (0.03) (0.03) (0.02) (0.16)
------------ ------------ ------------ ------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------ ------
------------ ------------ ------------ ------
Total Return (not annualized) 3.44% 2.56% 1.97% 4.05%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 195,031 $ 118,169 $ 137,412 $ 3,898
Number of Shares Outstanding, End of Period (000) 195,042 118,169 137,416 3,900
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 0.63% 0.52% 0.27% 0.23%
Ratio of Net Investment Income to Average Net
Assets(2) 3.47% 2.55% 3.12% 4.42%
- ------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets
Prior to Waived Fees and Reimbursed Expenses 0.80% 0.77% 0.79% 0.57%
(2) Ratio of Net Investment Income to Average Net
Assets Prior to Waived Fees and Reimbursed
Expenses 3.30% 2.30% 2.60% 4.08%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
* THE FUND COMMENCED OPERATIONS ON MAY 12, 1992.
** THIS CLASS COMMENCED OPERATIONS ON JUNE 20, 1994.
135
<PAGE> 306
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT FUND
---------------------------------------------------------------------
CLASS A*
---------------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED PERIOD
DEC. 31, DEC. 31, DEC. 31, DEC. 31, ENDED
1994 1993 1992 1991 DEC. 31, 1990
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.99 $ 9.95 $ 10.13 $ 10.12 $ 10.00
Income From Investment Operations:
Net Investment Income 0.43 0.44 0.59 0.78 0.08
Net Realized and Unrealized Capital
Gain/(Loss) on Investments (0.80) 0.04 (0.18) 0.01 0.12
------------ ------------ ------------ ------------ ------
Total From Investment Operations (0.37) 0.48 0.41 0.79 0.20
Less Distributions:
Dividends From Net Investment Income (0.43) (0.44) (0.59) (0.78) (0.08)
Distributions From Net Realized
Capital Gain 0.00 0.00 0.00 0.00 0.00
------------ ------------ ------------ ------------ ------
Total Distributions (0.43) (0.44) (0.59) (0.78) (0.08)
------------ ------------ ------------ ------------ ------
Net Asset Value, End of Period $ 9.19 $ 9.99 $ 9.95 $ 10.13 $ 10.12
------------ ------------ ------------ ------------ ------
------------ ------------ ------------ ------------ ------
Total Return (not annualized)+ (3.81)% 4.87% 4.23% 8.60% 2.75%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 1,215,546 $ 1,949,013 $ 2,559,363 $ 566,840 $ 6,858
Number of Shares Outstanding, End of
Period (000) 132,256 195,132 257,238 55,933 678
Ratios to Average Net Assets
(annualized):
Ratio of Net Expenses to Average Net
Assets(1) 0.79% 0.76% 0.75% 0.50% 0.00%
Ratio of Net Investment Income to
Average Net Assets(2) 4.40% 4.37% 5.62% 7.36% 4.93%
Portfolio Turnover 164% 201% 197% 250% N/A**
- -------------------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average
Net Assets Prior to Waived Fees
and Reimbursed Expenses 0.94% 0.95% 0.94% 1.08% 5.48%
(2) Ratio of Net Investment Income
(loss) to Average Net Assets Prior
to Waived Fees and Reimbursed
Expenses 4.25% 4.18% 5.43% 6.78% (0.55)%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
+ TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES.
* THE FUND COMMENCED OPERATIONS ON NOVEMBER 1, 1990.
** THE FUND SOLD NO SECURITIES DURING THE PERIOD.
136
<PAGE> 307
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
VARIABLE RATE GOVERNMENT
FUND
--------------------------
CLASS D*
--------------------------
YEAR PERIOD
ENDED ENDED
DEC. 31, DEC. 31,
1994 1993
<S> <C> <C>
Net Asset Value, Beginning of Period $ 14.93 $ 15.00
Income From Investment Operations:
Net Investment Income 0.57 0.27
Net Realized and Unrealized Capital Gain/(Loss) on Investments (1.19) (0.07)
------------ ------------
Total From Investment Operations (0.62) 0.20
Less Distributions:
Dividends From Net Investment Income (0.57) (0.27)
Distributions From Net Realized Capital Gain 0.00 0.00
------------ ------------
Total Distributions (0.57) (0.27)
------------ ------------
Net Asset Value, End of Period $ 13.74 $ 14.93
------------ ------------
------------ ------------
Total Return (not annualized)+ (4.25)% 1.32%
Ratios/Supplemental Data:
Net Assets, End of Period (000) $ 12,220 $ 11,319
Number of Shares Outstanding, End of Period (000) 889 758
Ratios to Average Net Assets (annualized):
Ratio of Net Expenses to Average Net Assets(1) 1.29% 1.26%
Ratio of Net Investment Income to Average Net Assets(2) 3.94% 3.41%
Portfolio Turnover 164% 201%
- ------------------------------------------------------------------------------------------------
(1) Ratio of Net Expenses to Average Net Assets Prior to Waived Fees
and Reimbursed Expenses 1.55% 1.75%
(2) Ratio of Net Investment Income to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses 3.68% 2.92%
- ------------------------------------------------------------------------------------------------
</TABLE>
* THIS CLASS COMMENCED OPERATIONS ON JULY 1, 1993.
+ TOTAL RETURNS DO NOT INCLUDE THE 1% CONTINGENT DEFERRED SALES CHARGE.
137
<PAGE> 308
NOTES TO THE FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION. Overland Express Funds, Inc. (the "Company") is registered
under the Investment Company Act of 1940, as amended, as an open-end series
investment company. The Company commenced operations on April 7, 1988 and
includes thirteen separate diversified Funds: the Asset Allocation Fund, the
Dividend Income Fund, the Growth and Income Fund, the Money Market Fund, the
Municipal Income Fund, the Overland Sweep Fund, the Short-Term U.S. Government
Portfolio Fund, the Strategic Growth Fund, the U.S. Government Income Fund, the
U.S. Treasury Money Market Fund, the Variable Rate Government Fund, the 1-3
Year Duration Full Faith and Credit Government Income, the 1-3 Year Duration
Municipal Income Fund, and two non-diversified funds: the California Tax-Free
Bond Fund and the California Tax-Free Money Market Fund. The financial
statements of the Dividend Income Fund, Growth and Income Fund, Short-Term U.S
Government Portfolio Fund, Overland Sweep Fund, 1-3 Year Duration Municipal
Income Fund, and 1-3 Year Duration Full Faith and Credit Fund are presented
separately from these financial statements.
Each of the Funds presented in this book (the "Funds"), with the exception
of the Money Market Fund, the California Tax-Free Money Market Fund and the
U.S. Treasury Money Market Fund, commenced offering Class D shares on July 1,
1993. The U.S. Treasury Money Market Fund and the Money Market Fund commenced
offering Class I shares on June 20, 1994 and August 18, 1994, respectively. The
three classes of shares differ principally in their respective sales charges,
shareholder servicing fees, and distribution fees. Shareholders of each class
also bear certain expenses that pertain to that particular class. All
shareholders bear the common expenses of the Fund, and earn income from the
portfolio, pro rata based on the average daily net assets of each class,
without distinction between share classes. Dividends are declared separately
for each class. Gains are allocated to each class pro rata based upon net
assets of each class on the date of distribution. No class has preferential
dividend rights; differences in per share dividend rates are generally due to
differences in separate class expenses, including distribution and shareholder
servicing fees and from the relative weightings of pro rata income and gain
allocations.
138
<PAGE> 309
NOTES TO THE FINANCIAL STATEMENTS
The following significant accounting policies are consistently followed by
the Company in the preparation of its financial statements, and such policies
are in conformity with generally accepted accounting principles for investment
companies.
SECURITY VALUATION
Investments in securities for which the primary market is a national
securities exchange or the NASDAQ National Market System are stated at the last
reported sales price on the day of valuation. U.S. Government obligations are
valued at stated mean between the last reported bid and ask prices. In the
absence of any sale of such securities on the valuation date and in the case of
other securities, excluding debt securities maturing in 60 days or less, the
valuations are based on latest quoted bid prices. Debt securities maturing in
60 days or less are valued at amortized cost. Debt securities other than those
maturing in 60 days or less and other than U.S. Government obligations are
valued at the latest quoted bid price. Securities for which quotations are not
readily available are valued at fair value as determined by policies set by the
board of directors.
The California Tax-Free Money Market Fund, the Money Market Fund and the
U.S. Treasury Money Market Fund use the amortized cost method to value their
portfolio securities and seek to maintain constant net asset values of $1.00
per share, there is no assurance the Funds will meet this objective. The
amortized cost method involves valuing a security at its cost and amortizing
any discount or premium over the period until maturity, which approximates
market value.
Cash equivalents relating to firm commitment purchase agreements are
segregated by the custodian and may not be sold without appropriate replacement
while the current commitment is outstanding.
SECURITY TRANSACTIONS AND REVENUE RECOGNITION
Securities transactions are accounted for on the date the securities are
purchased or sold (trade date). Dividend income is recognized on the
ex-dividend date, and interest income is recognized on a daily accrual basis.
Realized gains or losses are reported on the basis of identified cost of
securities delivered. Bond discounts and premiums are amortized as required by
the Internal Revenue Code.
139
<PAGE> 310
NOTES TO THE FINANCIAL STATEMENTS
REPURCHASE AGREEMENTS
Transactions involving purchases of securities under agreements to resell
("repurchase agreements") are treated as collateralized financing transactions
and are recorded at their contracted resale amounts. These repurchase
agreements, if any, are detailed in each Fund's Portfolio of Investments. The
adviser to the Funds pools the Funds' cash and invests in repurchase agreements
entered into by the Funds. The prospectuses require that the cash investments
be fully collateralized based on values that are marked to market daily. The
collateral is held by an agent bank under a tri-party agreement. It is the
adviser's responsibility to value collateral daily and to obtain additional
collateral as necessary to maintain market value equal to or greater than the
resale price. The repurchase agreements held in the Funds at December 31, 1994
are collateralized by U.S. Treasury or federal agency obligations. The
repurchase agreements were entered into on December 30, 1994.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income of the Asset
Allocation Fund and the Strategic Growth Fund are declared and distributed
quarterly. Dividends to shareholders from net investment income are declared
daily and distributed monthly for the California Tax-Free Bond Fund, the
California Tax-Free Money Market Fund, the Money Market Fund, the Municipal
Income Fund, the U.S. Government Income Fund, the U.S. Treasury Money Market
Fund and the Variable Rate Government Fund. Any dividends to shareholders from
net realized capital gain are declared and distributed annually.
FEDERAL INCOME TAXES
The Company's policy is to comply with the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and to
distribute substantially all its net investment income and any net realized
capital gains to its shareholders. Therefore, no federal or state income tax
provision is required. The Money Market Fund has a net capital loss
carryforward of $1,392 which will expire in the year 2001 and $36,799 which
will expire in the year 2002. The Municipal Income Fund has a net capital loss
carryforward of $3,600,931 which will expire in the year 2002. The U.S.
Government Income Fund has a net capital loss carryforward of $1,212,813 which
will expire in the year 2002. The U.S. Treasury Money Market Fund has a net
capital loss carryforward of $12,241 which
140
<PAGE> 311
NOTES TO THE FINANCIAL STATEMENTS
will expire in the year 2002. The California Tax-Free Money Market Fund has a
net capital loss carryforward of $76,188, which will expire in the year 2002.
The Variable Rate Government Fund has a net capital loss carryforward of
$978,191 which will expire in 1999, $15,382,953 which will expire in 2000,
$2,818,400 which will expire in the year 2001 and $125,280,827 which will
expire in the year 2002. The Board intends to offset net capital gains with
each capital loss carryforward until each carryforward has been fully utilized
or expires. No capital gain distribution shall be made until the capital loss
carryforward has been fully utilized or expires.
Due to the timing of dividend distributions and the differences in
accounting for income and realized gains (losses) for financial statement and
federal income tax purposes, the fiscal year in which amounts are distributed
may differ from the year in which the income and realized gains (losses) were
recorded by the portfolio. The differences between the income or gains
distributed on a book versus tax basis are shown as excess distributions of net
investment income and net realized gain on sales of investments in the
accompanying Statements of Changes in Net Assets.
On the Statements of Assets and Liabilities, as a result of book-to-tax
differences due to current year and prior year tax returns of capital,
reclassification adjustments have been made to the Strategic Growth Fund to
decrease overdistributed net investment income and paid in capital by $449,157.
In addition, due to the fact that certain distribution fees for the Municipal
Income Fund are charged to capital for federal income tax purposes and expensed
for financial statement purposes book-to-tax differences exist and a
reclassification adjustment has been made to decrease overdistributed net
investment income and paid in capital by $163,734.
ORGANIZATION EXPENSES
Stephens Inc. ("Stephens"), the Funds' administrator, sponsor and
distributor, has incurred expenses in connection with the organization and
initial registration of the various funds. These expenses were charged to the
individual Funds and are being amortized by the Funds on a straightline basis
over 60 months from the date the Funds commenced operations.
141
<PAGE> 312
NOTES TO THE FINANCIAL STATEMENTS
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into separate advisory contracts on behalf of the
Funds with Wells Fargo Bank, N.A. ("WFB"). Pursuant to the contract, WFB
furnishes to the Funds investment guidance and policy direction in connection
with daily portfolio management. Under the contract with the Asset Allocation
Fund, WFB is entitled to be paid a monthly advisory fee at the annual rate of
0.70% of such Fund's average daily net assets up to $500 million and 0.60% of
average daily net assets in excess of $500 million. Under the contracts with
the California Tax-Free Bond Fund, the Municipal Income Fund, the Strategic
Growth Fund, the U.S. Government Income Fund and the Variable Rate Government
Fund, WFB entitled to be is paid a monthly advisory fee at the annual rate of
0.50% of the average daily net assets of each respective Fund. Under the
contract with the California Tax-Free Money Market Fund, WFB is entitled to be
paid a monthly advisory fee at the annual rate of 0.45% of average daily net
assets. Under the contracts with the Money Market Fund and the U.S. Treasury
Money Market Fund, WFB is entitled to be paid a monthly advisory fee based on
an annual rate of 0.25% of the average daily net assets.
The Company has entered into contracts on behalf of the Funds (except the
Asset Allocation Fund) with WFB whereby WFB is responsible for providing
custody and fund accounting services for the Funds. For all of these Funds WFB
is entitled to an annual fee for custody services based on a rate of 0.0167% of
the average daily net assets of the respective Fund. For fund accounting
services, WFB is entitled to a monthly base fee from each Fund of $2,000 plus
an annual fee of 0.07% of the first $50 million, 0.045% of the next $50 million
and 0.02% of the remaining average daily net assets.
In connection with the Asset Allocation Fund, formerly managed under a
license agreement, the Company has entered into a subadvisory contract with
Wells Fargo Nikko Investment Advisors ("WFNIA"). This subadvisory agreement was
approved by shareholder vote at a special meeting of the shareholders on August
15, 1994. WFNIA is an affiliate of Wells Fargo & Company. Pursuant to such
142
<PAGE> 313
NOTES TO THE FINANCIAL STATEMENTS
agreement WFB pays WFNIA a subadvisory fee. In addition, Wells Fargo
Institutional Trust Company N.A. ("WFITC"), a subsidiary of WFNIA, acts as
custodian for this Fund. Custody fees are paid to WFITC from the subadvisory
fee paid to WFNIA.
The Company has entered into a contract on behalf of the Funds with WFB
whereby WFB will provide transfer agent and shareholder services for the Funds.
Under the contract, WFB is paid a minimum monthly fee of $3,000 per fund unless
net assets of the fund are under $20 million. For as long as the assets remain
under $20 million the fund will not be charged any transfer agency fees by WFB.
The Funds may enter into servicing agreements with one or more servicing
agents on behalf of Class D shares of the Funds. Under such agreements,
servicing agents have agreed to provide shareholder liaison services, including
responding to customer inquiries and providing information on their
investments, and to provide such other related services as the Fund or a Class
D shareholder may reasonably request. For these services, a servicing agent
receives a fee, on an annualized basis for the Fund's then current fiscal year,
not to exceed 0.25% of the average daily net assets of the Class D shares of
the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER
SERVICE FEE
FUND CLASS D
<S> <C>
Asset Allocation Fund $ 28,377
California Tax-Free Bond Fund 20,828
Municipal Income Fund 43,503
Strategic Growth Fund 37,050
U.S. Government Income Fund 17,454
Variable Rate Government Fund 35,962
</TABLE>
The Company has entered into administration and distribution agreements on
behalf of the Funds with Stephens. Under the agreements, Stephens has agreed to
provide supervisory, administrative and distribution services to the Funds. For
providing supervisory and administrative services, the California Tax-Free Bond
Fund, the Strategic Growth Fund and the Variable Rate Government Fund have each
agreed to pay Stephens a monthly fee at the annual rate of 0.15% of each Funds'
average daily net assets up to $200 million and 0.10% of the average daily net
assets in excess of $200 million. For the Asset Allocation Fund, the California
Tax-Free Money Market Fund and the U.S. Government Income Fund, Stephens is
entitled to be compensated for administrative and services monthly at the
annual
143
<PAGE> 314
NOTES TO THE FINANCIAL STATEMENTS
rate of 0.10% of the average daily net assets of such Fund up to $200 million
and 0.05% of the average daily net assets in excess of $200 million. The Money
Market Fund, the Municipal Income Fund and the U.S. Treasury Money Market Fund
have agreed to pay Stephens a monthly administrative fee at the annual rate of
0.10% of each Funds' average daily net assets.
The Company has adopted separate Distribution Plans for Class A and Class D
shares pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The separate
Class A Distribution Plan for each of the California Tax-Free Bond Fund, the
California Tax-Free Money Market Fund and the U.S. Government Income Fund,
provides that each Fund may defray all or part of the cost of preparing,
printing and distributing prospectuses and other promotional materials by
paying on an annual basis up to the greater of $100,000 or 0.05% of the Class A
shares of a Fund's average daily net assets for costs incurred. Each of these
Funds may participate in joint distribution activities with the other Funds, in
which event, expenses reimbursed out of the assets of one of the Funds may be
attributable, in part, to the distribution-related activities of another Fund.
Generally, the expenses attributable to joint distribution activities will be
allocated among the Funds in proportion to their relative net asset sizes.
The Company has adopted separate distribution plans pursuant to Rule 12b-1
under the 1940 Act, whereby on behalf of Class A shares of the Asset Allocation
Fund, the Money Market Fund, the Municipal Income Fund, the Strategic Growth
Fund, the U.S. Treasury Money Market Fund and the Variable Rate Government
Fund, a Fund may pay Stephens, as compensation for distribution-related
services, a monthly fee at an annual rate of up to 0.25% of the average daily
net assets attributable to the Fund's Class A shares. The Class D Distribution
Plan of the Asset Allocation Fund and Strategic Growth Fund provide that Funds
may pay the Distributor a monthly fee at an annual rate of up to 0.75% of each
such Fund's average daily net assets attributable to Class D shares. In
addition, the Municipal Income Fund may pay, as compensation for
distribution-related services, a monthly fee at an annual rate of up to 0.15%
of the average daily net assets attributable to
144
<PAGE> 315
NOTES TO THE FINANCIAL STATEMENTS
both of its Class A and D shares. Until February 28, 1995, a portion of the
Municipal Income Fund distribution fee will be charged to net capital for
income tax purposes.
<TABLE>
<CAPTION>
DISTRIBUTION
FEES
FUND CLASS A
<S> <C>
Asset Allocation Fund $ 125,161
California Tax-Free Bond Fund 161,701
Municipal Income Fund 163,733
Strategic Growth Fund 67,308
U.S. Government Income Fund 22,458
Variable Rate Government Fund 4,240,278
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTION
FEES
FUND CLASS D
<S> <C>
Asset Allocation Fund $ 81,793
California Tax-Free Bond Fund 41,656
Municipal Income Fund 60,905
Strategic Growth Fund 111,150
U.S. Government Income Fund 34,908
Variable Rate Government Fund 71,924
</TABLE>
WAIVED FEES
The following fees were waived for the year ended December 31, 1994:
<TABLE>
<CAPTION>
WAIVED
FUND FEES
<S> <C>
Asset Allocation $ 69,419
California Tax-Free Bond 1,166,246
California Tax-Free Money Market 61,626
Money Market 129,201
Municipal Income 549,664
Strategic Growth 134,333
U.S. Government Income 179,536
U.S. Treasury Money Market 247,364
Variable Rate Government 2,477,609
</TABLE>
Waived fees continue at the discretion of WFB.
Certain officers and directors of the Company are also officers of
Stephens. At December 31, 1994 Stephens owned 177,395 shares of Asset
Allocation Fund, 1,583 shares of California Tax-Free Bond Fund, 44,711 shares
of California Tax-Free Money
145
<PAGE> 316
NOTES TO THE FINANCIAL STATEMENTS
Market Fund, 1,281,101 shares of Money Market Fund, 12,371 shares of Municipal
Income Fund, 5,355 shares of Strategic Growth Fund, 2,681 shares of U.S.
Government Income Fund, 118,385 shares of U.S. Treasury Money Market Fund and
12,758 shares of Variable Rate Government Fund.
Stephens has retained $1,351,388 as sales charges from the proceeds of
capital shares sold by the Company for the year ended December 31, 1994. Wells
Fargo Securities Inc. a subsidiary of WFB, received $57,371 as sales charges
from the proceeds of capital shares sold by the Company for the year ended
December 31, 1994.
3. INVESTMENT PORTFOLIO TRANSACTIONS*
Purchases and sales of investments, exclusive of short-term securities, for
each fund for the year ended December 31, 1994 were as follows:
<TABLE>
<CAPTION>
ASSET CALIFORNIA MUNICIPAL
AGGREGATE PURCHASES ALLOCATION TAX-FREE INCOME
AND SALES OF: FUND BOND FUND FUND
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $ 26,402,377 $ 0 $ 0
Sales proceeds 4,308,938 0 0
OTHER SECURITIES:
Purchases at cost 3,195,419 12,490,288 33,316,994
Sales proceeds 30,947,639 74,618,595 47,275,276
</TABLE>
<TABLE>
<CAPTION>
U.S.
STRATEGIC GOVERNMENT VARIABLE RATE
AGGREGATE PURCHASES GROWTH INCOME GOVERNMENT
AND SALES OF: FUND FUND FUND
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS:
Purchases at cost $ 0 $ 10,393,380 $ 157,569,844
Sales proceeds 0 16,229,875 62,293,438
OTHER SECURITIES:
Purchases at cost 64,179,054 12,977,154 2,340,660,020
Sales proceeds 61,096,020 9,767,022 3,333,075,418
</TABLE>
- --------------------------------------------------------------------------------
* ALL FUNDS NOT REFLECTED IN THIS SCHEDULE TRADED EXCLUSIVELY IN SHORT-TERM
SECURITIES.
146
<PAGE> 317
NOTES TO THE FINANCIAL STATEMENTS
4. CAPITAL SHARES TRANSACTIONS
As of December 31, 1994, there were 20 billion shares of $.001 par value
capital stock authorized by the Company. As of December 31, 1994, each Fund was
authorized to issue 100 million shares of $.001 par value capital stock for
each class of shares, except the California Tax-Free Money Market Fund, the
Money Market Fund, the U.S. Treasury Money Market Fund, and the Variable Rate
Government Fund which are as follows:
<TABLE>
<CAPTION>
SHARES
FUND AUTHORIZED
<S> <C>
California Tax-Free Money Market Fund 3 billion
Money Market Fund 1 billion
U.S. Treasury Money Market Fund 1 billion
Variable Rate Government Fund 500 million
</TABLE>
Transactions in capital shares for the year ended December 31, 1994 are
disclosed in detail in the Statements of Changes in Net Assets.
147
<PAGE> 318
STAGECOACH FUNDS, INC.
SEC REGISTRATION NOS. 33-42927; 811-6419
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The audited financial statements for the Company's Asset
Allocation, California Tax-Free Bond, California Tax-Free Income, Corporate
Stock, Diversified Income, Ginnie Mae, Growth and Income, Short-Intermediate
U.S. Government Income, U.S. Goverment Allocation and Variable Rate Government
Funds for the year ended December 31, 1994, are incorporated by reference to
Part B of the Company's Post-Effective Amendment No. 15, as filed with the
Securities and Exchange Commission on May 1, 1995.
The audited financial statements for the year ended December 31,
1994 for the Asset Allocation, California Tax-Free Bond, California Tax-Free
Money Market, Money Market, Strategic Growth, U.S. Government Income, U.S.
Treasury Money Market and Variable Rate Government Funds of Overland Express
Funds, Inc. (SEC File No. 33-16296; 811-8275), are included in Part B, Item 23.
The unaudited financial statements for the period ended June 30,
1995 for the Asset Allocation, California Tax-Free Bond, California Tax-Free
Money Market, Money Market, Municipal Income, Short-Term Government-Corporate
Income, Short-Term Municipal Income, Strategic Growth, U.S. Government Income,
U.S. Treasury Money Market and Variable Rate Government Funds of Overland
Express Funds, Inc., are included in Part B, Item 23.
(b) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C> <C>
1 - Amended and Restated Articles of Incorporation dated November 22, 1995,
incorporated by reference to Post-Effective Amendment No. 17 to the
Registration Statement, filed November 29, 1995.
2 - By-Laws, incorporated by reference to the Initial Registration
Statement, filed September 30, 1991.
3 - Not Applicable
4 - Not Applicable
5(a)(i)(A) - Advisory Contract with Wells Fargo Bank, N.A. on behalf of the Asset
Allocation Fund, incorporated by reference to Post-Effective Amendment
No. 2 to the Registration Statement, filed April 17, 1992.
(i)(B) - Sub-Advisory Contract withWells Fargo Nikko Investment Advisors on
behalf of the Asset Allocation Fund, incorporated by reference to Post-
Effective Amendment No. 2 to the Registration Statement, filed April
17, 1992.
(ii)(A) - Advisory Contract with Wells Fargo Bank, N.A. on behalf of the U.S.
Government Allocation Fund, incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement, filed April 17, 1992.
</TABLE>
C-1
<PAGE> 319
<TABLE>
<S> <C> <C>
(ii)(B) - Sub-Advisory Contract with Wells Fargo Nikko Investment Advisors on
behalf of the U.S. Government Allocation Fund, incorporated by
reference to Post-Effective Amendment No. 2 to the Registration
Statement, filed April 17, 1992.
(iii) - Advisory Contract with Wells Fargo Bank, N.A. on behalf of the
California Tax-Free Money Market Mutual Fund, incorporated by reference
to Post-Effective Amendment No. 2 to the Registration Statement, filed
April 17, 1992.
(iv) - Advisory Contract with Wells Fargo Bank, N.A. on behalf of the
California Tax-Free Bond Fund, incorporated by reference to Post-
Effective Amendment No. 2 to the Registration Statement, filed April
17, 1992.
(v) - Advisory Contract with Wells Fargo Bank, N.A. on behalf of the Ginnie
Mae Fund, incorporated by reference to Post-Effective Amendment No. 2
to the Registration Statement, filed April 17, 1992.
(vi) - Advisory Contract with Wells Fargo Bank, N.A. on behalf of the Growth
and Income Fund, incorporated by reference to Post-Effective Amendment
No. 2 to the Registration Statement, filed April 17, 1992.
(vii)(A) - Advisory Contract with Wells Fargo Bank, N.A. on behalf of the
Corporate Stock Fund, incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement, filed April 17, 1992.
(vii)(B) - Sub-Advisory Contract with Wells Fargo Nikko Investment Advisors on
behalf of the Corporate Stock Fund, incorporated by reference to Post-
Effective Amendment No. 2 to the Registration Statement, filed April
17, 1992.
(viii) - Advisory Contract with Wells Fargo Bank, N.A. on behalf of the Money
Market Mutual Fund, incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement, filed May 1, 1992.
(ix) - Advisory Contract with Wells Fargo Bank, N.A. on behalf of the
California Tax-Free Income Fund, incorporated by reference to Post-
Effective Amendment No. 4 to the Registration Statement, filed
September 10, 1992.
(x) - Advisory Contract with Wells Fargo Bank, N.A. on behalf of the
Diversified Income Fund, incorporated by reference to Post-Effective
Amendment No. 17 to the Registration Statement, filed November 29,
1995.
5(b)(i) - Administration Agreement with Stephens Inc. on behalf of the Asset
Allocation Fund, incorporated by reference to Post-Effective Amendment
No. 2 to the Registration Statement, filed April 17, 1992.
(b)(ii) - Administration Agreement with Stephens Inc. on behalf of the U.S.
Government Allocation Fund, incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement, filed April 17, 1992.
(b)(iii) - Administration Agreement with Stephens Inc. on behalf of the California
Tax-Free Bond Fund, incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement, filed April 17, 1992.
</TABLE>
C-2
<PAGE> 320
<TABLE>
<S> <C> <C>
(b)(iv) - Administration Agreement with Stephens Inc. on behalf of the California
Tax-Free Money Market Mutual Fund, incorporated by reference to Post-
Effective Amendment No. 2 to the Registration Statement, filed April
17, 1992.
(b)(v) - Administration Agreement with Stephens Inc. on behalf of the Ginnie Mae
Fund, incorporated by reference to Post-Effective Amendment No. 2 to
the Registration Statement, filed April 17, 1992.
(b)(vi) - Administration Agreement with Stephens Inc. on behalf of the Growth and
Income Fund, incorporated by reference to Post-Effective Amendment
No. 2 to the Registration Statement, filed April 17, 1992.
(b)(vii) - Administration Agreement with Stephens Inc. on behalf of the Corporate
Stock Fund, incorporated by reference to Post-Effective Amendment No. 2
to the Registration Statement, filed April 17, 1992.
(b)(viii) - Administration Agreement with Stephens Inc. on behalf of the Money
Market Mutual Fund, incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement, filed May 1, 1992.
(b)(ix) - Form of Administration Agreement with Stephens Inc. on behalf of the
California Tax-Free Income Fund, incorporated by reference to Post-
Effective Amendment No. 4 to the Registration Statement, filed
September 10, 1992.
(b)(x) - Form of Administration Agreement with Stephens Inc. on behalf of the
Diversified Income Fund, incorporated by reference to Post-Effective
Amendment No. 4 to the Registration Statement, filed September 10,
1992.
(b)(xi) - Administration Agreement with Stephens Inc. on behalf of the Short-
Intermediate U.S. Government Income Fund, incorporated by reference to
Post-Effective Amendment No. 8 to the Registration Statement, filed
February 10, 1994.
(b)(xii) - Administration Agreement with Stephens Inc. on behalf of the National
Tax-Free Money Market Mutual Fund, filed herewith.
(b)(xiii) - Administration Agreement with Stephens Inc. on behalf of the
Aggressive Growth Fund, filed herewith.
6(a) - Amended Distribution Agreement with Stephens Inc.,
incorporated by reference to Post-Effective Amendment No. 15 to the
Registration Statement, filed May 1, 1995.
(b)(i) - Selling Agreement with Marketing One Securities, Inc. on behalf of the
Funds, incorporated by reference to Post-Effective Amendment No. 2 to
the Registration Statement, filed April 17, 1992.
(b)(ii) - Selling Agreement with Wells Fargo Bank, N.A. on behalf of the Funds,
incorporated by reference to Post-Effective Amendment No. 2 to the
Registration Statement, filed April 17, 1992.
7 - Not Applicable
</TABLE>
C-3
<PAGE> 321
<TABLE>
<S> <C> <C>
8(a) - Custody Agreement with Wells Fargo Institutional Trust Company, N.A. on
behalf of the Asset Allocation Fund, incorporated by reference to Post-
Effective Amendment No. 2 to the Registration Statement, filed April
17, 1992.
(b) - Custody Agreement with Wells Fargo Institutional Trust Company, N.A. on
behalf of the U.S. Government Allocation Fund, incorporated by
reference to Post-Effective Amendment No. 2 to the Registration
Statement, filed April 17, 1992.
(c) - Custody Agreement with Wells Fargo Institutional Trust Company, N.A. on
behalf of the Corporate Stock Fund, incorporated by reference to Post-
Effective Amendment No. 2 to the Registration Statement, filed April
17, 1992.
(d) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the
California Tax-Free Money Market Mutual Fund, incorporated by reference
to Post-Effective Amendment No. 2 to the Registration Statement, filed
April 17, 1992.
(e) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the
California Tax-Free Bond Fund, incorporated by reference to Post-
Effective Amendment No. 2 to the Registration Statement, filed April
17, 1992.
(f) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the Growth
and Income Fund, incorporated by reference to Post-Effective Amendment
No. 2 to the Registration Statement, filed April 17, 1992.
(g) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the Ginnie
Mae Fund, incorporated by reference to Post-Effective Amendment No. 2
to the Registration Statement, filed April 17, 1992.
(h) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the Money
Market Fund, incorporated by reference to Post-Effective Amendment
No. 3 to the Registration Statement, filed May 1, 1992.
(i) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the
California Tax-Free Income Fund, incorporated by reference to Post-
Effective Amendment No. 17 to the Registration Statement, filed
November 29, 1995.
(j) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the
Diversified Income Fund, incorporated by reference to Post-Effective
Amendment No. 17 to the Registration Statement, filed November 29,
1995.
(k) - Custody Agreement with Wells Fargo Bank, N.A. on behalf of the Short-
Intermediate U.S. Government Income Fund, incorporated by reference to
Post-Effective Amendment No. 8 to the Registration Statement, filed
February 10, 1994.
(l) - Form of Custody Agreement with Wells Fargo Bank, N.A. on behalf of the
National Tax-Free Money Market Mutual Fund, incorporated by reference
to Post-Effective Amendment No. 17 to the Registration Statement, filed
November 29, 1995.
(m) - Form of Custody Agreement with Wells Fargo Bank, N.A. on behalf of the
Aggressive Growth Fund, filed herewith.
</TABLE>
C-4
<PAGE> 322
<TABLE>
<S> <C> <C>
9(a)(i) - Agency Agreement with Wells Fargo Bank, N.A. on behalf of the Funds,
incorporated by reference to Post-Effective Amendment No. 2 to the
Registration Statement, filed April 17, 1992.
9(a)(ii) - Form of Agency Agreement with Wells Fargo Bank, N.A. on behalf of the
National Tax-Free Money Market Mutual Fund, incorporated by reference
to Post-Effective Amendment No. 17 to the Registration Statement, filed
November 29, 1995.
9(a)(iii) - Form of Agency Agreement with Wells Fargo Bank, N.A. on behalf of the
Aggressive Growth Fund, filed herewith.
9(b)(i) - Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on behalf
of the California Tax-Free Money Market Mutual Fund, incorporated by
reference to Post-Effective Amendment No. 2 to the Registration
Statement, filed April 17, 1992.
(b)(ii) - Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on behalf
of the Corporate Stock Fund, incorporated by reference to Post-
Effective Amendment No. 2 to the Registration Statement, filed April
17, 1992.
(b)(iii) - Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on behalf
of the Money Market Mutual Fund, incorporated by reference to Post-
Effective Amendment No. 3 to the Registration Statement, filed May 1,
1992.
(b)(iv) - Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on behalf
of the California Tax-Free Income Fund, incorporated by reference to
Post-Effective Amendment No. 17 to the Registration Statement, filed
November 29, 1995.
(b)(v) - Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on behalf
of the Short-Intermediate U.S. Government Income Fund, incorporated by
reference to Post-Effective Amendment No. 8 to the Registration
Statement, filed February 10, 1994.
(b)(vi) - Form of Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on
behalf of the National Tax-Free Money Market Mutual Fund, incorporated
by reference to Post-Effective Amendment No. 17 to the Registration
Statement, filed November 29, 1995.
(b)(vii) - Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on behalf
of the Class B Shares of the Asset Allocation Fund, incorporated by
reference to Post-Effective Amendment No. 15 to the Registration
Statement, filed May 1, 1995.
(b)(viii) - Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on behalf
of the Class B Shares of the California Tax-Free Bond Fund,
incorporated by reference to Post-Effective Amendment No. 15 to the
Registration Statement, filed May 1, 1995.
(b)(ix) - Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on behalf
of the Class B Shares of the Diversified Income Fund, incorporated by
reference to Post-Effective Amendment No. 15 to the Registration
Statement, filed May 1, 1995.
</TABLE>
C-5
<PAGE> 323
<TABLE>
<S> <C> <C>
(b)(x) - Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on behalf
of the Class B Shares of the Ginnie Mae Fund, incorporated by reference
to Post-Effective Amendment No. 15 to the Registration Statement, filed
May 1, 1995.
(b)(xi) - Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on behalf
of the Class B Shares of the Growth and Income Fund, incorporated by
reference to Post-Effective Amendment No. 15 to the Registration
Statement, filed May 1, 1995.
(b)(xii) - Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on behalf
of the Class B Shares of the U.S. Government Allocation Fund,
incorporated by reference to Post-Effective Amendment No. 15 to the
Registration Statement, filed May 1, 1995.
(b)(xiii) - Form of Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on
behalf of the Class B Shares of the Aggressive Growth Fund, filed
herewith.
(b)(xiv) - Amended Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on
behalf of the Class A Shares of the Asset Allocation Fund, incorporated
by reference to Post-Effective Amendment No. 15 to the Registration
Statement, filed May 1, 1995.
(b)(xv) - Amended Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on
behalf of the Class A Shares of the California Tax-Free Bond Fund,
incorporated by reference to Post-Effective Amendment No. 15 to the
Registration Statement, filed May 1, 1995.
(b)(xvi) - Amended Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on
behalf of the Class A Shares of the Diversified Income Fund,
incorporated by reference to Post-Effective Amendment No. 15 to the
Registration Statement, filed May 1, 1995.
(b)(xvii) - Amended Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on
behalf of the Class A Shares of the Ginnie Mae Fund, incorporated by
reference to Post-Effective Amendment No. 15 to the Registration
Statement, filed May 1, 1995.
(b)(xviii) - Amended Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on
behalf of the Class A Shares of the Growth and Income Fund,
incorporated by reference to Post-Effective Amendment No. 15 to the
Registration Statement, filed May 1, 1995.
(b)(xix) - Amended Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on
behalf of the Class A Shares of the U.S. Government Allocation Fund,
incorporated by reference to Post-Effective Amendment No. 15 to the
Registration Statement, filed May 1, 1995.
(b)(xx) - Form of Shareholder Servicing Agreement with Wells Fargo Bank, N.A. on
behalf of the Class A Shares of the Aggressive Growth Fund, filed
herewith.
(c) - Cross Indemnification Agreement, incorporated by reference to Post-
Effective Amendment No. 11 to the Registration Statement of Stagecoach
Inc., filed December 1, 1995.
</TABLE>
C-6
<PAGE> 324
<TABLE>
<S> <C> <C>
(d)(i) - Servicing Plan on behalf of the National Tax-Free Money Market Mutual
Fund, incorporated by reference to Post-Effective Amendment No. 17 to
the Registration Statement, filed November 29, 1995.
(d)(ii) - Servicing Plan on behalf of the Class B Shares of the Asset Allocation
Fund, incorporated by reference to Post-Effective Amendment No. 15 to
the Registration Statement, filed May 1, 1995.
(d)(iii) - Servicing Plan on behalf of the Class B Shares of the California Tax-
Free Bond Fund, incorporated by reference to Post-Effective Amendment
No. 15 to the Registration Statement, filed May 1, 1995.
(d)(iv) - Servicing Plan on behalf of the Class B Shares of the Diversified
Income Fund, incorporated by reference to Post-Effective Amendment
No. 15 to the Registration Statement, filed May 1, 1995.
(d)(v) - Servicing Plan on behalf of the Class B Shares of the Ginnie Mae Fund,
incorporated by reference to Post-Effective Amendment No. 15 to the
Registration Statement, filed May 1, 1995.
(d)(vi) - Servicing Plan on behalf of the Class B Shares of the Growth and Income
Fund, incorporated by reference to Post-Effective Amendment No. 15 to
the Registration Statement, filed May 1, 1995.
(d)(vii) - Servicing Plan on behalf of the Class B Shares of the U.S. Government
Allocation Fund, incorporated by reference to Post-Effective Amendment
No. 15 to the Registration Statement, filed May 1, 1995.
(d)(viii) - Servicing Plan on behalf of the Class B Shares of the Aggressive Growth
Fund, filed herewith.
(d)(ix) - Servicing Plan on behalf of the Class A Shares of the Aggressive Growth
Fund, filed herewith.
10 - Opinion and Consent of Counsel, filed herewith.
11 - Consent of Auditors -- KPMG Peat Markwick LLP, filed herewith
12 - Not Applicable
13 - Investment letter, incorporated by reference to Item 24(b) of Pre-
Effective Amendment No. 1 to the Registration Statement, filed
November 29, 1991.
14 - Not Applicable
15(a)(i) - Distribution Plan on behalf of the California Tax-Free Money Market
Mutual Fund, incorporated by reference to Post-Effective Amendment
No. 2 to the Registration Statement, filed April 17, 1992.
(a)(ii) - Distribution Plan on behalf of the Corporate Stock Fund, incorporated
by reference to Post-Effective Amendment No. 2 to the Registration
Statement, filed April 17, 1992.
</TABLE>
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<TABLE>
<S> <C> <C>
(a)(iii) - Distribution Plan on behalf of the Money Market Mutual Fund,
incorporated by reference to Post-Effective Amendment No. 3 to the
Registration Statement, filed May 1, 1992.
(a)(iv) - Distribution Plan on behalf of the California Tax-Free Income Fund,
incorporated by reference to Post-Effective Amendment No. 4 to the
Registration Statement, filed September 10, 1992.
(a)(v) - Distribution Plan on behalf of the Short-Intermediate U.S. Government
Income Fund, incorporated by reference to Post-Effective Amendment
No. 8 to the Registration Statement, filed February 10, 1994.
(a)(vi) - Distribution Plan on behalf of the National Tax-Free Money Market
Mutual Fund, incorporated by reference to Post-Effective Amendment No.
17 to the Registration Statement, filed November 29, 1995.
(b)(i) - Distribution Plan on behalf of the Class B Shares of the Asset
Allocation Fund, incorporated by reference to Post-Effective Amendment
No. 15 to the Registration Statement, filed May 1, 1995.
(b)(ii) - Distribution Plan on behalf of the Class B Shares of the California
Tax-Free Bond Fund, incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement, filed May 1, 1995.
(b)(iii) - Distribution Plan on behalf of the Class B Shares of the Diversified
Income Fund, incorporated by reference to Post-Effective Amendment
No. 15 to the Registration Statement, filed May 1, 1995.
(b)(iv) - Distribution Plan on behalf of the Class B Shares of the Ginnie Mae
Fund, incorporated by reference to Post-Effective Amendment No. 15 to
the Registration Statement, filed May 1, 1995.
(b)(v) - Distribution Plan on behalf of the Class B Shares of the Growth and
Income Fund, incorporated by reference to Post-Effective Amendment
No. 15 to the Registration Statement, filed May 1, 1995.
(b)(vi) - Distribution Plan on behalf of the Class B Shares of the U.S.
Government Allocation Fund, incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement, filed May 1, 1995.
(b)(vii) - Distribution Plan on behalf of the Class B Shares of the Aggressive
Growth Fund, filed herewith.
(c)(i) - Amended Distribution Plan on behalf of the Class A Shares of the Asset
Allocation Fund, incorporated by reference to Post-Effective Amendment
No. 15 to the Registration Statement, filed May 1, 1995.
(c)(ii) - Amended Distribution Plan on behalf of the Class A Shares of the
California Tax-Free Bond Fund, incorporated by reference to Post-
Effective Amendment No. 15 to the Registration Statement, filed May 1,
1995.
(c)(iii) - Amended Distribution Plan on behalf of the Class A Shares of the
Diversified Income Fund, incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement, filed May 1, 1995.
</TABLE>
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<TABLE>
<S> <C> <C>
(c)(iv) - Amended Distribution Plan on behalf of the Class A Shares of the Ginnie
Mae Fund, incorporated by reference to Post-Effective Amendment No. 15
to the Registration Statement, filed May 1, 1995.
(c)(v) - Amended Distribution Plan on behalf of the Class A Shares of the Growth
and Income Fund, incorporated by reference to Post-Effective Amendment
No. 15 to the Registration Statement, filed May 1, 1995.
(c)(vi) - Amended Distribution Plan on behalf of the Class A Shares of the U.S.
Government Allocation Fund, incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement, filed May 1, 1995.
(c)(vii) - Distribution Plan on behalf of the Class A Shares of the Aggressive
Growth Fund, filed herewith.
16(a) - Schedules for Computation of Performance Data, incorporated by
reference to Post-Effective Amendment No. 2, filed April 17, 1992.
16(b) - Schedules for Computation of Performance Data, incorporated by
reference to Post-Effective Amendment No. 15, filed May 1, 1995.
17 - Powers of Attorney, incorporated by reference to Initial Registration
Statement, filed September 30, 1991.
18(a) - Rule 18f-3 Multi-Class Plan, incorporated by reference to Post-
Effective Amendment No. 14 to the Registration Statement, filed
April 14, 1995.
18(b) - Amended Rule 18f-3 Multi-Class Plan, filed herewith.
</TABLE>
Item 25. Persons Controlled by or under Common Control with Registrant
No person is controlled by or under common control with Registrant.
Item 26. Number of Holders of Securities
As of October 31, 1995, the number of record holders of each
class of Securities of the Registrant was as follows:
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<TABLE>
<CAPTION>
Title of Class Number of Record Holders
-------------- ------------------------
Class A* Class B
------- -------
<S> <C> <C>
Asset Allocation Fund 14,176 960
U.S. Government Allocation Fund 3,849 119
California Tax-Free Money Market Mutual Fund 15,130 N/A
California Tax-Free Bond Fund 9,023 514
Growth and Income Fund 4,933 318
Ginnie Mae Fund 4,288 233
Corporate Stock Fund 658 N/A
Money Market Mutual Fund 9,506 N/A
California Tax-Free Income Fund 2,293 N/A
Diversified Income Fund 3,859 226
Short-Intermediate U.S. Government 1,964 N/A
Income Fund
National Tax-Free Money Market 1 N/A
Mutual Fund
</TABLE>
* For purposes of this chart, shares of single class Funds are included under
the designation "Class A"
Item 27. Indemnification
The following paragraphs of Article VIII of the Registrant's
Articles of Incorporation provide:
(h) The Corporation shall indemnify (1) its Directors and
officers, whether serving the Corporation or at its request any other
entity, to the full extent required or permitted by the General Laws of
the State of Maryland now or hereafter in force, including the advance of
expenses under the procedures and to the full extent permitted by law, and
(2) its other employees and agents to such extent as shall be authorized
by the Board of Directors or the Corporation's By-Laws and be permitted by
law. The foregoing rights of indemnification
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shall not be exclusive of any other rights to which those seeking
indemnification may be entitled. The Board of Directors may take such
action as is necessary to carry out these indemnification provisions and
is expressly empowered to adopt, approve and amend from time to time such
By-Laws, resolutions or contracts implementing such provisions or such
further indemnification arrangements as may be permitted by law. No
amendment of these Articles of Incorporation of the Corporation shall
limit or eliminate the right to indemnification provided hereunder with
respect to acts or omissions occurring prior to such amendment or repeal.
Nothing contained herein shall be construed to authorize the Corporation
to indemnify any Director or officer of the Corporation against any
liability to the Corporation or to any holders of securities of the
Corporation to which he is subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in
the conduct of his office. Any indemnification by the Corporation shall
be consistent with the requirements of law, including the 1940 Act.
(i) To the fullest extent permitted by Maryland
statutory and decisional law and the 1940 Act, as amended or
interpreted, no Director or officer of the Corporation shall be
personally liable to the Corporation or its stockholders for money
damages; provided, however, that nothing herein shall be construed to
protect any Director or officer of the Corporation against any liability
to which such Director or officer would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard
of the duties involved in the conduct of his office. No amendment,
modification or repeal of this Article VIII shall adversely affect any
right or protection of a Director or officer that exists at the time of
such amendment, modification or repeal.
Item 28. Business and Other Connections of Investment Adviser.
Wells Fargo Bank, N.A. ("Wells Fargo Bank"), a wholly owned
subsidiary of Wells Fargo & Company, serves as investment adviser to all of the
Registrant's investment portfolios, and to certain other registered open-end
management investment companies. Wells Fargo Bank's business is that of a
national banking association with respect to which it conducts a variety of
commercial banking and trust activities.
To the knowledge of Registrant, none of the directors or
executive officers of Wells Fargo Bank, except those set forth below, is or has
been at any time during the past two fiscal years engaged in any other
business, profession, vocation or employment of a substantial nature, except
that certain executive officers also hold various positions with and engage in
business for Wells Fargo & Company. Set forth below are the names and principal
businesses of the directors and executive officers of Wells Fargo Bank who are
or during the past two fiscal years have been engaged in any other business,
profession, vocation or employment of a substantial nature for their own
account or in the capacity of director, officer, employee, partner or trustee.
All the directors of Wells Fargo Bank also serve as directors of Wells Fargo &
Company.
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<TABLE>
<CAPTION>
Name and Position Principal Business(es) and Address(es)
at Wells Fargo Bank During at Least the Last Two Fiscal Years
------------------- ------------------------------------------
<S> <C>
H. Jesse Arnelle Senior Partner of Arnelle & Hastie
Director 455 Market Street
San Francisco, CA 94105
Director of FPL Group, Inc.
700 Universe Blvd.
P.O. Box 14000
North Palm Beach, FL 33408
William R. Breuner General Partner in Breuner Associates, Breuner Properties and
Director Breuner-Pavarnick Real Estate Developers. Retired Chairman of
the Board of Directors of John Breuner Co.
2300 Clayton Road, Suite 1570
Concord, CA 94520
Vice Chairman of the California State Railroad
Museum Foundation.
111 I Street
Old Sacramento, CA 95814
William S. Davila President and Director of The Vons Companies, Inc.
Director 618 Michillinda Avenue
Arcadia, CA 91007
Officer of Western Association of Food Chains
825 Colorado Blvd. #203
Los Angeles, CA 90041
Rayburn S. Dezember Director of CalMat Co.
Director 3200 San Fernando Road
Los Angeles, CA 90065
Director of Tejon Ranch Co.
P.O. Box 1000
Lebec, CA 93243
Director of Turner Casting Corp.
P.O. Box 1099
Cudahy, CA 90201
Director of The Bakersfield Californian
P.O. Box 440
1707 I Street
Bakersfield, CA 93302
Director of Kern County Economic Development Corp.
P.O. Box 1229
2700 M Street, Suite 225
Bakersfield, CA 93301
</TABLE>
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<TABLE>
<S> <C>
Chairman of the Board of Trustees of Whittier College
13406 East Philadelphia Avenue
P.O. Box 634
Whittier, CA 90608
Paul Hazen Chairman of the Board of Directors of
Chairman of the Wells Fargo & Company
Board of Directors 420 Montgomery Street
San Francisco, CA 94105
Director of Pacific Telesis Group
130 Kearny Street
San Francisco, CA 94108
Director of Phelps Dodge Corp.
2600 North Central Avenue
Phoenix, AZ 85004
Director of Safeway Inc.
Fourth and Jackson Streets
Oakland, CA 94660
Robert K. Jaedicke Accounting Professor and Dean Emeritus of
Director Graduate School of Business, Stanford University
MBA Admissions Office
Stanford, CA 94305
Director of Homestake Mining Co.
650 California Street
San Francisco, CA 94108
Director of California Water Service Company
1720 North First Street
San Jose, CA 95112
Director of Boise Cascade Corp.
1111 West Jefferson Street
P.O. Box 50
Boise, ID 83728
Director of Enron Corp.
1400 Smith Street
Houston, TX 77002
Director of GenCorp, Inc.
175 Ghent Road
Fairlawn, OH 44333
Paul A. Miller Chairman of Executive Committee and Director of
Director Pacific Enterprises
633 West Fifth Street
Los Angeles, CA 90071
</TABLE>
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<PAGE> 331
<TABLE>
<S> <C>
Trustee of Mutual Life Insurance Company of New York
1740 Broadway
New York, NY 10019
Director of Newhall Management Corporation
23823 Valencia Blvd.
Valencia, CA 91355
Trustee of University of Southern California
University Park TGF 200
665 Exposition Blvd.
Los Angeles, CA 90089
Ellen M. Newman President of Ellen Newman Associates
Director 323 Geary Street, Suite 507
San Francisco, CA 94102
Chair of Board of Trustees of
University of California at San Francisco Foundation
250 Executive Park Blvd., Suite 2000
San Francisco, CA 94143
Director of American Conservatory Theater
30 Grant Avenue
San Francisco, CA 94108
Director of California Chamber of Commerce
1201 K Street, 12th Floor
Sacramento, CA 95814
Philip J. Quigley Chairman, Chief Executive Officer and
Director Director of Pacific Telesis Group
130 Kearney Street, Rm. 3700
San Francisco, CA 94108
Director of Varian Associates
3050 Hansen Way
P.O. Box 10800
Palo Alto, CA 94303
Carl E. Reichardt Chairman and Chief Executive Officer of the
Director Board of Directors of Wells Fargo & Company
420 Montgomery Street
San Francisco, CA 94105
Director of Ford Motor Company
The American Road
Dearborn, MI 48121
Director of Hospital Corporation of America,
HCA-Hospital Corp. of America
One Park Plaza
Nashville, TN 37203
</TABLE>
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<PAGE> 332
<TABLE>
<S> <C>
Director of Pacific Gas and Electric Company
77 Beale Street
San Francisco, CA 94105
Director of Newhall Management Corporation
23823 Valencia Blvd.
Valencia, CA 91355
Donald B. Rice President, Chief Operating Officer and Director of
Director Teledyne, Inc.
2049 Century Park East
Los Angeles, CA 90067
Director of Vulcan Materials Company
One Metroplex Drive
Birmingham, AL 35209
Retired Secretary of the Air Force
Susan G. Swenson President and Chief Executive Officer of Cellular One
Director 651 Gateway Blvd.
San Francisco, CA 94080
Chang-Lin Tien Chancellor of University of California at Berkeley
Director UC at Berkeley
Berkeley, CA 94720
John A. Young President, Director and Chief Executive Officer of
Director Hewlett-Packard Company
3000 Hanover Street
Palo Alto, CA 94304
Director of Chevron Corporation
225 Bush Street
San Francisco, CA 94104
William F. Zuendt Director of 3Com Corp.
President 5400 Bayfront Plaza
P.O. Box 58145
Santa Clara, CA 95052
Director of MasterCard International
888 Seventh Avenue
New York, NY 10106
Trustee of Golden Gate University
536 Mission Street
San Francisco, CA 94163
</TABLE>
C-15
<PAGE> 333
Wells Fargo Nikko Investment Advisors ("WFNIA") serves as the
sub-adviser to the Asset Allocation, Corporate Stock and U.S. Government
Allocation Funds of the Company and as adviser or sub-adviser to various other
open-end management investment companies. For additional information, see "The
Funds and Management" in the Prospectus and "Management" in the Statement of
Additional Information of such Funds. For information as to the business,
profession, vocation or employment of a substantial nature of each of the
officers and management committees of WFNIA, reference is made to WFNIA's Form
ADV and Schedules A and D filed under the Investment Advisers Act of 1940, File
No. 801-36479, incorporated herein by reference.
Item 29. Principal Underwriters.
(a) Stephens Inc., distributor for the Registrant, does not
presently act as investment adviser for any other registered investment
companies, but does act as principal underwriter for the Overland Express
Funds, Inc., Stagecoach Inc. and Stagecoach Trust; and is the exclusive
placement agent for Master Investment Trust, Managed Series Investment Trust,
Life & Annuity Trust and Master Investment Portfolio, which are registered
open-end management investment companies, and has acted as principal
underwriter for the Liberty Term Trust, Inc., Nations Government Income Term
Trust 2003, Inc., and Nations Government Income Term Trust 2004, Inc., and
Managed Balanced Target Maturity Fund, Inc., which are closed-end management
investment companies and Nations Fund Trust, Nations Funds, Inc., Nations Fund
Portfolios, Inc. and The Capitol Mutual Funds, which are open-end management
investment companies.
(b) Information with respect to each director and officer of
the principal underwriter is incorporated by reference to Form ADV and
Schedules A and D filed by Stephens Inc. with the Securities and Exchange
Commission pursuant to the Investment Advisers Act of 1940 (file No.
501-15510).
(c) Not Applicable.
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder
are maintained at one or more of the following offices: Stagecoach Funds, Inc.
maintains those accounts books and other documents required by Rule 31a-l(b)(4)
and (d), Rule 31a-2(a)(3) and (c) at 111 Center Street, Little Rock, Arkansas
72201; Wells Fargo Bank maintains all other accounts, books or other documents
required by Rules 31a-1, 31a-2 and 31a-3 at 525 Market Street, San Francisco,
California 94163; and copies of such documents also are maintained by
stagecoach Funds, Inc. Original and/or copies of certain of the accounts, books
or other documents relating to the Asset Allocation Fund, the Corporate Stock
Fund and the U.S. Government Allocation Fund may be retained by WFNIA, 45
Fremont Street, San Francisco, California 94105, in its capacity as sub-adviser
or by Wells Fargo Institutional Trust Company, N.A., 45 Fremont Street, San
Francisco, California 94105, as custodian to these Funds.
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<PAGE> 334
Item 31. Management Services.
Other than as set forth under the captions "The Fund, the Master
Portfolio and Management" and "Management, Distribution and Servicing Fees" in
the Prospectus constituting Part A of this Registration Statement and
"Management" in the Statement of Additional Information constituting Part B of
this Registration Statement, the Registrant is not a party to any
management-related service contract.
Item 32. Undertakings.
(a) Not Applicable.
(b) With regard to the Aggressive Growth Fund, Registrant undertakes
to file a Post-Effective Amendment using financials, which need
not be certified, within four to six months from the effective
date of this Post-Effective Amendment to its Registration
Statement.
(c) Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
provisions set forth above in response to Item 27, or otherwise,
the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue
(d) Registrant undertakes to hold a special meeting of its
shareholders for the purpose of voting on the question of removal
of a director or directors if requested in writing by the holders
of at least 10W of the Company's outstanding voting securities,
and to assist in communicating with other shareholders as
required by Section 16(c) of the Investment Company Act of
1940.
(e) Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of its most current annual
report to shareholders, upon request and without charge.
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<PAGE> 335
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to its Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereto duly authorized in the City of Little Rock, State of
Arkansas on the 14th day of December, 1995.
STAGECOACH FUNDS, INC.
By /s/ R. Greg Feltus
------------------
(R. Greg Feltus, President)
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the date indicated:
Signature Title
--------- -----
/s/R. Greg Feltus Director, Chairman and
----------------- President (Principal Executive Officer)
(R. Greg Feltus)
/s/Richard H. Blank, Jr. Chief Operating Officer,
------------------------ Secretary and Treasurer
(Richard H. Blank, Jr.)
/s/Jack S. Euphrat Director
------------------
(Jack S. Euphrat)
/s/Thomas S. Goho Director
-----------------
(Thomas S. Goho)
/s/Zoe Ann Hines Director
----------------
(Zoe Ann Hines)
/s/W. Rodney Hughes Director
-------------------
(W. Rodney Hughes)
/s/Robert M. Joses Director
------------------
(Robert M. Joses)
/s/J. Tucker Morse Director
------------------
(J. Tucker Morse)
*By: /s/R. Greg Feltus
-----------------
(R. Greg Feltus)
As Attorney-in-Fact
<PAGE> 336
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to the Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereto duly authorized in the City of Little Rock, State of
Arkansas on the 14th day of December, 1995.
MASTER INVESTMENT TRUST
By /s/ Richard H. Blank, Jr.
-------------------------
(Richard H. Blank, Jr., Secretary)
Signature Title
--------- -----
/s/ R. Greg Feltus Trustee, Chairman and President
------------------ (Principal Executive Officer)
(R. Greg Feltus)
/s/ Richard H. Blank, Jr. Secretary and Treasurer (Chief
------------------------- Operating Officer)
(Richard H. Blank, Jr.)
/s/Jack S. Euphrat Trustee
------------------
(Jack S. Euphrat)
/s/ Thomas S. Goho Trustee
------------------
(Thomas S. Goho)
/s/ Zoe Ann Hines Trustee
------------------
(Zoe Ann Hines)
/s/ W. Rodney Hughes Trustee
--------------------
(W. Rodney Hughes)
/s/ Robert M. Joses Trustee
-------------------
(Robert M. Joses
/s/ J. Tucker Morse Trustee
-------------------
(J. Tucker Morse
*By: /s/Richard H. Blank, Jr.
(Richard H. Blank, Jr.)
As Attorney-in-Fact
<PAGE> 337
STAGECOACH FUNDS, INC.
FILE NOS. 33-42927; 811-6419
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
<S> <C>
EX-99.B5(b)(xii) - Administration Agreement with Stephens Inc. on behalf of the
National Tax-Free Money Market Mutual Fund
EX-99.B5(b)(xiii) - Administration Agreement with Stephens Inc. on behalf of
the Aggressive Growth Fund
EX-99.B8(m) - Form of Custody Agreement with Wells Fargo Bank, N.A. on behalf of
the Aggressive Growth Fund
EX-99.B9(a)(iii) - Form of Agency Agreement with Wells Fargo Bank, N.A. on behalf of
the Aggressive Growth Fund
EX-99.B9(b)(xiii) - Form of Shareholder Servicing Agreement with Wells Fargo Bank,
N.A. on behalf of the Aggressive Growth Fund - Class B Shares
EX-99.B9(b)(xx) - Form of Shareholder Servicing Agreement with Wells Fargo Bank,
N.A. on behalf of the Aggressive Growth Fund - Class A Shares
EX-99.B9(d)(viii) - Servicing Plan on behalf of the Aggressive Growth Fund - Class B
Shares
EX-99.B9(d)(ix) - Servicing Plan on behalf of the Aggressive Growth Fund - Class A
Shares
EX-99.B10 - Opinion and Consent of Counsel
EX-99.B11 - Consent of Auditors -- KPMG Peat Marwick LLP
EX-99.B15(b)(vii) - Distribution Plan on behalf of the Class B Shares of the
Aggressive Growth Fund
EX-99.B15(c)(vii) - Distribution Plan on behalf of the Class A Shares of the
Aggressive Growth Fund
EX-99.B18(b) - Amended Rule 18f-3 Multi-Class Plan
</TABLE>
<PAGE> 1
EX-99.B5(b)(xii)
ADMINISTRATION AGREEMENT
National Tax-Free Money Market Mutual Fund
a portfolio of
STAGECOACH FUNDS, INC.
111 Center Street
Little Rock, Arkansas 72201
February 12, 1996
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Company") on behalf of the National Tax-Free Money Market Mutual Fund (the
"Fund") and Stephens Inc. (the "Administrator") as follows:
1. The Company is a registered open-end management investment
company currently consisting of thirteen investment portfolios, but which may
from time to time consist of a greater or lesser number of investment
portfolios (the "Funds"). The Company proposes to engage in the business of
investing and reinvesting the assets of the Fund in the manner and in
accordance with the investment objective and restrictions specified in the
Company's Registration Statement, as amended from time to time (the
"Registration Statement"), filed by the Company under the Investment Company
Act of 1940 (the "Act") and the Securities Act of 1933. Copies of the
Registration Statement have been furnished to the Administrator. Any
amendments to the Registration Statement shall be furnished to the
Administrator promptly.
2. The Company is engaging the Administrator to
provide the administrative services specified elsewhere in this agreement,
subject to the overall supervision of the Board of Directors of the Company.
The Company's Board of Directors has directed that the Fund achieve its
investment objective by investing the Fund's assets in a corresponding
portfolio of Master Investment Trust (the "Trust"), another registered
investment company, which is advised by Wells Fargo Bank, N.A. (the "Adviser"),
until such time as the Board decides to invest the Fund's assets in another
registered investment company or enters into an advisory contract to directly
manage the Fund's assets.
3. The Administrator shall, at its expense, provide the
following administrative services in connection with the operations of the
Company and the Fund: (a) furnishing office
1
<PAGE> 2
space and certain facilities required for conducting the business of the Fund;
(b) general supervision of the operation of the Fund, including coordination of
the services performed by the Trust's or Company's investment adviser (if any),
transfer and dividend disbursing agent, shareholder servicing agents,
custodian, independent auditors and legal counsel; regulatory compliance,
including the compilation of information for documents such as reports to, and
filings with, the Securities and Exchange Commission and state securities
commissions; and preparation of proxy statements and shareholder reports for
the Company; (c) the compensation of the Company's directors, officers and
employees who are affiliated with the Administrator; (d) general supervision
relating to the compilation of data required for the preparation of periodic
reports on the performance of its obligations under this agreement and
statements of the Fund that are distributed to the Company's officers and Board
of Directors and the preparation of such additional reports and information as
the Company's Board of Directors or officers shall reasonably request; and (e)
all other administrative services reasonably necessary for the operation of the
Fund, other than those services that are to be provided by the Company's
shareholder servicing agents and transfer and dividend disbursing agent.
4. Except as provided in each of the Company's investment
advisory contracts and shareholder servicing and administration agreements, the
Company shall bear all costs of its operations, including any Fund's pro rata
share of the cost of operations of a Master Portfolio in which it invests; the
compensation of its directors who are not affiliated with any investment
adviser of the Company's Funds; the Administrator or any of their affiliates;
any advisory and shareholder servicing and administration fees; payments for
distribution-related expenses pursuant to any Rule 12b-1 Plan, i.e., a plan of
distribution of the Company adopted on behalf of any of the Funds pursuant to
Rule 12b-1 under the Act; governmental fees; interest charges; taxes; fees and
expenses of its independent auditors, legal counsel, transfer agent and
dividend disbursing agent; expenses of redeeming shares; expenses of preparing
and printing any stock certificates, prospectuses (except the expense of
printing and mailing prospectuses used for promotional purposes, unless
otherwise payable pursuant to a Rule 12b-1 Plan), shareholders' reports,
notices, proxy statements and reports to regulatory agencies; travel expenses
of directors, officers and employees; office supplies; insurance premiums and
certain expenses relating to insurance coverage; trade association membership
dues; brokerage and other expenses connected with the execution of portfolio
securities transactions; fees and expenses of any custodian, including those
for keeping books and accounts and calculating the net asset value per share of
the Fund; expenses of shareholders' meetings; expenses relating to the
issuance, registration and qualification of shares of the Fund; pricing
services, if any; organizational expenses; and any extraordinary expenses.
Expenses attributable to one or more, but not all, of the Funds are charged
against the assets of the relevant Funds. General expenses of the Company are
allocated among the Funds in a manner proportionate to the net assets of each
Fund, on a transactional basis or on such other basis as the Board of Directors
deems equitable.
5. The Administrator shall give the Company the benefit of the
Administrator's best judgment and efforts in rendering services under this
agreement. As an inducement to the Administrator's undertaking to render these
services, the Company agrees that the Administrator shall not be liable under
this agreement for any mistake in judgment or in any other event whatsoever
except for lack of good faith, provided that nothing in this agreement shall be
deemed
2
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to protect or purport to protect the Administrator against any liability to the
Company or its shareholders to which the Administrator would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of the Administrator's duties under this agreement or by reason of
reckless disregard of its obligations and duties hereunder.
6. In consideration of the services to be rendered by the
Administrator under this agreement, the Company shall pay the Administrator a
monthly fee on the first business day of each month, at the annual rate of
0.05% of the average daily value (as determined on each business day at the
time set forth in the Registration Statement for determining net asset value
per share) of the Fund's net assets during the preceding month. If the fee
payable to the Administrator pursuant to this paragraph 6 begins to accrue
after the beginning of any month or if this agreement terminates before the end
of any month, the fee for the period from the effective date to the end of that
month or from the beginning of that month to the termination date,
respectively, shall be prorated according to the proportion that the period
bears to the full month in which the effectiveness or termination occurs. For
purposes of calculating each such monthly fee, the value of the Fund's net
assets shall be computed in the manner specified in the Company's Registration
Statement and the Company's Articles of Incorporation for the computation of
the value of the Fund's net assets in connection with the determination of the
net asset value of Fund shares. For purposes of this agreement, a "business
day" is any day the New York Stock Exchange is open for trading.
7. If in any fiscal year the total expenses of the Fund
incurred by, or allocated to, the Fund excluding taxes, interest, brokerage
commissions and other portfolio transaction expenses, other expenditures that
are capitalized in accordance with generally accepted accounting principles,
extraordinary expenses and amounts accrued or paid under a Rule 12b-1 Plan of
the Fund, but including the fees provided for in paragraph 6 and those provided
for pursuant to any investment advisory contract of the Fund or Trust
("includable expenses"), exceed the most restrictive expense limitation
applicable to the Fund imposed by state securities laws or regulations
thereunder, as these limitations may be raised or lowered from time to time,
the Administrator shall waive or reimburse that portion of the excess derived
by multiplying the excess by a fraction, the numerator of which shall be the
percentage at which the excess portion attributable to the fee payable pursuant
to this agreement is calculated under paragraph 6 hereof, and the denominator
of which shall be the sum of such percentage plus the percentage at which the
excess portion attributable to any fee payable pursuant to an investment
advisory contract of the Fund and/or the Trust, to the extent the Fund has
invested its assets in the Trust, is calculated (the "Applicable Ratio"), but
only to the extent of the fee hereunder for the fiscal year. If the fees
payable under this agreement and/or the Fund's Investment Advisory Contract
contributing to such excess portion are calculated at more than one percentage
rate, the Applicable Ratio shall be calculated separately on the basis of, and
applied separately to, the portions of the fees calculated at the different
rates. At the end of each month of the Company's fiscal year, the Company
shall review the includable expenses accrued during that fiscal year to the end
of that period and shall estimate the includable expenses for the balance of
that fiscal year. If as a result of that review and estimation it appears
likely that the includable expenses will exceed the limitations referred to in
this paragraph 7 for a fiscal year with respect to the Fund, the monthly fee
set forth in paragraph 6 payable to the Administrator for such month shall be
reduced, subject to a later
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<PAGE> 4
adjustment, by an amount equal to the Applicable Ratio times the pro rata
portion (prorated on the basis of the remaining months of the fiscal year,
including the month just ended) of the amount by which the includable expenses
for the fiscal year are expected to exceed the limitations provided for in this
paragraph 7. For purposes of computing the excess, if any, over the most
restrictive applicable expense limitation, the value of the Fund's net assets
shall be computed in the manner specified in the last sentence of paragraph 6,
and any reimbursements required to be made by the Administrator shall be made
once a year promptly after the end of the Company's fiscal year.
8. This agreement shall become effective on its execution date
and shall thereafter continue in effect for a period of no less than two years.
Thereafter, this agreement may be terminated at any time, without the payment
of any penalty, by a vote of a majority of the Fund's outstanding voting
securities (as defined in the Act) and by a vote of a majority of the Company's
entire Board of Directors on 60 days' written notice to the Administrator or by
the Administrator on 60 days' written notice to the Company.
9. Except to the extent necessary to perform the
Administrator's obligations under this agreement, nothing herein shall be
deemed to limit or restrict the right of the Administrator, or any affiliate of
the Administrator, or any employee of the Administrator to engage in any other
business or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, firm, individual or association.
10. This agreement shall be governed by and construed in
accordance with the laws of the State of Arkansas.
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<PAGE> 5
If the foregoing correctly sets forth the agreement between the
Company and the Administrator, please so indicate by signing and returning to
the Company the enclosed copy hereof.
Very truly yours,
STAGECOACH FUNDS, INC.,
on behalf of the National Tax-Free Money
Market Mutual Fund
By: /s/Richard H. Blank, Jr.
------------------------
Name: Richard H. Blank, Jr.
Title: Chief Operating Officer, Secretary and
Treasurer
ACCEPTED as of the date
set forth above:
STEPHENS INC.
By: /s/R. Greg Feltus
-----------------
Name: R. Greg Feltus
Title: Senior Vice President
5
<PAGE> 1
EX-99.B5(b)(xiii)
ADMINISTRATION AGREEMENT
Aggressive Growth Fund
a portfolio of
STAGECOACH FUNDS, INC.
111 Center Street
Little Rock, Arkansas 72201
December ___, 1995
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Dear Sirs:
This will confirm the agreement between the undersigned (the
"Company") on behalf of the Aggressive Growth Fund (the "Fund") and Stephens
Inc. (the "Administrator") as follows:
1. The Company is a registered open-end management investment
company currently consisting of thirteen investment portfolios, but which may
from time to time consist of a greater or lesser number of investment
portfolios (the "Funds"). The Company proposes to engage in the business of
investing and reinvesting the assets of the Fund in the manner and in
accordance with the investment objective and restrictions specified in the
Company's Registration Statement, as amended from time to time (the
"Registration Statement"), filed by the Company under the Investment Company
Act of 1940 (the "Act") and the Securities Act of 1933. Copies of the
Registration Statement have been furnished to the Administrator. Any
amendments to the Registration Statement shall be furnished to the
Administrator promptly.
2. The Company is engaging the Administrator to
provide the administrative services specified elsewhere in this agreement,
subject to the overall supervision of the Board of Directors of the Company.
The Company's Board of Directors has directed that the Fund achieve its
investment objective by investing the Fund's assets in a corresponding
portfolio of Master Investment Trust (the "Trust"), another registered
investment company, which is advised by Wells Fargo Bank, N.A. (the "Adviser"),
until such time as the Board decides to invest the Fund's assets in another
registered investment company or enters into an advisory contract to directly
manage the Fund's assets.
3. The Administrator shall, at its expense, provide the
following administrative services in connection with the operations of the
Company and the Fund: (a) furnishing office space and certain facilities
required for conducting the business of the Fund; (b) general
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<PAGE> 2
supervision of the operation of the Fund, including coordination of the
services performed by the Trust's or Company's investment adviser (if any),
transfer and dividend disbursing agent, shareholder servicing agents,
custodian, independent auditors and legal counsel; regulatory compliance,
including the compilation of information for documents such as reports to, and
filings with, the Securities and Exchange Commission and state securities
commissions; and preparation of proxy statements and shareholder reports for
the Company; (c) the compensation of the Company's directors, officers and
employees who are affiliated with the Administrator; (d) general supervision
relating to the compilation of data required for the preparation of periodic
reports on the performance of its obligations under this agreement and
statements of the Fund that are distributed to the Company's officers and Board
of Directors and the preparation of such additional reports and information as
the Company's Board of Directors or officers shall reasonably request; and (e)
all other administrative services reasonably necessary for the operation of the
Fund, other than those services that are to be provided by the Company's
shareholder servicing agents and transfer and dividend disbursing agent.
4. Except as provided in each of the Company's advisory
contracts and shareholder servicing and administration agreements, the Company
shall bear all costs of its operations, including any Fund's pro rata share of
the cost of operations of a Master Portfolio in which it invests; the
compensation of its directors who are not affiliated with any investment
adviser of the Company's Funds; the Administrator or any of their affiliates;
any advisory and shareholder servicing and administration fees; payments for
distribution-related expenses pursuant to any Rule 12b-1 Plan, i.e., a plan of
distribution of the Company adopted on behalf of any of the Funds pursuant to
Rule 12b-1 under the Act; governmental fees; interest charges; taxes; fees and
expenses of its independent auditors, legal counsel, transfer agent and
dividend disbursing agent; expenses of redeeming shares; expenses of preparing
and printing any stock certificates, prospectuses (except the expense of
printing and mailing prospectuses used for promotional purposes, unless
otherwise payable pursuant to a Rule 12b-1 Plan), shareholders' reports,
notices, proxy statements and reports to regulatory agencies; travel expenses
of directors, officers and employees; office supplies; insurance premiums and
certain expenses relating to insurance coverage; trade association membership
dues; brokerage and other expenses connected with the execution of portfolio
securities transactions; fees and expenses of any custodian, including those
for keeping books and accounts and calculating the net asset value per share of
the Fund; expenses of shareholders' meetings; expenses relating to the
issuance, registration and qualification of shares of the Fund; pricing
services, if any; organizational expenses; and any extraordinary expenses.
Expenses attributable to one or more, but not all, of the Funds are charged
against the assets of the relevant Funds. General expenses of the Company are
allocated among the Funds in a manner proportionate to the net assets of each
Fund, on a transactional basis or on such other basis as the Board of Directors
deems equitable.
5. The Administrator shall give the Company the benefit of the
Administrator's best judgment and efforts in rendering services under this
agreement. As an inducement to the Administrator's undertaking to render these
services, the Company agrees that the Administrator shall not be liable under
this agreement for any mistake in judgment or in any other event whatsoever
except for lack of good faith, provided that nothing in this agreement shall be
deemed to protect or purport to protect the Administrator against any liability
to the Company or its
2
<PAGE> 3
shareholders to which the Administrator would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of the
Administrator's duties under this agreement or by reason of reckless disregard
of its obligations and duties hereunder.
6. In consideration of the services to be rendered by the
Administrator under this agreement, the Company shall pay the Administrator a
monthly fee on the first business day of each month, at the annual rate of
0.03% of the average daily value (as determined on each business day at the
time set forth in the Registration Statement for determining net asset value
per share) of the Fund's net assets during the preceding month. If the fee
payable to the Administrator pursuant to this paragraph 6 begins to accrue
after the beginning of any month or if this agreement terminates before the end
of any month, the fee for the period from the effective date to the end of that
month or from the beginning of that month to the termination date,
respectively, shall be prorated according to the proportion that the period
bears to the full month in which the effectiveness or termination occurs. For
purposes of calculating each such monthly fee, the value of the Fund's net
assets shall be computed in the manner specified in the Company's Registration
Statement and the Company's Articles of Incorporation for the computation of
the value of the Fund's net assets in connection with the determination of the
net asset value of Fund shares. For purposes of this agreement, a "business
day" is any day the New York Stock Exchange is open for trading.
7. If in any fiscal year the total expenses of the Fund
incurred by, or allocated to, the Fund excluding taxes, interest, brokerage
commissions and other portfolio transaction expenses, other expenditures that
are capitalized in accordance with generally accepted accounting principles,
extraordinary expenses and amounts accrued or paid under a Rule 12b-1 Plan of
the Fund, but including the fees provided for in paragraph 6 and those provided
for pursuant to any investment advisory contract of the Fund or Trust
("includable expenses"), exceed the most restrictive expense limitation
applicable to the Fund imposed by state securities laws or regulations
thereunder, as these limitations may be raised or lowered from time to time,
the Administrator shall waive or reimburse that portion of the excess derived
by multiplying the excess by a fraction, the numerator of which shall be the
percentage at which the excess portion attributable to the fee payable pursuant
to this agreement is calculated under paragraph 6 hereof, and the denominator
of which shall be the sum of such percentage plus the percentage at which the
excess portion attributable to any fee payable pursuant to an investment
advisory contract of the Fund and/or the Trust, to the extent the Fund has
invested its assets in the Trust, is calculated (the "Applicable Ratio"), but
only to the extent of the fee hereunder for the fiscal year. If the fees
payable under this agreement and/or the Fund's Investment Advisory Contract
contributing to such excess portion are calculated at more than one percentage
rate, the Applicable Ratio shall be calculated separately on the basis of, and
applied separately to, the portions of the fees calculated at the different
rates. At the end of each month of the Company's fiscal year, the Company
shall review the includable expenses accrued during that fiscal year to the end
of that period and shall estimate the includable expenses for the balance of
that fiscal year. If as a result of that review and estimation it appears
likely that the includable expenses will exceed the limitations referred to in
this paragraph 7 for a fiscal year with respect to the Fund, the monthly fee
set forth in paragraph 6 payable to the Administrator for such month shall be
reduced, subject to a later adjustment, by an amount equal to the Applicable
Ratio times the pro rata portion (prorated on
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<PAGE> 4
the basis of the remaining months of the fiscal year, including the month just
ended) of the amount by which the includable expenses for the fiscal year are
expected to exceed the limitations provided for in this paragraph 7. For
purposes of computing the excess, if any, over the most restrictive applicable
expense limitation, the value of the Fund's net assets shall be computed in the
manner specified in the last sentence of paragraph 6, and any reimbursements
required to be made by the Administrator shall be made once a year promptly
after the end of the Company's fiscal year.
8. This agreement shall become effective on its execution date
and shall thereafter continue in effect for a period of no less than two years.
Thereafter, this agreement may be terminated at any time, without the payment
of any penalty, by a vote of a majority of the Fund's outstanding voting
securities (as defined in the Act) and by a vote of a majority of the Company's
entire Board of Directors on 60 days' written notice to the Administrator or by
the Administrator on 60 days' written notice to the Company.
9. Except to the extent necessary to perform the
Administrator's obligations under this agreement, nothing herein shall be
deemed to limit or restrict the right of the Administrator, or any affiliate of
the Administrator, or any employee of the Administrator to engage in any other
business or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, firm, individual or association.
10. This agreement shall be governed by and construed in
accordance with the laws of the State of Arkansas.
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<PAGE> 5
If the foregoing correctly sets forth the agreement between the
Company and the Administrator, please so indicate by signing and returning to
the Company the enclosed copy hereof.
Very truly yours,
STAGECOACH FUNDS, INC.,
on behalf of the Agressive Growth Fund
By: /s/ RICHARD H. BLANK, JR.
------------------------
Name: Richard H. Blank, Jr.
Title: Chief Operating Officer, Secretary
and Treasurer
ACCEPTED as of the date
set forth above:
STEPHENS INC.
By: /s/ R. GREG FELTUS
--------------------------
Name: R. Greg Feltus
Title: Senior Vice President
5
<PAGE> 1
EX-99.B8(m)
FORM OF
CUSTODY AGREEMENT
STAGECOACH FUNDS, INC.
111 CENTER STREET
LITTLE ROCK, ARKANSAS 72201
This Agreement is made as of the ____ day of December, 1995 (the
"Agreement"), by and between STAGECOACH FUNDS, INC. (the "Company"), on behalf
of the Aggressive Growth Fund (the "Fund"), and WELLS FARGO BANK, N.A. (the
"Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter set forth, the
Company and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meaning:
1. "Authorized Person" shall be deemed to include the treasurer,
the controller or any other person, whether or not any such person is an
Officer or employee of the Company, duly authorized by the Board of Directors
("Directors") to give Oral Instructions and Written Instructions on behalf of
the Fund and listed in the Certificate attached hereto as Appendix A or such
other Certificate as may be received from time to time by the Custodian.
2. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its
successor(s) and its nominee(s).
3. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Custodian, which is actually received by the Custodian and signed on behalf
of the Fund by any two Officers of the Company.
4. "Clearing Member" shall mean a registered broker-dealer that
is a member of a national securities exchange qualified to act as a custodian
for an investment company, or any broker-dealer reasonably believed by the
Custodian to be such a clearing member.
5. "Depository" shall mean The Depository Trust Company ("DTC"),
Participants Trust Company ("PTC"), and any other clearing agency registered
with the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934, its successor(s) and its nominee(s), provided the
Custodian has received a certified copy of a resolution of the Board of
Directors specifically approving deposits in DTC, PTC or such other
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<PAGE> 2
clearing agency. The term "Depository" shall further mean and include any
person authorized to act as a depository pursuant to Section 17, Rule 17f-4 or
Rule 17f-5 thereunder, under the Investment Company Act of 1940, its
successor(s) and its nominee(s), specifically identified in a certified copy of
a resolution of the Board of Directors approving deposits therein by the
Custodian.
6. "Margin Account" shall mean a segregated account in the name
of a broker, dealer, or Clearing Member, or in the name of the Company or the
Fund for the benefit of a broker, dealer, or Clearing Member, or otherwise, in
accordance with an agreement between the Company on behalf of the Fund, the
Custodian and a broker, dealer, or Clearing Member (a "Margin Account
Agreement"), separate and distinct from the custody account, in which certain
Securities and/or moneys of the Fund shall be deposited and withdrawn from time
to time in connection with such transactions as the Fund may from time to time
determine. Securities held in the Book-Entry System or the Depository shall be
deemed to have been deposited in, or withdrawn from, a Margin Account upon the
Custodian's effecting an appropriate entry on its books and records.
7. "Money Market Securities" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to principal and interest
by the government of the United States or agencies or instrumentalities
thereof, commercial paper, certificates of deposit and bankers' acceptances,
repurchase and reverse repurchase agreements with respect to the same and bank
time deposits, where the purchase and sale of such securities normally requires
settlement in federal funds on the same date as such purchase or sale.
8. "Officers" shall be deemed to include the President, Vice
President, the Secretary, the Treasurer, the Controller, any Assistant
Secretary, any Assistant Treasurer or any other person or persons duly
authorized by the Directors of the Company to execute any Certificate,
instruction, notice or other instrument on behalf of the Fund and listed in the
Certificate attached hereto as Appendix B or such other Certificate as may be
received by the Custodian from time to time.
9. "Oral Instructions" shall mean verbal instructions actually
received by the Custodian from an Authorized Person or from a person reasonably
believed by the Custodian to be an Authorized Person.
10. "Reverse Repurchase Agreement" shall mean an agreement
pursuant to which the Fund sells Securities and agrees to repurchase such
Securities at a described or specified date and price.
11. "Security" or "Securities" shall be deemed to include,
without limitation, Money Market Securities, Reverse Repurchase Agreements,
common stock and other instruments or rights having characteristics similar to
common stocks, preferred stocks, debt obligations issued by state or municipal
governments and by public authorities (including, without limitation, general
obligations bonds), bonds, debentures, notes, mortgages or other obligations,
and any certificates, receipts, warrants or other instruments representing
rights to receive, purchase, sell or subscribe
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<PAGE> 3
for the same, or evidencing or representing any other rights or interest
therein, or any property or assets.
12. "Segregated Security Account" shall mean an account
maintained under the terms of this Agreement as a segregated account, by
recordation or otherwise, within the custody account in which certain
Securities and/or other assets of the Fund shall be deposited and withdrawn
from time to time in accordance with Certificates received by the Custodian in
connection with such transactions as the Fund may from time to time determine.
13. "Shares" shall mean the shares of common stock of the Fund,
each of which, in the case of the Fund having Series, is allocated to a
particular Series.
14. "Written Instructions" shall mean written communications
actually received by the Custodian from an Authorized Person or from a person
reasonably believed by the Custodian to be an Authorized Person by telex or any
other such system whereby the receiver of such communications is able to verify
by codes or otherwise with a reasonable degree of certainty the authenticity of
the sender of such communication.
ARTICLE II
APPOINTMENT OF A CUSTODIAN
1. The Company on behalf of the Fund hereby constitutes and
appoints the Custodian as custodian of all the Securities and moneys at any
time owned by the Fund during the term of this Agreement.
2. The Custodian hereby accepts appointment as such custodian and
agrees to perform all the duties thereof as set forth in this Agreement.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in Article V, the Fund will
deliver or cause to be delivered to the Custodian all Securities and all moneys
owned by it, including cash received for the issuance of its Shares, at any
time during the term of this Agreement. The Custodian will not be responsible
for such Securities and such moneys until actually received by it. The
Custodian will be entitled to reverse any credits made on the Fund's behalf
where such credits have been previously made and moneys are not finally
collected. The Fund shall deliver to the Custodian a certified resolution of
the Directors of the Company authorizing and instructing the Custodian on a
continuous and ongoing basis to deposit in the Book-Entry System all Securities
eligible for deposit therein and to utilize the Book- Entry System to the
extent possible in connection with its performance hereunder, including,
without limitation, in connection with settlements of purchases and sales of
Securities, loans of Securities, and deliveries and returns of Securities
collateral. Prior to a deposit of Securities of the Fund in the Depository,
the Fund shall deliver to the
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<PAGE> 4
Custodian a certified resolution of the Directors of the Company approving,
authorizing and instructing the Custodian on a continuous and ongoing basis
until instructed to the contrary by a Certificate actually received by the
Custodian to deposit in the Depository all Securities eligible for deposit
therein and to utilize the Depository to the extent possible in connection with
its performance hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of Securities, and
deliveries and returns of Securities collateral. Securities and moneys of the
Fund deposited in either the Book-Entry System or the Depository will be
represented in accounts which include only assets held by the Custodian for
customers, including, but not limited to, accounts in which the Custodian acts
in a fiduciary or representative capacity.
2. The Custodian shall credit to a separate account in the name
of the Fund all moneys received by it for the account of the Fund, and shall
disburse the same only:
(a) In payment for Securities purchased, as provided in Article
IV hereof;
(b) In payment of dividends or distributions, as provided in
Article VIII hereof;
(c) In payment of original issue or other taxes, as provided in
Article IX hereof;
(d) In payment for Shares redeemed by it, as provided in Article
IX hereof;
(e) Pursuant to Certificate(s) setting forth the name(s) and
address(es) of the person(s) to whom the payment is to be made, and the purpose
for which payment is to be made; or
(f) In payment of the fees and in reimbursement of the expenses
and liabilities of the Custodian, as provided in Article XII hereof.
3. Promptly after the close of business on each day, the
Custodian shall furnish the Fund with confirmations and a summary of all
transfers to or from the account of the Fund during said day. Where Securities
are transferred to the account of the Fund, the Custodian shall also by
book-entry or otherwise identify as belonging to the Fund a quantity of
Securities in a fungible bulk of Securities registered in the name of the
Custodian (or its nominee) or shown on the Custodian's account on the books of
the Book-Entry System or the Depository. The Custodian shall furnish the Fund
at least monthly with a detailed statement of the Securities and moneys held
for the Fund under this Agreement.
4. Except as otherwise provided in Article V, all Securities held
for the Fund which are issued or issuable only in bearer form, except such
Securities as are held in the Book-Entry System, shall be held by the Custodian
in that form; all other Securities held for the Fund may be registered in the
name of the Fund, in the name of any duly appointed registered nominee of the
Custodian as the Custodian may from time to time determine, or in the name of
the Book-Entry System or the Depository or their successor(s) or their
nominee(s). The Company agrees to furnish to the Custodian appropriate
instruments to enable the Custodian to hold or deliver in
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<PAGE> 5
proper form for transfer, or to register in the name of its registered nominee
or in the name of the Book-Entry System or the Depository, any Securities which
it may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund. The Custodian shall hold all such
Securities which are not held in the Book-Entry System or in the Depository in
a separate account in the name of the Fund physically segregated at all times
from those of any other person or persons.
5. Except as otherwise provided in this Agreement and unless
otherwise instructed to the contrary by a Certificate, the Custodian by itself,
or through the use of the Book-Entry System or the Depository with respect to
the Securities therein deposited, shall, with respect to all Securities held
for the Fund in accordance with this Agreement:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount payable upon such
Securities which are called, but only if either (i) the Custodian receives a
written notice of such call, or (ii) notice of such call appears in one or more
of the publications listed in Appendix C annexed hereto, which may be amended
at any time by the Custodian upon five business days' prior notification to the
Fund;
(c) Present for payment and collect the amount payable upon all
Securities which mature;
(d) Surrender Securities in temporary form for definitive
Securities;
(e) Execute, as Custodian, any necessary declarations or
certificates of ownership under the federal income tax laws or the laws or
regulations of any other taxing authority now or hereafter in effect; and
(f) Hold directly, or through the Book-Entry System or the
Depository with respect to Securities therein deposited, for the account of the
Fund all rights and similar securities issued with respect to any Securities
held by the Custodian hereunder.
6. Upon receipt of a Certificate and not otherwise, the
Custodian, directly or through the use of the Book-Entry System or the
Depository, shall:
(a) Execute and deliver to such persons as may be designated in
such Certificate proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities may be exercised;
(b) Deliver any Securities held for the Fund in exchange for
other Securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
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<PAGE> 6
(c) Deliver any Securities held for the Fund to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or sale of
assets of any corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or other instruments
or documents as may be issued to it to evidence such delivery;
(d) Make such transfer or exchanges of the assets of the Fund and
take such other steps as shall be stated in said order to be for the purpose of
effectuating any duly authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund; and
(e) Present for payment and collect the amount payable upon
Securities not described in preceding paragraph 5(b) of this Article which may
be called as specified in the Certificate.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
1. Promptly after each purchase or sale (as applicable) of
Securities by the Fund, other than a purchase or sale of any Reverse Repurchase
Agreement, the Fund shall deliver to the Custodian (i) with respect to each
purchase or sale of Securities which are not Money Market Securities, a
Certificate; and (ii) with respect to each purchase or sale of Money Market
Securities, a Certificate, Oral Instructions or Written Instructions,
specifying with respect to each such purchase or sale: (a) the name of the
issuer and the title of the Securities; (b) the number of shares or the
principal amount purchased or sold and accrued interest, if any; (c) the date
of purchase or sale and settlement date; (d) the purchase or sale price per
unit; (e) the total amount payable upon such purchase or sale; (f) the name of
the person from whom or the broker through whom the purchase or sale was made,
and the name of the clearing broker, if any; (g) in the case of a purchase, the
name of the broker to which payment is to be made; and (h) in the case of a
sale, the name of the broker to whom the Securities are to be delivered. In
the case of a purchase, the Custodian shall, upon receipt of Securities
purchased by or for the Fund, pay out of the moneys held for the account of the
Fund the total amount payable to the person from whom, or the broker through
whom, the purchase was made, provided that the same conforms to the total
amount payable as set forth in such Certificate, Oral Instructions or Written
Instructions. In the case of a sale, the Custodian shall deliver the
Securities upon receipt of the total amount payable to the Fund upon such sale,
provided that the same conforms to the total amount payable as set forth in
such Certificate, Oral Instructions or Written Instructions. Subject to the
foregoing, the Custodian may accept payment in such form as shall be
satisfactory to it, and may deliver Securities and arrange for payment in
accordance with the customs prevailing among dealers in securities.
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<PAGE> 7
ARTICLE V
SHORT SALES
1. Promptly after any short sale, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the name of the issuer and the title
of the Security; (b) the number of shares or principal amount sold, and accrued
interest or dividends, if any; (c) the dates of the sale and settlement; (d)
the sale price per unit; (e) the total amount credited to the Fund upon such
sale, if any (f) the amount of cash and/or the amount and kind of Securities,
if any, which are to be deposited in a Margin Account and the name in which
such Margin Account has been or is to be established; (g) the amount of cash
and/or the amount and kind of Securities, if any, to be deposited in a
Segregated Security Account; and (h) the name of the broker through which such
short sale was made. The Custodian shall upon its receipt of a statement from
such broker confirming such sale and that the total amount credited to the Fund
upon such sale, if any, as specified in the Certificate is held by such broker
for the account of the Custodian (or any nominee of the Custodian) as custodian
of the Fund, issue a receipt or make the deposits into the Margin Account and
the Segregated Security Account specified in the Certificate.
2. In connection with the closing-out of any short sale, the Fund
shall promptly deliver to the Custodian a Certificate specifying with respect
to each such closing-out: (a) the name of the issuer and the title of the
Security; (b) the number of shares or the principal amount, and accrued
interest or dividends, if any, required to effect such closing-out to be
delivered to the broker; (c) the dates of the closing-out and settlement; (d)
the purchase price per unit; (e) the net total amount payable to the Fund upon
such closing-out; (f) the net total amount payable to the broker upon such
closing-out; (g) the amount of cash and the amount and kind of Securities, if
any, to be withdrawn, from the Margin Account; (h) the amount of cash and/or
the amount and kind of Securities, if any, to be withdrawn from the Segregated
Security Account; and (i) the name of the broker through which the Fund is
effecting such closing-out. The Custodian shall, upon receipt of the net total
amount payable to the Fund upon such closing-out and the return and/or
cancellation of the receipts, if any, issued by the Custodian with respect to
the short sale being closed-out, pay out the moneys held for the account of the
Fund to the broker the net total amount payable to the broker, and make the
withdrawals from the Margin Account and the Segregated Security Account, as the
same are specified in the Certificate.
ARTICLE VI
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters into a Reverse Repurchase
Agreement with respect to Securities and money held by the Custodian hereunder,
the Fund shall deliver to the Custodian a Certificate, or in the event such
Reverse Repurchase Agreement is a Money Market Security, a Certificate, Oral
Instructions or Written Instructions specifying: (a) the total amount payable
to the Fund in connection with such Reverse Repurchase Agreement; (b) the
broker or dealer through or with which the Reverse Repurchase Agreement is
entered; (c) the amount and kind of Securities to be delivered by the Fund to
such broker or dealer; (d) the date of such Reverse Repurchase Agreement; and
(e) the amount of cash and/or the amount and kind of Securities, if
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<PAGE> 8
any, to be deposited in a Segregated Security Account in connection with such
Reverse Repurchase Agreement. The Custodian shall, upon receipt of the total
amount payable to the Fund specified in the Certificate, Oral Instructions or
Written Instructions make the delivery to the broker or dealer, and the
deposits, if any, to the Segregated Security Account, specified in such
Certificate, Oral Instructions or Written Instructions.
2. Upon the termination of a Reverse Repurchase Agreement
described in paragraph 1 of this Article VI, the Fund shall promptly deliver a
Certificate or, in the event such Reverse Repurchase Agreement is a Money
Market Security, a Certificate, Oral Instructions or Written Instructions to
the Custodian specifying: (a) the Reverse Repurchase Agreement being
terminated; (b) the total amount payable by the Fund in connection with such
termination; (c) the amount and kind of Securities to be received by the Fund
in connection with such termination; (d) the date of termination; (e) the name
of the broker or dealer with or through which the Reverse Repurchase Agreement
is to be terminated; and (f) the amount of cash and/or the amount and kind of
Securities to be withdrawn from the Segregated Security Account. The Custodian
shall, upon receipt of the amount and kind of Securities to be received by the
Fund specified in the Certificate, Oral Instructions or Written Instructions,
make the payment to the broker or dealer, and the withdrawals, if any, from the
Segregated Security Account, specified in such Certificate, Oral Instructions
or Written Instructions.
ARTICLE VII
MARGIN ACCOUNTS, SEGREGATED SECURITY
ACCOUNTS AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such deposits to,
or withdrawals from, a Segregated Security Account as specified in a
Certificate received by the Custodian. Such Certificate shall specify the
amount of cash and/or the amount and kind of Securities to be deposited in, or
withdrawn from, the Segregated Security Account. In the event that the Fund
fails to specify in a Certificate the name of the issuer, the title and the
number of shares or the principal amount of any particular Securities to be
deposited by the Custodian into, or withdrawn from, a Segregated Securities
Account, the Custodian shall be under no obligation to make any such deposit or
withdrawal and shall so notify the Fund.
2. The Custodian shall make deliveries or payments from a Margin
Account to the broker, dealer or Clearing Member in whose name, or for whose
benefit, the account was established as specified in the Margin Account
Agreement.
3. Amounts received by the Custodian as payments or distributions
with respect to Securities deposited in any Margin Account shall be dealt with
in accordance with the terms and conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and security
interest in and to any property at any time held by the Custodian in any
Collateral Account described herein.
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<PAGE> 9
5. On each business day, the Custodian shall furnish the Fund
with a statement with respect to the Fund's Margin Account in which money or
Securities are held specifying as of the close of business on the previous
business day: (a) the name of the Margin Account; (b) the amount and kind of
Securities held therein; and (c) the amount of money held therein. The
Custodian shall make available upon request to any broker or dealer specified
in the name of a Margin Account a copy of the statement furnished the Fund with
respect to such Margin Account.
6. Promptly after the close of business on each business day in
which cash and/or Securities are maintained in a Collateral Account, the
Custodian shall furnish the Fund with a statement with respect to the Fund's
Collateral Account specifying the amount of cash and/or the amount and kind of
Securities held therein. No later than the close of business next succeeding
the delivery to the Fund of such statement, the Fund shall furnish the
Custodian with a Certificate or Written Instructions specifying the then market
value of the Securities described in such statement.
ARTICLE VIII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish the Custodian with a copy of the
resolution of the Directors, certified by the Secretary or any Assistant
Secretary, either (i) setting forth the date of the declaration of a dividend
or distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined, the amount payable per
share to the shareholders of record as of that date and the total amount
payable to the Dividend Agent of the Fund on the payment date, or (ii)
authorizing the declaration of dividends and distributions on a daily basis or
some other periodic basis and authorizing the Custodian to rely on Oral
Instructions, Written Instructions or a Certificate setting forth the date of
the declaration of such dividend or distribution, the date of payment thereof,
the record date as of which shareholders entitled to payment shall be
determined, the amount payable per share to the shareholders of record as of
that date and the total amount payable to the Dividend Agent on the payment
date.
2. Upon the payment date specified in such resolution, Oral
Instructions, Written Instructions or Certificate, the Custodian shall pay out
the moneys held for the account of the Fund the total amount payable to the
Dividend Agent of the Fund.
ARTICLE IX
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any of its Shares, it shall
deliver to the Custodian a Certificate duly specifying the number of Shares
sold, trade date, price and the amount of money to be received by the Custodian
for the sale of such Shares.
2. Upon receipt of such money from the Transfer Agent or a
co-transfer agent, the Custodian shall credit such money to the account of the
Fund.
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<PAGE> 10
3. Upon issuance of any of the Fund's Shares in accordance with
the foregoing provisions of this Article IX, the Custodian shall pay, out of
the money held for the account of the Fund, all original issue or other taxes
required to be paid by the Fund in connection with such issuance upon the
receipt of a Certificate specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund shall redeem
any of its Shares, it shall furnish the Custodian with a Certificate specifying
the number of Shares redeemed and the amount to be paid for the Shares
redeemed.
5. Upon receipt from the Transfer Agent or co-transfer agent of
an advice setting forth the number of Shares received by the Transfer Agent or
co-transfer agent for redemption, and that such Shares are valid and in good
form for redemption, the Custodian shall make payment to the Transfer Agent or
co-transfer agent, as the case may be, out of the moneys held for the account
of the Fund of the total amount specified in the Certificate issued pursuant to
paragraph 4 of this Article IX.
6. Notwithstanding the above provisions regarding the redemption
of any of the Fund's Shares, whenever its Shares are redeemed pursuant to any
check redemption privilege which may from time to time be offered by the Fund,
the Custodian, unless otherwise instructed by a Certificate, shall, upon
receipt of an advice from the Fund or its agent setting forth that the
redemption is in good form for redemption in accordance with the check
redemption procedure, honor the check presented as part of such check
redemption privilege out of the money held in the account of the Fund for such
purposes.
ARTICLE X
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian should in its sole discretion advance funds
on behalf of the Fund which results in an overdraft because the moneys held by
the Custodian for the account of the Fund shall be insufficient to pay the
total amount payable upon a purchase of Securities as set forth in a
Certificate or Oral Instructions issued pursuant to Article IV, or which
results in an overdraft for some other reason, or if the Fund is, for any other
reason, indebted to the Custodian (except a borrowing for investment or for
temporary or emergency purposes using Securities as collateral pursuant to a
separate agreement and subject to the provisions of paragraph 2 of this Article
X), such overdraft or indebtedness shall be deemed to be a loan made by the
Custodian to the Fund payable on demand and shall bear interest from the date
incurred at a rate per annum (based on a 360-day year for the actual number of
days involved) equal to 1/2% over the Custodian's prime commercial lending rate
in effect from time to time, such rate to be adjusted on the effective date of
any change in such prime commercial lending rate but in no event to be less
than 6% per annum. Any such overdraft or indebtedness shall be reduced by an
amount equal to the total of all amounts due the Fund which have not been
collected by the Custodian on behalf of the Fund when due because of the
failure of the Custodian to make timely demand or presentment for payment. In
addition, the Company on behalf of the Fund hereby agrees that the Custodian
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<PAGE> 11
shall have a continuing lien and security interest in and to any property at
any time held by it for the benefit of the Fund or in which the Fund may have
an interest which is then in the Custodian's possession or control or in
possession or control of any third party acting on the Custodian's behalf. The
Company authorizes the Custodian, in its sole discretion, at any time to charge
any such overdraft or indebtedness together with interest due thereon against
any balance of account standing to the Fund's credit on the Custodian's books.
2. The Fund will cause to be delivered to the Custodian by any
bank (including, if the borrowing is pursuant to a separate agreement, the
Custodian) from which it borrows money for investment or for temporary or
emergency purposes using Securities as collateral for such borrowings, a notice
or undertaking in the form currently employed by any such bank setting forth
the amount which such bank will loan to the Fund against delivery of a stated
amount of collateral. The Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to each such borrowing: (a) the name of
the bank; (b) the amount and terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory note, duly endorsed by the
Fund, or other loan agreement; (c) the time and date, if known, on which the
loan is to be entered into; (d) the date on which the loan becomes due and
payable; (e) the total amount payable to the Fund on the borrowing date; (f)
the market value of Securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of shares or the
principal of any particular Securities; and (g) a statement specifying whether
such loan is for investment purposes or for temporary or emergency purposes and
that such loan is in conformance with the Investment Company Act of 1940 and
the Fund's prospectus. The Custodian shall deliver on the borrowing date
specified in a Certificate the specified collateral and the executed promissory
note, if any, against delivery by the lending bank of the total amount of the
loan payable, provided that the same conforms to the total amounts payable as
set forth in the Certificate. The Custodian may, at the option of the lending
bank, keep such collateral in its possession, but such collateral shall be
subject to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Custodian shall deliver such Securities
as additional collateral as may be specified in a Certificate to collateralize
further any transaction described in this paragraph. The Fund shall cause all
Securities released from collateral status to be returned directly to the
Custodian, and the Custodian shall receive from time to time such return of
collateral as may be tendered to it. In the event that the Fund fails to
specify in a Certificate the name of the issuer, the title and number of shares
or the principal amount of any particular Securities to be delivered as
collateral by the Custodian, the Custodian shall not be under any obligation to
deliver any Securities.
ARTICLE XI
LOANS OF PORTFOLIO SECURITIES OF THE FUND
1. If the Fund is permitted by the terms of the Company's
Articles of Incorporation and as disclosed in the Fund's most recent and
currently effective prospectus to lend its portfolio Securities, within
twenty-four (24) hours after each loan of portfolio Securities the Fund shall
deliver or cause to be delivered to the Custodian a Certificate specifying with
respect to each such loan; (a) the name of the issuer and the title of the
Securities; (b) the number of shares or the
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<PAGE> 12
principal amount loaned; (c) the date of loan and delivery; (d) the total
amount to be delivered to the Custodian against the loan of the Securities,
including the amount of cash collateral and the premium, if any, separately
identified; and (e) the name of the broker, dealer or financial institution to
which the loan was made. The Custodian shall deliver the Securities thus
designated to the broker, dealer or financial institution to which the loan was
made upon receipt of the total amount designated as to be delivered against the
loan of Securities. The Custodian may accept payment in connection with a
delivery otherwise than through the Book-Entry System or Depository only in the
form of a certified or bank cashier's check payable to the order of the Fund or
the Custodian drawn on New York Clearing House funds and may deliver Securities
in accordance with the customs prevailing among dealers in securities.
2. Promptly after each termination of the loan of Securities by
the Fund, it shall deliver or cause to be delivered to the Custodian a
Certificate specifying with respect to each such loan termination and return of
Securities: (a) the name of the issuer and the title of the Securities to be
returned; (b) the number of shares or the principal amount to be returned; (c)
the date of termination; (d) the total amount to be delivered by the Custodian
(including the cash collateral for such Securities minus any offsetting credits
as described in said Certificate); and (e) the name of the broker, dealer or
financial institution from which the Securities will be returned. The
Custodian shall receive all Securities returned from the broker, dealer, or
financial institution to which such Securities were loaned and upon receipt
thereof shall pay, out of the moneys held for the account of the Fund, the
total amount payable upon such return of Securities as set forth in the
Certificate.
ARTICLE XII
THE CUSTODIAN
1. Except as hereinafter provided, neither the Custodian nor its
nominee shall be liable for any loss or damage, including attorney's fees,
resulting from its action or omission to act or otherwise, either hereunder or
under any Margin Account Agreement, except for any such loss or damage arising
out of its own negligence or willful misconduct. The Custodian may, with
respect to questions of law arising hereunder or under any Margin Account
Agreement, apply for and obtain the advice and opinion of counsel to the Fund
or of its own counsel, at the expense of the Fund, and shall be fully protected
with respect to anything done or omitted by it in good faith in conformity with
such advice or opinion. The Custodian shall be liable to the Fund for any loss
or damage resulting from the use of the Book-Entry System or any Depository
arising by reason of any negligence, misfeasance or willful misconduct on the
part of the Custodian or any of its employees or agents.
2. Without limiting the generality of the foregoing, the
Custodian shall be under no obligation to inquire into, and shall not be liable
for:
(a) The validity of the issue of any Securities purchased, sold
or written by or for the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received thereof;
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<PAGE> 13
(b) The legality of the issue or sale of any of the Fund's
Shares, or the sufficiency of the amount to be received therefor;
(c) The legality of the redemption of any of the Fund's Shares,
or the propriety of the amount to be paid therefor;
(d) The legality of the declaration or payment of any dividend by
the Fund;
(e) The legality of any borrowing by the Fund using Securities as
collateral;
(f) The legality of any loan of portfolio Securities pursuant to
Article XI of this Agreement, nor shall the Custodian be under any duty or
obligation to see to it that any cash collateral delivered to it by a broker,
dealer or financial institution or held by it at any time as a result of such
loan of portfolio Securities of the Fund is adequate collateral for the Fund
against any loss it might sustain as a result of such loan. The Custodian
specifically, but not by way of limitation, shall not be under any duty or
obligation periodically to check or notify the Fund that the amount of such
cash collateral held by it for the Fund is sufficient collateral for the Fund,
but such duty or obligation shall be the sole responsibility of the Fund. In
addition, the Custodian shall be under no duty or obligation to see that any
broker, dealer or financial institution to which portfolio Securities of the
Fund are lent pursuant to Article XI of this Agreement makes payment to it of
any dividends or interest which are payable to or for the account of the Fund
during the period of such loan or at the termination of such loan, provided,
however, that the Custodian shall promptly notify the Fund in the event that
such dividends or interest are not paid and received when due; or
(g) The sufficiency or value of any amounts of money and/or
Securities held in any Margin Account, Segregated Security Account or
Collateral Account in connection with transactions by the Fund. In addition,
the Custodian shall be under no duty or obligation to see that any broker,
dealer, or Clearing Member makes payment to the Fund of any variation margin
payment or similar payment which the Fund may be entitled to receive from such
broker, dealer, or Clearing Member, to see that any payment received by the
Custodian from any broker, dealer, or Clearing Member is the amount the Fund is
entitled to receive, or to notify the Fund of the Custodian's receipt or
non-receipt of any such payment; provided however that the Custodian, upon the
Fund's written request, shall as Custodian, demand from any broker, dealer, or
Clearing Member identified by the Fund the payment of any variation margin
payment or similar payment that the Fund asserts it is entitled to receive
pursuant to the terms of a Margin Account Agreement or otherwise from such
broker, dealer, or Clearing Member.
3. The Custodian shall not be liable for, or considered to be the
Custodian of, any money, whether or not represented by any check, draft or
other instrument for the payment of money, received by it on behalf of the Fund
until the Custodian actually receives and collects such money directly or by
the final crediting of the account representing the Fund's interest at the
Book-Entry System or the Depository.
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4. The Custodian shall have no responsibility and shall not be
liable for ascertaining or acting upon any calls, conversions, exchanges,
offers, tenders, interest rate changes or similar matters relating to
Securities held in the Depository unless the Custodian shall have actually
received timely notice from the Depository. In no event shall the Custodian
have any responsibility or liability for the failure of the Depository to
collect, or for the late collection or late crediting by the Depository of any
amount payable upon Securities deposited in the Depository which may mature or
be redeemed, retired, called or otherwise become payable. However, upon
receipt of a Certificate from the Fund of an overdue amount on Securities held
in the Depository, the Custodian shall make a claim against the Depository on
behalf of the Fund, except that the Custodian shall not be under any obligation
to appear in, prosecute or defend any action, suit or proceeding in respect to
any Securities held by the Depository which in its opinion may involve it in
expense or liability, unless indemnity satisfactory to it against all expense
and liability be furnished as often as may be required.
5. The Custodian shall not be under any duty or obligation to
take action to effect collection of any amount due to the Fund from the
Transfer Agent of the Fund nor to take any action to effect payment or
distribution by the Transfer Agent of the Fund of any amount paid by the
Custodian to the Transfer Agent of the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or obligation to
take action to effect collection of any amount, if the Securities upon which
such amount is payable are in default, or if payment is refused after due
demand or presentation, unless and until (i) it shall be directed to take such
action by a Certificate and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any such action.
7. The Custodian may appoint one or more banking institutions as
Depository or Depositories or as sub- custodian(s), including, but not limited
to, banking institutions located in foreign countries, of Securities and moneys
at any time owned by the Fund, upon terms and conditions approved in a
Certificate, which shall, if requested by the Custodian, be accompanied by an
approving resolution of the Company's Board of Directors adopted in accordance
with Rule 17f-5 under the Investment Company Act of 1940, as amended.
8. The Custodian shall not be under any duty or obligation to
ascertain whether any Securities at any time delivered to or held by it for the
account of the Fund are such as properly may be held by the Fund under the
provisions of its Articles of Incorporation.
9. The Custodian shall not be entitled to compensation for
providing custody services to the Fund so long as the Custodian or an affiliate
receives fees for providing agency services to the Fund. If the Custodian or
an affiliate no longer receives compensation for providing such services, the
Custodian shall be entitled to such reasonable fees as it may from time to time
negotiate with the Fund.
10. The Custodian shall be entitled to rely upon any Certificate,
notice or other instrument in writing received by the Custodian and reasonably
believed by the Custodian to be a Certificate. The Custodian shall be entitled
to rely upon any Oral Instructions and any Written
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<PAGE> 15
Instructions actually received by the Custodian pursuant to Article IV or VII
hereof. The Fund agrees to forward to the Custodian a Certificate or facsimile
thereof, confirming such Oral Instructions or Written Instructions in such
manner so that such Certificate or facsimile thereof is received by the
Custodian, whether by hand delivery, telex or otherwise, by the close of
business of the same day that such Oral Instructions or Written Instructions
are given to the Custodian. The Fund agrees that the fact that such confirming
instructions are not received by the Custodian shall in no way affect the
validity of the transactions hereby authorized by the Fund. The Fund agrees
that the Custodian shall incur no liability to the Fund in acting upon Oral
Instructions given to the Custodian hereunder concerning such transactions,
provided such instructions reasonably appear to have been received from an
Authorized Person.
11. The Custodian shall be entitled to rely upon any instrument,
instruction or notice received by the Custodian and reasonably believed by the
Custodian to be given in accordance with the terms and conditions of any Margin
Account Agreement. Without limiting the generality of the foregoing, the
Custodian shall be under no duty to inquire into, and shall not be liable for,
the accuracy of any statements or representations contained in any such
instrument or other notice including, without limitation, any specification of
any amount to be paid to a broker, dealer, or Clearing Member.
12. The books and records pertaining to the Fund which are in the
possession of the Custodian shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the Investment Company
Act of 1940, as amended, and other applicable securities laws, rules and
regulations. The Fund, or the Fund's authorized representative(s), shall have
access to such books and records during the Custodian's normal business hours.
Upon the reasonable request of the Fund, copies of any such books and records
shall be provided by the Custodian to the Fund or the Fund's authorized
representative(s) at the Fund's expense.
13. The Custodian shall provide the Company with any report
obtained by the Custodian on the system of internal accounting control of the
Book-Entry System or the Depository and with such reports on its own systems of
internal accounting control as the Company may reasonably request from time to
time.
14. The Fund agrees to indemnify the Custodian against and save
the Custodian harmless from all liability, claims, losses and demands
whatsoever, including attorney's fees, howsoever arising or incurred because of
or in connection with the Custodian's payment or non-payment of checks pursuant
to paragraph 6 of Article IX as part of any check redemption privilege program
of the Fund, except for any such liability, claim, loss and demand arising out
of the Custodian's own negligence or willful misconduct.
15. Subject to the foregoing provisions of this Agreement, the
Custodian may deliver and receive Securities, and receipts with respect to such
Securities, and arrange for payments to be made and received by the Custodian
in accordance with the customs prevailing from time to time among brokers or
dealers in such Securities.
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<PAGE> 16
16. The Custodian shall have no duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set
forth in this Agreement or Appendix D attached hereto, and no covenant or
obligation shall be implied in this Agreement against the Custodian.
ARTICLE XIII
TERMINATION
1. This Agreement shall continue until December __, 1996, and
thereafter shall continue automatically for successive annual periods ending on
the last day of December of each year, provided such continuance is
specifically approved at least annually by (i) the Company's Directors or (ii)
vote of a majority (as defined in the Investment Company Act of 1940) of the
Fund's outstanding voting securities, provided that in either event its
continuance also is approved by a majority of the Company's Directors who are
not "interested persons" (as defined in said Act) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. This Agreement is terminable without penalty, on sixty (60)
days' notice, by the Company's Directors or, by vote of holders of a majority
of the Fund's Shares or, upon not less than ninety (90) days' notice, by the
Custodian. In the event such notice is given by the Fund, it shall be
accompanied by a copy of a resolution of the Directors of the Company on behalf
of the Fund, certified by the Secretary or any Assistant Secretary, electing to
terminate this Agreement and designating a successor custodian or custodians,
each of which shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. In the event such notice is
given by the Custodian, the Fund shall, on or before the termination date,
deliver to the Custodian a copy of a resolution of the Directors, certified by
the Secretary or any Assistant Secretary, designating a successor custodian or
custodians. In the absence of such designation by the Fund, the Custodian may
designate a successor custodian which shall be a bank or trust company having
not less than $2,000,000 aggregate capital, surplus and undivided profits.
Upon the date set forth in such notice, this Agreement shall terminate and the
Custodian shall, upon receipt of a notice of acceptance by the successor
custodian, on that date deliver directly to the successor custodian all
Securities and moneys then owned by the Fund and held by it as Custodian, after
deducting all fees, expenses, and other amounts for the payment of
reimbursement of which shall then be entitled.
2. If a successor custodian is not designated by the Company on
behalf of the Fund or the Custodian in accordance with the preceding paragraph,
the Fund shall, upon the date specified in the notice of termination of this
Agreement and upon the delivery by the Custodian of all Securities (other than
Securities held in the Book-Entry System which cannot be delivered to the Fund)
and moneys then owned by the Fund, be deemed to be its own custodian, and the
Custodian shall thereby be relieved of all duties and responsibilities pursuant
to this Agreement, other than the duty with respect to Securities held in the
Book-Entry System, in any Depository or by a Clearing Member which cannot be
delivered to the Fund, to hold such Securities hereunder in accordance with
this Agreement.
16
<PAGE> 17
ARTICLE XIV
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate signed by two of
the present Officers of the Company under its seal, setting forth the names and
the signatures of the present Authorized Persons. The Company agrees to
furnish to the Custodian a new Certificate in similar form in the event that
any such present Authorized Person ceases to be an Authorized Person or in the
event that other or additional Authorized Persons are elected or appointed.
Until such new Certificate shall be received, the Custodian shall be fully
protected in acting under the provisions of this Agreement upon Oral
Instructions or signatures of the present Authorized Persons as set forth in
the last delivered Certificate.
2. Annexed hereto as Appendix B is a Certificate signed by two of
the present Officers of the Company under its seal, setting forth the names and
the signatures of the present Officers of the Company. The Fund agrees to
furnish to the Custodian a new Certificate in similar form in the event any
such present Officer ceases to be an Officer of the Company, or in the event
that other or additional Officers are elected or appointed. Until such new
Certificate shall be received, the Custodian shall be fully be protected in
acting under the provisions of this Agreement upon the signatures of the
Officers as set forth in the last delivered Certificate.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian, shall be deemed
sufficiently given if addressed to the Custodian and mailed or delivered to it
at its offices at 420 Montgomery Street, San Francisco, California, 94105, or
at such other place as the Custodian may from time to time designate in
writing.
4. Any notice or other instrument in writing, authorized or
required by this Agreement to be given by or on behalf of the Fund, shall be
deemed sufficiently given if addressed to the Fund and mailed or delivered to
it at its office at 111 Center Street, Little Rock, Arkansas, 72201, or at such
other place as the Fund may from time to time designate in writing.
5. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties to this Agreement and
approved by a resolution of the Directors of the Company.
6. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successor(s) and assign(s); provided,
however, that this Agreement shall not be assignable by the Company without the
written consent of the Custodian, or by the Custodian without the written
consent of the Company, authorized or approved by a resolution of its
Directors.
7. This Agreement shall be construed in accordance with the laws
of the State of California.
8. This Agreement may be executed in any number of counterparts,
each which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
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<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective Officers, thereunto duly authorized, as of
the day and year first above written.
STAGECOACH FUNDS, INC. WELLS FARGO BANK, N.A.
By: _______________________ By: ____________________________
Name: _____________________ Name: __________________________
Title: ______________________ Title: _________________________
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<PAGE> 19
AUTHORIZED PERSONS
Pursuant to Article I, Para. 1, and Article XIV, Para. 1,
of the Custody Agreement, the following persons have been authorized by the
Board of Directors to give Oral Instructions and Written Instructions on behalf
of the Fund.
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
By: ________________________
Name: ______________________
Title: _____________________
-A-
<PAGE> 20
APPENDIX B
OFFICERS
Pursuant to Article I, Para. 8, and Article XIV, Para.
2, of the Custody Agreement, the term "Officers" does not include any persons
other than the President, Vice President, Secretary, Treasurer, Controller,
Assistant Secretary and Assistant Treasurer; and the following persons are
Officers of the Company authorized by the Board of Directors to execute any
Certificate, instruction, notice or other instrument on behalf of the Fund.
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
Signature: ____________________________
Name: _________________________________
By: ___________________________________ By: __________________________
Name: _________________________________ Name: ________________________
Title: ______________________________ Title: _______________________
-B-
<PAGE> 21
APPENDIX C
DESIGNATED PUBLICATIONS LIST FOR CALLED INSTRUMENTS
The following publications are designated publications for the
purposes of Article III, Para. 5(b):
A. The Bond Buyer
B. The Depository Trust Company Notices
C. Financial Daily Card Services
D. The New York Times
E. Standard & Poor's Called Bond Record
F. The Wall Street Journal
-C-
<PAGE> 22
APPENDIX D
COMPANY AND FUND ACCOUNTING SERVICES:
SCHEDULE OF SERVICES
A. Maintain Fund general ledger and journal.
B. Prepare and record disbursements for direct Fund expenses.
C. Prepare daily money transfers.
D. Reconcile all Fund bank and custodian accounts.
E. Assist Fund independent auditors as appropriate.
F. Prepare daily projection of available cash balances.
G. Record trading activity for purposes of determining net asset values and
daily dividend.
H. Prepare daily portfolio evaluation report to value portfolio Securities
and determine daily accrued income.
I. Determine the daily net asset value per share.
J. Determine the daily dividend per share.
K. Prepare monthly, quarterly, semi-annual and annual financial statements.
L. Provide financial information for reports to the Securities and Exchange
Commission in compliance with the provisions of the Investment Company
Act of 1940 and the Securities Act of 1933, the Internal Revenue Service
and any other regulatory or governmental agencies as required.
M. Provide financial, yield, net asset value, etc., information to National
Association of Securities Dealers, Inc., and other survey and statistical
agencies as instructed from time to time by the Fund.
-D-
<PAGE> 1
EX-99.B9(a)(iii)
FORM OF
AGENCY AGREEMENT
This agreement is made and entered into as of this ___ day of December, 1995
(the "Agreement"), by and between Stagecoach Funds, Inc., a registered
diversified management investment company incorporated in the State of Maryland
(the "Company"), and Wells Fargo Bank, N.A., national association ("Agent"),
for transfer agency and dividend disbursing as follows:
I. SERVICES.
A. Appointment of Agent. The Company hereby appoints Agent as
its transfer and dividend disbursing agent for the Aggressive Growth Fund (the
"Fund") and Agent accepts such appointment.
B. Description of Services. As consideration for the
compensation hereinafter described in Section I (C), Agent agrees to provide
the Fund with the facilities and services described and set forth on Schedule A
attached hereto and incorporated herein by reference.
C. Compensation. As consideration for the services described
in Section I (B), above, the Company shall pay to Agent a fee of _______% of
the average daily net assets of the Fund.
II. EXPENSES. The Company, on behalf of the Fund, shall promptly
reimburse Agent for all reasonable out-of- pocket expenses incurred by Agent in
connection with the performance of services under this Agreement, including,
without limitation, the following:
A. Postage, including first class mail insurance in connection
with mailing share certificates, express delivery, etc.;
B. Envelopes, check forms, continuous forms, forms for reports
and statements, stationary and other similar supplies;
C. Fees and costs of outside legal counsel employed by Agent;
D. Banking services, fees, and costs for wire transfers,
deposit accounts, etc.
E. Expenses of fidelity and liability insurance and bonding;
F. Fees and costs relating to the use, licensing, development
or implementation of data processing software used by or for the Fund;
G. Data transmission expenses;
H. Costs and microfilm/microfiche; and
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<PAGE> 2
I. Costs for telephone lines and equipment.
III. TERM. This Agreement shall become effective as of the date first
above written and shall continue until terminated pursuant to its provisions.
IV. INSURANCE. Agent agrees to procure and maintain such fidelity
bond coverage as may be required by the Investment Company Act of 1940 (the
"1940 Act"), in the amounts and with such deductibles as are required by or
permitted under the 1940 Act, as it may be amended from time to time.
V. REGISTRATION AND COMPLIANCE.
A. Agent represents that it is registered as a transfer agent
with the Securities and Exchange Commission ("SEC") pursuant to Section 17A of
the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations promulgated thereunder, and Agent agrees to maintain said
registration current and comply with all of the requirements of the Exchange
Act, rules and regulations during the term of this Agreement.
B. The Company represents that it is a diversified management
investment company registered with the SEC in accordance with the 1940 Act and
the rules and regulations promulgated thereunder. The Company is authorized to
offer and sell its shares pursuant to the 1940 Act, the Securities Act of 1933,
as amended ("1933 Act") and the rules and regulations promulgated thereunder.
The Company will furnish Agent with a list of those jurisdictions in the United
States and elsewhere in which it is authorized to offer and sell its shares to
the general public and will maintain the currency of such list by amendment.
The Company agrees promptly to advise Agent of any change in or limitation upon
its authority to carry on business as an investment company pursuant to the
1940 Act, the Exchange Act and the 1933 Act and the statutes, rules and
regulations of each and every jurisdiction to which it is subject.
VI. DOCUMENTATION. The Company and Agent shall each supply to the
other upon request such documentation as is required by them to carry out their
respective obligations under this Agreement including, but not limited to,
articles of incorporation, bylaws, codes of ethics, registration statements,
permits, financial reports, third party audits, certificates of authority,
computer tapes and related items.
VII. PROPRIETARY INFORMATION. It is agreed that all records and
documents, excepting computer data processing programs and any related
documentation used or prepared by, or on behalf of Agent for the performance of
its services hereunder, are the property of the Company and shall be open to
audit or inspection by the Company or its agents during the normal business
hours of Agent, shall be maintained in a manner designed to preserve the
confidentiality thereof and to comply with applicable federal and state laws
and regulations, and shall, in whole or any specified part, be surrendered to
the Company or its duly authorized agents upon receipt by Agent of reasonable
notice of and request therefor.
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<PAGE> 3
VIII. INDEMNITY. The Company, on behalf the Fund, shall indemnify and
hold Agent harmless against any losses, claims, damages, liabilities or
expenses (including reasonable attorney's fees and expenses) resulting from any
claim, demand, action or suit brought by any person other than the Company
(including a shareholder naming the Company as a party) and not resulting from
Agent's bad faith, willful misfeasance, reckless disregard of its obligations
and duties, gross negligence or breach of this Agreement, and arising out of,
or in connection with:
A. Agent's performance hereunder;
B. Any error or omission in any record (including but not
limited to magnetic tapes, computer printouts, hard copies and microfilm or
microfiche copies) delivered, or caused to be delivered, by the Company to
Agent in connection with this Agreement;
C. Bad faith, willful misfeasance, reckless disregard of its
obligations and duties or negligence of the Company, or Agent's acting upon any
instructions reasonably believed by it to have been properly executed or
communicated by any person duly authorized by the Company;
D. Agent's acting in reliance upon advice given by counsel for
Agent or upon advice reasonably believed by it to have been given by counsel
for the Company; or
E. Agent's acting in reliance upon any instrument reasonably
believed by it to have been genuine and signed, countersigned or executed by
the proper person(s) in accordance with the currently effective certificate(s)
of authority delivered to Agent by the Company.
In the event that Agent requests the Company to indemnify
or hold it harmless hereunder, agent shall use its best efforts to inform the
Company of the relevant facts concerning the matter in question. Agent shall
use reasonable care to identify and promptly notify the Company concerning any
matter which presents, or appears likely to present, a claim for
indemnification against the Company or the Fund.
The Company shall have the election of defending Agent
against any claim which may be the subject of indemnification hereunder. In
the event the Company so elects, it will so notify Agent and thereupon the
Company shall take over defense of the claim, and (if so requested by the
Company) Agent shall incur no further legal limit or other expenses related
thereto for which it would be entitled to indemnity hereunder; provided,
however, that nothing herein contained shall prevent Agent from retaining, at
its own expense, counsel to defend any claim. Except with the Company's prior
consent, Agent shall in no event confess any claim or make any compromise in
any matter in which the Company will be asked to indemnify or hold harmless
hereunder.
IX. LIABILITY
A. Damages. Agent shall not be liable to the Company, or any
third party, for punitive, exemplary, indirect, special or consequential
damages (even if Agent has been advised of the possibility of such damages)
arising from its obligations and the services provided under this
3
<PAGE> 4
Agreement, including but not limited to loss of profits, loss of use of the
shareholder accounting system, cost of capital and expenses of substitute
facilities, programs or services.
B. Force Majeure. Anything in this Agreement to the contrary
notwithstanding, Agent shall not be liable for delays or errors occurring by
reason of circumstances beyond its control, including but not limited to acts
or civil or military authority, national emergencies, work stoppage, fire,
flood, catastrophe, earthquake, acts of God, insurrection, war, riot, data
processing and communications downtime (where such downtime occurs for reasons
other than Agent's gross negligence or willful misconduct) or interruption of
power supply.
X. AMENDMENT. This Agreement and the Schedules attached hereto and
made a part hereof may be amended at any time, with or without shareholder
approval (except as otherwise required by law), in writing signed by each of
the parties hereto. Any change in the Company's registration statements or
other documents of compliance or in the forms relating to any plan, program or
service offered by its current prospectus which would require a change in
Agent's obligations hereunder shall be subject to Agent's approval, which
approval shall not be unreasonably withheld.
XI. TERMINATION. This Agreement may be terminated by either party
without cause upon one hundred twenty (120) days prior written notice to the
other, and at any time for cause in the event that such cause remains
unremedied for more than thirty (30) days after receipt by the other party of
written specification of such cause.
In the event the Company designates a successor to any of Agent's
obligations hereunder, Agent shall, at the expense and pursuant to the
direction of the Company, transfer promptly to such successor all relevant
books, records and other data of the Company in the possession or under the
control of Agent.
XII. SEVERABILITY. If any clause or provision of this Agreement is
determined to be illegal, invalid or unenforceable under present or future laws
effective during the term hereof, then such clause or provision shall be
considered severed herefrom and the remainder of this Agreement shall continue
in full force and effect.
XIII. APPLICABLE LAW. This Agreement shall be subject to and construed
in accordance with the laws of the State of California.
XIV. ENTIRE AGREEMENT. Except as otherwise provided herein, this
Agreement constitutes the entire and complete agreement of the parties hereto
relating to the subject matter hereof and supersedes and merges all prior
contracts and discussions between the parties.
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<PAGE> 5
XV. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same Agreement and
each of which shall be deemed an original.
STAGECOACH FUNDS, INC. WELLS FARGO BANK, N.A.
By: _______________________ By: _________________________
Name: _____________________ Name: _______________________
Title: ____________________ Title: ______________________
5
<PAGE> 6
SCHEDULE A
SCHEDULE OF SERVICES
1. Share Transfer and Dividend Disbursing Services
A. Maintaining shareholder accounts, including processing of new
accounts.
B. Posting address changes and other file maintenance for
shareholder accounts.
C. Posting all transactions to the shareholder file, including:
- Direct purchase
- Wire order purchases
- Direct redemptions
- Telephone redemption
- Wire order redemption
- Direct exchanges
- Dividend payments
- Dividend reinvestments
- Telephone exchanges
- Transfers
D. Preparing daily reconciliations of shareholder processing to
money movement instructions.
E. Issuing all checks and stopping and replacing checks.
F. Mailing confirmations and checks
G. Performing certain of the Fund's other mailings, including:
- Dividend and capital gain distributions
- 1099/year-end shareholder reporting
- Daily confirmations
- Furnish certified list of shareholders (hard copy
of microfilm)
H. Maintaining and retrieving all required past history for
shareholders and provide research capabilities as follows:
- Daily monitoring of all processing activity to
verify back-up documentation
- Providing exception reports
- Microfilming
- Storing, retrieving and
archiving records in accordance with Rules 31a-1,
31a-2, and 31a-3 under the 1940 Act.
I. Reporting and remitting as necessary for state escheat
requirements.
<PAGE> 1
EX-99.B9(b)(xiii)
FORM OF
SHAREHOLDER SERVICING AGREEMENT
(Class B Shares)
THIS SHAREHOLDER SERVICING AGREEMENT ("Agreement"), dated as of
December __, 1995, is made by and between Stagecoach Funds, Inc. ("Company"), a
Maryland corporation having its principal place of business at 111 Center
Street, Little Rock, Arkansas 72201, on behalf of the Aggressive Growth Fund
("Fund"), and Wells Fargo Bank, N.A., 525 Market Street, Suite 1900, San
Francisco, California 94163, as shareholder servicing agent hereunder
("Shareholder Servicing Agent");
W I T N E S S E T H:
WHEREAS, Class B shares of common stock (.001 par value) of the
Fund (hereinafter "Class B Shares") may be purchased or redeemed through a
broker/dealer or financial institution which has entered into a shareholder
servicing agreement with the Company on behalf of the Fund; and
WHEREAS, the Shareholder Servicing Agent wishes to facilitate
purchases and redemptions of Class B Shares by its customers (the "Customers")
and wishes to act as the Customers' agent in performing certain administrative
functions in connection with transactions in Class B Shares from time to time
for the account of the Customers and to provide related services to the
Customers in connection with their investments in the Fund; and
WHEREAS, it is in the best interest of the Fund to make the
services of the Shareholder Servicing Agent available to the Customers who,
from time to time, become shareholders of the Fund;
NOW THEREFORE, the Company, on behalf of the Fund, and the
Shareholder Servicing Agent hereby agree as follows:
1. Appointment. The Shareholder Servicing Agent hereby agrees
to perform certain services for Customers as hereinafter set forth. The
Shareholder Servicing Agent's appointment hereunder is not exclusive, and the
Shareholder Servicing Agent shall not be entitled to notice of or a right to
consent to the execution of a shareholder servicing agreement with any other
person.
2. Services to Be Performed.
2.1 Types of Services. The Shareholder Servicing Agent
shall be responsible for performing shareholder account administrative and
servicing functions, which shall include, without limitation:
<PAGE> 2
(a) answering Customer inquiries regarding
account status and history, the manner in
which purchases, exchanges and redemptions
of Class B Shares may be effected;
(b) assisting Customers in designating and
changing dividend options, account
designations and addresses;
(c) providing necessary personnel and facilities
to establish and maintain Customer accounts
and records;
(d) assisting in processing purchase, redemption
and exchange transactions;
(e) arranging for the wiring of money;
(f) transferring money in connection with
Customer orders to purchase or redeem shares;
(g) verifying and guaranteeing Customer
signatures in connection with redemption and
exchange orders and transfers and changes in
Customer accounts with banks which are
designated in a Fund Account Application and
which are approved by the Fund's Transfer
Agent;
(h) furnishing (either separately or on an
integrated basis with other reports sent to a
Customer by the Shareholder Servicing Agent)
monthly and year-end statements and
confirmations of purchases, redemptions and
exchanges;
(i) furnishing, on behalf of the Class B Shares
of the Fund, proxy statements, annual reports,
updated prospectuses and other communications
to Customers;
(j) receiving, tabulating and sending to the Fund
proxies executed by Customers; and
(k) providing such other related services, and
necessary personnel and facilities to
provide all of the shareholder services
contemplated hereby, in each case, as the
Company or a Customer may reasonably request.
2.2 Standard of Services. All services to be rendered
by the Shareholder Servicing Agent hereunder shall be performed in a
professional, competent and timely manner. Any detailed operating standards
and procedures to be followed by the Shareholder Servicing Agent in performing
the services described above shall be determined from time to time by
2
<PAGE> 3
agreement between the Shareholder Servicing Agent and the Company. The Company
acknowledges that the Shareholder Servicing Agent's ability to perform on a
timely basis certain of its obligations under this Agreement depends upon the
Fund's timely delivery of certain materials and/or information to the
Shareholder Servicing Agent. The Company agrees to use its best efforts to
provide, or cause to be provided, such materials to the Shareholder Servicing
Agent in a timely manner.
2.3 Investments through Distributor. The Company and
the Shareholder Servicing Agent hereby agree that all purchases of Class B
Shares effected by the Shareholder Servicing Agent on behalf of its Customers
shall be effected by it through Stephens Inc. ("Distributor") in its capacity
as the Fund's principal underwriter.
3. Fees.
3.1 Fees from the Fund. In consideration of the
services described in Section 2 hereof and the incurring of expenses in
connection therewith, the Shareholder Servicing Agent shall receive a fee to be
paid in arrears periodically or on a periodic basis to be agreed upon by the
Company and the Shareholder Servicing Agent from time to time (but in no event
less frequently than semi-annually) determined by a formula based upon the
number of accounts serviced by the Shareholder Servicing Agent during the
period for which payment is being made, the level of assets or activity in such
accounts during such period, and/or the expenses incurred by the Shareholder
Servicing Agent. In no event will such fees exceed 0.25%, on an annualized
basis, of the average daily net assets of the Fund represented by Class B
Shares owned of record by the Shareholder Servicing Agent on behalf of the
Customers during the period for which payment is being made. For purposes of
determining the fees payable to the Shareholder Servicing Agent hereunder, the
per share value of the Class B Shares' net assets shall be computed in the
manner specified in the Class B Shares' then- current prospectus.
Notwithstanding the foregoing, if applicable laws, regulations or rules impose
a maximum fee amount (a "cap") on Class B Shares with respect to shareholder
servicing fees and/or fees for distribution-related services, the amount
payable hereunder shall be reduced to an amount which, when considered in
conjunction with the fees payable by the Fund for the Class B Shares'
distribution-related activities, is the maximum amount payable to the
Shareholder Servicing Agent under applicable laws, regulations or rules. The
above fee constitutes all fees to be paid to the Shareholder Servicing Agent by
the Fund or the Company with respect to the shareholder services contemplated
hereby.
3.2 Fees from Customers. It is agreed that the
Shareholder Servicing Agent may impose certain conditions on Customers, subject
to the terms of the Fund's then-current prospectus, in addition to or different
from those imposed by the Fund, such as requiring a minimum initial investment
or the payment of additional fees directly by the Customer for additional
services offered by the Shareholder Servicing Agent to the Customer; provided,
however, that the Shareholder Servicing Agent may not charge customers any
direct fee which would constitute a "sales load" within the meaning of Section
2(a)(35) of the Investment Company Act of 1940, as amended (the "1940 Act").
The Shareholder Servicing Agent shall bill Customers directly for any such
additional fees. In the event the Shareholder Servicing Agent
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<PAGE> 4
charges Customers such additional fees, it shall notify the Company in advance
and make appropriate prior written disclosure (such disclosure to be in
accordance with all applicable laws) to Customers of any such additional fees
charged directly to the Customer. To the extent required by applicable rules
and regulations of the Securities and Exchange Commission, the Company shall
make written disclosure of the fees paid or to be paid by the Fund to the
Shareholder Servicing Agent pursuant to Section 3.1 of this Agreement. In no
event shall the Shareholder Servicing Agent have recourse or access, as
Shareholder Servicing Agent or otherwise, to the assets in the Customer's
account, except to the extent expressly authorized by law or by such Customer,
or to any assets of the Fund or the Company, for payment of any additional
direct fees referred to in this Section 3.2
4. Information Pertaining to the Shares. The Shareholder
Servicing Agent and its officers, employees and agents are not authorized to
make any representations concerning the Company, the Fund or Class B Shares to
Customers or prospective Customers, excepting only accurate communication of
any information provided by or on behalf of any administrator of the Company or
the Fund or any distributor of Class B Shares or information contained in the
Class B Shares' then-current prospectus. In furnishing such information
regarding the Company, the Fund or Class B Shares, the Shareholder Servicing
Agent shall act as agent for the Customer only and shall have no authority to
act as agent for the Company, the Fund or the Class B Shares. Advance copies
or proofs of all materials which are proposed to be circulated or disseminated
by the Shareholder Servicing Agent to Customers or prospective Customers and
which identify or describe the Company, the Fund or Class B Shares shall be
provided to the Company at least 10 days prior to such circulation or
dissemination (unless the Company consents in writing to a shorter period), and
such materials shall not be circulated or disseminated or further circulated or
disseminated at any time after the Company shall have given written notice to
the Shareholder Servicing Agent of any objection thereto.
Nothing in this Section 4 shall be construed to make the Company
liable for the use (as opposed to the accuracy) of any information about the
Company, the Fund or Class B Shares which is disseminated by the Shareholder
Servicing Agent.
5. Use of the Shareholder Servicing Agent's Name. The Company
shall not use the name of the Shareholder Servicing Agent, or any of its
affiliates or subsidiaries, in any prospectus, sales literature or other
materials relating to the Company, the Fund or Class B Shares in a manner not
approved by the Shareholder Servicing Agent prior thereto in writing; provided,
however, that the approval of the Shareholder Servicing Agent shall not be
required for any use of its name which merely refers in accurate and factual
terms to its appointment hereunder or which is required by the Securities and
Exchange Commission or any state securities authority or any other appropriate
regulatory, governmental or judicial authority; provided, further, that in no
event shall such approval be unreasonably withheld or delayed.
6. Use of the Name of the Fund or the Company. The
Shareholder Servicing Agent shall not use the name of the Fund, the Company or
Class B Shares on any checks, bank drafts, bank statements or forms for other
than internal use in a manner not approved by the Company prior thereto in
writing; provided, however, that the approval of the Company shall not
4
<PAGE> 5
be required for the use of the Company's name or the Fund's name in connection
with communications permitted by Section 4 hereof or (subject to Section 4, to
the extent the same may be applicable) for any use of the Company's name or the
Fund's name which merely identifies the Company or the Fund, as the case may be
in connection with the Shareholder Servicing Agent's role hereunder or which is
required by the Securities and Exchange Commission or any state securities
authority or any other appropriate regulatory, governmental or judicial
authority; provided, further, that in no event shall such approval be
unreasonably withheld or delayed.
7. Security. The Shareholder Servicing Agent represents and
warrants that to the best of its knowledge, the various procedures and systems
which it has implemented (including provision for twenty-four hours a day
restricted access) with regard to safeguarding from loss or damage attributable
to fire, theft or any other cause the Company's records and other data within
its possession or control and the Shareholder Servicing Agent's records, data,
equipment, facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes therein
from time to time as in its judgment are required for the secure performance of
its obligations hereunder. The parties shall review such systems and
procedures on a periodic basis, and the Company shall from time to time specify
the types of records and other data of the Company to be safeguarded in
accordance with this Section 7.
8. Compliance with Laws. The Shareholder Servicing Agent
shall comply with all applicable federal and state laws and regulations,
including securities laws. The Shareholder Servicing Agent represents and
warrants to the Company that the performance of all its obligations hereunder
will comply with all applicable laws and regulations, the provisions of its
charter documents and by-laws and all material contractual obligations binding
upon the Shareholder Servicing Agent. The Shareholder Servicing Agent
furthermore undertakes that it will promptly, after the Shareholder Servicing
Agent becomes so aware, inform the Company of any change in applicable laws or
regulations (or interpretations thereof) or in its charter or by-laws or
material contracts which would prevent or impair full performance of any of its
obligations hereunder.
9. Reports. To the extent requested by the Company from time
to time, but at least quarterly, the Shareholder Servicing Agent will provide
the Treasurer of the Company with a written report of the amounts expended by
the Shareholder Servicing Agent pursuant to this Agreement and the purposes for
which such expenditures were made. Such written reports shall be in a form
satisfactory to the Company and shall supply all information necessary for the
Company to discharge its responsibilities under applicable laws and
regulations. In addition, the Shareholder Servicing Agent shall have a duty to
furnish to the Company's Board of Directors such information as may reasonably
be necessary to an informed determination of whether this Agreement should be
implemented or continued pursuant to Section 16.
10. Record Keeping.
10.1 Section 31(a). The Shareholder Servicing Agent
shall maintain records in a form acceptable to the Company and in compliance
with applicable laws and the rules and regulations of the Securities and
Exchange Commission, including but not limited to the record-
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keeping requirements of Section 31(a) of the 1940 Act and the rules thereunder,
with respect to the services contemplated by this Agreement. Such records
shall be deemed to be the property of the Company and will be made available,
at the Company's request, for inspection and use by the Company,
representatives of the Company and governmental authorities. The Shareholder
Servicing Agent agrees that, for so long as it retains any records hereunder,
it will meet all reporting requirements pursuant to the 1940 Act and applicable
to the Shareholder Servicing Agent with respect to such records.
10.2 Rules 17a-3 and 17a-4. The Shareholder Servicing
Agent shall maintain accurate and complete records with respect to services
performed by the Shareholder Servicing Agent in connection with the purchase
and redemption of Class B Shares through the Distributor. Such records shall
be maintained in a form reasonably acceptable to the Company and in compliance
with the requirements of Rules 17a-3 and 17a-4 under the Securities Exchange
Act of 1934, as amended, pursuant to which any dealer of Class B Shares must
maintain certain records. All such records maintained by the Shareholder
Servicing Agent shall be the property of the Distributor and will be made
available for inspection and use by the Company or the Distributor upon the
request of either. The Shareholder Servicing Agent shall file with the
Securities and Exchange Commission and other appropriate governmental
authorities, and furnish to the Company and the Distributor copies of, all
reports and undertakings as may be reasonably requested by the Company or the
Distributor in order to comply with such rules. If so requested by the
Distributor, the Shareholder Servicing Agent shall confirm to the Distributor
its obligations under this Section 10.2 by a writing reasonably satisfactory to
the Distributor.
10.3 Identification, Etc. of Records. The Company shall
from time to time instruct the Shareholder Servicing Agent in writing as to,
and the Company and the Shareholder Servicing Agent shall periodically review,
the records to be maintained and the procedures to be followed by the
Shareholder Servicing Agent in complying with the foregoing Sections 10.1 and
10.2 and Section 8 to the extent it relates to record-keeping required under
federal securities laws and regulations. Notwithstanding the provisions of
Section 8, the Shareholder Servicing Agent shall be entitled to rely on such
instructions.
10.4 Transfer of Customer Data. In the event this
Agreement is terminated or a successor to the Shareholder Servicing Agent is
appointed, the Shareholder Servicing Agent shall, at the expense of the
Company, transfer to such successor as the Company may designate a certified
list of the beneficial owners of Class B Shares serviced by the Shareholder
Servicing Agent (with name, address and tax identification or Social Security
number), a complete record of the account of each such shareholder and the
status thereof, and all other relevant books, records, correspondence, and
other data established or maintained by the Shareholder Servicing Agent under
this Agreement. In the event this Agreement is terminated, the Shareholder
Servicing Agent will use its best efforts to cooperate in the orderly transfer
of such duties and responsibilities to the successor, including assistance in
the establishment of books, records and other data by the successor.
10.5 Survival of Record-Keeping Obligations. The
record-keeping obligations imposed in this Section 10 shall survive the
termination of this Agreement for the
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shorter of a period of six years or that minimum period required by applicable
rules or regulations of the Securities and Exchange Commission.
10.6 Obligations Pursuant to Agreement Only. Nothing in
this Section 10 shall be construed to mean that the Shareholder Servicing Agent
would, by virtue of its role hereunder, be required under applicable law to
maintain the records required to be maintained by it under this Section 10, but
it is understood that the Shareholder Servicing Agent has agreed to do so in
order to enable the Company and the Distributor to comply with laws and
regulations applicable to them.
10.7 Shareholder Servicing Agent's Rights to Copy
Records. Anything in this Section 10 to the contrary notwithstanding, except
to the extent otherwise prohibited by law, the Shareholder Servicing Agent
shall have the right to copy, maintain and use any records maintained by the
Shareholder Servicing Agent pursuant to this Section 10, except as otherwise
prohibited by Sections 4 and 6 hereof.
11. Force Majeure. The Shareholder Servicing Agent shall not
be liable or responsible for delays or errors by reason of circumstances beyond
its reasonable control, including, but not limited to, acts of civil or
military authority, national emergencies, labor difficulties, fire, mechanical
breakdown, flood or catastrophe, acts of God, insurrection, war, riots or
failure of communication systems or power supply.
12. Indemnification.
12.1 Indemnification of the Shareholder Servicing Agent.
The Company will indemnify and hold the Shareholder Servicing Agent harmless
from all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) from any claim, demand, action or suit
(collectively, "Claims") (a) arising in connection with misstatements or
omissions in the Fund's prospectus, actions or inactions by the Company or any
of its agents or contractors or the performance of the Shareholder Servicing
Agent's obligations hereunder and (b) not resulting from (i) the bad faith or
negligence of the Shareholder Servicing Agent, its officers, employees or
agents, or (ii) any breach of applicable law by the Shareholder Servicing
Agent, its officers, employees or agents, or (iii) any action of the
Shareholder Servicing Agent, its officers, employees or agents which exceeds
the legal authority of the Shareholder Servicing Agent or its authority
hereunder, or (iv) any error or omission of the Shareholder Servicing Agent,
its officers, employees or agents with respect to the purchase, redemption and
transfer of Customers' Class B Shares or the Shareholder Servicing Agent's
verification or guarantee of any Customer signature. Notwithstanding anything
herein to the contrary, the Company will indemnify and hold the Shareholder
Servicing Agent harmless from any and all losses, claims, damages, liabilities
or expenses (including reasonable counsel fees and expenses) resulting from any
Claim as a result of its acting in accordance with any written instructions
reasonably believed by the Shareholder Servicing Agent to have been executed by
any person duly authorized by the Company, or as a result of acting in reliance
upon any instrument or stock certificate reasonably believed by the Shareholder
Servicing Agent to have been genuine and signed, countersigned or executed by a
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<PAGE> 8
person duly authorized by the Company, excepting only the gross negligence or
bad faith of the Shareholder Servicing Agent.
In any case in which the Company may be asked to indemnify or hold
the Shareholder Servicing Agent harmless, the Company shall be advised of all
pertinent facts concerning the situation in question and the Shareholder
Servicing Agent shall use reasonable care to identify and notify the Company
promptly concerning any situation which presents or appears likely to present a
claim for indemnification against the Company. The Company shall have the
option to defend the Shareholder Servicing Agent against any Claim which may be
the subject of indemnification hereunder. In the event that the Company elects
to defend against such Claim, the defense shall be conducted by counsel chosen
by the Company and reasonably satisfactory to the Shareholder Servicing Agent.
The Shareholder Servicing Agent may retain additional counsel at its expense.
Except with the prior written consent of the Company, the Shareholder Servicing
Agent shall not confess any Claim or make any compromise in any case in which
the Company will be asked to indemnify the Shareholder Servicing Agent.
12.2 Indemnification of the Company. Without limiting
the rights of the Company under applicable law, the Shareholder Servicing Agent
will indemnify and hold the Company harmless from all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses) from
any Claim (a) resulting from (i) the bad faith or negligence of the Shareholder
Servicing Agent, its officers, employees or agents, or (ii) any breach of
applicable law by the Shareholder Servicing Agent, its officers, employees or
agents, or (iii) any action of the Shareholder Servicing Agent, its officers,
employees or agents which exceeds the legal authority of the Shareholder
Servicing Agent or its authority hereunder, or (iv) any error or omission of
the Shareholder Servicing Agent, its officers, employees or agents with respect
to the purchase, redemption and transfer of Customers' Class B Shares or the
Shareholder Servicing Agent's verification or guarantee of any Customer
signature, and (b) not resulting from the Shareholder Servicing Agent's actions
in accordance with written instructions reasonably believed by the Shareholder
Servicing Agent to have been executed by any person duly authorized by the
Company, or in reliance upon any instrument or stock certificate reasonably
believed by the Shareholder Servicing Agent to have been genuine and signed,
countersigned or executed by a person duly authorized by the Company.
In any case in which the Shareholder Servicing Agent may be asked
to indemnify or hold the Company harmless, the Shareholder Servicing Agent
shall be advised of all pertinent facts concerning the situation in question
and the Company shall use reasonable care to identify and notify the
Shareholder Servicing Agent promptly concerning any situation which presents or
appears likely to present a claim for indemnification against the Shareholder
Servicing Agent. The Shareholder Servicing Agent shall have the option to
defend the Company against any Claim which may be the subject of
indemnification hereunder. In the event that the Shareholder Servicing Agent
elects to defend against such Claim, the defense shall be conducted by counsel
chosen by the Shareholder Servicing Agent and satisfactory to the Company. The
Company may retain additional counsel at its expense. Except with the prior
written consent of the Shareholder Servicing Agent, the Company shall not
confess any Claim or make any compromise in any case in which the Shareholder
Servicing Agent will be asked to indemnify the Company.
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<PAGE> 9
12.3 Survival of Indemnities. The indemnities granted
by the parties in this Section 12 shall survive the termination of this
Agreement.
13. Insurance. The Shareholder Servicing Agent shall maintain
reasonable insurance coverage against any and all liabilities which may arise
in connection with the performance of its duties hereunder.
14. Notices. All notices or other communications hereunder to
either party shall be in writing and shall be deemed sufficient if mailed to
such party at the address of such party set forth in the preamble of this
Agreement or at such other address as such party may have designated by written
notice to the other.
15. Further Assurances. Each party agrees to perform such
further acts and execute such further documents as are necessary to effectuate
the purposes hereof.
16. Implementation and Duration of Agreement. This Agreement
is effective upon a "vote of a majority of the outstanding voting securities"
(as defined in the 1940 Act) and approval by the Company's Board of Directors,
and of the Directors who are not "interested persons" of the Company (as
defined in the 1940 Act) and have no direct or indirect financial interest in
the operation of the Fund's Distribution Plan (the "Plan"), this Agreement, or
any other agreement related to such Plan, including the Fund's Amended
Distribution Agreement, cast in person at a meeting called for the purpose of
voting on this Agreement. Subject to Section 17, this Agreement shall continue
in effect for a period of more than one year from the date hereof so long as
such continuance is specifically approved at least annually by a vote of
Company's Board of Directors, in the manner described above.
17. Termination. This Agreement may be terminated by the
Company, without the payment of any penalty, at any time upon not more than 60
days' nor less than 30 days' notice, by a vote of a majority of the Board of
Directors of the Company who are not "interested persons" of the Company (as
defined in the 1940 Act) and have no direct or indirect financial interest in
the operation of the Plan, this Agreement or any other agreement related to
such Plan, including the Amended Distribution Agreement, or by "a vote of a
majority of the outstanding voting securities" (as defined in the 1940 Act) of
the Fund. The Shareholder Servicing Agent may terminate this Agreement upon
not more than 60 days' nor less than 30 days' notice to the Company.
Notwithstanding anything herein to the contrary, but except as provided in
Section 20 of this Agreement, this Agreement may not be assigned and shall
terminate automatically without notice to either party upon any assignment.
Upon termination hereof, the Fund shall pay such compensation as may be due the
Shareholder Servicing Agent as of the date of such termination.
18. Changes; Amendments. This Agreement may be supplemented or
amended only by written instrument signed by both parties, but may not be
amended to increase materially the maximum amount payable without approval of
"a vote of a majority of the outstanding voting securities" (as defined in the
1940 Act) of the Fund, and all material amendments must be approved in the
manner described in Section 16.
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19. Limitation of Liability. The Shareholder Servicing Agent
hereby agrees that obligations assumed by the Company pursuant to this
Agreement shall be limited in all cases to the Fund and its assets and that the
Shareholder Servicing Agent shall not seek satisfaction of any such obligations
from the Board of Directors or any individual Director of the Company or from
the assets of any other portfolio or series of the Company.
20. Subcontracting by Shareholder Servicing Agent. The
Shareholder Servicing Agent may, with the written approval of the Company (such
approval not to be unreasonably withheld or delayed), subcontract for the
performance of the Shareholder Servicing Agent's obligations hereunder with any
one or more persons, including but not limited to any one or more persons which
is an affiliate of the Shareholder Servicing Agent; provided, however, that the
Shareholder Servicing Agent shall be as fully responsible to the Company for
the acts and omissions of any subcontractor as it would be for its own acts or
omissions.
21. Authority to Vote. The Company hereby confirms that,
nothing contained in the Articles of Incorporation of the Company would
preclude the Shareholder Servicing Agent, at any meeting of shareholders of the
Company or of the Fund, from voting any Class B Shares held in accounts
serviced by the Shareholder Servicing Agent and which are otherwise not
represented in person or by proxy at the meeting, proportionately in accordance
with the votes cast by holders of all Class B Shares otherwise represented at
the meeting in person or by proxy and held in accounts serviced by the
Shareholder Servicing Agent.
22. Compliance with Laws and Policies; Cooperation. The
Company hereby agrees that it will comply with all laws and regulations
applicable to the Fund's operations and the Shareholder Servicing Agent agrees
that it will comply with all laws and regulations applicable to providing the
services contemplated hereby.
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22.1 Miscellaneous. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the State of
California. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
STAGECOACH FUNDS, INC. on behalf of
the Aggressive Growth Fund (Class B Shares)
By: __________________________________
Name: ________________________________
Title: _______________________________
WELLS FARGO BANK, N.A.
By: __________________________
Name: _________________________
Title: ________________________
By: __________________________
Name: _________________________
Title: ________________________
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<PAGE> 1
EX-99.B9(b)(xx)
FORM OF
SHAREHOLDER SERVICING AGREEMENT
(Class A Shares)
THIS SHAREHOLDER SERVICING AGREEMENT ("Agreement"), dated as of
December __, 1995, is made by and between Stagecoach Funds, Inc. ("Company"), a
Maryland corporation having its principal place of business at 111 Center
Street, Little Rock, Arkansas 72201, on behalf of the Aggressive Growth Fund
("Fund"), and Wells Fargo Bank, N.A., 525 Market Street, Suite 1900, San
Francisco, California 94163, as shareholder servicing agent hereunder
("Shareholder Servicing Agent");
W I T N E S S E T H:
WHEREAS, Class A shares of common stock (.001 par value) of the
Fund (hereinafter "Class A Shares") may be purchased or redeemed through a
broker/dealer or financial institution which has entered into a shareholder
servicing agreement with the Company on behalf of the Fund; and
WHEREAS, the Shareholder Servicing Agent wishes to facilitate
purchases and redemptions of Class A Shares by its customers (the "Customers")
and wishes to act as the Customers' agent in performing certain administrative
functions in connection with transactions in Class A Shares from time to time
for the account of the Customers and to provide related services to the
Customers in connection with their investments in the Fund; and
WHEREAS, it is in the best interest of the Fund to make the
services of the Shareholder Servicing Agent available to the Customers who,
from time to time, become shareholders of the Fund;
NOW THEREFORE, the Company, on behalf of the Fund, and the
Shareholder Servicing Agent hereby agree as follows:
1. Appointment. The Shareholder Servicing Agent hereby agrees
to perform certain services for Customers as hereinafter set forth. The
Shareholder Servicing Agent's appointment hereunder is not exclusive, and the
Shareholder Servicing Agent shall not be entitled to notice of or a right to
consent to the execution of a shareholder servicing agreement with any other
person.
2. Services to Be Performed.
2.1 Types of Services. The Shareholder Servicing Agent
shall be responsible for performing shareholder account administrative and
servicing functions, which shall include, without limitation:
<PAGE> 2
(a) answering Customer inquiries regarding
account status and history, the manner in
which purchases, exchanges and redemptions
of Class A Shares may be effected;
(b) assisting Customers in designating and
changing dividend options, account
designations and addresses;
(c) providing necessary personnel and facilities
to establish and maintain Customer accounts
and records;
(d) assisting in processing purchase, redemption
and exchange transactions;
(e) arranging for the wiring of money;
(f) transferring money in connection with
Customer orders to purchase or redeem shares;
(g) verifying and guaranteeing Customer
signatures in connection with redemption and
exchange orders and transfers and changes in
Customer accounts with banks which are
designated in a Fund Account Application and
which are approved by the Fund's Transfer
Agent;
(h) furnishing (either separately or on an
integrated basis with other reports sent to a
Customer by the Shareholder Servicing Agent)
monthly and year-end statements and
confirmations of purchases, redemptions and
exchanges;
(i) furnishing, on behalf of the Class A Shares
of the Fund, proxy statements, annual reports,
updated prospectuses and other communications
to Customers;
(j) receiving, tabulating and sending to the Fund
proxies executed by Customers; and
(k) providing such other related services, and
necessary personnel and facilities to
provide all of the shareholder services
contemplated hereby, in each case, as the
Company or a Customer may reasonably request.
2.2 Standard of Services. All services to be rendered
by the Shareholder Servicing Agent hereunder shall be performed in a
professional, competent and timely manner. Any detailed operating standards
and procedures to be followed by the Shareholder Servicing Agent in performing
the services described above shall be determined from time to time by
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<PAGE> 3
agreement between the Shareholder Servicing Agent and the Company. The Company
acknowledges that the Shareholder Servicing Agent's ability to perform on a
timely basis certain of its obligations under this Agreement depends upon the
Fund's timely delivery of certain materials and/or information to the
Shareholder Servicing Agent. The Company agrees to use its best efforts to
provide, or cause to be provided, such materials to the Shareholder Servicing
Agent in a timely manner.
2.3 Investments through Distributor. The Company and
the Shareholder Servicing Agent hereby agree that all purchases of Class A
Shares effected by the Shareholder Servicing Agent on behalf of its Customers
shall be effected by it through Stephens Inc. ("Distributor") in its capacity
as the Fund's principal underwriter.
3. Fees.
3.1 Fees from the Fund. In consideration of the
services described in Section 2 hereof and the incurring of expenses in
connection therewith, the Shareholder Servicing Agent shall receive a fee to be
paid in arrears periodically or on a periodic basis to be agreed upon by the
Company and the Shareholder Servicing Agent from time to time (but in no event
less frequently than semi-annually) determined by a formula based upon the
number of accounts serviced by the Shareholder Servicing Agent during the
period for which payment is being made, the level of assets or activity in such
accounts during such period, and/or the expenses incurred by the Shareholder
Servicing Agent. In no event will such fees exceed 0.25%, on an annualized
basis, of the average daily net assets of the Fund represented by Class A
Shares owned of record by the Shareholder Servicing Agent on behalf of the
Customers during the period for which payment is being made. For purposes of
determining the fees payable to the Shareholder Servicing Agent hereunder, the
per share value of the Class A Shares' net assets shall be computed in the
manner specified in the Class A Shares' then- current prospectus.
Notwithstanding the foregoing, if applicable laws, regulations or rules impose
a maximum fee amount (a "cap") on Class A Shares with respect to shareholder
servicing fees and/or fees for distribution-related services, the amount
payable hereunder shall be reduced to an amount which, when considered in
conjunction with the fees payable by the Fund for the Class A Shares'
distribution-related activities, is the maximum amount payable to the
Shareholder Servicing Agent under applicable laws, regulations or rules. The
above fee constitutes all fees to be paid to the Shareholder Servicing Agent by
the Fund or the Company with respect to the shareholder services contemplated
hereby.
3.2 Fees from Customers. It is agreed that the
Shareholder Servicing Agent may impose certain conditions on Customers, subject
to the terms of the Fund's then-current prospectus, in addition to or different
from those imposed by the Fund, such as requiring a minimum initial investment
or the payment of additional fees directly by the Customer for additional
services offered by the Shareholder Servicing Agent to the Customer; provided,
however, that the Shareholder Servicing Agent may not charge customers any
direct fee which would constitute a "sales load" within the meaning of Section
2(a)(35) of the Investment Company Act of 1940, as amended (the "1940 Act").
The Shareholder Servicing Agent shall bill Customers directly for any such
additional fees. In the event the Shareholder Servicing Agent
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<PAGE> 4
charges Customers such additional fees, it shall notify the Company in advance
and make appropriate prior written disclosure (such disclosure to be in
accordance with all applicable laws) to Customers of any such additional fees
charged directly to the Customer. To the extent required by applicable rules
and regulations of the Securities and Exchange Commission, the Company shall
make written disclosure of the fees paid or to be paid by the Fund to the
Shareholder Servicing Agent pursuant to Section 3.1 of this Agreement. In no
event shall the Shareholder Servicing Agent have recourse or access, as
Shareholder Servicing Agent or otherwise, to the assets in the Customer's
account, except to the extent expressly authorized by law or by such Customer,
or to any assets of the Fund or the Company, for payment of any additional
direct fees referred to in this Section 3.2
4. Information Pertaining to the Shares. The Shareholder
Servicing Agent and its officers, employees and agents are not authorized to
make any representations concerning the Company, the Fund or Class A Shares to
Customers or prospective Customers, excepting only accurate communication of
any information provided by or on behalf of any administrator of the Company or
the Fund or any distributor of Class A Shares or information contained in the
Class A Shares' then-current prospectus. In furnishing such information
regarding the Company, the Fund or Class A Shares, the Shareholder Servicing
Agent shall act as agent for the Customer only and shall have no authority to
act as agent for the Company, the Fund or the Class A Shares. Advance copies
or proofs of all materials which are proposed to be circulated or disseminated
by the Shareholder Servicing Agent to Customers or prospective Customers and
which identify or describe the Company, the Fund or Class A Shares shall be
provided to the Company at least 10 days prior to such circulation or
dissemination (unless the Company consents in writing to a shorter period), and
such materials shall not be circulated or disseminated or further circulated or
disseminated at any time after the Company shall have given written notice to
the Shareholder Servicing Agent of any objection thereto.
Nothing in this Section 4 shall be construed to make the Company
liable for the use (as opposed to the accuracy) of any information about the
Company, the Fund or Class A Shares which is disseminated by the Shareholder
Servicing Agent.
5. Use of the Shareholder Servicing Agent's Name. The Company
shall not use the name of the Shareholder Servicing Agent, or any of its
affiliates or subsidiaries, in any prospectus, sales literature or other
materials relating to the Company, the Fund or Class A Shares in a manner not
approved by the Shareholder Servicing Agent prior thereto in writing; provided,
however, that the approval of the Shareholder Servicing Agent shall not be
required for any use of its name which merely refers in accurate and factual
terms to its appointment hereunder or which is required by the Securities and
Exchange Commission or any state securities authority or any other appropriate
regulatory, governmental or judicial authority; provided, further, that in no
event shall such approval be unreasonably withheld or delayed.
6. Use of the Name of the Fund or the Company. The
Shareholder Servicing Agent shall not use the name of the Fund, the Company or
Class A Shares on any checks, bank drafts, bank statements or forms for other
than internal use in a manner not approved by the Company prior thereto in
writing; provided, however, that the approval of the Company shall not
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<PAGE> 5
be required for the use of the Company's name or the Fund's name in connection
with communications permitted by Section 4 hereof or (subject to Section 4, to
the extent the same may be applicable) for any use of the Company's name or the
Fund's name which merely identifies the Company or the Fund, as the case may be
in connection with the Shareholder Servicing Agent's role hereunder or which is
required by the Securities and Exchange Commission or any state securities
authority or any other appropriate regulatory, governmental or judicial
authority; provided, further, that in no event shall such approval be
unreasonably withheld or delayed.
7. Security. The Shareholder Servicing Agent represents and
warrants that to the best of its knowledge, the various procedures and systems
which it has implemented (including provision for twenty-four hours a day
restricted access) with regard to safeguarding from loss or damage attributable
to fire, theft or any other cause the Company's records and other data within
its possession or control and the Shareholder Servicing Agent's records, data,
equipment, facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes therein
from time to time as in its judgment are required for the secure performance of
its obligations hereunder. The parties shall review such systems and
procedures on a periodic basis, and the Company shall from time to time specify
the types of records and other data of the Company to be safeguarded in
accordance with this Section 7.
8. Compliance with Laws. The Shareholder Servicing Agent
shall comply with all applicable federal and state laws and regulations,
including securities laws. The Shareholder Servicing Agent represents and
warrants to the Company that the performance of all its obligations hereunder
will comply with all applicable laws and regulations, the provisions of its
charter documents and by-laws and all material contractual obligations binding
upon the Shareholder Servicing Agent. The Shareholder Servicing Agent
furthermore undertakes that it will promptly, after the Shareholder Servicing
Agent becomes so aware, inform the Company of any change in applicable laws or
regulations (or interpretations thereof) or in its charter or by-laws or
material contracts which would prevent or impair full performance of any of its
obligations hereunder.
9. Reports. To the extent requested by the Company from time
to time, but at least quarterly, the Shareholder Servicing Agent will provide
the Treasurer of the Company with a written report of the amounts expended by
the Shareholder Servicing Agent pursuant to this Agreement and the purposes for
which such expenditures were made. Such written reports shall be in a form
satisfactory to the Company and shall supply all information necessary for the
Company to discharge its responsibilities under applicable laws and
regulations. In addition, the Shareholder Servicing Agent shall have a duty to
furnish to the Company's Board of Directors such information as may reasonably
be necessary to an informed determination of whether this Agreement should be
implemented or continued pursuant to Section 16.
10. Record Keeping.
10.1 Section 31(a). The Shareholder Servicing Agent
shall maintain records in a form acceptable to the Company and in compliance
with applicable laws and the rules and regulations of the Securities and
Exchange Commission, including but not limited to the record-
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<PAGE> 6
keeping requirements of Section 31(a) of the 1940 Act and the rules thereunder,
with respect to the services contemplated by this Agreement. Such records
shall be deemed to be the property of the Company and will be made available,
at the Company's request, for inspection and use by the Company,
representatives of the Company and governmental authorities. The Shareholder
Servicing Agent agrees that, for so long as it retains any records hereunder,
it will meet all reporting requirements pursuant to the 1940 Act and applicable
to the Shareholder Servicing Agent with respect to such records.
10.2 Rules 17a-3 and 17a-4. The Shareholder Servicing
Agent shall maintain accurate and complete records with respect to services
performed by the Shareholder Servicing Agent in connection with the purchase
and redemption of Class A Shares through the Distributor. Such records shall
be maintained in a form reasonably acceptable to the Company and in compliance
with the requirements of Rules 17a-3 and 17a-4 under the Securities Exchange
Act of 1934, as amended, pursuant to which any dealer of Class A Shares must
maintain certain records. All such records maintained by the Shareholder
Servicing Agent shall be the property of the Distributor and will be made
available for inspection and use by the Company or the Distributor upon the
request of either. The Shareholder Servicing Agent shall file with the
Securities and Exchange Commission and other appropriate governmental
authorities, and furnish to the Company and the Distributor copies of, all
reports and undertakings as may be reasonably requested by the Company or the
Distributor in order to comply with such rules. If so requested by the
Distributor, the Shareholder Servicing Agent shall confirm to the Distributor
its obligations under this Section 10.2 by a writing reasonably satisfactory to
the Distributor.
10.3 Identification, Etc. of Records. The Company shall
from time to time instruct the Shareholder Servicing Agent in writing as to,
and the Company and the Shareholder Servicing Agent shall periodically review,
the records to be maintained and the procedures to be followed by the
Shareholder Servicing Agent in complying with the foregoing Sections 10.1 and
10.2 and Section 8 to the extent it relates to record-keeping required under
federal securities laws and regulations. Notwithstanding the provisions of
Section 8, the Shareholder Servicing Agent shall be entitled to rely on such
instructions.
10.4 Transfer of Customer Data. In the event this
Agreement is terminated or a successor to the Shareholder Servicing Agent is
appointed, the Shareholder Servicing Agent shall, at the expense of the
Company, transfer to such successor as the Company may designate a certified
list of the beneficial owners of Class A Shares serviced by the Shareholder
Servicing Agent (with name, address and tax identification or Social Security
number), a complete record of the account of each such shareholder and the
status thereof, and all other relevant books, records, correspondence, and
other data established or maintained by the Shareholder Servicing Agent under
this Agreement. In the event this Agreement is terminated, the Shareholder
Servicing Agent will use its best efforts to cooperate in the orderly transfer
of such duties and responsibilities to the successor, including assistance in
the establishment of books, records and other data by the successor.
10.5 Survival of Record-Keeping Obligations. The
record-keeping obligations imposed in this Section 10 shall survive the
termination of this Agreement for the
6
<PAGE> 7
shorter of a period of six years or that minimum period required by applicable
rules or regulations of the Securities and Exchange Commission.
10.6 Obligations Pursuant to Agreement Only. Nothing in
this Section 10 shall be construed to mean that the Shareholder Servicing Agent
would, by virtue of its role hereunder, be required under applicable law to
maintain the records required to be maintained by it under this Section 10, but
it is understood that the Shareholder Servicing Agent has agreed to do so in
order to enable the Company and the Distributor to comply with laws and
regulations applicable to them.
10.7 Shareholder Servicing Agent's Rights to Copy
Records. Anything in this Section 10 to the contrary notwithstanding, except
to the extent otherwise prohibited by law, the Shareholder Servicing Agent
shall have the right to copy, maintain and use any records maintained by the
Shareholder Servicing Agent pursuant to this Section 10, except as otherwise
prohibited by Sections 4 and 6 hereof.
11. Force Majeure. The Shareholder Servicing Agent shall not
be liable or responsible for delays or errors by reason of circumstances beyond
its reasonable control, including, but not limited to, acts of civil or
military authority, national emergencies, labor difficulties, fire, mechanical
breakdown, flood or catastrophe, acts of God, insurrection, war, riots or
failure of communication systems or power supply.
12. Indemnification.
12.1 Indemnification of the Shareholder Servicing Agent.
The Company will indemnify and hold the Shareholder Servicing Agent harmless
from all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) from any claim, demand, action or suit
(collectively, "Claims") (a) arising in connection with misstatements or
omissions in the Fund's prospectus, actions or inactions by the Company or any
of its agents or contractors or the performance of the Shareholder Servicing
Agent's obligations hereunder and (b) not resulting from (i) the bad faith or
negligence of the Shareholder Servicing Agent, its officers, employees or
agents, or (ii) any breach of applicable law by the Shareholder Servicing
Agent, its officers, employees or agents, or (iii) any action of the
Shareholder Servicing Agent, its officers, employees or agents which exceeds
the legal authority of the Shareholder Servicing Agent or its authority
hereunder, or (iv) any error or omission of the Shareholder Servicing Agent,
its officers, employees or agents with respect to the purchase, redemption and
transfer of Customers' Class A Shares or the Shareholder Servicing Agent's
verification or guarantee of any Customer signature. Notwithstanding anything
herein to the contrary, the Company will indemnify and hold the Shareholder
Servicing Agent harmless from any and all losses, claims, damages, liabilities
or expenses (including reasonable counsel fees and expenses) resulting from any
Claim as a result of its acting in accordance with any written instructions
reasonably believed by the Shareholder Servicing Agent to have been executed by
any person duly authorized by the Company, or as a result of acting in reliance
upon any instrument or stock certificate reasonably believed by the Shareholder
Servicing Agent to have been genuine and signed, countersigned or executed by a
7
<PAGE> 8
person duly authorized by the Company, excepting only the gross negligence or
bad faith of the Shareholder Servicing Agent.
In any case in which the Company may be asked to indemnify or hold
the Shareholder Servicing Agent harmless, the Company shall be advised of all
pertinent facts concerning the situation in question and the Shareholder
Servicing Agent shall use reasonable care to identify and notify the Company
promptly concerning any situation which presents or appears likely to present a
claim for indemnification against the Company. The Company shall have the
option to defend the Shareholder Servicing Agent against any Claim which may be
the subject of indemnification hereunder. In the event that the Company elects
to defend against such Claim, the defense shall be conducted by counsel chosen
by the Company and reasonably satisfactory to the Shareholder Servicing Agent.
The Shareholder Servicing Agent may retain additional counsel at its expense.
Except with the prior written consent of the Company, the Shareholder Servicing
Agent shall not confess any Claim or make any compromise in any case in which
the Company will be asked to indemnify the Shareholder Servicing Agent.
12.2 Indemnification of the Company. Without limiting
the rights of the Company under applicable law, the Shareholder Servicing Agent
will indemnify and hold the Company harmless from all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses) from
any Claim (a) resulting from (i) the bad faith or negligence of the Shareholder
Servicing Agent, its officers, employees or agents, or (ii) any breach of
applicable law by the Shareholder Servicing Agent, its officers, employees or
agents, or (iii) any action of the Shareholder Servicing Agent, its officers,
employees or agents which exceeds the legal authority of the Shareholder
Servicing Agent or its authority hereunder, or (iv) any error or omission of
the Shareholder Servicing Agent, its officers, employees or agents with respect
to the purchase, redemption and transfer of Customers' Class A Shares or the
Shareholder Servicing Agent's verification or guarantee of any Customer
signature, and (b) not resulting from the Shareholder Servicing Agent's actions
in accordance with written instructions reasonably believed by the Shareholder
Servicing Agent to have been executed by any person duly authorized by the
Company, or in reliance upon any instrument or stock certificate reasonably
believed by the Shareholder Servicing Agent to have been genuine and signed,
countersigned or executed by a person duly authorized by the Company.
In any case in which the Shareholder Servicing Agent may be asked
to indemnify or hold the Company harmless, the Shareholder Servicing Agent
shall be advised of all pertinent facts concerning the situation in question
and the Company shall use reasonable care to identify and notify the
Shareholder Servicing Agent promptly concerning any situation which presents or
appears likely to present a claim for indemnification against the Shareholder
Servicing Agent. The Shareholder Servicing Agent shall have the option to
defend the Company against any Claim which may be the subject of
indemnification hereunder. In the event that the Shareholder Servicing Agent
elects to defend against such Claim, the defense shall be conducted by counsel
chosen by the Shareholder Servicing Agent and satisfactory to the Company. The
Company may retain additional counsel at its expense. Except with the prior
written consent of the Shareholder Servicing Agent, the Company shall not
confess any Claim or make any compromise in any case in which the Shareholder
Servicing Agent will be asked to indemnify the Company.
8
<PAGE> 9
12.3 Survival of Indemnities. The indemnities granted
by the parties in this Section 12 shall survive the termination of this
Agreement.
13. Insurance. The Shareholder Servicing Agent shall maintain
reasonable insurance coverage against any and all liabilities which may arise
in connection with the performance of its duties hereunder.
14. Notices. All notices or other communications hereunder to
either party shall be in writing and shall be deemed sufficient if mailed to
such party at the address of such party set forth in the preamble of this
Agreement or at such other address as such party may have designated by written
notice to the other.
15. Further Assurances. Each party agrees to perform such
further acts and execute such further documents as are necessary to effectuate
the purposes hereof.
16. Implementation and Duration of Agreement. This Agreement
is effective upon a "vote of a majority of the outstanding voting securities"
(as defined in the 1940 Act) and approval by the Company's Board of Directors,
and of the Directors who are not "interested persons" of the Company (as
defined in the 1940 Act) and have no direct or indirect financial interest in
the operation of the Fund's Distribution Plan (the "Plan"), this Agreement, or
any other agreement related to such Plan, including the Fund's Amended
Distribution Agreement, cast in person at a meeting called for the purpose of
voting on this Agreement. Subject to Section 17, this Agreement shall continue
in effect for a period of more than one year from the date hereof so long as
such continuance is specifically approved at least annually by a vote of
Company's Board of Directors, in the manner described above.
17. Termination. This Agreement may be terminated by the
Company, without the payment of any penalty, at any time upon not more than 60
days' nor less than 30 days' notice, by a vote of a majority of the Board of
Directors of the Company who are not "interested persons" of the Company (as
defined in the 1940 Act) and have no direct or indirect financial interest in
the operation of the Plan, this Agreement or any other agreement related to
such Plan, including the Amended Distribution Agreement, or by "a vote of a
majority of the outstanding voting securities" (as defined in the 1940 Act) of
the Fund. The Shareholder Servicing Agent may terminate this Agreement upon
not more than 60 days' nor less than 30 days' notice to the Company.
Notwithstanding anything herein to the contrary, but except as provided in
Section 20 of this Agreement, this Agreement may not be assigned and shall
terminate automatically without notice to either party upon any assignment.
Upon termination hereof, the Fund shall pay such compensation as may be due the
Shareholder Servicing Agent as of the date of such termination.
18. Changes; Amendments. This Agreement may be supplemented or
amended only by written instrument signed by both parties, but may not be
amended to increase materially the maximum amount payable without approval of
"a vote of a majority of the outstanding voting securities" (as defined in the
1940 Act) of the Fund, and all material amendments must be approved in the
manner described in Section 16.
9
<PAGE> 10
19. Limitation of Liability. The Shareholder Servicing Agent
hereby agrees that obligations assumed by the Company pursuant to this
Agreement shall be limited in all cases to the Fund and its assets and that the
Shareholder Servicing Agent shall not seek satisfaction of any such obligations
from the Board of Directors or any individual Director of the Company or from
the assets of any other portfolio or series of the Company.
20. Subcontracting by Shareholder Servicing Agent. The
Shareholder Servicing Agent may, with the written approval of the Company (such
approval not to be unreasonably withheld or delayed), subcontract for the
performance of the Shareholder Servicing Agent's obligations hereunder with any
one or more persons, including but not limited to any one or more persons which
is an affiliate of the Shareholder Servicing Agent; provided, however, that the
Shareholder Servicing Agent shall be as fully responsible to the Company for
the acts and omissions of any subcontractor as it would be for its own acts or
omissions.
21. Authority to Vote. The Company hereby confirms that,
nothing contained in the Articles of Incorporation of the Company would
preclude the Shareholder Servicing Agent, at any meeting of shareholders of the
Company or of the Fund, from voting any Class A Shares held in accounts
serviced by the Shareholder Servicing Agent and which are otherwise not
represented in person or by proxy at the meeting, proportionately in accordance
with the votes cast by holders of all Class A Shares otherwise represented at
the meeting in person or by proxy and held in accounts serviced by the
Shareholder Servicing Agent.
22. Compliance with Laws and Policies; Cooperation. The
Company hereby agrees that it will comply with all laws and regulations
applicable to the Fund's operations and the Shareholder Servicing Agent agrees
that it will comply with all laws and regulations applicable to providing the
services contemplated hereby.
10
<PAGE> 11
22.1 Miscellaneous. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the State of
California. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
STAGECOACH FUNDS, INC. on behalf of
the Aggressive Growth Fund (Class A Shares)
By: __________________________________
Name: ________________________________
Title: _______________________________
WELLS FARGO BANK, N.A.
By: __________________________
Name: _________________________
Title: ________________________
By: __________________________
Name: _________________________
Title: ________________________
11
<PAGE> 1
EX-99.B9(d)(viii)
STAGECOACH FUNDS, INC.
AGGRESSIVE GROWTH FUND
SERVICING PLAN
CLASS B SHARES
Section 1. Each of the proper officers of Stagecoach Funds, Inc.
(the "Company") is authorized to execute and deliver, in the name and on behalf
of the Company, written agreements based substantially on the form attached
hereto as Appendix A or any other form duly approved by the Company's Board of
Directors ("Agreements") with broker/dealers, banks and other financial
institutions that are dealers of record or holders of record or which have a
servicing relationship with the beneficial owners of Class B Shares ("Servicing
Agents") of the Company's Aggressive Growth Fund (the "Fund"). Pursuant to
such Agreements, Servicing Agents shall provide support services as set forth
therein to their clients who beneficially own Class B Shares in consideration
of a fee, computed monthly in the manner set forth in the Fund's then current
prospectus, at an annual rate of up to 0.25% of the average daily net asset
value of Class B Shares beneficially owned by or attributable to such clients.
The Company's distributor, administrator and adviser and their respective
affiliates are eligible to become Servicing Agents and to receive fees under
this Servicing Plan. All expenses incurred by the Fund in connection with the
Agreements and the implementation of this Servicing Plan shall be borne
entirely by the holders of Class B Shares of the Fund.
Section 2. The Company's administrator shall monitor the
arrangements pertaining to the Company's Agreements with Servicing Agents. The
Company's administrator shall not, however, be obligated by this Servicing Plan
to recommend, and the Company shall not be obligated to execute, any Agreement
with any qualifying Servicing Agents.
Section 3. So long as this Servicing Plan is in effect, the
Company's administrator shall provide to the Company's Board of Directors, and
the Directors shall review, at least quarterly, a written report of the amounts
expended pursuant to this Servicing Plan and the purposes for which such
expenditures were made.
Section 4. Unless sooner terminated, this Servicing Plan (and
each related agreement) shall continue in effect for a period of one year from
its date of execution and shall continue thereafter for successive annual
periods, provided that such continuance is specifically approved at least
annually by a majority of the Board of Directors, including a majority of the
Directors who are not "interested persons," as defined in the Investment
Company Act of 1940, of the Company and have no direct or indirect financial
interest in the operation of this Servicing Plan or in any Agreement related to
this Servicing Plan (the "Disinterested Directors") cast in person at a meeting
called for the purpose of voting on such approval.
Section 5. This Servicing Plan may be amended at any time with
respect to the Fund by the Company's Board of Directors, provided that any
material amendment of the terms of this Servicing Plan (including a material
increase of the fee payable hereunder) shall become effective only upon the
approvals set forth in Section 4.
Section 6. This Servicing Plan is terminable at any time with
respect to the Fund by vote of a majority of the Disinterested Directors.
Section 7. While this Servicing Plan is in effect, the selection
and nomination of the Disinterested Directors shall be committed to the
discretion of such Disinterested Directors.
Section 8. Notwithstanding anything herein to the contrary, the
Fund shall not be obligated to make any payments under this Plan that exceed
the maximum amounts payable under Article III, Section 26 of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
Section 9. The Company will preserve copies of this Servicing
Plan, Agreements, and any written reports regarding this Servicing Plan
presented to the Board of Directors for a period of not less than six years.
Dated: November 15, 1995
<PAGE> 1
EX-99.B9(d)(ix)
STAGECOACH FUNDS, INC.
AGGRESSIVE GROWTH FUND
SERVICING PLAN
CLASS A SHARES
Section 1. Each of the proper officers of Stagecoach Funds, Inc.
(the "Company") is authorized to execute and deliver, in the name and on behalf
of the Company, written agreements based substantially on the form attached
hereto as Appendix A or any other form duly approved by the Company's Board of
Directors ("Agreements") with broker/dealers, banks and other financial
institutions that are dealers of record or holders of record or which have a
servicing relationship with the beneficial owners of Class A Shares ("Servicing
Agents") of the Company's Aggressive Growth Fund (the "Fund"). Pursuant to
such Agreements, Servicing Agents shall provide support services as set forth
therein to their clients who beneficially own Class A Shares in consideration
of a fee, computed monthly in the manner set forth in the Fund's then current
prospectus, at an annual rate of up to 0.25% of the average daily net asset
value of Class A Shares beneficially owned by or attributable to such clients.
The Company's distributor, administrator and adviser and their respective
affiliates are eligible to become Servicing Agents and to receive fees under
this Servicing Plan. All expenses incurred by the Fund in connection with the
Agreements and the implementation of this Servicing Plan shall be borne
entirely by the holders of Class A Shares of the Fund.
Section 2. The Company's administrator shall monitor the
arrangements pertaining to the Company's Agreements with Servicing Agents. The
Company's administrator shall not, however, be obligated by this Servicing Plan
to recommend, and the Company shall not be obligated to execute, any Agreement
with any qualifying Servicing Agents.
Section 3. So long as this Servicing Plan is in effect, the
Company's administrator shall provide to the Company's Board of Directors, and
the Directors shall review, at least quarterly, a written report of the amounts
expended pursuant to this Servicing Plan and the purposes for which such
expenditures were made.
Section 4. Unless sooner terminated, this Servicing Plan (and
each related agreement) shall continue in effect for a period of one year from
its date of execution and shall continue thereafter for successive annual
periods, provided that such continuance is specifically approved at least
annually by a majority of the Board of Directors, including a majority of the
Directors who are not "interested persons," as defined in the Investment
Company Act of 1940, of the Company and have no direct or indirect financial
interest in the operation of this Servicing Plan or in any Agreement related to
this Servicing Plan (the "Disinterested Directors") cast in person at a meeting
called for the purpose of voting on such approval.
Section 5. This Servicing Plan may be amended at any time with
respect to the Fund by the Company's Board of Directors, provided that any
material amendment of the terms of this Servicing Plan (including a material
increase of the fee payable hereunder) shall become effective only upon the
approvals set forth in Section 4.
Section 6. This Servicing Plan is terminable at any time with
respect to the Fund by vote of a majority of the Disinterested Directors.
<PAGE> 2
Section 7. While this Servicing Plan is in effect, the selection
and nomination of the Disinterested Directors shall be committed to the
discretion of such Disinterested Directors.
Section 8. Notwithstanding anything herein to the contrary, the
Fund shall not be obligated to make any payments under this Plan that exceed
the maximum amounts payable under Article III, Section 26 of the Rules of Fair
Practice of the National Association of Securities Dealers, Inc.
Section 9. The Company will preserve copies of this Servicing
Plan, Agreements, and any written reports regarding this Servicing Plan
presented to the Board of Directors for a period of not less than six years.
Dated: November 15, 1995
2
<PAGE> 1
EX-99.B10
December 18, 1995 (202) 887-1500
Stagecoach Funds, Inc.
111 Center Street
Little Rock, Arkansas 72201
Re: Shares of Common Stock of the
Aggressive Growth Fund of Stagecoach Funds, Inc.
Ladies/Gentlemen:
We refer to Post-Effective Amendment No. 19 and Amendment No. 20
to the Registration Statement on Form N-1A (SEC File Nos. 33-42927 and
811-6419) (the "Registration Statement") of Stagecoach Funds, Inc.(the
"Company") relating to the registration of an indefinite number of shares of
common stock of the Aggressive Growth Fund of the Company (collectively, the
"Shares").
We have been requested by the Company to furnish this opinion as
Exhibit 10 to the Registration Statement.
We have examined such records, documents, instruments,
certificates of public officials and of the Company, made such inquiries of the
Company, and examined such questions of law as we have deemed necessary for the
purpose of rendering the opinion set forth herein. We have also verified with
the Company's transfer agent the maximum number of shares issued by the Company
during fiscal year 1994. We have assumed the genuineness of all signatures and
the authenticity of all items submitted to us as originals and the conformity
with originals of all items submitted to us as copies.
<PAGE> 2
Based upon and subject to the foregoing, we are of the opinion
that:
The issuance and sale of the Shares by the Company have been duly
and validly authorized by all appropriate action, and assuming delivery by sale
or in accord with the Fund's dividend reinvestment plan in accordance with the
description set forth in the Registration Statement, as amended, the Shares
will be legally issued, fully paid and nonassessable by the Company.
We consent to the inclusion of this opinion as an exhibit to the
Registration Statement.
In addition, we hereby consent to the use of our name and to the
reference to our firm under "Legal Counsel" in the Prospectus and the
description of advice rendered by our firm under "Management" in the Statement
of Additional Information, both of which are included as part of the
Registration Statement.
Very truly yours,
/s/ MORRISON & FOERSTER
MORRISON & FOERSTER
<PAGE> 1
EX-99.B11
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Shareholders
Stagecoach Funds, Inc.:
We consent to the incorporation by reference in the Stagecoach Funds, Inc.
Post-Effective Amendment No. 19 to the Registration Statement Number 33-42927
on Form N-1A under the Securities Act of 1933 and Amendment No. 20 to the
Registration Statement Number 811-6419 on Form N-1A under the Investment
Company Act of 1940 of our report dated February 17, 1995, on the financial
statements and financial highlights of the Asset Allocation Fund, California
Tax-Free Bond Fund, California Tax-Free Income Fund, Corporate Stock Fund,
Diversified Income Fund, Ginnie Mae Fund, Growth and Income Fund,
Short-Intermediate U.S. Government Income Fund, U.S. Government Allocation Fund
and Variable Rate Government Fund (ten of the funds comprising Stagecoach
Funds, Inc.) for the year ended December 31, 1994, which report has been
incorporated by reference in the Statement of Additional Information.
We also consent to the inclusion of our report dated February 17, 1995, on the
financial statements and financial highlights of the Asset Allocation Fund,
California Tax-Free Bond Fund, California Tax-Free Money Market Fund, Money
Market Fund, Municipal Income Fund, Strategic Growth Fund, U.S. Government
Income Fund, U.S. Treasury Money Market Fund and Variable Rate Government Fund
(nine of the funds, comprising Overland Express Funds, Inc.) for the year ended
December 31, 1994, which report has been included in the Statement of
Additional Information.
We also consent to the reference to our firm under the heading "Financial
Highlights" in the prospectus and "Independent Auditors" in the Statement of
Additional Information incorporated by reference into the prospectus.
/s/ KPMG PEAT MARWICK LLP
San Francisco, California
December 15, 1995
<PAGE> 1
EX-99.B15(b)(vii)
DISTRIBUTION PLAN
Aggressive Growth Fund
(Class B Shares)
WHEREAS, Stagecoach Funds, Inc. ("Company") is an open-end,
management investment company and is registered as such under the Investment
Company Act of 1940, as amended ("Act"); and
WHEREAS, the Company desires to adopt a Distribution Plan ("Plan")
pursuant to Rule 12b-1 under the Act on behalf of the Class B Shares of the
Aggressive Growth Fund ("Fund") and the Board of Directors, including a
majority of the Qualified Directors (as defined below), has determined that
there is a reasonable likelihood that adoption of the Plan will benefit the
Fund and its Class B shareholders;
NOW THEREFORE, the Fund hereby adopts the Plan in accordance with
Rule 12b-1 under the Act on the following terms and conditions:
Section 1. Pursuant to the Plan, the Company may pay to
Stephens Inc. ("Distributor"), as compensation for distribution-related
services provided, or reimbursement of distribution-related expenses incurred,
a monthly fee at an annual rate of up to 0.75% of the Fund's average daily net
assets attributable to Class A Shares. The actual fee payable to the
Distributor shall, within such limit, be determined from time to time by mutual
agreement between the Company and the Distributor. 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, provided such payments are primarily intended to result in the
sale of shares. The Distributor may retain any portion of the total
distribution fee payable hereunder to compensate it for distribution related
services provided by it or to reimburse it for other distribution- related
expenses.
Section 2. The Plan shall be effective on the date upon
which it is approved by "vote of a majority of the outstanding voting
securities" (as defined below) of Class B Shares of the Fund and a majority of
the Directors of the Company, including a majority of the Qualified Directors
(as defined below), pursuant to a vote cast in person at a meeting (or
meetings) called for the purpose of voting on the approval of the Plan.
Section 3. The Plan (and each related agreement) will
continue in effect for one year from its effective date, unless earlier
terminated in accordance with its terms, and will remain in effect from year to
year thereafter if such continuance is specifically approved at least annually
by vote of a majority of both (a) the Directors of the Company and (b) the
Qualified Directors, cast in person at a meeting (or meetings) called for the
purpose of voting on such approval.
1
<PAGE> 2
Section 4. The Company shall provide to the Company's Board
of Directors and the Directors shall review, at least quarterly, a written
report of the amounts expended by the Company under the Plan and each related
agreement and the purposes for which such expenditures were made.
Section 5. The Plan may be terminated at any time by vote
of a majority of the Qualified Directors or by vote of a majority of the
outstanding voting securities of Class B Shares of the Fund.
Section 6. All agreements related to the Plan shall be in
writing and shall be approved by vote of a majority of both (a) the Directors
of the Company and (b) the Qualified Directors, cast in person at a meeting
called for the purpose of voting on such approval; provided however, that the
identity of a particular participating organization executing any such
agreement may be ratified by such a vote within 90 days of such execution. Any
agreement related to the Plan shall provide:
A. That such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the Qualified
Directors or by vote of a majority of the outstanding voting
securities of Class B Shares of the Fund, on not more than 60
days' written notice to any other party to the agreement; and
B. That such agreement shall terminate automatically in the
event of its "assignment" (as defined below).
Section 7. The Plan may not be amended to increase
materially the amount that may be expended by the Fund pursuant to the Plan
without the approval by a vote of a majority of the outstanding voting
securities of Class B Shares of the Fund, and no material amendment to the Plan
shall be made unless approved by vote of a majority of both (a) the Directors
of the Company and (b) the Qualified Directors, cast in person at a meeting (or
meetings) called for the purpose of voting on such approval.
Section 8. While the Plan is in effect, the selection and
nomination of each Director who is not an "interested person" (as defined
below) of the Company shall be committed to the discretion of the Directors who
are not interested persons.
Section 9. To the extent any payments made by the Fund
pursuant to a Servicing Agreement are deemed to be payments for the financing
of any activity primarily intended to result in the sale of Class B Shares
within the context of Rule 12b-1 under the Act, such payments shall be deemed
to have been approved pursuant to this Plan. Notwithstanding anything herein
to the contrary, the Fund shall not be obligated to make any payments under
this Plan that exceed the maximum amounts payable under Article III, Section 26
of the Rules of Fair Practice of the National Association of Securities
Dealers.
Section 10. The Company shall preserve copies of the Plan,
each related agreement and each report made pursuant to Section 4 hereof, for a
period of not less than six
2
<PAGE> 3
years from the date of the Plan, such agreement or such report, as the case may
be, the first two years in an easily accessible place.
Section 11. As used in the Plan, (a) the terms "assignment,"
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings specified in the Act and the
rules and regulations thereunder, subject to such exemption as may be granted
by the Securities and Exchange Commission, and (b) the term "Qualified
Directors" shall mean the Directors of the Company who are not interested
persons of the Company and have no direct or indirect financial interest in the
operation of the Plan or in any agreements related to the Plan.
Section 12. The Company, on behalf of the Fund, intends to
enter into Shareholder Servicing Agreements with one or more financial
institutions serving as Servicing Agents under which such Servicing Agents
would be paid a fee for the provision of shareholder services. To the extent
any portion of the fees payable under the Shareholder Servicing Agreements is
deemed to be for distribution-related services, such fees are approved and may
be paid pursuant to the Plan and in accordance with Rule 12b-1 under the Act,
provided that the Shareholder Servicing Agreements, to the extent they are
deemed to relate to distribution-related services, are approved and otherwise
treated in all respects as agreements related to the Plan.
Dated: November 15, 1995
3
<PAGE> 1
EX-99.B15(b)(vii)
DISTRIBUTION PLAN
Aggressive Growth Fund
(Class A Shares)
WHEREAS, Stagecoach Funds, Inc. ("Company") is an open-end,
management investment company and is registered as such under the Investment
Company Act of 1940, as amended ("Act"); and
WHEREAS, the Company desires to adopt a Distribution Plan ("Plan")
pursuant to Rule 12b-1 under the Act on behalf of the Class A Shares of the
Aggressive Growth Fund ("Fund") and the Board of Directors, including a
majority of the Qualified Directors (as defined below), has determined that
there is a reasonable likelihood that adoption of the Plan will benefit the
Fund and its Class A shareholders;
NOW THEREFORE, the Fund hereby adopts the Plan in accordance with
Rule 12b-1 under the Act on the following terms and conditions:
Section 1. Pursuant to the Plan, the Company may pay to
Stephens Inc. ("Distributor"), as compensation for distribution-related
services provided, or reimbursement of distribution-related expenses incurred,
a monthly fee at an annual rate of up to 0.10% of the Fund's average daily net
assets attributable to Class A Shares. The actual fee payable to the
Distributor shall, within such limit, be determined from time to time by mutual
agreement between the Company and the Distributor. 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, provided such payments are primarily intended to result in the
sale of shares. The Distributor may retain any portion of the total
distribution fee payable hereunder to compensate it for distribution related
services provided by it or to reimburse it for other distribution- related
expenses.
Section 2. The Plan shall be effective on the date upon
which it is approved by "vote of a majority of the outstanding voting
securities" (as defined below) of Class A Shares of the Fund and a majority of
the Directors of the Company, including a majority of the Qualified Directors
(as defined below), pursuant to a vote cast in person at a meeting (or
meetings) called for the purpose of voting on the approval of the Plan.
Section 3. The Plan (and each related agreement) will
continue in effect for one year from its effective date, unless earlier
terminated in accordance with its terms, and will remain in effect from year to
year thereafter if such continuance is specifically approved at least annually
by vote of a majority of both (a) the Directors of the Company and (b) the
Qualified Directors, cast in person at a meeting (or meetings) called for the
purpose of voting on such approval.
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Section 4. The Company shall provide to the Company's Board
of Directors and the Directors shall review, at least quarterly, a written
report of the amounts expended by the Company under the Plan and each related
agreement and the purposes for which such expenditures were made.
Section 5. The Plan may be terminated at any time by vote
of a majority of the Qualified Directors or by vote of a majority of the
outstanding voting securities of Class A Shares of the Fund.
Section 6. All agreements related to the Plan shall be in
writing and shall be approved by vote of a majority of both (a) the Directors
of the Company and (b) the Qualified Directors, cast in person at a meeting
called for the purpose of voting on such approval; provided however, that the
identity of a particular participating organization executing any such
agreement may be ratified by such a vote within 90 days of such execution. Any
agreement related to the Plan shall provide:
A. That such agreement may be terminated at any time, without
payment of any penalty, by vote of a majority of the Qualified
Directors or by vote of a majority of the outstanding voting
securities of Class A Shares of the Fund, on not more than 60
days' written notice to any other party to the agreement; and
B. That such agreement shall terminate automatically in the
event of its "assignment" (as defined below).
Section 7. The Plan may not be amended to increase
materially the amount that may be expended by the Fund pursuant to the Plan
without the approval by a vote of a majority of the outstanding voting
securities of Class A Shares of the Fund, and no material amendment to the Plan
shall be made unless approved by vote of a majority of both (a) the Directors
of the Company and (b) the Qualified Directors, cast in person at a meeting (or
meetings) called for the purpose of voting on such approval.
Section 8. While the Plan is in effect, the selection and
nomination of each Director who is not an "interested person" (as defined
below) of the Company shall be committed to the discretion of the Directors who
are not interested persons.
Section 9. To the extent any payments made by the Fund
pursuant to a Servicing Agreement are deemed to be payments for the financing
of any activity primarily intended to result in the sale of Class A Shares
within the context of Rule 12b-1 under the Act, such payments shall be deemed
to have been approved pursuant to this Plan. Notwithstanding anything herein
to the contrary, the Fund shall not be obligated to make any payments under
this Plan that exceed the maximum amounts payable under Article III, Section 26
of the Rules of Fair Practice of the National Association of Securities
Dealers.
Section 10. The Company shall preserve copies of the Plan,
each related agreement and each report made pursuant to Section 4 hereof, for a
period of not less than six
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years from the date of the Plan, such agreement or such report, as the case may
be, the first two years in an easily accessible place.
Section 11. As used in the Plan, (a) the terms "assignment,"
"interested person" and "vote of a majority of the outstanding voting
securities" shall have the respective meanings specified in the Act and the
rules and regulations thereunder, subject to such exemption as may be granted
by the Securities and Exchange Commission, and (b) the term "Qualified
Directors" shall mean the Directors of the Company who are not interested
persons of the Company and have no direct or indirect financial interest in the
operation of the Plan or in any agreements related to the Plan.
Section 12. The Company, on behalf of the Fund, intends to
enter into Shareholder Servicing Agreements with one or more financial
institutions serving as Servicing Agents under which such Servicing Agents
would be paid a fee for the provision of shareholder services. To the extent
any portion of the fees payable under the Shareholder Servicing Agreements is
deemed to be for distribution-related services, such fees are approved and may
be paid pursuant to the Plan and in accordance with Rule 12b-1 under the Act,
provided that the Shareholder Servicing Agreements, to the extent they are
deemed to relate to distribution-related services, are approved and otherwise
treated in all respects as agreements related to the Plan.
Dated: November 15, 1995
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EX-99.B18(b)
STAGECOACH FUNDS, INC.
AMENDED RULE 18F-3 MULTI-CLASS PLAN
I. INTRODUCTION.
Pursuant to Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"), the following sets forth the method for allocating
fees and expenses among each class of shares in the separate investment
portfolios ("Funds") of Stagecoach Funds, Inc. (Registration Nos. 33-42927 and
811-6419) (the "Company"). In addition, this Rule 18f-3 Multi-Class Plan (the
"Plan") sets forth the maximum initial sales loads, contingent deferred sales
charges ("CDSCs"), Rule 12b-1 distribution fees, shareholder servicing fees,
conversion features, exchange privileges and other shareholder services
applicable to a particular class of shares of the Funds.
The Company is an open-end series investment company registered
under the 1940 Act, the shares of which are registered on Form N-1A under the
Securities Act of 1933. Upon the effective date of Rule 18f-3, the Company
hereby elects to offer multiple classes of shares of the Funds pursuant to the
provisions of Rule 18f-3 and the Plan. The Plan does not make any material
changes to the class arrangements and expense allocations previously approved
by the Board of Directors of the Company pursuant to the exemptive order issued
under Section 6(c) of the 1940 Act to Stagecoach Funds, Inc., Overland Express
Funds, Inc., WellsFunds Inc. (now Stagecoach Inc.), Wells Fargo Bank, N.A. (the
investment adviser of the Company) (the "Bank"), and Stephens Inc. (the
principal underwriter of the Company) ("Stephens") on May 18, 1993 (1940 Act
Release No. 19479).
The Company currently offers the following thirteen separate
Funds: the Aggressive Growth Fund, Asset Allocation Fund, California Tax-Free
Bond Fund, California Tax-Free Income Fund, California Tax-Free Money Market
Mutual Fund, Corporate Stock Fund, Diversified Income Fund, Ginnie Mae Fund,
Growth and Income Fund, Money Market Mutual Fund, National Tax-Free Money
Market Mutual Fund, Short-Intermediate U.S. Government Income Fund, and the
U.S. Government Allocation Fund. Seven of these Funds are authorized to issue
two classes of shares -- Class A Shares and Class B Shares: the Aggressive
Growth Fund, Asset Allocation Fund, California Tax-Free Bond Fund, Diversified
Income Fund, Ginnie Mae Fund, Growth and Income Fund, and U.S. Government
Allocation Fund (collectively, the "Multi-Class Funds"). The differences
between these classes are discussed below.
<PAGE> 2
II. ALLOCATION OF EXPENSES.
Pursuant to Rule 18f-3 under the 1940 Act, the Company will
allocate to each class of shares of a Multi- Class Fund (i) any fees and
expenses incurred by the Fund in connection with the distribution of such class
of shares under a distribution plan adopted for such class of shares pursuant
to Rule 12b-1, and (ii) any fees and expenses incurred by the Fund under a
shareholder servicing plan in connection with the provision of shareholder
services to the holders of such class of shares. In addition, pursuant to Rule
18f-3, the Company may allocate the following fees and expenses to a particular
class of shares of a single Multi-Class Fund:
(i) transfer agent fees identified by the transfer agent as
being attributable to such class of shares;
(ii) printing and postage expenses related to preparing and
distributing materials such as shareholder reports, notices, prospectuses,
reports, and proxies to current shareholders of that class or to regulatory
agencies with respect to such class of shares;
(iii) blue sky registration or qualification fees incurred by
such class of shares;
(iv) Securities and Exchange Commission registration fees
incurred by such class of shares;
(v) the expense of administrative personnel and services as
required to support the shareholders of such class of shares;
(vi) litigation or other legal expenses relating solely to such
class of shares; and
(vii) fees of the Company's Directors incurred as result of
issues relating to such class of shares.
The initial determination of the class expenses that will be
allocated by the Company to a particular class of shares and any subsequent
changes thereto will be reviewed by the Board of Directors of the Company and
approved by a vote of the Directors of the Company, including a majority of the
Directors who are not interested persons of the Company.
Income, realized and unrealized capital gains and losses, and any
expenses of a Multi-Class Fund not allocable to a particular class of the Fund
pursuant to this Plan shall be allocated to each class of the Fund based upon
the relative net asset value of that class in relation to the aggregate net
asset value of the Fund. In certain cases, Stephens, the Bank or another
service provider for a Multi-Class Fund may waive or reimburse all or a portion
of the expenses of a specific class of shares of the Multi-Class Fund. The
Board of Directors will monitor any such waivers or reimbursements to ensure
that they do not provide a means for cross-subsidization between classes.
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III. CLASS ARRANGEMENTS.
The following summarizes the maximum initial sales loads, CDSCs,
Rule 12b-1 distribution fees, shareholder servicing fees, conversion features,
exchange privileges and other shareholder services applicable to a particular
class of shares of the Multi-Class Funds. Additional details and restrictions
regarding such fees and services are set forth in the relevant Fund's current
Prospectus and Statement of Additional Information.
A. CLASS A SHARES -- MULTI-CLASS FUNDS
1. Maximum Initial Sales Load: 4.50%; except for the
Short-Intermediate U.S. Government Income Fund and Variable Rate Government
Fund, which have maximum initial sales loads of 3.00%.
2. Contingent Deferred Sales Charge: None
3. Maximum Annual Rule 12b-1 Distribution Fee: 0.05% of
average daily net assets attributable to Class A Shares.
4. Maximum Annual Shareholder Servicing Fee: 0.30% of
average daily net assets attributable to Class A Shares.
5. Conversion Features: None
6. Exchange Privileges: Class A Shares of a Multi-Class
Fund may be exchanged for Class A Shares of any other Multi-Class Fund or
shares of any single-class Fund.
7. Other Class-Specific Shareholder Services: None
B. CLASS B SHARES -- MULTI-CLASS FUNDS
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: Class B Shares of a
Multi-Class Fund which are redeemed within one, two, three or four years from
the receipt of a purchase order affecting such shares will be subject to a CDSC
equal to 3.00%, 2.00%, 1.00% and 1.00%, respectively, of the dollar amount
equal to the lesser of the net asset value ("NAV") at the time of purchase of
the Class B Shares being redeemed or the NAV of such shares at the time of
redemption. No CDSC will be imposed on Class B Shares purchased through
reinvestment of dividends or capital gain distributions.
3. Maximum Annual Rule 12b-1 Distribution Fee: 0.70% of
average daily net assets attributable to Class B Shares.
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4. Maximum Annual Shareholder Servicing Fee: 0.30% of
average daily net assets attributable to Class B Shares.
5. Conversion Features: Class B Shares of a Multi-Class
Fund that have been outstanding for six years after the end of the month in
which the shares were initially purchased will automatically convert to Class A
Shares of such Fund and, consequently, will no longer be subject to the higher
Rule 12b-1 fees applicable to Class B Shares. Such conversion will be on the
basis of the relative NAVs of the two classes, without the imposition of any
sales charge or other charge, except that the lower Rule 12b-1 fees applicable
to Class A Shares shall thereafter be applied to such converted shares.
6. Exchange Privileges: Class B Shares of a Multi-Class
Fund may be exchanged for Class B Shares of any other Multi-Class Fund, shares
of the Money Market Mutual Fund, or shares of the California Tax-Free Money
Market Mutual Fund.
7. Other Class-Specific Shareholder Services: None
IV. BOARD REVIEW.
The Board of Directors of the Company shall review the Plan as it
deems necessary. Prior to any material amendment(s) to the Plan with respect
to any Multi-Class Fund's shares, the Company's Board of Directors, including a
majority of the Directors that are not interested persons of the Company, shall
find that the Plan, as proposed to be amended (including any proposed
amendments to the method of allocating class and/or fund expenses), is in the
best interest of each class of shares of the Fund individually and the Fund as
a whole. In considering whether to approve any proposed amendment(s) to the
Plan, the Directors of the Company shall request and evaluate such information
as it considers reasonably necessary to evaluate the proposed amendment(s) to
the Plan.
Adopted by the Company effective April 3, 1995
Approved as amended November 15, 1995
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