STAGECOACH FUNDS INC /AK/, 497, 1996-01-12

STAGECOACH FUNDS INC /AK/
497, 1996-01-12

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<PAGE> 1

STAGECOACH FUNDS, INC.

SUPPLEMENT DATED JANUARY 2, 1996
TO THE CURRENT PROSPECTUS, AS PREVIOUSLY SUPPLEMENTED, AND
STATEMENT OF ADDITIONAL INFORMATION OF EACH FUND OF
STAGECOACH FUNDS, INC.

As of January 1, 1996, Wells Fargo Bank, N.A. provides investment advisory
services for approximately $33 billion of assets.

Each Fund's current Prospectus, as supplemented, and Statement of
Additional Information are hereby amended accordingly.
<PAGE> 2

LOGO

------------------------------
PROSPECTUS
------------------------------

MONEY MARKET MUTUAL FUND - CLASS A SHARES

CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND

NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND

May 1, 1995
As Supplemented on August 24, 1995
<PAGE> 3

STAGECOACH FUNDS(R)

MONEY MARKET MUTUAL FUND - CLASS A SHARES
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND

Stagecoach Funds, Inc. ("Stagecoach Funds") and Stagecoach Inc. are
professionally managed, open-end series investment companies, consisting of
several separate funds, each with different investment objectives and policies.
This Prospectus contains information about three of the funds in the Stagecoach
Family of Funds-the MONEY MARKET MUTUAL FUND and the CALIFORNIA TAX-FREE MONEY
MARKET MUTUAL FUND of Stagecoach Funds, and the NATIONAL TAX-FREE MONEY MARKET
MUTUAL FUND of Stagecoach Inc. (each a "Fund" and, collectively, the "Funds" or
"Money Market Funds").

AN INVESTMENT IN THE FUNDS AND SERIES IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE IS NO ASSURANCE THAT THE FUNDS OR THE SERIES WILL BE ABLE
TO MAINTAIN A CONSTANT $1.00 NET ASSET VALUE PER SHARE.

This Prospectus sets forth concisely information about the Funds and the
Series that a prospective investor should know before investing. It should be
read and retained for future reference. Statements of Additional Information
("SAIs"), dated May 1, 1995, for the Money Market Mutual Fund and California
Tax-Free Money Market Mutual Fund, and dated July 19, 1995 for the National
Tax-Free Money Market Mutual Fund have been filed with the Securities and
Exchange Commission ("SEC") and are incorporated by reference. The SAI for each
Fund is available free of charge by writing to Stagecoach Shareholder Services,
Wells Fargo Bank, N.A., P.O. Box 7066, San Francisco, CA 94120-7066 or by
calling 800-222-8222. Information concerning Class S Shares is also available by
calling this number. 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 FUNDS INVOLVES CERTAIN RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL.

PROSPECTUS DATED MAY 1, 1995
AS SUPPLEMENTED ON AUGUST 24, 1995

PROSPECTUS
<PAGE> 4

The MONEY MARKET MUTUAL FUND seeks to provide investors with a high level of
income, while preserving capital and liquidity, by investing in high-quality,
short-term securities. This Prospectus describes the Class A Shares of the Money
Market Mutual Fund. The Money Market Mutual Fund offers a second class of
shares, Class S Shares, that are available only to qualified business investors
who purchase Fund shares through certain non-interest bearing transaction
accounts at Wells Fargo Bank.

The NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND seeks to provide investors with
a high level of income exempt from federal income taxes, while preserving
capital and liquidity. The Fund seeks to achieve its investment objective by
investing all of its assets in the Tax-Free Money Market Master Series (the
"Series") of Managed Series Investment Trust (the "Master Trust"), an open-end,
management investment company, rather than in a portfolio of securities. The
Series has the same investment objective as the Fund.

The Funds are advised by Wells Fargo Bank which also serves as the Funds'
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 Funds' sponsor and
administrator and serves as the distributor of the Funds' shares.

Stagecoach Inc. and Stagecoach Funds are sometimes referred to herein
individually as a "Company" and together as the "Companies."

WELLS FARGO BANK IS THE INVESTMENT ADVISER TO THE FUNDS AND/OR SERIES AND
PROVIDES CERTAIN OTHER SERVICES TO THE FUNDS AND SERIES, FOR WHICH IT
IS COMPENSATED. STEPHENS, WHICH IS NOT AFFILIATED WITH
WELLS FARGO BANK, IS THE SPONSOR AND DISTRIBUTOR
FOR THE FUNDS.

PROSPECTUS
<PAGE> 5

TABLE OF CONTENTS
-------

PROSPECTUS SUMMARY 1

SUMMARY OF FUND EXPENSES 5

FINANCIAL HIGHLIGHTS 8

HOW THE FUNDS WORK 10

THE FUNDS, THE MASTER TRUST AND MANAGEMENT 16

INVESTING IN THE FUNDS 19

DIVIDENDS 26

HOW TO REDEEM SHARES 26

ADDITIONAL SHAREHOLDER SERVICES 31

MANAGEMENT AND SERVICING FEES 33

TAXES 36

PROSPECTUS APPENDIX - ADDITIONAL INVESTMENT POLICIES A-1

PROSPECTUS
<PAGE> 6

PROSPECTUS SUMMARY

The Funds provide 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 each of the Funds. For more
information, please refer specifically to the identified Prospectus sections and
generally to the Prospectus and the SAI for each Fund.

Q. WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

A. The MONEY MARKET MUTUAL FUND seeks to provide investors with a high level of
income, while preserving capital and liquidity, by investing in
high-quality, short-term securities. In pursuing this objective, the Fund
invests in securities with remaining maturities not exceeding thirteen
months, as determined in accordance with Rule 2a-7 under the Investment
Company Act of 1940, as amended (the "1940 Act"). These securities include
obligations of the U.S. Government, its agencies and instrumentalities,
high-quality debt obligations such as corporate debt, certain obligations of
U.S. banks and certain repurchase agreements.

The NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND seeks to provide investors
with a high level of income exempt from federal income taxes, while
preserving capital and liquidity. The Fund seeks to achieve its investment
objective by investing all of its assets in the Tax-Free Money Market Master
Series of the Master Trust, which has the same investment objective as the
Fund. The Series seeks to achieve this investment objective by investing in
high-quality, U.S. dollar-denominated money market instruments, primarily
municipal obligations, with remaining maturities not exceeding thirteen
months.

Each Fund and the Series seeks to maintain a net asset value of $1.00 per
share; however, there is no assurance that this will be achieved. See "How
the Funds Work -- Investment Objectives and Policies" and "Prospectus
Appendix -- Additional Investment Policies."

1 PROSPECTUS
<PAGE> 7

Q. WHO MANAGES MY INVESTMENTS?

A. Wells Fargo Bank, as the investment adviser to the Money Market Mutual Fund,
the California Tax-Free Money Market Mutual Fund and the Series, manages
your investments. A separate investment adviser has not been retained for
the National Tax-Free Money Market Mutual Fund because this Fund invests all
of its assets in the Series. Wells Fargo Bank also provides the Funds and
the Series with transfer agency, dividend disbursing agency and custodial
services. In addition, Wells Fargo Bank is a Shareholder Servicing Agent and
a Selling Agent (as defined below) of the Funds. See "The Funds, the Master
Trust and Management" and "Management and Servicing Fees."

Q. HOW DO I INVEST?

A. You may invest by purchasing Fund shares at their net asset value. You may
open an account by investing at least $2,500, and you 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 Funds are open. Shares of the California Tax-Free Money
Market Mutual Fund and The National Tax-Free Money Market Mutual Fund may
not be suitable investments for tax-exempt institutions or tax-exempt
retirement plans, since such investors would not benefit from the exempt
status of such Funds' dividends. See "Investing in the Funds." In addition,
California Tax-Free Money Market Mutual Fund shares are not available in all
states. For more details, contact Stephens (the Funds' sponsor and
distributor), a Shareholder Servicing Agent (such as Wells Fargo Bank) or a
Selling Agent.

Q. WHAT ARE THE FEES FOR INVESTING?

A. Unlike certain other mutual funds that charge sales loads or other
transaction fees, the Funds do not impose shareholder transaction fees on
the purchase, redemption or exchange of their shares, or for reinvesting
dividends. For its advisory services, Wells Fargo Bank is entitled to
monthly investment advisory fees at the annual rate of 0.50%, 0.40% and
0.30% of the average daily net assets of the California Tax-Free Money
Market Mutual Fund, the Money Market Mutual Fund, and the Series,
respectively. Wells Fargo Bank also provides transfer agency services and
custody services to the Funds and the Series. Wells Fargo Bank is not
entitled to any additional compensation for providing such services to the
Funds or the Series.

For its services as administrator of the Funds and the Series, Stephens is
entitled to receive an annual fee at the rate of 0.05% of the average daily
net assets of each Fund.

The Funds have adopted Distribution Plans under the SEC's Rule 12b-1 which
permit payment of a monthly fee at the annual rate of 0.05% of each Fund's
average

PROSPECTUS 2
<PAGE> 8

daily net assets to Stephens as compensation for distribution-related
services. The National Tax-Free Money Market Mutual Fund has adopted a
Shareholder Servicing Plan pursuant to which it may enter into agreements
with Shareholder Servicing Agents. The Shareholder Servicing Plans permit
the Funds to compensate Shareholder Servicing Agents at a rate of up to
0.30%, 0.30% and 0.25% of the average daily net assets of the California
Tax-Free Money Market Mutual Fund, the Money Market Mutual Fund, and the
National Tax-Free Money Market Mutual Fund, respectively. See "The Funds,
The Master Trust and Management."

Q. HOW ARE THE FUNDS' INVESTMENTS VALUED?

A. The price per share or "net asset value"("NAV") of a Fund depends upon the
total value of portfolio securities owned by such Fund (plus cash and other
assets net of liabilities) and the number of its shares outstanding. In the
case of the National Tax-Free Money Market Mutual Fund, the NAV depends upon
the total value of portfolio securities owned by the Series (plus cash and
other assets net of liabilities) and the number of the Series' shares
outstanding. Wells Fargo Bank calculates the NAV for each Fund and the
Series on each day that the Funds and the Series are open. See "Investing in
the Funds -- Share Price."

Q. HOW WILL I RECEIVE DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS?

A. Dividends from net investment income are declared daily, paid monthly and
automatically reinvested in additional shares of the Funds at net asset
value unless you elect to receive dividends in cash. Any capital gains are
distributed at least annually. See "Dividends" and "Additional Shareholder
Services."

Q. ARE EXCHANGES TO OTHER FUNDS PERMITTED?

A. Yes. The exchange privilege enables you to exchange Fund shares for shares of
another fund offered pursuant to another prospectus of the respective fund's
company, or shares of certain other investment companies in the Stagecoach
Family of Funds, to the extent such shares are offered for sale in your
state of residence. See "Additional Shareholder Services -- Exchange
Privilege."

Q. HOW MAY I REDEEM SHARES?

A. You may redeem your shares, without charge by a Fund, by letter, by an
automatic feature called the Systematic Withdrawal Plan, or by telephone
unless you have declined telephone privileges, on any day the relevant Fund
is open for business. See "How To Redeem Shares." For more details, contact
Stephens, a Shareholder Servicing Agent (such as Wells Fargo Bank) or a
Selling Agent.

Q. WHAT ARE SOME OF THE POTENTIAL RISKS ASSOCIATED WITH THIS TYPE OF INVESTMENT?

A. Investments in the Funds or the Series are not bank deposits or obligations
of Wells Fargo Bank and are not insured by the Federal Deposit Insurance
Corporation

3 PROSPECTUS
<PAGE> 9

("FDIC"), nor are they insured or guaranteed against loss of principal.
Although the Funds and the Series seek to maintain a stable net asset value
of $1.00 per share, there is no assurance that they will be able to do so.
Since the California Tax-Free Money Market Mutual Fund invests primarily in
securities issued by California, its agencies and municipalities, events in
California are more likely to affect this Fund's investments. Also, the
California Tax-Free Money Market Mutual Fund is nondiversified, which means
that its assets may be invested among fewer issuers and therefore the value
of its assets may be subject to greater impact by events affecting one of
its investments. You should be prepared to accept some risk with the money
you invest in these Funds. As with all mutual funds, there can be no
assurance that the Funds will achieve their investment objectives.

PROSPECTUS 4
<PAGE> 10

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 Funds. As shown below, you are not charged
sales charges, redemption fees, or exchange fees. You should consider this
expense information together with the important information in this Prospectus,
including the Funds' investment objectives and policies.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<CAPTION>
CALIFORNIA NATIONAL
MONEY MARKET TAX-FREE MONEY TAX-FREE MONEY
MUTUAL FUND MARKET MUTUAL MARKET MUTUAL
(CLASS A SHARES) FUND FUND
<S> <C> <C> <C>
Maximum Sales Charge
Imposed
on Purchases (as a
percentage
of offering
price)............ None None None
Sales Charge Imposed on
Reinvested
Dividends......... None None None
Sales Charge Imposed on
Redemptions*........ None None None
Exchange Fees........... None None None
</TABLE>

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
MONEY
MARKET CALIFORNIA NATIONAL TAX-
MUTUAL FUND TAX-FREE FREE MONEY
(CLASS A MONEY MARKET MARKET MUTUAL
SHARES) MUTUAL FUND FUND**
<S> <C> <C> <C> <C> <C> <C>
Management Fee......... 0.40% 0.50% 0.30%
Rule 12b-1 Fee(1)...... 0.02% 0.03% 0.05%
Other Expenses:
Shareholder
Servicing
Fee(1)***........ 0.28% 0.04% 0.00%
Administrative
Fee.............. 0.03% 0.03% 0.05%
Miscellaneous
Expenses(1)...... 0.02% 0.05% 0.10%
----- -----
Total Other
Expenses(1):......... 0.33% 0.12% 0.15%
----- -----
TOTAL FUND OPERATING
EXPENSES(1)........ 0.75% 0.65% 0.50%
</TABLE>

- -------------------------------

<TABLE>
<C> <S>
(1) After any waivers or reimbursements.
* The Company reserves the right to impose a charge for wiring
redemption proceeds.
** Other Mutual Funds may invest in the Tax-Free Money Market
Master Series and such other funds' expenses, and
correspondingly, investment returns may differ from those of
the National Tax-Free Money Market Mutual 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 Funds, such
as requiring a minimum initial investment or payment of a
separate fee for additional services.
</TABLE>

5 PROSPECTUS
<PAGE> 11

EXAMPLE OF EXPENSES

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
An investor would pay the following
expenses on a $1,000 investment
in a Fund, assuming a 5% annual
return and redemption at the end of
each time period indicated:
California Tax-Free Money
Market Mutual Fund............. $7 $ 21 $ 36 $ 81
Money Market Mutual Fund (Class
A Shares)...................... $8 $ 24 $ 42 $ 93
National Tax-Free Money Market
Mutual Fund.................... $5 $ 16 $ N/A $N/A
</TABLE>

EXPLANATION OF TABLES

SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell Fund
shares. There are no Shareholder Transaction Expenses for these Funds. However,
the Company reserves the right to impose a charge for wiring redemption
proceeds.

ANNUAL FUND OPERATING EXPENSES for the Class A Shares of the Money Market
Mutual Fund and shares of the California Tax-Free Money Market Mutual Fund are
based on amounts incurred during the most recent fiscal year, restated to
reflect voluntary fee waivers and expense reimbursements that are expected to
continue during the current fiscal year. Annual Fund Operating Expenses for the
National Tax-Free Money Market Mutual Fund summarize expenses charged at the
Master Trust level as well as expenses charged at the Company level. The amounts
shown above for the National Tax-Free Money Market Mutual Fund under "Management
Fee," "Rule 12b-1 Fee" and "Administrative Fee" reflect contract amounts; the
amounts shown under "Shareholder Servicing Fee," "Miscellaneous Expenses,"
"Total Other Expenses" and "Total Fund Operating Expenses" reflect certain
anticipated voluntary fee waivers and expense reimbursements for the current
fiscal year. Wells Fargo Bank and Stephens each has agreed to waive or reimburse
all or a portion of its respective fees if certain Fund expenses exceed limits
set by state securities laws or regulations. In addition, Wells Fargo Bank and
Stephens each, at its sole discretion, may waive or reimburse all or a portion
of its respective fees charged to, or expenses paid by, a Fund or the Series.
Any waivers or reimbursements would reduce the total expenses of the Funds or
Series. There can be no assurance that such waivers or reimbursements would
continue. Absent waivers and reimbursements, the percentages shown above under
"Rule 12b-1 Fee," "Total Other Expenses" and "Total Fund Operating Expenses"
would be 0.05%, 0.44% and 0.89%, respectively, for the Class A Shares of the
Money Market Mutual Fund and 0.05%, 0.53% and 1.08%, respectively, for the
California Tax-Free Money Market Mutual Fund. Absent waivers and reimbursements,
"Shareholder Servicing Fee," "Miscellaneous Expenses," "Total Other Expenses"
and "Total Fund Operating

PROSPECTUS 6
<PAGE> 12

Expenses" would be 0.25%, 0.30%, 0.60% and 0.95%, respectively, for the National
Tax-Free Money Market Mutual Fund. Long-term shareholders in the Funds 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 each
Fund, please see the Prospectus section captioned "Management and Servicing
Fees."

EXAMPLE OF EXPENSES is a hypothetical example which illustrates the expenses
associated with a $1,000 investment over the periods shown, 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 a 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. If current fee waivers and/or reimbursements are
discontinued, the amounts contained in the "Example of Expenses" may increase.

With regard to the combined fees and expenses of the National Tax-Free Money
Market Mutual Fund and the Series, the Board of Directors of Stagecoach Inc. has
considered whether various costs and benefits of investing all the Fund's assets
in the Series would be more or less than if the Fund invested in portfolio
securities directly, and believes that the Fund should achieve economic
efficiencies by investing in the Series. Additionally, the Board of Directors
believes that the aggregate fees assessed by this Fund and the Series should be
less than those expenses that the Directors believe would be incurred had the
Fund invested directly in the securities held by the Series. See the Prospectus
sections captioned "The Funds, the Master Trust and Management" and "Management
and Servicing Fees" for more complete descriptions of the various costs and
expenses applicable to investors in this Fund. In addition, if this Fund were to
change its fundamental investment strategy and no longer invest in the Series of
the Master Trust, these expenses may change.

7 PROSPECTUS
<PAGE> 13

FINANCIAL HIGHLIGHTS

The following information relating to the Class A Shares of the Money Market
Mutual Fund and the shares of the California Tax-Free Money Market Mutual Fund
has been derived from the Financial Highlights in such Funds' 1994 annual
financial statements. The financial statements are included in the SAI for each
such Fund and have been audited by KPMG Peat Marwick LLP, independent auditors,
whose report dated February 17, 1995 also is included in the SAIs. This
information should be read in conjunction with the 1994 annual financial
statements for these Funds and the notes thereto. The SAI for each of the Funds
has been incorporated by reference into this Prospectus. Financial information
is not provided in connection with the National Tax-Free Money Market Mutual
Fund because the Fund had not begun operations during the periods presented.

MONEY MARKET MUTUAL FUND
FOR A CLASS A SHARE OUTSTANDING

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED*
DEC. 31, 1994 DEC. 31, 1993 DEC. 31, 1992
-------------- -------------- -------------
<S> <C> <C> <C>
Net Asset Value Beginning
of Period................ $ 1.00 $ 1.00 $ 1.00
Income from Investment
Operations:
Net Investment Income.... 0.04 0.03 0.02
Less Distributions:
Dividends from Net
Investment Income...... (0.04) (0.03) (0.02)
Net Asset Value End of
Period................... $ 1.00 $ 1.00 $ 1.00
====== ====== ======
Total Return (not
annualized).............. 3.74% 2.70% 1.50%
Ratios/Supplemental Data:
Net Assets, End of Period
(000's).................. $2,343,942 $317,474 $236,269
Number of shares
outstanding, End of
Period (000's)........... 2,344,028 317,474 236,270
Ratios to Average Net
Assets (annualized):
Ratio of Expenses to
Average Net Assets(1).... 0.69% 0.58% 0.20%
Ratio of Net Investment
Income to Average Net
Assets(2)................ 4.12% 2.67% 2.98%
- -------------------
(1) Ratio of Expenses to
Average Net Assets
Prior To
Waived Fees and
Reimbursed Expenses.... 0.89% 1.00% 0.94%
(2) Ratio of Net Investment
Income to Average Net
Assets Prior To Waived
Fees and Reimbursed
Expenses............... 3.92% 2.25% 2.24%
* The Fund commenced operations on July 1,
1992
</TABLE>

PROSPECTUS 8
<PAGE> 14

CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
FOR A SHARE OUTSTANDING

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993 DEC. 31, 1992
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.00 $ 1.00 $ 1.00
Income from Investment
Operations:
Net Investment
Income............... 0.02 0.02 0.03
Less Distributions:
Dividends from Net
Investment Income.... (0.02) (0.02) (0.03)
Net Asset Value, End of
Period................. $ 1.00 $ 1.00 $ 1.00
====== ====== ======
Total Return (not
annualized)............ 2.28% 1.89% 2.81%
Ratios/Supplemental Data:
Net Assets, End of Period
(000's)................ $869,745 $793,420 $572,906
Number of shares
outstanding, End of
Period (000's)......... 869,824 793,426 572,907
Ratios to Average Net
Assets (annualized):
Ratio of Expenses to
Average Net
Assets(1).............. 0.62% 0.55% 0.28%
Ratio of Net Investment
Income to Average Net
Assets(2).............. 2.26% 1.88% 2.41%
- -------------------
(1) Ratio of Expenses to
Average Net Assets
Prior to
Waived Fees and
Reimbursed
Expenses............. 1.08% 1.06% 1.03%
(2) Ratio of Net
Investment Income to
Average Net Assets
Prior to Waived Fees
and Reimbursed
Expenses............. 1.80% 1.37% 1.66%
</TABLE>

9 PROSPECTUS
<PAGE> 15

HOW THE FUNDS WORK

INVESTMENT OBJECTIVES AND POLICIES

THE MONEY MARKET MUTUAL FUND

The Money Market Mutual Fund seeks to provide investors with a high level of
income, while preserving capital and liquidity, by investing in high-quality,
short-term securities. The Fund invests its assets only in U.S.
dollar-denominated, high-quality money market instruments, and may engage in
certain other investment activities as described in this Prospectus. Permitted
investments include U.S. Government short-term obligations, obligations of
domestic and foreign banks, commercial paper, and repurchase agreements. In
pursuing its objective, the Fund invests in instruments with remaining
maturities not exceeding thirteen months, as determined in accordance with Rule
2a-7 under the 1940 Act. As with all mutual funds, there can be no assurance
that the Fund, which is a diversified portfolio, will achieve its investment
objective. A more complete description of these investments and investment
activities is contained in the "Prospectus Appendix - Additional Investment
Policies" and in the SAI.

THE CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND

The California Tax-Free Money Market Mutual Fund seeks to obtain a high level
of income exempt from federal income taxes and California personal income taxes,
while preserving capital and liquidity, by investing in high-quality, U.S.
dollar-denominated money market instruments, primarily municipal obligations.
This investment objective is fundamental and cannot be changed without
shareholder approval. There can be no assurance that the Fund, which is a
nondiversified portfolio, will achieve its investment objective. Wells Fargo
Bank, as investment adviser to the Fund, pursues the Fund's objective by
investing (under normal market conditions) substantially all of the Fund's
assets in the following types of municipal obligations that pay interest which
is exempt from both federal income tax and California personal income tax:
bonds, notes, and commercial paper issued by or on behalf of the State of
California, its cities, municipalities, political subdivisions and other public
authorities with remaining maturities not exceeding thirteen months, as
determined in accordance with Rule 2a-7 under the 1940 Act. These municipal
obligations and the taxable investments described below may bear interest at
rates that are not fixed ("floating- and variable-rate instruments").

The California Tax-Free Money Market Mutual Fund, which is nondiversified, may
temporarily invest some of its assets in certain high-quality, taxable money
market instruments or may engage in certain other investment activities as
described in this Prospectus. The Fund may elect to invest temporarily up to 20%
of its net assets in certain permitted taxable investments, which include cash
reserves, U.S. Government obligations, obligations of domestic and foreign
banks, foreign securities, rated

PROSPECTUS 10
<PAGE> 16

commercial paper, taxable municipal obligations, repurchase agreements, and
loans of portfolio securities. Such temporary investments would most likely be
made when there is an unexpected or abnormal level of investor purchases or
redemptions of Fund shares or because of unusual market conditions. The income
from these temporary investments and investment activities may be subject to
federal income taxes and California personal income taxes. However, as stated
above, Wells Fargo Bank seeks to invest substantially all of the Fund's assets
in securities exempt from such taxes. An additional description of tax-free
municipal obligations, taxable money market instruments, and other investment
activities is contained in the "Prospectus Appendix - Additional Investment
Policies" and in the SAI.

As a matter of fundamental policy, at least 80% of the California Tax-Free
Money Market Mutual Fund's net assets are invested (under normal market
conditions) in municipal obligations that pay interest which is exempt from
federal income taxes and not subject to the federal alternative minimum tax (or
in other open-end tax-free money market funds with a similar fundamental
policy). At least 65% of the Fund's total assets are invested (under normal
market conditions) in municipal obligations that pay interest which is exempt
from California personal income taxes. However, as a matter of general operating
policy, the Fund seeks to have substantially all of its assets invested in such
municipal obligations. The Fund's investment adviser may rely either on an
opinion of counsel to the issuer of the municipal obligations or on Internal
Revenue Service ("IRS") rulings regarding the tax treatment of these
obligations. In addition, the Fund may invest 25% or more of its assets in
California municipal obligations that are related in such a way that an
economic, business or political development or change affecting one such
obligation would also affect the other obligations; for example, the California
Tax-Free Money Market Mutual Fund may own different municipal obligations which
pay interest based on the revenues of similar types of projects.

THE NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND

The National Tax-Free Money Market Mutual Fund seeks to provide investors with
a high level of income exempt from federal income taxes, while preserving
capital and liquidity. The Fund seeks to achieve its investment objective by
investing all of its assets in the Series, which has the same investment
objective as the Fund. The Series seeks to achieve this investment objective by
investing in high-quality, U.S. dollar denominated money market instruments,
primarily municipal obligations, with remaining maturities not exceeding
thirteen months.

Since the investment characteristics of the Fund will correspond directly to
those of the Series, the following is a discussion of the various investments of
and techniques employed by the Series of the Master Trust.

11 PROSPECTUS
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exempt from federal income tax: bonds, notes and commercial paper issued by or
on behalf of states, territories, and possessions of the United States
(including the District of Columbia) and their political subdivisions, agencies,
instrumentalities (including government-sponsored enterprises) and authorities,
the interest on which, in the opinion of counsel to the issuer or bond counsel,
is exempt from federal income tax. These municipal obligations and the taxable
investments described below may bear interest at rates that are not fixed
("floating- and variable-rate instruments").

The Series may temporarily invest some of its assets in cash reserves or
certain high-quality, taxable money market instruments, or may engage in other
investment activities as described in this Prospectus. The Series may elect to
invest temporarily up to 20% of its net assets in certain permitted taxable
investments, which include cash reserves, U.S. Government obligations,
obligations of domestic banks, commercial paper, taxable municipal obligations
and repurchase agreements. The Series may also invest in U.S. dollar-denominated
obligations of foreign banks and foreign securities. Such temporary investments
would most likely be made when there is an unexpected or abnormal level of
investor purchases or redemptions of interests in the Series or because of
unusual market conditions. The income from these temporary investments and
investment activities may be subject to federal income tax. However, as stated
above, Wells Fargo Bank seeks to invest substantially all of the Series' assets
in securities exempt from such taxes. A more complete description of tax-free
municipal obligations, taxable money market instruments, and other investment
activities is contained in the "Prospectus Appendix -- Additional Investment
Policies."

As a matter of fundamental policy, at least 80% of the net assets of the
Series are invested (under normal market conditions) in municipal obligations
that pay interest which is exempt from federal income tax and is not subject to
the federal alternative minimum tax. However, as a matter of general operating
policy, the Series seeks to invest substantially all of its assets in such
municipal obligations. The Series' investment adviser may rely either on the
opinion of counsel to the issuer of the municipal obligations or on IRS rulings
regarding the tax treatment of these obligations. In addition, the Series may
invest 25% or more of its assets in municipal obligations that are related in
such a way that an economic, business or political development or change
affecting one such obligation would also affect the other obligations; for
example, the Series may own different municipal obligations which pay interest
based on the revenues of similar types of projects.

MASTER/FEEDER STRUCTURE

PROSPECTUS 12
<PAGE> 18

options, if any, for investments in shares of the Series is available from
Stephens by calling 800-643-9691 or by calling Wells Fargo Bank at 800-222-8222.
The expenses and, correspondingly, the returns of other investment options in
the Series may differ from those of the Fund.

The Board of Directors of Stagecoach Inc. believes that certain economic
efficiencies may be realized if other mutual funds or institutional investors
invest their assets in the Series. For example, fixed expenses that otherwise
would have been borne solely by the Fund would be spread among a potentially
larger asset base provided by more than one fund investing in the Series. The
Fund and other entities (if any) investing in the Series would each be liable
for all obligations of the Series. However, the risk of the Fund incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance exists and the Master Trust itself is unable to meet
its obligations. Accordingly, Stagecoach Inc.'s Board of Directors believes that
neither the Fund nor its shareholders will be adversely affected by reason of
investing their assets in the Series. However, if a mutual fund or other
investor withdraws its investment from the Series, the economic efficiencies
(e.g., spreading fixed expenses across a larger asset base) that Stagecoach
Inc.'s Board believes should be available through investment in the Series may
not be fully achieved. In addition, given the relatively novel nature of the
master/feeder structure, accounting and operational difficulties, although
unlikely, could occur.

The investment objectives and other fundamental policies of the National
Tax-Free Money Market Mutual Fund and the Series cannot be changed without
approval by the holders of a majority (as defined in the 1940 Act) of such
Fund's or Series' outstanding voting shares. Whenever the Fund, as a Series
interestholder, is requested to vote on matters pertaining to any fundamental
policy of such Series, the Fund will hold a meeting of its shareholders to
consider such matters and will cast its votes in proportion to the votes
received from Fund shareholders. The Fund will vote Series shares for which it
receives no voting instructions in the same proportion as the votes received
from Fund shareholders. In addition, certain policies of the Series which are
non-fundamental could be changed by vote of a majority of the Master Trust's
Trustees without interestholder vote. If the Series' investment objective or
fundamental or non-fundamental policies are changed, the Fund investing in such
Series could subsequently change its objective or policies to correspond to
those of the Series, or the Fund could redeem its Series shares and either seek
a new investment company in which to invest with a matching objective or retain
its own investment adviser to manage the Fund's portfolio in accordance with
its objective. In the latter case, the Fund'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 such Fund or the Series, to the extent
possible. Additional information regarding the officers and directors of
Stagecoach Funds,

13 PROSPECTUS
<PAGE> 19

Stagecoach Inc. and the Master Trust is included in the SAI for each Fund under
"Management."

RISK FACTORS

The Funds and the Series, under the 1940 Act, must comply with certain
investment criteria designed to provide liquidity, reduce risk, and allow the
Funds and the Series to maintain a stable net asset value of $1.00 per share. Of
course, the Funds and the Series cannot guarantee a $1.00 share price. The
dollar-weighted average portfolio maturity of each of the Funds and the Series
must not exceed 90 days. Any security that a Fund or the Series purchases must
have a remaining maturity of not more than thirteen months. In addition, any
security that a Fund or the Series purchases must present minimal credit risks
and be of high quality (i.e., be rated in the top two rating categories by the
required number of nationally recognized statistical rating organizations
("NRSROs") or, if unrated, determined to be of comparable quality to such rated
securities). These determinations are made by Wells Fargo Bank, as the Funds' or
Series' investment adviser, as the case may be, under guidelines adopted by the
Board of Directors of each Company, or the Master Trust's Board of Trustees,
respectively.

The Funds and the Series seek to reduce risk by investing their assets in
securities of various issuers. As such, the Money Market Mutual Fund, the
National Tax-Free Money Market Mutual Fund and the Series, but not the
California Tax-Free Money Market Mutual Fund, will be considered to be
diversified for purposes of the 1940 Act. In addition, the Funds, since their
respective inceptions, have emphasized safety of principal and high credit
quality. In particular, the internal investment policies of Wells Fargo Bank,
the investment adviser to the Funds and Series, have always prohibited the
purchase for the Funds and Series of many types of floating-rate derivative
securities that are considered potentially volatile. The following types of
derivative securities ARE NOT permitted investments for the Funds and the
Series:

- capped floaters (on which interest is not paid when market rates move above
a certain level);

- leveraged floaters (whose interest-rate reset provisions are based on a
formula that magnifies changes in interest rates);

- range floaters (which do not pay any interest if market interest rates move
outside of a specified range);

- dual index floaters (whose interest-rate reset provisions are tied to more
than one index so that a change in the relationship between these indices
may result in the value of the instrument falling below face value); and

- inverse floaters (which reset in the opposite direction of their index).

Additionally, the Funds and the Series may not invest in securities whose
interest rate reset provisions are tied to an index that materially lags
short-term interest rates, such

PROSPECTUS 14
<PAGE> 20

Cost of Funds Index ("COFI") floaters. The Funds and the Series may only invest
in floating-rate securities that bear interest at a rate that resets quarterly
or more frequently, and which resets based on changes in standard money market
rate indices such as U.S. Government Treasury bills, London Interbank Offered
Rate, the prime rate, published commercial paper rates, federal funds rates,
Public Securities Associates ("PSA") floaters or JJ Kenney index floaters.

Since the California Tax-Free Money Market Mutual Fund invests primarily in
securities issued by California and its agencies and municipalities, events in
California will be more likely to affect the Fund's investments. While the
California Tax-Free Money Market Mutual Fund seeks to reduce risk by investing
its assets in securities of various issuers, the Fund will be considered to be
nondiversified for purposes of the 1940 Act. However, the California Tax-Free
Money Market Mutual Fund will comply with Internal Revenue Code of 1986 ("Code")
diversification requirements, as described in the "Prospectus
Appendix -- Additional Investment Policies" section below.

California is experiencing recurring budget deficits caused by lower than
anticipated tax revenues and increased expenditures for certain programs. These
budget deficits have depleted the state's available cash resources, and the
state has recently had to use a series of external borrowings to meet its cash
needs. In addition, since 1992 some of the credit rating agencies have assigned
their third highest rating to certain of the state's debt obligations. On July
15, 1994, three of the ratings agencies rating California's long-term debt
lowered their rating of the state's general obligation bonds. Moody's Investors
Service lowered its rating from "Aa" to "A1," Standard & Poor's Ratings Group
lowered its rating from "A+" to "A" and termed its outlook as "stable," and
Fitch Investors Service lowered its rating from "AA" to "A." Since the
California Tax-Free Money Market Mutual Fund may invest only in securities rated
in the top two rating categories, any further rating downgrade of the state's
debt obligations may impact the availability of securities that meet the Fund's
investment policies and restrictions. The Fund's investment adviser continues to
monitor and evaluate the Fund's investments in light of the events in California
and the California Tax-Free Money Market Mutual Fund's investment objective and
investment policies. The rating agencies also continue to monitor events in the
state and the state and local governments' responses to budget shortfalls. See
"Special Considerations Affecting California Municipal Obligations" in the SAI
for the California Tax-Free Money Market Mutual Fund.

Investments in the Funds are not insured against loss of principal. Although
Wells Fargo Bank seeks to achieve the investment objectives of the Funds, there
is no assurance that the Funds will be able to maintain a constant $1.00 net
asset value per share. The Funds are subject to interest rate risk (i.e., the
risk that increases in market interest rates may adversely affect the value of
the securities in which the Funds invest and hence the value of your investment
in the Funds; the value of such securities generally changes inversely to market
interest rates.) See "Prospectus Appendix -- Additional Investment Policies" for
further discussion of investment objectives and risks.

15 PROSPECTUS
<PAGE> 21

PERFORMANCE

The performance of the Class A Shares of the Money Market Mutual Fund and the
shares of the Tax-Free Funds may be advertised in terms of current yield or
effective yield. In addition, the performance of the Tax-Free Funds may be
advertised in terms of tax-equivalent yield or effective tax-equivalent yield.
These performance figures are based on historical results and are not intended
to indicate future performance. The investment performance of the National
Tax-Free Money Market Mutual Fund will correspond to the investment experience
of the Series.

Yield refers to the income generated by an investment in shares of a Tax-Free
Fund, or Class of shares of the Money Market Mutual Fund, over a specified
period (7-day or 30-day), expressed as an annual percentage rate. Effective
yields are calculated similarly but assume that the income earned from a Fund is
reinvested in the Fund or in shares of the same class of such Fund. Because of
the effects of compounding, effective yields are slightly higher than yields.
The tax-equivalent yield and the effective tax-equivalent yield of the Tax-Free
Funds assume that a stated income tax rate has been applied to determine the
tax-equivalent figures. The application of the stated income tax rate results in
higher yield and effective yield figures. The Tax-Free Funds may also present
nonstandard performance information, such as distribution rate, for purposes of
sales literature. Performance quotations are computed separately for Class A
Shares and Class S Shares of the Money Market Mutual Fund.

Additional performance information is contained in each Company's annual
report which is available upon request without charge by calling the Company at
800-222-8222.

THE FUNDS, THE MASTER TRUST
AND MANAGEMENT

THE MONEY MARKET MUTUAL FUND AND THE CALIFORNIA TAX-FREE
MONEY MARKET MUTUAL FUND

The Money Market Mutual Fund and the California Tax-Free Money Market Mutual
Fund are two funds of Stagecoach Funds. Stagecoach Funds was organized as a
Maryland corporation on September 9, 1991, and currently offers shares of nine
other funds: the Asset Allocation Fund, the California Tax-Free Bond Fund, the
California Tax-Free Income Fund, the Corporate Stock Fund, the Diversified
Income Fund, the Ginnie Mae Fund, the Growth and Income Fund, the
Short-Intermediate U.S. Government Income Fund and the U.S. Government
Allocation Fund. The Money Market Mutual Fund also offers a second class of
shares -- Class S Shares. Class S Shares are subject to different levels of fees
and expenses than Class A Shares and the performance of such shares may vary
accordingly. Class S Shares are currently available only to qualified business

PROSPECTUS 16
<PAGE> 22

investors who purchase such shares through certain non-interest bearing
transaction accounts with Wells Fargo Bank. Please contact Stagecoach
Shareholder Services at 800-222-8222 if you would like additional information
about Class S Shares.

The Board of Directors of Stagecoach Funds supervises these funds' activities
and monitors their contractual arrangements with various service providers.
Although Stagecoach Funds is not required to hold annual shareholder meetings,
special meetings may be required for purposes such as electing or removing
Directors, approving advisory contracts and distribution plans, and changing the
Funds' investment objectives or fundamental investment policies. All shares of
Stagecoach Funds have equal voting rights and will be voted in the aggregate,
rather than by fund or class, unless otherwise required by law (such as when the
voting matter affects only one fund or class). As a shareholder of the Funds,
you are entitled to 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 SAI
for each Fund.

THE NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND AND THE MASTER TRUST

The National Tax-Free Money Market Mutual Fund is a fund of Stagecoach Inc.
Stagecoach Inc. was organized as a Maryland corporation on October 15, 1992, and
currently includes the following thirteen other funds: the Asset Allocation
Fund, the Bond Index Fund, the California Tax-Free Intermediate Income Fund, the
California Tax-Free Money Market Fund, the California Tax-Free Short-Term Income
Fund, the Growth and Income Fund, the Growth Stock Fund, the Money Market Fund,
the National Tax-Free Intermediate Income Fund, the Overland National Tax-Free
Institutional Money Market Fund, the Short-Intermediate Term Fund, the S&P 500
Stock Fund and the U.S. Treasury Allocation Fund.

The Board of Directors of Stagecoach Inc. supervises these funds' activities
and monitors their contractual arrangements with various service providers. As
noted above, the Fund may withdraw its investment in the Series only if the
Board of Directors of Stagecoach Inc. determines that this is in the best
interests of the Fund and its shareholders to do so. Upon any such withdrawal,
the Board of Directors of Stagecoach Inc. 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 Series. Although
Stagecoach Inc. is not required to hold annual shareholder meetings, special
meetings may be required for purposes such as electing or removing Directors,
approving advisory contracts and distribution plans, and changing the Fund's
investment objective or fundamental investment policies. All shares of
Stagecoach Inc. have equal voting rights and will be voted in the aggregate,
rather than by fund, unless otherwise required by law (such as when the voting
matter affects only one fund). As a shareholder

17 PROSPECTUS
<PAGE> 23

of the Fund, you are entitled to one vote for each share you own and fractional
votes for fractional shares owned. In addition, whenever the Fund is requested
to vote on matters pertaining to the Series, Stagecoach Inc. will hold a meeting
of the Fund's shareholders and will cast its vote as instructed by Fund
shareholders. The Directors of Stagecoach Inc. will vote shares for which they
receive no voting instructions in the same proportion as the shares for which
they do receive voting instructions. A more detailed statement of the voting
rights and attributes of the shares is contained in the "Capital Stock" section
of the SAI for the Fund.

The Master Trust was established on October 28, 1993, as a Delaware business
trust. The Master Trust's Declaration of Trust permits the Board of Trustees to
issue beneficial interests in the Master Trust to investors based on their
proportionate investments in the Master Trust. The Master Trust is divided into
separate portfolios called series. The Master Trust has retained the services of
Wells Fargo Bank as investment adviser and Stephens as administrator and
placement agent. The Board of Trustees of the Master Trust is responsible for
the general management of the Master Trust and supervising the actions of Wells
Fargo Bank and Stephens in these capacities.

INDEMNIFICATION AGREEMENT

Because this Prospectus combines disclosures relating to two separate
investment companies, there is a possibility that one investment company might
become liable for a misstatement, inaccuracy or incomplete disclosure in this
Prospectus concerning the other investment company. Stagecoach Inc. and
Stagecoach Funds have entered into an indemnification agreement that creates a
right of indemnification from the investment company responsible for any such
misstatement, inaccuracy or incomplete disclosure that may appear in this
Prospectus.

INVESTMENT ADVISER

Wells Fargo Bank is the investment adviser to the Series, the Money Market
Mutual Fund and the California Tax-Free Money Market Mutual Fund. Wells Fargo
Bank, one of the ten largest banks in the United States, was founded in 1852 and
is the oldest bank in the western United States. As of June 30, 1995, various
divisions and affiliates of Wells Fargo Bank provided investment advisory
services for approximately $211 billion of assets of individuals, trusts,
estates and institutions. As of the same date, Wells Fargo Bank provided
investment advisory services for approximately $28 billion of assets of
individuals, trusts, estates and institutions. Wells Fargo Bank also serves as
the investment adviser to the other separately managed series of the Master
Trust, funds of Stagecoach Inc. and Stagecoach Funds and to four other
registered, open-end, management investment companies each of which consists 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 94105.

PROSPECTUS 18
<PAGE> 24

Morrison & Foerster, counsel to Stagecoach Funds, Stagecoach Inc. and the
Master Trust and special counsel to Wells Fargo Bank, has advised Stagecoach
Funds, Stagecoach Inc., the Master Trust and Wells Fargo Bank that Wells Fargo
Bank may perform the services contemplated by the Advisory Contracts without
violation of the Glass-Steagall Act or other applicable banking laws or
regulations. 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, including the Glass-Steagall Act, and
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, as well as future changes in such statutes,
regulations and judicial or administrative decisions or interpretations, could
prevent Wells Fargo Bank from continuing to perform, in whole or in part, such
services. If Wells Fargo Bank were prohibited from performing any such services,
it is expected that the Board of Directors/Trustees would recommend to the
shareholders/interestholders that they approve a new advisory agreement with
another entity or entities qualified to perform such services.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank is also the Funds' and the Series' custodian and transfer and
dividend disbursing agent. In addition, Wells Fargo Bank is a Shareholder
Servicing Agent and Selling Agent of the Funds.

SPONSOR, ADMINISTRATOR AND DISTRIBUTOR

Stephens is the Funds' and the Master Trust's sponsor and administrator, and
distributes the Funds' shares. Stephens is a full service broker/dealer and
investment advisory firm located at 111 Center Street, Little Rock, Arkansas
72201. 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 FUNDS

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.

19 PROSPECTUS
<PAGE> 25

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.

The Companies or Stephens may make the Prospectus available in an electronic
format. Upon receipt of a request from you or your representative, the relevant
Company or Stephens will transmit or cause to be transmitted promptly, without
charge, a paper copy of the electronic Prospectus.

SHARE PRICE

The price of a share of each Fund is its net asset value ("NAV"). The NAV of
each share of the California Tax-Free Money Market Mutual Fund and the National
Tax-Free Money Market Mutual Fund is computed by adding the value of the
respective Fund's portfolio investments plus cash and other assets, deducting
liabilities and then dividing the result by the number of outstanding shares of
such Fund. The National Tax-Free Money Market Mutual Fund's investments in the
Series are valued at the NAV of the Series' shares. The Series calculates the
NAV of its shares on the same day and at the same time as the National Tax-Free
Money Market Mutual Fund. The NAV of a share of each Class of the Money Market
Mutual Fund is the value of total net assets attributable to each Class divided
by the number of outstanding shares of that Class. The value of 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. As noted above,
the Funds seek to maintain a constant $1.00 per share NAV, although there is no
assurance that they will be able to do so.

Shares of a Fund may be purchased on any day such Fund is open (a "Business
Day"). Currently, the Money Market Mutual Fund and California Tax-Free Money
Market Mutual Fund observe the following holidays: New Year's Day, Presidents'
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day (each, with respect to such Funds, a "Holiday"), the National Tax-Free Money
Market Mutual Fund observes the aforementioned Holidays and also observes Martin
Luther King, Jr. Day, Columbus Day and Veterans Day (with respect to such Fund,
these days are also "Holidays"). The NAV of each Fund's shares is calculated as
of 9:00 a.m. (Pacific time) on any day such Fund is open. The NAV of shares
acquired through other means may be calculated at other times. All transaction
orders are processed at the NAV next determined after the order is received.

PROSPECTUS 20
<PAGE> 26

The Funds' and the Series' NAV are each calculated on the basis of the
amortized cost method. This valuation method is based on the receipt of a steady
rate of payment from the date of purchase until maturity rather than actual
changes in market value. The Boards of Directors of Stagecoach Funds and of
Stagecoach Inc., respectively and the Master Trust's Board of Trustees believe
that this valuation method accurately reflects fair value.

HOW TO BUY SHARES

You may buy shares of the Funds on any Business Day by any of the methods
described below. After a properly completed Account Application is received and
your wire order or check is received, or an account with a bank, which is
designated in the Account Application and which is approved by the Transfer
Agent (an "Approved Account") is debited, your purchase order will be made
effective and full and fractional shares will be purchased at the next
determined NAV, which is expected to remain a constant $1.00 per share. If
shares are purchased by a check which does not clear, the purchase may be
cancelled and the investor may be held responsible for any losses or fees
incurred. In addition, the Funds may hold payment on any redemption until
reasonably satisfied that investments made by check have been collected (which
may take up to 15 days). Stagecoach Inc. and Stagecoach Funds reserve the right
to reject any purchase order or suspend sales at any time.

Generally, the minimum initial investment amount is $2,500. However, the
minimum initial investment amount is $100 for investments made through the
AutoSaver Plan purchase method (described below) and $250 for investments in
Class A Shares of the Money Market Mutual Fund made through any tax-sheltered
retirement account for which Wells Fargo Bank serves as custodian or trustee
under a prototype trust approved by the IRS (a "Plan Account"). Where shares of
the California Tax-Free Money Market Mutual Fund, Class A Shares of the Money
Market Mutual Fund or shares of the National Tax-Free Money Market Mutual Fund
are purchased in exchange for shares of another fund in the Stagecoach Family of
Funds, the minimum initial investment amount applicable to the shares being
exchanged carries over. This means, for example, that you can invest $1,000 in
shares of the California Tax-Free Money Market Mutual Fund,Class A Shares of the
Money Market Mutual Fund or shares of the National Tax-Free Money Market Mutual
Fund even though each such Fund ordinarily requires a $2,500 minimum balance, in
an exchange from a fund that has a $1,000 minimum balance. In addition, the
minimum initial or subsequent purchase amount requirements may be waived or
lowered for investments effected on a group basis by certain entities and their
employees, such as pursuant to a payroll deduction or other accumulation plan.
In addition, the minimum initial purchase amount does not apply to investors who
purchase shares of the Funds as customers of a financial institution which has
established a cash sweep arrangement with respect to one of the Funds. All
subsequent investments must be at least $100. If you have questions regarding
purchases of shares, please contact the

21 PROSPECTUS
<PAGE> 27

Company at 800-222-8222 or contact a Shareholder Servicing Agent or Selling
Agent (defined below).

Shares of the National Tax-Free Money Market Mutual Fund and the California
Tax-Free Money Market Mutual Fund may not be suitable investments for tax-exempt
institutions or tax-sheltered retirement plans, since such investors would not
benefit from the exempt status of the Funds' dividends. See "Federal Income
Taxes - Special Tax Considerations" in the SAI for each Fund. In addition,
California Tax-Free Money Market Mutual Fund shares are not available in all
states.

INITIAL PURCHASES BY WIRE

1. Complete an Account Application.

2. Instruct the wiring bank to transmit the specified amount in federal funds
($2,500 or more) 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, if
applicable)
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 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 $2,500 or more, payable to
"Stagecoach Funds (Name of Fund) (designate Class A, if applicable)," to the
address set forth in "Initial Purchases by Wire."

PROSPECTUS 22
<PAGE> 28

3. Share purchases are effected at the NAV next determined after the Account
Application is received and accepted.

AUTOSAVER PLAN PURCHASES

The AutoSaver Plan provides you with a convenient way to establish and
automatically add to your 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 a designated
Approved Bank account. Wells Fargo Bank is an Approved Bank. The Transfer Agent
withdraws and uses this amount to purchase shares of the specified Fund on your
behalf on or about the fifth Business Day of each month. There are no separate
fees charged to you by the Funds for participating in the AutoSaver Plan.

You may change your investment amount, suspend purchases or terminate your
election at any time by notifying 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 Money Market Mutual Fund through a Plan
Account or other tax-deferred retirement plan. Contact a Shareholder Servicing
Agent (such as Wells Fargo Bank) or a Selling Agent for materials describing
Plan Accounts available through it, and the benefits, provisions, and fees of
such Plan Accounts. The minimum initial investment amount for Class A Shares of
the Money Market Mutual Fund 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 Individual
Retirement Account ("IRA"), up to specified limits. Investment earnings in the
IRA will be 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.

23 PROSPECTUS
<PAGE> 29

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 SAI for each Fund.

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

PROSPECTUS 24
<PAGE> 30

with a check payable to "Stagecoach Funds (name of Fund) (designate Class A, if
applicable)" to the address set forth in "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 Funds through a broker/dealer
or financial institution which has entered into a Selling Agreement with
Stephens, as the Funds' Distributor ("Selling Agent"), by 9:00 a.m. (Pacific
time) on any Business Day, including placing an order for which payment is to be
made from your free cash credit balance in a securities account maintained with
a Selling Agent. These purchase orders generally will be executed on the same
day the order is placed if notice is provided to the Transfer Agent by 9:00 a.m.
and federal funds are received by the Transfer Agent before the close of
business. If your purchase order is received by a Selling Agent after 9:00 a.m.
on any Business Day or federal funds are not received by the Transfer Agent
before the close of business, then your purchase order generally will be
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. A Selling Agent which is a financial institution 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 Funds 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 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 to
the Transfer Agent before 9:00 a.m. (Pacific time) and federal funds are
received by the Transfer Agent before the close of business, the purchase order
generally will be executed on the same day. If your Shareholder Servicing Agent
transmits your purchase order to the Transfer Agent after 9:00 a.m. or federal
funds are not received by the Transfer Agent before the close of business, then
your order will be executed on the next Business Day, except that automated
investment program purchase orders transmitted through Shareholder Servicing
Agents are executed at 1:00 p.m. on each Business Day. The Shareholder Servicing
Agent is responsible for the prompt transmission of your purchase order to the
Transfer Agent. Financial Institutions acting as Shareholder Servicing Agents
may be

25 PROSPECTUS
<PAGE> 31

required to register as dealers pursuant to applicable state securities laws,
which may differ from federal law and any interpretations expressed herein.

STATEMENTS AND REPORTS

The Funds, or a Shareholder Servicing Agent on their behalf, will typically
send you a monthly statement of your account after every month in which there
has been a transaction that affects your share balance or your Fund account
registration. The Funds do 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.

DIVIDENDS

The Funds intend to declare dividends on a daily basis payable to shareholders
of record as of 9:00 a.m. (Pacific time). If your purchase order is received
before 9:00 a.m. on any Business Day, you begin earning dividends on that
Business Day and continue to earn dividends through the day prior to the date
you redeem such shares. If your purchase order for shares is processed at or
after 9:00 a.m. on any Business Day, you begin earning dividends on the next
Business Day and continue to earn dividends through the day on which you redeem
your shares. Dividends for a Saturday, Sunday or Holiday are declared payable to
shareholders of record as of the preceding Business Day. If you redeem shares
before a dividend payment date, any dividends credited to you are paid on the
following dividend payment date unless you have redeemed all of the shares in
your account, in which case you will receive your accrued dividends together
with your redemption proceeds. The Funds will distribute any capital gains at
least annually.

Dividends declared in a month generally are paid on the last Business Day of
such month. You have three options for receiving dividends and any capital gain
distributions. They are discussed under "Additional Shareholder
Services - Dividend and Distribution Options."

HOW TO REDEEM SHARES

You may redeem all or a portion of your shares in a Fund on any Business Day
without any charge by the Funds. Your shares will be 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 of shares in a Fund may result in a gain or loss for federal and
state income tax purposes. The Funds ordinarily remit your 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

PROSPECTUS 26
<PAGE> 32

period during which an emergency exists as a result of which (a) disposal by the
Funds and/or Series of securities owned by them is not reasonably practicable or
(b) it is not reasonably practicable for the Funds and/or Series fairly to
determine the value of their net assets, or a period during which the SEC by
order permits deferral of redemptions for the protection of security holders of
the Funds and/or Series. In addition, the Funds may hold payment on your
redemption 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. Payment of redemption proceeds may be made in securities, subject to
regulation by some state securities commissions.

Due to the high cost of maintaining Fund accounts with small balances, the
Funds reserve 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 Fund shares after you have made only the applicable
minimum initial investment). You will be given 30 days' notice to make an
additional investment to increase your account balance to an amount equal to or
greater than the applicable minimum balance. For a discussion of applicable
minimum balance requirements, see "Investing in the Funds - How to Buy Shares."

Redemption orders that are received by the Transfer Agent before 9:00 a.m.
(Pacific Time) on any Business Day generally will be executed on that Business
Day. Redemption orders that are received after 9:00 a.m. on any Business Day
generally will be executed on the next Business Day.

REDEMPTIONS BY TELEPHONE

Telephone redemption or exchange privileges are made available to you
automatically upon opening an account, unless you specifically decline such
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
Companies require 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 relevant Company and the
Transfer Agent may be liable for any losses due to unauthorized or fraudulent
instructions. Neither the Companies 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 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).

27 PROSPECTUS
<PAGE> 33

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
you at your address of record or your designated Approved Bank account, or
other unusual circumstances exist which 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 Funds - Initial Purchases by Wire."

Unless other instructions are given in proper form, a check for your
redemption proceeds will be sent to your address of record.

EXPEDITED REDEMPTIONS BY MAIL OR TELEPHONE

You may request an expedited redemption of Fund shares by letter, in which
case your receipt of redemption proceeds, but not the Fund's receipt of your
redemption request, would be expedited. Telephone redemption or exchange
privileges are made available to you automatically upon the opening of an
account unless you specifically decline such privileges. You also may request an
expedited redemption of Fund shares 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 equal to $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.

You may mail 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, proceeds of 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 Companies reserve 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

PROSPECTUS 28
<PAGE> 34

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 before 9:00 a.m. (Pacific
time) on a Business Day, your redemption proceeds will be transmitted to your
designated account with an Approved Bank or Selling Agent on the same 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
proceeds of less than $5,000 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 Fund shares redeemed from your account and the proceeds distributed to you
on a monthly basis. You may participate in this plan only if you have a Fund
account valued at $10,000 or more as of the date of your election to
participate, your dividend and capital gain distributions are being reinvested
automatically and you are not a participant 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 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 Funds for
participating in the Systematic Withdrawal Plan.

You may change your withdrawal amount, suspend withdrawals or terminate your
participation in the Systematic Withdrawal Plan 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.

29 PROSPECTUS
<PAGE> 35

REDEMPTIONS THROUGH SELLING AGENTS

You may request a redemption of Fund shares through your Selling Agent.
Redemption orders transmitted by a Selling Agent to the Transfer Agent before
9:00 a.m. (Pacific time) on any Business Day will be executed on that day.
Redemption orders transmitted by a Selling Agent to the Transfer Agent after
9:00 a.m. on any Business Day will be executed 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 a Selling Agent, and the Transfer
Agent has been informed of such arrangements, proceeds of a redemption order
made by you through a Selling Agent will be credited to an account with an
Approved Bank that you have designated in the Account Application. If no such
account is designated, a check for the proceeds will be mailed to your address
of record or, if such address is no longer valid, the proceeds will be credited
to your account with the Selling Agent. You may request a check from the Selling
Agent or may elect to retain the 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 a 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. Redemption orders transmitted by a Shareholder Servicing Agent to the
Transfer Agent before 9:00 a.m. (Pacific time) will be executed on that day.
Redemption orders transmitted by a Shareholder Servicing Agent to the Transfer
Agent after 9:00 a.m. will be executed on the next Business Day, except that
automated investment program redemption orders transmitted through Shareholder
Servicing Agents are executed at 1:00 p.m. on each Business Day. The Shareholder
Servicing Agent is responsible for the prompt transmission of your redemption
order to the Funds.

Unless you have made other arrangements with your Shareholder Servicing Agent,
and the Transfer Agent has been informed of such arrangements, proceeds of a
redemption order made by you through your Shareholder Servicing Agent will be
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 proceeds
will be mailed to your address of record or, if such address is no longer valid,
the proceeds will be credited to your account with your Shareholder Servicing
Agent or to another account designated in your agreement with your Shareholder
Servicing Agent.

PROSPECTUS 30
<PAGE> 36

ADDITIONAL SHAREHOLDER SERVICES

The Companies offer you a number of optional services. As noted above, you can
take advantage of the AutoSaver Plan, the Systematic Withdrawal Plan, and
Expedited Redemptions by Letter and Telephone. In addition, the Funds offer you
three 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 three 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 which paid such dividends or capital gain distributions.
Dividends and distributions declared in a month generally are reinvested 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 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 Funds' dividend disbursing agent on
your behalf.

C. 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 Funds'
dividend disbursing agent on your behalf.

The Companies forward moneys to the dividend disbursing agent so that it may
issue you dividend checks under the Check Payment Option. The dividend
disbursing agent may benefit from the temporary use of such moneys until these
checks clear.

EXCHANGE PRIVILEGE

31 PROSPECTUS
<PAGE> 37

- Obtain and carefully read the prospectus of the fund into which you want to
exchange. Prospectuses may be obtained by calling 800-222-8222.

- Shares are exchanged at the next determined NAV.

- You may exchange shares of the California Tax-Free Money Market Mutual Fund
and Class A Shares of the Money Market Mutual Fund for shares of one of the
Company's single-class funds, for Class A or Class B Shares of one of the
Company's multi-class funds or for Retail Shares of another fund. You may
also exchange shares of the California Tax-Free Money Market Mutual Fund for
Class A Shares of the Money Market Mutual Fund and vice versa.

- If you exchange into a 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.

- 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 is sent to you.

- The dollar amount of shares you exchange must meet the minimum initial
and/or subsequent investment amounts of the other fund.

- The Companies reserve the right to limit the number of times shares may be
exchanged between funds, to reject any telephone exchange order, to charge a
nominal exchange fee (although it currently does not do so) or otherwise to
modify or discontinue exchange privileges at any time. Under SEC rules,
subject to limited exceptions, each Company must notify you 60 days before
it modifies or discontinues the exchange privilege.

The procedures applicable to Fund share redemptions also apply to Fund share
exchanges. In particular, because the only transaction orders that are processed
at 1:00 p.m. are those that are received at that time through Shareholder
Servicing Agents in connection with automated investment programs, exchange
orders received through other means after 9:00 a.m. will be processed on the
next day that is a Business Day for both funds involved in the exchange. In
addition, a signature guarantee may be required for exchanges between
shareholder accounts registered in identical names if the amount being exchanged
is more than $25,000.

To exchange shares, write the Transfer Agent at the mailing address under
"Investing in the Funds - Initial Purchases by Wire" or 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."

PROSPECTUS 32
<PAGE> 38

MANAGEMENT AND SERVICING FEES

INVESTMENT ADVISER

Subject to the overall supervision of the Boards of Directors of Stagecoach
Funds and Stagecoach Inc. and the Board of Trustees of the Master Trust, Wells
Fargo Bank, as the Funds' and the Series' investment adviser, provides
investment guidance and policy direction in connection with the management of
the Funds' assets. Wells Fargo Bank also furnishes the Board of Directors with
periodic reports on the Funds' investment strategies and performance. For these
services, Wells Fargo Bank is entitled to a monthly investment advisory fee at
the annual rate of 0.40% of the average daily net assets of the Money Market
Mutual Fund, 0.50% of the average daily net assets of the California Tax-Free
Money Market Mutual Fund and 0.30% of the average daily net assets of the
Series, of which the National Tax-Free Money Market Mutual Fund bears a pro rata
portion. From time to time, Wells Fargo Bank may waive such fees in whole or in
part. Any such waiver will reduce expenses of the Funds and the Series and,
accordingly, have a favorable impact on the Funds' yields. From time to time,
each of the Funds, consistent with its investment objective, policies and
restrictions, may invest in securities of companies with which Wells Fargo Bank
has a lending relationship. For the year ended December 31, 1994, Wells Fargo
Bank was paid 0.40% of the average daily net assets of the Money Market Mutual
Fund and 0.49% of the average daily net assets of the California Tax-Free Money
Market Mutual Fund for its services as investment adviser.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank also serves as the Funds' and the Series' custodian and
transfer and dividend disbursing agent. Wells Fargo Bank performs the custodial
services at its address above. Under its respective Custody Agreement with Wells
Fargo Bank, each Fund and the Series 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 each Fund's
and/or Series' Custody Agreement. The transfer and dividend disbursing agency
activities are performed at 525 Market Street, San Francisco, California 94105.

SHAREHOLDER SERVICING AGENT

33 PROSPECTUS
<PAGE> 39

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
each of the Funds, 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
Funds 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 such fees, as calculated on an
annualized basis for each Fund's then-current fiscal year, exceed the lesser of
(1) 0.30% of the average daily net assets of the California Tax-Free Money
Market Mutual Fund, 0.30% of the average daily net assets attributable to the
Class A shares of the Money Market Mutual Fund or 0.25% of the average daily net
assets of the National Tax-Free Money Market Mutual Fund, as represented by
shares 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 of a Fund or Class of a Fund, as the case may be.

A Shareholder Servicing Agent may impose certain conditions on its customers,
subject to the terms of this Prospectus, in addition to or different from those
imposed by the Funds, such as requiring a minimum initial investment or payment
of a separate fee for additional services. Each Shareholder Servicing Agent will
be required to agree to disclose any fees it may directly charge its customers
who are shareholders of a Fund and to notify them in writing at least 30 days
before it imposes any transaction fees.

SPONSOR, ADMINISTRATOR AND DISTRIBUTOR

PROSPECTUS 34
<PAGE> 40

each Fund's and the Series' business, and compensates the Directors/Trustees,
officers and employees who are affiliated with Stephens. For these services,
Stephens is entitled to a monthly fee at the annual rate of 0.03% of the Money
Market Mutual Fund's and California Tax-Free Money Market Mutual Fund's average
daily net assets and 0.05% of the National Tax-Free Money Market Mutual Fund's
average daily net assets. From time to time, Stephens may waive its fees charged
to a Fund in whole or in part. Any such waivers will reduce a Fund's expenses
and, accordingly, have a favorable impact on such Fund's yield.

Stagecoach Funds and Stagecoach Inc. have each adopted Distribution Plans on
behalf of the Class A Shares of the Money Market Mutual Fund and shares of the
Tax-Free Funds under the SEC's Rule 12b-1 ("Plans"). The Money Market Mutual
Fund, pursuant to the Plan adopted on behalf of the Class A Shares, may defray
all or part of the actual cost of preparing and printing prospectuses and other
promotional materials and of delivering prospectuses and those materials to
prospective Class A shareholders by paying on an annual basis up to 0.05% of the
average daily net assets attributable to the Class A Shares. Pursuant to the
Plan for the California Tax-Free Money Market Mutual Fund, the Fund may defray
all or a part of the cost of preparing and printing prospectuses and of
delivering prospectuses and those materials to prospective shareholders of the
Fund by paying on an annual basis up to 0.05% of the Fund's average daily net
assets. Pursuant to the Plan for the National Tax-Free Money Market Mutual Fund,
Stephens is entitled to receive as compensation for distribution-related
services, a monthly fee at an annual rate of up to 0.05% of the average daily
net assets of the Fund.

Stephens has entered into Distribution Agreements with the Funds and acts as
agent for the Funds for the sale of their shares and may enter into selling
agreements with other agents ("Selling Agents") that wish to make available
shares of the Funds to their respective customers. The Money Market Mutual Fund
and California Tax-Free Money Market Mutual Fund may participate in joint
distribution activities with any of the other funds of Stagecoach Funds, in
which event, expenses reimbursed out of the assets of either Fund may be
attributable, in part, to the distribution-related activities of another fund of
Stagecoach Funds. The National Tax-Free Money Market Mutual Fund may participate
in joint distribution activities with any of the other funds of Stagecoach Inc.,
in which event, expenses reimbursed out of the assets of the Fund may be
attributable, in part, to the distribution-related activities of another fund of
Stagecoach Inc. Generally, the expenses attributable to joint distribution
activities will be allocated among each Fund and the other funds of the
respective Company in proportion to their relative net asset sizes, although
each Company's Board of Directors may allocate such expenses in any other manner
that it deems fair and equitable. In addition, Stephens has established a
non-cash compensation program, pursuant to which broker/dealers or financial
institutions that sell shares of the Funds 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.

35 PROSPECTUS
<PAGE> 41

Financial institutions acting as Shareholder Servicing Agents or Selling
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

From time to time, Wells Fargo Bank and Stephens may waive their respective
fees in whole or in part and reimburse expenses payable to others. Any such
waivers or reimbursements will reduce a Fund's expenses and, accordingly, have a
favorable impact on such Fund's yield. Except for the expenses borne by Wells
Fargo Bank and Stephens, each Company bears all costs of its operations,
including advisory, shareholder servicing, transfer agency, custody and
administration fees, payments pursuant to any Plans, interest, fees and expenses
of independent auditors and legal counsel, and any extraordinary expenses.
Expenses attributable to each Fund or Class are charged against the assets of
the Fund or Class. General expenses of each Company are allocated among all of
the funds of such Company, including the Funds, in a manner proportionate to the
net assets of each fund, on a transactional basis, or on such other basis as
each Company's Board of Directors deems equitable.

TAXES

By complying with the applicable provisions of the Code, the Money Market
Mutual 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 net investment income (including net short-term
capital gains, if any) declared and paid by the Money Market Mutual Fund will be
taxable as ordinary income to Fund shareholders. Whether you take dividend
payments in cash or have them automatically reinvested in additional shares in
the Money Market Mutual Fund, 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. The Money Market Mutual Fund intends to pay out
substantially all of its net investment income and net realized capital gains
(if any) for each year. The Money Market Mutual Fund does not expect its
dividends to qualify for the dividends-received deduction allowed to corporate
shareholders.

PROSPECTUS 36
<PAGE> 42

By complying with the applicable provisions of the Code, the California
Tax-Free Money Market Mutual Fund will not be subject to federal income taxes
with respect to net investment income and net realized capital gains distributed
to its shareholders, and the Fund's shareholders will not be subject to federal
income taxes on any Fund dividends attributable to interest from tax-exempt
securities. However, dividends attributable to interest from taxable securities
and capital gains (if any) will be taxable to shareholders. In addition, by
complying with the applicable provisions of the California Revenue and Taxation
Code, Fund dividends also will be exempt from California personal income tax to
the extent such dividends are attributable to instruments that pay interest
which would be exempt from California personal income taxes were such
instruments held directly by an individual.

Stagecoach Inc. intends to qualify the National Tax-Free Money Market Mutual
Fund as a regulated investment company under Subchapter M of the Code. The Fund
will be treated as a separate entity for tax purposes and thus the provisions of
the Code applicable to regulated investment companies generally will be applied
to the Fund, rather than to the Company as a whole. In addition, net capital
gains, net investment income, and operating expenses will be determined
separately for the Fund.

By complying with the applicable provisions of the Code, the National Tax-Free
Money Market Mutual Fund will not be subject to federal income taxes with
respect to net investment income and net realized capital gains distributed to
its shareholders, and the Fund's shareholders will not be subject to federal
income taxes on any dividends of the Fund attributable to interest from
tax-exempt securities. However, dividends attributable to interest from taxable
securities and capital gains (if any) will be taxable to shareholders. In
addition, by complying with the applicable provisions of the Code, Fund
dividends also will be exempt from personal income tax to the extent such
dividends are attributable to instruments that pay interest which would be
exempt from personal income taxes if such instruments were held directly by an
individual. The Fund does not make any representation regarding the taxation of
its corporate shareholders and recommends that such shareholders consult their
tax advisors.

The National Tax-Free Money Market Mutual Fund seeks to comply with the
applicable provisions of the Code by investing all of its assets in the Series.
The Series intends to qualify for federal tax purposes as a partnership. As
such, the Fund will be deemed to own directly its proportionate share of the
Master Trust's assets. Therefore, any interest, dividends, gains or losses of
the Series will be deemed to have been "passed through" to the Fund and other
investors in the Series, regardless of whether such interest, dividends or gains
have been distributed by the Series or losses have been realized by the Fund or
other investors. Accordingly, if the Series 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, or gains without
receipt of any corresponding distribution. The Series will seek to minimize
recognition by investors of interest, dividends or gains without a corresponding
distribution.

37 PROSPECTUS
<PAGE> 43

The federal alternative minimum tax ("AMT") rules attempt to ensure that at
least a minimum amount of tax is paid by corporate and high-income noncorporate
taxpayers who obtain significant benefit from certain tax deductions and
exemptions. These deductions and exemptions have been designated "tax preference
items" which must be added back to taxable income for the purposes of
calculating AMT. Among the "tax preference items" and "adjustments" which must
be considered when calculating the AMT is tax-exempt interest from private
activity bonds issued after August 7, 1986. To the extent that the California
Tax-Free Money Market Mutual Fund invests in private activity bonds,
shareholders who pay the alternative minimum tax will be required to report that
portion of Fund dividends attributable to income from the bonds as a tax
preference item in determining their federal AMT. Shareholders will be notified
of the tax status of distributions made by the Funds. Persons who may be
"substantial users" (or "related persons" of substantial users) of facilities
financed by private activity bonds should consult their tax advisors before
purchasing shares in the California Tax-Free Money Market Mutual Fund. There are
other adjustments that may also affect adjusted current earnings for the
purposes of corporate AMT. Shareholders with questions or concerns about AMT
should also consult their tax advisors.

The Funds, or your Shareholder Servicing Agent on their behalf, will inform
you of the amount and nature of such Fund dividends and capital gains. You
should keep all statements you receive to assist in your personal record
keeping. Each Company is required to withhold, subject to certain exemptions, at
a rate of 31% on dividends paid or credited to individual shareholders of the
Funds, if a shareholder has not complied with IRS regulations or 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% back-up withholding for previous underreporting to the
IRS.

Foreign shareholders may be subject to different tax treatment, including a
withholding tax. See "Federal Income Taxes - Foreign Shareholders" in the SAIs.

The foregoing discussion regarding dividends, distributions and taxes is based
on tax laws and regulations which were in effect as of the date of this
Prospectus and summarizes only some of the important federal tax considerations
generally affecting the Funds and their shareholders. It is not intended as a
substitute for careful tax planning; you should consult your tax advisor with
respect to your specific tax situation as well as with respect to state and
local taxes.

Further federal tax considerations are discussed in the SAI for each Fund.

PROSPECTUS 38
<PAGE> 44

PROSPECTUS APPENDIX --
ADDITIONAL INVESTMENT POLICIES

FUND AND SERIES INVESTMENTS

Money Market Mutual Fund

The Money Market Mutual Fund may invest in the following:

(i) obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, including government-sponsored enterprises ("U.S.
Government obligations") (discussed below);

(ii) negotiable certificates of deposit, fixed time deposits, bankers'
acceptances or other short-term obligations of U.S. 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 ("bank instruments");

(iii) commercial paper rated at the date of purchase P-1 by Moody's Investors
Service, Inc. ("Moody's") or "A-1+" or "A-1" by Standard & Poor's
Corporation ("S&P") ("rated commercial paper");

(iv) commercial paper unrated at the date of purchase but secured by a
letter of credit from a U.S. bank that meets the above criteria for
investment;

(v) certain floating- and variable-rate instruments ("variable-rate
instruments") (discussed below);

(vi) certain repurchase agreements ("repurchase agreements") (discussed
below); and

(vii) short-term, U.S. dollar-denominated obligations of U.S. branches of
foreign banks that at the time of investment have more than $10 billion,
or the equivalent in other currencies, in total assets ("foreign bank
obligations") (discussed below).

California Tax-Free Money Market Mutual Fund

The California Tax-Free Money Market Mutual Fund may invest in the
following municipal obligations with remaining maturities not exceeding
thirteen months:

(i) long-term municipal bonds rated at the date of purchase "MIG 1" or "MIG
2" or, if no medium- or short-term rating is available, "Aa" or better
by Moody's or "AA" or better by S&P;

A-1 PROSPECTUS
<PAGE> 45

(ii) medium-term municipal notes rated at the date of purchase "MIG 1" or
"MIG 2" (or "VMIG 1" or "VMIG 2" in the case of an issue having a
variable rate with a demand feature) by Moody's or "SP-1+" or "SP-1" by
S&P; and

(iii) short-term municipal commercial paper rated at the date of purchase
"P-1" by Moody's or "A-1+" or "A-1+" by S&P.

Pending the investment of proceeds from the sale of Fund shares or proceeds
from sales of portfolio securities or in anticipation of redemptions or to
maintain a "defensive" posture when, in the opinion of Wells Fargo Bank, as
investment adviser, it is advisable to do so because of market conditions, the
California Tax-Free Money Market Mutual Fund may elect to invest temporarily up
to 20% of the current value of its total assets in cash reserves or the
following taxable high-quality money market instruments:

(i) U.S. Government obligations;

(ii) bank instruments;

(iii) rated commercial paper;

(iv) repurchase agreements;

(v) foreign bank obligations; and

(vi) high-quality municipal obligations, the income from which may or may not
be exempt from federal income taxes.

Moreover, the California Tax-Free Money Market Mutual Fund may invest
temporarily more than 20% of its total assets in such securities and in
high-quality, short-term municipal obligations the interest on which is not
exempt from federal income taxes to maintain a temporary defensive posture or in
an effort to improve after-tax yield to the California Tax-Free Money Market
Mutual Fund's shareholders when, in the opinion of Wells Fargo Bank, as
investment adviser, it is advisable to do so because of unusual market
conditions.

National Tax-Free Money Market Mutual Fund and
Tax-Free Money Market Master Series

The National Tax-Free Money Market Mutual Fund invests all its assets in
shares of the Series of the Master Trust. As a result, the performance of the
Fund corresponds to the investment experience of the Series. The Series may
invest in the following:

(i) certain municipal obligations (discussed below):

(ii) certain U.S. Government obligations (discussed below);

(iii) negotiable certificates of deposit, fixed time deposits, bankers'
acceptances or other obligations of U.S. banks (including foreign
branches) that have more than $1 billion in total assets at the time of
investment and are members of the

PROSPECTUS A-2
<PAGE> 46

Federal Reserve System or are examined by the Comptroller of the
Currency or whose deposits are insured by the FDIC:

(iv) commercial paper rated at the date of purchase P-1 by Moody's or "A-1+"
or "A-1" by S&P;

(v) certain floating- and variable-rate instruments (discussed below);

(vi) certain repurchase agreements (discussed below); and

(vii) short-term U.S. dollar denominated obligations of foreign branches of
U.S. banks or U.S. branches of foreign banks (discussed below).

The following describes certain instruments in which the Funds and the Series
may invest.

Municipal Obligations

Subject to the maturity and other restrictions of Rule 2a-7, the Funds and the
Series may invest in municipal obligations. Municipal bonds generally have a
maturity at the time of issuance of up to 40 years. Medium-term municipal notes
are generally issued in anticipation of the receipt of tax funds, of the
proceeds of bond placements, or of other revenues. The ability of an issuer to
make payments on notes is therefore especially dependent on such tax receipts,
proceeds from bond sales or other revenues, as the case may be. Municipal
commercial paper is a debt obligation with a stated maturity of 270 days or less
that is issued to finance seasonal working capital needs or as short-term
financing in anticipation of longer-term debt. From time to time, the California
Tax-Free Money Market Mutual Fund and the Series may each invest 25% or more of
the current value of its total assets in certain "private activity bonds," such
as pollution control bonds; provided, however, that such investments will be
made only to the extent they are consistent with the Fund's fundamental policy
of investing, under normal circumstances, at least 80% of its net assets in
municipal obligations that are exempt from federal income taxes and not subject
to the federal alternative minimum tax.

For a further discussion of factors affecting purchases of municipal
obligations by the California Tax-Free Money Market Mutual Fund, see "Special
Considerations Affecting California Municipal Obligations" in the SAI.

U.S. Government Obligations

A-3 PROSPECTUS
<PAGE> 47

agencies or instrumentalities of the U.S. Government are supported by the full
faith and credit of the United States or U.S. Treasury guarantees; others, by
the right of the issuer or guarantor to borrow from the U.S. Treasury; still
others, by the discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality; and others, only by the
credit of the agency or instrumentality issuing the obligation. In the case of
obligations not backed by the full faith and credit of the United States, the
investor must look principally to the agency or instrumentality issuing or
guaranteeing the obligation for ultimate repayment, which agency or
instrumentality may be privately owned. There can be no assurance that the U.S.
Government will provide financial support to its agencies or instrumentalities
where it is not obligated to do so. In addition, U.S. Government obligations are
subject to fluctuations in market value due to fluctuations in market interest
rates. As a general matter, the value of debt instruments, including U.S.
Government obligations, declines when market rates increase and rises when
market interest rates decrease. Certain types of U.S. Government obligations are
subject to fluctuations in yield or value due to their structure or contract
terms.

Other Investment Companies

The Funds and the Series may invest in shares of other investment companies.
The California Tax-Free Money Market Mutual Fund and the Series may invest in
shares of other open-end investment companies that invest exclusively in
high-quality short-term securities, provided however, that any such company has
a fundamental policy of investing, under normal circumstances, at least 80% of
its net assets in obligations that are exempt from federal income taxes and not
subject to the federal alternative minimum tax. Such investment companies can be
expected to charge management fees and other operating expenses that would be in
addition to those charged to the Funds or the Series; however, Wells Fargo Bank
has undertaken to waive its advisory fees with respect to that portion of the
Funds' or the Series' assets so invested. In no event may the Funds or the
Series, together with any company or companies controlled by a Fund or the
Series, own more than 3% of the total outstanding voting stock of any such
investment company, nor may a Fund or the Series, together with any such company
or companies, invest more than 5% of its assets in any one such investment
company or invest more than 10% of its assets in securities of all such
investment companies combined.

Floating- and Variable-Rate Instruments

Certain of the debt instruments that the Funds may purchase bear interest at
rates that are not fixed, but vary for example, with changes in specified market
rates or indices or at specified intervals. These instruments typically have
maturities of thirteen months or more, but may carry a demand feature that would
permit the holder to tender them back to the issuer at par value prior to
maturity. The Funds and the Series may, in accordance with SEC rules, account
for these instruments as maturing at the next interest rate readjustment date or
the date at which the respective Fund or the Series may tender the

PROSPECTUS A-4
<PAGE> 48

instrument back to the issuer, whichever is later. The floating- and
variable-rate instruments that the Funds and the Series may purchase include
certificates of participation in such obligations. With regard to the California
Tax-Free Money Market Mutual Fund and the Series, Wells Fargo Bank, as
investment adviser, may rely upon either an opinion of counsel or an IRS ruling
regarding the tax-exempt status of these certificates. The Funds and the Series
may invest in floating- and variable-rate obligations even if they carry stated
maturities in excess of thirteen months, upon compliance with certain conditions
of the SEC, in which case such obligations will be treated in accordance with
these conditions as having maturities not exceeding thirteen months.

Wells Fargo Bank, as investment adviser to the Funds and the Series, monitors
on an ongoing basis the ability of an issuer of a demand instrument to pay
principal and interest on demand. Events affecting the ability of the issuer of
a demand instrument to make payment when due may occur between the time a Fund
or the Series elects to demand payment and the time payment is due, thereby
affecting such Fund's ability to obtain payment at par. Demand instruments whose
demand feature is not exercisable within seven days may be treated as liquid,
provided that an active secondary market exists.

Repurchase Agreements

The Funds and the Series may enter into repurchase agreements wherein the
seller of a security to a Fund or the Series agrees to repurchase that security
from such Fund or the Series 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 Funds and the Series may
enter into repurchase agreements only with respect to U.S. Government
obligations and other obligations that could otherwise be purchased by the
participating Fund. All repurchase agreements will be fully collateralized based
on values that are marked to market daily. While the maturities of the
underlying securities in a repurchase agreement transaction may be greater than
thirteen months, the term of any repurchase agreement on behalf of a Fund or the
Series will always be less than thirteen months. If the seller defaults and the
value of the underlying securities has declined, the participating Fund or the
Series, as the case may be, may incur a loss. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the security,
disposition of the security by the participating Fund or the Series may be
delayed or limited. The Funds and the Series will enter into repurchase
agreements only with registered broker/dealers and commercial banks that meet
guidelines established by the Boards of Directors of the Funds or Board of
Trustees of the Master Trust and that are not affiliated with Wells Fargo Bank.
The Funds and the Series may participate in pooled repurchase agreement
transactions with other funds advised by Wells Fargo Bank.

A-5 PROSPECTUS
<PAGE> 49

Letters of Credit

Certain of the debt obligations, certificates of participation, commercial
paper and other short-term obligations which the Money Market Mutual Fund and
California Tax-Free Money Market Mutual Fund are permitted to purchase may be
backed by an unconditional and irrevocable letter of credit of a bank, savings
and loan association or insurance company which assumes the obligation for
payment of principal and interest in the event of default by the issuer. Letter
of credit-backed investments must, in the opinion of Wells Fargo Bank, be of
investment quality comparable to other permitted investments of such Fund.

Foreign Obligations

Each Fund and the Series may invest up to 25% of its assets in high-quality,
short-term (thirteen months or less) debt obligations of foreign branches of
U.S. banks or U.S. branches of foreign banks that are denominated in and pay
interest in U.S. dollars. Investments in foreign obligations involve certain
considerations that are not typically associated with investing in domestic
obligations. There may be less publicly available information about a foreign
issuer than about a domestic issuer. Foreign issuers also are not subject to the
same uniform accounting, auditing and financial reporting standards or
governmental supervision as domestic issuers. In addition, with respect to
certain foreign countries, interest may be withheld at the source under foreign
income tax laws, and there is a possibility of expropriation or confiscatory
taxation, political or social instability or diplomatic developments that could
adversely affect investments in, the liquidity of, and the ability to enforce
contractual obligations with respect to, securities of issuers located in those
countries.

Taxable Investments

Pending the investment of proceeds from the sale of shares of the Series or
proceeds from sales of portfolio securities or in anticipation of redemptions or
to maintain a "defensive" posture when, in the opinion of Wells Fargo Bank, as
investment adviser, it is advisable to do so because of market conditions, the
Series may elect to invest temporarily up to 20% of the current value of its net
assets in cash reserves including the following taxable high-quality money
market instruments: (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; (iii) commercial paper rated at the date
of purchase "P-1" by Moody's or "A-1+" or "A-1" by S&P; (iv) certain repurchase
agreements; and (v) high-quality municipal obligations, the income from which
may or may not be exempt from federal income taxes.

PROSPECTUS A-6
<PAGE> 50

Moreover, the Series may invest temporarily more than 20% of its total assets
in such securities and in high-quality, short-term municipal obligations the
interest on which is not exempt from federal income taxes to maintain a
temporary defensive posture or in an effort to improve after-tax yield to the
Series' interestholders when, in the opinion of Wells Fargo Bank, as investment
adviser, it is advisable to do so because of unusual market conditions.

INVESTMENT POLICIES

Each Fund's investment objective, as set forth in the "How the Funds Work --
Investment Objectives and Policies" section, is fundamental; that is, it may not
be changed without approval by the vote of the holders of a majority of such
Fund's outstanding voting securities, as described under "Capital Stock" in the
SAI. In addition, any fundamental investment policy may not be changed without
such shareholder approval. If the relevant Company's Board of Directors
determines, however, that a Fund's investment objective can best be achieved by
a substantive change in a nonfundamental investment policy or strategy, such
Company's Board may make such a change without shareholder approval and will
disclose any such material changes in the then-current prospectus.

As matters of fundamental policy, the Money Market Mutual Fund and California
Tax-Free Money Market Mutual Fund may: (i) borrow from banks up to 10% of the
current value of each of their net assets only for temporary purposes in order
to meet redemptions, and these borrowings may be secured by the pledge of up to
10% of the current value of each of their net assets (but investments may not be
purchased by a Fund while any such outstanding borrowing in excess of 5% of its
net assets exists); (ii) not make loans of portfolio securities or other assets,
except that loans for purposes of this restriction will not include the purchase
of fixed time deposits, repurchase agreements, commercial paper and other
short-term obligations, and other types of debt instruments commonly sold in a
public or private offering; and (iii) not invest more than 25% of their assets
(i.e. , concentrate) in any particular industry, excluding, (a) investments in
municipal securities by the California Tax-Free Money Market Mutual Fund (for
the purpose of this restriction, private activity bonds shall not be deemed
municipal securities if the payments of principal and interest on such bonds is
the ultimate responsibility of nongovernmental users), (b) U.S. Government
obligations, and (c) obligations of domestic banks (for purposes of this
restriction, domestic bank obligations do not include obligations of foreign
branches of U.S. banks and obligations of U.S. branches of foreign banks).

As matters of nonfundamental policy: (i) the Money Market Mutual Fund may not
purchase securities of any issuer (except for U.S. Government obligations, for
certain temporary purposes and for certain guarantees and unconditional puts) if
as a result more than 5% of the value of the Money Market Mutual Fund's total
assets would be invested in the securities of such issuer or the Money Market
Mutual Fund would own

A-7 PROSPECTUS
<PAGE> 51

more than 10% of the outstanding voting securities of such issuer; (ii) the
Money Market Mutual Fund may not invest more than 10% of the current value of
its net assets in securities that are illiquid by virtue of the absence of a
readily available market or legal or contractual restrictions on resale and
fixed time deposits that are subject to withdrawal penalties and that have
maturities of more than seven days; and (iii) the California Tax-Free Money
Market Mutual Fund may not invest more than 10% of the current value of its net
assets in repurchase agreements having maturities of more than seven days,
illiquid securities and fixed time deposits that are subject to withdrawal
penalties and that have maturities of more than seven days. With respect to item
(i), it may be possible that the Company would own more than 10% of the
outstanding voting securities of an issuer.

For purposes of complying with the Code, the California Tax-Free Money Market
Mutual Fund will diversify its holdings so that, at the end of each quarter of
the taxable year, (i) at least 50% of the market value of the California
Tax-Free Money Market Mutual Fund's assets is represented by cash, U.S.
Government obligations and other securities limited in respect of any one issuer
to an amount not greater than 5% of the California Tax-Free Money Market Mutual
Fund's assets and 10% of the outstanding voting securities of such issuer, and
(ii) not more than 25% of the value of its assets is invested in the securities
of any one issuer (other than U.S. Government obligations and the securities of
other regulated investment companies), or of two or more issuers which the
taxpayer controls and which are determined to be engaged in the same or similar
trades or businesses or related trades or businesses.

In addition, at least 65% of the California Tax-Free Money Market Mutual
Fund's total assets are invested (under normal market conditions) in municipal
obligations that pay interest which is exempt from California personal income
taxes. However, as a matter of general operating policy, the California Tax-Free
Money Market Mutual Fund seeks to have substantially all of its assets invested
in such municipal obligations.

PROSPECTUS A-8
<PAGE> 52

respect to investments in (a) municipal securities (for the purposes of this
restriction, private activity bonds and notes shall not be deemed municipal
securities if the payments of principal and interest on such bonds and notes is
the ultimate responsibility of non-governmental entities), (b) U.S. Government
obligations, and (c) certain obligations of domestic banks; and (iv) not
purchase securities of any issuer (except securities issued or guaranteed by the
U.S. Government, its agencies and instrumentalities, including
government-sponsored enterprises) if, as a result, with respect to 75% of its
total assets, more than 5% of the value of the Series' total assets would be
invested in the securities of any one issuer or, with respect to 100% of its
total assets the Series' ownership would be more than 10% of the outstanding
voting securities of such issuer.

As matters of non-fundamental policy the National Tax-Free Money Market Mutual
Fund and the Series may each: (i) invest up to 10% of the current value of its
net assets in securities that are illiquid by virtue of the absence of a readily
available market or the existence of legal or contractual restrictions on resale
and fixed time deposits that are subject to withdrawal penalties and that have
maturities of more than seven days; and (ii) invest up to 10% of the current
value of its net assets in repurchase agreements having maturities of more than
seven days, and restricted securities (which include securities that must be
registered under the Securities Act of 1933 before they may be offered to the
public).

A-9 PROSPECTUS
<PAGE> 53

THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE> 54

SPONSOR, DISTRIBUTOR AND ADMINISTRATOR

Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201

INVESTMENT ADVISER, 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 Funds, 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:
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
- are NOT FDIC insured
- are NOT guaranteed by Wells Fargo Bank
- are NOT deposits or obligations of the Bank
- involve investment risk, including possible loss of
principal LOGO
Money Market Mutual Funds seek to maintain a stable net
asset value of $1.00 per share; however, there can be no
assurance that the funds will meet this objective.
</TABLE>

LOGO SC 1023 (8/95)
Printed on Recycled Paper
<PAGE> 55

<TABLE>
<S> <C>
LOGO
P.O. Box 7066
San Francisco, CA 94120-7066
</TABLE>

STAGECOACH FUNDS:
- --------------------------------------------------------------------------------

LOGO SC-1023
Printed on Recycled Paper (8/95)
<PAGE> 56

STAGECOACH FUNDS, INC.

SUPPLEMENT DATED JANUARY 2, 1996
TO THE CURRENT PROSPECTUS, AS PREVIOUSLY SUPPLEMENTED, AND
STATEMENT OF ADDITIONAL INFORMATION OF EACH FUND OF
STAGECOACH FUNDS, INC.

As of January 1, 1996, Wells Fargo Bank, N.A. provides investment advisory
services for approximately $33 billion of assets.

Each Fund's current Prospectus, as supplemented, and Statement of
Additional Information are hereby amended accordingly.
<PAGE> 57

LOGO

MONEY MARKET MUTUAL FUND -- CLASS A SHARES
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND
NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND

Stagecoach Funds, Inc. ("Stagecoach Funds") and Stagecoach Inc. are
open-end investment companies consisting of several separate funds, each with
different investment objectives and policies. This Prospectus contains
information about three such funds, the MONEY MARKET MUTUAL FUND and the
CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND of Stagecoach Funds and the
NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND of Stagecoach Inc. (each, a "Fund"
and, collectively, the "Funds"). This Prospectus is intended exclusively for
persons investing in one of the funds through any of the following accounts with
Wells Fargo Bank, N.A. ("Wells Fargo Bank"): a Money Market Checking Account,
California Tax-Free Money Market Checking Account, National Tax-Free Money
Market Checking Account (each, a "Checking Account"), Money Market Access
Account, California Tax-Free Money Market Access Account or National Tax-Free
Money Market Access Account (each, an "Access Account," together with the
Checking Accounts, the "Accounts").

AN INVESTMENT IN THE FUNDS, THROUGH AN ACCOUNT OR OTHERWISE, AND/OR THE
SERIES (AS DEFINED BELOW) IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENTAL AGENCY. THERE IS NO ASSURANCE THAT THE FUNDS OR THE
SERIES WILL BE ABLE TO MAINTAIN A CONSTANT $1.00 NET ASSET VALUE PER SHARE.

Please read this Prospectus before investing and retain it for future
reference. It sets forth concisely the information about the Funds and the
Series that you should know before investing. Statements of Additional
Information ("SAIs"), dated May 1, 1995, for the Money Market Mutual Fund and
California Tax-Free Money Market Mutual Fund, and dated July 19, 1995, for the
National Tax-Free Money Market Mutual Fund, as amended from time to time, have
been filed with the Securities and Exchange Commission ("SEC") and are
incorporated by reference. The SAI for each Fund is available free of charge by
writing to Stagecoach Shareholder Services at the address set forth in the
Prospectus under "Investing in the Funds -- Opening an Account" or by calling
800-222-8222.

THE NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND SEEKS TO ACHIEVE ITS
INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS ASSETS IN THE TAX-FREE MONEY MARKET
MASTER SERIES ("SERIES") OF MANAGED SERIES INVESTMENT TRUST (THE "TRUST"), A
PROFESSIONALLY MANAGED OPEN-END INVESTMENT COMPANY, WHICH HAS AN IDENTICAL
INVESTMENT OBJECTIVE. The National Tax-Free Money Market Mutual Fund and the
Series seek to obtain a high level of income exempt
---------------------
FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED, ENDORSED OR
GUARANTEED BY, 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 A FUND
INVOLVES CERTAIN RISKS, INCLUDING POSSIBLE LOSS
OF PRINCIPAL.

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.

PROSPECTUS DATED JULY 19, 1995
<PAGE> 58

from federal income taxes, while preserving capital and liquidity. The Series
seeks to achieve its investment objective by investing in high-quality, U.S.
dollar-denominated money market instruments, primarily municipal obligations,
with remaining maturities not exceeding thirteen months.

The MONEY MARKET MUTUAL FUND seeks to provide investors with a high level
of income, while preserving capital and liquidity, by investing in high-quality,
short-term securities. This Prospectus describes only the Class A Shares of the
Money Market Mutual Fund. The Money Market Mutual Fund offers another class of
shares -- Class S Shares. Class S Shares are available only to qualified
business investors who invest in the Money Market Mutual Fund through certain
non-interest bearing transaction accounts with Wells Fargo Bank.

Each of the Accounts combines a non-interest bearing Wells Fargo Bank
deposit account with a daily sweep of balances to or from a designated Fund.
Persons investing through an Account also receive a disclosure statement (the
"Disclosure Statement") describing the various features and operations of the
Accounts. The Disclosure Statement should be reviewed in conjunction with this
Prospectus.

You may also invest directly in the Funds. Information regarding direct
investments in the Funds, including a separate prospectus that describes how to
invest directly in a Fund, may be obtained by calling 800-222-8222. In this
prospectus, Stagecoach Funds and Stagecoach Inc. are sometimes referred to
collectively as "Stagecoach" and individually as a "Company."

WELLS FARGO BANK IS THE INVESTMENT ADVISER TO THE FUNDS AND THE SERIES AND
PROVIDES CERTAIN OTHER SERVICES TO THE FUNDS AND THE SERIES FOR WHICH
IT IS COMPENSATED, STEPHENS INC., WHICH IS NOT AFFILIATED WITH
WELLS FARGO BANK, IS THE SPONSOR AND ADMINISTRATOR FOR THE
FUNDS AND THE TRUST AND SERVES AS DISTRIBUTOR FOR THE
FUNDS AND AS PLACEMENT AGENT FOR THE SERIES.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................................................................... ii
Summary of Fund Expenses.............................................................. v
Financial Highlights.................................................................. ix
How the Funds Work.................................................................... 1
Risk Factors........................................................................ 4
The Funds, the Trust and Management................................................... 7
Investing in the Funds................................................................ 9
Dividends............................................................................. 11
How To Redeem Shares.................................................................. 12
Additional Shareholder Services....................................................... 12
Management and Servicing Fees......................................................... 12
Taxes................................................................................. 16
Prospectus Appendix -- Additional Investment Policies................................. A-1
</TABLE>

i
<PAGE> 59

PROSPECTUS SUMMARY

This Prospectus is intended exclusively for use by persons investing in the
Funds through an Account with Wells Fargo Bank. Each Account combines a
non-interest bearing Wells Fargo Bank deposit account (the "Transaction
Account") with a daily sweep of Transaction Account balances to or from a
designated Fund. The following provides you with summary information about each
of the Funds. For more information, please refer specifically to the identified
Prospectus sections and generally to the Prospectus and SAI for each Fund.

Q. WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

A. THE MONEY MARKET MUTUAL FUND seeks to provide investors with a high level
of income, while preserving capital and liquidity, by investing in
high-quality, short-term securities. In pursuing this objective, the Fund
invests in securities with remaining maturities not exceeding thirteen
months, as determined in accordance with Rule 2a-7 under the Investment
Company Act of 1940, as amended (the "1940 Act"). These securities include
obligations of the U.S. Government, its agencies and instrumentalities,
high-quality debt obligations such as corporate debt, certain obligations
of U.S. banks and certain repurchase agreements.

The CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND seeks to provide
investors with a high level of income exempt from federal income taxes and
California personal income taxes, while preserving capital and liquidity,
by investing in high-quality, U.S. dollar-denominated money market
instruments, primarily municipal obligations with remaining maturities not
exceeding thirteen months, as determined in accordance with Rule 2a-7
under the 1940 Act. Under normal market conditions, substantially all of
the Fund's assets will be invested in California municipal obligations
that are exempt from federal income taxes and California personal income
taxes. Certain risks may arise from the Fund's concentration in
investments in California municipal obligations.

The NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND seeks to provide investors
with a high level of income exempt from federal income taxes, while
preserving capital and liquidity. The Fund seeks to achieve its investment
objective by investing all of its assets in the Tax-Free Money Market
Master Series of the Trust, which has the same investment objective as the
Fund. The Series seeks to achieve this investment objective by investing
in high-quality, U.S. dollar-denominated money market instruments,
primarily municipal obligations, with remaining maturities not exceeding
thirteen months.

Q. WHO MANAGES MY INVESTMENTS?

ii
<PAGE> 60

Fund because this Fund invests all of its assets in the Series. Wells
Fargo Bank also provides the Funds and the Series with transfer agency,
dividend disbursing agency and custodial services. In addition, Wells
Fargo Bank is a Shareholder Servicing Agent and a Selling Agent (as
defined below) of the Funds. See "The Funds, the Trust and Management" and
"Management and Servicing Fees."

Q. HOW DO I INVEST?

A. This Prospectus is designed only for persons who are investing in a Fund
through an Account with Wells Fargo Bank. Wells Fargo Bank computes the
net amount of deposits to and withdrawals from your Transaction Account
(the "Net Sweep Amount") on any day Wells Fargo Bank is open for business.
If deposits exceed withdrawals from your Transaction Account, Wells Fargo
Bank transmits a purchase order on your behalf to the appropriate Fund in
an amount equal to the dollar value of the Net Sweep Amount. Shares of the
California Tax-Free Money Market Mutual Fund and National Tax-Free Money
Market Mutual Fund (the "Tax-Free Funds") may not be suitable investments
for tax-exempt institutions or tax-exempt retirement plans, since such
investors would not benefit from the exempt status of such Funds'
dividends. In addition, the Funds do not make any representations
regarding the taxation of their corporate shareholders. The information in
this Prospectus should be read in conjunction with the Disclosure
Statement. See "Investing in the Funds." You also may invest directly in
the Funds. For more details, including a separate prospectus that
describes how to invest directly in a Fund, contact Stephens Inc.
("Stephens") (the Funds' sponsor and distributor) or a Shareholder
Servicing Agent or Selling Agent (such as Wells Fargo Bank).

Q. HOW WILL I RECEIVE DIVIDENDS AND ANY CAPITAL GAINS?

A. Dividends from net investment income of the Funds are declared daily and
are paid monthly to your Account through automatic reinvestment in the
Funds. Any capital gains are distributed at least annually in a similar
manner. Various dividend and distribution options, such as the option to
direct the payment of proceeds from dividends and distributions to another
account, are not available to persons investing in the Funds through an
Account. See "Dividends" and "Additional Shareholder Services."

Q. HOW MAY I REDEEM SHARES?

A. If, on any day Wells Fargo Bank is open for business, withdrawals from
your Account exceed deposits, Wells Fargo Bank transmits a redemption
order on your behalf to the appropriate Fund in the dollar amount of that
day's Net Sweep Amount. If your Account with Wells Fargo Bank is closed as
described in the applicable Disclosure Statement, Wells Fargo Bank
transmits a redemption request on your behalf to the appropriate Fund for
the balance of your Fund shares held through such Account. See "How To
Redeem Shares."

iii
<PAGE> 61

Q. WHAT ARE SOME OF THE POTENTIAL RISKS ASSOCIATED WITH THIS TYPE OF
INVESTMENT?

A. Investments in the Funds and the Series are not insured against loss of
principal. Although the Funds seek to maintain a stable net asset value of
$1.00 per share, there is no assurance that they will be able to do so.
Deposits to the Accounts are eligible for federal deposit insurance only
for the brief period they are in the Transaction Account prior to being
swept into a Fund. The Funds' shares are not insured or guaranteed by the
U.S. Government. Since the California Tax-Free Money Market Mutual Fund
will invest primarily in securities issued by California, its agencies and
municipalities, events in California are more likely to affect this Fund's
investments. Also, the California Tax-Free Money Market Mutual Fund is
nondiversified, which means that its assets may be invested among fewer
issuers and therefore the value of its assets may be subject to greater
impact by events affecting one of its investments. You should be prepared
to accept some risk with the money you invest in the Funds. As with all
mutual funds, there can be no assurance that the Funds will achieve their
investment objectives. See "How The Funds Work -- Risk Factors" and
"Prospectus Appendix -- Additional Investment Policies."

iv
<PAGE> 62

SUMMARY OF FUND EXPENSES

The purpose of this summary is to help you understand the various costs and
expenses you will bear directly or indirectly as a shareholder of the Funds. As
shown below, you are not charged sales charges, redemption fees, or exchange
fees. You should consider this expense information together with the important
information in this Prospectus, including the Funds' investment objectives and
policies.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<CAPTION>
MONEY MARKET CALIFORNIA NATIONAL
MUTUAL FUND TAX-FREE TAX-FREE
(CLASS A MONEY MARKET MONEY MARKET
SHARES) MUTUAL FUND MUTUAL FUND
--------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases (as a
percentage of offering price).................. None None None
Sales Charge Imposed on Reinvested Dividends....... None None None
Sales Charge Imposed on Redemptions(1)............. None None None
Exchange Fees...................................... None None None
</TABLE>

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
NATIONAL
MONEY MARKET CALIFORNIA TAX-FREE
MUTUAL FUND TAX-FREE MONEY MARKET
(CLASS A MONEY MARKET MUTUAL FUND(2)
SHARES) MUTUAL FUND
--------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Management Fee..................................... 0.40% 0.50% 0.30%
Rule 12b-1 Fee(3).................................. 0.02% 0.03% 0.05%
Total Other Expenses(3)
Shareholder Servicing Fee(3)................... 0.28% 0.04% 0.00%
Administrative Fee............................. 0.03% 0.03% 0.05%
Other Expenses(3).............................. 0.02% 0.05% 0.10%
----- ----- -----
0.33% 0.12% 0.15%
----- ----- -----
TOTAL FUND OPERATING
EXPENSES(3)(4)................................. 0.75% 0.65% 0.50%
</TABLE>

- ---------------

<TABLE>
<C> <S>
(1) The Company reserves the right to impose a charge for wiring redemption proceeds.
(2) Other mutual funds may invest in the Tax-Free Money Market Master Series and such other funds'
expenses and, correspondingly, investment returns may differ from those of the National Tax-Free
Money Market Mutual Fund.
(3) After any waivers or reimbursements.
(4) Additional fees charged by Wells Fargo Bank related to the Accounts are not included in this
table. See Account Fees and Charges.
</TABLE>

v
<PAGE> 63

EXAMPLE OF EXPENSES

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment in a
Fund, assuming (A) a 5% annual return and (B) redemption at the
end of each time period indicated:
Money Market Mutual Fund (Class A Shares)..................... $8 $24 $42 $ 93
California Tax-Free Money Market Mutual Fund.................. $7 $21 $36 $ 81
National Tax-Free Money Market Mutual Fund.................... $5 $16 N/A N/A
</TABLE>

ACCOUNT FEES AND CHARGES(1)

<TABLE>
<CAPTION>
CALIFORNIA NATIONAL CALIFORNIA NATIONAL
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET
CHECKING CHECKING CHECKING ACCESS ACCESS ACCESS
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Monthly Account Fee............ $ 5.00(2) $ 5.00(2) $ 5.00(2) None None None
Transaction Fees(3)
Per Check Written.......... None None None $ 3.00(4) $ 3.00(4) $ 3.00(4)
Per Check Deposited........ None None None None None None
Per Cash Deposit........... None None None None None None
Miscellaneous Fees............. Variable(5) Variable(5) Variable(5) Variable(5) Variable(5) Variable(5)
Minimum Opening Balance........ None None None $ 2,500 $ 2,500 $ 2,500
</TABLE>

- ---------------

(1) You may purchase or redeem Fund shares directly without opening an Account
and without incurring the fees and charges for, or deriving the benefits of,
the Account Services described above. Information regarding direct
investment in the Funds, including a separate prospectus that describes how
to invest directly in a Fund, may be obtained by calling 800-222-8222.

(2) Fee is waived for qualifying accounts with balances in excess of $75,000 as
further described in the Disclosure Statement.

(3) A Transaction Fee is charged to an Account whenever one of the listed
transactions occurs.

(4) Accounts are each charged $3.00 per check if more than three checks are
posted during a statement period.

(5) Various miscellaneous fees may be charged to an Account on a per
transaction, per statement or other basis as described in "Miscellaneous
Fees and Charges" and "Using Your Money Market Checking or Money Market
Access Accounts" and elsewhere in the Disclosure Statement.

vi
<PAGE> 64

EXPLANATION OF TABLES

SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
Fund shares. There are no Shareholder Transaction Expenses for these Funds.
However, the Company reserves the right to impose a charge for wiring redemption
proceeds.

ANNUAL FUND OPERATING EXPENSES for the Class A Shares of the Money Market
Mutual Fund and shares of the California Tax-Free Money Market Mutual Fund are
based on amounts incurred during the most recent fiscal year, restated to
reflect voluntary fee waivers and expense reimbursements that are expected to
continue during the current fiscal year. Annual Fund Operating Expenses for the
National Tax-Free Money Market Mutual Fund summarize expenses charged at the
Trust level as well as expenses charged at the Company level. The amounts shown
above for the National Tax-Free Money Market Mutual Fund under "Master Series
Management Fee," "Rule 12b-1 Fee" and "Administrative Fee" reflect contract
amounts; the amounts shown under "Shareholder Servicing Fee," "Other Expenses,"
"Total Other Expenses" and "Total Fund Operating Expenses" reflect certain
anticipated voluntary fee waivers and expense reimbursements for the current
fiscal year. Wells Fargo Bank and Stephens each has agreed to waive or reimburse
all or a portion of its respective fees if certain Fund expenses exceed limits
set by state securities laws or regulations. In addition, Wells Fargo Bank and
Stephens each, at its sole discretion, may waive or reimburse all or a portion
of its respective fees charged to, or expenses paid by, a Fund or the Series.
Any waivers or reimbursements would reduce the total expenses of the Funds or
Series. There can be no assurance that such waivers or reimbursements would
continue. Absent waivers and reimbursements, the percentages shown above under
"Rule 12b-1 Fees," "Total Other Expenses" and "Total Fund Operating Expenses"
would be 0.05%, 0.44% and 0.89%, respectively, for the Class A Shares of the
Money Market Mutual Fund and 0.05%, 0.53% and 1.08%, respectively, for the
California Tax-Free Money Market Mutual Fund. Absent waivers and reimbursements,
"Shareholder Servicing Fee," "Other Expenses," "Total Other Expenses" and "Total
Fund Operating Expenses" would be 0.25%, 0.30%, 0.60% and 0.95%, respectively,
for the National Tax-Free Money Market Mutual Fund. Long-term shareholders in
the Funds 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 each Fund, please see the Prospectus section captioned "Management
and Servicing Fees."

EXAMPLE OF EXPENSES is a hypothetical example which illustrates the
expenses associated with a $1,000 investment over the periods shown, 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 a 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. If current fee waivers and/or reimbursements are
discontinued, the amounts contained in the "Example of Expenses" may increase.

With regard to the combined fees and expenses of the National Tax-Free
Money Market Mutual Fund and Series, the Board of Directors of Stagecoach Inc.
has considered whether various costs and

vii
<PAGE> 65

benefits of investing all the Fund's assets in the Series would be more or less
than if the Fund invested in portfolio securities directly, and believes that
the Fund should achieve economic efficiencies by investing in the Series.
Additionally, the Board of Directors believes that the aggregate fees assessed
by this Fund and the Series should be less than those expenses that the
Directors believe would be incurred had the Fund invested directly in the
securities held by the Series. See the Prospectus sections captioned "The Funds,
the Trust and Management" and "Management and Servicing Fees" for more complete
descriptions of the various costs and expenses applicable to investors in this
Fund. In addition, if this Fund was to change its fundamental investment
strategy and no longer invest in the Series of the Trust, these expenses may
change.

ACCOUNT FEES AND CHARGES are charges you pay to Wells Fargo Bank for banking
services offered to you as an Account holder. The fees and charges applicable to
each Account are discussed below. Wells Fargo Bank currently charges a monthly
account fee for each of the Checking Accounts. This fee may be waived for
certain accounts meeting specified requirements as set forth in the applicable
Disclosure Statement. Wells Fargo Bank may, in certain cases, charge a check
writing fee for the Access Accounts. In addition, each Account is subject to
various other fees and charges which may be assessed on a monthly or other
periodic basis, or on a per transaction, per statement or other basis. For
additional information with respect to Account fees and charges, including a
description of the services available to Accountholders, you should refer to the
applicable consumer Disclosure Statement, particularly the sections captioned
"Miscellaneous Fees and Charges" and "Using Your Money Market Checking or Money
Market Access Accounts." This Prospectus is intended exclusively for use by
persons investing in a Fund through an Account. Wells Fargo Bank may, in the
future, permit investors to acquire shares of the Funds through additional
accounts not described in this Prospectus. Investors desiring to invest directly
in a Fund should obtain a separate prospectus by calling 800-222-8222.

viii
<PAGE> 66

FINANCIAL HIGHLIGHTS

The following information relating to the Class A Shares of the Money
Market Mutual Fund and the shares of the California Tax-Free Money Market Mutual
Fund has been derived from the Financial Highlights in such Funds' 1994 annual
financial statements. The financial statements are incorporated by reference
into the SAI for each such Fund and have been audited by KPMG Peat Marwick LLP,
independent auditors, whose report dated February 17, 1995 also is incorporated
by reference in the SAI. This information should be read in conjunction with the
1994 annual financial statements for these Funds and the notes thereto. The SAI
for each of the Funds has been incorporated by reference into this Prospectus.
Financial information is not provided in connection with the National Tax-Free
Money Market Mutual Fund because the Fund had not begun operations during the
periods presented.

MONEY MARKET MUTUAL FUND
FOR A CLASS A SHARE OUTSTANDING

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED*
DEC. 31, 1994 DEC. 31, 1993 DEC. 31, 1992
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 1.00 $ 1.00 $ 1.00
Income From Investment Operations:
Net Investment Income.................................. 0.04 0.03 0.02
Less Distributions:
Dividends From Net Investment Income................... (0.04) (0.03) (0.02)
Net Asset Value End of Period.......................... $ 1.00 $ 1.00 $ 1.00
====== ====== ======
Total Return (not annualized).......................... 3.74% 2.70% 1.50%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)...................... $2,343,942 $317,474 $236,269
Number of Shares Outstanding, End of Period (000's).... 2,344,028 317,474 236,270
Ratios to Average Net Assets (annualized):
Ratio of Expenses to Average Net Assets(1)............. 0.69% 0.58% 0.20%
Ratio of Net Investment Income to Average Net
Assets(2)............................................ 4.12% 2.67% 2.98%
- ---------------
(1) Ratio of Expenses to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses................ 0.89% 1.00% 0.94%
(2) Ratio of Net Investment Income to Average Net
Assets Prior to Waived Fees and Reimbursed
Expenses........................................... 3.92% 2.25% 2.24%
* The Fund commenced operations on July 1, 1992
</TABLE>

ix
<PAGE> 67

CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND

FOR A SHARE OUTSTANDING

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, 1994 DEC. 31, 1993 DEC. 31, 1992
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 1.00 $ 1.00 $ 1.00
Income From Investment Operations:
Net Investment Income.................................. 0.02 0.02 0.03
Less Distributions:
Distributions From Net Investment Income............... (0.02) (0.02) (0.03)
Net Asset Value, End of Period......................... $ 1.00 $ 1.00 $ 1.00
====== ====== ======
Total Return (not annualized).......................... 2.28% 1.89% 2.81%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)...................... $869,745 $793,420 $572,906
Number of Shares Outstanding, End of Period (000's).... 869,824 793,426 572,907
Ratios to Average Net Assets (annualized):
Ratio of Expenses to Average Net Assets(1)............. 0.62% 0.55% 0.28%
Ratio of Net Investment Income to Average Net
Assets(2)............................................ 2.26% 1.88% 2.41%
- ---------------
(1) Ratio of Expenses to Average Net Assets Prior to
Waived Fees and Reimbursed Expenses................ 1.08% 1.06% 1.03%
(2) Ratio of Net Investment Income to Average Net
Assets Prior to Waived Fees and Reimbursed
Expenses........................................... 1.80% 1.37% 1.66%
</TABLE>

x
<PAGE> 68

HOW THE FUNDS WORK

INVESTMENT OBJECTIVES AND POLICIES

THE MONEY MARKET MUTUAL FUND

The MONEY MARKET MUTUAL FUND seeks to provide investors with a high level
of income, while preserving capital and liquidity, by investing in high-quality,
short-term securities. The Fund invests its assets only in U.S.
dollar-denominated, high-quality money market instruments, and may engage in
certain other investment activities as described in this Prospectus. Permitted
investments include U.S. Government short-term obligations, obligations of
domestic and foreign banks, commercial paper, and repurchase agreements. In
pursuing its objective, the Fund invests in instruments with remaining
maturities not exceeding thirteen months, as determined in accordance with Rule
2a-7 under the 1940 Act. As with all mutual funds, there can be no assurance
that the Fund, which is a diversified portfolio, will achieve its investment
objective. A more complete description of these investments and investment
activities is contained in the "Prospectus Appendix -- Additional Investment
Policies" and in the SAI.

THE CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND

The CALIFORNIA TAX-FREE MONEY MARKET MUTUAL FUND seeks to obtain a high
level of income exempt from federal income taxes and California personal income
taxes, while preserving capital and liquidity, by investing in high-quality,
U.S. dollar-denominated money market instruments, primarily municipal
obligations. This investment objective is fundamental and cannot be changed
without shareholder approval. There can be no assurance that the Fund, which is
a nondiversified portfolio, will achieve its investment objective. Wells Fargo
Bank, as investment adviser to the Fund, will pursue the Fund's objective by
investing (under normal market conditions) substantially all of the Fund's
assets in the following types of municipal obligations that pay interest which
is exempt from both federal income tax and California personal income tax:
bonds, notes and commercial paper issued by or on behalf of the State of
California, its cities, municipalities, political subdivisions and other public
authorities with remaining maturities not exceeding thirteen months, as
determined in accordance with Rule 2a-7 under the 1940 Act. These municipal
obligations and the taxable investments described below may bear interest at
rates that are not fixed ("floating- and variable-rate instruments").

The California Tax-Free Money Market Mutual Fund may temporarily invest
some of its assets in certain high-quality, taxable money market instruments or
may engage in other investment activities as described in this Prospectus. The
Fund may elect to invest temporarily up to 20% of its net assets in certain
permitted taxable investments, which include cash reserves, U.S. Government
obligations, obligations of domestic and foreign banks, foreign securities,
rated commercial paper, taxable municipal obligations, repurchase agreements,
and loans of portfolio securities. Such temporary investments would most likely
be made when there is an unexpected or abnormal level of investor purchases or
redemptions of Fund shares or because of unusual market conditions. The income
from these temporary investments and investment activities may be subject to
federal income taxes and California personal income taxes. However, as stated
above, Wells Fargo Bank seeks to invest

1
<PAGE> 69

substantially all of the Fund's assets in securities exempt from such taxes. A
more complete description of tax-free municipal obligations, taxable money
market instruments, and other investment activities is contained in the
"Prospectus Appendix -- Additional Investment Policies" and in the Fund's SAI.

As a matter of fundamental policy, at least 80% of the California Tax-Free
Money Market Mutual Fund's net assets are invested (under normal market
conditions) in municipal obligations that pay interest which is exempt from
federal income taxes and not subject to the federal alternative minimum tax (or
in other open-end tax-free money market funds with a similar fundamental
policy). At least 65% of the Fund's total assets are invested (under normal
market conditions) in municipal obligations that pay interest which is exempt
from California personal income taxes. However, as a matter of general operating
policy, the Fund seeks to have substantially all of its assets invested in such
municipal obligations. The Fund's investment adviser may rely either on an
opinion of counsel to the issuer of the municipal obligations or on Internal
Revenue Service ("IRS") rulings regarding the tax treatment of these
obligations. In addition, the Fund may invest 25% or more of its assets in
California municipal obligations that are related in such a way that an
economic, business or political development or change affecting one such
obligation would also affect the other obligations. For example, the California
Tax-Free Money Market Mutual Fund may own different municipal obligations which
pay interest based on the revenues of similar types of projects.

THE NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND

The National Tax-Free Money Market Mutual Fund seeks to provide investors
with a high level of income exempt from federal income taxes, while preserving
capital and liquidity. The Fund seeks to achieve its investment objective by
investing all of its assets in the Series, which has the same investment
objective as the Fund. The Series seeks to achieve this investment objective by
investing in high-quality, U.S. dollar denominated money market instruments,
primarily municipal obligations, with remaining maturities not exceeding
thirteen months.

Since the investment characteristics of the Fund will correspond directly
to those of the Series, the following is a discussion of the various investments
of and techniques employed by the Series of the Trust.

Wells Fargo Bank, as investment adviser to the Series, pursues the
investment objective of the Series by investing (under normal market conditions)
substantially all of the Series' assets in the following types of municipal
obligations that pay interest which is exempt from federal income tax: bonds,
notes and commercial paper issued by or on behalf of states, territories, and
possessions of the United States (including the District of Columbia) and their
political subdivisions, agencies, instrumentalities (including
government-sponsored enterprises) and authorities, the interest on which, in the
opinion of counsel to the issuer or bond counsel, is exempt from federal income
tax. These municipal obligations and the taxable investments described below may
bear interest at rates that are not fixed ("floating- and variable-rate
instruments").

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MASTER/FEEDER STRUCTURE

The National Tax-Free Money Market Mutual Fund is a feeder fund in a
master/feeder structure. Accordingly, it invests all of its assets in the
Series. The Series has the same investment objective as the Fund. See
"Investment Objectives and Policies". In addition to selling its shares to the
Fund, the Series may sell its shares to other mutual funds or other accredited
investors. Information regarding additional options, if any, for investments in
shares of the Series is available from Stephens by calling 1-800-643-9691 or by
calling Wells Fargo Bank at 1-800-222-8222. The expenses and, correspondingly,
the returns of other investment options in the Series may differ from those of
the Fund.

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shareholders will be adversely affected by reason of investing their assets in
the Series. However, if a mutual fund or other investor withdraws its investment
from the Series, the economic efficiencies (e.g., spreading fixed expenses
across a larger asset base) that the Company's Board believes should be
available through investment in the Series may not be fully achieved. In
addition, given the relatively novel nature of the master/feeder structure,
accounting and operational difficulties, although unlikely, could occur.

The investment objectives and other fundamental policies of the National
Tax-Free Money Market Mutual Fund and the Series cannot be changed without
approval by the holders of a majority (as defined in the 1940 Act) of such
Fund's or Series' outstanding voting shares. Whenever the Fund, as a Series
shareholder, is requested to vote on matters pertaining to any fundamental
policy of such Series, the Fund will hold a meeting of its shareholders to
consider such matters and will cast its votes in proportion to the votes
received from Fund shareholders. The Fund will vote Series shares for which it
receives no voting instructions in the same proportion as the votes received
from Fund shareholders. In addition, certain policies of the Series which are
non-fundamental could be changed by vote of a majority of the Trust's Trustees
without shareholder vote. If the Series' investment objective or fundamental or
non-fundamental policies are changed, the Fund investing in such Series could
subsequently change its objective or policies to correspond to those of the
Series, or the Fund could redeem its Series shares and either seek a new
investment company in which to invest with a matching objective or retain its
own investment adviser to manage the Fund's portfolio in accordance with its
objective. In the latter case, the Fund'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 such Fund or the Series, to the extent
possible. Additional information regarding the officers and directors of
Stagecoach Funds, Stagecoach Inc. and the Trust is included in the SAI for each
Fund under "Management."

RISK FACTORS

The Funds and the Series, under the 1940 Act, must comply with certain
investment criteria designed to provide liquidity, reduce risk, and allow the
Funds and the Series to maintain a stable net asset value of $1.00 per share. Of
course, the Funds and the Series cannot guarantee a $1.00 share price. The
dollar-weighted average portfolio maturity of each of the Funds and the Series
must not exceed 90 days. Any security that a Fund or the Series purchases must
have a remaining maturity of not more than thirteen months. In addition, any
security that a Fund or the Series purchases must present minimal credit risks
and be of high quality (i.e., be rated in the top two rating categories by the
required number of nationally recognized statistical rating organizations
("NRSROs") or, if unrated, determined to be of comparable quality to such rated
securities). These determinations are made by Wells Fargo Bank, as the Funds' or
Series' Investment Adviser, as the case may be, under guidelines adopted by the
Board of Directors of each Company, or the Trust's Board of Trustees,
respectively.

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- capped floaters (on which interest is not paid when market rates move
above a certain level);

- leveraged floaters (whose interest-rate reset provisions are based on a
formula that magnifies changes in interest rates);

- range floaters (which do not pay any interest if market interest rates
move outside of a specified range);

- dual index floaters (whose interest-rate reset provisions are tied to
more than one index so that a change in the relationship between these
indices may result in the value of the instrument falling below face
value); and

- inverse floaters (which reset in the opposite direction of their index).

Additionally, the Funds and the Series may not invest in securities whose
interest rate reset provisions are tied to an index that materially lags
short-term interest rates, such Cost of Funds Index ("COFI") floaters. The Funds
and the Series may only invest in floating-rate securities that bear interest at
a rate that resets quarterly or more frequently, and which resets based on
changes in standard money market rate indices such as U.S. Government Treasury
bills, London Interbank Offered Rate, the prime rate, published commercial paper
rates, federal funds rates, Public Securities Associates ("PSA") floaters or JJ
Kenney index floaters.

Since the California Tax-Free Money Market Mutual Fund will invest
primarily in securities issued by California and its agencies and
municipalities, events in California will be more likely to affect the Fund's
investments. While the California Tax-Free Money Market Mutual Fund will seek to
reduce risk by investing its assets in securities of various issuers, the Fund
will be considered to be nondiversified for purposes of the 1940 Act. However,
the California Tax-Free Money Market Mutual Fund will comply with Internal
Revenue Code of 1986 ("Code") diversification requirements, as described in the
"Prospectus Appendix - Additional Investment Policies" section below.

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<PAGE> 73

Investors Service lowered its rating from "Aa" to "A1," Standard & Poor's
Ratings Group lowered its rating from "A+" to "A" and termed its outlook as
"stable," and Fitch Investors Service lowered its rating from "AA" to "A." Since
the California Tax-Free Money Market Mutual Fund may invest only in securities
rated in the top two rating categories, any further rating downgrade of the
state's debt obligations may impact the availability of securities that meet the
Fund's investment policies and restrictions. The Fund's investment adviser
continues to monitor and evaluate the Fund's investments in light of the events
in California and the California Tax-Free Money Market Mutual Fund's investment
objective and investment policies. The rating agencies also continue to monitor
events in the state and the state and local governments' responses to budget
shortfalls. See "Special Considerations Affecting California Municipal
Obligations" in the SAI for the California Tax-Free Money Market Mutual Fund.

Investments in the Funds, through an Account or otherwise, are not insured
against loss of principal. Although Wells Fargo Bank will seek to achieve the
investment objectives of the Funds, there is no assurance that the Funds will be
able to maintain a constant $1.00 net asset value per share. The Funds are
subject to interest rate risk (i.e., the risk that increases in market interest
rates may adversely affect the value of the securities in which the Funds invest
and hence the value of your investment in the Funds; the value of such
securities generally changes inversely to market interest rates.) See
"Prospectus Appendix -- Additional Investment Policies" for further discussion
of investment objectives and risks.

PERFORMANCE

The performance of the Class A Shares of the Money Market Mutual Fund and
the shares of the Tax-Free Funds may be advertised in terms of current yield or
effective yield. In addition, the performance of the Tax-Free Funds may be
advertised in terms of tax-equivalent yield or effective tax-equivalent yield.
These performance figures are based on historical results and are not intended
to indicate future performance. The investment performance of the National
Tax-Free Money Market Mutual Fund will correspond to the investment experience
of the Series.

Yield refers to the income generated by an investment in a Fund, or class
of a Fund, over a seven-day period, expressed as an annual percentage rate.
Effective yields are calculated similarly, but assume that the income earned
from a Fund is reinvested in the Fund or in shares of the same class of such
Fund. Because of the effects of compounding, effective yields are slightly
higher than yields. The tax-equivalent yield and the effective tax-equivalent
yield of the Tax-Free Funds assume that a stated income tax rate has been
applied to determine the tax-equivalent figures. The application of the stated
income tax rate results in higher yield and effective yield figures. The
National Tax-Free Money Market Mutual Fund may also advertise thirty-day yield
information.

Additional performance information is contained in each Company's annual
report which is available upon request without charge by calling the Company at
1-800-222-8222.

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THE FUNDS, THE TRUST AND MANAGEMENT

THE MONEY MARKET MUTUAL FUND AND THE CALIFORNIA TAX-FREE
MONEY MARKET MUTUAL FUND

The Money Market Mutual Fund and the California Tax-Free Money Market
Mutual Fund are two funds of Stagecoach Funds. Stagecoach Funds was organized as
a Maryland corporation on September 9, 1991, and currently offers shares of ten
other funds: the Asset Allocation Fund, the California Tax-Free Bond Fund, the
California Tax-Free Income Fund, the Corporate Stock Fund, the Diversified
Income Fund, the Ginnie Mae Fund, the Growth and Income Fund, the
Short-Intermediate U.S. Government Fund, the U.S. Government Allocation Fund and
the Variable Rate Government Fund. The Money Market Mutual Fund also offers a
second class of shares -- Class S Shares. Class S Shares are subject to
different levels of fees and expenses than Class A Shares and the performance of
such shares may vary accordingly. Class S Shares are currently available only to
qualified business investors who purchase such shares through certain
non-interest bearing transaction accounts with Wells Fargo Bank. Please contact
Stagecoach Shareholder Services at 1-800-222-8222 if you would like additional
information about Class S Shares.

The Board of Directors of Stagecoach Funds supervises these funds'
activities and monitors their contractual arrangements with various
service-providers. Although Stagecoach Funds is not required to hold annual
shareholder meetings, special meetings may be required for purposes such as
electing or removing Directors, approving advisory contracts and distribution
plans, and changing the Funds' investment objectives or fundamental investment
policies. All shares of Stagecoach Funds have equal voting rights and will be
voted in the aggregate, rather than by fund or class, unless otherwise required
by law (such as when the voting matter affects only one fund or class). As a
shareholder of the Funds, you are entitled to 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 SAI for each Fund.

THE NATIONAL TAX-FREE MONEY MARKET MUTUAL FUND AND THE TRUST

The Board of Directors of Stagecoach Inc. supervises these funds'
activities and monitors their contractual arrangements with various
service-providers. As noted above, the Fund may withdraw its investment in the
Series only if the Board of Directors of Stagecoach Inc. determines that this is
in the best interests of the Fund and its shareholders to do so. Upon any such
withdrawal, the Board of

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<PAGE> 75

Directors of Stagecoach Inc. 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 Series. Although
Stagecoach Inc. is not required to hold annual shareholder meetings, special
meetings may be required 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
Stagecoach Inc. have equal voting rights and will be voted in the aggregate,
rather than by fund, unless otherwise required by law (such as when the voting
matter affects only one fund). As a shareholder of the Fund, you are entitled to
one vote for each share you own and fractional votes for fractional shares
owned. In addition, whenever the Fund is requested to vote on matters pertaining
to the Series, Stagecoach Inc. will hold a meeting of the Fund's shareholders
and will cast its vote as instructed by Fund shareholders. The directors of
Stagecoach Inc. will vote shares for which they receive no voting instructions
in the same proportion as the shares for which they do receive voting
instructions. A more detailed statement of the voting rights and attributes of
the shares is contained in the "Capital Stock" section of the SAI for the Fund.

The Trust was established on October 28, 1993, as a Delaware business
trust. The Trust's Declaration of Trust permits the Board of Trustees to issue
beneficial interests in the Trust to investors based on their proportionate
investments in the Trust. The Trust is divided into separate portfolios called
series. The Trust has retained the services of Wells Fargo Bank as investment
adviser and Stephens as administrator and placement agent. The Board of Trustees
of the Trust is responsible for the general management of the Trust and
supervising the actions of Wells Fargo Bank and Stephens in these capacities.

INDEMNIFICATION AGREEMENT

INVESTMENT ADVISER

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<PAGE> 76

ment companies each of which consists 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 94105.

Morrison & Foerster, counsel to Stagecoach and the Trust and special
counsel to Wells Fargo Bank, has advised Stagecoach, the Trust and Wells Fargo
Bank that Wells Fargo Bank may perform the services contemplated by the Advisory
Contracts without violation of the Glass-Steagall Act or other applicable
banking laws or regulations. 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, including the Glass-Steagall Act, and
regulations relating to the permissible activities of banks and their
subsidiaries or affiliates, as well as future changes in such statutes,
regulations and judicial or administrative decisions or interpretations, could
prevent Wells Fargo Bank from continuing to perform, in whole or in part, such
services. If Wells Fargo Bank were prohibited from performing any such services,
it is expected that the Board of Directors/Trustees would recommend to the
shareholders that they approve a new advisory agreement with another entity or
entities qualified to perform such services.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank is also the Funds' and the Series' custodian and transfer
and dividend disbursing agent. In addition, Wells Fargo Bank is a Shareholder
Servicing Agent and Selling Agent of the Funds.

SPONSOR, ADMINISTRATOR AND DISTRIBUTOR

Stephens is the Funds' and the Trust's sponsor and administrator, and
distributes the Funds' shares. Stephens is a full service broker/dealer and
investment advisory firm located at 111 Center Street, Little Rock, Arkansas
72201. 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 FUNDS

OPENING AN ACCOUNT

The shares of the Funds described in this Prospectus are offered to
consumers and businesses that establish an Account with Wells Fargo Bank. Each
Account combines a Transaction Account (a non-interest bearing deposit account)
with a daily sweep of balances to or from a Fund designated by the
Accountholder. Investors may open an Account and designate a Fund by completing
and signing an Account Application and appropriate Disclosure Statement
corresponding to the type of Account being opened. The Disclosure Statement
contains important information about the various features

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<PAGE> 77

and operations of the Accounts and should be reviewed in conjunction with this
Prospectus. Wells Fargo Bank may, in the future, permit investors to acquire
shares of the Funds through additional accounts not described in this
Prospectus.

Although this Prospectus is intended exclusively for persons investing in a
Fund through an Account, the Funds are available to investors by direct
investment. Information regarding direct investments, including a separate
prospectus that describes how to invest directly in a Fund, may be obtained by
calling 800-222-8222 or by writing to Stagecoach Shareholder Services at the
address set forth below:

Wells Fargo Bank N.A.
c/o Stagecoach Shareholder Services
P.O. Box 7066
San Francisco, California 94120-7066
Telefacsimile: 1-415-543-9538

SHARE PRICE

The price of a share of each Fund is its net asset value ("NAV"). The NAV
of each share of the California Tax-Free Money Market Mutual Fund and the
National Tax-Free Money Market Mutual Fund is computed by adding the value of
the respective Fund's portfolio investments plus cash and other assets,
deducting liabilities and then dividing the result by the number of outstanding
shares of such Fund. The National Tax-Free Money Market Mutual Fund's
investments in the Series are valued at the NAV of the Series' shares. The
Series calculates the NAV of its shares on the same day and at the same time as
the National Tax-Free Money Market Mutual Fund. The NAV of a share of each Class
of the Money Market Mutual Fund is the value of total net assets attributable to
each Class divided by the number of outstanding shares of that Class. The value
of 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. As noted
above, the Funds seek to maintain a constant $1.00 per share NAV, although there
is no assurance that they will be able to do so.

Shares of a Fund may be purchased through an Account on any day the Fund
and Wells Fargo Bank are open (a "Business Day"). Currently, the National
Tax-Free Money Market Mutual Fund and Wells Fargo Bank observe the following
holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Memorial
Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day
and Christmas Day (each, a "Holiday"); the Money Market Mutual Fund and
California Tax-Free Money Market Mutual Fund observe the aforementioned
Holidays, except for Martin Luther King, Jr. Day, Columbus Day and Veterans Day.
The NAV of each Fund's shares is calculated as of 9:00 a.m. (Pacific time) on
any day such Fund is open. The NAV of shares acquired through other means may be
calculated at other times. All transaction orders are processed at the NAV next
determined after the order is received.

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The Funds' and the Master Series' NAV are each calculated on the basis of
the amortized cost method. This valuation method is based on the receipt of a
steady rate of payment from the date of purchase until maturity rather than
actual changes in market value. The Company's Board of Directors and the Trust's
Board of Trustees believe that this valuation method accurately reflects fair
value.

HOW TO BUY SHARES

Fund shares may be purchased by making a deposit into your Account. Each
Business Day Wells Fargo Bank computes the Net Sweep Amount, which is the net
amount of all deposits, withdrawals, charges and credits made to and from a
Transaction Account. If deposits and credits exceed withdrawals and charges, you
authorize Wells Fargo Bank, on your behalf, to transmit a purchase order to the
Fund designated in your Account in the amount of that day's Net Sweep Amount.
For example, if you make a $500 deposit and withdraw $100 on the same day, and
there are no other transactions on that day, the Net Sweep Amount for that day
would be $400. Wells Fargo Bank, on your behalf, would transmit a purchase order
to the designated Fund on the next Business Day in the amount of $400. Your
purchase order will be made effective and full and fractional Shares will be
purchased at the next determined NAV, which is expected to remain a constant
$1.00 per share. Deposits and other transactions to your Account are sometimes
not immediately included in the Net Sweep Amount. Cash and items drawn on Wells
Fargo Bank are generally credited to the Net Sweep Amount on the same Business
Day as the day of deposit. Local and non-local checks are usually credited to
your Net Sweep Amount on the first or second Business Day, respectively, after
the day of your deposit. In addition, adjustments may sometimes be made to your
Account to reflect dishonored or returned items. For additional information
refer to the applicable Disclosure Statement and, specifically therein, "Holds
and Funds Availability".

Shares of the Tax-Free Funds may not be suitable investments for tax-exempt
institutions or tax-sheltered retirement plans, since such investors would not
benefit from the exempt status of the Funds' dividends and distributions. See
"Federal Income Taxes -- Special Tax Considerations" in the SAI.

DIVIDENDS

The Funds intend to declare dividends daily payable to shareholders of
record as of 9:00 a.m. (Pacific time). You will begin earning dividends on
shares of the Funds on the day your purchase order for shares is effective and
continue to earn dividends through the day prior to the date you redeem such
shares. Dividends for a Saturday, Sunday or Holiday are credited on the
preceding business day. If you redeem shares before the dividend payment date,
any dividends credited to you will be paid on the following dividend payment
date. The Funds will declare capital gains (if any) at least annually. Dividends
declared in a month will be reinvested in Fund shares early in the following
month.

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HOW TO REDEEM SHARES

If, on any day Wells Fargo Bank is open for business, withdrawals from your
Account, including check transactions, exceed deposits and credits, Wells Fargo
Bank will transmit a redemption order on your behalf to the appropriate Fund in
the dollar amount of that day's Net Sweep Amount. If your Account with Wells
Fargo Bank is closed as described in the applicable Disclosure Statement, Wells
Fargo Bank will transmit a redemption request on your behalf to the appropriate
Fund for the balance of your Fund shares held through your Account. Fund shares
will normally be redeemed at the next NAV, expected to be a constant $1.00 per
share, calculated after the Fund has received the redemption order transmitted
on your behalf. Redemption proceeds may be more or less than the amount invested
and, therefore, a redemption of shares in a Fund may result in a gain or loss
for federal and state income tax purposes. The Funds ordinarily will remit your
redemption proceeds within seven days after your redemption order is received
from Wells Fargo Bank 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 the Funds and/or
Series of securities owned by them is not reasonably practicable or (b) it is
not reasonably practicable for the Funds and/or Series fairly to determine the
value of their net assets, or a period during which the SEC by order permits
deferral of redemptions for the protection of security holders of the Funds
and/or Series. In addition, Wells Fargo Bank may withhold redemption proceeds
pending check collection or processing or for other reasons all as set forth
more fully in "Holds and Funds Availability" and elsewhere in the applicable
Disclosure Statement.

ADDITIONAL SHAREHOLDER SERVICES

A number of services available to persons who invest directly in the Funds,
including certain exchange privileges which allow shareholders to exchange their
Fund shares for shares of other Funds, are not available to persons who invest
in Fund shares through Accounts. These services are described in separate
prospectuses describing direct investments in the Funds, which are available
from Stagecoach Shareholder Services by calling 800-222-8222.

MANAGEMENT AND SERVICING FEES

INVESTMENT ADVISER

Subject to the overall supervision of Stagecoach Funds' Board of Directors,
Wells Fargo Bank, as the investment adviser to the Money Market Mutual Fund and
California Tax-Free Money Market Mutual Fund, provides investment guidance and
policy direction in connection with the management of such Funds' assets. Wells
Fargo Bank also furnishes the Board of Directors with periodic reports on the
investment strategies and performance of these Funds. For its services as
investment adviser, Wells Fargo Bank is entitled to a monthly investment
advisory fee at the annual rate of 0.40% of the average daily net assets of the
Money Market Mutual Fund and 0.50% of the average daily net assets of the
California Tax-Free Money Market Mutual Fund. From time to time, Wells Fargo
Bank may

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<PAGE> 80

waive such fees in whole or in part. Any such waiver will reduce expenses of the
Funds and, accordingly, have a favorable impact on the Funds' yields. From time
to time, each of the Funds, consistent with its investment objectives, policies
and restrictions, may invest in securities of companies with which Wells Fargo
Bank has a lending relationship. For the year ended December 31, 1994,
Stagecoach Funds paid advisory fees at the annual rate of 0.40% of the average
daily net assets of the Money Market Mutual Fund and 0.50% of the average daily
net assets of the California Tax-Free Money Market Mutual Fund to Wells Fargo
Bank as compensation for its services to such Funds.

Subject to the overall supervision of the Trust's Board of Trustees, Wells
Fargo Bank, as the Series' investment adviser, provides investment guidance and
policy direction in connection with the management of the Series' assets. Wells
Fargo Bank also furnishes the Board of Trustees with periodic reports on the
Series' investment strategies and performance. From time to time, the Series, 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. For its services as investment adviser, Wells Fargo Bank is
entitled to a monthly investment advisory fee at the annual rate of 0.30% of the
average daily net assets of the Series. From time to time, Wells Fargo Bank may
waive such fees in whole or in part. Any such waiver will reduce the expenses of
the Series and, accordingly, have a favorable impact on the Series' yields and
total returns.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank also serves as the Funds' and the Series' custodian and
transfer and dividend disbursing agent. Pursuant to their respective Custody
Agreements, the Funds and the Series 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 each Fund's
Custody Agreement. The custodial, transfer and dividend disbursing agency
activities are performed at 525 Market Street, San Francisco, California 94105.

SHAREHOLDER SERVICING AGENT

The Funds have entered into Shareholder Servicing Agreements with Wells
Fargo Bank, and may enter into similar agreements with other entities
("Shareholder Servicing Agents"). Under such agreements, Shareholder Servicing
Agents will, as agent for their customers, among other things: answer customer
inquiries regarding account status and history and the manner in which
purchases, exchanges and redemptions 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
each of the Funds, proxy statements, annual reports,

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<PAGE> 81

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 Funds or a shareholder may reasonably request. For these
services, a Shareholder Servicing Agent is entitled to receive a fee, which may
be paid periodically, determined by a formula based upon the asset level or
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. The
fees paid by each Fund as calculated on an annualized basis for the respective
Fund's then-current fiscal year, may not exceed the lesser of (1) 0.30% of the
average daily net assets of the California Tax-Free Money Market Mutual Fund,
0.30% of the average daily net assets attributable to the Class A Shares of the
Money Market Mutual Fund or 0.25% of the average daily net assets of the
National Tax-Free Money Market Mutual Fund, as represented by shares 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 National Association of Securities Dealers, Inc. ("NASD"), whichever is
less. 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 NAV of each
Fund or Class of a Fund.

SPONSOR, ADMINISTRATOR AND DISTRIBUTOR

Subject to the overall supervision of the governing Board of
Directors/Trustees, Stephens provides each Fund and the Series with
administrative services, including general supervision of each Fund's operation,
coordination of the other services provided to each Fund and the Series,
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.
Stephens also furnishes office space and certain facilities to conduct each
Fund's and the Series' business, and compensates the Directors/Trustees,
officers and employees who are affiliated with Stephens. For these services,
Stephens is entitled to a monthly fee at the annual rate of 0.03% of the Money
Market Mutual Fund's and California Tax-Free Money Market Mutual Fund's average
daily net assets and 0.05% of the National Tax-Free Money Market Mutual Fund's
average daily net assets. From time to time, Stephens may waive its fees charged
to a Fund in whole or in part. Any such waivers will reduce a Fund's expenses
and, accordingly, have a favorable impact on such Fund's yield.

Stagecoach Funds and Stagecoach Inc. have each adopted Distribution Plans
on behalf of the Class A Shares of the Money Market Mutual Fund and shares of
the Tax-Free Funds under the SEC's Rule 12b-1 ("Plans"). The Money Market Mutual
Fund, pursuant to the Plan adopted on behalf of the Class A Shares, may defray
all or part of the actual cost of preparing and printing prospectuses and other
promotional materials and of delivering prospectuses and those materials to
prospective shareholders of a Fund by paying on an annual basis up to 0.05% of
each such Fund's average daily net assets. Pursuant to the Plan for the National
Tax-Free Money Market Mutual Fund, Stephens is entitled to receive as
compensation for distribution-related services, a monthly fee at an annual rate
of up to 0.05% of the average daily net assets of the Fund. Stephens has entered
into Distribution

14
<PAGE> 82

Agreements with the Funds and acts as agent for the Funds for the sale of their
shares and may enter into selling agreements with other agents ("Selling
Agents") that wish to make available shares of the Funds to their respective
customers. The Money Market Mutual Fund and California Tax-Free Money Market
Mutual Fund may participate in joint distribution activities with any of the
other funds of Stagecoach Funds, in which event, expenses reimbursed out of the
assets of either Fund may be attributable, in part, to the distribution-related
activities of another fund of Stagecoach Funds. The National Tax-Free Money
Market Mutual Fund may participate in joint distribution activities with any of
the other funds of Stagecoach Inc., in which event, expenses reimbursed out of
the assets of the Fund may be attributable, in part, to the distribution-related
activities of another fund of Stagecoach Inc. Generally, the expenses
attributable to joint distribution activities will be allocated among each Fund
and the other funds of the respective Company in proportion to their relative
net asset sizes, although each Company's Board of Directors may allocate such
expenses in any other manner that it deems fair and equitable. In addition,
Stephens has established a non-cash compensation program, pursuant to which
broker/dealers or financial institutions that sell shares of the Funds 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.

FUND EXPENSES

As noted previously, from time to time, Wells Fargo Bank and Stephens may
waive their respective fees in whole or in part and reimburse expenses payable
to others. Any such waivers or reimbursements will reduce a Fund's expenses and,
accordingly, have a favorable impact on such Fund's yield. Except for the
expenses borne by Wells Fargo Bank and Stephens, the Companies and the Trust
bear all costs of their respective operations, including the following: the
compensation of each Company's Directors and the Trust's Trustees who are not
affiliated with Wells Fargo Bank or Stephens or any of their affiliates;
advisory, shareholder servicing and administration fees; payments pursuant to
any Plan; interest charges; taxes; fees and expenses of independent auditors,
legal counsel, transfer agents and dividend disbursing agents; expenses of
redeeming shares of a Fund or interests in the Trust; 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' 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 for keeping books and accounts and calculating a
Fund's

15
<PAGE> 83

NAV per share; expenses of shareholders' meetings; expenses relating to the
issuance, registration and qualification of the shares of a Fund; pricing
services; and any extraordinary expenses. Expenses attributable to each Fund,
Class and/or Series are charged against the assets of such Fund, Class and/or
Series. General expenses of each Company or the Trust are allocated among all of
the funds of such Company (including the Funds) or series of the Trust
(including the Series), in a manner proportionate to the net assets of each fund
or series, on a transactional basis, or on such other basis as such Company's
Board of Directors or the Trust's Board of Trustees deems equitable.

TAXES

By complying with the applicable provisions of the Code, the Money Market
Mutual 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 net investment income (including net short-term
capital gains, if any) declared and paid by the Money Market Mutual Fund will be
taxable as ordinary income to Fund shareholders. 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.
The Money Market Mutual Fund intends to pay out substantially all of its net
investment income and net realized capital gains (if any) for each year. The
Money Market Mutual Fund does not expect its dividends to qualify for the
dividends-received deduction allowed to corporate shareholders.

By complying with the applicable provisions of the Code, the California
Tax-Free Money Market Mutual Fund will not be subject to federal income taxes
with respect to net investment income and net realized capital gains distributed
to its shareholders, and the Fund's shareholders will not be subject to federal
income taxes on any Fund dividends attributable to interest from tax-exempt
securities. However, dividends attributable to interest from taxable securities
and capital gains (if any) will be taxable to shareholders. In addition, by
complying with the applicable provisions of the California Revenue and Taxation
Code, the Fund's dividends also will be exempt from California personal income
tax to the extent such dividends are attributable to instruments that pay
interest which would be exempt from California personal income taxes were such
instruments held directly by an individual.

By complying with the applicable provisions of the Code, the National
Tax-Free Money Market Mutual Fund will not be subject to federal income taxes
with respect to net investment income and net realized capital gains distributed
to its shareholders, and the Fund's shareholders will not be subject to federal
income taxes on any dividends of the Fund attributable to interest from
tax-exempt securities. However, dividends attributable to interest from taxable
securities and capital gains (if any) will be taxable to shareholders. The Fund
does not make any representation regarding the taxation of its corporate
shareholders with respect to Fund distributions and recommends that each such
shareholder consult a tax advisor.

16
<PAGE> 84

The National Tax-Free Money Market Mutual Fund seeks to comply with the
applicable provisions of the Code by investing all of its assets in the Series.
The Series intends to qualify for federal 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, gains or losses of the
Series will be deemed to have been "passed through" to the Fund and other
investors in the Series, regardless of whether such interest, dividends or gains
have been distributed by the Series or losses have been realized by the Fund or
other investors. Accordingly, if the Series 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, or gains without
receipt of any corresponding distribution. The Series will seek to minimize
recognition by investors of interest, dividends or gains without a corresponding
distribution.

The Funds, or your Shareholder Servicing Agent on their behalf, will inform
you of the amount and nature of such Fund's dividends and capital gains. You
should keep all statements you receive to assist in your personal record
keeping. Each Company is required to withhold, subject to certain exemptions, at
a rate of 31% on dividends paid and redemption proceeds (including proceeds from
exchanges) paid or credited to individual shareholders of a Fund if a
shareholder has not complied with IRS regulations or 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% back-up withholding for previous underreporting to the IRS.

Foreign shareholders may be subject to different tax treatment, including a
withholding tax. See "Federal Income Taxes -- Foreign Shareholders" in the SAI
for each Fund.

Further federal tax considerations are discussed in the SAI for each Fund.
All investors should consult their individual tax advisers with respect to their
particular tax situations as well as the state and local tax status of
investments in shares of the Funds.

17
<PAGE> 85

PROSPECTUS APPENDIX -- ADDITIONAL
INVESTMENT POLICIES

FUND AND SERIES INVESTMENTS

Money Market Mutual Fund

The Money Market Mutual Fund may invest in the following:

<TABLE>
<C> <S>
(i) obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, including government-sponsored enterprises ("U.S. Government
obligations") (discussed below);
(ii) negotiable certificates of deposit, fixed time deposits, bankers' acceptances or
other short-term obligations of U.S. 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 ("bank instruments");
(iii) commercial paper rated at the date of purchase P-1 by Moody's Investors Service,
Inc. ("Moody's") or "A-1+" or "A-1" by Standard & Poor's Corporation ("S&P")
("rated commercial paper");
(iv) commercial paper unrated at the date of purchase but secured by a letter of
credit from a U.S. bank that meets the above criteria for investment;
(v) certain floating- and variable-rate instruments ("variable-rate instruments")
(discussed below);
(vi) certain repurchase agreements ("repurchase agreements") (discussed below); and
(vii) short-term, U.S. dollar-denominated obligations of U.S. branches of foreign banks
that at the time of investment have more than $10 billion, or the equivalent in
other currencies, in total assets ("foreign bank obligations") (discussed below).
</TABLE>

California Tax-Free Money Market Mutual Fund

The California Tax-Free Money Market Mutual Fund may invest in the
following municipal obligations with remaining maturities not exceeding thirteen
months:

A-1
<PAGE> 86

<TABLE>
<C> <S>
(i) long-term municipal bonds rated at the date of purchase "MIG 1" or "MIG 2" or, if
no medium- or short-term rating is available, "Aa" or better by Moody's or "AA"
or better by S&P;
(ii) medium-term municipal notes rated at the date of purchase "MIG 1" or "MIG 2" (or
"VMIG 1" or "VMIG 2" in the case of an issue having a variable rate with a demand
feature) by Moody's or "SP-1+" or "SP-1" by S&P; and
(iii) short-term municipal commercial paper rated at the date of purchase "P-1" by
Moody's or "A-1+" or "A-1+" by S&P.
</TABLE>

<TABLE>
<C> <S>
(i) U.S. Government obligations;
(ii) bank instruments;
(iii) rated commercial paper;
(iv) repurchase agreements;
(v) foreign bank obligations; and
(vi) high-quality municipal obligations, the income from which may or may not be
exempt from federal income taxes.
</TABLE>

National Tax-Free Money Market Mutual Fund and Tax-Free Money Market Master
Series

The National Tax-Free Money Market Mutual Fund invests all its assets in
shares of the Series of the Trust. As a result, the performance of the Fund will
correspond to the investment experience of the Series. The Series may invest in
the following:

A-2
<PAGE> 87

<TABLE>
<C> <S>
(i) certain municipal obligations (discussed below):
(ii) certain U.S. Government obligations (discussed below);
(iii) negotiable certificates of deposit, fixed time deposits, bankers' acceptances
or other obligations of U.S. 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:
(iv) commercial paper rated at the date of purchase P-1 by Moody's or "A-1+" or
"A-1" by S&P;
(v) certain floating- and variable-rate instruments (discussed below);
(vi) certain repurchase agreements (discussed below); and
(vii) short-term U.S. dollar denominated obligations of foreign branches of U.S.
banks or U.S. branches of foreign banks (discussed below).
</TABLE>

The following describes certain instruments in which the Funds and the
Series may invest.

Municipal Obligations

Subject to the maturity and other restrictions of Rule 2a-7, the Funds and
the Series may invest in municipal obligations. Municipal bonds generally have a
maturity at the time of issuance of up to 40 years. Medium-term municipal notes
are generally issued in anticipation of the receipt of tax funds, of the
proceeds of bond placements, or of other revenues. The ability of an issuer to
make payments on notes is therefore especially dependent on such tax receipts,
proceeds from bond sales or other revenues, as the case may be. Municipal
commercial paper is a debt obligation with a stated maturity of 270 days or less
that is issued to finance seasonal working capital needs or as short-term
financing in anticipation of longer-term debt. From time to time, the California
Tax-Free Money Market Mutual Fund and the Series may each invest 25% or more of
the current value of its total assets in certain "private activity bonds," such
as pollution control bonds; provided, however, that such investments will be
made only to the extent they are consistent with the Fund's fundamental policy
of investing, under normal circumstances, at least 80% of its net assets in
municipal obligations that are exempt from federal income taxes and not subject
to the federal alternative minimum tax.

U.S. Government Obligations

U.S. Government obligations include securities issued or guaranteed as to
principal and interest by the U.S. Government and supported by the full faith
and credit of the U.S. Treasury. U.S. Treasury

A-3
<PAGE> 88

obligations differ mainly in the length of their maturity. Treasury bills, the
most frequently issued marketable government securities, have a maturity of up
to one year and are issued on a discount basis. U.S. Government obligations also
include securities issued or guaranteed by federal agencies or
instrumentalities, including government-sponsored enterprises. Some obligations
of agencies or instrumentalities of the U.S. Government are supported by the
full faith and credit of the United States or U.S. Treasury guarantees; others,
by the right of the issuer or guarantor to borrow from the U.S. Treasury; still
others, by the discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality; and others, only by the
credit of the agency or instrumentality issuing the obligation. In the case of
obligations not backed by the full faith and credit of the United States, the
investor must look principally to the agency or instrumentality issuing or
guaranteeing the obligation for ultimate repayment, which agency or
instrumentality may be privately owned. There can be no assurance that the U.S.
Government will provide financial support to its agencies or instrumentalities
where it is not obligated to do so. In addition, U.S. Government obligations are
subject to fluctuations in market value due to fluctuations in market interest
rates. As a general matter, the value of debt instruments, including U.S.
Government obligations, declines when market rates increase and rises when
market interest rates decrease. Certain types of U.S. Government obligations are
subject to fluctuations in yield or value due to their structure or contract
terms.

Other Investment Companies

The Funds and the Series may invest in shares of other investment
companies. The California Tax-Free Money Market Mutual Fund and the Series may
invest in shares of other open-end investment companies that invest exclusively
in high-quality short-term securities, provided however, that any such company
has a fundamental policy of investing, under normal circumstances, at least 80%
of its net assets in obligations that are exempt from federal income taxes and
not subject to the federal alternative minimum tax. Such investment companies
can be expected to charge management fees and other operating expenses that
would be in addition to those charged to the Funds or the Series; however, Wells
Fargo Bank has undertaken to waive its advisory fees with respect to that
portion of the Funds' or the Series' assets so invested. In no event may the
Funds or the Series, together with any company or companies controlled by a Fund
or the Series, own more than 3% of the total outstanding voting stock of any
such investment company, nor may a Fund or the Series, together with any such
company or companies, invest more than 5% of its assets in any one such
investment company or invest more than 10% of its assets in securities of all
such investment companies combined.

Floating- and Variable-Rate Instruments

Certain of the debt instruments that the Funds may purchase bear interest
at rates that are not fixed, but vary for example, with changes in specified
market rates or indices or at specified intervals. These instruments typically
have maturities of thirteen months or more, but may carry a demand feature that
would permit the holder to tender them back to the issuer at par value prior to
maturity. The Funds and the Series may, in accordance with SEC rules, account
for these instruments as

A-4
<PAGE> 89

maturing at the next interest rate readjustment date or the date at which the
respective Fund or the Series may tender the instrument back to the issuer,
whichever is later. The floating- and variable-rate instruments that the Funds
and the Series may purchase include certificates of participation in such
obligations. With regard to the California Tax-Free Money Market Mutual Fund and
the Series, Wells Fargo Bank, as investment adviser, may rely upon either an
opinion of counsel or an IRS ruling regarding the tax-exempt status of these
certificates. The Funds and the Series may invest in floating-and variable-rate
obligations even if they carry stated maturities in excess of thirteen months,
upon compliance with certain conditions of the SEC, in which case such
obligations will be treated in accordance with these conditions as having
maturities not exceeding thirteen months.

Wells Fargo Bank, as investment adviser to the Funds and the Series, will
monitor on an ongoing basis the ability of an issuer of a demand instrument to
pay principal and interest on demand. Events affecting the ability of the issuer
of a demand instrument to make payment when due may occur between the time a
Fund or the Series elects to demand payment and the time payment is due, thereby
affecting such Fund's ability to obtain payment at par. Demand instruments whose
demand feature is not exercisable within seven days may be treated as liquid,
provided that an active secondary market exists.

Repurchase Agreements

The Funds and the Series may enter into repurchase agreements wherein the
seller of a security to a Fund or the Series agrees to repurchase that security
from such Fund or the Series 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 Funds and the Series may
enter into repurchase agreements only with respect to U.S. Government
obligations and other obligations that could otherwise be purchased by the
participating Fund. All repurchase agreements will be fully collateralized based
on values that are marked to market daily. While the maturities of the
underlying securities in a repurchase agreement transaction may be greater than
thirteen months, the term of any repurchase agreement on behalf of a Fund or the
Series will always be less than thirteen months. If the seller defaults and the
value of the underlying securities has declined, the participating Fund or the
Series, as the case may be, may incur a loss. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the security,
disposition of the security by the participating Fund or the Series may be
delayed or limited. The Funds and the Series will enter into repurchase
agreements only with registered broker/dealers and commercial banks that meet
guidelines established by the Boards of Directors of the Funds or Board of
Trustees of the Trust and that are not affiliated with Wells Fargo Bank. The
Funds and the Series may participate in pooled repurchase agreement transactions
with other funds advised by Wells Fargo Bank.

Letters of Credit

A-5
<PAGE> 90

credit of a bank, savings and loan association or insurance company which
assumes the obligation for payment of principal and interest in the event of
default by the issuer. Letter of credit-backed investments must, in the opinion
of Wells Fargo Bank, be of investment quality comparable to other permitted
investments of the Fund.

Foreign Obligations

Each Fund and the Series may invest up to 25% of its assets in
high-quality, short-term (thirteen months or less) debt obligations of foreign
branches of U.S. banks or U.S. branches of foreign banks that are denominated in
and pay interest in U.S. dollars. Investments in foreign obligations involve
certain considerations that are not typically associated with investing in
domestic obligations. There may be less publicly available information about a
foreign issuer than about a domestic issuer. Foreign issuers also are not
subject to the same uniform accounting, auditing and financial reporting
standards or governmental supervision as domestic issuers. In addition, with
respect to certain foreign countries, interest may be withheld at the source
under foreign income tax laws, and there is a possibility of expropriation or
confiscatory taxation, political or social instability or diplomatic
developments that could adversely affect investments in, the liquidity of, and
the ability to enforce contractual obligations with respect to, securities of
issuers located in those countries.

Taxable Investments

Moreover, the Series may invest temporarily more than 20% of its total
assets in such securities and in high-quality, short-term municipal obligations
the interest on which is not exempt from federal income taxes to maintain a
temporary defensive posture or in an effort to improve after-tax yield to the
Series' shareholders when, in the opinion of Wells Fargo Bank, as investment
adviser, it is advisable to do so because of unusual market conditions.

INVESTMENT POLICIES

Each Fund's investment objective, as set forth in the "How the Funds
Work -- Investment Objectives and Policies" section, is fundamental; that is, it
may not be changed without approval by

A-6
<PAGE> 91

the vote of the holders of a majority of such Fund's outstanding voting
securities, as described under "Capital Stock" in the SAI. In addition, any
fundamental investment policy may not be changed without such shareholder
approval. If the Company's Board of Directors determines, however, that a Fund's
investment objective can best be achieved by a substantive change in a
nonfundamental investment policy or strategy, the Company's Board may make such
change without shareholder approval and will disclose any such material changes
in the then-current prospectus.

As matters of fundamental policy, the Money Market Mutual Fund and
California Tax-Free Money Market Mutual Fund may: (i) borrow from banks up to
10% of the current value of each of their net assets only for temporary purposes
in order to meet redemptions, and these borrowings may be secured by the pledge
of up to 10% of the current value of each of their net assets (but investments
may not be purchased by a Fund while any such outstanding borrowing in excess of
5% of its net assets exists); (ii) not make loans of portfolio securities or
other assets, except that loans for purposes of this restriction will not
include the purchase of fixed time deposits, repurchase agreements, commercial
paper and other short-term obligations, and other types of debt instruments
commonly sold in a public or private offering; and (iii) not invest more than
25% of their assets (i.e. , concentrate) in any particular industry, excluding,
(a) investments in municipal securities by the California Tax-Free Money Market
Mutual Fund (for the purpose of this restriction, private activity bonds shall
not be deemed municipal securities if the payments of principal and interest on
such bonds is the ultimate responsibility of nongovernmental users), (b) U.S.
Government obligations, and (c) obligations of domestic banks (for purposes of
this restriction, domestic bank obligations do not include obligations of
foreign branches of U.S. banks and obligations of U.S. branches of foreign
banks).

As a matter of nonfundamental policy: (i) the Money Market Mutual Fund may
not purchase securities of any issuer (except for U.S. Government obligations,
for certain temporary purposes and for certain guarantees and unconditional
puts) if as a result more than 5% of the value of the Money Market Mutual Fund's
total assets would be invested in the securities of such issuer or the Money
Market Mutual Fund would own more than 10% of the outstanding voting securities
of such issuer; (ii) the Money Market Mutual Fund may not invest more than 10%
of the current value of its net assets in securities that are illiquid by virtue
of the absence of a readily available market or legal or contractual
restrictions on resale and fixed time deposits that are subject to withdrawal
penalties and that have maturities of more than seven days; and (iii) the
California Tax-Free Money Market Mutual Fund may not invest more than 10% of the
current value of its net assets in repurchase agreements having maturities of
more than seven days, illiquid securities and fixed time deposits that are
subject to withdrawal penalties and that have maturities of more than seven
days. With respect to item (i), it may be possible that the Company would own
more than 10% of the outstanding voting securities of an issuer.

A-7
<PAGE> 92

outstanding voting securities of such issuer, and (ii) not more than 25% of the
value of its assets is invested in the securities of any one issuer (other than
U.S. Government obligations and the securities of other regulated investment
companies), or of two or more issuers which the taxpayer controls and which are
determined to be engaged in the same or similar trades or businesses or related
trades or businesses.

As matters of fundamental policy the National Tax-Free Money Market Mutual
Fund and the Series may: (i) borrow from banks up to 10% of the current value of
each of their net assets only for temporary purposes in order to meet
redemptions, and these borrowings may be secured by the pledge of up to 10% of
the current value of their respective net assets (but investments by the Series
may not be purchased while any such outstanding borrowing in excess of 5% of its
net assets exists); (ii) not make loans, except that each of the Fund and the
Master Series may purchase or hold debt instruments, lend its portfolio
securities and enter into repurchase agreement transactions in accordance with
its investment policies; loans for purposes of this restriction will not include
the Fund's purchase of interests in the Master Series; and (iii) not 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 or Series' investments in that industry would be 25% or more
of the current value of the Fund's or Series' total assets, provided that there
is no limitation with respect to investments in (a) municipal securities (for
the purposes of this restriction, private activity bonds and notes shall not be
deemed municipal securities if the payments of principal and interest on such
bonds and notes is the ultimate responsibility of non-governmental entities),
(b) U.S. Government obligations, and (c) certain obligations of domestic banks;
and (iv) not purchase securities of any issuer (except securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities, including
government-sponsored enterprises) if, as a result, with respect to 75% of its
total assets, more than 5% of the value of the Series' total assets would be
invested in the securities of any one issuer or, with respect to 100% of its
total assets the Series' ownership would be more than 10% of the outstanding
voting securities of such issuer.

As a matter of non-fundamental policy the National Tax-Free Money Market
Mutual Fund and the Series may each: (i) invest up to 10% of the current value
of its net assets in securities that are illiquid by virtue of the absence of a
readily available market or the existence of legal or contractual restrictions
on resale and fixed time deposits that are subject to withdrawal penalties and
that have maturities of more than seven days; and (ii) invest up to 10% of the
current value of its net assets in repurchase agreements having maturities of
more than seven days, and restricted securities (which include securities that
must be registered under the Securities Act of 1933 before they may be offered
to the public).

A-8
<PAGE> 93

SPONSOR, DISTRIBUTOR AND ADMINISTRATOR
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201

INVESTMENT ADVISER, 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

INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Three Embarcadero Center
San Francisco, California 94111

FOR MORE INFORMATION ABOUT THE FUNDS,
SIMPLY CALL (800) 222-8222,
OR WRITE:

STAGECOACH FUNDS
C/O STAGECOACH
SHAREHOLDER SERVICES
WELLS FARGO BANK, N.A.
P.O. BOX 7066
SAN FRANCISCO, CALIFORNIA 94120-7066

<TABLE>
<S> <C>
- --------------------------------------------------------
STAGECOACH MONEY MARKET MUTUAL FUNDS:
------------------------------------------------------
- are NOT FDIC insured
- are NOT deposits or obligations of Wells
Fargo Bank
- are NOT guaranteed by Wells Fargo Bank
- involve investment risk, including possible
loss of principal
LOGO
- seek to maintain a stable net asset value of
$1.00 per share, however, there can be no
assurance that the Funds will meet this
objective. Yields will vary with market
conditions.
- --------------------------------------------------------
</TABLE>

LOGO

------------------------

PROSPECTUS
------------------------

Money Market Mutual Fund
(Class A Shares)

California Tax-Free Money
Market Mutual Fund

National Tax-Free Money
Market Mutual Fund

------------------------
July 19, 1995
------------------------

NOT FDIC INSURED

SIG 014 (7/95)
<PAGE> 94

STAGECOACH FUNDS, INC.

SUPPLEMENT DATED JANUARY 2, 1996
TO THE CURRENT PROSPECTUS, AS PREVIOUSLY SUPPLEMENTED, AND
STATEMENT OF ADDITIONAL INFORMATION OF EACH FUND OF
STAGECOACH FUNDS, INC.

As of January 1, 1996, Wells Fargo Bank, N.A. provides investment advisory
services for approximately $33 billion of assets.

Each Fund's current Prospectus, as supplemented, and Statement of
Additional Information are hereby amended accordingly.
<PAGE> 95

LOGO

------------------------------

PROSPECTUS

------------------------------

GINNIE MAE FUND

SHORT-INTERMEDIATE
U.S. GOVERNMENT
INCOME FUND

May 1, 1995
As Supplemented on May 2, 1995 and August 24, 1995
<PAGE> 96

STAGECOACH FUNDS(R)

GINNIE MAE FUND
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND

Stagecoach Funds, Inc. (the "Company") is a professionally managed, open-end
series investment company. This Prospectus contains information about two of the
funds in the Stagecoach Family of Funds - the GINNIE MAE FUND and the
SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND (each a "Fund" and, collectively,
the "Funds").

The GINNIE MAE FUND seeks to provide investors with a long-term total rate of
return through preserving capital and earning high interest income by investing
principally in a portfolio of U.S. Government mortgage pass-through securities,
consisting primarily of securities issued by the Government National Mortgage
Association (popularly called "Ginnie Maes"), Federal National Mortgage
Association and Federal Home Loan Mortgage Corporation. The SHORT-INTERMEDIATE
U.S. GOVERNMENT INCOME FUND seeks to provide investors with current income,
while preserving capital, by investing primarily in a portfolio consisting of
short- to intermediate-term securities issued or guaranteed by the U.S.
Government, its agencies and instrumentalities.

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 Funds' goals match your own. Statements of Additional
Information ("SAIs"), dated May 1, 1995, for the Funds, have been filed with the
Securities and Exchange Commission ("SEC") and are incorporated by reference.
The SAI for each Fund 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.

SHARES OF THE FUNDS 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 FUNDS INVOLVES CERTAIN
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.

PROSPECTUS DATED MAY 1, 1995
AS SUPPLEMENTED ON MAY 2, 1995 AND AUGUST 24, 1995

PROSPECTUS
<PAGE> 97

The Ginnie Mae Fund offers two classes of shares - Class A Shares and Class B
Shares (each, a "Class"). The Short-Intermediate U.S. Government Income Fund
offers a single class of shares.

Each Fund is advised by Wells Fargo Bank, which also serves as each Fund'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 Funds' sponsor and
administrator and serves as the distributor of the Funds' shares.

THE FUNDS' SHARES AND PORTFOLIO INVESTMENTS (EXCEPT AS NOTED UNDER "HOW THE
FUNDS WORK - INVESTMENT OBJECTIVES AND POLICIES" AND "PROSPECTUS APPENDIX -
ADDITIONAL INVESTMENT POLICIES") ARE NOT INSURED OR GUARANTEED BY THE UNITED
STATES OR ANY FEDERAL AGENCY OR INSTRUMENTALITY.

WELLS FARGO BANK IS THE INVESTMENT ADVISER AND PROVIDES CERTAIN OTHER SERVICES
TO THE FUNDS, FOR WHICH IT IS COMPENSATED. STEPHENS, WHICH IS NOT AFFILIATED
WITH WELLS FARGO BANK, IS THE SPONSOR AND DISTRIBUTOR FOR THE FUNDS.

PROSPECTUS
<PAGE> 98

TABLE OF CONTENTS
-------

PROSPECTUS SUMMARY 1

SUMMARY OF FUND EXPENSES 5

FINANCIAL HIGHLIGHTS 8

HOW THE FUNDS WORK 10

THE FUNDS AND MANAGEMENT 15

INVESTING IN THE FUNDS 17

DIVIDENDS 28

HOW TO REDEEM SHARES 28

ADDITIONAL SHAREHOLDER SERVICES 33

MANAGEMENT AND SERVICING FEES 36

TAXES 40

PROSPECTUS APPENDIX - ADDITIONAL INVESTMENT POLICIES A-1

PROSPECTUS
<PAGE> 99

PROSPECTUS SUMMARY

The Funds provide 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 Funds. For more information,
please refer specifically to the identified Prospectus sections and generally to
the Prospectus and SAI for each Fund.

Q. WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

A. The GINNIE MAE FUND seeks to provide investors with a long-term total rate
of return through preserving capital and earning high interest income by
investing principally in a portfolio of U.S. Government mortgage
pass-through securities, consisting primarily of securities issued by the
Government National Mortgage Association ("GNMA"), Federal National
Mortgage Association ("FNMA") and Federal Home Loan Mortgage Corporation
("FHLMC"). Under normal market conditions, the Fund will invest at least
65% of its assets in securities issued by GNMA.

The SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND seeks to provide
investors with current income, while preserving capital, by investing
primarily in a portfolio consisting of short- to intermediate-term
securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities. The Fund invests primarily in U.S. Treasury securities,
notes and bonds and obligations issued or guaranteed by federal agencies or
instrumentalities, including government-sponsored enterprises such as GNMA
and FNMA. Under normal market conditions, at least 65% of the Fund's total
assets will be invested in U.S. Government obligations and the
dollar-weighted effective average maturity of the portfolio is expected to
be between two and five years. The Fund may also invest in investment-grade
corporate debt obligations. The Fund is designed for investors with
investment horizons of two to five years.

Q. WHO MANAGES MY INVESTMENTS?

A. Wells Fargo Bank, as the Funds' investment adviser, manages your
investments. Wells Fargo Bank also provides transfer agency and dividend
disbursing agency and custodial services to the Funds. In addition, Wells
Fargo Bank is a Shareholder Servicing Agent and a Selling Agent under a
Selling Agreement with Stephens, the Funds' distributor. See "The Funds and
Management" and "Management and Servicing Fees."

Q. HOW DO I INVEST?

A. You may invest by purchasing shares of the Funds at their public offering
price, which is the net asset value per share plus any applicable sales
charge. Class A Shares of the Ginnie Mae Fund are subject to a maximum
front-end sales charge of 4.50%.

1 PROSPECTUS
<PAGE> 100

Class B Shares of the Ginnie Mae Fund 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. The shares of the Short-Intermediate U.S. Government Income Fund
are subject to a maximum front-end sales charge of 3.00%. 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 of the Ginnie Mae Fund and
shares of the Short-Intermediate U.S. Government Income Fund 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 make additional investments of at least $100, although certain
exceptions to these minimums may be available. Shares of a Fund may be
purchased by wire, by check or by electing an automatic investment feature
called the AutoSaver Plan on any day the Fund is open. See "Investing in the
Funds." For more details, contact Stephens (the Funds' Sponsor and
Distributor), a Shareholder Servicing Agent or Selling Agent (such as Wells
Fargo Bank).

Q. HOW WILL I RECEIVE DIVIDENDS AND ANY CAPITAL GAINS?

A. Dividends from net investment income of the Funds are declared daily.
Dividends paid by the Short-Intermediate U.S. Government Income Fund are
automatically reinvested at net asset value without a sales charge in shares
of the Fund paying the dividends. Dividends paid by the Ginnie Mae Fund are
automatically reinvested in shares of the Class of the Fund which paid such
dividends. You may also elect to receive dividends in cash or to reinvest
the dividends 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. The 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."

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. Contingent deferred sales charges may be
charged 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."

PROSPECTUS 2
<PAGE> 101

For 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 any of the Funds is not insured against loss of principal.
Therefore, you should be prepared to accept some risk with the money you
invest in the Funds. As with all mutual funds, there can be no assurance
that the Funds will achieve their investment objectives.

Each Fund invests primarily in U.S. Government obligations. U.S. Government
obligations include securities issued or guaranteed as to principal and
interest by the U.S. Government and supported by the full faith and credit
of the U.S. Treasury. U.S. Government obligations also include securities
issued or guaranteed by federal agencies or instrumentalities, including
government-sponsored enterprises. Some obligations of agencies or
instrumentalities of the U.S. Government are supported by the full faith and
credit of the United States or U.S. Treasury guarantees; others, by the
right of the issuer or guarantor to borrow from the U.S. Treasury; still
others, by the discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality; and others, only by
the credit of the agency or instrumentality issuing the obligation. In the
case of obligations not backed by the full faith and credit of the United
States, the investor must look principally to the agency or instrumentality
issuing or guaranteeing the obligation for ultimate repayment, which agency
or instrumentality may be privately owned. There can be no assurance that
the U.S. Government will provide financial support to its agencies or
instrumentalities where it is not obligated to do so.

In addition, U.S. Government obligations are subject to fluctuations in
market value due to fluctuations in market interest rates. As a general
matter, the value of debt instruments, including U.S. Government
obligations, declines when market interest rates increase, and rises when
market interest rates decrease. Certain types of U.S. Government obligations
are subject to fluctuations in yield or value due to their structure or
contract terms.

Although the GNMA securities in the Ginnie Mae Fund's portfolio are
guaranteed by the U.S. Government as to timely payment of principal and
interest, this Fund as well as the other Funds, also may purchase other
types of U.S. Government obligations that are not backed by the full faith
and credit of the U.S. Government. In addition, the corporate debt
securities in which the Short-Intermediate U.S. Government Income Fund may
invest are subject to credit risk, which is the risk that the issuer cannot
pay all or a portion of the obligation represented by a particular security.

The adjustable rate feature of the mortgages underlying the adjustable rate
mortgage securities ("ARMS") and the collateralized mortgage obligations
("CMOs") in

3 PROSPECTUS
<PAGE> 102

which the Short-Intermediate U.S. Government Income Fund invests should
reduce, but will not eliminate, price fluctuations in such securities.
Accordingly, the net asset value of shares of this Fund, as well as the
other Funds, will fluctuate.

Q. WHAT ARE DERIVATIVES AND DO THE FUNDS 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 adjustable rate mortgage-backed securities, floating- and variable-rate
instruments and certain U.S. Government obligations, are considered
derivatives. Some derivatives may be more sensitive than direct securities
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 DO THE FUNDS TAKE TO CONTROL DERIVATIVES-RELATED RISKS?

A. Wells Fargo Bank, as investment adviser, uses a variety of internal risk
management procedures to ensure that derivatives use is consistent with a
Fund's investment objective, does not expose the Fund to undue risks and is
closely monitored. These procedures include providing periodic reports to
the Board of Directors concerning the use of derivatives. Derivatives use by
each Fund also is subject to broadly applicable investment policies. For
example, the Funds may not invest more than a specified percentage of their
assets in "illiquid securities," including those derivatives that do not
have active secondary markets. Nor may a Fund use certain derivatives
without establishing adequate "cover" in compliance with SEC rules limiting
the use of leverage. For more information on all of the Funds' investment
activities, see "Prospectus Appendix -- Additional Investment Policies."

PROSPECTUS 4
<PAGE> 103

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 Funds. As shown below, you are not charged
exchange fees. You should consider this expense information together with the
important information in this Prospectus, including the Funds' investment
objectives and policies.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<CAPTION>
SHORT-INTERMEDIATE
GINNIE MAE FUND GINNIE MAE FUND U.S. GOVERNMENT
(CLASS A SHARES) (CLASS B SHARES) INCOME FUND
---------------- ---------------- ------------------
<S> <C> <C> <C>
Maximum Sales Charge
Imposed on Purchases
(as a percentage of
offering price) ....... 4.50% None 3.00%
Sales Charge Imposed on
Reinvested
Dividends ............. None None None
Maximum Sales Charge
Imposed on
Redemptions* .......... None 3.00% None
Exchange Fees ............. None None None
</TABLE>

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
GINNIE MAE FUND SHORT-INTERMEDIATE
GINNIE MAE FUND (CLASS B U.S. GOVERNMENT
(CLASS A SHARES) SHARES) INCOME FUND
---------------- --------------- ------------------
<S> <C> <C> <C>
Management Fee ............. 0.50% 0.50% 0.50%
Rule 12b-1 Fee ............. 0.05% 0.70% 0.05%
Total Other Expenses(1):
Shareholder Servicing
Fee(1)** ............. 0.19% 0.19% 0.30%
Administrative Fee ..... 0.03% 0.03% 0.03%
Other Expenses(1) ...... 0.06% 0.06% 0.07%
---- ---- ----
0.28% 0.28% 0.40%
---- ---- ----
TOTAL FUND OPERATING
EXPENSES(1) .............. 0.83% 1.48% 0.95%
</TABLE>

- -------------------------------

<TABLE>
<C> <S>
(1) After any waivers or reimbursements.
* The Company reserves the right to impose a charge for wiring
redemption proceeds.
** The Funds understand 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 Funds, such as requiring a higher minimum
initial investment or payment of a separate fee for additional
services.
</TABLE>

5 PROSPECTUS
<PAGE> 104

<TABLE>
<CAPTION>
EXAMPLE OF EXPENSES 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 shares of the
specified Fund, assuming (A) a 5% annual
return and (B) redemption at the end of
each time period indicated:

Ginnie Mae Fund (Class A Shares)....... $ 53 $70 $89 $143
Short-Intermediate U.S. Government
Income Fund.......................... $ 39 $59 $81 $143
</TABLE>

EXAMPLE OF EXPENSES - CLASS B SHARES

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment in Class B Shares of the
Fund, assuming (A) a 5% annual return and
(B) redemption at the end of each time
period indicated:

Ginnie Mae Fund........................ $ 45 $57 $99 $103

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:

Ginnie Mae Fund........................ $ 15 $47 $99 $103
</TABLE>

EXPLANATION OF TABLES

SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of the Funds. You are subject to a front-end sales charge on purchases of
Class A Shares of the Ginnie Mae Fund and shares of the Short-Intermediate U.S.
Government Income Fund. You 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 Funds - 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 Funds - Sales Charges."

ANNUAL FUND OPERATING EXPENSES for the Class A Shares of the Ginnie Mae Fund
and the shares of the Short-Intermediate U.S. Government Income Fund are based
on amounts incurred during the most recent fiscal year, restated to reflect
voluntary fee waivers and expense reimbursements that are expected to continue
during the current fiscal year. Wells Fargo Bank and Stephens each has agreed to
waive or reimburse all or a portion of its respective fees if certain expenses
of the Funds 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, a Fund. Any waivers or reimbursements would reduce a Fund's total expenses.
There can be no assurances that waivers or reimbursements will continue. Absent
waivers and reimbursements, the percentages shown above under "Total Other

PROSPECTUS 6
<PAGE> 105

Expenses" and "Total Fund Operating Expenses" would be 0.52% and 1.07%,
respectively, for the Class A Shares of the Ginnie Mae Fund and 1.73% and 2.28%,
respectively, for the shares of the Short-Intermediate U.S. Government Income
Fund. Since Class B Shares were not offered during 1994, the percentages shown
above with respect to Class B Shares under "Total Other Expenses" and "Total
Fund Operating Expenses" reflect certain anticipated voluntary fee waivers and
expense reimbursements for the current fiscal year. Absent waivers and
reimbursements, the "Total Other Expenses" and "Total Fund Operating Expenses"
would be 0.57% and 1.77%, respectively, for Class B Shares of the Ginnie Mae
Fund. The Funds 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 each Fund, please see the Prospectus sections captioned "Investing
in the Funds - How To Buy Shares" and "Management and Servicing Fees."

EXAMPLE OF EXPENSES is a hypothetical example that illustrates the expenses
associated with a $1,000 investment in shares of the Funds over stated periods,
based on the expenses in the respective tables 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 a 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.

7 PROSPECTUS
<PAGE> 106

FINANCIAL HIGHLIGHTS

The following information for each of the Funds has been derived from the
Financial Highlights in the Funds' 1994 annual financial statements. The
financial statements are included in the SAI for each Fund. Except for periods
ending prior to January 1, 1992, which were audited by other auditors whose
report dated February 19, 1992, expressed an unqualified opinion on this
information, the Financial Statements have been audited by KPMG Peat Marwick
LLP, independent auditors, whose report dated February 17, 1995 also is included
in the SAIs. This information should be read in conjunction with the Funds' 1994
annual financial statements and the notes thereto. The SAI for each Fund has
been incorporated by reference into this Prospectus. Financial information is
not provided in connection with Class B Shares because Class B Shares were not
offered during the periods presented.

GINNIE MAE FUND

FOR A CLASS A SHARE OUTSTANDING AS SHOWN

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, PERIOD ENDED*
1994 1993 1992 DEC. 31, 1991
---------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period....................... $11.31 $11.34 $11.42 $10.00
Income from investment
operations:
Net investment income.......... 0.77 0.83 0.83 0.83
Net realized and unrealized
capital gains/(losses) on
investments.................. (1.13) (0.03) (0.08) 0.59
Total from investment
operations................... (0.36) 0.80 0.75 1.42
Less distributions:
Dividends from net investment
income....................... (0.77) (0.83) (0.83) 0.00
Distributions from net realized
capital gains................ 0.00 0.00 0.00 0.00
Total distributions............ (0.77) (0.83) (0.83) 0.00
Net asset value, end of
period....................... $10.18 $11.31 $11.34 $11.42
Total return (not
annualized)+................. (3.23)% 7.19% 6.86% 14.30%
Ratios/supplemental data:
Net assets, end of period
(000)........................ $171,288 $303,530 $184,692 $34,870
Number of shares outstanding,
end of period (000).......... 16,818 26,835 16,289 3,053
Ratios of average net assets
(annualized):
Ratio of expenses to average
net assets(1)................ 0.73% 0.46% 0.46% 1.04%
Ratio of net investment income
to average net assets(2)..... 7.20% 7.19% 7.93% 7.66%
Portfolio turnover............. 69% 121% 73% 241%
- -------------------
(1) Ratio of expenses to
average net assets prior
to waived fees and
reimbursed expenses........ 1.07% 1.02% 1.26% 1.05%
(2) Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses....................... 6.86% 6.63% 7.13% 7.65%

* The Fund commenced operations on January 3, 1991. The financial information for
the fiscal period ended December 31, 1991 is based on the financial information
for the Ginnie Mae Fund ("IRA Ginnie Mae Fund") of the Wells Fargo Investment
Trust for Retirement Programs ("Trust") which was reorganized into the Ginnie
Mae Fund on January 1, 1992.
+ Total returns do not include any sales charges.
</TABLE>

PROSPECTUS 8
<PAGE> 107

SHORT-INTERMEDIATE U.S. GOVERNMENT
INCOME FUND
FOR A SHARE OUTSTANDING AS SHOWN

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED*
DEC. 31, 1994 DEC. 31, 1993
------------- -------------
<S> <C> <C>
Net asset value, beginning of period............ $9.99 $10.00
Income from investment operations:
Net investment income........................... 0.46 0.06
Net realized and unrealized capital
gains/(losses) on investments................. (0.60) (0.01)
Total from investment operations................ (0.14) 0.05
Less distributions:
Dividends from net investment income............ (0.46) (0.06)
Distributions from net realized capital gains... 0.00 0.00
Total distributions............................. (0.46) (0.06)
Net asset value, end of period.................. $9.39 $9.99
Total return (not annualized)+.................. (1.42)% 0.40%
Ratios/supplemental data:
Net assets, end of period (000)................. $11,602 $8,557
Number of shares outstanding, end of period
(000)......................................... 1,236 857
Ratios to average net assets (annualized):
Ratio of expenses to average net assets(1)...... 0.25% 0.00%
Ratio of net investment income to average net
assets(2)..................................... 4.75% 3.49%
Portfolio turnover.............................. 288% N/A
- -------------------
(1) Ratio of expenses to average net assets
prior to waived fees and reimbursed
expenses.................................... 2.28% 2.45%
(2) Ratio of net investment income to average
net assets prior to waived fees and
reimbursed expenses......................... 2.72% 1.04%

* The Fund commenced operations on October
27, 1993.
+ Total returns do not include any sales
charges.
</TABLE>

9 PROSPECTUS
<PAGE> 108

HOW THE FUNDS WORK

INVESTMENT OBJECTIVES AND POLICIES

GINNIE MAE FUND

The Ginnie Mae Fund seeks to provide investors with a long-term total rate of
return through preserving capital and earning high interest income by investing
principally in a portfolio of U.S. Government mortgage pass-through securities,
consisting primarily of securities issued by GNMA, FNMA and FHLMC. This
investment objective is fundamental and cannot be changed without shareholder
approval. As with all mutual funds, there can be no assurance that the Fund,
which is a diversified portfolio, will achieve its investment objective. Under
normal market conditions, the Fund will invest at least 65% of its total assets
in GNMA securities. These securities may bear interest at rates that are not
fixed ("floating- and variable-rate instruments") or may be purchased on a
"when-issued" or "firm commitment basis." The Fund also may invest in U.S.
Treasury securities, which are backed by the full faith and credit of the U.S.
Government, and repurchase agreements.

GNMAs, FNMAs and FHLMCs are mortgage-backed securities representing part
ownership of a pool of residential mortgage loans. A "pool" or group of such
mortgages is assembled and, after being approved by the entity, is offered to
investors through securities dealers. Once approved by GNMA, a government
corporation within the U.S. Department of Housing and Urban Development, the
timely payment of interest and principal of a GNMA security is guaranteed by the
full faith and credit of the U.S. Government. FNMA and FHLMC are federally
chartered corporations supervised by the U.S. Government and acting as
government-sponsored enterprises. FNMA and FHLMC securities are not direct
obligations of the U.S. Treasury, but are supported by the credit of FNMA or
FHLMC only. FNMA guarantees timely payment of interest and principal on its
securities; FHLMC guarantees timely payment of interest and ultimate payment of
principal only.

Although the GNMA securities in the Ginnie Mae Fund's portfolio are guaranteed
by the U.S. Government as to timely payment of principal and interest, the
market value of these securities, upon which the Fund's daily net asset value is
based, will fluctuate. The Fund is subject to interest rate risk, that is, the
risk that increases in interest rates may adversely affect the value of the
securities in which the Fund invests, and hence the value of your investment in
the Fund. The value of the securities in which the Fund invests generally
changes inversely to changes in interest rates.

Moreover, no assurance can be given that the U.S. Government would supply
financial support to U.S. Government-sponsored enterprises such as FNMA and
FHLMC in the event of a default in payment on the underlying mortgages which the
government-sponsored enterprise is unable to make good. Principal on the
mortgages underlying the

PROSPECTUS 10
<PAGE> 109

mortgage pass-through securities in which the Ginnie Mae Fund invests may be
prepaid in advance of maturity. Such prepayments tend to increase when interest
rates decline and may present the Fund with more principal to invest at lower
rates. The converse also tends to be the case. Portfolio turnover should not
adversely affect the Fund since portfolio transactions ordinarily will be made
directly with principals on a net basis and, consequently, the Fund will not
incur brokerage expenses.

The Ginnie Mae Fund may temporarily invest some of its assets in high-quality
money market instruments, which include U.S. Government obligations, obligations
of domestic and foreign banks, and short-term corporate debt obligations. Such
temporary investments would most likely be made when there is an unexpected or
abnormal level of investor purchases or redemptions of Fund shares or because of
unusual market conditions. The Fund also may lend its portfolio securities. A
more complete description of the Fund's investments and investment activities is
contained in the "Prospectus Appendix - Additional Investment Policies" and in
the Fund's SAI.

SHORT-INTERMEDIATE U.S. GOVERNMENT INCOME FUND

The Short-Intermediate U.S. Government Income Fund seeks to provide investors
with current income, while preserving capital, by investing primarily in a
portfolio consisting of short- to intermediate-term securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities. This
investment objective is fundamental and cannot be changed without shareholder
approval. As with all mutual funds, there can be no assurance that the Fund,
which is a diversified portfolio, will achieve its investment objective.

The Short-Intermediate U.S. Government Income Fund may invest in obligations
of any maturity. Under ordinary circumstances, the dollar-weighted effective
average maturity of the Fund's portfolio is generally expected to be between two
and five years and at least 65% of the value of its total assets will be
invested in U.S. Government obligations. The Fund seeks to enhance its total
return by shortening the average maturity of portfolio securities when interest
rates are anticipated to increase and lengthening the maturity of such portfolio
securities to take advantage of anticipated interest rate declines. Portfolio
turnover generally involves some expense to the Fund, including dealer mark-ups.

The Short-Intermediate U.S. Government Income Fund's assets will be invested
and reinvested in U.S. Government obligations and in investment-grade corporate
debt obligations rated at the date of purchase in the top four rating groups by
Standard & Poor's Corporation ("S&P") or Moody's Investor Services, Inc.
("Moody's"), i.e., AAA/Aaa, AA/Aa, A/A, and BBB/Baa by S&P and Moody's,
respectively. Securities rated BBB/Baa have speculative characteristics. In
addition, it is possible that securities in which the Fund may invest could be
downgraded by a ratings group subsequent to purchase by the Fund. The Fund will
not hold more than 5% of its assets in securities that have been downgraded
below investment grade subsequent to purchase. The Fund

11 PROSPECTUS
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may also purchase securities which represent the interest portion or the
principal portion (sometimes referred to as "STRIPs") of securities in which the
Fund may otherwise invest. STRIPs have significantly different investment
characteristics than the instruments from which they derive. S&P and Moody's
assign ratings based upon their judgement of the risk of default of the
securities underlying the STRIPs. However, investors should understand that most
of the risk of these securities comes from interest rate risk and not from the
risk of default. STRIPs may have significantly greater interest rate risk than
traditional government securities with identical ratings.

The Short-Intermediate U.S. Government Income Fund may invest in ARMS whose
interest rates are periodically reset when market rates change. The Fund is
designed for investors who seek a relatively stable net asset value while
providing high current income relative to high-quality, short-term investment
alternatives. ARMS are pass-through certificates representing ownership
interests in a pool of adjustable rate mortgages and the resulting cash flow
from those mortgages. The ARMS in which the Fund may invest are issued or
guaranteed by GNMA, FNMA or FHLMC. Unlike conventional debt securities, which
provide for periodic (usually semi-annual) payments of interest and payments of
principal at maturity or on specified call dates, ARMS provide for monthly
payments based on a pro rata share of both periodic interest and principal
payments and prepayments of principal on the underlying mortgage pool (less
GNMA's, FNMA's or FHLMC's fees and any applicable loan servicing fees.)

The full and timely payment of principal and interest on GNMA ARMS is
guaranteed by GNMA and backed by the full faith and credit of the U.S.
Government. FNMA also guarantees full and timely payment of both interest and
principal, while FHLMC guarantees full and timely payment of interest and
ultimate payment of principal. FNMA and FHLMC ARMS are not backed by the full
faith and credit of the U.S. Government. However, because FNMA and FHLMC are
government-sponsored enterprises, these securities are considered by some
investors to be high-quality investments that present minimal credit risks. The
yields provided by these ARMS have historically exceeded the yields on other
types of U.S. Government securities with comparable maturities. Of course, there
can be no assurance that this historical performance will continue or that the
Fund will meet its investment objective.

The Short-Intermediate U.S. Government Income Fund also may invest in the
adjustable rate portions of collateralized mortgage obligations ("CMOs") issued
by government agencies, instrumentalities or government-sponsored enterprises
including, primarily, FNMA and FHLMC, and collateralized by pools of mortgage
loans. Payments of principal and interest on the collateral mortgages are used
to pay debt service on the CMOs. All CMOs purchased by the Fund will be rated,
at the time of purchase, AAA by S&P or Aaa by Moody's. S&P and Moody's assign
ratings based upon their judgment of the risk of default (i.e., the risk that
the issuer or guarantor may default in the payment of principal and/or interest)
of the securities underlying the CMOs. However, investors should understand that
most of the risk of these securities comes from interest rate risk

PROSPECTUS 12
<PAGE> 111

(i.e., the risk that market interest rates may adversely affect the value of the
securities in which the Fund invests) and not from the risk of default. CMOs may
have significantly greater interest rate risk than traditional government
securities with identical ratings. The adjustable rate portions of CMOs have
significantly less interest rate risk.

The Short-Intermediate U.S. Government Income Fund, on a temporary basis may
invest cash balances in U.S. Treasury bills, engage in repurchase agreements and
lend its portfolio securities, provided the value of such loans of portfolio
securities does not exceed one-third of the current value of its total assets.
Such temporary investments would most likely be made when there is an unexpected
or abnormal level of investor purchases or redemptions of Fund shares or because
of unusual market conditions. A more complete description of the Fund's
investments and investment activities is contained in the "Prospectus
Appendix - Additional Investment Policies" and in the Fund's SAI.

Although the ARMS are guaranteed by the U.S. Government, its agencies or
instrumentalities (including government-sponsored enterprises as noted above),
the market value of these securities, upon which the Short-Intermediate
Government Income Fund's daily net asset value is based, will fluctuate. The
Fund is subject to interest rate risk, that is, the risk that increases in
interest rates may adversely affect the value of the securities in which the
Fund invests, and hence the value of your investment in the Fund. The values of
these securities generally change inversely to changes in interest rates.
However, the adjustable rate feature of the mortgages underlying the ARMS and
the CMOs in which the Fund may invest should reduce, but will not eliminate,
price fluctuations in such securities, particularly during periods of extreme
fluctuations in market interest rates.

Moreover, there can be no assurance that the U.S. Government would supply
financial support to its agencies or instrumentalities, where it is not
obligated to do so. Principal on the mortgages underlying the mortgage
pass-through securities in which the Short-Intermediate U.S. Government Income
Fund invests may be prepaid in advance of maturity; these prepayments tend to
increase when interest rates decline, presenting the Fund with more principal to
invest at lower rates. The converse also tends to be the case when interest
rates rise.

A more complete description of the Short-Intermediate U.S. Government Income
Fund's investments and investment activities is contained in the "Prospectus
Appendix - Additional Investment Policies" and in the Fund's SAI.

U.S. Government obligations have been selected by Wells Fargo Bank as the
Short-Intermediate U.S. Government Income Fund's principal investments because
of their relatively low purchase and sale transaction costs and because of the
low default risk associated with them (i.e., they are issued or guaranteed as to
principal and interest by the U.S. Government, its agencies or
instrumentalities).

13 PROSPECTUS
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On May 2, 1995, the Company's Board of Directors approved an Agreement and
Plan of Reorganization (the "Plan"). Under the Plan, the Short-Intermediate U.S.
Government Income Fund will acquire all of the assets of the Variable Rate
Government Fund, a Fund of the Stagecoach Family of Funds, in exchange for
shares of the Short-Intermediate U.S. Government Income Fund and the assumption
by the Short-Intermediate U.S. Government Income Fund of stated liabilities of
the Variable Rate Government Fund. The Plan has been approved by shareholders of
the Variable Rate Government Fund at a Special Meeting of Shareholders on August
7, 1995, and the reorganization will take place at the end of August 1995.

PERFORMANCE

The performance of shares of the Short-Intermediate U.S. Government Income
Fund and each Class of shares of the Ginnie Mae Fund may be advertised in terms
of yield and average annual total return. These performance figures are based on
historical results and are not intended to indicate future performance.

The yield of a Class of shares of the Ginnie Mae Fund is calculated by
dividing the net investment income per share earned during a specified period
(usually 30 days) for the Class A shares by the public offering price per share
(which includes the maximum sales charge), or for the Class B shares by the net
asset value per share (which does not include the maximum contingent deferred
sales charge), on the last day of such period and annualizing the result. The
yield of the shares of the Short-Intermediate U.S. Government Income Fund is
calculated by dividing the Fund's net investment income per share earned during
a specified period (usually 30 days) by the public offering price per share
(which includes the maximum sales charge) on the last day of such period and
annualizing the result. In addition to presenting a standardized yield, at
times, each Fund also may present nonstandardized yields, total returns and
distribution rates for purposes of sales literature. For example, the
performance figure may be calculated on the basis of an investment in the Funds
at the net asset value per share or at net asset value per share plus a reduced
sales charge, 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
(see "Investing in the Funds - How To Buy Shares").

Standardized and nonstandardized total return figures for shares of the Short-
Intermediate U.S. Government Income Fund or a Class of shares of the Ginnie Mae
Fund also may be presented. Average annual total return is based on the overall
dollar or percentage change in value of a hypothetical investment in the Fund or
Class and assumes that all the dividends and capital gain distributions
attributable to the Fund or Class, as the case may be, are reinvested at net
asset value in such Fund or Class. Standardized average annual total return is
calculated for Class A Shares assuming you

PROSPECTUS 14
<PAGE> 113

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. Nonstandardized total return may be calculated
assuming no sales charge or a reduced sales charge was paid on such investment.

Because of differences in the fees and/or expenses borne by Class B Shares,
the performance figures on such shares can be expected, at any given time, to be
lower than the performance figures on Class A Shares. Standardized performance
quotations are computed separately for Class A and Class B Shares.

Additional information about the performance of each Fund is contained in the
Annual Report for each Fund. The Annual Reports may be obtained free of charge
by calling the Company at 800-222-8222.

THE FUNDS AND MANAGEMENT

The Funds are two 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 nine other series: the Asset Allocation Fund, the California
Tax-Free Bond Fund, the California Tax-Free Income Fund, the California Tax-Free
Money Market Mutual Fund, the Corporate Stock Fund, the Diversified Income Fund,
the Growth and Income Fund, the Money Market Mutual Fund and the U.S. Government
Allocation Fund. The Board of Directors of the Company supervises each Fund's
activities and monitors its 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 a 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 a 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 Funds' SAIs.

Wells Fargo Bank is the Funds' investment adviser, transfer agent and dividend
disbursing agent. Wells Fargo Bank is also the custodian for the Ginnie Mae Fund
and the Short-Intermediate U.S. Government Income Fund. In addition, Wells Fargo
Bank is a Shareholder Servicing Agent of the Funds and a Selling Agent under
Selling Agreements with the Funds' distributor. Wells Fargo Bank, one of the ten
largest banks in the United States, was founded in 1852 and is the oldest bank
in the western United States. As of June 30, 1995, various divisions and
affiliates of Wells Fargo Bank provided

15 PROSPECTUS
<PAGE> 114

investment advisory services for approximately $211 billion of assets of
individuals, trusts, estates and institutions. As of June 30, 1995, Wells Fargo
Bank managed or advised approximately $28 billion in assets. Wells Fargo Bank
also serves as the investment adviser to the other separately managed series of
the Company, and to seven 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.

Mr. Paul Single assumed responsibility for the day-to-day management of the
portfolio of the Ginnie Mae Fund on May 1, 1995. Mr. Single has managed taxable
bond portfolios for over a decade, and has specific expertise in mortgage-backed
securities. Prior to joining Wells Fargo Bank, in early 1988, he was a senior
portfolio manager for Benham Capital Management Group. Mr. Single received his
B.S. from Springfield College and is a chartered financial analyst.

Mr. Mark Kraschel has been responsible for the day-to-day management of the
portfolio of the Short-Intermediate U.S. Government Income Fund since October
1993. He has also been responsible for the day-to-day management of the
portfolio of the Ginnie Mae Fund since May 1, 1995. He has specialized in
short-term bond investment applications for over a decade. He joined Wells Fargo
Bank in 1988 after five years in fixed-income management at First Boston
Corporation. Mr. Kraschel holds a B.S. in business administration from the
University of Oregon and an M.B.A. in finance from the University of San
Francisco.

Mr. Scott Smith also has been responsible for the day-to-day management of the
portfolio of the Short-Intermediate U.S. Government Income Fund since 1993 and
has been responsible for the management of the portfolio of the Ginnie Mae Fund
since May 1, 1995. He joined Wells Fargo Bank in 1988 as a taxable money market
portfolio specialist. His experience includes a position with a private money
management firm with mutual fund investment operations. Mr. Smith holds a B.A.
degree from the University of San Diego and is a chartered financial analyst.

Stephens is the Funds' sponsor and administrator, and distributes the Funds'
shares. Stephens is a full service broker/dealer and investment advisory firm
located at 111 Center Street, Little Rock, Arkansas 72201. Stephens and its
predecessor have been providing securities and investment services for more than
60 years and 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.

PROSPECTUS 16
<PAGE> 115

INVESTING IN THE FUNDS

OPENING AN ACCOUNT

You can buy shares in either Fund 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 1-800-222-8222.

Call the number on your confirmation statement to obtain information about
what is required to change registration.

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 Stephens will transmit or cause to be transmitted promptly, without charge, a
paper copy of the electronic Prospectus.

To invest in the Funds through a tax-deferred retirement plan, please contact
a Shareholder Servicing Agent or a Selling Agent to receive information and the
required separate application. See "Tax-Deferred Retirement Plans" below.

SHARE VALUE

The value of a share of each Fund is its "net asset value," or NAV. The NAV
per share of the Short-Intermediate U.S. Government Income Fund is computed by
adding the value of the Fund's portfolio investments plus cash and other assets,
deducting liabilities and then dividing the result by the total number of Fund
shares outstanding. The NAV of a share of a Class of the Ginnie Mae Fund is the
value of total net assets attributable to each Class divided by the number of
outstanding shares of that Class. The value of 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 Funds are open for business each day the New York Stock Exchange ("NYSE")
is open for trading ("Business Day"). Currently, the NYSE is closed on New
Year's Day,

17 PROSPECTUS
<PAGE> 116

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 the Funds and each Class of the
Funds, as appropriate, 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 other assets of the Funds are valued at
current market prices, or if such prices are not readily available, at fair
value as determined in good faith by the Company's Board of Directors. Prices
used for such valuations may be obtained from independent pricing services.

HOW TO BUY SHARES

Shares of the Funds 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 will not be due from the Selling Agent until the settlement date.
The settlement date is normally three Business Days after the order is placed.
It is the responsibility of the Selling Agent to forward payment for shares
being purchased to a Fund promptly. Payment must accompany orders placed
directly through the Transfer Agent.

Payments for shares of each Fund will be invested in full and fractional
shares of the Fund at the applicable offering price. If shares are purchased by
a check which doesn't clear, the Company reserves the right to cancel the
purchase and hold the investor responsible for any losses or fees incurred. In
addition, the Funds may hold payment on any redemption until reasonably
satisfied that your payments 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 are the Front-end Sales Charge Schedules listing the front-end
sales charges applicable to purchases of Class A Shares of the Ginnie Mae Fund
and shares of the Short-Intermediate U.S. Government Income Fund. As shown
below, reductions in

PROSPECTUS 18
<PAGE> 117

the rates 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 the Ginnie Mae Fund:

<TABLE>
<CAPTION>
FRONT-END FRONT-END
SALES CHARGE SALES CHARGE AS DEALER ALLOWANCE
AS % OF % 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>

The following is the Front-end Sales Charge Schedule for purchasing shares of
the Short-Intermediate U.S. Government Income Fund:

<TABLE>
<CAPTION>
FRONT-END FRONT-END
SALES CHARGE SALES CHARGE AS DEALER ALLOWANCE
AS % OF % OF NET AS % OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
- ----------------------- -------------- --------------- ----------------
<S> <C> <C> <C>
Less than $100,000..... 3.00% 3.09% 2.65%
$100,000 up to
$249,999............. 2.25 2.30 2.00
$250,000 up to
$599,999............. 1.50 1.52 1.30
$600,000 and over...... 0.60 0.60 0.50
</TABLE>

Class B Shares are not subject to a front-end sales charge. However, Class B
Shares which are redeemed within one, two, three or four years from the date of
purchase of 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. See "Investing in the
Funds - Contingent Deferred Sales Charges - Class B Shares."

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.

19 PROSPECTUS
<PAGE> 118

If Class A shares are purchased through a Selling Agent, Stephens reallows the
portion of the 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 applicable 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
front-end 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 Funds 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

Volume Discounts

The Volume Discounts described in the Front-end Sales Charge Schedules are
available to you based on the combined dollar amount you invest in shares of one
or more of the Company's funds which assess a front-end sales charge (the "Load
Funds"). Since Class B Shares are not subject to front-end sales charges, you
may not consider the amount of any Class B Shares you hold in determining a
Volume Discount.

Right of Accumulation

The Right of Accumulation allows you to combine the amount you invest in Class
A Shares of the Ginnie Mae Fund and in shares of the Short-Intermediate U.S.
Government Income Fund with the total NAV of Class A Shares or other shares
(other than Class B Shares) in any of the Load Funds to determine reduced sales
charges in accordance with the above Sales Charge Schedules. 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 a Fund, the
front-end sales charge on the additional $20,000 investment would be 3.50% of
the applicable offering price for the Ginnie Mae Fund and 2.25% for the Short-
Intermediate U.S. Government Income Fund. To obtain such 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.

Letter of Intent

A Letter of Intent allows you to purchase Class A Shares of the Ginnie Mae
Fund and shares of the Short-Intermediate U.S. Government Income Fund over a
13-month period

PROSPECTUS 20
<PAGE> 119

at a reduced front-end sales charge based on the total amount 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 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 a 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. Dividend 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 or shares of the
Short-Intermediate U.S. Government Income Fund in Class A Shares of a Fund or in
shares of another of the Company's funds registered in your state of residence
at NAV, without a front-end sales charge, within 120 days after your redemption.
However, if the fund you are purchasing imposes a front-end sales charge that is
higher than the one you have paid in connection with the shares you have
redeemed, you pay the difference. You may reinvest at NAV 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.

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 (a) investing proceeds from a redemption of shares of another
open-end investment company or (b) investing proceeds from a redemption of units
of a unit

21 PROSPECTUS
<PAGE> 120

investment trust sold through Wells Fargo Securities, Inc. on which you paid a
front-end sales charge; (ii) such redemption occurred within thirty (30) days
prior to the date of the purchase order; and (iii) such other company or trust
is distributed and advised by entities other than Stephens and Wells Fargo Bank,
respectively, or their affiliates. 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).

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 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 a Fund at a reduced front-end 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% 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

Shares of a Fund may be purchased at NAV, without 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. Shares of a
Fund also may be purchased at NAV, without 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. Shares also may be purchased at NAV,
without a front-end sales charge, by employee benefit and thrift plans for such
persons and by any investment advisory, trust or other fiduciary account,
including a Plan Account, that is maintained, managed or advised by Wells Fargo
Bank or its affiliates ("Fiduciary Accounts"). In addition, you may purchase
shares of a Fund at NAV, without 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 Fund within

PROSPECTUS 22
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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 are not subject to front-end sales charges but may be subject
to contingent deferred sales charges. Class B Shares which 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 will
not be imposed on amounts representing increases in NAV above the NAV at time of
purchase. Contingent deferred sales charges will not be 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
(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.

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.

23 PROSPECTUS
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You may buy shares of a 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
($1,000 or more) 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, if
applicable)
Account Name(s): Name(s) in which to be registered
Account Number: (if investing into an existing account)

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, if applicable)," to
the address set forth in "Initial Purchases by Wire."

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.

PROSPECTUS 24
<PAGE> 123

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 Funds 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 Funds 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 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 will be tax-deferred until
withdrawn, at which time the individual may be in a lower tax bracket.

25 PROSPECTUS
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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.

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. 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 a Fund's
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 for initial purchases, or by mail with a check payable
to "Stagecoach Funds (Name of Fund) (designate Class A or B if applicable)" to
the address set forth in "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.

PROSPECTUS 26
<PAGE> 125

PURCHASES THROUGH SELLING AGENTS

You may place a purchase order for shares of a Fund through a broker/dealer or
financial institution which has entered into a Selling Agreement with Stephens,
as the Funds' Distributor ("Selling Agent"). If your order is placed by the
close of the NYSE, the purchase order generally will be 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
will be 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 a Fund will not be
due until settlement date, the Selling Agent might benefit from the temporary
use of your payment. A financial institution which 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

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 will be 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 will be 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 Funds, or a Shareholder Servicing Agent on their behalf, will typically
send you a confirmation or statement of your account after every transaction
that affects your share balance or your Fund account registration. The Funds do
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.

27 PROSPECTUS
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DIVIDENDS

Each Fund intends to declare a daily dividend of substantially all of its net
investment income. Dividends declared in a month generally are paid on the last
Business Day of such month to shareholders of record. The Funds 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 will 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 will be 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 gain distributions of Class A
Shares and Class B Shares.

Dividends for a Saturday, Sunday or Holiday are declared payable to
shareholders of record as of the preceding Business Day.

If you redeem shares before the dividend payment date, any dividends credited
to you are paid on the following dividend payment date unless you have redeemed
all shares in your account, in which case you will receive your accrued
dividends together with your redemption proceeds.

HOW TO REDEEM SHARES

PROSPECTUS 28
<PAGE> 127

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, the Funds 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 Funds' current intention, the Funds may make
payment of redemption proceeds in securities if conditions warrant, subject to
regulation by some state securities commissions. In addition, the Funds reserve
the right to impose charges for wiring redemption proceeds.

Due to the high cost of maintaining Fund accounts with small balances, the
Funds reserve 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 an
amount equal to or greater than the applicable minimum balance. Plan Accounts
are not subject to minimum Fund account balance requirements. For a discussion
of applicable minimum balance requirements, see "Investing in the Funds -- 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 will require 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 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, if applicable, 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
you at your address

29 PROSPECTUS
<PAGE> 128

of record or your designated Approved Bank account, or other unusual
circumstances exist which 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 Funds - 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 a 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 a 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.

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."

PROSPECTUS 30
<PAGE> 129

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.

SYSTEMATIC WITHDRAWAL PLAN

The Company's Systematic Withdrawal Plan provides you with a convenient way to
redeem Fund shares from your account and have 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 Funds for participating in the Systematic Withdrawal Plan.
However, you 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 for shares of a Fund 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 will be 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

31 PROSPECTUS
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NYSE, or not received by the Transfer Agent prior to the close of business, your
order will be 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 will be 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 will be mailed to your address of record or, if such address is no
longer valid, the net proceeds will be 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, the Selling Agent 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 a 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 will be 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 will be
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.

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 will be 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 will be mailed to your address of record or, if
such address is no longer valid, the net proceeds will be credited to your
account with your Shareholder Servicing Agent or to another account designated
in your agreement with your Shareholder Servicing Agent.

PROSPECTUS 32
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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 Funds offer you several dividend and distribution payment
options and an exchange privilege, which are described below. If you have any
questions about the options available to you, please call 800-222-8222.

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 which paid such dividend or capital gain distribution. Dividends and
distributions declared in a month generally are reinvested 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 Funds 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 of the Ginnie Mae Fund 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. Dividends and
distributions paid on Class A Shares may also be invested in shares of a
non-money market fund with a single 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. Dividends and distributions paid on shares of the Short-
Intermediate U.S. Government Income Fund may be invested in Class A Shares, in
Retail Shares of another fund, in shares of a single class fund or in shares of
the California Tax-Free Money Market Mutual 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 Funds' dividend disbursing agent on your behalf.

D. The Check Payment Option lets you receive a check for all dividends and/or
capital gain distributions, which generally is mailed either to your designated
address

33 PROSPECTUS
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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 Funds' 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 in order to respond to changes in your
investment and savings goals or in market conditions. Shares of the
Short-Intermediate U.S. Government Income Fund may be exchanged for Class A
Shares or Retail Shares of another fund, for shares of a single class fund or
for shares of the California Tax Free Money Market Mutual Fund. Class A Shares
of the Ginnie Mae Fund may be exchanged for Class A Shares or Retail Shares of
another fund, for shares of the California Tax Free Money Market Mutual Fund or
for shares of a single class fund. Class B Shares of the Ginnie Mae Fund may be
exchanged for Class B Shares of another fund, for shares of the California
Tax-Free Money Market Mutual Fund or for Class A Shares of the Money Market
Mutual Fund (the Money Market Mutual Fund and California Tax-Free Money Market
Mutual Fund are, collectively, the "Money Market Mutual Funds").

Before making an exchange from a 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.

- - Each exchange, in effect, represents the redemption of shares of one fund and
the purchase of shares in another, which may produce a gain or loss for tax
purposes. A confirmation of each exchange transaction will be sent to you.

- - 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

PROSPECTUS 34
<PAGE> 133

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 shares
of the California Tax-Free Money Market Mutual Fund or for Class A Shares of
the 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.

CONVERSION

Class B Shares of the Ginnie Mae 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 the same 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 net asset values 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. Because the per share net asset value 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 will be
considered new purchases for purposes of the conversion feature.

35 PROSPECTUS
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If a shareholder effects one or more exchanges among Class B Shares of any
fund or among shares of the Money Market Mutual Funds during the six-year period
and exchange 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 will be converted into Class A Shares.

MANAGEMENT AND SERVICING FEES

INVESTMENT ADVISER

For these services, Wells Fargo Bank is entitled to a monthly investment
advisory fee from the Ginnie Mae Fund, at the annual rate of 0.50% of the first
$250 million of the Fund's average daily net assets, 0.40% of the next $250
million, and 0.30% in excess of $500 million; and a monthly investment advisory
fee for the Short-Intermediate U.S. Government Income Fund at the annual rate of
0.50% of the Fund'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 the
Funds' expenses and, accordingly, have a favorable impact on the Funds' yield
and total return. For the year ended December 31, 1994, the Ginnie Mae Fund and
the Short-Intermediate U.S. Government Income Fund paid 0.50% and 0.00%,
respectively, of their average daily net assets to Wells Fargo Bank for its
services as investment adviser.

Purchase and sale orders of the securities held by the Funds 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 Funds 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 Funds, to the extent consistent
with their investment objectives, policies and restrictions, may invest in
securities of companies with which Wells Fargo Bank has a lending relationship.

PROSPECTUS 36
<PAGE> 135

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank serves as the custodian for the Funds. Under its Custody
Agreement with Wells Fargo Bank, each 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 each
Fund's Custody Agreement. Wells Fargo Bank performs the custodial services at
its address above.

Wells Fargo Bank also serves as the transfer and dividend disbursing agent for
the Funds. Wells Fargo Bank performs the transfer and dividend disbursing agency
activities at 525 Market Street, San Francisco, California 94163.

SHAREHOLDER SERVICING AGENT

The Funds have entered into Shareholder Servicing Agreements with Wells Fargo
Bank and may enter into similar agreements with other entities. Under such
agreements, Shareholder Servicing Agents (including Wells Fargo Bank) will, 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 each of the Funds, proxy
statements, annual reports, updated prospectuses and other communications to
shareholders; receive, tabulate and send to the Funds proxies executed by
shareholders; and provide such other related services as the Funds 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 shareholder servicing fees for the
Short-Intermediate U.S. Government Income Fund, as calculated on an annualized
basis for the Fund's then-current fiscal year, exceed the lesser of (1) 0.30% of
the average daily net assets of the Fund represented by shares 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

37 PROSPECTUS
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such fees that constitutes a "service fee," as that term is used by the NASD,
exceed 0.25% of the average net asset value of the Fund. In no event will
shareholder servicing fees for the Ginnie Mae Fund, as calculated on an
annualized basis for the Fund's then-current fiscal year, exceed the lesser of
(1) 0.30% of the average daily net assets of the Fund represented by 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 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 NAV attributable to the Class A and Class B Shares of the Fund.

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 Funds, such as requiring a higher minimum initial
investment or by directly charging its customers for its services. Each
Shareholder Servicing Agent will be required to agree to disclose any fees it
may directly charge its customers who are shareholders of a Fund and to notify
them in writing at least 30 days before it imposes any transaction fees.

SPONSOR, ADMINISTRATOR AND DISTRIBUTOR

Subject to the overall supervision of the Company's Board of Directors,
Stephens provides the Funds with administrative services, including general
supervision of each Fund's operation, coordination of the other services
provided to each Fund, 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 each Fund'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 each Fund a monthly fee at the annual rate of up to 0.03% of each
Fund's average daily net assets. From time to time, Stephens may waive its fees
from a Fund in whole or in part. Any such waiver will reduce a Fund's expenses
and, accordingly, have a favorable impact on such Fund's yield and total return.

Stephens, as the principal underwriter of the Funds within the meaning of the
1940 Act, has entered into a Distribution Agreement with the Company pursuant to
which Stephens has the responsibility for distributing shares of the Funds. The
Company also has adopted a Distribution Plan on behalf of each of the Funds
under the SEC's Rule 12b-1 (each, a "Plan"). Under the Plan for the Class A
Shares of the Ginnie Mae Fund, the Fund may defray all or part of the cost of
preparing and printing prospectuses and other promotional materials and of
delivering prospectuses and those materials to prospective Class A shareholders
by paying on an annual basis up to 0.05% of the average daily net assets
attributable to Class A Shares of such Fund. Under the Plan for

PROSPECTUS 38
<PAGE> 137

the shares of the Short-Intermediate U.S. Government Income Fund, the Fund may
defray all or a part of the cost of preparing and printing prospectuses and
other promotional material to prospective shareholders by paying on an annual
basis up to 0.05% of the average daily net assets attributable to the Fund. The
Plan for the shares of the Short-Intermediate U.S. Government Income Fund
provides only for the reimbursement of actual expenses. Under the Class B Plan
for the Ginnie Mae Fund, the Fund may defray all or part of such costs and pay
compensation to the Distributor and Selling Agents for sales support services.
The Class B Plan for the Ginnie Mae Fund provides for payments, on an annual
basis, of up to 0.70% of the average daily net assets attributable to the Class
B Shares of the Fund. The Distribution Agreement provides that Stephens shall
act as agent for the Funds for the sale of their shares, and may enter into
Selling Agreements with Selling Agents that wish to make available shares of the
Funds to their respective customers. The Funds may participate in joint
distribution activities with any of the other funds of the Company, in which
event, expenses reimbursed out of the assets of the Funds may be attributable,
in part, to the distribution-related activities of another fund of the Company.
Generally, the expenses attributable to joint distribution activities will be
allocated among each Fund and the other funds of the Company in proportion to
their relative net asset sizes, although the Company's Board of Directors may
allocate such expenses in any other manner that it deems fair and equitable.

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

From time to time, Wells Fargo Bank and Stephens may waive their respective
fees in whole or in part and reimburse expenses payable to others. Any such
waivers or reimbursements will reduce a Fund's expenses and, accordingly, have a
favorable impact on a Fund's yield and total return. Except for the expenses
borne by Wells Fargo Bank and Stephens, the Company bears all costs of its
operations, including advisory, shareholder servicing, transfer agency, custody
and administration fees, payments pursuant to any Plans, fees and expenses of
independent auditors and legal counsel, and any extraordinary expenses. Expenses
attributable to each Fund or class are charged against the assets of the Fund or
class. General expenses of the Company are allocated among all of the funds of
the Company, including the Funds, in a manner proportionate to the net assets of
each fund, on a transactional basis, or on such other basis as the Company's
Board of Directors deems equitable.

39 PROSPECTUS
<PAGE> 138

TAXES

By complying with the applicable provisions of the Code, the Funds are not
subject to federal income taxes with respect to net investment income and net
realized capital gains distributed to their shareholders. Dividends from the
investment income (including net short-term capital gains, if any) declared and
paid by each Fund will be taxable as ordinary income to Fund 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 a Fund which are held under a qualified
tax-deferred retirement plan. See "Investing in the Funds - Tax-Deferred
Retirement Plans" above. The Funds pay out all their net investment income and
net realized capital gains (if any) for each year. The Funds' dividends do not
qualify for the dividends-received deduction allowed to corporate shareholders.

Portions of the investment income of the Short-Intermediate U.S. Government
Income Fund may be subject to foreign taxes withheld at the source; however, the
Fund will be able to pass through any portion of the foreign taxes to its
shareholders.

The Funds, or your Shareholder Servicing Agent on their behalf, will inform
you of the amount and nature of such Fund dividends and capital gains. You
should keep all statements you receive to assist in your personal recordkeeping.
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 Funds if a correct Taxpayer Identification Number, certified when
required, is not on file with the Company or the Transfer Agent. In connection
with this withholding requirement, you will be asked to certify on your Account
Application that the social security or taxpayer identification number you
provide is correct and that you are not subject to 31% backup withholding for
previous underreporting to the IRS.

Foreign shareholders may be subject to different tax treatment, including a
withholding tax. See "Federal Income Taxes - Foreign Shareholders" in the SAIs.

Further federal tax considerations are discussed in the SAIs. 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 Funds.

PROSPECTUS 40
<PAGE> 139

PROSPECTUS APPENDIX -
ADDITIONAL INVESTMENT POLICIES

FUND INVESTMENTS

Ginnie Mae Fund

FHLMC issues two types of mortgage pass-through securities: mortgage
participation certificates ("PCs") and guaranteed mortgage certificates
("GMCs"). PCs resemble GNMA certificates in that each PC represents a pro rata
share of all interest and principal payments made and owed on the underlying
pool of mortgages. GMCs also represent a pro rata interest in a pool of
mortgages. These instruments, however, pay interest semiannually and return
principal once a year in guaranteed minimum payments.

These mortgage-backed securities differ from bonds in that principal is paid
back by the borrower over the length of the loan rather than returned in a lump
sum at maturity. They are called "pass-through" securities because both interest
and principal payments, including prepayments, are passed through to the holder
of the security. The GNMA securities in which the Ginnie Mae Fund will invest
are of the "modified" type, which entitles the holder of such certificates to
receive its share of all interest and principal payments owed on the underlying
pool of mortgage loans, regardless of whether or not the mortgagors actually
make the payments.

The payment of principal on the underlying mortgages may exceed the minimum
required by the schedule of payments for the mortgages. Such prepayments are
made at the option of the mortgagors for a wide variety of reasons reflecting
their individual circumstances. For example, mortgagors may speed up the rate at
which they prepay their mortgages when interest rates decline sufficiently to
encourage refinancing. The Ginnie Mae Fund, when such prepayments are passed
through to it, may be able to reinvest them only at a lower rate of interest. As
a result, if the Fund purchases such securities at a premium, a prepayment rate
that is faster than expected will reduce yield to maturity, while a prepayment
rate that is slower than expected will have the opposite effect of increasing
yield to maturity. Conversely, if the Fund purchased such securities at a
discount, faster than expected prepayments will increase, while slower than
expected prepayments will reduce, yield to maturity. Accelerated prepayments on
securities purchased by the Fund at a premium also impose a risk of loss of
principal because the premium may not have been fully amortized at the time the
principal is repaid in full. In choosing specific issues, Wells Fargo Bank, as
investment adviser, will have made assumptions about the likely speed of
prepayment. Actual experience may vary from this assumption resulting in a
higher or lower investment return than anticipated.

A-1 PROSPECTUS
<PAGE> 140

Short-Intermediate U.S. Government Income Fund

The mortgages underlying ARMS guaranteed by GNMA are fully insured or
guaranteed by the Federal Housing Administration, the Veterans Administration or
the Farmers Home Administration, while those underlying ARMS issued by FNMA or
FHLMC are typically conventional residential mortgages which are not so insured
or guaranteed, but which conform to specific underwriting, size and maturity
standards.

In a CMO, a series of bonds or certificates is issued in multiple classes.
Each class of CMOs, often referred to as a "tranche," is issued at a specified
coupon rate and has a stated maturity or final distribution date. The principal
and interest payment on the underlying mortgages may be allocated among the
classes of CMOs in several ways. Typically, payments of principal, including any
prepayments, on the underlying mortgages are applied to the classes in the order
of their respective stated maturities or final distribution dates, so that no
payment of principal is made on CMOs of a class until all CMOs of other classes
having earlier stated maturities or final distribution dates have been paid in
full. One or more classes of CMOs may have coupon rates that reset periodically
based on an index, such as the London Interbank Offered Rate ("LIBOR").

The interest rates on the mortgages underlying the ARMS and the CMOs in which
the Short-Intermediate U.S. Government Income Fund may invest generally are
readjusted at intervals of one year or less in response to changes in a
predetermined interest rate index. There are two main categories of indices:
those based on U.S. Treasury securities and those derived from a calculated
measure, such as cost-of-funds index or a moving average of mortgage rates.
Commonly utilized indices include the one-year and five-year constant maturity
U.S. Treasury note rates, the three-month U.S. Treasury bill rate, the 180-day
U.S. Treasury bill rate, rates on longer-term U.S. Treasury securities, the
National Median Cost of Funds, the one-month, three-month, six-month or one-year
LIBOR, a published prime rate, or commercial paper rates. Certain of these
indices follow overall market interest rates more closely than others.

Adjustable rate mortgages, an increasingly common form of residential
financing, generally are originated by banks and thrift institutions and have a
specified maturity date. Most provide for amortization of principal in a manner
similar to fixed-rate mortgages but have interest payment amounts that change in
response to changes in a specified interest rate index. The rate of interest due
on such a mortgage is calculated by adding an agreed-upon "margin" to the
specified index, although there generally are limitations or "caps" on interest
rate movements in any given period or over the life of the mortgage. To the
extent that the interest rates on adjustable rate mortgages underlying the ARMS
or the CMOs in which the Short-Intermediate U.S. Government Income Fund may
invest cannot be adjusted in response to interest rate changes because of such
caps, the ARMS or CMOs are likely to respond to changes in market rates more
like fixed-rate securities. In other words, interest rate increases in excess of
such caps can be expected to cause the ARMS or CMOs backed by mortgages that
have such caps to decline in value to a greater extent than would be the case in
the absence of such caps.

PROSPECTUS A-2
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Conversely, interest rate decreases below such floors can be expected to cause
the ARMS or CMOs backed by mortgages that have such floors to increase in value
to a greater extent than would be the case in the absence of such floors.

Since the interest rates on many mortgages underlying ARMS and CMOs are reset
on an annual basis and generally are subject to caps, it can be expected that
the prices of such ARMS and CMOs will fluctuate to the extent prevailing market
interest rates are not reflected in the interest rates payable on the underlying
adjustable rate mortgages or the CMO. In this regard, the NAV of the
Short-Intermediate U.S. Government Income Fund's shares could fluctuate to the
extent interest rates on underlying mortgages differ from prevailing market
interest rates during interim periods between interest rate reset dates.
Accordingly, investors could experience some principal loss or less gain than
might otherwise be achieved if they redeem their Fund shares before the interest
rates on the mortgages underlying the Fund's portfolio securities are adjusted
to reflect prevailing market interest rate.

The holder of ARMS and certain CMOs receives not only monthly scheduled
payments of principal and interest but also may receive unscheduled principal
payments representing prepayments on the underlying mortgages. An investor,
therefore, may have to reinvest the periodic payments and any unscheduled
prepayments of principal it receives at a rate of interest which is lower than
the rate on the ARMS and CMOs held by it.

The Short-Intermediate U.S. Government Income Fund also may invest cash
balances temporarily in U.S. Treasury bills, which are short-term U.S.
Government obligations with maturities which do not exceed one year. As
described further in its SAI, the Fund may purchase certain securities on a
when-issued basis, although it currently does not expect to invest more than 5%
of its assets in such securities.

INVESTMENT ACTIVITIES

Money Market Instruments and Temporary Investments

The Funds may have temporary cash balances on account of new purchases,
dividends, interest and reserves for redemptions, which will generally be less
than 5% of a Fund's portfolio and which will be invested in the following
high-quality money market instruments: (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; (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;
(iv) nonconvertible corporate debt securities (e.g., bonds and debentures) with
remaining maturities of no more than one year that are rated at least

A-3 PROSPECTUS
<PAGE> 142

"Aa" by Moody's or "AA" by S&P; (v) repurchase agreements; and (vi) 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 Funds.

U.S. Government Obligations

U.S. Government obligations include securities issued or guaranteed as to
principal and interest by the U.S. Government and supported by the full faith
and credit of the U.S. Treasury. U.S. Treasury obligations differ mainly in the
length of their maturity. Treasury bills, the most frequently issued marketable
government securities, have a maturity of up to one year and are issued on a
discount basis. U.S. Government obligations also include securities issued or
guaranteed by federal agencies or instrumentalities, including
government-sponsored enterprises. Some obligations of agencies or
instrumentalities of the U.S. Government are supported by the full faith and
credit of the United States or U.S. Treasury guarantees; others, by the right of
the issuer or guarantor to borrow from the U.S. Treasury; still others, by the
discretionary authority of the U.S. Government to purchase certain obligations
of the agency or instrumentality; and others, only by the credit of the agency
or instrumentality issuing the obligation. In the case of obligations not backed
by the full faith and credit of the United States, the investor must look
principally to the agency or instrumentality issuing or guaranteeing the
obligation for ultimate repayment, which agency or instrumentality may be
privately owned. There can be no assurance that the U.S. Government would
provide financial support to its agencies or instrumentalities where it is not
obligated to do so. In addition, U.S. Government obligations are subject to
fluctuations in market value due to fluctuations in market interest rates. As a
general matter, the value of debt instruments, including U.S. Government
obligations, declines when market interest rates increase and rises when market
interest rates decrease. Certain types of U.S. Government obligations are
subject to fluctuations in yield or value due to their structure or contract
terms.

Corporate Debt Instruments

The Funds may invest in commercial paper (including variable amount master
demand notes) which refers to short-term, unsecured promissory notes issued by
corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations which permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangements between the issuer and a commercial
bank acting as agent for the payee of such notes whereby

PROSPECTUS A-4
<PAGE> 143

both parties have the right to vary the amount of the outstanding indebtedness
on the notes.

The Short-Intermediate U.S. Government Income Fund may invest in
nonconvertible corporate debt securities (e.g., bonds and debentures). The
Ginnie Mae Fund also may invest in nonconvertible corporate debt securities with
no more than one year remaining to maturity at the date of settlement, provided
that such corporate bonds and debentures are rated at the time of purchase at
least "Aa" by Moody's or "AA" by S&P.

Floating- and Variable-Rate Instruments

Certain of the instruments which the Funds may purchase bear interest at rates
that are not fixed but vary, for example, with changes in specified market rates
or indices or specified intervals. Certain of these instruments may carry a
demand feature that would permit the holder to tender them back to the issuer at
par value prior to maturity. The floating- and variable-rate instruments that
the Funds may purchase include certificates of participation in such obligations
purchased from banks. Wells Fargo Bank monitors on an ongoing basis the ability
of an issuer of a demand instrument to pay principal and interest on demand.
Events affecting the ability of the issuer of a demand instrument to make
payment when due may occur between the date a Fund elects to demand payment and
the date payment is due. Such events may affect the ability of the issuer of the
instrument to make payment when due, thereby affecting the Funds' ability to
obtain payment at par. Demand instruments whose demand feature is not
exercisable within seven days may be treated as liquid, provided that an active
secondary market exists.

Repurchase Agreements

The Funds may enter into repurchase agreements wherein the seller of a
security to a Fund agrees to repurchase that security from such Fund at a
mutually agreed-upon time and price. The period of maturity is usually quite
short, often overnight or a few days, although it may extend over a number of
months. The Funds may enter into repurchase agreements only with respect to U.S.
Government obligations and other obligations that would be permissible
investments for 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 Funds may be greater than one year. If the seller defaults and the value
of the underlying securities has declined, a Fund may incur a loss. In addition,
if bankruptcy proceedings are commenced with respect to the seller of the
security, the participating Fund's disposition of the security may be delayed or
limited. A Fund will enter into repurchase agreements only with registered
broker/dealers and commercial banks which meet guidelines established by the
Company's Board of Directors and are not affiliated with the Fund's investment
adviser. The Funds may participate in pooled repurchase agreement transactions
with other funds advised by Wells Fargo Bank.

A-5 PROSPECTUS
<PAGE> 144

Loans of Portfolio Securities

The Short-Intermediate U.S. Government Income Fund may lend securities from
their portfolio to brokers, dealers and financial institutions (but not
individuals) if cash, U.S. Government obligations or other high-quality debt
instruments equal to at least 100% of the current market value of the securities
loan (including accrued interest thereon) plus the interest payable to the Fund
with respect to the loan are maintained with the Fund. In determining whether to
lend a security to a particular broker, dealer or financial institution, the
Fund's investment adviser considers all relevant facts and circumstances,
including the credit-worthiness of the broker, dealer or financial institution.
Any loans of portfolio securities will be fully collateralized based on values
that are marked to market daily. The Fund will not enter into any portfolio
security lending arrangement having a duration of longer than one year. Any
securities that the Fund may receive as collateral will not become part of the
Fund's portfolio at the time of the loan and, in the event of a default by the
borrower, the Fund, if permitted by law, will dispose of such collateral except
for such part thereof that is a security in which the Fund is permitted to
invest. During the time securities are on loan, the borrower will pay the Fund
any accrued income on those securities, and the Fund may invest the cash
collateral and earn income or receive an agreed-upon fee from a borrower that
has delivered cash-equivalent collateral. The Fund does not lend securities
having a value that exceeds one-third of the current value of its assets. Loans
of securities by the Fund are subject to termination at the Fund's or the
borrower's option. The Fund may pay reasonable administrative and custodial fees
in connection with a securities loan and may pay a negotiated portion of the
interest or fee earned with respect to the collateral to the borrower or the
placing broker. Borrowers and placing brokers may not be affiliated, directly or
indirectly, with the Company, the investment adviser, or the Distributor.

Foreign Obligations

The Short-Intermediate U.S. Government Income Fund may invest up to 25% of its
assets in high-quality, short-term debt obligations of foreign branches of U.S.
banks or U.S. branches of foreign banks that are denominated in and pay interest
in U.S. dollars. Investments in foreign obligations involve certain
considerations that are not typically associated with investing in domestic
obligations. There may be less publicly available information about a foreign
issuer than about a domestic issuer. Foreign issuers also are not subject to the
same uniform accounting, auditing and financial reporting standards or
governmental supervision as domestic issuers. In addition, with respect to
certain foreign countries, interest may be withheld at the source under foreign
income tax laws, and there is a possibility of expropriation or confiscatory
taxation, political or social instability or diplomatic developments that could
adversely affect investments in, the liquidity of, and the ability to enforce
contractual obligations with respect to, securities of issuers located in those
countries.

PROSPECTUS A-6
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Other Investment Companies

The Funds 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 the Funds' investment adviser
will waive its advisory fees for that portion of the Funds' 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
Short-Intermediate U.S. Government Income 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.

When-Issued Securities and Firm Commitment Agreements

The Ginnie Mae Fund may engage in securities transactions on a "when-issued"
or "firm commitment" basis. The price of such securities is fixed at the time a
commitment to purchase or sell is made, but delivery and payment for the
when-issued securities take place at a later date. Normally, the settlement date
occurs within one month of the purchase or sale. As an operating policy, the
settlement date always will be within 120 days. At the time securities purchased
on a when-issued basis are actually delivered to the Fund, their value may be
higher or lower than the price the Fund agreed to pay for such securities.
During the period between commitment and settlement, no payment is made by the
Fund and no interest accrues to the Fund. In some instances, the Fund may sell a
security and at the same time make a commitment to purchase the same security at
a future date at a specified price. Conversely, the Fund may purchase a security
and at the same time make a commitment to sell the same security at a future
date at a specified price. These types of transactions are executed
simultaneously in what are known as "roll" transactions. For example, a
securities dealer may seek to purchase a particular security which the Fund
owns. The Fund will sell that security to the dealer and simultaneously enter
into a "firm commitment" agreement to buy back the same security at a future
date, as described above. The net effect of these transactions is to generate
income for the Fund since the dealer is willing to execute these transactions at
prices favorable to the Fund in order to acquire the specific security which it
buys in the initial purchase transaction. Wells Fargo Bank will limit these
transactions to a maximum of 35% of the Fund's total assets.

There is a risk that a party with whom the Ginnie Mae Fund enters into
when-issued or firm commitment agreements may not perform its obligation to
deliver or purchase the securities, which could result in a gain or loss to the
Fund. To minimize the risk of default, the Fund enters into such transactions
only with those major banks and non-bank U.S. Government securities dealers who
are recognized by the Board of Governors of the Federal Reserve System as
primary dealers.

A-7 PROSPECTUS
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INVESTMENT POLICIES

Each Fund's investment objective, as set forth in "How the Funds
Work - Investment Objectives and Policies," is fundamental; that is, it may not
be changed without approval by the vote of the holders of a majority of such
Fund's outstanding voting securities, as described under "Capital Stock" in the
SAI for each Fund. In addition, any fundamental investment policy may not be
changed without such share-holder approval. If the Board of Directors
determines, however, that a Fund's investment objective can best be achieved by
a substantive change in a nonfundamental investment policy or strategy, the
Company's Board may make such change without shareholder approval and will
disclose any such material changes in the then-current prospectus.

As matters of fundamental policy, a Fund may: (i) not purchase securities of
any issuer (except U.S. Government obligations) if as a result more than 5% of
the value of a Fund's total assets would be invested in the securities of such
issuer or a Fund would own more than 10% of the outstanding voting securities of
such issuer; (ii) make loans of portfolio securities in accordance with its
investment policies; and (iii) not invest 25% or more of its assets (i.e.,
concentrate) in any particular industry, except that the Fund may invest 25% or
more of its assets in U.S. Government obligations. In addition, as a matter of
fundamental policy, the Short-Intermediate U.S. Government Income 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. As a matter
of fundamental policy, the Ginnie Mae Fund may borrow from banks up to 20% 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 20% of
the current value of its net assets. Each Fund may not purchase investments
while any such outstanding borrowing exceeds 5% of such Fund's net assets.

With respect to fundamental investment policy (i) above, the
Short-Intermediate U.S. Government Income Fund is subject to this restriction
only with respect to 75% of the Fund's assets, and, with regard to both Funds,
it may be possible that the Company would own more than 10% of the outstanding
voting securities of the issuer. With respect to fundamental investment policy
concerning bank borrowing above, the Ginnie Mae Fund presently does not intend
to put at risk more than 5% of its assets during the coming year. With respect
to fundamental investment policy (ii) above, the Short-Intermediate U.S.
Government Income Fund does not intend to make loans of its portfolio securities
during the coming year, and the Ginnie Mae Fund does not intend to put at risk
more than 5% of its assets during the coming year.

As a matter of nonfundamental policy, the Ginnie Mae Fund may invest up to 10%
of the current value of its net assets in repurchase agreements having
maturities of more than seven days, illiquid securities and fixed time deposits
that are subject to withdrawal penalties and that have maturities of more than
seven days.

PROSPECTUS A-8
<PAGE> 147

As a matter of nonfundamental policy, the Short-Intermediate U.S. Government
Income 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-9 PROSPECTUS
<PAGE> 148

THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE> 149

SPONSOR, DISTRIBUTOR AND ADMINISTRATOR

Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201

INVESTMENT ADVISER, 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 Funds, 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:
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
- are NOT FDIC insured
- are NOT guaranteed by Wells Fargo Bank
- are NOT deposits or obligations of the Bank LOGO
- involve investment risk, including possible loss
of principal
</TABLE>

LOGO SC 1020 (8/95)
Printed on Recycled Paper
<PAGE> 150

LOGO
P.O. Box 7066
San Francisco, CA 94120-7066

STAGECOACH FUNDS:
- --------------------------------------------------------------------------------

LOGO SC 1020 (8/95)
Printed on Recycled Paper
<PAGE> 151

STAGECOACH FUNDS, INC.

SUPPLEMENT DATED JANUARY 2, 1996
TO THE CURRENT PROSPECTUS, AS PREVIOUSLY SUPPLEMENTED, AND
STATEMENT OF ADDITIONAL INFORMATION OF EACH FUND OF
STAGECOACH FUNDS, INC.

As of January 1, 1996, Wells Fargo Bank, N.A. provides investment advisory
services for approximately $33 billion of assets.

Each Fund's current Prospectus, as supplemented, and Statement of
Additional Information are hereby amended accordingly.
<PAGE> 152

LOGO

------------------------------

PROSPECTUS

------------------------------

CALIFORNIA TAX-FREE BOND FUND

CALIFORNIA TAX-FREE INCOME FUND

May 1, 1995
As Supplemented on May 31, 1995 and August 24, 1995
<PAGE> 153

STAGECOACH FUNDS(R)

CALIFORNIA TAX-FREE BOND FUND
CALIFORNIA TAX-FREE INCOME FUND

Stagecoach Funds, Inc. (the "Company") is a professionally managed, open-end
series investment company. This Prospectus contains information about two of the
funds in the Stagecoach Family of Funds - the CALIFORNIA TAX-FREE BOND FUND and
the CALIFORNIA TAX-FREE INCOME FUND (each a "Fund" and, collectively, the
"Funds").

The CALIFORNIA TAX-FREE INCOME FUND seeks to provide investors with a high
level of income exempt from federal income taxes and California personal income
taxes, while preserving capital.

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 a Fund's goals match your own. Statements of Additional
Information ("SAIs"), dated May 1, 1995, for the Funds have been filed with the
Securities and Exchange Commission ("SEC") and are incorporated by reference.
The SAI for each Fund 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.

SHARES OF THE FUNDS ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED,
ENDORSED OR GUARANTEED BY, WELLS FARGO BANK, N.A. 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 FUNDS INVOLVES CERTAIN RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL.

PROSPECTUS DATED MAY 1, 1995
AS SUPPLEMENTED ON MAY 31, 1995 AND AUGUST 24, 1995

PROSPECTUS
<PAGE> 154

Two classes of the California Tax-Free Bond Fund (each a "Class") are
described in this Prospectus - Class A Shares and Class B Shares. The California
Tax-Free Income Fund offers only one class of shares. Under ordinary market
conditions, substantially all of the Funds' assets will consist of securities
the interest on which is exempt from federal income taxes and California
personal income taxes.

The Funds, nondiversified portfolios of the Company, are advised by Wells
Fargo Bank, N.A. ("Wells Fargo Bank"), which also serves as the Funds' 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 Funds' sponsor and administrator and
serves as the distributor of the Funds' shares.

PROSPECTUS
<PAGE> 155

TABLE OF CONTENTS
-------

PROSPECTUS SUMMARY 1

SUMMARY OF FUND EXPENSES 4

FINANCIAL HIGHLIGHTS 8

HOW THE FUNDS WORK 10

THE FUNDS AND MANAGEMENT 13

INVESTING IN THE FUNDS 15

DIVIDENDS 25

HOW TO REDEEM SHARES 25

ADDITIONAL SHAREHOLDER SERVICES 30

MANAGEMENT AND SERVICING FEES 33

TAXES 37

PROSPECTUS APPENDIX - ADDITIONAL INVESTMENT POLICIES A-1

PROSPECTUS
<PAGE> 156

PROSPECTUS SUMMARY

The Funds provide you with a convenient way to invest in a portfolio of
securities selected by professional management. The following provides you with
summary information about each of the Funds. For more information, please refer
specifically to the identified Prospectus sections and generally to the
Prospectus and SAI for each Fund.

Q. WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

A. The CALIFORNIA TAX-FREE BOND FUND seeks to provide investors with a high
level of income exempt from federal income taxes and California personal
income taxes, while preserving capital, by investing in medium- to
long-term, investment-grade municipal securities.

The CALIFORNIA TAX-FREE INCOME FUND seeks to provide investors with a high
level of income exempt from federal income taxes and California personal
income taxes, while preserving capital.

Under normal market conditions, substantially all of the Funds' assets will
be invested in California municipal obligations that are exempt from federal
income taxes and California personal income taxes. Certain risks may arise
from the Funds' concentration in investments in California municipal
obligations. As with all mutual funds, there can be no assurance that the
Funds will achieve their investment objectives. See "How the Funds Work" and
"Prospectus Appendix - Additional Investment Policies."

Q. WHO MANAGES MY INVESTMENTS?

A. Wells Fargo Bank, as the Funds' investment adviser, manages your
investments. Wells Fargo Bank also provides the Funds with transfer agency,
dividend disbursing agency and custodial services. In addition, Wells Fargo
Bank is a Shareholder Servicing Agent and a Selling Agent. See "The Funds
and Management" and "Management and Servicing Fees."

Q. HOW DO I INVEST?

A. You may invest by purchasing shares of the Funds at their public offering
price, which is the net asset value per share plus any applicable sales
charge. There is a maximum front-end sales charge of 4.50% for purchasing
Class A Shares of the California Tax-Free Bond Fund and a maximum front-end
sales charge of 3.00% for purchasing shares of the California Tax-Free
Income Fund. Class B Shares of the California Tax-Free Bond Fund 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 other cases the front-end sales charge may be reduced. You may
open an account by investing at least $1,000 in the California Tax-Free Bond
Fund

1 PROSPECTUS
<PAGE> 157

or California Tax-Free Income Fund and you may add to your account by making
additional investments of at least $100, although certain exceptions to
these minimums may be available. Shares of a Fund may be purchased by wire,
by mail or by an automatic investment feature called the AutoSaver Plan on
any day the Fund is open. Shares of the Funds may not be suitable
investments for tax-exempt institutions or tax-exempt retirement plans,
since such investors would not benefit from the exempt status of the Funds'
dividends. See "Investing in the Funds." For more details, contact Stephens
(the Funds' 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 of the California Tax-Free Bond Fund
are declared daily and automatically reinvested monthly in additional
shares of the same Class of such Fund at net asset value. You may also
elect to receive dividends in cash or to reinvest dividends from the
California Tax-Free Bond Fund in shares of certain other funds in the
Stagecoach Family of Funds. Capital gains, if any, will be distributed at
least annually in the same manner as dividends. The net investment income
available for distribution by the California Tax-Free Bond Fund to holders
of Class B Shares will be reduced by the amount of the higher Rule 12b-1
fee payable on behalf of those shares. Class B Shares of the California
Tax-Free Bond Fund automatically convert into Class A Shares of the same
Fund after six years. See "Dividends" and "Additional Shareholder
Services."

Dividends from net investment income of the California Tax-Free Income
Fund are declared daily and automatically reinvested monthly in additional
shares of the Fund at net asset value. You may also elect to receive
dividends in cash. Capital gains, if any, will be distributed annually in
the same manner as dividends. See "Dividends" and "Additional Shareholder
Services."

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 respective
Fund is open. Except for any contingent deferred sales charge which may be
applicable upon redemption of Class B Shares of the California Tax-Free
Bond Fund, the Funds make no charge for redeeming their shares. 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 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 any of the Funds is not insured against loss of principal.
When the value of the securities that the Funds own declines, so does the
value of your Fund's

PROSPECTUS 2
<PAGE> 158

shares. The portfolio debt instruments of the Funds are subject to interest
rate risk and credit risk. Interest rate risk is the risk that increases in
market interest rates may adversely affect the value of the municipal
securities in which the Funds invest and hence the value of your investment
in the Funds; the value of such securities generally changes inversely to
changes in market interest rates. Credit risk is the risk that the issuer of
a debt instrument is unable, due to financial constraints, to make timely
payments on its outstanding obligations. In addition, the Funds may invest a
portion of their assets in municipal securities that are considered to have
speculative characteristics.

Since the Funds will invest primarily in securities issued by California,
its agencies and municipalities, events in California are more likely to
affect the Funds' investments. Also, the Funds are nondiversified, which
means that their assets may be invested among fewer issuers and therefore
the value of their assets may be subject to greater impact by events
affecting one of their investments. You should be prepared to accept some
risk with the money you invest in the Funds. As with all mutual funds, there
can be no assurance that the Funds will achieve their investment objectives.

Q. WHAT ARE DERIVATIVES AND DO THE FUNDS 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 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 DO THE FUNDS TAKE TO CONTROL DERIVATIVES-RELATED RISKS?

A. Wells Fargo Bank, as investment adviser, uses a variety of internal risk
management procedures to ensure that derivatives use is consistent with a
Fund's investment objective, does not expose the Fund to undue risks and is
closely monitored. These procedures include providing periodic reports to
the Board of Directors concerning the use of derivatives. Derivatives use by
each Fund also is subject to broadly applicable investment policies. For
example, the Funds may not invest more than a specified percentage of their
assets in "illiquid securities," including types of derivatives without
active secondary markets. Nor may a Fund use certain derivatives without
establishing adequate "cover" in compliance with SEC rules limiting the use
of leverage. For more information on all of the Funds' investment
activities, see "Prospectus Appendix -- Additional Investment Policies."

3 PROSPECTUS
<PAGE> 159

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 Funds. As shown below, you are not charged
exchange fees. You should consider this expense information together with the
important information in this Prospectus, including the Funds' investment
objectives and policies.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<CAPTION>
CALIFORNIA
TAX-FREE CALIFORNIA
BOND FUND TAX-FREE INCOME
(CLASS A SHARES) FUND
----------------- -----------------
<S> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)................... 4.50% 3.00%
Sales Charge Imposed
on Reinvested Dividends.............. None None
Maximum Sales Charge Imposed
on Redemptions*...................... None None
Exchange Fees............................ None None
</TABLE>

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
CALIFORNIA
TAX-FREE
BOND FUND CALIFORNIA
(CLASS A TAX-FREE INCOME
SHARES) FUND
------------- --------------
<S> <C> <C> <C> <C>
Management Fee.................................. 0.50% 0.50%
Rule 12b-1 Fee(1)............................... 0.05% 0.05%
Total Other Expenses(1):
Shareholder Servicing Fee(1)**.............. 0.20% 0.20%
Administrative Fee.......................... 0.03% 0.03%
Other Expenses(1)........................... 0.07% 0.07%
----- -----
0.30% 0.30%
----- -----
TOTAL FUND OPERATING
EXPENSES(1)................................. 0.85% 0.85%
</TABLE>

- -------------------------------

<TABLE>
<S> <C>
(1) After any waivers or reimbursements.
* The Company reserves the right to impose a charge for wiring
redemption proceeds.
** The Funds understand 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 Funds, such as requiring a higher minimum
initial investment or payment of a separate fee for additional
services.
</TABLE>

PROSPECTUS 4
<PAGE> 160

<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 the specified Fund,
assuming (A) a 5% annual return and (B)
redemption at the end of each time
period indicated:

California Tax-Free Bond Fund (Class A
Shares)................................. $ 53 $71 $90 $145
California Tax-Free Income Fund........... $ 38 $56 $76 $132
</TABLE>

SHAREHOLDER TRANSACTION EXPENSES FOR CLASS B SHARES

<TABLE>
<CAPTION>
CALIFORNIA
TAX-FREE
BOND FUND
-----------------
<S> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)............................... None
Sales Charge Imposed
on Reinvested Dividends.......................... None
Maximum Sales Charge Imposed
on Redemptions*.................................. 3.00%
Exchange Fees........................................ None
</TABLE>

ANNUAL FUND OPERATING EXPENSES FOR CLASS B SHARES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
CALIFORNIA
TAX-FREE
BOND FUND
-----------------
<S> <C> <C>
>Management Fee...................................... 0.50%
Rule 12b-1 Fee....................................... 0.70%
Total Other Expenses(1):
Shareholder Servicing Fee(1)**................... 0.20%
Administrative Fee............................... 0.03%
Other Expenses(1)................................ 0.07%
-----
0.30%
-----
TOTAL FUND OPERATING
EXPENSES(1)...................................... 1.50%
</TABLE>

- -------------------------------

<TABLE>
<S> <C>
(1) After any waivers or reimbursements.
* The Company reserves the right to impose a charge for wiring
redemption proceeds.
** 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.
</TABLE>

5 PROSPECTUS
<PAGE> 161

<TABLE>
<CAPTION>
EXAMPLE OF EXPENSES - CLASS B 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 B Shares of the
specified Fund, assuming (A) a 5% annual
return and (B) redemption at the end of each
time period indicated:
California Tax-Free Bond Fund............. $ 45 $57 $ 100 $105

You would pay the following expenses on a
$1,000 investment in Class B Shares of the
specified Fund, assuming a 5% annual return
and no redemption:
California Tax-Free Bond Fund............. $ 15 $47 $ 100 $105
</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 only on purchases of the
Class A Shares of the California Tax-Free Bond Fund and the shares of the
California Tax-Free Income Fund. In certain instances, you may qualify for a
reduction or waiver of the sales charge for these two Funds. You may also be
subject to a contingent deferred sales charge on Class B Shares of the
California Tax-Free Bond Fund if you redeem such shares within a specified
period. See "Investing in the Funds - Sales Charges." However, the Company
reserves the right to impose a charge for wiring redemption proceeds.

ANNUAL FUND OPERATING EXPENSES for the California Tax-Free Income Fund and the
Class A Shares of the California Tax-Free Bond Fund are based on amounts
incurred during the most recent fiscal year, restated to include voluntary fee
waivers and expense reimbursements that are expected to continue during the
current fiscal year. Since Class B Shares were not offered during 1994, the
figures with respect to Class B Shares contained under "Total Other Expenses"
and "Annual Fund Operating Expenses," are based on anticipated fees and
expenses, including anticipated voluntary fee waivers and reimbursements. Wells
Fargo Bank and Stephens each has agreed to waive or reimburse all or a portion
of its respective fees if certain expenses of the Funds 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
the respective fees charged to, or expenses paid by, a Fund. Any waivers or
reimbursements would reduce a Fund's total expenses. There can be no assurance
that waivers or reimbursements will continue. Absent waivers and reimbursements,
the percentages shown above under "Total Other Expenses," and "Total Fund
Operating Expenses" would be 0.51% and 1.06%, respectively, for the Class A
Shares of the California Tax-Free Bond Fund and 0.66% and 1.21%, respectively,
for the California Tax-Free Income Fund. Absent waivers and reimbursements, the
percentages shown above under "Total Other Expenses" and "Total Fund Operating
Expenses" would be 0.56% and 1.76%, respectively, for the Class B Shares of the
California Tax-Free Bond Fund. Long-term shareholders in the Funds could pay
more in sales charges than the maximum front-end sales charge applicable to
mutual funds sold by members of the National Association of Securities

PROSPECTUS 6
<PAGE> 162

Dealers ("NASD"). For more complete descriptions of the various costs and
expenses you can expect to incur as an investor in each Fund, please see the
Prospectus section captioned "Management and Servicing Fees."

EXAMPLE OF EXPENSES is a hypothetical example which illustrates the expenses
associated with a $1,000 investment over stated periods, based on the expenses
in the respective tables 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 a 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.

7 PROSPECTUS
<PAGE> 163

FINANCIAL HIGHLIGHTS

The following information has been derived from the Financial Highlights in
the Funds' 1994 annual financial statements. The financial statements are
included in the SAI for each Fund and have been audited by KPMG Peat Marwick
LLP, independent auditors, whose report dated February 17, 1995 also is included
in the SAIs. This information should be read in conjunction with the Funds' 1994
annual financial statements and notes thereto. The SAI for each Fund has been
incorporated by reference into this Prospectus. Financial information is not
provided in connection with Class B Shares because Class B Shares were not
offered during the periods presented.

CALIFORNIA TAX-FREE BOND FUND

FOR A CLASS A SHARE OUTSTANDING AS SHOWN

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period...... $11.20 $10.41 $10.00
Income from investment operations:
Net investment income..................... 0.56 0.56 0.53
Net realized and unrealized capital
gains/(losses) on investments........... (1.36) 0.84 0.41
Total from investment operations.......... (0.80) 1.40 0.94
Less distributions:
Dividends from net investment income...... (0.56) (0.56) (0.53)
Distributions from net realized capital
gains................................... 0.00 (0.05) 0.00
Total distributions....................... (0.56) (0.61) (0.53)
Net asset value, end of period............ $ 9.84 $11.20 $10.41

Total return (not annualized)+............ (7.27)% 13.82% 10.35%
Ratios/supplemental data:
Net assets, end of period (000)........... $305,847 $532,848 $242,409
Number of shares outstanding, end of
period (000)............................ 31,078 47,580 23,298
Ratios to average net assets (annualized):
Ratio of expenses to average net
assets(1)............................... 0.65% 0.64% 0.19%
Ratio of net investment income to average
net assets(2)........................... 5.35% 5.05% 5.67%
Portfolio turnover........................ 3% 7% 18%

- -------------------

(1) Ratio of expenses to average net
assets prior to waived fees and
reimbursed expenses................... 1.06% 1.01% 1.07%
(2) Ratio of net investment income to
average net assets prior to waived
fees and reimbursed expenses.......... 4.94% 4.68% 4.79%
+ Total returns do not include any sales charges.
</TABLE>

PROSPECTUS 8
<PAGE> 164

CALIFORNIA TAX-FREE INCOME FUND

FOR A SHARE OUTSTANDING AS SHOWN

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED*
DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992
---------- ---------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period... $10.36 $10.05 $10.00
Income from investment operations:
Net investment income.................. 0.40 0.39 0.02
Net realized and unrealized capital
gains (losses) on
investments.......................... (0.52) 0.31 0.05

Total from investment operations....... (0.12) 0.70 0.07
Less distributions:
Dividends from net investment income... (0.40) (0.39) (0.02)
Distributions from net realized capital
gains................................ 0.00 0.00 0.00

Total distributions.................... (0.40) (0.39) (0.02)
Net asset value, end of period......... $ 9.84 $10.36 $10.05

Total return (not annualized)+......... (1.10)% 7.10% 0.84%
Ratios/supplemental data:
Net assets, end of period (000)........ $48,998 $52,873 $7,821
Number of shares outstanding, end of
period (000)......................... 4,979 5,105 778
Ratios to average net assets
(annualized):
Ratio of expenses to average net
assets(1)............................ 0.16% 0.34% 0.00%
Ratio of net investment income to
average net assets(2)................ 4.03% 3.74% 3.56%
Portfolio turnover..................... 33% 11% 0%

- -------------------
(1) Ratio of expenses to average net
assets prior to waived fees and
reimbursed expenses................ 1.21% 1.23% 1.55%
(2) Ratio of net investment income to
average net assets prior to waived
fees and reimbursed expenses....... 2.98% 2.85% 2.01%
* The Fund commenced operations on
November 18, 1992.
+ Total returns do not include any
sales charges.
</TABLE>

9 PROSPECTUS
<PAGE> 165

HOW THE FUNDS WORK

INVESTMENT OBJECTIVES AND POLICIES

The CALIFORNIA TAX-FREE BOND FUND seeks to provide investors with a high level
of income exempt from federal income taxes and California personal income taxes,
while preserving capital, by investing in medium- to long-term, investment-grade
municipal securities. Medium- and long-term securities include those securities
issued with maturities of 2 to 10 years and 10 or more years, respectively.
Investment grade is a term used to describe securities suitable for purchase by
prudent investors. Standard & Poor's Corporation ("S&P"), a nationally
recognized statistical rating organization ("NRSRO"), designates its top four
bond ratings as investment grade: AAA, AA, A and BBB. Moody's Investors Service,
Inc. ("Moody's") is also an NRSRO and designates its top four bond ratings as
investment grade: Aaa, Aa, A and Baa. The Fund also may invest in unrated
municipal securities that are determined by Wells Fargo Bank, as investment
adviser, to be of comparable quality to municipal securities that are rated
investment grade. A description of the relevant ratings is contained in the
Appendix to the SAI for the Fund.

The CALIFORNIA TAX-FREE INCOME FUND seeks to provide investors with a high
level of income exempt from federal income taxes and California personal income
taxes, while preserving capital. It pursues this objective by investing
primarily in short- and intermediate-term, investment-grade municipal
securities. Short-term securities are securities issued with maturities of less
than 2 years. Intermediate-term securities are securities issued with maturities
of 2 to 10 years. The Fund also may invest in unrated municipal securities that
are determined by Wells Fargo Bank, as investment adviser, to be of comparable
quality to municipal securities that are rated investment grade. A description
of the relevant ratings is contained in the Appendix to the SAI for the Fund.

The investment objective for each Fund is fundamental and cannot be changed
without shareholder approval. As with all mutual funds, there can be no
assurance that the Funds, which are nondiversified, will achieve their
investment objectives. Wells Fargo Bank, as investment adviser to the Funds,
will pursue the Funds' objectives by investing (under normal market conditions)
substantially all of the Funds' assets in the following types of municipal
obligations that pay interest which is exempt from both federal income tax and
California personal income tax: bonds, notes and commercial paper issued by or
on behalf of the State of California, its cities, municipalities, political
subdivisions and other public authorities. These municipal obligations and the
taxable investments described below may bear interest at rates that are not
fixed ("floating- and variable-rate instruments").

Each Fund may temporarily invest some of its assets in cash reserves or
certain high-quality, taxable money market instruments, or may engage in other
investment activities. Each Fund may elect to invest temporarily up to 20% of
its net assets in certain

PROSPECTUS 10
<PAGE> 166

permitted taxable investments, which include cash reserves, U.S. Government
obligations, obligations of domestic banks, commercial paper, taxable municipal
obligations, and repurchase agreements. The Funds may make loans of portfolio
securities. Such temporary investments would most likely be made when there is
an unexpected or abnormal level of investor purchases or redemptions of shares
of a Fund or because of unusual market conditions. The income from these
temporary investments and investment activities may be subject to federal income
taxes and California personal income taxes. However, as stated above, Wells
Fargo Bank seeks to invest substantially all of the Funds' assets in securities
exempt from such taxes. Additional description of tax-free municipal
obligations, taxable money market instruments, and other investment activities
is contained in the "Prospectus Appendix - Additional Investment Policies" and
in the SAI for each Fund.

As a matter of fundamental policy, at least 80% of each Fund's net assets are
invested (under normal market conditions) in municipal obligations that pay
interest which is exempt from federal income taxes and not subject to the
federal alternative minimum tax (or in other open-end tax-free funds with a
similar fundamental policy). In addition, under normal market conditions, at
least 65% of the California Tax-Free Bond Fund's total assets are invested in
municipal bonds, as opposed to municipal notes or commercial paper, and at least
65% of the California Tax-Free Income Fund's total assets are invested in short-
and intermediate-term municipal securities. As a matter of general operating
policy, the California Tax-Free Income Fund intends that, under normal market
conditions, the average expected duration of its portfolio securities will be
from one to five years.

At least 65% of each Fund's total assets are invested (under normal market
conditions) in municipal obligations that pay interest which is exempt from
California personal income taxes. However, as a matter of general operating
policy, each Fund seeks to have substantially all of its assets invested in such
municipal obligations. The Funds' investment adviser may rely either on an
opinion of counsel to the issuer of the municipal obligations or on Internal
Revenue Service ("IRS") rulings regarding the tax treatment of these
obligations. In addition, each Fund may invest 25% or more of its assets in
California municipal obligations that are related in such a way that an
economic, business or political development or change affecting one such
obligation would also affect the other obligations; for example, a Fund may own
different municipal obligations which pay interest based on the revenues of
similar types of projects.

LIMITING INVESTMENT RISKS

As noted above and discussed further in the section captioned "Prospectus
Appendix - Additional Investment Policies," some of the securities purchased by
the Funds may be rated in the lowest investment grade category (i.e., rated BBB
by S&P or Baa by Moody's). These securities are regarded by S&P as having an
adequate capacity to pay interest and repay principal, but changes in economic
conditions or other

11 PROSPECTUS
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circumstances are more likely to lead to a weakened capacity to make such
repayments. Moody's considers such securities as having speculative
characteristics.

Since the Funds will invest primarily in securities issued by California and
its agencies and municipalities, events in California will be more likely to
affect the Funds' investments. While the Funds will seek to reduce risk by
investing their assets in securities of various issuers, the Funds will be
considered to be nondiversified for purposes of the 1940 Act. However, the Funds
will comply with the Internal Revenue Code of 1986 ("Code") diversification
requirements, as described in the "Prospectus Appendix - Additional Investment
Policies" section below.

California is experiencing recurring budget deficits caused by lower than
anticipated tax-revenues and increased expenditures for certain programs. These
budget deficits have depleted the state's available cash resources, and the
state has recently had to use a series of external borrowings to meet its cash
needs. In addition, since 1992 some of the credit rating agencies have assigned
their third highest rating to certain of the state's debt obligations. On July
15, 1994, three of the ratings agencies rating California's long-term debt
lowered their ratings of the state's general obligation bonds. Moody's Investors
Service lowered its rating from "Aa" to "A1," Standard & Poor's Ratings Group
lowered its rating from "A+" to "A" and termed its outlook as "stable," and
Fitch Investors Service lowered its rating from "AA" to "A." The Funds may
invest in securities rated in the top four rating categories, i.e., investment
grade securities. Any further rating downgrade of the state's debt obligations
may impact the availability of securities that meet the Funds' investment
policies and restrictions. The Funds' investment adviser will continue to
monitor and evaluate the investments of each Fund in light of the events in
California and each Funds' investment objective and investment policies. The
rating agencies will also continue to monitor events in the state and the state
and local governments' responses to budget shortfalls. See "Special
Considerations Affecting California Municipal Obligations" in the SAI for each
Fund.

PERFORMANCE

The performance of each Class of shares of the California Tax-Free Bond Fund
and the shares of the California Tax-Free Income Fund may be advertised in terms
of yield, tax-equivalent yield and average annual total return. Performance
figures are based on historical results and are not intended to indicate future
performance.

The yield of a Class of shares of the California Tax-Free Bond 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.
Similarly, the yield of the shares of the California Tax-Free Income Fund is
calculated by dividing the net investment income per share earned during a
specified period (usually 30 days) by its public offering price per share (which

PROSPECTUS 12
<PAGE> 168

includes the maximum sales charge) on the last day of such period and
annualizing the result. The tax-equivalent yield of the shares of a Class of the
California Tax-Free Bond Fund and the shares of the California Tax-Free Income
Fund is similarly calculated but assumes that a stated income tax rate has been
applied to determine the tax-equivalent figure. In addition to presenting these
standardized yields, at times, the Funds also may present nonstandardized total
returns, yields, and distribution rates for purposes of sales literature. For
example, these performance figures may be calculated on the basis of an
investment in the Funds at the net asset value per share or at the net asset
value per share plus, in the case of Class A Shares, at net asset value or at a
reduced sales charge (see "Investing in the Funds - How To Buy Shares"), rather
than the public offering price per share. In this case, the figures might not
reflect the effect of the sales charge that you may have paid.

Standardized and nonstandardized total return figures for the Funds also may
be presented. Average annual total return is based on the overall dollar or
percentage change in value of a hypothetical investment in the Funds and assumes
that all dividends and capital gain distributions attributable to a Class or
Fund are reinvested in that Class or Fund. Standardized average annual total
return for Class A Shares is calculated assuming you have paid the maximum sales
charge; and for Class B Shares is calculated assuming on a one-year investment
you have paid the maximum contingent deferred sales charge, on your hypothetical
investment. Nonstandardized average annual or cumulative total returns may be
calculated assuming no sales charge or a reduced sales charge was paid on such
investment.

Because of differences in the fees and/or expenses borne by Class B Shares of
the California Tax-Free Bond Fund, the performance figures are on such shares
can be expected, at any given time, to be lower than the performance figures are
on such Funds' Class A Shares. Performance figures are computed separately for
Class A Shares and Class B Shares.

Additional information about the performance of each Fund is contained in the
Annual Report for each Fund. The Annual Reports may be obtained free of charge
by calling the Company at 800-222-8222.

THE FUNDS AND MANAGEMENT

13 PROSPECTUS
<PAGE> 169

their contractual arrangements with various service providers. Although the
Company is not required to hold annual shareholder meetings, special meetings
may be required for purposes such as electing or removing Directors, approving
advisory contracts and distribution plans, and changing the Funds' investment
objectives or fundamental investment policies. Pursuant to a plan approved by
the Board of Directors, the previously existing single class of shares of the
California Tax-Free Bond Fund has been redesignated the "Class A Shares" and a
new Class of Shares, the "Class B Shares", has been created. 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 Funds, you are
entitled to 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 SAI for each Fund.

Wells Fargo Bank is the Funds' investment adviser, transfer and dividend
disbursing agent and custodian. In addition, Wells Fargo Bank is a Shareholder
Servicing Agent of the Funds, and a Selling Agent under a Selling Agreement with
the Funds' distributor. Wells Fargo Bank, one of the ten largest banks in the
United States, was founded in 1852 and is the oldest bank in the western United
States. As of June 30, 1995, various divisions and affiliates of Wells Fargo
Bank provided investment advisory services for approximately $211 billion of
assets of individuals, trusts, estates and institutions. As of June 30, 1995,
Wells Fargo Bank provided investment advisory services for approximately $28
billion of assets of individuals, trusts, estates and institutions. Wells Fargo
Bank also serves as the investment adviser to the 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.

Mr. David Klug assumed sole responsibility for the day-to-day management of
the portfolio of the California Tax-Free Bond Fund on June 1, 1995. Mr. Klug had
been a co-manager of the Fund since January 1992, and has managed municipal bond
portfolios for Wells Fargo Bank for over nine years. Prior to joining Wells
Fargo Bank, he managed the municipal bond portfolio for a major property and
casualty insurance company. Mr. Klug holds an M.B.A. from the University of
Chicago, and is a member of the National Federation of Municipal Analysts and
its California chapter.

Ms. Laura Milner assumed sole responsibility for the day-to-day management of
the portfolio of the California Tax-Free Income Fund on June 1, 1995. Ms. Milner
had been a co-manager of the Fund since November 1992. Her background includes
over seven years experience specializing in short- and long-term municipal
securities with Salomon Brothers. She is a member of the National Federation of
Municipal Analysts and its California chapter.

PROSPECTUS 14
<PAGE> 170

Stephens is the Funds' sponsor and administrator, and distributes the Funds'
shares. Stephens is a full service broker/dealer and investment advisory firm
located at 111 Center Street, Little Rock, Arkansas 72201. 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 FUNDS

OPENING AN ACCOUNT

You can buy shares in any of the Funds 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 1-800-222-8222.

Call the number on your confirmation statement to obtain information about
what is required to change registration.

SHARE VALUE

The value of a share of each Fund is its "net asset value," or NAV. The NAV of
each share of the California Tax-Free Income Fund is determined by dividing the
value of the Fund's total assets less the value of Fund liabilities by the
number of outstanding shares of the Fund. The NAV of each share of a Class of
the California Tax-Free Bond Fund is the value of total net assets attributable
to each Class divided by the number of outstanding shares of that Class. The
value of 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

15 PROSPECTUS
<PAGE> 171

the California Tax-Free Income Fund and the NAV of a share of each Class of the
California Tax-Free Bond Fund is expected to fluctuate daily.

Shares of a Fund may be purchased on any day the Fund is open. The Funds are
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 typically is closed on the weekday immediately before or
after such Holiday. Wells Fargo Bank calculates the NAV of the California
Tax-Free Bond Fund and California Tax-Free Income Fund 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 other assets of the Funds are valued at
current market prices or, if such prices are not readily available, at fair
value as determined in good faith by the Company's Board of Directors. Prices
used for such valuations may be obtained from independent pricing services.

HOW TO BUY SHARES

You may buy shares of a Fund on any day the Fund is open by any of the methods
described below. Shares of the Funds are offered continuously at the applicable
offering price (the NAV plus any 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 of the Funds purchased through a Selling Agent (as defined
below) will not be due from the Selling Agent until the settlement date. The
settlement date is normally 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 Funds promptly. Payment must accompany orders placed directly
through the Transfer Agent.

Payments for shares of a Fund will be invested in full and fractional shares
of such Fund at the applicable offering price. If shares are purchased by a
check which doesn't clear, the Company reserves the right to cancel the purchase
and hold the investor responsible for any losses or fees incurred. In addition,
the Funds 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 amount in the Funds is generally $1,000. In
addition, the minimum initial or subsequent purchase amount requirements may be
waived or lowered for investments effected on a group basis by certain entities
and their employees, such as pursuant to a payroll deduction or other
accumulation plan. If you have questions regarding purchases of shares, please
contact the Company at

PROSPECTUS 16
<PAGE> 172

800-222-8222 or contact a Shareholder Servicing Agent or Selling Agent (defined
below).

Shares of the Funds may not be suitable investments for tax-exempt
institutions or tax-sheltered retirement plans, since such investors would not
benefit from the exempt status of the Funds' dividends. See "Federal Income
Taxes - Special Tax Considerations" in each Fund's SAI.

SALES CHARGES

Set forth below are Front-end Sales Charge Schedules listing the front-end
sales charges applicable to purchases of Class A Shares of the California
Tax-Free Bond Fund and the shares of the California Tax-Free Income 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 the California Tax-Free Bond 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 2.625
$500,000 up to
$999,999.............. 2.00 2.04 1.75
$1,000,000 and over..... 1.00 1.01 0.85
</TABLE>

The following is the Front-end Sales Charge Schedule for purchasing shares of
the California Tax-Free Income 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 $100,000...... 3.00% 3.09% 2.65%
$100,000 up to
$249,999.............. 2.25 2.30 2.00
$250,000 up to
$599,999.............. 1.50 1.52 1.30
$600,000 and over....... 0.60 0.60 0.50
</TABLE>

17 PROSPECTUS
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Class B Shares of the California Tax-Free Bond Fund are not subject to
front-end sales charges. Class B Shares of the California Tax-Free Bond Fund
which are redeemed within one, two, three and four years from the receipt of a
purchase order will be subject to a contingent deferred sales charge equal to
3.00%, 2.00%, 1.00% or 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 Funds - Contingent Deferred Sales Charges - Class B Shares."

If Class A Shares of the California Tax-Free Bond Fund or shares of the
California Tax-Free Income Fund 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 Funds 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 CHARGES

Volume Discounts

The Volume Discounts described in the Front-end Sales Charge Schedules 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"). Since Class B Shares are not subject
to a front-end sales charge you may not consider the amount of Class B Shares
you hold in determining Volume Discount.

Right of Accumulation

The Right of Accumulation allows you to combine the amount you invest in Class
A Shares of the California Tax-Free Bond Fund and shares of the California
Tax-Free Income 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 appropriate 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

PROSPECTUS 18
<PAGE> 174

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 the Class A Shares of the California Tax-Free Bond Fund, the front-end sales
charge on the additional $20,000 investment would be 3.50% of the offering
price. If instead you invest the $20,000 in the California Tax-Free Income Fund,
the front-end sales charge on the additional amount would be 2.25% of the
offering price. To obtain such 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.

Letter of Intent

A Letter of Intent allows you to purchase Class A Shares of the California
Tax-Free Bond Fund and shares of the California Tax-Free Income 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 the shares (other
than Class B Shares) in any of the Load Funds you already own. Each investment
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 sales charge. Dividend 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 Fund shares in Class A Shares
of a Fund, or in certain of the Company's funds registered in your state of
residence at NAV, without a front-end sales charge, within 120 days after your
redemption. However, if the fund you are purchasing imposes a front-end sales
charge that is higher than the one you have paid in connection with the shares
you have redeemed, you pay the difference. 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.

19 PROSPECTUS
<PAGE> 175

Reductions for Families or Fiduciaries

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 shares of another
open-end investment company or (ii) you are investing proceeds from a redemption
of units of a unit investment trust sold through Wells Fargo Securities Inc. on
which you paid a front-end sales charge; (iii) such redemption occurred within
thirty (30) days prior to the date of the purchase order; and (iv) such other
company or trust is distributed and advised by entities other than Stephens and
Wells Fargo Bank, respectively, or their affiliates. 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 sales charges and provide satisfactory evidence
thereof (e.g., a confirmation of the 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 shares (other than Class B Shares) purchased by all members of the
qualified group. For purposes of this paragraph, a qualified group consists of a
"company," as defined in the 1940 Act, which has been in existence for more than
six months and which has a primary purpose other than acquiring Fund shares at a
reduced front-end 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% 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

PROSPECTUS 20
<PAGE> 176

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 California Tax-Free Bond Fund and shares of the
California Tax-Free Income Fund may be purchased at NAV, without 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 such Funds also may be purchased at NAV,
without 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 Funds also may be purchased at NAV, without a
front-end sales charge, by employee benefit and thrift plans for such persons
and to any investment advisory, trust or other fiduciary or retirement account
that is maintained, managed or advised by Wells Fargo Bank or its affiliates. In
addition, you may purchase shares of the Funds at NAV, without a sales charge,
with proceeds from a required minimum distribution from any 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 California Tax-Free Bond Fund are not subject to
front-end sales charges but may be subject to contingent deferred sales charges.
Class B Shares which are redeemed within one, two, three or four years of the
purchase of 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 NAV Amount.
Contingent deferred sales charges will not be imposed on amounts representing
increases in NAV above the NAV at the time of purchase. Contingent deferred
sales charges will not be assessed on Class B Shares purchased through
reinvestment of dividends or capital gains distributions. Class B Shares
automatically convert to Class A Shares of the same Fund six years after the end
of the month in which such Class B Shares were acquired.

21 PROSPECTUS
<PAGE> 177

Contingent deferred sales charges are waived on redemptions of Class B Shares
of a Fund (i) following the death or disability (as defined in the Code) of a
shareholder, (ii) to the extent that the redemption represents a minimum
required distribution from an individual retirement account or other retirement
plan to a shareholder who has reached age 70 1/2, (iii) effected pursuant to the
Company's right to liquidate a shareholder's account if the aggregate NAV 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.

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.

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.

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, if
applicable)
Account Name(s): name(s) in which to be registered
Account Number: (if investing into an existing account)

Generally, the minimum investment amount for shares of the California
Tax-Free Bond Fund and California Tax-Free Income Fund is $1,000.

Wells Fargo Bank, N.A.
Stagecoach Shareholder Services
P.O. Box 7066
San Francisco, California 94120-7066
Telefacsimile: 1-415-543-9538

PROSPECTUS 22
<PAGE> 178

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 an appropriate amount, payable
to "Stagecoach Funds (Name of Fund) (designate Class A or B, if applicable)"
to the address set forth in "Initial Purchases by Wire."

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 shares of a
Fund on your behalf on or about the fifth Business Day of each month. There are
no separate fees charged to you by a Fund for participating in the AutoSaver
Plan.

You may change your investment amount, suspend purchases or terminate your
election at any time by notifying the Transfer Agent at least five Business Days
prior to any scheduled transaction.

ADDITIONAL PURCHASES

You may make additional purchases of $100 or more by instructing the Funds'
Transfer Agent to debit a designated Approved Bank account, by wire by
instructing the wiring bank to transmit the specified amount as directed above
for initial purchases, or by mail with a check payable to "Stagecoach Funds
(Name of Fund) (designate Class A or B, if applicable)" to the address set forth
in "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

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If your order for shares of the Funds is placed by the close of the NYSE, the
purchase order generally will be 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 will be
executed on the next Business Day following the day your order is placed.
Because payment for shares of the Funds will not be due until settlement date,
the Selling Agent might benefit from temporary use of your payment.

The Selling Agent is responsible for the prompt transmission of your purchase
order to the Funds. A financial institution acting 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

The Shareholder Servicing Agent is responsible for the prompt transmission of
your purchase order to the Transfer Agent.

STATEMENTS AND REPORTS

The Funds or a Shareholder Servicing Agent on their behalf, will typically
send you a confirmation or statement of your account after every transaction
that affects your share balance or your Fund account registration. The Funds do
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 24
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DIVIDENDS

The Funds intend to declare daily substantially all of their net investment
income as a dividend payable to shareholders of record as of the close of
regular trading of the NYSE, which is currently 1:00 p.m. (Pacific time). You
will begin earning dividends on the Business Day following the date your
purchase order is effective and continue to earn dividends through the day you
redeem such shares. The net investment income of the California Tax-Free Bond
Fund 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 Shares and Class B Shares.

Dividends for a Saturday, Sunday or Holiday are declared payable to
shareholders of record as of the preceding Business Day. If you redeem shares
before the dividend payment date, any dividends credited to you are paid on the
following dividend payment date unless you have redeemed all of the shares in
your account, in which case you will receive your accrued dividends together
with your redemption proceeds. The Funds will distribute any capital gains at
least annually.

Dividends declared in a month generally are paid on the last Business Day of
each month. You have several options for receiving dividends and any capital
gains distributions. They are discussed under "Additional Shareholder
Services - Dividend and Distribution Options."

HOW TO REDEEM SHARES

You may redeem all or a portion of your shares in a Fund on any day the Fund
is open. Your shares will be 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 of shares in
a Fund may result in a gain or loss for federal and state income tax purposes.
The California Tax-Free Bond Fund ordinarily remits your 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. The California Tax-Free Income Fund ordinarily
remits your net redemption proceeds, without any charge by the Fund, 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

25 PROSPECTUS
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which (a) disposal by the Funds of securities owned by them is not reasonably
practicable or (b) it is not reasonably practicable for the Funds fairly to
determine the value of their net assets, or a period during which the SEC by
order permits deferral of redemptions for the protection of security holders of
the Funds. In addition, the Funds may hold payment on your redemption 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 Funds' current intention, the Funds may make payment of redemption
proceeds in securities if conditions warrant, subject to regulation by some
state securities commissions. In addition, the Funds reserve the right to impose
charges for wiring redemption proceeds.

Due to the high cost of maintaining Fund accounts with small balances, the
Funds reserve 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). You will be given 30 days' notice to
make an additional investment to increase your account balance to the applicable
minimum balance. For a discussion of applicable minimum balance requirements,
see "Investing in the Funds -- How to Buy Shares."

REDEMPTIONS BY TELEPHONE

REDEMPTIONS BY MAIL

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.

PROSPECTUS 26
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exist which 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 Funds - 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 a 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 a Fund by telephone on any day the Fund is
open, 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.

Upon request, net redemption proceeds of 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 for shares of the Funds is received by
the Transfer Agent by the close of the NYSE on a Business Day, your net
redemption

27 PROSPECTUS
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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. 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 proceeds of less than $5,000 will be mailed to your
address of record or, at your election, credited to an Approved Bank account
designated in your Account Application.

SYSTEMATIC WITHDRAWAL PLAN

The Company's Systematic Withdrawal Plan provides you with a convenient way to
have shares of a Fund redeemed from your account and the net redemption proceeds
distributed to you on a monthly basis. You may participate in this plan only if
you have a Fund account valued at $10,000 or more as of the date of your
election to participate, your dividend and capital gain distributions are being
reinvested automatically and you are not a participant 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 Funds
for participating in the Systematic Withdrawal Plan. However, you should not
participate in the Systematic Withdrawal Plan if you also are purchasing shares
of a Fund 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 for a Fund 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 will be 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

PROSPECTUS 28
<PAGE> 184

NYSE, or not received by the Transfer Agent prior to the close of business, your
order will be 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 a Selling Agent, and the Transfer
Agent has been informed of such arrangements, net proceeds of a redemption order
made by you through a Selling Agent will be 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 will be mailed to
your address of record or, if such address is no longer valid, the net
redemption proceeds will be 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

If your redemption order for shares of a Fund is transmitted by the
Shareholder Servicing Agent, on your behalf, to the Transfer Agent before the
close of the NYSE, the redemption order will be 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 will be 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.

Unless you have made other arrangements with your Shareholder Servicing Agent,
and the Transfer Agent has been informed of such arrangements, net proceeds of a
redemption order made by you through your Shareholder Servicing Agent will be
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 will be mailed to your address of record or, if such address
is no longer valid, the net redemption proceeds will be credited to your account
with your Shareholder Servicing Agent or to another account designated in your
agreement with your Shareholder Servicing Agent.

29 PROSPECTUS
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ADDITIONAL SHAREHOLDER SERVICES

The Company offers you a number of optional services. As noted above, you can
take advantage of the AutoSaver Plan, the Systematic Withdrawal Plan, and
Expedited Redemptions by Letter and Telephone. In addition, the Funds offer 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 dividend
and distribution options listed below. If you have questions about the dividend
and distribution options available to you, please call 800-222-8222.

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 which 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 Funds 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 of the California Tax-Free Bond
Fund 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 Money Market Mutual Fund and the California Tax-Free Money Market Mutual
Fund are collectively, the "Money Market Mutual Funds"). Dividends and
distributions paid on Class A Shares of the California Tax-Free Bond Fund may
also be invested in shares of a non-money market fund with a single class of
shares (a "single class fund"). Dividends and distributions paid on Class B
Shares of the California Tax-Free Bond Fund may not be invested in shares of a
single class fund. Dividends and distributions paid on shares of the California
Tax-Free Income Fund may be reinvested in Class A Shares of a multi-class fund,
shares of a single class fund or shares of the California Tax-Free Money Market
Mutual Fund.

PROSPECTUS 30
<PAGE> 186

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 Funds' 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
for you to buy shares in the other funds of the Stagecoach Family of Funds that
are registered in your state of residence in order to respond to changes in your
investment and savings goals or in market conditions. Class A and Class B Shares
of the California Tax-Free Bond 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 of the California Tax-Free Bond Fund may also be exchanged for
shares of a single class fund or for Retail Shares of another fund. Shares of
the California Tax-Free Income Fund may be exchanged for Class A Shares or
Retail Shares of another fund, shares of a single class fund or shares of the
California Tax-Free Money Market Mutual Fund.

Before making an exchange from a 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 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.

- The dollar amount of shares you exchange must meet the minimum initial
and/or subsequent investment amounts of the other fund.

31 PROSPECTUS
<PAGE> 187

limited exceptions, the Company ordinarily 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 the California
Tax-Free Bond 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. In particular, because the only transaction orders involving the
California Tax-Free Money Market Mutual Fund that are processed at 1:00 p.m. are
those that are received at that time through Shareholder Servicing Agents in
connection with automated investment programs, exchange orders involving the
California Tax-Free Money Market Mutual Fund received through other means after
9:00 a.m. will be processed on the next day that is a Business Day for both
funds involved in the exchange.

CONVERSION

Class B Shares of the California Tax-Free Bond 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 the same Fund and,
consequently, will no longer be subject to the higher Rule 12b-1 Fees applicable
to Class B Shares of such Fund. Such conversion will be 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 32
<PAGE> 188

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 will be considered new purchases for purposes of
the conversion feature.

If a shareholder effects one or more exchanges among Class B Shares of any
fund, 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 exchange back
into Class B Shares, the holding period for the shares so exchanged will be
counted toward the six-year period and any Class B Shares held at the end of six
years will be converted into Class A Shares.

MANAGEMENT AND SERVICING FEES

INVESTMENT ADVISER

Subject to the overall supervision of the Company's Board of Directors, Wells
Fargo Bank, as the Funds' investment adviser, provides investment guidance and
policy direction in connection with the management of the Funds' assets. Wells
Fargo Bank also furnishes the Board of Directors with periodic reports on the
Funds' investment strategies 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 average daily net assets of each Fund. From time to time, Wells
Fargo Bank may waive such fees in whole or in part. Any such waiver will reduce
expenses of the Funds and, accordingly, have a favorable impact on the Funds'
yields and total returns. From time to time, each of the Funds, consistent with
its investment objectives, policies and restrictions, may invest in securities
of companies with which Wells Fargo Bank has a lending relationship. For the
year ended December 31, 1994, the Company paid 0.50% of the average daily net
assets of the California Tax-Free Bond Fund to Wells Fargo Bank for its services
as investment adviser. For the year ended December 31, 1994, Wells Fargo Bank
waived all advisory fees for the California Tax-Free Income Fund and the Company
did not pay advisory fees to Wells Fargo Bank on behalf of the Fund.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank also serves as each Fund's custodian and transfer and
dividend disbursing agent. Pursuant to separate Custody Agreements with Wells
Fargo Bank, each 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 each Fund's Custody
Agreement. The transfer and dividend

33 PROSPECTUS
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disbursing agency activities are performed at 525 Market Street, San Francisco,
California 94163.

SHAREHOLDER SERVICING AGENT

The Funds have entered into Shareholder Servicing Agreements with Wells Fargo
Bank, and may enter into similar agreements with other entities. Under such
agreements, Shareholder Servicing Agents (including Wells Fargo Bank) will, as
agent for their customers, among other things: answer customer inquiries
regarding account status and history and the manner in which purchases,
exchanges and redemptions 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 each of the Funds, proxy
statements, annual reports, updated prospectuses and other communications to
shareholders; receive, tabulate and send to the Funds proxies executed by
shareholders; and provide such other related services as the Funds 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 for the
California Tax-Free Bond Fund, as calculated on an annualized basis for the
Fund's then current fiscal year, exceed the lesser of (1) 0.30% 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 such Fund's average net asset value attributable to the Class A and Class B
Shares. In no event will the shareholder servicing fees for the California
Tax-Free Income Fund, as calculated on an annualized basis for the Fund's then
current fiscal year, exceed the lesser of (1) 0.30% of the average daily net
assets of the Fund represented by shares 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

PROSPECTUS 34
<PAGE> 190

applicable laws, regulations or rules, including the 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 each such Fund's average net asset value.

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 Funds, such as requiring a higher minimum initial
investment or payment of a separate fee for additional services. Each
Shareholder Servicing Agent will be required to agree to disclose any fees it
may directly charge its customers who are shareholders of a Fund and to notify
them in writing at least 30 days before it imposes any transaction fees.

SPONSOR, ADMINISTRATOR AND DISTRIBUTOR

Subject to the overall supervision of the Company's Board of Directors,
Stephens provides the Funds with administrative services, including general
supervision of each Fund's operation, coordination of the other services
provided to each Fund, 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 each Fund's
business, and compensates the Company's Directors, officers and employees who
are affiliated with Stephens. For these services, Stephens is entitled to a
monthly fee at the annual rate of 0.03% of each Fund's average daily net assets.
From time to time, Stephens may waive its fees from a Fund in whole or in part.
Any such waivers will reduce a Fund's expenses and, accordingly, have a
favorable impact on such Fund's yield and total return.

Stephens, as the principal underwriter of the Funds within the meaning of the
1940 Act, has entered into a Distribution Agreement with the Company pursuant to
which Stephens is responsible for distributing Fund shares. The Company also has
adopted a Distribution Plan on behalf of the Funds under the SEC's Rule 12b-1
("Plans"). Under the Plan of the California Tax-Free Income Fund, the Fund may
defray all or part of the cost of preparing and printing prospectuses and other
promotional materials and of delivering prospectuses and those materials to
prospective Fund Shareholders by paying on an annual basis up to 0.05% of the
average daily net assets of the Fund. Under the Class A Plan, the California
Tax-Free Bond Fund may defray all or part of the cost of preparing and printing
prospectuses and other promotional materials and of delivering prospectuses and
those materials to prospective Fund shareholders by paying on an annual basis up
to 0.05% of the average daily net assets attributable to the Class A Shares. The
Plans, other than the Class B Plan, provide only for the reimbursement of actual
expenses. Under the Plan for the Class B Shares of the California Tax-Free Bond
Fund, the Fund may defray all or part of such costs and pay compensation to the
Distributor and Selling Agents for sales support services. The Class B Plan
provides for payment, on an

35 PROSPECTUS
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annual basis, of up to 0.70% of the average daily net assets attributable to the
Class B Shares of the California Tax-Free Bond Fund. The Distribution Agreement
provides that Stephens shall act as agent for the Funds for the sale of their
shares and may enter into Selling Agreements with Selling Agents that wish to
make available shares of the Funds to their respective customers. The Funds may
participate in joint distribution activities with any of the other funds of the
Company, in which event, expenses reimbursed out of the assets of the Funds may
be attributable, in part, to the distribution-related activities of another fund
of the Company. Generally, the expenses attributable to joint distribution
activities will be allocated among each Fund and the other funds of the Company
in proportion to their relative net asset sizes, although the Company's Board of
Directors may allocate such expenses in any other manner that it deems fair and
equitable.

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

From time to time, Wells Fargo Bank and Stephens may waive their respective
fees in whole or in part and reimburse expenses payable to others. Any such
waivers or reimbursements will reduce a Fund's expenses and, accordingly, have a
favorable impact on such Fund's yield and total return. Except for the expenses
borne by Wells Fargo Bank and Stephens, the Company bears all costs of its
operations, including advisory, shareholder servicing, transfer agency, custody
and administration fees, payments pursuant to any Plans, fees and expenses of
independent auditors and legal counsel, and any extraordinary expenses. Expenses
attributable to each Fund or class are charged against the assets of the Fund or
class. General expenses of the Company are allocated among all of the funds of
the Company, including the Funds, in a manner proportionate to the net assets of
each fund, on a transactional basis, or on such other basis as the Company's
Board of Directors deems equitable.

PROSPECTUS 36
<PAGE> 192

TAXES

By complying with the applicable provisions of the Code, the Funds will not be
subject to federal income taxes with respect to net investment income and net
realized capital gains distributed to their shareholders, and the Funds'
shareholders will not be subject to federal income taxes on any dividends of the
Funds attributable to interest from tax-exempt securities. However, dividends
attributable to interest from taxable securities, accretion of market discount
on certain bonds and capital gains (if any) will be taxable to shareholders. In
addition, by complying with the applicable provisions of the California Revenue
and Taxation Code, dividends of the Funds also will be exempt from California
personal income tax to the extent such dividends are attributable to instruments
that pay interest which would be exempt from California personal income taxes
were such instruments held directly by an individual. The Funds do not make any
representation regarding the taxation of their corporate shareholders with
respect to their distributions and recommends that they consult their tax
advisors.

Interest on indebtedness incurred or continued to purchase or carry shares of
the Funds will not be deductible to the extent that a Fund's distributions are
exempt from federal tax. In an attempt to maintain equity among taxpayers, the
IRS has devised federal alternative minimum tax ("AMT") rules to ensure that at
least a minimum amount of tax is paid by corporate and high-income noncorporate
taxpayers who obtain significant benefit from certain tax deductions and
exemptions. These deductions and exemptions have been designated "tax preference
items" which must be added back to taxable income for purposes of calculating
AMT. Among the "tax preference items" and "adjustments" which must be considered
when calculating the AMT is tax-exempt interest from private activity bonds
issued after August 7, 1986. To the extent that a Fund invests in private
activity bonds, shareholders who pay the alternative minimum tax will be
required to report that portion of Fund dividends attributable to income from
the bonds as a tax preference item in determining their federal AMT.
Shareholders will be notified of the tax status of distributions made by the
Funds. Persons who may be "substantial users" (or "related persons" of
substantial users) of facilities financed by private activity bonds should
consult their tax advisors before purchasing shares in the Funds. There are
other adjustments that may also affect adjusted current earnings for the
purposes of corporate AMT. Shareholders with questions or concerns about AMT
should also consult their tax advisors.

The Funds, or your Shareholder Servicing Agent on their behalf, will inform
you of the amount and nature of the Fund's dividends and capital gains. You
should keep all statements you receive to assist in your personal record
keeping. The Company is required to withhold, subject to certain exemptions, at
a rate of 31% on dividends paid or credited to individual shareholders of the
Funds, 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

37 PROSPECTUS
<PAGE> 193

Account Application that the social security or taxpayer identification number
you provide is correct and that you are not subject to 31% backup withholding
for previous underreporting to the IRS.

Foreign shareholders may be subject to different tax treatment, including a
withholding tax. See "Federal Income Taxes - Foreign Shareholders" in the SAI
for each Fund.

Further federal tax considerations are discussed in the SAIs. All investors
should consult their individual tax advisors with respect to their particular
tax situations.

PROSPECTUS 38
<PAGE> 194

PROSPECTUS APPENDIX -
ADDITIONAL INVESTMENT POLICIES

FUND INVESTMENTS

Municipal Securities

The Funds invest in municipal bonds rated at the date of purchase "Baa" or
better by Moody's or "BBB" or better by S&P, or unrated bonds that are
considered by Wells Fargo Bank, as investment adviser, to be of comparable
quality. Bonds rated at the minimum permitted level have speculative
characteristics and are more likely than higher-rated bonds to have a weakened
capacity to pay principal and interest in times of adverse economic conditions;
all are considered investment grade. Municipal bonds generally have a maturity
at the time of issuance of up to 40 years.

The Funds invest in municipal notes rated at the date of purchase "MIG 2" (or
"VMIG 2" in the case of an issue having a variable rate with a demand feature)
or better by Moody's or "SP-2" or better by S&P, or unrated notes that are
considered by Wells Fargo Bank, as investment adviser, to be of comparable
quality. Municipal notes generally have maturities at the time of issuance of
three years or less. Municipal notes are generally issued in anticipation of the
receipt of tax funds, of the proceeds of bond placements, or of other revenues.
The ability of an issuer to make payments on notes is therefore especially
dependent on such tax receipts, proceeds from bond sales or other revenues, as
the case may be.

The Funds invest in municipal commercial paper rated at the date of purchase
"P-1" or "P-2" by Moody's or "A-1+," "A-1" or "A-2" by S&P, or unrated
commercial paper that is considered by Wells Fargo Bank, as investment adviser,
to be of comparable quality. Municipal commercial paper is a debt obligation
with a stated maturity of 270 days or less that is issued to finance seasonal
working capital needs or as short-term financing in anticipation of longer-term
debt.

In the event a security purchased by the Funds is downgraded below investment
grade, the Funds may retain such security, although the Funds may not have more
than 5% of their assets invested in securities rated below investment grade at
any time. A description of the ratings is contained in the Appendix to the SAI
for each Fund.

From time to time, each Fund may invest 25% or more of the current value of
its total assets in certain "private activity bonds," such as pollution control
bonds; provided, however, that such investments will be made only to the extent
they are consistent with the Funds' fundamental policy of investing, under
normal circumstances, at least 80% of their net assets in municipal obligations
that are exempt from federal income taxes and not subject to the federal
alternative minimum tax, and provided further that the Funds may not invest 25%
or more of their assets in industrial development bonds.

A-1 PROSPECTUS
<PAGE> 195

For a further discussion of factors affecting purchases of municipal
obligations by the Funds, see "Special Considerations Affecting California
Municipal Obligations" in the SAI for each Fund.

Taxable Investments

Pending the investment of proceeds from the sale of shares of the Funds or
proceeds from sales of portfolio securities or in anticipation of redemptions or
to maintain a "defensive" posture when, in the opinion of Wells Fargo Bank, as
investment adviser, it is advisable to do so because of market conditions, each
Fund may elect to invest temporarily up to 20% of the current value of its net
assets in cash reserves, in instruments that pay interest which is exempt from
federal income taxes, but not from California personal income taxes, or the
following taxable high-quality money market instruments: (i) U.S. Government
obligations; (ii) negotiable certificates of deposit, bankers' acceptance 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; (iv) certain repurchase agreements; and (v) high-quality municipal
obligations, the income from which may or may not be exempt from federal income
taxes.

U.S. Government Obligations

U.S. Government obligations include securities issued or guaranteed as to
principal and interest by the U.S. Government and supported by the full faith
and credit of the U.S. Treasury. U.S. Treasury obligations differ mainly in the
length of their maturity. Treasury bills, the most frequently issued marketable
government securities, have a maturity of up to one year and are issued on a
discount basis. U.S. Government obligations also include securities issued or
guaranteed by federal agencies or instrumentalities, including
government-sponsored enterprises. Some obligations of agencies or
instrumentalities of the U.S. Government are supported by the full faith and
credit of the United States or U.S. Treasury guarantees; others, by the right of
the issuer or guarantor to borrow from the U.S. Treasury; still others, by the
discretionary authority of the U.S. Government to purchase certain obligations
of the agency or instrumentality; and others, only by the credit of the agency
or instrumentality issuing the obligation. In the case of obligations not backed
by the full faith and credit of the United States, the investor must look
principally to the agency or instrumentality issuing or guaranteeing the
obligation for ultimate repayment, which agency or instrumentality may be
privately owned. There can be no assurance that the U.S. Government will provide
financial support to its agencies or instrumentalities where it is not obligated
to do so. In addition, U.S. Government obligations are subject to fluctuations
in market value due to fluctuations in market interest rates. As a general
matter, the value of debt instruments,

PROSPECTUS A-2
<PAGE> 196

including U.S. Government obligations, declines when market rates increase and
rises when market interest rates decrease. Certain types of U.S. Government
obligations are subject to fluctuations in yield or value due to their structure
or contract terms.

When-Issued Securities

Certain of the securities in which the Funds invest are purchased on a
when-issued basis, in which case delivery and payment normally take place within
45 days after the date of the commitment to purchase. The Funds make commitments
to purchase securities on a when-issued basis only with the intention of
actually acquiring the securities, but may sell them before the settlement date
if it is deemed advisable. When-issued securities are subject to market
fluctuation, and no income accrues to the purchaser during the period prior to
issuance. The purchase price and the interest rate received on debt securities
are fixed at the time the purchaser enters into the commitment. Purchasing a
security on a when-issued basis can involve a risk that the market price at the
time of delivery may be lower than the agreed-upon purchase price, in which case
there could be an unrealized loss at the time of delivery.

Each Fund establishes a segregated account in which it maintains cash, U.S.
Government obligations or other high-quality debt instruments in an amount at
least equal in value to its respective commitments to purchase when-issued
securities. If the value of these assets declines, the Fund places additional
liquid assets in the account on a daily basis so that the value of the assets in
the account is equal to the amount of such commitments.

Other Tax-Exempt Mutual Funds

The Funds may invest in shares of other open-end investment companies that
have a fundamental policy of investing, under normal circumstances, at least 80%
of their net assets in obligations that are exempt from federal income taxes and
are not subject to the federal alternative minimum tax. Such investment
companies can be expected to charge management fees and other operating expenses
that would be in addition to those charged to the Funds. However, the Funds'
investment adviser has undertaken to waive its advisory fees with respect to
assets so invested. In no event may each Fund, together with any company or
companies controlled by it, own more than 3% of the total outstanding voting
stock of any such company, nor may any Fund, together with any such company or
companies, invest more than 5% of its assets in any one such company or invest
more than 10% of its assets in securities of all such companies combined.
Notwithstanding any other investment policy or limitation (whether or not
fundamental), as a matter of fundamental policy, the California Tax-Free Income
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.

A-3 PROSPECTUS
<PAGE> 197

Floating- and Variable-Rate Instruments

Certain of the debt instruments that the Funds may purchase bear interest at
rates that are not fixed, but vary, for example, with changes in specified
market rates or indices or at specified intervals. Certain of these instruments
may carry a demand feature that would permit the holder to tender them back to
the issuer at par value prior to maturity. The floating- and variable-rate
instruments that the Funds may purchase include certificates of participation in
such obligations.

Wells Fargo Bank, as investment adviser to the Funds, will monitor on an
ongoing basis the ability of an issuer of a demand instrument to pay principal
and interest on demand. Events affecting the ability of the issuer of a demand
instrument to make payment when due may occur between the time a Fund elects to
demand payment and the time payment is due, thereby affecting such Fund's
ability to obtain payment at par. Demand instruments whose demand feature is not
exercisable within seven days, may be treated as liquid provided that an active
secondary market exists.

Repurchase Agreements

The Funds may enter into repurchase agreements wherein the seller of a
security to a Fund agrees to repurchase that security from such Fund at a
mutually agreed-upon time and price. The period of maturity is usually quite
short, often overnight or a few days, although it may extend over a number of
months. The Funds may enter into repurchase agreements only with respect to U.S.
Government obligations and other obligations that could otherwise be purchased
by the participating Fund. All repurchase agreements will be fully
collateralized based on values that are marked to market daily. The maturities
of the underlying securities in a repurchase agreement transaction may be
greater than one year. If the seller defaults and the value of the underlying
securities has declined, the participating Fund may incur a loss. In addition,
if bankruptcy proceedings are commenced with respect to the seller of the
security, the participating Fund's disposition of the security may be delayed or
limited. The Funds will enter into repurchase agreements only with registered
broker/dealers and commercial banks that meet guidelines established by the
Board of Directors of the Funds and that are not affiliated with Wells Fargo
Bank. The Funds may participate in pooled repurchase agreement transactions with
other funds advised by Wells Fargo Bank.

Loans of Portfolio Securities

PROSPECTUS A-4
<PAGE> 198

creditworthiness of the broker, dealer or financial institution. Any loans of
portfolio securities will be fully collateralized based on values that are
marked to market daily. The Funds will not enter into any portfolio security
lending arrangement having a duration of longer than one year with respect to
the California Tax-Free Income Fund, and 13 months with respect to the
California Tax-Free Bond Fund. Any securities that a Fund may receive as
collateral will not become part of such Fund's portfolio at the time of the loan
and, in the event of a default by the borrower, such Fund, if permitted by law,
will dispose of such collateral except for such part thereof that is a security
in which such Fund is permitted to invest. During the time securities are on
loan, the borrower will pay such Fund any accrued income on those securities,
and such Fund may invest the cash collateral and earn additional income or
receive an agreed-upon fee from a borrower that has delivered cash-equivalent
collateral. The Funds will not lend securities having a value that exceeds
one-third of the current value of each of their total assets. Loans of
securities by the Funds will be subject to termination at the Funds' or the
borrower's option. The Funds may pay reasonable administrative and custodial
fees in connection with a securities loan and may pay a negotiated portion of
the interest or fee earned with respect to the collateral to the borrower or the
placing broker. Borrowers and placing brokers may not be affiliated, directly or
indirectly, with the Company, the investment adviser, or the Distributor.

INVESTMENT POLICIES

Each Fund's investment objective, as set forth in the "How the Funds Work -
Investment Objectives and Policies," section is fundamental; that is, it may not
be changed without approval by the vote of the holders of a majority of such
Fund's outstanding voting securities, as described under "Capital Stock" in the
SAI for each Fund. In addition, any fundamental investment policy may not be
changed without such shareholder approval. If the Company's Board of Directors
determines, however, that a Fund's investment objective can best be achieved by
a substantive change in a nonfundamental investment policy or strategy, the
Company's Board 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 Funds may borrow from banks up to 10%
of the current value of each of their net assets only for temporary purposes in
order to meet redemptions, and these borrowings may be secured by the pledge of
up to 10% of the current value of each of their net assets (but investments may
not be purchased by a Fund while any such outstanding borrowings exceed 5% of
its net assets); (ii) the California Tax-Free Bond Fund may make loans of
portfolio securities in accordance with its investment policies and (iii) the
Funds may not 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 a Fund's investments in that industry would be
25% or more of the current value of such Fund's total assets, provided that
there is no limitation with respect to investments in (a) municipal securities
(for the

A-5 PROSPECTUS
<PAGE> 199

purpose of this restriction, private activity bonds shall not be deemed
municipal securities if the payment of principal and interest on such bonds is
the ultimate responsibility of nongovernmental users) and (b) U.S. Government
obligations.

As a matter of nonfundamental policy, the California Tax-Free Bond Fund may
invest up to 10%, and the California Tax-Free Income Fund may invest up to 15%,
of the current value of each Fund's net assets in repurchase agreements having
maturities of more than seven days, illiquid securities and fixed time deposits
that are subject to withdrawal penalties and that have maturities of more than
seven days.

For purposes of complying with the Code, each Fund will diversify its holdings
so that, at the end of each quarter of the taxable year: (i) at least 50% of the
market value of each Fund's assets is represented by cash, U.S. Government
obligations 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 (ii) not more than 25% of the value of its
assets is invested in the securities of any one issuer (other than U.S.
Government obligations and the securities of other regulated investment
companies), or of two or more issuers which the taxpayer controls and which are
determined to be engaged in the same or similar trades or businesses or related
trades or businesses. With respect to paragraph (i), it may be possible that the
Company would own more than 10% of the outstanding voting securities of an
issuer.

PROSPECTUS A-6
<PAGE> 200

THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE> 201

SPONSOR, DISTRIBUTOR AND ADMINISTRATOR

Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201

INVESTMENT ADVISER, 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 Funds, 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:
- --------------------------------------------------------------------------------

LOGO SC 1022 (8/95)
Printed on Recycled Paper
<PAGE> 202

STAGECOACH FUNDS, INC.

SUPPLEMENT DATED JANUARY 2, 1996
TO THE CURRENT PROSPECTUS, AS PREVIOUSLY SUPPLEMENTED, AND
STATEMENT OF ADDITIONAL INFORMATION OF EACH FUND OF
STAGECOACH FUNDS, INC.

As of January 1, 1996, Wells Fargo Bank, N.A. provides investment advisory
services for approximately $33 billion of assets.

Each Fund's current Prospectus, as supplemented, and Statement of
Additional Information are hereby amended accordingly.
<PAGE> 203

LOGO

------------------------------

PROSPECTUS

------------------------------

DIVERSIFIED INCOME FUND

GROWTH AND INCOME FUND

May 1, 1995
As Supplemented on August 24, 1995
<PAGE> 204

STAGECOACH FUNDS(R)

DIVERSIFIED INCOME FUND
GROWTH AND INCOME FUND

Stagecoach Funds, Inc. (the "Company") is a professionally managed, open-end
series investment company. This Prospectus contains information about two of the
funds in the Stagecoach Family of Funds - the DIVERSIFIED INCOME FUND and the
GROWTH AND INCOME FUND (each, a "Fund" and, collectively, the "Funds"). Two
classes of shares of the Funds (each, a "Class") are described in this
Prospectus - Class A Shares and Class B Shares.

The DIVERSIFIED INCOME FUND seeks to earn current income and a growing stream
of income over time, consistent with preservation of capital. The Fund pursues
this objective by investing primarily in income-producing debt instruments and
equity securities, including common stocks, and preferred stocks and debt
instruments that are convertible into common stocks. The GROWTH AND INCOME FUND
seeks to earn current income and achieve long-term capital appreciation by
investing primarily in common stocks, and preferred stocks and debt securities
that are convertible into common stocks.

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 Funds' goals match your own. Statements of Additional
Information ("SAIs"), dated May 1, 1995, for the Funds have been filed with the
Securities and Exchange Commission ("SEC") and are incorporated by reference.
The SAI for each Fund 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.

PROSPECTUS DATED MAY 1, 1995
AS SUPPLEMENTED ON AUGUST 24, 1995

PROSPECTUS
<PAGE> 205

The Diversified Income Fund and the Growth and Income Fund are advised by
Wells Fargo Bank, which also serves as the Funds' 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 Funds' sponsor and administrator and serves as
the distributor of the Funds' shares.

PROSPECTUS
<PAGE> 206

TABLE OF CONTENTS

PROSPECTUS SUMMARY 1

SUMMARY OF FUND EXPENSES 4

FINANCIAL HIGHLIGHTS 8

HOW THE FUNDS WORK 10

THE FUNDS AND MANAGEMENT 14

INVESTING IN THE FUNDS 16

DIVIDENDS 26

HOW TO REDEEM SHARES 27

ADDITIONAL SHAREHOLDER SERVICES 31

MANAGEMENT AND SERVICING FEES 34

TAXES 37

PROSPECTUS APPENDIX - ADDITIONAL INVESTMENT POLICIES A-1

PROSPECTUS
<PAGE> 207

PROSPECTUS SUMMARY

The Funds provide 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 Funds. For more information,
please refer specifically to the identified Prospectus sections and generally to
the Prospectus and SAI for each Fund.

Q. WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

A. The DIVERSIFIED INCOME FUND seeks to earn current income and a growing
stream of income over time, consistent with preservation of capital. It
pursues this objective by investing primarily in income-producing debt
instruments and equity securities, including common stocks, and preferred
stocks and debt instruments that are convertible into common stocks. Debt
instruments will include obligations issued or guaranteed by the U.S.
Government, its agencies and instrumentalities, high quality bonds and a
broad range of other debt instruments, such as bonds and other debt
securities of domestic companies, U.S. dollar-denominated debt obligations
of foreign issuers, including foreign corporations and foreign governments,
and various asset-backed securities. Common stocks will be selected on the
basis of strong earnings growth trend, above-average prospects for future
earnings growth and diversification among industries and companies.
Convertible securities will be selected on the basis of strong earnings and
credit record, the ability to provide current income and the
characteristics described above with respect to common stocks.

The GROWTH AND INCOME FUND seeks to earn current income and achieve
long-term capital appreciation by investing primarily in common stocks, and
preferred stocks and debt securities that are convertible into common
stocks. Common stocks will be selected on the basis of strong earnings
growth trend, above-average prospects for future earnings growth and
diversification among industries and companies. Convertible securities will
be selected on the basis of strong earnings and credit record, the ability
to provide current income and the same characteristics described above with
respect to common stocks.

As with all mutual funds, there can be no assurance that the Funds will
achieve their investment objectives. See "How the Funds Work" and
"Prospectus Appendix - Additional Investment Policies" for further
information on investments.

Q. WHO MANAGES MY INVESTMENTS?

A. Wells Fargo Bank, as the Funds' investment adviser, manages your
investments. Wells Fargo Bank also provides transfer agency, dividend
disbursing agency and custodial services to the Funds. In addition, Wells
Fargo Bank is a Shareholder Servicing Agent and a Selling Agent under a
Selling Agreement with Stephens, the Funds' distributor. See "The Funds and
Management" and "Management and Servicing Fees."

1 PROSPECTUS
<PAGE> 208

Q. HOW DO I INVEST?

A. You may invest by purchasing shares of the Funds at their 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 Funds." For more
details, contact Stephens (the Funds' 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 quarterly and
automatically reinvested in shares of the same Class of the respective Fund
at net asset value without a sales charge unless you elect to receive
dividends in cash. You may also elect to reinvest the dividends earned by
the Funds 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."

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 charged 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 more details, contact Stephens, a
Shareholder Servicing Agent or a Selling Agent (such as Wells Fargo Bank).

PROSPECTUS 2
<PAGE> 209

Q. WHAT ARE SOME OF THE POTENTIAL RISKS ASSOCIATED WITH THIS TYPE OF
INVESTMENT?

A. An investment in a Fund is not insured against loss of principal. When the
value of the securities that a Fund 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 Funds. The portfolio equity securities of
the Funds 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. The portfolio debt instruments of the Funds are subject to
credit and interest rate risk. Credit risk is the risk that issuers of the
debt instruments in which the Funds invest may default on the payment of
principal and/or interest. Interest rate risk is the risk that increases in
market interest rates may adversely affect the value of the debt instruments
in which the Funds invest and hence the value of your investment in a Fund.
The Growth and Income Fund's investments in smaller-size companies present
greater risks than investments in larger-size companies with more
established operating histories and financial capacity. As with all mutual
funds, there can be no assurance that the Funds will achieve their
investment objectives.

Q. WHAT ARE DERIVATIVES AND DO THE FUNDS 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 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 DO THE FUNDS TAKE TO CONTROL DERIVATIVES-RELATED RISKS?

A. Wells Fargo Bank, as investment adviser to each Fund, uses a variety of
internal risk management procedures to ensure that derivatives use is
consistent with each Fund's investment objective, does not expose the Fund
to undue risks and is closely monitored. These procedures include providing
periodic reports to the Board of Directors concerning the use of
derivatives. Derivatives use by each Fund also is subject to broadly
applicable investment policies. For example, the Funds may not invest more
than a specified percentage of their assets in "illiquid securities,"
including those derivatives that do not have active secondary markets. Nor
may a Fund use certain derivatives without establishing adequate "cover" in
compliance with SEC rules limiting the use of leverage. For more information
on the Funds' investment activities, see "Prospectus Appendix - Additional
Investment Policies."

3 PROSPECTUS
<PAGE> 210

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 Funds. As shown below, you are not charged
exchange fees. You should consider this expense information together with the
important information in this Prospectus, including the Funds' investment
objectives and policies.

SHAREHOLDER TRANSACTION EXPENSES
FOR CLASS A SHARES

<TABLE>
<CAPTION>
DIVERSIFIED GROWTH AND
INCOME FUND INCOME FUND
<S> <C> <C>
Maximum Sales Charge Imposed
on Purchase (as a percentage
of offering price)....................... 4.50% 4.50%
Sales Charge Imposed
on Reinvested Dividends.................. None None
Maximum Sales Charge Imposed
on Redemptions*............................ None None
Exchange Fees................................ None None
</TABLE>

ANNUAL FUND OPERATING EXPENSES
FOR CLASS A SHARES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
DIVERSIFIED GROWTH AND
INCOME FUND INCOME FUND
<S> <C> <C> <C> <C>
Management Fee.................................. 0.50% 0.50%
Rule 12b-1 Fee.................................. 0.05% 0.05%
Total Other Expenses(1):
Shareholder Servicing Fee**................. 0.30% 0.30%
Administrative Fee.......................... 0.03% 0.03%
Other Expenses(1)........................... 0.32% 0.23%
----- -----
0.65% 0.56%
----- -----
TOTAL FUND OPERATING
EXPENSES(1)................................... 1.20% 1.11%
</TABLE>

- -------------------------------

PROSPECTUS 4
<PAGE> 211

<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 a
Fund, assuming (A) a 5% annual return and
(B) redemption at the end of each time
period indicated:

Diversified Income Fund................ $ 57 $81 $ 108 $184
Growth and Income Fund................. $ 56 $79 $ 103 $174
</TABLE>

SHAREHOLDER TRANSACTION EXPENSES
FOR CLASS B SHARES

<TABLE>
<CAPTION>
DIVERSIFIED GROWTH AND
INCOME FUND INCOME FUND
<S> <C> <C>
Maximum Sales Charge Imposed
on Purchase (as a percentage
of offering price)................. None None
Sales Charge Imposed
on Reinvested Dividends............ None None
Maximum Sales Charge Imposed
on Redemptions*...................... 3.00% 3.00%
Exchange Fees.......................... None None
</TABLE>

ANNUAL FUND OPERATING EXPENSES
FOR CLASS B SHARES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
DIVERSIFIED GROWTH AND
INCOME FUND INCOME FUND
<S> <C> <C> <C> <C>
Management Fee......................... 0.50% 0.50%
Rule 12b-1 Fee......................... 0.70% 0.70%
Total Other Expenses(1):
Shareholder Servicing Fee**........ 0.30% 0.30%
Administrative Fee................. 0.03% 0.03%
Other Expenses(1).................. 0.32% 0.23%
----- -----
0.65% 0.56%
----- -----
TOTAL FUND OPERATING
EXPENSES(1).......................... 1.85% 1.76%
----- -----
</TABLE>

- -------------------------------

5 PROSPECTUS
<PAGE> 212

EXAMPLE OF EXPENSES --
CLASS B SHARES

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses
on a $1,000 investment in Class B
Shares of a Fund, assuming (A) a 5%
annual return and (B) redemption at
the end of each time period indicated:
Diversified Income Fund.......... $ 49 $68 $ 122 $145
Growth and Income Fund........... $ 48 $65 $ 116 $125

You would pay the following expenses
on a $1,000 investment in Class B
Shares of a Fund, assuming a 5%
annual return and no redemption:
Diversified Income Fund.......... $ 19 $58 $ 122 $145
Growth and Income Fund........... $ 18 $55 $ 116 $125
</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 of the Funds 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 Funds - 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 Funds - Sales Charges."

ANNUAL FUND OPERATING EXPENSES for the Class A Shares of the Growth and Income
Fund are based on amounts incurred during the most recent fiscal year reflecting
voluntary fee waivers or reimbursements. 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, a Fund. Any waivers or reimbursements would reduce a Fund's total expenses.
Absent waivers and reimbursements, the percentages shown above under "Total
Other Expenses" and "Total Fund Operating Expenses" would be 0.60% and 1.15%,
respectively, for the Class A Shares of the Growth and Income Fund. There can be
no assurance that waivers or reimbursements will continue. Annual fund operating
expenses for the Class A Shares of the Diversified Income Fund are based on
amounts incurred during the most recent fiscal year, restated to reflect
voluntary fee waivers and expense reimbursements that are expected to continue
during the current fiscal year. Absent such waivers and reimbursements, "Total
Other Expenses" and "Total Fund Operating Expenses" would be 0.79% and 1.34%,
respectively, for the Class A Shares of the Diversified Income Fund. Since Class
B Shares were not offered during 1994, the percentages shown above with

PROSPECTUS 6
<PAGE> 213

respect to Class B Shares under "Total Other Expenses" and "Total Fund Operating
Expenses" reflect certain anticipated voluntary fee waivers and expense
reimbursements for the current fiscal year. Absent waivers and reimbursements,
"Total Other Expenses" and "Total Fund Operating Expenses" would be 0.84% and
2.04%, respectively, for the Class B Shares of the Diversified Income Fund and
0.65% and 1.85%, respectively, for the Class B Shares of the Growth and Income
Fund. Long-term shareholders of the Funds 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 each Fund, please see the Prospectus
sections captioned "Investing in the Funds - 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 Funds over stated periods
based on the expenses in the respective tables 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 a 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.

7 PROSPECTUS
<PAGE> 214

FINANCIAL HIGHLIGHTS

The following information has been derived from the Financial Highlights in
the Funds' 1994 annual financial statements. The financial statements are
included in the SAI for each Fund. Except for periods ending prior to January 1,
1992, which were audited by other auditors whose report dated February 19, 1992,
expressed an unqualified opinion on this information, the financial statements
have been audited by KPMG Peat Marwick LLP, independent auditors, whose report
dated February 17, 1995 also is included in the SAI for each Fund. This
information should be read in conjunction with the Funds' 1994 annual financial
statements and notes thereto. The SAI for each Fund has been incorporated by
reference into this Prospectus. Financial information is not provided in
connection with Class B Shares because Class B Shares were not offered during
the periods presented.

DIVERSIFIED INCOME FUND
FOR A CLASS A SHARE OUTSTANDING AS SHOWN

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
DEC. 31, DEC. 31, DEC. 31,
1994 1993 1992*
---------- ---------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period.... $11.08 $10.29 $10.00
Income from investment operations:
Net investment income................... 0.33 0.30 0.02
Net realized and unrealized capital
gains/(losses) on investments......... (0.32) 0.96 0.29
------- ------- ------
Total from investment operations........ 0.01 1.26 0.31
Less distributions:
Dividends from net investment income.... (0.33) (0.30) (0.02)
Distributions from net realized capital
gains................................. 0.00 (0.17) 0.00
------- ------- ------
Total distributions..................... (0.33) (0.47) (0.02)
Net asset value, end of period.......... $10.76 $11.08 $10.29
======= ======= ======
Total return (not annualized)+.......... 0.08% 12.33% 3.10%
Ratios/supplemental data:
Net assets, end of period (000)......... $45,178 $26,704 $1,379
Number of shares outstanding, end of
period (000).......................... 4,198 2,411 134
Ratios to average net assets
(annualized):
Ratio of expenses to average net
assets(1)............................. 1.06% 0.46% 0.00%
Ratio of net investment income to
average net assets(2)................. 3.16% 3.51% 4.09%
Portfolio turnover...................... 62% 46% 1%

- ---------------------------------------------------------------------------
(1) Ratio of expenses to average net
assets prior to waived fees and
reimbursed expenses................. 1.34% 1.66% 3.49%
(2) Ratio of net investment income to
average net assets prior to waived
fees and reimbursed expenses........ 2.88% 2.31% 0.60%
* The Fund commenced operations on
November 18, 1992.
+ Total returns do not include any sales
charges.
</TABLE>

PROSPECTUS 8
<PAGE> 215

GROWTH AND INCOME FUND
FOR A CLASS A SHARE OUTSTANDING AS SHOWN

<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR PERIOD
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............................. $14.75 $13.88 $12.84 $10.29 $10.00
Income from investment operations:
Net investment income................ 0.22 0.23 0.27 0.41 0.26
Net realized and unrealized capital
gains/(losses)
on investments..................... (0.27) 0.93 1.44 2.14 0.03
------- ------- ------- ------- ------
Total from investment operations..... (0.05) 1.16 1.71 2.55 0.29
Less Distributions:
Dividends from net investment
income............................. (0.22) (0.23) (0.27) 0.00 0.00
Distributions from net realized
capital gains...................... (0.38) (0.06) (0.40) 0.00 0.00
------- ------- ------- ------- ------
Total distributions.................. (0.60) (0.29) (0.67) 0.00 0.00
Net asset value, end of period....... $14.10 $14.75 $13.88 $12.84 $10.29
======= ======= ======= ======= ======
Total return (not annualized)**...... (0.29)% 8.44% 13.45% 24.77% 2.90%
Ratios/supplemental data:
Net assets, end of period (000)...... $113,525 $112,236 $44,883 $10,323 $430
Number of shares outstanding, end of
period (000)....................... 8,050 7,609 3,233 804 42
Ratios to average net assets
(annualized):
Ratio of expenses to average net
assets(1).......................... 1.11% 0.93% 0.42% 0.05% 0.00%
Ratio of net investment income to
average net assets(2).............. 1.51% 1.72% 2.31% 3.50% 2.51%
Portfolio turnover................... 71% 55% 80% 13% 0%

- ---------------------------------------------------------------------------
(1) Ratio of expenses to average net
assets prior to waived fees and
reimbursed expenses.............. 1.15% 1.11% 1.10% 1.16% N/A
(2) Ratio of net investment income to
average net assets prior to
waived fees and reimbursed
expenses......................... 1.47% 1.54% 1.63% 2.39% N/A

* The financial information for the fiscal periods prior to, and including, 1991 is
based on the financial information for the Select Stock Fund ("IRA Select Stock
Fund") of the Wells Fargo Investment Trust for Retirement Programs ("Trust") which
was reorganized into the Growth Stock Fund on January 2, 1992.
** Total returns do not include any sales charges.
+ The Fund commenced operations on August 2, 1990.
</TABLE>

9 PROSPECTUS
<PAGE> 216

HOW THE FUNDS WORK

INVESTMENT OBJECTIVES AND POLICIES

DIVERSIFIED INCOME FUND

The Diversified Income Fund's investment objective is to seek current income
and a growing stream of income over time, consistent with preservation of
capital. The Fund pursues this objective by investing primarily in
income-producing debt instruments and equity securities, including common
stocks, and preferred stocks and debt instruments that are convertible into
common stocks. As with all mutual funds, there can be no assurance that the
Fund, which is a diversified portfolio, will achieve its investment objective.
The Fund invests, under normal market conditions, substantially all of its total
assets in income-producing securities, including both debt instruments and
equity securities, and, under normal market conditions, at least 50% of its
total assets in equity securities.

The Diversified Income Fund will invest in common stocks of issuers that, in
the opinion of Wells Fargo Bank, as the Fund's investment adviser, exhibit a
strong earnings growth trend and that are believed by Wells Fargo Bank to have
above-average prospects for future earnings growth. The Fund's common stocks
will be diversified among industries and companies. Emphasis will be placed on
common stocks which are trading at low price-to-earnings ratios, either relative
to the overall market or to the security's historic price-to-earnings
relationship, and in common stocks of issuers that have historically paid
above-average dividends.

Under normal market conditions, at least 90% of the Diversified Income Fund's
equity securities, including, for this purpose, the convertible securities
described below, will be issued by large companies (i.e., for purposes of the
Fund, companies with a market capitalization of more than $1 billion). Some
investments also may be made in equity securities of medium- and smaller-size
companies (i.e., for purposes of the Fund, those companies with at least $250
million but less than $1 billion in capitalization) which may have the potential
to generate high levels of future revenue and earnings growth and where the
investment opportunity may not be fully reflected in the price of the securities
but which may involve greater risks than investments in larger companies. There
may be some additional risks associated with investments in smaller companies
because securities issued by such companies tend to trade less frequently and
may be less liquid than securities issued by larger companies. In addition,
smaller companies, relative to larger concerns, may depend on a small group of
key managers or may have limited product lines, financial resources or available
markets. As a result, the price of securities issued by small companies may be
more volatile than the price of securities issued by larger companies.

PROSPECTUS 10
<PAGE> 217

The debt instruments held by the Diversified Income Fund will include
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities (including government-sponsored enterprises) ("U.S. Government
obligations"), and a broad range of other debt instruments, as described in this
Prospectus or in the SAI, such as bonds and other debt securities of domestic
companies, U.S. dollar-denominated debt obligations of foreign issuers,
including foreign corporations and foreign governments, and various asset-backed
securities. Most of the debt instruments acquired by the Fund will be issued by
companies or governmental entities located within the United States. All of the
nonconvertible debt instruments acquired by the Fund will be rated within 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 instruments
determined by the Adviser to be of comparable quality. Up to 20% of the assets
of the Fund that are invested in debt instruments may be rated, at the time of
purchase, in the lowest of these four rating categories (i.e., rated BBB by S&P
or Baa by Moody's). These securities 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. Subsequent to its purchase by the Fund, an issue of securities
may cease to be rated or its rating may be reduced below the minimum rating
required for purchase by the Fund. The Adviser will consider such an event in
determining whether the Fund should continue to hold the obligation.

The Diversified Income Fund may temporarily 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 Fund may purchase for
liquidity purposes include U.S. Treasury bills, shares of other mutual funds and
repurchase agreements (as described below).

GROWTH AND INCOME FUND

The Growth and Income Fund seeks to earn current income and achieve long-term
capital appreciation by investing primarily in common stocks, and preferred
stocks and debt securities that are convertible into common stocks. There can be
no assurance that the Fund, which is a diversified portfolio, will achieve its
investment objective. Under normal market conditions, the Fund will invest at
least 65% of its total assets in common stocks and securities which are
convertible into common stocks and at least 65% of its total assets in
income-producing securities. Up to 10% of the Fund's assets may be invested in
securities of foreign issuers.

The Growth and Income Fund will invest in common stocks of issuers that, in
the opinion of Wells Fargo Bank, as the Fund's investment adviser, exhibit a
strong earnings growth trend and that are believed by Wells Fargo Bank to have
above-average prospects

11 PROSPECTUS
<PAGE> 218

for future earnings growth. The Fund will maintain a portfolio of common stocks
diversified among industries and companies. The Fund may invest in common stocks
of large companies (i.e., for the purposes of the Fund, those companies with
more than $750 million in capitalization) which Wells Fargo Bank believes offer
the potential for long-term earnings growth or above-average dividend yield.
Emphasis may be placed on common stocks which are trading at low
price-to-earnings ratios, either relative to the overall market or to the
security's historic price-to-earnings relationship, and on common stocks of
issuers that have historically paid above-average dividends. Some investments
also may be made in common stocks of medium- and smaller-size companies (i.e.,
for the purposes of the Fund, those companies with at least $250 million, but
less than $750 million in capitalization) which may have the potential to
generate high levels of future revenue and earnings growth and where the
investment opportunity may not be fully reflected in the price of the securities
but which may involve greater risks than investments in larger companies.

The Growth and Income Fund intends to invest less than 50% of its assets in
the securities of medium- and smaller-size companies and the remainder in
securities of larger-size companies. However, the actual percentages may vary
according to changes in market conditions and the judgment of the Fund's
investment adviser of how best to achieve the Fund's investment objective. There
may be some additional risk associated with investments in smaller companies
because securities of such companies tend to trade less frequently and may be
less liquid than securities issued by larger companies. In addition, smaller
companies, relative to larger concerns, may depend on a small group of key
managers or may have limited product lines, financial resources or available
markets. As a result, the price of securities issued by small companies may be
more volatile than the price of securities issued by larger companies.

The Growth and Income Fund may temporarily 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 Fund may purchase for
liquidity purposes include U.S. Treasury bills, shares of other mutual funds and
repurchase agreements (as described below).

ADDITIONAL PERMITTED INVESTMENT ACTIVITIES

Convertible Securities. The Funds will seek to invest in convertible
securities that provide current income and are issued by companies with the
characteristics described above for each Fund and that have a strong earnings
and credit record. The Funds may purchase convertible securities that are
fixed-income debt securities or preferred stocks, and which may be converted at
a stated price within a specified period of time into a certain quantity of the
common stock of the same issuer. Convertible securities, while usually
subordinate to similar nonconvertible securities, are senior to common stocks in
an issuer's capital structure. Convertible securities offer flexibility by
providing

PROSPECTUS 12
<PAGE> 219

the investor with a steady income stream (which generally yield a lower amount
than similar nonconvertible securities and a higher amount than common stocks
yield) as well as the opportunity to take advantage of increases in the price of
the issuer's common stock through the conversion feature. Fluctuations in the
convertible security's price can reflect changes in the market value of the
common stock or changes in market interest rates. At most, 5% of each Fund's net
assets will be invested, at the time of purchase, in convertible securities that
are not rated in the four highest rating categories by one or more NRSROs, such
as Moody's or S&P, or unrated but determined by the Adviser to be of comparable
quality.

A more complete description of the Funds' investments and investment
activities is contained in the "Prospectus Appendix - Additional Investment
Policies" and in the SAI for each Fund.

PERFORMANCE

The performance of each Class of shares of the Funds 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 Funds 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 Funds - 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 each 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.

13 PROSPECTUS
<PAGE> 220

Additional information about the performance of each Fund is contained in the
Annual Report for each Fund. The Annual Reports may be obtained free of charge
by calling the Company at 800-222-8222.

THE FUNDS AND MANAGEMENT

The Funds are two 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 nine other series: the Asset Allocation Fund, the California
Tax-Free Bond Fund, the California Tax-Free Income Fund, the California Tax-Free
Money Market Mutual Fund, the Corporate Stock Fund, the Ginnie Mae Fund, the
Money Market Mutual Fund, the Short-Intermediate U.S. Government Income Fund and
the U.S. Government Allocation Fund. 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 Funds' 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 Funds, 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 Funds' SAIs.

Wells Fargo Bank is the Funds' investment adviser, transfer and dividend
disbursing agent, and custodian. In addition, Wells Fargo Bank is a Shareholder
Servicing Agent of the Funds and a Selling Agent under a Selling Agreement with
the Funds' distributor. Wells Fargo Bank, one of the ten largest banks in the
United States, was founded in 1852 and is the oldest bank in the western United
States. As of June 30, 1995, Wells Fargo Bank provided investment advisory
services for approximately $28 billion of assets of individuals, trusts, estates
and institutions. As of June 30, 1995, various divisions and affiliates of Wells
Fargo Bank provided investment advisory services for approximately $211 billion
of assets of individuals, trusts, estates and institutions. Wells Fargo Bank
also serves as the investment adviser to the other separately managed series of
the

PROSPECTUS 14
<PAGE> 221

Company, and to seven 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.

Mr. Allen Wisniewski has been responsible for the day-to-day management of the
portfolios of the Diversified Income Fund and the Growth and Income Fund since
November 1992 and January 1992, respectively. He also is responsible for
managing equity and balanced accounts for high-net-worth individuals and
pensions. Mr. Wisniewski joined Wells Fargo Bank in April 1987 with the
acquisition of Bank of America's consumer trust services, where he was a
portfolio manager. He received his B.A. degree and M.B.A. degree in economics
and finance from the University of California at Los Angeles. He is a member of
the Los Angeles Society of Financial Analysts.

Mr. Robert Bissell also has been responsible for the day-to-day management of
the portfolios of the Diversified Income Fund and the Growth and Income Fund
since November 1992 and January 1992, respectively. Mr. Bissell joined Wells
Fargo Bank at the time of its 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 counsel with M.H. Edie Investment
Counseling, where he managed institutional and high-net-worth 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.

Stephens is the Funds' sponsor and administrator, and distributes the Funds'
shares. Stephens is a full service broker/dealer and investment advisory firm
located at 111 Center Street, Little Rock, Arkansas 72201. 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.

15 PROSPECTUS
<PAGE> 222

INVESTING IN THE FUNDS

OPENING AN ACCOUNT

Call the number on your confirmation statement to obtain information about
what is required to change registration.

To invest in the Funds through tax-deferred retirement plans through which the
Funds are 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 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 each Fund is its "net asset value," or NAV. The NAV of
a share of each Class of a Fund is the value of the total net assets
attributable to each such Class 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 Funds are 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

PROSPECTUS 16
<PAGE> 223

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 Funds' 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 Company's Board of Directors. Prices
used for such valuations may be provided by independent pricing services.

HOW TO BUY SHARES

Shares of each Class of a 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 will not be 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 a Fund will be invested in full and
fractional shares of such Class at the applicable offering price. If shares are
purchased by a check which does not clear, the Company reserves the right to
cancel the purchase and hold the investor responsible for any losses or fees
incurred. In addition, the Funds 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.

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 Funds. 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.

17 PROSPECTUS
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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 Funds are not subject to a front-end sales charge.
However, Class B Shares 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
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 Funds - Contingent Deferred
Sales Charges - Class B Shares."

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 Funds 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

PROSPECTUS 18
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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 a 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 a 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.

Letter of Intent

A Letter of Intent allows you to purchase Class A Shares of a 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 a 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 a Fund or shares of another of the Company's funds registered in your
state of residence at

19 PROSPECTUS
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NAV, without a front-end sales charge, within 120 days after your redemption.
However, if the other investment portfolio charges 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.

Reductions for Families or Fiduciaries

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 shares of another
open-end investment company or (ii) you are investing proceeds from a redemption
of units of a unit investment trust sold through Wells Fargo Securities Inc. on
which you paid a front-end sales charge; (iii) such redemption occurred within
thirty (30) days prior to the date of the purchase order; and (iv) such other
company or trust is distributed and advised by entities other than Stephens and
Wells Fargo Bank, respectively, or their affiliates. 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).

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 a Fund at a reduced sales charge, and the "related parties"
of such company. For purposes of this

PROSPECTUS 20
<PAGE> 227

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 Funds may be purchased at NAV, without 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 Funds also may be purchased at NAV, without 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 Funds also may be purchased at NAV, without a front-end sales
charge, by employee benefit and thrift plans for such persons and to any
investment advisory, trust or other fiduciary account, 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 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 Funds are not subject to front-end sales charges but may
be subject to contingent deferred sales charges. Class B Shares which 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 will not be imposed on amounts representing increases in NAV above the
NAV at the time of purchase and will not be 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.

21 PROSPECTUS
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Contingent deferred sales charges are waived on redemptions of Class B Shares
of a 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.

You may buy shares of the Funds 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)

PROSPECTUS 22
<PAGE> 229

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."

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

TAX-DEFERRED RETIREMENT PLANS

You may be entitled to invest in the Funds through a Plan Account or other
tax-deferred retirement plan. Contact a Shareholder Servicing Agent or a Selling
Agent (such

23 PROSPECTUS
<PAGE> 230

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 will be tax-deferred until
withdrawn, at which time the individual may be in a lower tax bracket.

PROSPECTUS 24
<PAGE> 231

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 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 Funds through a broker/dealer
or financial institution which has entered into a Selling Agreement with
Stephens, as the Funds' Distributor ("Selling Agent"). If your order is placed
by the close of the NYSE, the purchase order generally will be 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 will be 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 Funds will
not be due until settlement date, the Selling Agent might benefit from the
temporary use of your payment. A financial institution which 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.

25 PROSPECTUS
<PAGE> 232

PURCHASES THROUGH SHAREHOLDER SERVICING AGENTS

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 will be 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 will be 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

DIVIDENDS

The Funds intend to declare quarterly dividends of substantially all of their
net investment income. The Funds 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

PROSPECTUS 26
<PAGE> 233

attributable to a particular class also may affect the relative dividends and/or
capital gains distributions of Class A and Class B Shares.

HOW TO REDEEM SHARES

You may redeem all or a portion of your shares in a Fund on any Business Day.
Your shares will be 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 Funds' current intention, the Funds may make
payment of redemption proceeds in securities if conditions warrant, subject to
regulation by some state securities commissions. In addition, the Funds reserve
the right to impose charges for wiring redemption proceeds.

Due to the high cost of maintaining Fund accounts with small balances, the
Funds reserve 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 Funds -- How To Buy Shares."

REDEMPTIONS BY TELEPHONE

27 PROSPECTUS
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from any person representing himself or herself to be the investor and
reasonably believed by the Transfer Agent to be genuine. The Company will
require the Transfer Agent to employ reasonable procedures, such as requiring a
form of personal identification, to confirm that instructions are genuine and,
if it does not follow such procedures, the Company and the Transfer Agent may be
liable for any losses due to unauthorized or 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 which 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 Funds - 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

PROSPECTUS 28
<PAGE> 235

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.

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.

SYSTEMATIC WITHDRAWAL PLAN

29 PROSPECTUS
<PAGE> 236

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 Funds for participating in the
Systematic Withdrawal Plan. However, you 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 will be 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 will be 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 will be 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 will be mailed to your address of record or, if such address is no
longer valid, the net proceeds will be 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 a 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 will be 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

PROSPECTUS 30
<PAGE> 237

your order will be 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.

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 will be 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 will be mailed to your address of record or, if
such address is no longer valid, the net redemption proceeds will be 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

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 which 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.

31 PROSPECTUS
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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 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.

EXCHANGE PRIVILEGE

Before making an exchange from a 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.

PROSPECTUS 32
<PAGE> 239

- 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.

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 Funds - 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 a 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

33 PROSPECTUS
<PAGE> 240

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 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 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 will be
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
will be converted into Class A Shares.

MANAGEMENT AND SERVICING FEES

INVESTMENT ADVISER

Subject to the overall supervision of the Company's Board of Directors, Wells
Fargo Bank, as the Funds' investment adviser, provides investment guidance and
policy direction in connection with the management of the Funds' assets. Wells
Fargo Bank also furnishes the Board of Directors with periodic reports on the
Funds' 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 Diversified Income Fund's average daily net assets; and 0.50% of the first
$250 million of the Growth and Income Fund's average daily net assets, 0.40% of
the next $250 million, and 0.30% of the Growth and Income Fund's average daily
net assets in excess of $500 million. From time to time, Wells Fargo Bank may
waive such fees in whole or in part. Any such waiver will reduce expenses of the
Funds, and, accordingly, have a favorable impact on the Funds' yield and total
return. From time to time, each of the Funds, consistent with its investment
objective, policies and restrictions, may invest in securities of companies with
which Wells Fargo Bank has a lending relationship. For the year ended December
31, 1994, the Company paid 0.50% and 0.50% of the average daily net assets of
the Diversified Income Fund and the Growth and Income Fund, respectively, to
Wells Fargo Bank as compensation for its services as investment adviser.

PROSPECTUS 34
<PAGE> 241

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank serves as each Fund's custodian and transfer and dividend
disbursing agent. Pursuant to separate Custody Agreements with Wells Fargo Bank,
each 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 each Fund's Custody Agreement. The transfer and
dividend disbursing agency activities are performed at 525 Market Street, San
Francisco, California 94163.

SHAREHOLDER SERVICING AGENT

The Funds have entered into Shareholder Servicing Agreements with Wells Fargo
Bank on behalf of each Class of the Funds, and may enter into similar agreements
with other entities. Under such agreements, Shareholder Servicing Agents
(including Wells Fargo Bank) will, 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
each of the Funds, proxy statements, annual reports, updated prospectuses and
other communications to shareholders; receive, tabulate and send to the Funds
proxies executed by shareholders; and provide such other related services as the
Funds 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) 0.30% 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
each Fund.

35 PROSPECTUS
<PAGE> 242

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 Funds, such as requiring a higher minimum initial
investment or payment of a separate fee for additional services. Each
Shareholder Servicing Agent will be required to agree to disclose any fees it
may directly charge its customers who are shareholders of a Fund and to notify
them in writing at least 30 days before it imposes any transaction fees.

SPONSOR, ADMINISTRATOR AND DISTRIBUTOR

Subject to the overall supervision of the Company's Board of Directors,
Stephens provides the Funds with administrative services, including general
supervision of each Fund's operation, coordination of the other services
provided to each Fund, 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 each Fund'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 each Fund a monthly fee at the annual rate of 0.03% of each Fund's
average daily net assets. From time to time, Stephens may waive its fees from a
Fund in whole or in part. Any such waiver will reduce a Fund's expenses and,
accordingly, have a favorable impact on such Fund's yield and total return.

Stephens, as the principal underwriter of the Funds within the meaning of the
1940 Act, has entered into a Distribution Agreement with the Company pursuant to
which Stephens is responsible for distributing Class A and Class B Shares of the
Funds. The Company also has adopted a Distribution Plan on behalf of each Class
of shares of the Funds under the SEC's Rule 12b-1 ("Plans"). Under the Class A
Plan for each Fund, each Fund may defray all or part of the cost of preparing
and printing prospectuses and other promotional materials and of delivering
prospectuses and those materials to prospective Class A shareholders paying on
an annual basis up to 0.05% of the average daily net assets attributable to the
Class A Shares. The Class A Plans provide only for the reimbursement of actual
expenses. Under the Class B Plans, each Fund may defray all or part of such
costs and pay compensation to the Distributor and Selling Agents for sales
support services. The Class B Plans provide for payments, on an annual basis, of
up to 0.70% of the average daily net assets attributable to the Class B Shares
of each Fund. The Distribution Agreement provides that Stephens shall act as
agent for the Funds for the sale of their shares, and may enter into Selling
Agreements with Selling Agents that wish to make available shares of the Funds
to their respective customers. The Funds may participate in joint distribution
activities with any of the other funds of the Company, in which event, expenses
reimbursed out of the assets of the Funds may be attributable, in part, to the
distribution-related activities of another fund of the Company. Generally, the
expenses attributable to joint distribution activities will be allocated among
each Fund

PROSPECTUS 36
<PAGE> 243

and the other funds of the Company in proportion to their relative net asset
sizes, although the Company's Board of Directors may allocate such expenses in
any other manner that it deems fair and equitable.

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

From time to time, Wells Fargo Bank and Stephens may waive their respective
fees in whole or in part and reimburse expenses payable to others. Any such
waivers or reimbursements will reduce a Fund's expenses and, accordingly, have a
favorable impact on such Fund's yield and total return. Except for the expenses
borne by Wells Fargo Bank and Stephens, the Company bears all costs of its
operations, including advisory, shareholder servicing, transfer agency, custody
and administration fees, payments pursuant to any Plans, fees and expenses of
its independent auditors and legal counsel, and any extraordinary expenses.
Expenses attributable to each Fund or Class are charged against the assets of
the Fund or Class. General expenses of the Company are allocated among all of
the funds of the Company, including the Funds, in a manner proportionate to the
net assets of each fund, on a transactional basis, or on such other basis as the
Company's Board of Directors deems equitable.

TAXES

By complying with the applicable provisions of the Code, the Funds will not be
subject to federal income taxes with respect to net investment income and net
realized capital gains distributed to their shareholders. Dividends from
investment income (including net short-term capital gains, if any) declared and
paid by each Fund will be taxable as ordinary income to a 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

37 PROSPECTUS
<PAGE> 244

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 a Fund which are held under a qualified
tax-deferred retirement plan. See "Investing in the Funds - Tax-Deferred
Retirement Plans" above. The Funds intend to pay out substantially all their net
investment income and net realized capital gains (if any) for each year.
Corporate shareholders of the Funds may be eligible for the dividends-received
deduction on the dividends (excluding the net capital gains dividends) paid by a
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.

Portions of each Fund's investment income may be subject to foreign taxes
withheld at the source; however, neither Fund will be able to pass through any
portion of the foreign taxes to its shareholders.

The Funds, or your Shareholder Servicing Agent on their 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 Funds if a
correct taxpayer identification number, certified when required, is not on file
with the Company or the Transfer Agent. In connection with this withholding
requirement, you will be asked to certify on your Account Application that the
social security or taxpayer identification number you provide is correct and
that you are not subject to 31% backup withholding for previous underreporting
to the IRS.

Foreign shareholders may be subject to different tax treatment, including a
withholding tax. See "Federal Income Taxes - Foreign Shareholders" in each
Fund's SAI.

PROSPECTUS 38
<PAGE> 245

PROSPECTUS APPENDIX --
ADDITIONAL INVESTMENT POLICIES

FUND INVESTMENTS

Temporary Investments

From time to time, for temporary defensive purposes, the Funds 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.

U.S. Government Obligations

A-1 PROSPECTUS
<PAGE> 246

and others, only by the credit of the agency or instrumentality issuing the
obligation. In the case of obligations not backed by the full faith and credit
of the United States, the investor must look principally to the agency or
instrumentality issuing or guaranteeing the obligation for ultimate repayment,
which agency or instrumentality may be privately owned. There can be no
assurance that the U.S. Government will provide financial support to its
agencies or instrumentalities where it is not obligated to do so. In addition,
U.S. Government obligations are subject to fluctuations in market value due to
fluctuations in market interest rates. As a general matter, the value of debt
instruments, including U.S. Government obligations, declines when market rates
increase and rises when market interest rates decrease. Certain types of U.S.
Government obligations are subject to fluctuations in yield or value due to
their structure or contract terms.

Foreign Securities

The Funds may invest a portion of their assets (generally, no more than 35% of
the Diversified Income Fund, and generally no more than 10%, but in no event
more than 25%, of the Growth and Income Fund) in securities of foreign
governmental and private issuers that are denominated in and pay interest in
U.S. dollars. Investments in foreign securities involve certain considerations
that are not typically associated with investing in domestic securities. There
may be less publicly available information about a foreign issuer than about a
domestic issuer. Foreign issuers also are not generally subject to the same
accounting, auditing and financial reporting standards or governmental
supervision as domestic issuers. In addition, with respect to certain foreign
countries, interest may be withheld at the source under foreign income tax laws,
and there is a possibility of expropriation or confiscatory taxation, political
or social instability or diplomatic developments that could adversely affect
investments in, the liquidity of, and the ability to enforce contractual
obligations with respect to, securities of issuers located in those countries.

Floating- and Variable-Rate Instruments

Certain of the debt instruments that the Funds may purchase bear interest at
rates that are not fixed, but vary, for example with, changes in specified
market rates or indices or specified intervals. Certain of these instruments may
carry a demand feature that would permit the holder to tender them back to the
issuer at par value prior to maturity. Wells Fargo Bank, as investment adviser,
will monitor on an ongoing basis the ability of an issuer of a demand instrument
to pay principal and interest on demand. Events affecting the ability of the
issuer of a demand instrument to make payment when due may occur between the
date a Fund elects to demand payment and the date payment is due. Such events
may affect the ability of the issuer of the instrument to make payment when due,
thereby affecting a Fund's ability to obtain payment at par, except when such
demand instruments permit same-day settlement. Demand instruments whose demand
feature is not exercisable within seven days may be treated as liquid, provided
that an active secondary market exists.

PROSPECTUS A-2
<PAGE> 247

Repurchase Agreements

The Funds may enter into repurchase agreements wherein the seller of a
security to a Fund agrees to repurchase that security from the Fund at a
mutually agreed-upon time and price. The period of maturity is usually quite
short, often overnight or a few days, although it may extend over a number of
months. The Funds may enter into repurchase agreements only with respect to U.S.
Government obligations and other obligations 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 Funds may
be greater than one year. If the seller defaults and the value of the underlying
securities has declined, a Fund may incur a loss. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the security, a Fund's
disposition of the security may be delayed or limited. The Funds will enter into
repurchase agreements only with registered broker/dealers and commercial banks
that meet guidelines established by the Company's Board of Directors and are not
affiliated with the Funds' investment adviser. The Funds may participate in
pooled repurchase agreement transactions with other Funds advised by Wells Fargo
Bank.

Loans of Portfolio Securities

The Funds may lend securities from their portfolios to brokers, dealers and
financial institutions (but not individuals) if cash, U.S. Government
obligations or other high-quality debt instruments equal to at least 100% of the
current market value of the securities loan (including accrued interest thereon)
plus the interest payable to a Fund with respect to the loan is maintained with
the Fund. In determining whether to lend a security to a particular broker,
dealer or financial institution, a Fund's investment adviser will consider all
relevant facts and circumstances, including the creditworthiness of the broker,
dealer or financial institution. Any loans of portfolio securities will be fully
collateralized based on values that are marked to market daily. The Funds will
not enter into any portfolio security lending arrangement having a duration of
longer than one year. Any securities that a Fund may receive as collateral will
not become part of the Fund's portfolio at the time of the loan and, in the
event of a default by the borrower, the Fund, if permitted by law, will dispose
of such collateral except for such part thereof that is a security in which the
Fund is permitted to invest. During the time securities are on loan, the
borrower will pay a Fund any accrued income on those securities, and the Fund
may invest the cash collateral and earn additional income or receive an
agreed-upon fee from a borrower that has delivered cash-equivalent collateral.
Neither Fund will lend securities having a value that exceeds one-third of the
current value of its total assets. Loans of securities by a Fund will be subject
to termination at the Fund's or the borrower's option. The Funds may pay
reasonable administrative and custodial fees in connection with a securities
loan and may pay a negotiated portion of the interest or fee earned with respect
to the collateral to the

A-3 PROSPECTUS
<PAGE> 248

borrower or the placing broker. Borrowers and placing brokers may not be
affiliated, directly or indirectly, with the Company, the investment adviser, or
the Distributor.

Other Investment Companies

The Funds 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 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. Notwithstanding any other investment policy or
limitation (whether or not fundamental), as a matter of fundamental policy, the
Diversified Income 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

Each Fund's investment objective, as set forth in "How the Funds
Work - Investment Objectives and Policies," is fundamental; that is, it may not
be changed without approval by the vote of the holders of a majority of a Fund's
outstanding voting securities, as described under "Capital Stock" in the SAI for
each Fund. If the Board of Directors determines, however, that a 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 Funds may not purchase securities of
any issuer (except U.S. Government obligations) if as a result, more than 5% of
the value of a Fund's total assets would be invested in the securities of such
issuer or a Fund would own more than 10% of the outstanding voting securities of
such issuer; (ii) each 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 a Fund while any such
outstanding borrowings exceed 5% of the Fund's net assets); (iii) each Fund may
make loans of portfolio securities in accordance with its investment policies;
and (iv) each 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 Diversified Income Fund is subject to this restriction
only with respect to 75% of the Fund's assets, and, with regard to both Funds,
it may be possible that the Company would own more than 10% of the outstanding
voting securities of the issuer.

PROSPECTUS A-4
<PAGE> 249

With respect to fundamental investment policy (iii) above, the Diversified
Income Fund does not intend to make loans of its portfolio securities during the
coming year.

As a matter of nonfundamental policy, the Funds each may invest up to 10% 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-5 PROSPECTUS
<PAGE> 250

THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE> 251

SPONSOR, DISTRIBUTOR AND ADMINISTRATOR

Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201

INVESTMENT ADVISER, 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 Funds, 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:
- --------------------------------------------------------------------------------

LOGO SC 1019 (8/95)
Printed on Recycled Paper
<PAGE> 252

LOGO
P.O. Box 7066
San Francisco, CA 94120-7066

STAGECOACH FUNDS:
- --------------------------------------------------------------------------------

LOGO SC 1019 (8/95)
Printed on Recycled Paper
<PAGE> 253

STAGECOACH FUNDS, INC.

SUPPLEMENT DATED JANUARY 2, 1996
TO THE CURRENT PROSPECTUS, AS PREVIOUSLY SUPPLEMENTED, AND
STATEMENT OF ADDITIONAL INFORMATION OF EACH FUND OF
STAGECOACH FUNDS, INC.

As of January 1, 1996, Wells Fargo Bank, N.A. provides investment advisory
services for approximately $33 billion of assets.

Each Fund's current Prospectus, as supplemented, and Statement of
Additional Information are hereby amended accordingly.
<PAGE> 254

LOGO

------------------------------

P R O S P E C T U S

------------------------------

MONEY MARKET MUTUAL FUND

CLASS S SHARES

MAY 24, 1995
<PAGE> 255

LOGO

MONEY MARKET MUTUAL FUND -- CLASS S SHARES

Stagecoach Funds, Inc. ("Stagecoach Funds" or the "Company") is an open-end
investment company consisting of several separate funds, each with different
investment objectives and policies. This Prospectus contains information about
one class of shares of a fund in the Stagecoach Family of Funds -- the CLASS S
SHARES of the MONEY MARKET MUTUAL FUND (the "Fund"). The MONEY MARKET MUTUAL
FUND seeks to provide investors with a high level of income, while preserving
capital and liquidity, by investing in high-quality, short-term securities.

Currently, Class S Shares are available only to qualified business
investors who purchase such shares through a Managed Sweep Account (sometimes,
an "Account") offered by Wells Fargo Bank, N.A. ("Wells Fargo Bank"). A Managed
Sweep Account combines a non-interest bearing Wells Fargo Bank deposit account
with a daily sweep of balances to or from the Fund's Class S Shares. Persons
investing in Class S Shares through a Managed Sweep Account also receive a
Business Account Agreement and Disclosure Statement (the "Disclosure Statement")
describing the various features and operations of the Account. The Disclosure
Statement should be reviewed in conjunction with this Prospectus.

AN INVESTMENT IN THE FUND, THROUGH A MANAGED SWEEP ACCOUNT OR OTHERWISE, IS
NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENTAL
AGENCY. THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A CONSTANT
$1.00 NET ASSET VALUE PER SHARE.

Please read this Prospectus before investing and retain it for future
reference. It sets forth concisely the information about the Fund and Class S
Shares that an investor should know before investing. A Statement of Additional
Information (the "SAI"), dated May 1, 1995, for the Money Market Mutual Fund has
been filed with the Securities and Exchange Commission (the "SEC") and is
incorporated by reference. The SAI for the Fund 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.

This Prospectus describes one class of shares of the Fund -- the Class S
Shares. The Fund also offers a class of shares designated the Class A Shares.
Investors who are not eligible to invest in Class S shares may be eligible to
invest in Class A Shares. Investments in Class A Shares may be made through the
Fund's distributor or through selling agents authorized to sell such shares on
behalf of the distributor, or directly from the Fund. Information regarding
investments in Class A Shares of the Fund, including a separate prospectus
describing such shares, may be obtained by calling 800-222-8222.

FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED, ENDORSED OR
GUARANTEED BY, 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 RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.

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.

WELLS FARGO BANK IS THE INVESTMENT ADVISER AND PROVIDES CERTAIN OTHER
SERVICES TO THE FUND FOR WHICH IT IS COMPENSATED. STEPHENS INC.,
WHICH IS NOT AFFILIATED WITH WELLS FARGO BANK, IS THE SPONSOR
AND DISTRIBUTOR FOR THE FUND.

PROSPECTUS, DATED MAY 24, 1995
<PAGE> 256

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary............................................................ 1
Summary of Fund Expenses...................................................... 3
How the Fund Works............................................................ 6
Limiting Investment Risks..................................................... 6
The Fund and Management....................................................... 7
Investing in the Fund......................................................... 8
Dividends..................................................................... 10
How To Redeem Shares.......................................................... 10
Additional Shareholder Services............................................... 10
Management and Servicing Fees................................................. 11
Taxes......................................................................... 13
Class A Shares................................................................ 14
Prospectus Appendix - Additional Investment Policies.......................... A-1
</TABLE>
<PAGE> 257

PROSPECTUS SUMMARY

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 IS THE FUND'S INVESTMENT OBJECTIVE?

A. The MONEY MARKET MUTUAL FUND seeks to provide investors with a high level
of income, while preserving capital and liquidity, by investing in
high-quality, short-term securities. In pursuing this objective, the Fund
invests in securities with remaining maturities not exceeding thirteen
months, as determined in accordance with Rule 2a-7 under the Investment
Company Act of 1940, as amended (the "1940 Act"). The securities in which
the Fund invests include obligations of the U.S. Government, its agencies
and instrumentalities, high-quality debt obligations such as corporate
debt, certain obligations of U.S. banks and certain repurchase agreements.

The Fund seeks to maintain a net asset value of $1.00 per share; however,
there is no assurance that this will be achieved. See "How the Fund
Works - Investment Objectives and Policies" and "Prospectus
Appendix - Additional Investment Policies."

Q. WHO MANAGES MY INVESTMENTS?

A. Wells Fargo Bank, as the Fund's investment adviser, manages your
investments. Wells Fargo Bank also provides the Fund with transfer agency,
dividend disbursing agency and custodial services. In addition, Wells Fargo
Bank is a Shareholder Servicing Agent (as defined below) and a Selling
Agent (as defined below) of the Fund. See "The Fund and Management" and
"Management and Servicing Fees."

Q. HOW DO I INVEST?

A. This Prospectus is designed only for businesses that invest in Class S
Shares of the Fund through a Managed Sweep Account with Wells Fargo Bank. A
Managed Sweep Account combines a non-interest bearing Wells Fargo Bank
deposit account (the "Transaction Account") with a daily sweep of
Transaction Account balances to or from the Fund. Wells Fargo Bank computes
the net amount of deposits to and withdrawals from your Transaction Account
(the "Net Sweep Amount") each day Wells Fargo Bank is open for business. If
deposits exceed withdrawals from your Transaction Account, Wells Fargo Bank
transmits a purchase order on your behalf to the Fund in an amount equal to
the dollar value of the Net Sweep Amount. The information in this
Prospectus should be read in conjunction with the Disclosure Statement
related to your Account. See "Investing in the Fund."

Q. HOW WILL I RECEIVE DIVIDENDS AND ANY CAPITAL GAINS?

A. Dividends from net investment income of the Fund are declared daily and are
paid monthly to your Account through automatic reinvestment in Class S
Shares of the Fund. Any capital gains will be distributed at least annually
in a similar manner. Various dividend and distribution options, such as the
option to direct the payment of proceeds from dividends and distributions
to another account, which may be available to holders of the Fund's Class A
Shares, are not available to persons investing in Class S Shares through a
Managed Sweep Account. See "Dividends" and "Additional Shareholder
Services."

1
<PAGE> 258

Q. HOW MAY I REDEEM SHARES?

A. If, on any day Wells Fargo Bank is open for business, withdrawals from your
Managed Sweep Account exceed deposits, Wells Fargo Bank transmits a
redemption order on your behalf to the Fund in the dollar amount of that
day's Net Sweep Amount. If your Managed Sweep Account with Wells Fargo Bank
is closed as described in the applicable Disclosure Statement, Wells Fargo
Bank will transmit a redemption request on your behalf to the Fund for the
balance of your Fund shares held through such Account. See "How To Redeem
Shares."

Q. WHAT ARE THE POTENTIAL RISKS ASSOCIATED WITH THIS TYPE OF INVESTMENT?

A. An investment in the Fund is not insured against loss of principal.
Although the Fund seeks to maintain a stable net asset value of $1.00 per
share, there is no assurance that it will be able to do so. Deposits to
the Accounts are eligible for federal deposit insurance only for the brief
period they are in the Transaction Account prior to being swept into the
Fund. The Fund's shares are neither insured nor guaranteed by the U.S.
Government. You should be prepared to accept some risk with the money you
invest in the Fund. As with all mutual funds, there can be no assurance
that the Fund will achieve its investment objective. See "How The Fund
Works - Risk Factors" and "Prospectus Appendix - Additional Investment
Policies."

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<PAGE> 259

SUMMARY OF FUND EXPENSES

The following tables provide: (i) a summary of expenses relating to
purchases and sales of Class S Shares of the Fund, (ii) the aggregate annual
operating expenses of the Fund as a percentage of average net assets, (iii) an
example illustrating the dollar cost of such expenses on a $1,000 investment in
the Fund's Class S Shares and (iv) a summary of Account fees and charges. As
shown below, shareholders of the Class S Shares are not charged sales charges,
redemption fees or exchange fees.

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<CAPTION>
MONEY MARKET
MUTUAL FUND
(CLASS S SHARES)
----------------
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering
price)..................................................................... None
Sales Charge Imposed on Reinvested Dividends................................. None
Sales Charge Imposed on Redemptions(1)....................................... None
Exchange Fees................................................................ None
</TABLE>

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
MONEY MARKET
MUTUAL FUND
(CLASS S
SHARES)
---------------
<S> <C> <C>
Management Fee.............................................................. 0.40%
Rule 12b-1 Fee.............................................................. 0.75%
Total Other Expenses(2)
Shareholder Servicing Fee................................................. 0.25%
Administrative Fee........................................................ 0.03%
Other Expenses(2)......................................................... 0.02%
-----
0.30%
-----
TOTAL FUND OPERATING EXPENSES(2)(3)......................................... 1.45%
</TABLE>

- ---------------

(1) The Company reserves the right to impose a charge for wiring redemption
proceeds.
(2) After any waivers or reimbursements.
(3) Additional fees charged by Wells Fargo Bank related to the Accounts are not
included in this table. See Account Fees and Charges.

EXAMPLE OF EXPENSES

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment in the Fund,
assuming (A) a 5% annual return and (B) redemption at the end of each
time period indicated:
Money Market Mutual Fund
(Class S Shares)................................................. $ 15 $ 46
</TABLE>

3
<PAGE> 260

ACCOUNT FEES AND CHARGES

Set forth below is a summary of fees which may be charged by Wells Fargo
Bank for various banking services available through the Managed Sweep Account.
For additional information on Account fees and charges please refer to the
Disclosure Statement accompanying this Prospectus.

<TABLE>
<CAPTION>
MANAGED
SWEEP
ACCOUNT*
------------
<S> <C>
Monthly Account Fees
Managed Sweep Account Fee................................................. $ 25.00
Checking Maintenance Fee.................................................. $ 15.00
Transaction Fees(1)
Per Check Written......................................................... $ 0.14
Per Check Deposited....................................................... $ 0.095
Per Cash Deposit.......................................................... $ 1.20(2)
Miscellaneous Fees............................................................. Variable(3)
Minimum Opening Balance........................................................ $ 10,000
</TABLE>

- ---------------

* Currently, Class S Shares of the Fund may be purchased only through a
Managed Sweep Account. Class A Shares of the Fund may be purchased without
opening an Account and without incurring the fees for, or deriving the
benefits of, the Account Services described above. Information regarding
Class A Shares may be obtained by calling 800-222-8222.
(1) A Transaction Fee is charged whenever one of the listed transactions occurs.
(2) A fee of $1.20 is charged for every $1,000 of cash deposited.
(3) Various miscellaneous fees may be charged on a per transaction, per
statement or other basis as described in "Miscellaneous Fees and Charges"
and elsewhere in the Disclosure Statement.

4
<PAGE> 261

EXPLANATION OF TABLES

SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
Fund shares. There are no Shareholder Transaction Expenses for the Fund, except
that the Company reserves the right to impose a charge for wiring redemption
proceeds.

The ANNUAL FUND OPERATING EXPENSES table illustrates the operating expenses
of the Class S Shares of the Fund as a percentage of average net assets. Wells
Fargo Bank and Stephens each has agreed to waive or reimburse all or a portion
of its respective fees or expenses 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. Any waivers or
reimbursements would reduce the Fund's total expenses. There can be no
assurances that waivers or reimbursements will continue. The percentages shown
above under "Total Other Expenses" and "Total Fund Operating Expenses" reflect
certain anticipated voluntary fee waivers and expense reimbursements for the
current fiscal year. Absent waivers and reimbursements, the percentages shown
above under "Total Other Expenses" and "Total Fund Operating Expenses" would be
0.39% and 1.54%, respectively. Long-term shareholders in 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 Class S Shares of
the Fund, please see the Prospectus section captioned "Management and Servicing
Fees."

EXAMPLE OF EXPENSES is a hypothetical example which illustrates the
expenses associated with a $1,000 investment over the periods shown, 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.

ACCOUNT FEES AND CHARGES are charges you pay to Wells Fargo Bank for
banking services offered to you as a Managed Sweep Account holder. The fees and
charges applicable to your Account are discussed below. Wells Fargo Bank
currently charges monthly account fees for the Managed Sweep Account. In
addition, your Account is subject to various other fees and charges which may be
assessed on a monthly or other periodic basis, or on a per transaction, per
statement or other basis. For additional information with respect to Account
fees and charges, including a description of the services available to Account
holders, you should refer to the Disclosure Statement, particularly the section
captioned "Miscellaneous Fees and Charges."

5
<PAGE> 262

HOW THE FUND WORKS

INVESTMENT OBJECTIVES AND POLICIES

The MONEY MARKET MUTUAL FUND seeks to provide investors with a high level
of income, while preserving capital and liquidity, by investing in high-quality,
short-term securities. The Fund invests its assets only in U.S.
dollar-denominated, high-quality money market instruments, and may engage in
certain other investment activities as described in this Prospectus. Permitted
investments include U.S. Government short-term obligations, obligations of
domestic and foreign banks, commercial paper, and repurchase agreements. In
pursuing its objective, the Fund invests in instruments with remaining
maturities not exceeding thirteen months, as determined in accordance with Rule
2a-7 under the 1940 Act. As with all mutual funds, there can be no assurance
that the Fund, which is a diversified portfolio, will achieve its investment
objective. A more complete description of these investments and investment
activities is contained in the "Prospectus Appendix - Additional Investment
Policies" and in the SAI.

LIMITING INVESTMENT RISKS

The Fund seeks to reduce risk by investing its assets in securities of
various issuers. As such, the Fund is considered to be diversified for purposes
of the 1940 Act. In addition, the Fund, since its inception, has emphasized
safety of principal and high credit quality. In particular, the internal
investment policies of the Fund's investment adviser, Wells Fargo Bank, have
always prohibited the purchase for the Fund of many types of floating rate
derivative securities that are considered potentially volatile. The following
types of derivative securities are not permitted investments for the Fund:

- capped floaters (on which interest is not paid when market rates move above
a certain level);

- leveraged floaters (whose interest rate reset provisions are based on a
formula that magnifies changes in interest rates);

- range floaters (which do not pay any interest if market interest rates move
outside of a specified range);

- dual index floaters (whose interest rate reset provisions are tied to more
than one index so that a change in the relationship between these indices
may result in the value of the instrument falling below face value); and

- inverse floaters (which reset in the opposite direction of their index).

Additionally, the Fund may not invest in securities whose interest rate
reset provisions are tied to an index that materially lags short-term interest
rates, such as "COFI floaters." The Fund may only invest in floating rate
securities that bear interest at a rate that resets quarterly or more
frequently, and which resets based on changes in standard money market rate
indices such as U.S. Treasury bills, London Interbank Offered Rate, the prime
rate, published commercial paper rates or federal funds rates.

Pursuant to the 1940 Act, the Fund must comply with certain investment
criteria designed to provide liquidity, reduce risk, and allow the Fund to
maintain a stable net asset value of $1.00 per share. Of course, the Fund cannot
guarantee a $1.00 share price. The Fund

6
<PAGE> 263

maintains a dollar-weighted average portfolio maturity of no more than 90 days.
Any security that the Fund purchases must have a remaining maturity of not more
than thirteen months. In addition, any security that the Fund purchases must
present minimal credit risks and be of high quality (i.e., be rated in the top
two rating categories by the required number of nationally recognized
statistical rating organizations ("NRSROs") or, if unrated, determined to be of
comparable quality to such rated securities). These determinations are made by
Wells Fargo Bank, as the Fund's Investment Adviser, pursuant to guidelines
adopted by the Company's Board of Directors.

PERFORMANCE

The performance of the Class S Shares may be advertised in terms of current
yield or effective yield. Performance figures are based on historical results
calculated under uniform SEC formulas and are not intended to indicate future
performance.

Yield refers to the income generated by an investment in the Class S Shares
of the Fund over a seven-day period, expressed as an annual percentage rate.
Effective yields are calculated similarly, but assume that the income earned
from the Fund is reinvested in the Fund. Because of the effects of compounding,
effective yields are slightly higher than yields.

Additional information about the Fund's performance is contained in the
Fund's Annual Report. The Annual Report may be obtained free of charge by
calling the Company at 800-222-8222.

THE FUND AND MANAGEMENT

The MONEY MARKET MUTUAL FUND is a fund of Stagecoach Funds. Stagecoach
Funds was organized as a Maryland corporation on September 9, 1991 and currently
offers shares of eleven other funds: the Asset Allocation Fund, the California
Tax-Free Bond Fund, the California Tax-Free Income Fund, the California Tax-Free
Money Market Mutual Fund, the Corporate Stock Fund, the Diversified Income Fund,
the Ginnie Mae Fund, the Growth and Income Fund, the Short-Intermediate U.S.
Government Income Fund, the U.S. Government Allocation Fund and the Variable
Rate Government Fund. The Board of Directors of Stagecoach Funds supervises
these funds' activities and monitors their contractual arrangements with various
service-providers. Although Stagecoach Funds is not required to hold annual
shareholder meetings, special meetings may be required for purposes such as
electing or removing Directors, approving advisory contracts and distribution
plans, and changing the Funds' investment objectives or fundamental investment
policies. All shares of Stagecoach Funds 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 are entitled to one vote for each
share you own and fractional votes for fractional shares owned. The Money Market
Mutual Fund also offers a second class of shares -- Class A Shares. Class A
Shares are subject to different levels of fees and expenses than Class S Shares
and the performance of such shares may vary accordingly. 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.

INVESTMENT ADVISER

Wells Fargo Bank is the Fund's investment adviser. Wells Fargo Bank, one of
the ten largest banks in the United States, was founded in 1852 and is the
oldest bank in the western

7
<PAGE> 264

United States. As of December 31, 1994, various divisions and affiliates of
Wells Fargo Bank provided investment advisory services for approximately $200
billion of assets of individuals, trusts, estates and institutions. Wells Fargo
Bank also serves as the investment adviser to the other separately managed funds
of the Company and to six other registered, open-end, management investment
companies each of which consists of several separately managed investment
portfolios. Wells Fargo Bank, a wholly owned subsidiary of Wells Fargo &
Company, is located at 525 Market Street, San Francisco, California 94163.

Morrison & Foerster, counsel to the Company and special counsel to Wells
Fargo Bank, has advised Stagecoach and Wells Fargo Bank that Wells Fargo Bank
may perform the services contemplated by the Advisory Contract without violation
of the Glass-Steagall Act or other applicable banking laws or regulations. 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, including the Glass-Steagall Act, and regulations relating to
the permissible activities of banks and their subsidiaries or affiliates, as
well as future changes in such statutes, regulations and judicial or
administrative decisions or interpretations, could prevent Wells Fargo Bank from
continuing to perform, in whole or in part, such services. If Wells Fargo Bank
were prohibited from performing any such services, it is expected that the
Company's Board of Directors would recommend to the shareholders that they
approve a new advisory agreement with another entity or entities qualified to
perform such services.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank is also the Fund's custodian and transfer and dividend
disbursing agent. In addition, Wells Fargo Bank is a Shareholder Servicing Agent
and Selling Agent of the Fund.

SPONSOR, ADMINISTRATOR AND DISTRIBUTOR

Stephens is the Fund's sponsor and administrator, and distributes the
Fund's shares. Stephens is a full service broker/dealer and investment advisory
firm located at 111 Center Street, Little Rock, Arkansas 72201. 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

Class S Shares of the Fund are offered by this Prospectus to businesses
that establish a Managed Sweep Account with Wells Fargo Bank. Each Account
combines a Transaction Account (a non-interest bearing deposit account) with a
periodic sweep of balances to or from the Fund. Investors may open an Account by
completing and signing an Account Application and appropriate Disclosure
Statement. The Disclosure Statement contains important information about the
various features and operations of the Accounts and should be reviewed in
conjunction with this Prospectus. Wells Fargo Bank may, in the future, permit

8
<PAGE> 265

investors to acquire shares of the Fund through additional accounts not
described in this Prospectus.

SHARE PRICE

The price of a share of each Class of the Fund is its net asset value
("NAV"). The NAV of a share of each Class of the Money Market Mutual Fund is the
value of total net assets attributable to each Class divided by the number of
outstanding shares of that Class. The value of 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. As noted above, the Fund seeks to
maintain a constant $1.00 per share NAV, although there is no assurance that it
will be able to do so.

Shares of the Fund may be purchased on any day the Fund is open (a
"Business Day"). The Fund is open on any day that either the New York Stock
Exchange or Wells Fargo Bank is open. Currently, the holidays observed by both
the New York Stock Exchange and Wells Fargo Bank are New Year's Day, Presidents'
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day (each, a "Holiday"). Wells Fargo Bank calculates the NAV of Fund shares
acquired through the Managed Sweep Account as of 9:00 a.m. (Pacific time). The
NAV of shares acquired through other means may be calculated at other times. All
transaction orders are processed at the NAV next determined after the order is
received.

The Funds' portfolio investments are valued on the basis of amortized cost.
This valuation method is based on the receipt of a steady yield on portfolio
instruments from the date of purchase until maturity rather than actual changes
in market value. The Company's Board of Directors believes that this valuation
method accurately reflects fair value.

HOW TO BUY SHARES

Class S Shares may be purchased by making a deposit into your Account. On
each day Wells Fargo Bank and the Fund are open Wells Fargo Bank computes the
Net Sweep Amount, which is the net amount of all deposits, withdrawals, charges
and credits made to and from a Transaction Account. If deposits and credits
exceed withdrawals and charges, you authorize Wells Fargo Bank, on your behalf,
to transmit a purchase order to the Fund designated in your Account in the
amount of that day's Net Sweep Amount. For example, if you make a $500 deposit
and withdraw $100 on the same day, and there are no other transactions on that
day, the Net Sweep Amount for that day would be $400. Wells Fargo Bank, on your
behalf, would transmit a purchase order to the designated Fund on the next
Business Day in the amount of $400. Your purchase order will be made effective
and full and fractional Shares will be purchased at the next determined NAV,
which is expected to remain a constant $1.00 per share. Deposits and other
transactions to your Account are sometimes not immediately included in the Net
Sweep Amount. Cash and items drawn on Wells Fargo Bank are generally credited to
the Net Sweep Amount on the same Business Day as the day of deposit. Local and
non-local checks are usually credited to your Net Sweep Amount on the first or
second Business Day, respectively, after the day of your deposit. In addition,
adjustments may sometimes be made to your Account to reflect dishonored or
returned

9
<PAGE> 266

items. For additional information refer to the applicable Disclosure Statement
and, specifically therein, "Holds and Funds Availability."

DIVIDENDS

The Fund declares dividends daily payable to shareholders of record as of
9:00 a.m. (Pacific time). You begin earning dividends on your Class S shares of
the Fund on the day your purchase order for such shares is effective and
continue to earn dividends through the day prior to the date you redeem such
shares. Dividends for a Saturday, Sunday or Holiday are credited on the
preceding Business Day. If you redeem shares before the dividend payment date,
any dividends credited to you will be paid on the following dividend payment
date. The Fund declares any capital gains at least annually. Dividends declared
in a month are reinvested in Class S Shares of the Fund early in the following
month.

HOW TO REDEEM SHARES

If, on any day Wells Fargo Bank and the Fund are open for business,
withdrawals from your Managed Sweep Account, including check transactions,
exceed deposits and credits, Wells Fargo Bank will transmit a redemption order
on your behalf to the Fund in the dollar amount of that day's Net Sweep Amount.
If your Managed Sweep Account with Wells Fargo Bank is closed as described in
the applicable Disclosure Statement, Wells Fargo Bank transmits a redemption
request on your behalf to the Fund for the balance of the Class S Shares of the
Fund held through your Account. Your shares are normally redeemed at the next
NAV, expected to be a constant $1.00 per share, calculated after the Fund has
received the redemption order transmitted on your behalf. Redemption proceeds
may be more or less than the amount invested and, therefore, a redemption of
Fund shares may result in a gain or loss for federal and state income tax
purposes. The Fund ordinarily will remit your redemption proceeds within seven
days after your redemption order is received from Wells Fargo Bank 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 the Fund of securities owned by it
is not reasonably practicable or (b) it is not reasonably practicable for the
Fund to determine fairly 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 the Fund. In addition, Wells Fargo Bank may withhold redemption
proceeds pending check collection or processing or for other reasons all as set
forth more fully in "Holds and Funds Availability" and elsewhere in the
applicable Disclosure Statement.

ADDITIONAL SHAREHOLDER SERVICES

Certain optional services available to persons who invest directly in Class
A Shares of the Fund, including certain exchange privileges which allow
shareholders to exchange their Fund shares for shares of other funds in the
Stagecoach Family of Funds, are not available to persons who invest in Class S
Shares of the Fund. These services are described in separate prospectuses
describing direct investments in Class A Shares of the Fund, which are available
from Stagecoach Shareholder Services by calling 800-222-8222.

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<PAGE> 267

MANAGEMENT AND SERVICING FEES

INVESTMENT ADVISER

Subject to the overall supervision of the Company's Board of Directors,
Wells Fargo Bank, as the investment adviser to the Fund, provides investment
guidance and policy direction in connection with the management of the Fund's
assets. Wells Fargo Bank also furnishes the Board of Directors with periodic
reports on the investment strategies and performance of the Fund. For its
services as investment adviser, Wells Fargo Bank is entitled to a monthly
investment advisory fee at the annual rate of 0.40% of the average daily net
assets of the Fund. From time to time, Wells Fargo Bank, may waive such fees in
whole or in part. Any such waiver will reduce the Fund's expenses and,
accordingly, have a favorable impact on the Fund's yield. From time to time the
Fund consistent with its investment objectives, policies and restrictions, may
invest in securities of companies with which Wells Fargo Bank has a lending
relationship. For the year ended December 31, 1994, Wells Fargo Bank was paid
0.40% of the average daily net assets of the Fund for its services as investment
adviser.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank also serves as the Fund's custodian, transfer agent and
dividend disbursing agent. Under its 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 94105.

SHAREHOLDER SERVICING AGENT

The Company has entered into a Shareholder Servicing Agreement with Wells
Fargo Bank on behalf of the Class S Shares and may enter into similar agreements
with other entities. Under such agreements, Shareholder Servicing Agents will,
as agent for their customers, among other things: answer customer inquiries
regarding account status and history and the manner in which purchases and
redemptions of Fund shares may be effected; provide necessary personnel and
facilities to establish and maintain shareholder accounts and records; assist in
processing purchase and redemption 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 orders and
transfers; 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 and redemptions; 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 asset level or 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. The fee will not exceed, on an
annualized basis for the Fund's then-current fiscal year, the lesser of (1)
0.25% of the average daily net assets attributable to the Class S Shares of

11
<PAGE> 268

the Fund, as represented by shares 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 National Association of Securities
Dealers, Inc. ("NASD").

A Shareholder Servicing Agent 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 minimum initial investment
or payment of a separate fee for additional services. Each Shareholder Servicing
Agent will be 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.

SPONSOR, ADMINISTRATOR AND DISTRIBUTOR

Subject to the overall supervision of the Company's Board of Directors,
Stephens provides the Fund with administrative services, including general
supervision of the Fund's operation, coordination of the other services provided
to the Fund, 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. Stephens also furnishes office space and certain facilities to
conduct the Fund's business, and compensates the Directors, officers and
employees who are affiliated with Stephens. For these services, Stephens is
entitled to 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 charged to the
Fund in whole or in part. Any such waivers will reduce the Fund's expenses and,
accordingly, have a favorable impact on the Fund's yield.

Stephens also has entered into a Distribution Agreement pursuant to which
it has the responsibility for distributing Fund shares. The Company has adopted
a Distribution Plan on behalf of the Class S Shares of the Fund under the SEC's
Rule 12b-1 (the "Plan"). Under the Plan and pursuant to the Distribution
Agreement, the Fund pays Stephens, as compensation for distribution-related
services, a monthly fee at the annual rate of up to 0.75% of the average daily
net assets attributable to the Class S Shares of the Fund or the maximum amount
payable under applicable laws, regulations and rules, whichever is less. The
actual fee payable to Stephens is determined, within the applicable limit, from
time to time by mutual agreement between the Company and Stephens. Stephens may
retain any portion of the total distribution 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 fee payable
to Stephens under the Distribution Agreement is not based upon the actual
expenditures of Stephens, the expenses of Stephens (which may include overhead
expenses) may be more or less than the fees received by it under the
Distribution Agreement. The Plan contemplates further that, to the extent any
fees payable pursuant to a Shareholder Servicing Agreement (discussed above) are
deemed to be for distribution-related services, rather than shareholder
services, such payments are approved and payable pursuant to the Plan. 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.

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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

As noted previously, from time to time, Wells Fargo Bank and Stephens may
waive their respective fees in whole or in part and reimburse expenses payable
to others. Any such waivers or reimbursements will reduce the Fund's expenses
and, accordingly, have a favorable impact on the yield of the Fund's shares.
Except for the expenses borne by Wells Fargo Bank and Stephens, the Company
bears all costs of its operations, including advisory, shareholder servicing,
transfer agency, custody and administration fees; payments pursuant to the Plan;
interest, fees and expenses of independent auditors and legal counsel; and any
extraordinary expenses. Expenses attributable to the Fund are charged against
the Fund's assets. Certain expenses attributable only to Class S Shares or Class
A Shares are charged to such shares. General expenses of the Company are
allocated among all of the Company's funds, in a manner proportionate to the net
assets of each fund, on a transactional basis or on such other basis as the
Company's Board of Directors deems equitable.

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 net
investment income (including net short-term capital gains, if any) declared and
paid by the Fund will be taxable as ordinary income to Fund shareholders, even
if such dividends are automatically reinvested in Class S Shares. 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. The Fund intends to pay out substantially all of its net
investment income and net realized capital gains (if any) for each year. The
Fund does not expect its dividends to qualify for the dividends-received
deduction allowed to corporate shareholders.

The Fund, or the Fund's Shareholder Servicing Agent on its behalf, will
inform you of the amount and nature of the Fund's dividends and capital gains.
You should keep all statements you receive to assist in your personal record
keeping. The Company is required to withhold, subject to certain exemptions, at
a rate of 31% on dividends paid and redemption proceeds (including proceeds from
exchanges) paid or credited to individual shareholders of the Fund if a correct
Taxpayer Identification Number, certified when required, is not on file with the
Company or the Transfer Agent. In connection with this withholding requirement,
you will be asked to certify on your Account Application that the social
security or taxpayer identification number you provide is correct and that you
are not subject to 31% back-up withholding for previous underreporting to the
IRS.

Foreign shareholders may be subject to different tax treatment, including a
withholding tax. See "Federal Income Taxes - Foreign Shareholders" in the Fund's
SAI.

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Further federal tax considerations are discussed in the Fund's SAI. All
investors should consult their individual tax advisers with respect to their
particular tax situations as well as the state and local tax status of
investments in shares of the Fund.

CLASS A SHARES

In addition to the Class S Shares, the Fund also offers another class of
shares -- the Class A Shares. Class A Shares are available through direct
investment or through Wells Fargo Bank sweep accounts. Class A Shares are
subject to the same fees and expenses as the Class S Shares, except that Class A
shares are subject to a Rule 12b-1 fee of 0.05% of net assets and a shareholder
services fee of up to 0.30% of net assets. Under the Distribution Plan for Class
A Shares of the Fund, Stephens is entitled to receive as compensation for
distribution-related services, a monthly fee at an annual rate of up to 0.05% of
the Fund's average daily net assets attributable to Class A Shares. This fee may
be used by Stephens to compensate Selling Agents or to compensate or reimburse
Stephens for distribution-related expenses. Further, the Class A Shares have
exactly the same preference and conversion rights, restrictions, limitations,
qualifications, terms and conditions of redemption as the Class S Shares. The
Class A Shares also have identical voting rights except that, on matters that
affect one class but not another, only shareholders of the affected class have
voting rights and they vote as a class. Class A Shares of the Fund may be
exchanged for Class A Shares of any other investment portfolio of the Company or
for shares of certain other funds in the Stagecoach Family of Funds (provided
that shares of the investment portfolio to be acquired are registered for sale
in your state of residence). You may call 800-222-8222 to obtain additional
information about Class A Shares and a prospectus describing such shares.

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PROSPECTUS APPENDIX --
ADDITIONAL INVESTMENT POLICIES

FUND INVESTMENTS -- MONEY MARKET MUTUAL FUND

The Money Market Mutual Fund may invest in the following:

(i) obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities, including government-sponsored
enterprises ("U.S. Government obligations") (discussed below);

(ii) negotiable certificates of deposit, fixed time deposits, bankers'
acceptances or other short-term obligations of U.S. banks
(including foreign branches) that have more than $1 billion in
total assets at the time of investment and are members of the
Federal Reserve System or are examined by the Comptroller of the
Currency or whose deposits are insured by the Federal Deposit
Insurance Corporation ("FDIC") ("bank instruments");

(iii) commercial paper rated at the date of purchase P-1 by Moody's
Investors Service, Inc. ("Moody's") or "A-1+" or "A-1" by Standard
& Poor's Corporation ("S&P") ("rated commercial paper");

(iv) commercial paper unrated at the date of purchase but secured by a
letter of credit from a U.S. bank that meets the above criteria
for investment;

(v) certain floating and variable rate instruments ("variable rate
instruments") (discussed below);

(vi) certain repurchase agreements ("repurchase agreements") (discussed
below); and

(vii) short-term, U.S. dollar-denominated obligations of U.S. branches
of foreign banks that at the time of investment have more than $10
billion, or the equivalent in other currencies, in total assets
("foreign bank obligations") (discussed below).

Municipal Obligations

Municipal bonds generally have a maturity at the time of issuance of up to
40 years. Medium-term municipal notes are generally issued in anticipation of
the receipt of tax funds, of the proceeds of bond placements, or of other
revenues. The ability of an issuer to make payments on notes is therefore
especially dependent on such tax receipts, proceeds from bond sales or other
revenues, as the case may be. Municipal commercial paper is a debt obligation
with a stated maturity of 270 days or less that is issued to finance seasonal
working capital needs or as short-term financing in anticipation of longer-term
debt.

U.S. Government Obligations

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government-sponsored enterprises. Some obligations of agencies or
instrumentalities of the U.S. Government are supported by the full faith and
credit of the United States or U.S. Treasury guarantees; others, by the right of
the issuer or guarantor to borrow from the U.S. Treasury; still others, by the
discretionary authority of the U.S. Government to purchase certain obligations
of the agency or instrumentality; and others, only by the credit of the agency
or instrumentality issuing the obligation. In the case of obligations not backed
by the full faith and credit of the United States, the investor must look
principally to the agency or instrumentality issuing or guaranteeing the
obligation for ultimate repayment, which agency or instrumentality may be
privately owned. There can be no assurance that the U.S. Government will provide
financial support to its agencies or instrumentalities where it is not obligated
to do so. In addition, U.S. Government obligations are subject to fluctuations
in market value due to fluctuations in market interest rates. As a general
matter, the value of debt instruments, including U.S. Government obligations,
declines when market interest rates increase and rises when market interest
rates decrease. Certain types of U.S. Government obligations are subject to
fluctuations in yield or value due to their structure or contract terms.

Floating- and Variable-Rate Instruments

Certain of the debt instruments that the Fund may purchase bear interest at
rates that are not fixed, but vary, for example, with changes in specified
market rates or indices or at specified intervals. Certain of these instruments
may carry a demand feature that would permit the holder to tender them back to
the issuer at par value prior to maturity. The Fund may, in accordance with SEC
rules, account for these instruments as maturing at the next interest rate
readjustment date or the date at which the Fund may tender the instrument back
to the issuer, whichever is later. The floating- and variable-rate instruments
that the Fund may purchase include certificates of participation in such
obligations. The Fund may invest in floating- and variable-rate obligations even
if they carry stated maturities in excess of thirteen months, upon compliance
with certain conditions of the SEC, in which case such obligations will be
treated in accordance with these conditions as having maturities not exceeding
thirteen months.

Wells Fargo Bank, as investment adviser to the Fund, monitors on an ongoing
basis the ability of an issuer of a demand instrument to pay principal and
interest on demand. Events affecting the ability of the issuer of a demand
instrument to make payment when due may occur between the time a Fund elects to
demand payment and the time payment is due, thereby affecting such Fund's
ability to obtain payment at par. Demand instruments whose demand feature is not
exercisable within seven days may be treated as liquid, provided that an active
secondary market exists for those instruments.

Repurchase Agreements

The Fund may enter into repurchase agreements wherein the seller of a
security to the Fund agrees to repurchase that security from the Fund at a
mutually agreed-upon time and price. The period of maturity is usually quite
short, often overnight or a few days, although it may extend over a number of
months. The Fund may enter into repurchase agreements only with respect to U.S.
Government obligations and other obligations that could otherwise be purchased
by the Fund. All repurchase agreements will be fully collateralized based on
values that are marked to market daily. While the maturities of the underlying
securities in a repurchase agreement transaction may be greater than thirteen
months, the term of any

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repurchase agreement on behalf of the Fund will always be less than thirteen
months. If the seller defaults and the value of the underlying securities has
declined, the Fund may incur a loss. In addition, if bankruptcy proceedings are
commenced with respect to the seller of the security, the Fund's disposition of
the security may be delayed or limited. The Fund will enter into repurchase
agreements only with registered broker/dealers and commercial banks that meet
guidelines established by the Company's Board of Directors and that are not
affiliated with Wells Fargo Bank or Stephens. The Fund may participate in pooled
repurchase agreement transactions with other funds advised by Wells Fargo Bank.

Letters of Credit

Certain of the debt obligations, certificates of participation, commercial
paper and other short-term obligations which the Fund is permitted to purchase
may be backed by an unconditional and irrevocable letter of credit of a bank,
savings and loan association or insurance company that assumes the obligation
for payment of principal and interest in the event of default by the issuer.
Letter of credit-backed investments must, in the opinion of Wells Fargo Bank, be
of investment quality comparable to other permitted investments of the Fund.

Foreign Obligations

The Fund may invest up to 25% of its assets in high-quality, short-term
debt obligations of foreign branches of U.S. banks or U.S. branches of foreign
banks that are denominated in and pay interest in U.S. dollars. Investments in
foreign obligations raise certain considerations that are not typically
associated with investing in domestic obligations. There may be less publicly
available information about a foreign issuer than about a domestic issuer.
Foreign issuers also are not subject to the same uniform accounting, auditing
and financial reporting standards or governmental supervision as domestic
issuers. In addition, with respect to certain foreign countries, interest may be
withheld at the source under foreign income tax laws, and there is a possibility
of expropriation or confiscatory taxation, political or social instability or
diplomatic developments that could adversely affect investments in, the
liquidity of and the ability to enforce contractual obligations with respect to
securities of issuers located in those countries.

INVESTMENT POLICIES

The Fund's investment objective, as set forth in "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
Fund's SAI. If the Company's Board of Directors determines, however, that the
investment objective of the Fund can best be achieved by a substantive change in
a nonfundamental investment policy or strategy, the Company's Board may make
such change without shareholder approval and will disclose any such material
changes in the then-current prospectus.

As matters of fundamental policy, the Fund may: (i) borrow from banks up to
10% of the current value of its net assets only for temporary purposes in order
to meet redemptions, and these borrowings may be secured by the pledge of up to
10% of the current value of the Fund's net assets (but investments may not be
purchased by the Fund while any such outstanding borrowing in excess of 5% of
its net assets exists); (ii) not make loans of portfolio securities or other
assets, except that loans for purposes of this restriction will not

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include the purchase of fixed time deposits, repurchase agreements, commercial
paper and other short-term obligations, and other types of debt instruments
commonly sold in a public or private offering; and (iii) not invest more than
25% of its assets (i.e., concentrate) in any particular industry, excluding U.S.
Government obligations and obligations of domestic banks (for purposes of this
restriction, domestic bank obligations do not include obligations of foreign
branches of U.S. banks and obligations of U.S. branches of foreign banks).

As a matter of nonfundamental policy: (i) the Fund may not purchase
securities of any issuer (except for U.S. Government obligations, for certain
temporary purposes and for certain guarantees and unconditional puts) 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; and (ii) the Fund may not invest
more than 10% of the current value of its net assets in securities that are
illiquid by virtue of the absence of a readily available market or legal or
contractual restrictions on resale and fixed time deposits that are subject to
withdrawal penalties and that have maturities of more than seven days. With
respect to item (i), it may be possible that the Company would own more than 10%
of the outstanding voting securities of an issuer.

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SPONSOR, DISTRIBUTOR AND ADMINISTRATOR

Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201

INVESTMENT ADVISER, 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 Funds 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

<TABLE>
<S> <C> <C>
STAGECOACH MONEY MARKET MUTUAL FUNDS:
------------------------------------------------------------------------------------------------------------
- are NOT FDIC insured - seek to maintain a stable net asset value of
- are NOT deposits or obligations of Wells $1.00
Fargo Bank per share; however, there can be no assurance
- are NOT guaranteed by Wells Fargo Bank that the funds will meet this objective. Yields
- involve investment risk, including possible will vary with market conditions.
loss of principal LOGO
</TABLE>

BUS/189 (5/95)