STAGECOACH FUNDS INC /AK/, 485APOS, 1996-07-02

STAGECOACH FUNDS INC /AK/
485APOS, 1996-07-02

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<PAGE> 1

As filed with the Securities and Exchange Commission
on July 2, 1996
Registration No. 33-42927; 811-6419

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
[X]
Post-Effective Amendment No. 27

And

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]

Amendment No. 28 [X]
(Check appropriate box or boxes)

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

STAGECOACH FUNDS, INC.
(Exact Name of Registrant as specified in Charter)
111 Center Street
Little Rock, Arkansas 72201
(Address of Principal Executive Offices, including Zip Code)

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

Registrant's Telephone Number, including Area Code: (800) 643-9691
Richard H. Blank, Jr.
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
(Name and Address of Agent for Service)
With a copy to:
Robert M. Kurucza, Esq.
Marco E. Adelfio, Esq.
Morrison & Foerster LLP
2000 Pennsylvania Ave., N.W.
Washington, D.C. 20006

It is proposed that this filing will become effective (check appropriate box):

[ ] Immediately upon filing pursuant [ ] on _________ pursuant to
to Rule 485(b) Rule 485(b), or

[ ] 60 Days after filing pursuant [ ] on _________ pursuant to
to Rule 485(a)(1) Rule 485(a)(1), or

[X] 75 days after filing pursuant [ ] on _________ pursuant to
to Rule 485(a)(2) Rule 485(a)(2), or
<PAGE> 2
If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

The Registrant has registered an indefinite number of shares of its Common
Stock, $.001 par value, under the Securities Act of 1933, pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Rule 24f-2
Notice for the fiscal year ending December 31, 1995, was filed with the
Securities and Exchange Commission on February 29, 1996.

This Post-Effective Amendment to the Registration Statement also has been
executed by Master Investment Trust (another registered investment company with
separate series in which certain of the Registrant's series invest
substantially all of their assets) and by such company's trustees and principal
officer.
<PAGE> 3

EXPLANATORY NOTE

This Post-Effective Amendment to the Registration Statement
(the "Amendment") of Stagecoach Funds, Inc. (the "Company") is being
filed to register a new series of the Company offering Class A, B and
Institutional Shares - the Small Cap Fund (the "Fund"). The Fund will be
a feeder fund in a master/feeder structure, investing substantially all
of its assets into a newly organized series, the Small Cap Master
Portfolio, to be registered in Master Investment Trust (SEC File No.
811-6415).

This Amendment does not affect the Registration Statement
for the Company's previously existing Aggressive Growth, Asset
Allocation, California Tax-Free Bond, California Tax-Free Income,
California Tax-Free Money Market Mutual, Corporate Stock, Diversified
Income, Ginnie Mae, Growth and Income, Money Market Mutual, National
Tax-Free Money Market Mutual, Short-Intermediate U.S. Government Income
and U.S. Government Allocation Funds, or the Registration Statement for
the Arizona Tax-Free, Balanced, Equity Value, Government Money Market
Mutual, Intermediate Bond, Money Market Trust, National Tax-Free, Oregon
Tax-Free, Prime Money Market Mutual and Treasury Money Market Mutual
Funds.
<PAGE> 4
Cross Reference Sheet

SMALL CAP FUND

Form N-1A Item Number

Part A Prospectus Captions
- ------ -------------------

1 Cover Page
2 Prospectus Summary; Summary of Fund Expenses
3 Not Applicable
4 The Fund, the Master Portfolio and Management;
Prospectus Appendix - Additional Investment Policies
5 How the Fund Works; The Fund, the Master Portfolio
and Management
6 The Fund, the Master Portfolio and Management;
Investing in the Fund; Additional Shareholder
Services
7 Investing in the Fund; Dividends; Taxes
8 How To Redeem Shares
9 Not Applicable

Part B Statement of Additional Information Captions
- ------ --------------------------------------------

10 Cover Page
11 Table of Contents
12 Cover Page
13 Investment Restrictions Appendix
14 Management
15 Management
16 Management; Servicing Plans; Independent Auditors
17 Portfolio Transactions
18 Capital Stock; Other
19 Determination of Net Asset Value
20 Federal Income Tax
21 Distribution Plan
22 Performance Calculations
23 Financial Information

Part C Other Information
- ------ -----------------

24-32 Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C of this Document.
<PAGE> 5

PROSPECTUS

SMALL CAP FUND

CLASS A AND CLASS B SHARES

September __, 1996
<PAGE> 6
STAGECOACH FUNDS(R)

SMALL CAP FUND

CLASS A AND CLASS B SHARES

Stagecoach Funds, Inc. (the "Company") is an open-end, series
investment company. This Prospectus contains information about one of the
funds in the Stagecoach Family of Funds-the SMALL CAP FUND (the "Fund"). This
Prospectus describes two classes of shares of the Fund -- Class A Shares and
Class B Shares.

THE FUND'S INVESTMENT OBJECTIVE IS TO SEEK ABOVE-AVERAGE LONG-TERM
CAPITAL APPRECIATION IN ORDER TO PROVIDE INVESTORS WITH A RATE OF TOTAL RETURN
EXCEEDING THAT OF THE RUSSELL 2000 INDEX (BEFORE FEES AND EXPENSES) OVER A TIME
HORIZON OF THREE TO FIVE YEARS. THE FUND SEEKS TO ACHIEVE THIS OBJECTIVE BY
INVESTING ALL OF ITS ASSETS IN THE SMALL CAP MASTER PORTFOLIO ( THE "MASTER
PORTFOLIO") OF MASTER INVESTMENT TRUST (THE "TRUST"), AN OPEN-END, SERIES
INVESTMENT COMPANY, RATHER THAN IN A PORTFOLIO OF SECURITIES. THE MASTER
PORTFOLIO HAS THE SAME INVESTMENT OBJECTIVE AS THE FUND AND THE FUND'S
INVESTMENT EXPERIENCE CORRESPONDS DIRECTLY WITH THE MASTER PORTFOLIO'S
INVESTMENT EXPERIENCE.

The Master Portfolio seeks to achieve its investment objective through
the active management of a broadly diversified portfolio consisting primarily
of growth-oriented common stocks with market capitalizations between $50
million and $1 billion at the time of acquisition.

Please read this Prospectus and retain it for future reference. It is
designed to provide you with important information and to help you decide if
the Fund's goals match your own. A Statement of Additional Information ("SAI")
dated September __, 1996, containing additional and more detailed information
about the Fund has been filed with the Securities and Exchange Commission (the
"SEC") and is hereby incorporated by reference into this Prospectus. 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 1-800-222-8222. If
you hold shares in an IRA, please call 1-800-BEST-IRA (1-800-237-8472) 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.

SHARES OF THE FUND ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED,
ENDORSED OR GUARANTEED BY, WELLS FARGO BANK, N.A. ("WELLS FARGO") 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

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GOVERNMENTAL AGENCY. AN INVESTMENT IN THE FUND INVOLVES CERTAIN RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL.

WELLS FARGO IS THE INVESTMENT ADVISER AND PROVIDES CERTAIN OTHER
SERVICES TO THE FUND AND THE MASTER PORTFOLIO, FOR WHICH IT IS COMPENSATED.
STEPHENS INC. ("STEPHENS') WHICH IS NOT AFFILIATED WITH WELLS FARGO, IS THE
SPONSOR, ADMINISTRATOR AND DISTRIBUTOR FOR THE FUND.

PROSPECTUS DATED SEPTEMBER __, 1996

ii
<PAGE> 8
TABLE OF CONTENTS

<TABLE>
<S> <C>
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . 1

Summary of Fund Expenses . . . . . . . . . . . . . . . . . . . . . . 5

How the Fund Works . . . . . . . . . . . . . . . . . . . . . . . . . 7

Investment Objective and Policies . . . . . . . . . . . . . . . . 7

Master/Feeder Structure . . . . . . . . . . . . . . . . . . . . . 11

Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . 12

Investing in the Fund . . . . . . . . . . . . . . . . . . . . . . . . 15

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

How To Redeem Shares . . . . . . . . . . . . . . . . . . . . . . . . 25

Additional Shareholder Services . . . . . . . . . . . . . . . . . . . 29

Management, Distribution and Servicing Fees . . . . . . . . . . . . . 32

Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Prospectus Appendix-Additional Investment Policies . . . . . . . . A-1
</TABLE>

iii
<PAGE> 9
PROSPECTUS SUMMARY

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

Q. WHAT ARE THE FUND'S AND THE MASTER PORTFOLIO'S INVESTMENT OBJECTIVES?

A. The SMALL CAP FUND seeks above-average long-term capital appreciation in
order to provide investors with a rate of total return exceeding that of
the Russell 2000 Index (before fees and expenses) over a time horizon of
three to five years. The Fund seeks to achieve this investment objective
by investing all of its assets in the Master Portfolio of the Trust, a
professionally managed, open-end series investment company. The Master
Portfolio has the same investment objective as the Fund. The Master
Portfolio seeks to achieve this investment objective through the active
management of a broadly diversified portfolio consisting primarily of
growth-oriented common stocks with market capitalizations between $50
million and $1 billion at the time of acquisition. The Master Portfolio
intends to sell the common stock of any company in its investment
portfolio after such Company's market capitalization exceeds $2 billion.

The Master Portfolio invests primarily in common stocks expected by Wells
Fargo, as investment adviser, to have above-average prospects for capital
appreciation. In pursuing the Master Portfolio's investment objective,
Wells Fargo seeks to invest in smaller-sized companies, both domestic and
foreign, that it believes to be characterized by new or innovative
products, services or processes which should enhance prospects for growth
of future earnings. The Fund and Master Portfolio are designed to provide
above-average capital growth for investors willing to assume above-average
risk. As with all mutual funds, there can be no assurance that the Fund
and Master Portfolio will achieve their investment objectives. See "How
The Fund Works -- Investment Objective and Policies."

The Russell 2000 Index is a subset of the larger Russell 3000 Index. The
Russell 3000 Index includes 3000 large U.S. companies that, as of
[September] 1, 1996, constituted approximately [98%] of the capitalization
of the U.S. equity market. The Russell 2000 Index consists of the 2000
smallest securities in the larger Russell 3000 Index. As of September 1,
1996, the average market capitalization of companies in the Russell 2000
Index was [$__] million.

Q. WHO MANAGES MY INVESTMENTS?

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Fargo also provides the Fund and the Master Portfolio with transfer
agency, dividend disbursing agency and custodial services. Wells Fargo is
entitled to receive a monthly advisory fee at the annual rate of 0.60% of
the average daily net assets of the Master Portfolio.

See "Management of the Fund" and "Management, Distribution and Servicing
Fees."

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

A. Investments in the Fund and Master Portfolio are not insured against loss
of principal, are not bank deposits or obligations of Wells Fargo and are
not insured by the Federal Deposit Insurance Corporation ("FDIC"). The
Master Portfolio's equity investments are subject to market risk. Market
risk is the risk that stock prices will decline over short or even
extended periods. The U.S. stock market experiences periods when stock
prices rise and periods when stock prices decline. Therefore, you should
be prepared to accept some risk with the money invested in the Fund. As
with all mutual funds, there can be no assurance that the Fund or the
Master Portfolio will achieve its investment objective.

The Master Portfolio may invest a significant portion of its assets in the
securities of smaller and newer issuers. Investments in such companies
may present opportunities for capital appreciation because of high
potential earnings growth. However, such investments may present greater
risks than investments in larger-size companies with more established
operating histories, diverse product lines and financial capacity.
Securities of small and new companies generally trade less frequently or
in limited volume, or only in the over-the-counter market or on a regional
securities exchange. As a result, the prices of such securities may be
more volatile than those of larger, more established companies and, as a
group, these securities may suffer more severe price declines during
periods of generally declining equity prices.

Because the Master Portfolio engages in active portfolio management, the
Master Portfolio may experience relatively high turnover and transaction
(i.e., brokerage commission) costs. Portfolio turnover also can generate
short-term capital gains tax consequences. You should consult your
individual tax advisor with respect to your particular tax situation.

See "How the Fund Works -- Investment Objective and Policies."

Q. HOW DO I INVEST?

A. You may invest by purchasing shares of the Fund at its public offering
price, which is the net asset value ("NAV") plus any applicable sales
charge. 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. 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

2
<PAGE> 11
exceptions to these minimums may be available. Class A Shares are subject
to a maximum front-end sales charge of 4.50% (4.71% of the net amount
invested). 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 NAV at purchase or NAV 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. See "Investing in the Fund." For more details, contact
Stephens (the Fund's sponsor and distributor), a Shareholder Servicing
Agent or a Selling Agent (such as Wells Fargo).

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

A. The Fund declares dividends from net investment income annually.
Dividends are automatically reinvested in shares of the same class of the
Fund at NAV without a sales charge, unless you elect to receive dividends
in cash. You may also elect to reinvest dividends 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.

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. The Company does not charge
a fee for redemption of Class A Shares. In addition, the Company reserves
the right to impose charges for wiring redemption proceeds. For more
details, contact Stephens, a Shareholder Servicing Agent or a Selling
Agent (such as Wells Fargo).

See "How To Redeem Shares" and "How to Purchase Shares--Contingent
Deferred Sales Charges--Class B Shares."

Q. WHAT ARE DERIVATIVES AND DOES THE FUND OR MASTER PORTFOLIO USE THEM?

A. Derivatives are financial instruments whose value is derived, at least in
part, from the price of another security or a specified asset, index or
rate. Some of the permissible investments described in this Prospectus,
such as variable rate instruments which have an interest rate that is
reset periodically based on an index, can be considered derivatives. Some
derivatives may be more sensitive than direct securities 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. The Master Portfolio uses derivatives only to a limited
extent in ways that are incidental to its overall strategy of investing
directly in common stocks. For example, the Master Portfolio may, from
time to time, hold options, warrants or debt

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instruments that are convertible into (and whose value is, therefore,
"derived from") common stocks or may hold derivatives to hedge against an
underlying position in a security.

Q. WHAT STEPS DO THE FUND AND MASTER PORTFOLIO TAKE TO CONTROL
DERIVATIVES-RELATED RISKS?

A. Wells Fargo, as investment adviser to the Master Portfolio uses a variety
of internal risk management procedures to ensure that derivatives use is
consistent with the Fund's and the Master Portfolio's investment
objectives, does not expose the Fund or the Master Portfolio to undue
risks and is closely monitored. These procedures include providing
periodic reports to the Boards of Directors and Trustees concerning the
use of derivatives. Derivatives use also is subject to broadly applicable
investment policies. For example, neither the Fund nor the Master
Portfolio may invest more than a specified percentage of its assets in
"illiquid securities," including those derivatives that do not have active
secondary markets. Nor may certain derivatives be used without
establishing adequate "cover" in compliance with SEC rules limiting the
use of leverage.

For more information on the Fund's investment activities, see "Prospectus
Appendix-Additional Investment Policies."

4
<PAGE> 13
SUMMARY OF FUND EXPENSES

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<CAPTION>
SMALL CAP FUND
--------------
CLASS A CLASS B
SHARES SHARES
------ ------
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) 4.50% None
Sales Charge Imposed in Reinvested Dividends . . None None
Maximum Sales Charge Imposed on Redemptions . . . None 3.00%
Exchange Fees . . . . . . . . . . . . . . . . . None None
</TABLE>

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

<TABLE>
<CAPTION>
SMALL CAP FUND
--------------
CLASS A CLASS B
SHARES SHARES
------ ------
<S> <C> <C>
Management Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.60% 0.60%
12b-1 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10% 0.75%

Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40% 0.40%
---- ----

TOTAL FUND OPERATING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . 1.10% 1.75%

</TABLE>

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<PAGE> 14
EXAMPLE OF EXPENSES

CLASS A SHARES. You would pay the following expenses on a $1,000 investment
in Class A Shares of the Fund, assuming (A) a 5% annual return and (B)
redemption at the end of each time period indicated:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Class A Shares $ 56 $ 78
</TABLE>

CLASS B SHARES. 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:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Class B Shares $ 48 $ 65
</TABLE>

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:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Class B Shares $ 18 $ 55
</TABLE>

EXPLANATION OF TABLES

The purpose of the above tables is to assist you in understanding the
various costs and expenses that an investor in a Fund will bear directly or
indirectly. The tables reflect expenses at both the Fund and Master Portfolio
levels. The tables do not reflect any charges that may be imposed by
Shareholder Servicing Agents directly on their customer accounts in connection
with an investment in the Fund.

SHAREHOLDER TRANSACTION EXPENSES are charges you may 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 Fund and may be subject to a contingent deferred sales
charge on Class B Shares if you redeem such shares within a specified period.
In certain instances, you may qualify for a reduction or waiver of the
front-end sales charge. There are no other sales loads, redemption fees or
exchange fees charged by the Fund. However, the Company reserves the right to
impose charges for wiring redemption proceeds. See "Investing in the
Fund-Sales Charges."

ANNUAL FUND OPERATING EXPENSES for the Class A and B Shares are based
on applicable contract amounts currently in effect, except that the amounts
shown under "Other Expenses" and "Total Fund Operating Expenses" are based on
estimated amounts for the current fiscal year,

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<PAGE> 15
restated to reflect voluntary fee waivers and expense reimbursements that are
expected to continue to reduce expenses during the current fiscal year. Wells
Fargo and Stephens each may elect, in its sole discretion to otherwise waive or
reimburse all or a portion of its respective fees charged to, or expenses paid
by, the Fund or Master Portfolio. Any waivers or reimbursements would reduce
the Fund's total expenses. There can be no assurance that voluntary fee
waivers Longetermrshareholders ofntheuFund could pay more in
distribution-related charges than the economic equivalent of the maximum
front-end sales charges applicable to mutual funds sold by members of the
National Association of Securities Dealers Inc. ("NASD"). For more complete
descriptions of the various costs and expenses you can expect to incur as an
investor in the Fund, see "Investing in the Fund - How To Buy Shares" and
"Management, Distribution and Servicing Fees."

EXAMPLE OF EXPENSES is a hypothetical illustration of the expenses
associated with a $1,000 investment in shares of the Fund over stated periods
based on the expenses in the respective tables above and an assumed annual rate
of return of 5%. This annual 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;
actual expenses and returns may be greater or lesser than those shown.

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

With regard to the combined fees and expenses of the Fund and Master
Portfolio, the Company's Board of Directors has considered whether various
costs and benefits of investing all of the Fund's assets in the Master
Portfolio rather than directly in a portfolio of securities would be more or
less than if the Fund invested in portfolio securities directly. The Company's
Board of Directors believes that the aggregate per share expenses of the Fund
will be less than or approximately equal to the expenses incurred by the Fund
if the Fund invested directly in the type of securities held by the Master
Portfolio. See "Management, Distribution and Servicing Fees" for more complete
descriptions of the various costs and expenses applicable to the Fund. In
addition, if the Fund were to no longer invest in the Master Portfolio, these
expenses may change.

The Company offers a third class of shares that also invest in the
Master Portfolio -- The Institutional Class Shares. Institutional Class Shares
are available only to certain qualified institutional investors. In addition to
selling its interests to the Fund, the Master Portfolio may sell its interests
to other mutual funds or accredited investors. The expenses and,
correspondingly, the investment returns of the Institutional Class Shares and
other investment options in the Master Portfolio may differ from those of the
Class A and B Shares of the Fund. Information regarding these and other (if
any) investment options in the Master Portfolio may be obtained by calling
Stephens at 1-800-643-9691. Additional information regarding the Fund's and
the Master Portfolio's expenses is included under the headings "Summary of Fund
Expenses" and "Management, Distribution and Servicing Fees."

7
<PAGE> 16
HOW THE FUND WORKS

INVESTMENT OBJECTIVE AND POLICIES

Set forth below is a description of the investment objective and
related policies of the Fund and the Master Portfolio. As with all mutual
funds, there can be no assurance that the Fund or Master Portfolio will achieve
its investment objective.

INVESTMENT OBJECTIVE -- The Small Cap Fund's investment objective is
to seek above-average long-term capital appreciation in order to provide
investors with a rate of total return exceeding that of the Russell 2000 Index
(before fees and expenses) over a time horizon of three to five years. The
Small Cap Fund seeks to achieve its investment objective by investing all of
its assets in the Small Cap Master Portfolio, which has the same investment
objective as the Fund. The Fund and Master Portfolio are designed to provide
above-average capital growth for investors willing to assume above-average
risk. The Master Portfolio seeks to achieve this investment objective through
the active management of a broadly diversified portfolio of growth-oriented
common stocks. The Master Portfolio invests primarily in Companies with market
capitalizations between $50 million and $1 billion at the time of acquisition,
although it may sometimes invest in companies with capitalizations greater or
less than these amounts. The Master Portfolio invests primarily in common
stocks of domestic and foreign companies believed by Wells Fargo, as investment
adviser, to be characterized by new or innovative products, services or
processes and to have above-average prospects for capital appreciation. The
Master Portfolio will sell the common stock of any company in its investment
portfolio after such company's market capitalization exceeds $2 billion.

EQUITY SECURITIES -- The equity securities in the Master Portfolio's
investment portfolio may have some of the following characteristics:

- Low or no dividends

- Smaller market capitalizations (less than $1 billion)

- Less market liquidity

- Newly public companies (i.e., recent initial public offering)

- Relatively short operating histories

- Aggressive capitalization structures (including high debt levels)

- Involvement in rapidly growing/changing industries and/or new technologies

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<PAGE> 17
turnaround or acquisition candidates. The Master Portfolio may invest in
companies with a market capitalization under $50 million if Wells Fargo
believes such investments to be in the best interests of the Master Portfolio.
The Master Portfolio may invest in attractive larger capitalization companies
with market capitalizations greater than $1 billion, but will sell the common
stock of such companies after their capitalizations exceed $2 billion.
Additionally, the Master Portfolio may acquire securities through initial
public offerings of companies whose securities have been offered to the public
for three months or less ("IPOs") and may acquire and hold securities of
start-up companies and other newer issuers. It is expected that no more than
20% of the Master Portfolio's assets will be invested in these highly
aggressive issues at one time.

There may be some additional risks associated with investments in
smaller capitalization companies, IPOs and start-up companies or other newer
issuers. Such companies tend to have limited operating histories and their
securities tend to be less liquid than securities of larger companies.
Further, the market price of such companies' securities is generally more
sensitive to changes in the issuer's financial condition and current economic
trends, and, therefore, the prices of such companies' securities may be more
volatile than those of larger companies.

Under ordinary market conditions, at least 65% of the value of the
total assets of the Master Portfolio will be invested in common stocks and in
securities which are convertible into common stocks that Wells Fargo, as
investment adviser, believes have better-than-average prospects for
appreciation. At most, 5% of the Master Portfolio's net assets will be
invested in convertible debt securities that are not either rated in the four
highest rating categories by one or more nationally recognized statistical
rating organizations ("NRSROs"), such as Moody's Investor Service, Inc.
("Moody's") or Standard & Poor's Corporation ("S&P"), or unrated securities
determined by Wells Fargo to be of comparable quality. Securities rated in the
fourth lowest rating category (i.e., rated "BBB" by S&P or "Baa" by Moody's)
are regarded by S&P as having an adequate capacity to pay interest and repay
principal, but changes in economic conditions or other circumstances are more
likely to lead to a weakened capacity to make such repayments. Moody's
considers such securities as having speculative characteristics.

From time to time Wells Fargo may determine that conditions in the
securities markets make pursuing the Master Portfolio's basic investment
strategy inconsistent with the best interests of the Master Portfolio's
investors. At such times, Wells Fargo may use temporary alternative strategies,
primarily designed to reduce fluctuations in the value of the Master
Portfolio's assets. In implementing these temporary "defensive" strategies, the
Master Portfolio may invest in preferred stock or investment-grade debt
securities and in money market securities. It is expected that these temporary
"defensive" investments will not exceed 35% of the Master Portfolio's total
assets.

The Master Portfolio pursues an active trading investment strategy,
and the length of time the Master Portfolio has held a particular security is
not generally a consideration in investment decisions. Accordingly, the Master
Portfolio's portfolio turnover rate may be higher than that of other funds that
do not pursue an active trading investment strategy. Portfolio turnover
generally involves some expense to the Master Portfolio, including brokerage
commissions or dealer mark-

9
<PAGE> 18
ups and other transactions costs on the sale of securities and the reinvestment
in other securities. Portfolio turnover also can generate capital gains tax
consequences.

MASTER/FEEDER STRUCTURE

The Fund invests all of its assets in the Master Portfolio of the
Trust which has the same investment objective as the Fund. See "Investment
Objective and Policies" for a description of the Fund's and Master Portfolio's
objectives and policies and "Management of the Fund" for a description of the
Fund's and Master Portfolio's management. The Trust is organized as a trust
under the laws of the State of Delaware. See "Organization and Capital Stock."

The Master Portfolio is the successor to certain assets of the Small
Capitalization Growth Fund for Employment Retirement Plans, a collective
investment fund (the "Collective Investment Fund"). The Collective Investment
Fund was a private, non-registered investment fund previously managed by Wells
Fargo. Immediately prior to the commencement of the Fund's operations, the
assets of the Collective Investment Fund were purchased by the Master Portfolio
and the Collective Investment Fund redeemed all of its outstanding interests
and ceased operating as a trust. The master Portfolio manages its investments
in a manner identical in all material respects to the operation of the
Collective Investment Fund.

The Company's Board of Directors believes that if other investors
invest their assets in the Master Portfolio, certain economic efficiencies may
be realized with respect to the Master Portfolio. For example, fixed expenses
that otherwise would have been borne solely by the Fund would be spread among a
potentially larger asset base provided by more than one fund investing in the
Master Portfolio. The Fund and other entities investing in the Master Portfolio
are each liable for all obligations of the Master Portfolio. However, the risk
of the Fund incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance existed and the Trust itself
is unable to meet its obligations. Accordingly, the Company's Board of
Directors believes that neither the Fund nor its shareholders will be adversely
affected by investing Fund assets in the Master Portfolio. However, if a mutual
fund or other investor withdraws its investment from the Master Portfolio, the
economic efficiencies (e.g., spreading fixed expenses among a larger asset
base) that the Company's Board believes may be available through investment in
the Master Portfolio may not be fully achieved. In addition, given the relative
novelty of the master/feeder structure, accounting or operational difficulties,
although unlikely, could arise. See "Management, Distribution and Servicing
Fees" for additional description of the Fund's and Master Portfolio's expenses
and management.

The investment objective and other fundamental policies of the Master
Portfolio cannot be changed without approval by the holders of a majority (as
defined in the 1940 Act) of the Master Portfolio's outstanding interests. See
"Investment Objectives and Policies." Whenever the Fund, as an interestholder
of the Master Portfolio, is requested to vote on any matter submitted to
interestholders of the Master Portfolio, the Fund will hold a meeting of its
shareholders to consider such matters. The Fund will cast its votes in
proportion to the votes received from its shareholders. Shares for which the
Fund receives no voting instructions will be voted in the same proportion as
the votes received from the other Fund shareholders.

Certain policies of the Master Portfolio which are non-fundamental may
be changed by vote of a majority of the Trust's Trustees without interestholder
approval. If the Master Portfolio's

10
<PAGE> 19
investment objective or fundamental or non-fundamental policies are changed,
the Fund may elect to change its objective or policies to correspond to those
of the Master Portfolio. The Fund may also elect to redeem its interests in the
Master Portfolio and either seek a new investment company with a matching
objective in which to invest 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 the
Fund or the Master Portfolio, to the extent possible. See "Investment
Objective and Policies" for additional information regarding the Fund's and the
Master Portfolio's investment objectives and policies. Additional information
regarding the officers and Directors/Trustees of the Company and the Trust is
located in the Fund's SAI under "Management."

The Fund may withdraw its investment in the Master Portfolio only if
the Company's Board of Directors determines that such action is in the best
interests of the Fund and its shareholders. Upon such withdrawal, the Company's
Board would consider alternative investments, including investing all of the
Fund's assets in another investment company with the same investment objective
as the Fund or hiring an investment adviser to manage the Fund's assets in
accordance with the investment policies described below with respect to the
Master Portfolio. For a description of the management and expenses of the Fund
and the Master Portfolio, see the Prospectus section "Management, Distribution
and Servicing Fees."

In addition to offering Class A and Class B Shares, the Fund offers a
third class of shares to qualified institutional investors -- the Institutional
Class Shares, which are also invested in the Master Portfolio. The Master
Portfolio may sell its interests to other mutual funds or accredited investors.
The expenses and, correspondingly, the investment returns of other investment
options in the Master Portfolio may differ from those of the Class A and B
Shares of the Fund. Information regarding these and other (if any) investment
options in the Master Portfolio may be obtained by calling Stephens at
1-800-643-9691. Additional information regarding the Fund's and the Master
Portfolio's expenses is included under the heading "Summary of Expenses."

PERFORMANCE

The performance of each class of shares of the Fund may be advertised
in terms of average annual total return. These performance figures are based
on historical results and are not intended to indicate future performance.

Average annual total return on the shares of each class is based on
the overall dollar or percentage change in value of a hypothetical investment
in such shares and assumes that all dividends and capital gain distributions
attributable to such class are reinvested in shares of that class. The
standardized average annual total return as calculated for Class A Shares
assumes that you have paid the maximum sales charge and, as calculated for
Class B Shares, assumes you have paid the maximum applicable contingent
deferred sales charge on your hypothetical investment. In addition to
presenting standardized total return, the Funds also may present
nonstandardized total returns, yields and distribution rates for purposes of
sales literature. For example, the

11
<PAGE> 20
performance figure of the shares of a class or Fund 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.

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. The performance of the Fund will correspond
directly to the performance of its Master Portfolio.

The performance information advertised by the Fund for periods prior
to September __, 1996, the date the Fund and the Master Portfolio commenced
operations, is based upon the prior performance of the Collective Investment
Fund. The performance information is adjusted to reflect the Fund's and the
Master Portfolio's current level of operating expenses, including any front-end
sales loads or contingent deferred sales charges. The prior performance of the
Collective Investment Fund is deemed relevant because the Fund invests all of
its assets in the Master Portfolio which acquired the assets of the Collective
Investment Fund immediately prior to the commencement of the Fund's operations.
The Master Portfolio, as successor to the assets of the Collective Investment
Fund, is managed by Wells Fargo in a manner that is in all material respects
equivalent to the management of the Collective Investment Fund.

Additional information about the performance of the Fund will be
contained in the Annual Report for the Fund. The Annual Report, when it is
available, may be obtained free of charge by calling the Company at
1-800-222-8222.

MANAGEMENT OF THE FUND

The Fund is one of the Funds in the Stagecoach Family of Funds. The
Company was organized as a Maryland corporation on September 9, 1991. The
Company currently offers shares of the following series: the Aggressive
Growth, Arizona Tax-Free, Asset Allocation, Balanced, California Tax-Free Bond,
California Tax-Free Income, California Tax-Free Money Market Mutual, Corporate
Stock, Diversified Income, Equity Value, Ginnie Mae, Government Money Market
Mutual, Growth and Income, Intermediate Bond, Money Market Mutual, Money Market
Trust, National Tax-Free, National Tax-Free Money Market Mutual, Oregon
Tax-Free, Prime Money Market Mutual, Short-Intermediate U.S. Government Income,
Small Cap, Treasury Money Market Mutual and U.S. Government Allocation Funds.
The Board of Directors may, in the future, authorize the issuance of other
series of capital stock representing shares of additional investment
portfolios.

MASTER PORTFOLIO INVESTMENT ADVISER

12
<PAGE> 21

Wells Fargo is the investment adviser to the Master Portfolio. In
addition, Wells Fargo serves as the Fund's transfer and dividend disbursing
agent and is a shareholder servicing and selling agent. Wells Fargo, one of
the largest banks in the United States, was founded in 1852 and is the oldest
bank in the western United States. As of September 1, 1996, Wells Fargo and
its affiliates managed more than [$56] billion of assets of individuals,
trusts, estates and institutions. Wells Fargo also serves as the investment
adviser to the other separately managed funds (or master portfolios in which
such funds invest) of the Company, and acts as adviser or sub-adviser to five
other registered open-end management investment companies, each of which
consists of several separately managed investment portfolios. Wells Fargo, a
wholly owned subsidiary of Wells Fargo & Company, is located at 420 Montgomery
Street, San Francisco, California 94104.

Under the Investment Advisory Contract with the Master Portfolio,
Wells Fargo has agreed to furnish to the Master Portfolio investment guidance
and policy direction in connection with the daily portfolio management of the
Master Portfolio. Pursuant to the Investment Advisory Contract, Wells Fargo
also furnishes to the Board of Directors periodic reports on the investment
strategy and performance of the Master Portfolio. For its services as
investment adviser to the Master Portfolio, Wells Fargo is entitled to receive
monthly fees at the annual rate of 60% of the average daily net assets of the
Master Portfolio.

Mr. Jon Hickman, as Manager of the Growth Equity Team, has overseen
the management of the Master Portfolio since its inception. In addition, Mr.
Hickman also manages equity and balanced portfolios for individuals and
employee benefit plans. He has over ten years of experience in the investment
management field and is a member of Wells Fargo's Equity Strategy Committee.
Mr. Hickman has a B.A. and an M.B.A. in finance from Brigham Young University
and has been with Wells Fargo since its merger with Crocker National Bank in
1986.

Ms. Sandra Thornton, as portfolio co-manager of the Master Portfolio,
is primarily responsible for the day-to- day management of the Master
Portfolio. Ms. Thornton has been co-manager of the Master Portfolio since its
inception. Ms. Thornton co-managed the Small Capitalization Growth Fund,
from November, 1994 until the sale of its assets to the Master Portfolio in
September, 1996. Ms. Thornton manages other equity portfolios for Wells Fargo
and is a member of the Wells Fargo Growth Equity Team. Prior to joining Wells
Fargo in 1993, she worked in the research department of RCM Capital Management.
She obtained her license as a Certified Public Accountant from the State of
California while performing tax/financial planning services at Price
Waterhouse. She holds a B.A. from Albertus Magnus College and is a Chartered
Financial Analyst.

Mr. Steve Enos, as portfolio co-manager of the Master Portfolio, also
is primarily responsible for the day-to- day management of the Master
Portfolio. Mr. Enos has been co-manager of the Master Portfolio since its
inception. Mr. Enos co-managed the Small Capitalization Growth Fund from
November, 1994 until the sale of its assets to the Master Portfolio in
September, 1996. Mr. Enos is a member of the Wells Fargo Growth Equity Team.
He began his career with First Interstate Bank, where he was assistant vice
president and portfolio manager. Prior to joining Wells Fargo, he was a
principal at Dolan Capital Management where he managed both personal and
pension portfolios. Mr. Enos received his undergraduate degree in

13
<PAGE> 22
economics from the University of California at Davis. Mr. Enos is a Chartered
Financial Analyst and a member of the Association for Investment Management and
Research.

Morrison & Foerster, LLP, counsel to the Company and special counsel
to Wells Fargo, has advised the Company and Wells Fargo that Well Fargo Bank
and its affiliates may perform the services contemplated by the Investment
Advisory Contract and this Prospectus without violation of the Glass-Steagall
Act. Such counsel has pointed out, however, that there are no controlling
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, that
could prevent such entities from continuing to perform, in whole or in part,
such services. If any such entity were prohibited from performing any such
services, it is expected that new agreements would be proposed or entered into
with another entity or entities qualified to perform such services.

INVESTING IN THE FUND
OPENING AN ACCOUNT

You can buy shares in the 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.

After an application has been processed and an account has been
established, subsequent purchases of different funds of the Company under the
same umbrella account do not require the completion of additional applications.
A separate application must be processed for each different umbrella account
number (even if the registration is the same). Call the number on your
confirmation statement to obtain information about what is required to change
registration.

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

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

SHARE VALUE

The value of a share of the Fund is its "net asset value," or NAV.
Wells Fargo calculates the NAV of each class of the Fund each Business Day (as
defined below) as of the close of

14
<PAGE> 23
regular trading on the New York Stock Exchange ("NYSE"). The close of regular
trading on the NYSE is currently 1:00 p.m. (Pacific time).

The Fund is are open for business each day the 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.

The NAV of a share of each class of the Fund is determined by dividing
the total net assets attributable to such class (i.e., the value of the Fund's
portfolio investments and other assets less liabilities) by the number of
outstanding shares of that class. The NAV of each class is expected to
fluctuate daily and is based on the net asset value of the Master Portfolio in
which the Fund invests.

The portfolio investments of the Master Portfolio are generally valued
at current market prices, or if such prices are not readily available, at fair
value as determined in good faith by the Master Trust's Board of Trustees.
Prices used for such valuations may be provided by independent pricing
services. The Master Portfolio values debt obligations with remaining
maturities of 60 days or less at amortized cost.

HOW TO BUY SHARES

Shares of the Fund are offered continuously at the applicable offering
price (NAV plus any applicable sales charges) 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 Class A or Class B Shares of the Fund will be invested in
full and fractional Class A or Class B Shares of the Fund 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 Fund may hold
payment on any redemption until reasonably satisfied that your investments made
by check have been collected (which may take up to 10 days).

The minimum initial investment amount is generally $1000. The minimum
investment amount is $100 by the AutoSaver Plan purchase method (described
below) and $250 for any tax-sheltered retirement account for which Wells Fargo
serves as trustee or custodian under a prototype trust approved by the Internal
Revenue Service ("IRS") (a "Plan Account"). Generally subsequent investments
must be made in amounts of $100 or more. Where Fund shares are acquired in
exchange for shares of another fund in the Stagecoach Family of Funds, the
minimum initial investment amount applicable to the shares being exchanged
generally carries over.

15
<PAGE> 24
However, if the value of your investment in the shares you are exchanging has
been reduced below the minimum initial investment amount by changes in market
conditions or sales charges (and not by redemptions), you may carry over the
lesser amount into the Fund. Plan Accounts that invest in the Fund through
Wells Fargo ExpressInvestTM (available to certain Wells Fargo tax-deferred
retirement plans) are not subject to the minimum initial investment amount or
the subsequent investment amount requirements.

If you have questions regarding purchases of shares please call
1-800-222-8222. If you have questions regarding ExpressInvest please call
1-800-237-8472. For additional information on tax-deferred accounts, please
refer to the section "How to Buy Shares -- Tax-Deferred Retirement Plans" or
contact a Shareholder Servicing Agent.

SALES CHARGES

Set forth below is a Front-end Sales Charge Schedule listing the
front-end sales charges applicable to purchases of Class A Shares of the Fund.
As shown below, reductions in the rate of front-end sales charges ("Volume
Discounts") are available as you purchase additional shares (other than Class B
Shares). You should consider the front-end sales charge information set forth
below and the other information contained in this Prospectus when making your
investment decisions.

The following is the Front-end Sales Charge Schedule for purchasing Class A
Shares of the Fund:

<TABLE>
<CAPTION>
FRONT-END FRONT-END DEALER
SALES CHARGE SALES CHARGE ALLOWANCE
AS % OF AS % OF NET AS % OF
AMOUNT OF PURCHASE OFFERING PRICE 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 which are redeemed within one, two, three or four years
from the receipt of a purchase order affecting such shares are subject to a
contingent deferred sales charge equal to 3.00%, 2.00%, 1.00% and 1.00%,
respectively, of the dollar amount equal to the lesser of the NAV at the time
of purchase of the shares being redeemed or the NAV of such shares at the time
of redemption (the "NAV Amount"). Class B Shares of the Fund are not subject
to a front-end sales charge. 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

16
<PAGE> 25
contingent deferred sales charges applicable to such shares. When shares are
purchased directly through the Transfer Agent and no Selling Agent is involved
with the purchase, the entire sales charge is paid to Stephens. In addition,
Stephens has established a non-cash compensation program, pursuant to which
broker/dealers or financial institutions that sell shares of the Fund may earn
additional compensation in the form of trips to sales seminars or vacation
destinations, tickets to sporting events, theater or other entertainment,
opportunities to participate in golf or other outings and gift certificates for
meals or merchandise.

A Selling Agent or Shareholder 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.

REDUCED SALES CHARGE-CLASS A SHARES

Volume Discounts

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

Right of Accumulation

The Right of Accumulation allows you to combine the amount you invest
in Class A Shares of the Fund with the total NAV of shares (other than Class B
Shares) in any of the Load Funds to determine reduced front-end sales charges
in accordance with the above Front-end Sales Charge Schedule. In addition, you
also may combine the total NAV of shares (other than Class B Shares) which you
currently have invested in any other mutual fund that assesses a front-end
sales charge and is advised by Wells Fargo and sponsored by Stephens. For
example, if you own Class A Shares of the Load Funds with an aggregate NAV of
$90,000 and you invest an additional $20,000 in Class A Shares of the Fund, the
front-end sales charge on the additional $20,000 investment would be 3.50% of
the offering price. To obtain such a discount, you must provide sufficient
information at the time of your purchase to verify that your purchase qualifies
for the reduced front-end sales charge. Confirmation of the order is subject
to such verification. The Right of Accumulation may be modified or
discontinued at any time without prior notice with respect to all subsequent
shares purchased.

Letter of Intent

A Letter of Intent allows you to purchase Class A Shares of the Fund
over a 13-month period at a reduced front-end sales charge based on the total
amount of Class A Shares you intend to purchase plus the total NAV of shares
(other than Class B Shares) in any of the Load Funds you already own. Each
investment in Class A Shares that you make during the period may be made at the
reduced front-end sales charge that is applicable to the total amount you
intend to

17
<PAGE> 26
invest. If you do not invest the total amount within the period, you must pay
the difference between the higher front-end sales charge rate that would have
been applied to the purchases you made and the reduced front-end sales charge
rate you have paid. The minimum initial investment for a Letter of Intent is
5% of the total amount you intend to purchase, as specified in the Letter.
Shares of the Fund equal to 5% of the amount you intend to invest will be held
in escrow and, if you do not pay the difference within 20 days following the
mailing of a request, a sufficient amount of escrowed shares will be redeemed
for payment of the additional front-end sales charge. Dividends and capital
gain distributions paid on such shares held in escrow will be reinvested in
additional Fund shares.

Reinvestment

You may reinvest proceeds from a redemption of Class A Shares in Class
A Shares of the Fund or shares of another of the Company's funds registered in
your state of residence at NAV, without 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.

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 and which Fund's shares are purchased; 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 investing proceeds from a redemption of (a) shares of
another open-end investment company or (b) units of a unit investment trust
sold through Wells Fargo Securities, Inc., (ii) on which you paid a front-end
sales charge, and (iii) such redemption occurred within thirty (30) days prior
to the date of the purchase order. You must notify the Fund and/or the
Transfer Agent at the time you place such purchase order of your eligibility
for the waiver of front-end sales charges and provide satisfactory evidence
thereof (e.g., a confirmation of the redemption and the

18
<PAGE> 27
sales charges paid). Front-end sales charges will not be waived to the extent
the redemption proceeds are from a redemption of shares of another open-end
investment company that is affiliated with the Company on which you paid a
contingent deferred sales charge upon redemption.

Reductions for Qualified Groups

Reductions in front-end sales charges also apply to purchases by
individual members of a "qualified group." The reductions are based on the
aggregate dollar amount of Class A Shares purchased by all members of the
qualified group. For purposes of this paragraph, a qualified group consists of
a "company," as defined in the Investment Company Act of 1940 (the "1940 Act"),
which has been in existence for more than six months and which has a primary
purpose other than acquiring shares of the Fund at a reduced sales charge, and
the "related parties" of such company. For purposes of this paragraph, a
"related party" of a company is: (i) any individual or other company who
directly or indirectly owns, controls or has the power to vote 5% percent or
more of the outstanding voting securities of such company; (ii) any other
company of which such company directly or indirectly owns, controls or has the
power to vote 5% or more of its outstanding voting securities; (iii) any other
company under common control with such company; (iv) any executive officer,
director or partner of such company or of a related party; and (v) any
partnership of which such company is a partner. Investors seeking to rely on
their membership in a qualified group to purchase shares at a reduced sales
load must provide evidence satisfactory to the Transfer Agent of the existence
of a bona fide qualified group and their membership therein.

Waivers for Certain Parties

Class A Shares of the Fund may be purchased at NAV, without a
front-end sales charge, by directors, officers and employees (and their
spouses, parents, children and siblings) of the Company, Stephens, its
affiliates and Selling Agents. Class A Shares of the Fund also may be
purchased at NAV, without a front-end sales charge, by present and retired
directors, officers and employees (and their spouses, parents, children and
siblings) of Wells Fargo and its affiliates if Wells Fargo and/or the
respective affiliates agree. Class A Shares of the Funds also may be purchased
at NAV, without a front-end sales charge, by employee benefit and thrift plans
for such persons and to investment advisory, trust or other fiduciary account,
including certain Plan Accounts, that are maintained, managed or advised by
Wells Fargo or its affiliates ("Fiduciary Accounts"). Class A Shares of the
Fund are available, without a front-end sales charge, to institutions
purchasing shares for the sole purpose of creating a unit investment trust for
exclusive distribution through Wells Fargo Securities Inc. In addition, you may
purchase Class A Shares of the 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 serves as trustee, provided
that the proceeds are invested in the Fund within 30 days of such distribution
and such distribution is required as a result of reaching age 70 1/2.

19
<PAGE> 28

CONTINGENT DEFERRED SALES CHARGE-CLASS B SHARES

Class B Shares of the Fund may be subject to contingent deferred sales
charges, but are not subject to front-end 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 are subject to a contingent deferred sales
charge equal to 3.00%, 2.00%, 2.00% 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 and will not be assessed
on Class B Shares purchased through reinvestment of dividends or capital gain
distributions. Class B Shares automatically convert into Class A Shares of the
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 the 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 scheduled distribution from an
individual retirement account or other retirement plan to a shareholder who has
reached age 59 and 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. If your purchase amount would qualify you for a reduced sales charge on
Class A Shares, you should consider carefully whether you would pay lower fees
ultimately on Class A Shares or on Class B Shares. (See "Investing In The
Funds-Sales Charges" for information on reduced sales charges for Class A
Shares.)

You may buy shares of the Fund on any Business Day by any of the
methods described below. The Company reserves the right to reject any purchase
order or suspend sales at any time. Payment for orders that are not received
is returned after prompt inquiry. The issuance of shares is recorded on the
Company's books, and share certificates are not issued.

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<PAGE> 29

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 - Small Cap Fund (designate Class A or B)
Account Name(s): Name(s) in which to be registered
Account Number: (if investing into an existing account)

3. A completed Account Application should be mailed, or sent by
telefacsimile with the original subsequently mailed, to the following
address immediately after the funds are wired and must be received and
accepted by the Transfer Agent before an account can be opened:

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

4. Share purchases are effected at the public offering price or, in the
case of Class B Shares, at the NAV next determined after the Account
Application is received and accepted.

INITIAL PURCHASES BY MAIL

1. Complete an Account Application. Indicate the services to be used.

2. Mail the Account Application and a check for $1,000 or more payable to
"Stagecoach Funds - Small Cap 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

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

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<PAGE> 30
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
Account"). You may open an Approved Bank Account with Wells Fargo. The
Transfer Agent withdraws and uses this amount to purchase specified Fund shares
on your behalf on or about the day that you have selected or, if you have not
selected a day, on or about the 20th day of each month. The Transfer Agent
requires a minimum of ten (10) Business Days to implement your AutoSaver Plan
upon notification. There are no separate fees charged to you by the Funds for
participating in the AutoSaver Plan. An election will be terminated
automatically if your Approved Bank Account balance is insufficient to make a
scheduled withdrawal, or if either the Approved Bank Account or your Fund
account is closed.

You may change your investment amount, the date on which your
AutoSaver Purchase is effected, suspend purchases or terminate your election at
any time by providing notice to the Transfer Agent at least five (5) Business
Days prior to any scheduled transaction.

TAX-DEFERRED RETIREMENT PLANS

You may be entitled to invest in the Fund through a Plan Account or
other tax-deferred retirement plan. Contact a Shareholder Servicing Agent or
a Selling Agent (such as Wells Fargo) 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 (the minimum initial investment amount is not
applicable if you participate in ExpressInvest through a Plan Account).

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.

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 is phased down and eventually eliminated.

Any individual who works may make nondeductible contributions to an
IRA in addition to any deductible contributions. Total aggregate deductible
and nondeductible contributions are

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<PAGE> 31
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 known as a "SEP-IRA" through a Shareholder
Servicing Agent or a Selling Agent. 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
federal 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 income tax information is contained
under the heading "Taxes" in this Prospectus and in the SAI.

A Shareholder Servicing Agent or Selling Agent also may offer other
types of tax-deferred or tax-advantaged plans, including a Keogh retirement
plan for self-employed professional persons, sole proprietors and partnerships.

Application materials for opening a tax-deferred retirement plan can
be obtained from a Shareholder Servicing Agent or a Selling Agent. Return your
completed tax-deferred retirement plan application to your Shareholder
Servicing Agent or a Selling Agent for approval and processing. If your
tax-deferred retirement plan application is incomplete or improperly filled
out, there may be a delay before a Fund account is opened. You should ask your
Shareholder Servicing Agent or Selling Agent about the investment options
available to your tax-deferred retirement plan, since some of the funds in the
Stagecoach Family of Funds may be unavailable as options. Moreover, certain
features described herein, such as the AutoSaver Plan and the Systematic
Withdrawal Plan, may not be available to individuals or entities who invest
through a tax-deferred retirement plan.

ADDITIONAL PURCHASES

You may make additional purchases of $100 or more by instructing the
Fund's Transfer Agent to debit your 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 a Class, if applicable)" 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

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<PAGE> 32
You may place a purchase order for shares of the Fund through a
broker/dealer or financial institution which has entered into a Selling
Agreement with Stephens, as the Fund's 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 Fund. Because payment
for shares of the 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

Purchase orders for shares of the Fund may be transmitted to the
Transfer Agent through any entity that has entered into a Shareholder Servicing
Agreement with the Fund ("Shareholder Servicing Agent"), such as Wells Fargo.
See "Management, Distribution and Servicing Fees-Shareholder Servicing Agent."

The Shareholder Servicing Agent may transmit a purchase order to the
Transfer Agent, on your behalf, including a purchase order for which payment is
to be transferred from your Approved Bank Account 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 generally 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 Fund, 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 Fund does not issue share certificates. A statement with tax information
for the previous year 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 Fund intends to declare annual dividends of substantially all of
its net investment income. The Fund will distribute any capital gains at least
annually. You have several options for

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<PAGE> 33
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 such dividends and
distributions paid to you on newly issued shares shortly after your purchase
would represent, in substance, a return of your capital, such dividends and
distributions would ordinarily be taxable to you.

Net investment income available for distribution to the holders of
Class B Shares is reduced by the amount of the higher Rule 12b-1 Fee payable on
such shares. Other expenses, such as state securities registration fees and
transfer agency fees, that are attributable to a particular class also may
affect the relative dividends and/or capital gain distributions of Class A and
Class B Shares.

HOW TO REDEEM SHARES

You may redeem all or a portion of your shares in the Fund on any
Business Day. Your shares will be redeemed at the NAV next calculated after
the Fund has received your redemption request in proper form. Redemption
proceeds may be more or less than the amount invested and, therefore, a
redemption of shares may result in a gain or loss for federal and state income
tax purposes. The Fund ordinarily remits redemption proceeds, net of any
contingent deferred sales charge applicable with respect to Class B Shares (the
"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
the Fund of securities owned by it is not reasonably practicable or (b) it is
not reasonably practicable for the 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. In addition, the Fund may
hold payment on your redemptions until reasonably satisfied that your
investments made by check have been collected (which can take up to 10 days
from the purchase date). To ensure acceptance of your redemption request,
please follow the procedures described below. Although it is not the Fund's
current intention, the Fund may make payment of redemption proceeds in
securities if conditions warrant, subject to regulation by some state
securities commissions. In addition, the Fund reserves the right to impose
charges for wiring redemption proceeds.

Due to the high cost of maintaining Fund accounts with small balances,
the Fund reserves the right to close your account and send you the proceeds if
the balance falls below the applicable minimum balance because of redemption
(including a redemption of Fund shares after an investor has made only the
applicable minimum initial investment). However, you will be given 30 days'
notice to make an additional investment to increase your account balance to
$1,000 or more. Plan Accounts are not subject to minimum Fund account balance
requirements. For a discussion of applicable minimum balance requirements, see
"Investing in the Fund--How To Buy Shares."

REDEMPTIONS BY TELEPHONE

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<PAGE> 34
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 and the dollar
amount or number of Fund shares you want to redeem. Refer to your
Fund account number and give your social security number 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 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 Fund-Initial Purchases by Wire."

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

EXPEDITED REDEMPTIONS BY MAIL OR TELEPHONE

You may request an expedited redemption of 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. In addition, you also may request
an expedited redemption of shares of the Fund by telephone on any Business Day,
in which case both your receipt of redemption proceeds and the Fund's receipt
of your redemption request would be expedited. You may request expedited
redemption by telephone only if the total value of the shares redeemed is $100
or more.

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<PAGE> 35
You may request expedited redemption by telephone by calling the
Transfer Agent at the telephone number listed on your transaction confirmation
or by calling 1-800-222-8222.

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 Fund-Initial Purchases by Wire."

Upon request, net redemption proceeds of your expedited redemptions of
$5,000 or more will be wired or credited to an Approved Bank Account designated
in your Account Application or wired to the Selling Agent designated in your
Account Application. The Company reserves the right to impose a charge for
wiring redemption proceeds. When proceeds of your expedited redemption are to
be paid to someone else, to an address other than that of record, or to your
Approved Bank Account 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 Approved Bank Account 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 your
Approved Bank Account.

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 Fund
reserves the right to modify or terminate the expedited telephone redemption
privilege at any time.

SYSTEMATIC WITHDRAWAL PLAN

The Company's Systematic Withdrawal Plan provides you with a
convenient way to have shares of the Fund redeemed from your account and the
net redemption proceeds distributed to you on a monthly basis. You may
participate in the Systematic Withdrawal Plan only if you have a Fund account
valued at $10,000 or more as of the date of your election to participate, your
dividends and capital gain distributions are being reinvested automatically and
you are not participating in the AutoSaver Plan at any time while participating
in the Systematic Withdrawal Plan. You specify an amount ($100 or more) to be
distributed by check to your address of record or deposited in your Approved
Bank Account. The Transfer Agent redeems sufficient shares and mails or
deposits your net redemption proceeds as instructed on or about the fifth
Business Day prior to the end of each month. There are no separate fees
charged to you by the Fund for

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<PAGE> 36
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.

It may take up to ten (10) days after receipt of your request to
establish your participation in the Systematic Withdrawal Plan. You may change
your withdrawal amount, suspend withdrawals or terminate your election at any
time by notifying the Transfer Agent at least five (5) 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 your Approved Bank Account. 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 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 Fund shares 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 your

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<PAGE> 37
Approved Bank Account. 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. The
shareholder servicing agent may charge you a fee. In addition, the shareholder
servicing agent may benefit from the use of proceeds credited to your account
until any check it issues to you has cleared or until such proceeds have been
disbursed or reinvested on your behalf.

ADDITIONAL SHAREHOLDER SERVICES

The Company offers you a number of optional services. As noted above,
you can take advantage of the AutoSaver Plan, Tax-Deferred Retirement Plans,
the Systematic Withdrawal Plan and Expedited Redemptions by Letter and
Telephone. In addition, the Fund offers you several dividend and distribution
payment options and an exchange privilege, which are described below.

DIVIDEND AND DISTRIBUTION OPTIONS

When you fill out your Account Application, you can choose from the
following dividend and distribution options listed below. If you have
questions about the dividend and distribution options available to you, please
call 1-800-222-8222.

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. Dividends and distributions declared in a month generally
are reinvested in additional shares at NAV on the last business day of such
month. You are assigned this option automatically if you make no choice on
your Account Application.

B. The Fund Purchase Option lets you use your dividends and/or
capital gain distributions from the Fund to purchase, at NAV, shares of another
fund in the Stagecoach Family of Funds with which you have an established
account that has met the applicable minimum initial investment requirement.
Dividends and distributions paid on Class A or Class B Shares may be invested
in Class A or Class B Shares, respectively, of another fund, in Retail Shares
of another fund, in Class A Shares of the Money Market Mutual Fund or in shares
of the California Tax-Free Money Market Mutual Fund or National Tax-Free Money
Market Mutual Fund (the California Tax-Free Money Market Mutual Fund, Money
Market Mutual Fund (Class A Shares) and National Tax-Free 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.

C. The Automatic Clearing House Option permits you to have dividends
and capital gain distributions deposited in your Approved Bank Account. In the
event your Approved Bank Account is closed and such distribution is returned to
the Fund's dividend disbursing agent, the

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<PAGE> 38
distribution will be reinvested in your Fund account at the NAV next determined
after the distribution has been returned. Your Automatic Clearing House Option
will be converted to the Automatic Reinvestment Option.

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 Approved Bank Account shortly following
declaration. If the U.S. Postal Service cannot deliver your checks, or if your
checks remain uncashed for six months, those checks will be reinvested in your
Fund account at the NAV next determined after the earlier of the date the
checks have been returned to the dividend disbursing agent or the date six
months after the payment of such dividend or distribution. Your Check Payment
Option will be converted to the Automatic Reinvestment Option.

The Company takes reasonable efforts to locate investors whose checks
are returned or uncashed after six months.

EXCHANGE PRIVILEGE

Wells Fargo 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 other funds of the Stagecoach Family of Funds that are
registered in your state of residence, and allows you to respond to changes in
your investment and savings goals or in market conditions. Class A and Class B
Shares of the Fund may be exchanged for Class A and Class B Shares,
respectively, of another fund, or for shares of one of the Money Market Mutual
Funds. Class A Shares may also be exchanged for shares of a single class fund
or for Retail Shares of another fund.

Before making an exchange from the Fund into another fund of the
Stagecoach Family of Funds, please observe the following:

o Obtain and carefully read the prospectus of the fund into which
you want to exchange.

o 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.

o If you exchange Class B Shares for Class B Shares of another fund
or for shares of one of the Money Market Mutual Funds, a
contingent deferred sales charge will not be imposed upon the
exchange.

o 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 federal income tax purposes. A confirmation of
each exchange transaction will be sent to you.

o The dollar amount of shares you exchange generally must meet the
minimum initial and/or subsequent investment amounts of the fund
from which you are exchanging. If

30
<PAGE> 39
the value of your investment in the shares of the fund from which
you are exchanging has been reduced below the minimum initial
investment amount by changes in market conditions or sales charges
(and not by redemptions), you may carry over the shares you
acquire.

o 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.

o If you exchange Class B Shares for Class B Shares of another fund,
or for shares of one of the Money Market Mutual Funds, 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 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.

o 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 one of the Money Market
Mutual Funds.

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 (unless you have
specifically declined telephone exchange privileges) call the Transfer Agent at
the telephone number listed on your transaction confirmation, or contact your
Shareholder Servicing Agent or Selling Agent. The procedures applicable to
telephone redemptions, including the discussion regarding the responsibility
for the authenticity of telephone instructions, are also applicable to
telephone exchange requests. See "How to Redeem Shares-Expedited Redemptions
by Letter and Telephone."

CONVERSION

Class B Shares of the Fund that have been outstanding for six years
after the end of the month in which the shares were initially purchased will
automatically convert to Class A Shares of the 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

31
<PAGE> 40
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 on
Class B Shares will be considered new purchases for purposes of the conversion
feature. A conversion should not produce a gain or loss for federal income tax
purposes.

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 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, DISTRIBUTION
AND SERVICING FEES

INVESTMENT ADVISER

Wells Fargo, as the investment adviser to the Master Portfolio,
provides investment guidance and policy direction in connection with the
management of the Fund's and Master Portfolio's assets. Wells Fargo furnishes
the Company's Board of Directors and the Master Trust's Board of Trustees with
periodic reports on the Fund's and Master Portfolio's investment strategy and
performance.

For its services as investment adviser to the Master Portfolio, Wells
Fargo is entitled to monthly investment advisory fees at the annual rate of
0.60% of the Master Portfolio's average daily net assets. From time to time,
Wells Fargo may waive its advisory fees in whole or in part. Any such waiver
will reduce expenses of the Master Portfolio, and, accordingly, have a
favorable impact on the Master Portfolio's and the Fund's performance. From
time to time, the Master Portfolio, consistent with its investment objective,
policies and restrictions, may invest in securities of companies with which
Wells Fargo has a lending relationship.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo serves as custodian and transfer and dividend disbursing
agent to the Fund. The custodian, transfer and dividend disbursing agency
activities are performed at 525 Market Street, San Francisco, California 94105.
For its services as custodian to the fund, Wells Fargo is entitled to a net
asset charge at the annual rate of 0.0167%, payable monthly, plus specified
transaction charges. Wells Fargo also will provide portfolio accounting
services under the custody agreement for a monthly base fee of $2,000 plus a
net asset fee at the annual rate of 0.070% of the first $50,000,000 of a fund's
average daily net assets, 0.045% of the next $50,000,000, and 0.020% of the
average daily net assets in excess of $100,000,000. For its services as
transfer and dividend disbursing agent to the Fund, Wells Fargo

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<PAGE> 41
is entitled to receive a monthly fee at the annual rate of 0.07% of the
Fund's average daily net assets.

SHAREHOLDER SERVICING AGENT

The Fund has entered into a Shareholder Servicing Agreement with Wells
Fargo on behalf of each Class of the Fund's shares, and may enter into similar
agreements with other entities. Under such agreements, Shareholder Servicing
Agents (including Wells Fargo) agree, as agents for their customers, to provide
various administrative services with respect to Fund shares, such as
maintaining shareholder accounts and records, to assist shareholders with
purchases, exchanges and redemptions and to provide such other related services
as the Fund or a shareholder may reasonably request. For these services, a
Shareholder Servicing Agent receives a fee, which may be paid periodically,
determined by a formula based upon the number of accounts serviced by the
Shareholder Servicing Agent during the period for which payment is being made,
the level of activity in such accounts during such period and the expenses
incurred by the Shareholder Servicing Agent. In no event will the shareholder
servicing fees charged to each Class, as calculated on an annualized basis for
the Fund's then current fiscal year, exceed the lesser of (1) 0.25% of the
average daily net assets attributable to the Class A or B Shares of the Fund
owned during the period for which payment is being made by investors with whom
the Shareholder Servicing Agent maintains a servicing relationship, or (2) an
amount which equals the maximum amount payable to the Shareholder Servicing
Agent under applicable laws, regulations or rules, including the Rules of Fair
Practice of the NASD ("NASD Rules"). In no event will the portion of such fees
that constitutes a "service fee," as that term is used by the NASD, exceed
0.25% of the average net asset value attributable to the Class A and Class B
Shares of the Fund.

Shareholder Servicing Agents also may impose certain conditions on
their customers, subject to the terms of this Prospectus, in addition to or
different from those imposed by the Fund, such as requiring a higher minimum
initial investment or payment of a separate fee for additional services. Each
Shareholder Servicing Agent 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

Stephens, 111 Center Street, Little Rock, Arkansas 72201, has
entered into agreements with the Company and the Trust under which Stephens
acts as administrator for the Fund and the Master Portfolio. For these
administrative services, Stephens is entitled to receive from the Fund a
monthly fee at the annual rate of 0.05% of the average daily net assets of each
class of shares of the Fund. From time to time, Stephens may waive fees from
the Fund in whole or in part. Any such waiver will reduce expenses of the Fund
and, accordingly, have a favorable impact on the yield or return of the Fund.
Under the agreement with the Trust, Stephens is not entitled to receive a fee
for providing administrative services to the Master Portfolio so long as
Stephens is entitled to be compensated for providing administrative services to
another mutual fund that invests all of its assets in the Master Portfolio.

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<PAGE> 42
Under the respective Administration Agreements with the Fund and the
Master Portfolio, Stephens has agreed to provide as administrative services,
among other things, (i) general supervision of the operation of the Fund and
the Master Portfolio, including coordination of the services performed by the
various service providers, including the investment adviser (for the Master
Portfolio), transfer agent, custodian, independent auditors and legal counsel;
(ii) general supervision of regulatory compliance matters, including the
compilation of information for documents such as reports to, and filings with,
the SEC and state securities commissions, and the preparation of proxy
statements and shareholder reports for the Fund and the Master Portfolio; and
(iii) general supervision of the compilation of data required for the
preparation of periodic reports distributed to the Company's officers and Board
of Directors and the Trust's Board of Trustees. Stephens also furnishes office
space and certain facilities required for conducting the business of the Fund
and the Master Portfolio and pays the compensation of the directors, officers
and employees of the Company and the Trust who are affiliated with Stephens.

Stephens, as the principal underwriter of the Fund within the meaning
of the 1940 Act, has also entered into Distribution Agreements with the Company
pursuant to which Stephens has the responsibility for distributing Class A
Shares and Class B Shares of the Fund. The Distribution Agreements provide that
Stephens shall act as agent for the Fund for the sale of its Class A Shares and
Class B Shares and may enter into selling agreements with broker/dealers or
financial institutions to market and make available Class A Shares and Class B
Shares to their respective customers.

Under the Distribution Agreement for the Class A Shares, Stephens is
entitled to receive from the Fund, as reimbursement for all or part of the cost
of preparing and printing prospectuses and other promotional materials and of
delivering prospectuses and those materials to prospective shareholders and as
reimbursement for other distribution- related services, a fee computed on a
monthly basis at an annual rate of up to 0.10% of the average daily net assets
of the Class A Shares of the Fund.

Under the Distribution Agreement for the Class B Shares, Stephens is
entitled to receive from the Fund as compensation for distribution-related
services provided or as reimbursement for distribution-related expenses
incurred, a monthly fee at an annual rate of up to 0.75% of the average daily
net assets of the Class B Shares of the Fund. The actual fee payable to
Stephens pursuant to the Class B Distribution Agreement is determined, within
such limits, from time to time by mutual agreement between the Company and
Stephens, and may not exceed the maximum amount payable under the Rules of Fair
Practice of the NASD. Stephens may enter into selling agreements with one or
more selling agents under which such agents may receive from Stephens
compensation for sales support services on behalf of the Class B Shares. Such
compensation may include, but is not limited to, commissions or other payments
to such agents based on the average daily net assets of Class B Shares
attributable to them. Services provided by selling agents in exchange for
commissions and other payments to selling agents are the principal sales
support services provided to the Fund. Stephens may retain any portion of the
total distribution fee payable under the Distribution Agreement for the Class B
Shares to compensate it for distribution-related services provided by it or to
reimburse it for other distribution-related expenses.

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<PAGE> 43
Since the Distribution Agreements provide for fees that are used by
Stephens to pay for distribution services, a plan of distribution for each
class of shares (individually a "Plan," collectively the "Plans") and the
Distribution Agreement are approved and reviewed in accordance with Rule 12b-1
under the 1940 Act. Rule 12b-1 which regulates the manner in which an
investment company may, directly or indirectly, bear the expense of
distributing its shares. See "Distribution Plans" for a more complete
description of the Plans.

Stephens serves as placement agent for the Master Portfolio for which
it is not compensated. Stephens is a full service broker/dealer and investment
advisory firm. Stephens and its predecessor have been providing securities and
investment services for more than 60 years. Additionally, they have been
providing discretionary portfolio management services since 1983. Stephens
currently manages investment portfolios for pension and profit sharing plans,
individual investors, foundations, insurance companies and university
endowments.

FUND EXPENSES

From time to time, Wells Fargo 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 Fund's performance.

The Master Portfolio's Investment Advisory Contract and the
Administration Agreements with the Master Portfolio and the Fund provide that,
if in any fiscal year, the total aggregate expenses of the Master Portfolio and
the Fund incurred by, or allocated to, the Master Portfolio and the Fund
(excluding taxes, interest, brokerage commissions and other portfolio
transaction expenses, expenditures that are capitalized in accordance with
generally accepted accounting principles, extraordinary expenses and amounts
accrued or paid under a Plan) exceed the most restrictive expense limitation
applicable to a Fund imposed by the securities laws or regulations of the
states in which the Fund's shares are registered for sale, Wells Fargo and
Stephens shall waive their fees proportionately under the Investment Advisory
Contract and the Administration Agreements, respectively, for the fiscal year
to the extent of the excess, or reimburse the excess, but only to the extent of
their respective fees. The Investment Advisory Contract and the Administration
Agreements further provide that the total expenses shall be reviewed monthly so
that, to the extent the annualized expenses for such month exceed the most
restrictive applicable annual expense limitation, the monthly fees under the
Investment Advisory Contract and the Administration Agreements shall be reduced
as necessary. Currently, the most stringent applicable state expense ratio
limitation is 2.50% of the first $30 million of the Fund's average net assets
for its current fiscal year, 2% of the next $70 million of such assets, and
1.50% of such assets in excess of $100 million.

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<PAGE> 44
case of the Fund), and administration fees; payments pursuant to any Plans (in
the case of the Fund); interest charges; taxes; fees and expenses of
independent auditors; legal counsel, transfer agent and dividend disbursing
agent; expenses of redeeming Fund shares or interests in the Master Portfolio;
expenses of preparing and printing prospectuses (except the expense of printing
and mailing prospectuses used for promotional purposes, unless otherwise
payable pursuant to a Plan), shareholders' or investors' reports, notices,
proxy statements and reports to regulatory agencies; insurance premiums and
certain expenses relating to insurance coverage; trade association membership
dues; brokerage and other expenses connected with the execution of portfolio
transactions; fees and expenses of the custodian, including those of keeping
books and accounts and calculating the net asset value of the Fund and the
Master Portfolio; expenses of shareholders' or investors' meetings; expenses
relating to the issuance, registration and qualification of shares of the Fund;
pricing services; organizational expenses; and any extraordinary expenses.
Expenses attributable to the Fund and/or the Master Portfolio are charged
against the respective assets of the Fund and/or the Master Portfolio. A pro
rata portion of the expenses of the Company or Trust are charged against the
assets of the Fund or Master Portfolio as applicable.

TAXES

The Company intends to qualify the Fund as a regulated investment
company under Subchapter M of the Code, as long as such qualification is in the
best interest of the Fund's shareholders. The Fund will be treated as a
separate entity for tax purposes and thus the provisions of the Code applicable
to regulated investment companies will generally 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 Fund will not be
subject to federal income taxes with respect to net investment income and net
realized capital gains distributed to its shareholders. The Fund intends to
pay out substantially all of its net investment income and net realized capital
gains (if any) for each year.

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 its shareholders. Whether you take dividend payments and capital gain
distributions in cash or have them automatically reinvested in additional
shares in the Fund, they will be taxable to you. Generally, dividends and
capital gain distributions are taxable to shareholders when they are received.
However, dividends and capital gain distributions declared payable as of a
record date in October, November or December of any calendar year are deemed
under the Code to have been distributed by the Fund and received by the
shareholders on December 31 of that calendar year, if the dividends and capital
gain distributions are actually paid in the following January. Such dividends
and capital gain distributions will, accordingly, be taxable to the recipient
shareholders in the year in which the record date falls. You may be eligible
to defer the taxation of dividend and capital gain distributions on Fund shares
which are held under a qualified tax-deferred retirement plan. See "Investing
in the Fund- -Tax-Deferred Retirement Plans" above.

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<PAGE> 45
Corporate shareholders of the Fund may be eligible for the
dividends-received deduction on dividends paid out of a Fund's net investment
income attributable to dividends received from domestic corporations, which, if
received directly, would qualify for such deduction. In order to qualify for
the dividends-received deduction, a corporate shareholder must hold Fund shares
paying the dividends upon which the deduction is based for at least 46 days.

The Fund seeks to qualify as a regulated investment company by
investing all of their assets in the Master Portfolio. The Master Portfolio
will be treated as a non-publicly traded partnership rather than as a regulated
investment company or a corporation under the Code, and as such, shall not be
subject to federal income tax. As a non-publicly traded partnership, any
interest, dividends, gains and losses of the Master Portfolio shall be deemed
to have been "passed through" to the Fund (and other investors, if any) in
proportion to the Fund's ownership interest in the Master Portfolio. If the
Master Portfolio were to accrue but not distribute any interest, dividends or
gains, the Fund would be deemed to have realized and recognized its
proportionate share of such income, regardless of whether or not such income
has been distributed by the Master Portfolio. However, the Master Portfolio
will seek to minimize recognition by the Fund and other investors, if any, of
interest, dividends and gains without a corresponding distribution.

The Funds, or your Shareholder Servicing Agent on their behalf, will
inform you no later than January 31 of the amount and nature of the Fund's
dividends and capital gain distributions with respect to the previous year.
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 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 number 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 federal 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 Fund and its 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 income tax considerations are discussed
in the SAI.

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PROSPECTUS APPENDIX--
ADDITIONAL INVESTMENT POLICIES

FUND AND MASTER PORTFOLIO INVESTMENTS

Foreign Securities

The Master Portfolio may invest in securities of foreign governmental
and private issuers that are denominated in and pay interest in U.S. dollars.
These securities may take the form of American Depositary Receipts ("ADRs") and
European Depositary Receipts ("EDRs"). These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by a United States bank or trust
company which evidence ownership of underlying securities issued by a foreign
corporation. EDRs, which are sometimes referred to as Continental Depositary
Receipts ("CDRs"), are receipts issued in Europe typically by non-United States
banks and trust companies that evidence ownership of either foreign or domestic
securities. Generally, ADRs in registered form are designed for use in the
United States securities markets and EDRs and CDRs in bearer form are designed
for use in Europe.

Investments in foreign securities involve certain considerations that
are not typically associated with investing in domestic securities. There may
be less publicly available information about a foreign issuer than about a
domestic issuer. Foreign issuers also are not generally subject to the same
accounting, auditing and financial reporting standards or governmental
supervision as domestic issuers. In addition, with respect to certain foreign
countries, taxes 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.

Privately Issued Securities (Rule 144A)

The Master Portfolio may invest in privately issued securities which
may be resold in accordance with Rule 144A under the Securities Act of 1933
("Rule 144A Securities"). Rule 144A Securities are restricted securities which
are not publicly traded. Accordingly, the liquidity of the market for specific
Rule 144A Securities may vary. Wells Fargo, using guidelines approved by the
Board of Directors of the Company, will evaluate the liquidity characteristics
of each Rule 144A Security proposed for purchase by the Master Portfolio on a
case-by-case basis and will consider the following factors, among others, in
their evaluation: (1) the frequency of trades and quotes for the Rule 144A
Security; (2) the number of dealers willing to purchase or sell the Rule 144A
Security and the number of other potential purchasers; (3) dealer undertakings
to make a market in the Rule 144A Security; and (4) the nature of the Rule 144A
Security and the nature of the marketplace trades (e.g., the time needed to
dispose of the Rule 144A Security, the method of soliciting offers and the
mechanics of transfer). Privately issued securities that are determined by the
Master Portfolio's investment adviser to be "illiquid" will be subject to the
Master Portfolio's policy of not investing more than 15% of its net assets in
illiquid securities.

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Corporate Reorganizations

The Master Portfolio may invest in securities for which a tender or
exchange offer has been made or announced, and in securities of companies for
which a merger, consolidation, liquidation or similar reorganization proposal
has been announced if, in the judgment of Wells Fargo, there is a reasonable
prospect of capital appreciation significantly greater than the added portfolio
turnover expenses inherent in the short term nature of such transactions. The
principal risk associated with such investments is that such offers or
proposals may not be consummated within the time and under the terms
contemplated at the time of the investment, in which case, unless such offers
or proposals are replaced by equivalent or increased offers or proposals which
are consummated, the Master Portfolio may sustain a loss.

Options

The Master Portfolio may purchase or sell options on individual
securities and options on indices of securities as a means of achieving
additional return or of hedging the value of the Master Portfolio's investment
portfolio.

Call and Put Options on Specific Securities

The Master Portfolio may invest up to 15% of its assets, represented
by the premium paid, in the purchase of call and put options in respect of
specific securities (or groups of "baskets" of specific securities). A call
option gives the purchaser of the option the right to buy, and obligates the
writer to sell, an underlying security at the exercise price at any time during
the option period. Conversely, a put option gives the purchaser of the option
the right to sell, and obligates the writer to buy, an underlying security at
the exercise price at any time during the option period. Investments by the
Master Portfolio in off-exchange options will be treated as "illiquid" and
therefore subject to the Master Portfolio's policy of not investing more than
15% of its net assets in illiquid securities.

The Master Portfolio may write covered call option contracts to the
extent of 15% of the value of its net assets at the time such option contracts
are written. A covered call option is a call option for which the writer of
the option owns the security covered by the option. Covered call options
written by the Master Portfolio expose the Master Portfolio during the term of
the option (i) to the possible loss of opportunity to realize appreciation in
the market price of the underlying security or (ii) to possible loss caused by
continued holding of a security which might otherwise have been sold to protect
against depreciation in the market price of the security.

To close out a covered call option it has written, the Master
Portfolio makes a "closing purchase transaction" by purchasing an option on the
same security or securities with the same exercise price and expiration date as
the covered call option it has written. To close out an option it has
purchased, the Master Portfolio simply sells it. The Master Portfolio will
realize a profit or loss from a closing purchase transaction based upon the
difference between the amount paid to purchase an option and the amount
received from the sale thereof.

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Stock Index Options

The Master Portfolio may purchase call and put options and write
covered call options on stock indices listed on national securities exchanges
or traded in the over-the-counter market to the extent of 15% of the value of
its net assets.

The effectiveness of purchasing or writing stock index options will
depend upon the extent to which price movements in the Master Portfolio's
investment portfolio correlate with price movements of the stock index
selected. Because the value of a stock index option depends upon changes to
the price of all stocks comprising the index rather than the price of a
particular stock, whether the Master Portfolio will realize a gain or loss from
the purchase or writing of options on an index depends upon movements in the
price of all stocks in the index, rather than movements in the price of a
particular stock. Accordingly, successful use by the Master Portfolio of
options on stock indices will be subject to Wells Fargo's ability to correctly
analyze movements in the direction of the stock market generally or of
particular industry or market segments.

Warrants

The Master Portfolio may invest no more than 5% of its net assets at
the time of purchase in warrants (other than those that have been acquired in
units or attached to other securities) and not more than 2% of its net assets
in warrants which are not listed on the New York or American Stock Exchange.
Warrants represent rights to purchase securities at a specific price valid for
a specific period of time. The prices of warrants do not necessarily correlate
with the prices of the underlying securities. The Master Portfolio may only
purchase warrants on securities in which the Master Portfolio may invest
directly.

Temporary Investments

From time to time, for temporary defensive purposes, the Fund and
Master Portfolio may hold assets in cash or make short-term investments, to the
extent appropriate, to maintain adequate liquidity for redemption requests or
other cash management needs or for temporary defensive purposes. The
short-term investments that the Fund and Master Portfolio 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
"Prime-1" by Moody's or "A-1+" or "A-1" by S&P, or, if unrated, of comparable
quality as determined by Wells Fargo, 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;

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(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, as investment adviser, are of comparable quality to
obligations of U.S. banks which may be purchased by the Fund or Master
Portfolio.

Floating-and Variable-Rate Instruments

Certain of the debt instruments that the Master Portfolio 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 Master Portfolios
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 Master
Portfolios may tender the instrument back to the issuer, whichever is later.
The floating- and variable-rate instruments that the Master Portfolios may
purchase include certificates of participation in such obligations Wells Fargo,
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 the Fund or Master Portfolio 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 Fund's
or Master Portfolio'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.

Repurchase Agreements

The Master Portfolio may enter into repurchase agreements wherein the
seller of a security to the Master Portfolio agrees to repurchase that
security from the Master Portfolio at a mutually agreed-upon time and price.
The period of maturity is usually quite short, often overnight or a few days,
although it may extend over a number of months. The Master Portfolio may enter
into repurchase agreements only with respect to obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities
(including government-sponsored enterprises), ("U.S. Government Obligations")
certificates of deposit, bankers acceptances or commercial paper.
All repurchase agreements will be fully collateralized based on values that are
marked to market daily. If the seller defaults and the value of the
underlying securities has declined, the MasterPortfolio may incur a loss.
In addition, if bankruptcy proceedings are commenced with respect to the seller
of the security, the Master Portfolio'sdisposition of the security may be
delayed or limited. The Master Portfolio will only enter into repurchase
agreements with registered broker/dealers, commercial banks and other
financial institutions that meet guidelines established by the Trust's Board
of Trustees and are not affiliated with the investment adviser. The Master
Portfolio may also participate in pooled repurchase agreement transactions
with other funds advised by Wells Fargo.

Loans of Portfolio Securities

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The Fund and Master Portfolio 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 or Master Portfolio. In
determining whether to lend a security to a particular broker, dealer or
financial institution, the Fund's or Master Portfolio's investment adviser will
consider all relevant facts and circumstances, including the creditworthiness
of the broker, dealer or financial institution. Any loans of portfolio
securities will be fully collateralized based on values that are marked to
market daily. The Fund and Master Portfolio will not enter into any portfolio
security lending arrangement having a duration of longer than one year. Any
securities that the Fund or Master Portfolio may receive as collateral will not
become part of the portfolio of the Fund or Master Portfolio at the time of the
loan and, in the event of a default by the borrower, the Fund or Master
Portfolio, if permitted by law, will dispose of such collateral except for such
part thereof that is a security in which the Fund or Master Portfolio is
permitted to invest. During the time securities are on loan, the borrower will
pay the Fund or Master Portfolio any accrued income on those securities, and
the Fund or Master Portfolio 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 Fund and Master Portfolio will not lend
securities having a value that exceeds one-third of the current value of their
respective total assets. Loans of securities by the Fund or Master Portfolio
will be subject to termination at the Fund's, Master Portfolio's or the
borrower's option. The Fund and Master Portfolio 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.

Convertible Securities

The Master Portfolio may invest in convertible securities that provide
current income and are issued by companies with the characteristics described
above and that have a strong earnings and credit record. The Fund 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 the investor with a
steady income stream (which generally yield a lower amount than similar
nonconvertible securities and a higher amount than common stocks) 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 the 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.

Other Investment Companies

A-5
<PAGE> 51
The Master Portfolio may invest in shares of other open-end,
management investment companies, subject to the limitations of Section 12(d)(1)
of the Investment Company Act of 1940 (the "1940 Act"), and provided that (i)
any such purchases will be limited to temporary investments in shares of
unaffiliated investment companies and (ii) the investment adviser will waive
its advisory fees for that portion of the Master Portfolio's assets so
invested, except when such purchase is part of a plan of merger, consolidation,
reorganization or acquisition. Subject to the limitations of the 1940 Act, the
Master Portfolio may purchase shares of exchange-listed closed-end funds
consistent with pursuing its investment objective. The Master Portfolio does
not intend to invest more than 5% of its net assets in such securities during
the coming year.

Money Market Instruments

The Master Portfolio may invest in the following types of money market
instruments that have remaining maturities not exceeding one year: (i) U.S.
Government obligations; (ii) negotiable certificates of deposit, bankers'
acceptances and fixed time deposits and other obligations of domestic banks
(including foreign branches) that have more than $1 billion in total assets at
the time of investment and are members of the Federal Reserve System or are
examined by the Comptroller of the Currency or whose deposits are insured by
the FDIC; and (iii) commercial paper rated at the date of purchase "P-1" by
Moody's or "A-1" or "A-1+" by S&P. The Master Portfolio also may invest in
short-term U.S. dollar-denominated obligations of foreign banks (including
U.S. branches) that at the time of investment: (i) have more than $10 billion,
or the equivalent in other currencies, in total assets; (ii) are among the 75
largest foreign banks in the world as determined on the basis of assets; and
(iii) have branches or agencies in the United States.

---------------
INVESTMENT POLICY

The Fund's investment objective, as set forth in "How the Fund
Works-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. If the Board of Directors determines, however, that the Fund's investment
objective can best be achieved by a substantive change in a nonfundamental
investment policy or strategy, the Company may make such change without
shareholder approval and will disclose any such material changes in the
then-current Prospectus.

As matters of fundamental policy, the Master Portfolio may, among
other things,: (i) not purchase securities of any issuer (except U.S.
Government obligations) if as a result, with respect to 75% of the Master
Portfolio's assets, more than 5% of the value of the Master Portfolio's total
assets would be invested in the securities of such issuer or the Master
Portfolio would own more than 10% of the outstanding voting securities of such
issuer; (ii) borrow from banks up to 10% of the current value of its net assets
for temporary purposes only in order to meet redemptions, and these borrowings
may be secured by the pledge of up to 10% of the current value of its net
assets

A-6
<PAGE> 52
(but investments may not be purchased while any such outstanding borrowings
exceed 5% of its net assets); (iii) not make loans of portfolio securities
having a value that exceeds 33 1/3% of the current value of its net assets;
(iv) not invest 25% or more of its assets (i.e., concentrate) in any particular
industry, except that the Master Portfolio may invest 25% or more of its assets
in U.S. Government obligations.

As a matter of non-fundamental policy, the Master Portfolio may invest
up to 15% of the current value of its net assets in illiquid securities. For
this purpose, illiquid securities include, among others, (a) securities that
are illiquid by virtue of the absence of a readily available market or legal or
contractual restrictions on resale, (b) fixed time deposits that are subject to
withdrawal penalties and that have maturities of more than seven days, and (c)
repurchase agreements not terminable within seven days. Disposing of illiquid
or restricted securities may involve additional costs and require additional
time.

Notwithstanding any other investment policy or limitation (whether or
not fundamental), as a matter of fundamental policy, the Fund may invest all of
its assets in the securities of a single open-end management investment company
with substantially the same fundamental investment objective, policies and
limitations as the Fund. A decision to so invest all of its assets may,
depending on the circumstances applicable at the time, require the approval of
shareholders.

A-7
<PAGE> 53

Advised by WELLS FARGO BANK, N.A. & Sponsored/Distributed by
Stephens Inc., Member NYSE/SIPC

NOT FDIC INSURED

<PAGE> 54

[THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE> 55
SPONSOR, DISTRIBUTOR AND ADMINISTRATOR

Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201

INVESTMENT ADVISER, CUSTODIAN AND
TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank, N.A.
P.O. Box 7066
San Francisco, California 94120-7066

LEGAL COUNSEL

Morrison & Foerster LLP
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:

o are NOT insured by the FDIC or U.S. Government

o are NOT obligations or deposits of Wells Fargo Bank
nor guaranteed by the Bank

o involve investment risk, including possible loss of principal

SC0216 (9/96)

Printed on Recycled Paper

<PAGE> 56
P.O. Box 7066
San Francisco, CA 94120-7066

STAGECOACH FUNDS:

o are NOT insured by the FDIC or U.S. Government

o are NOT obligations or deposits of Wells Fargo Bank
nor guaranteed by the Bank

o involve investment risk, including possible loss
of principal

SC0216 (9/96)
Printed on Recycled Paper

<PAGE> 57
P.O. Box 7066
San Francisco, CA 94120-7066
BULK RATE
U.S. POSTAGE
PAID
DALLAS, TEXAS
Permit No. 1808

STAGECOACH FUNDS:

o are NOT insured by the FDIC or U.S. Government

o are NOT obligations or deposits of Wells Fargo Bank
nor guaranteed by the Bank

o involve investment risk, including possible loss
of principal

<PAGE> 58
PROSPECTUS

SMALL CAP FUND

INSTITUTIONAL CLASS SHARES

September __, 1996
<PAGE> 59
STAGECOACH FUNDS(R)

SMALL CAP FUND

INSTITUTIONAL CLASS SHARES

Stagecoach Funds, Inc. (the "Company") is an open-end, series
investment company. This Prospectus contains information about one of the
funds in the Stagecoach Family of Funds -- the SMALL CAP FUND (the "Fund").
This Prospectus describes the Institutional Class Shares of the Fund, which are
offered to qualified institutional investors.

Please read this Prospectus carefully and retain in for future
reference. It is designed to provide you with important information and to
help you decide if the Fund's goals match your own. A Statement of Additional
Information ("SAI") dated September __, 1996, containing additional and more
detailed information about the Fund has been filed with the Securities and
Exchange Commission (the "SEC") and is hereby incorporated by reference into
this Prospectus. 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 1-800-222-8222. If you hold shares in an IRA, please call 1-800-BEST-IRA
(1-800-237-8472) for information or assistance.

i
<PAGE> 60
SHARES OF THE FUND ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED,
ENDORSED OR GUARANTEED BY, WELLS FARGO BANK, N.A. ("WELLS FARGO") 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.

WELLS FARGO IS THE INVESTMENT ADVISER AND PROVIDES CERTAIN OTHER SERVICES TO
THE FUND AND THE MASTER PORTFOLIO, FOR WHICH IT IS COMPENSATED. STEPHENS INC.
("STEPHENS') WHICH IS NOT AFFILIATED WITH WELLS FARGO, IS THE SPONSOR,
ADMINISTRATOR AND DISTRIBUTOR FOR THE FUND.

PROSPECTUS DATED SEPTEMBER __, 1996

ii
<PAGE> 61

TABLE OF CONTENTS

<TABLE>

<S> <C>
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Summary of Fund Expenses . . . . . . . . . . . . . . . . . . . . . . . 5

How the Fund Works . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Investment Objective and Policies . . . . . . . . . . . . . . . . . 7

Master/Feeder Structure . . . . . . . . . . . . . . . . . . . . . . 11

Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

The Fund and Management . . . . . . . . . . . . . . . . . . . . . . . . 12

Investing in the Fund . . . . . . . . . . . . . . . . . . . . . . . . . 15

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

How To Redeem Shares . . . . . . . . . . . . . . . . . . . . . . . . . 25

Additional Shareholder Services . . . . . . . . . . . . . . . . . . . . 29

Management, Distribution and Servicing Fees . . . . . . . . . . . . . . 32

Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Prospectus Appendix-Additional Investment Policies . . . . . . . . . . A-1
</TABLE>

iii
<PAGE> 62
PROSPECTUS SUMMARY

Q. WHAT ARE THE FUND'S AND THE MASTER PORTFOLIO'S INVESTMENT OBJECTIVES?

A. The SMALL CAP FUND seeks above-average long-term capital appreciation in
order to provide investors with a rate of total return exceeding that of
the Russell 2000 Index (before fees and expenses) over a time horizon of
three to five years. The Fund seeks to achieve this investment objective
by investing all of its assets in the Master Portfolio of the Trust, a
professionally managed, open-end series investment company. The Master
Portfolio has the same investment objective as the Fund. The Master
Portfolio seeks to achieve this investment objective through the active
management of a broadly diversified portfolio consisting primarily of
growth-oriented common stocks with market capitalizations between $50
million and $1 billion at the time of acquisition. The Master Portfolio
will sell the common stock of any company in its investment portfolio
after such Company's market capitalization exceeds $2 billion.

The Master Portfolio invests primarily in common stocks expected by Wells
Fargo, as investment adviser, to have above-average prospects for capital
appreciation. In pursuing the Master Portfolio's investment objective,
Wells Fargo seeks to invest in smaller-sized companies, both domestic and
foreign, which it believes to be characterized by new or innovative
products, services or processes which should enhance prospects for growth
of future earnings. The Fund and Master Portfolio are designed to provide
above-average capital growth for investors willing to assume above-average
risk. As with all mutual funds, there can be no assurance that the Fund
and Master Portfolio will achieve their investment objectives. See "How
the Fund Works -- Investment Objective and Policies."

1
<PAGE> 63
Q. WHO MANAGES MY INVESTMENTS?

A. Wells Fargo, as the investment adviser of the Master Portfolio, manages
the investments of the Master Portfolio. The Company has not retained the
services of a separate investment adviser for the Fund because the Fund
invests all of its assets in the Master Portfolio. Wells Fargo also
provides the Fund and the Master Portfolio with transfer agency, dividend
disbursing agency and custodial services. Wells Fargo is entitled to
receive a monthly advisory fee at the annual rate of 0.60% of the average
daily net assets of the Master Portfolio.

See "The Fund and Management" and "Management, Distribution and Servicing
Fees."

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

See "How the Fund Works -- Investment Objective and Policies."

2
<PAGE> 64
Q. HOW DO I INVEST?

A. Qualified investors may invest by purchasing Institutional Class Shares of
the Fund at the net asset value per share without a sales charge ("NAV").
Qualified investors include certain customers of affiliate, franchise or
correspondent banks of Wells Fargo & Company and other selected
institutions ("Institutions"). Customers may include individuals, trusts,
partnerships and corporations. Purchases are effected through the
customer's account with the Institution under the terms of the customer's
account agreement with the Institution. Investors wishing to purchase the
Fund's Institutional Class Shares should contact their account
representatives.

See "Investing in the Fund" for additional information.

Q. ARE EXCHANGES TO OTHER FUNDS PERMITTED?

A. Yes. The exchange privilege enables investors to exchange Institutional
Class Shares for shares of another fund offered by the Company provided
such shares are offered for sale in your state of residence. Exchanges
are effected through the customer's account with the Institution under the
terms of the customer's account agreement with the Institution.

See "Exchanges."

Q. HOW MAY I REDEEM SHARES?

A. Investors may redeem shares at NAV, without charge by the Company.
Institutional Class Shares held by an Institution on behalf of its
customers must be redeemed under the terms of the customer's account
agreement with the Institution. It is the responsibility of an
Institution to transmit redemption requests to the Company and to credit
its customers' accounts. The Company reserves the right to impose charges
for wiring redemption proceeds.

See "Investing in the Fund -- Redemption of Institutional Class Shares."

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

A. Dividends from net investment income of a Fund are declared and paid
annually and automatically reinvested in additional Institutional Class
Shares at NAV. Shareholders also may elect to receive dividends in cash.
Any capital gains are distributed at least annually in the same manner as
dividends.

See "Dividends" for additional information.

Q. WHAT ARE DERIVATIVES AND DOES THE FUND OR MASTER PORTFOLIO USE THEM?

3
<PAGE> 65
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. The Master Portfolio uses derivatives only to a limited
extent in ways that are incidental to its overall strategy of investing
directly in common stocks. For example, the Master Portfolio may, from
time to time, hold options, warrants or debt instruments that are
convertible into (and whose value is, therefore, "derived from") common
stocks or may hold derivatives to hedge against an underlying position in
a security.

Q. WHAT STEPS DO THE FUND AND MASTER PORTFOLIO TAKE TO CONTROL
DERIVATIVES-RELATED RISKS?

For more information on the Fund's investment activities, see "How the
Fund Works" and "Prospectus Appendix- Additional Investment Policies."

4
<PAGE> 66

SUMMARY OF FUND EXPENSES

SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<CAPTION>
SMALL CAP FUND--
INSTITUTIONAL CLASS
-------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) . . . . . . None
Sales Charge Imposed in Reinvested Dividends None
Sales Charge Imposed on Redemptions . . . . . . . None
Exchange Fees . . . . . . . . . . . . . . . . . . None
</TABLE>

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

<TABLE>
<CAPTION>
SMALL CAP FUND--
INSTITUTIONAL CLASS
-------------------
<S> <C>
Management Fee . . . . . . . . . . . . . . . . . . . . 0.60%
Other Expenses (after waivers or reimbursements)(1) . . 0.15%
-----
TOTAL FUND OPERATING EXPENSES (after any waivers or
reimbursements)(2). . . . . . . . . . . . . . . . . . . 0.75%
</TABLE>

(1) Other Expenses (before waivers or reimbursements) would be 0.40%.
(2) Total Fund Operating Expenses (before waivers or reimbursements) would
be 1.00%.

5
<PAGE> 67
EXAMPLE OF EXPENSES

An investor would pay the following expenses on a $1,000 investment in the
Fund's Institutional Class Shares, assuming a 5% annual return and redemption
at the end of each time period indicated:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Institutional Class Shares $8 $24
</TABLE>

EXPLANATION OF TABLES

The purpose of the foregoing tables is to assist the investor in
understanding the various costs and expenses that a shareholder will bear
directly or indirectly. The tables reflect expenses at both the Fund and
Master Portfolio levels, but do not reflect any charges that may be imposed by
Wells Fargo or another Institution directly on its customer accounts in
connection with an investment in the Fund.

SHAREHOLDER TRANSACTION EXPENSES are charges incurred when a
shareholder buys or sells Fund shares. Institutional Class Shares are sold
with no shareholder transaction charges imposed by the Fund. The Company
reserves the right to impose a charge for wiring redemption proceeds. See
"Investing in the Fund."

ANNUAL FUND OPERATING EXPENSES for the Institutional Class Shares of
the Fund are based on applicable contract amounts currently in effect, except
that the amounts show under "Other Expenses" and "Total Fund Operating
Expenses" are based on estimated amounts for the current fiscal year, restated
to reflect voluntary fee waivers and expense reimbursements that are expected
to continue to reduce expenses during the current fiscal year. Wells Fargo and
Stephens have agreed to waive or reimburse all or a portion of their respective
fees charged to, or expenses paid by, the Fund to ensure that the Total Fund
Operating Expenses do not exceed, on an annual basis, [0.75%] of the Fund's
average daily net assets through September __, 1997. Any such waivers or
reimbursements would reduce the Fund's or Master Portfolio's total expenses.
There can be no assurance that voluntary fee waivers or reimbursements will
continue. For more complete descriptions of the various costs and expenses you
can expect to incur as an investor in the Fund, please see "Management,
Distribution and Servicing Fees."

EXAMPLE OF EXPENSES is a hypothetical illustration of the expenses
associated with a $1,000 investment in shares of the Fund over stated periods
based on the expenses in the respective tables above and an assumed annual rate
of return of 5%. The rate of return should not be considered an indication of
actual or expected performance of the Fund nor a representation of past or
future expenses; actual expenses and returns may be greater or lesser than
those shown.

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

6
<PAGE> 68
With regard to the combined fees and expenses of the Fund and Master
Portfolio, the Company's Board of Directors has considered whether various
costs and benefits of investing all of the Fund's assets in the Master
Portfolio rather than directly in a portfolio of securities would be more or
less than if the Fund invested in portfolio securities directly. The Company's
Board of Directors believes that the aggregate per share expenses of the Fund
will be less than or approximately equal to the expenses incurred by the Fund
if the Fund invested directly in the type of securities held by the Master
Portfolio. See "Management, Distribution and Servicing Fees" for more complete
descriptions of the various costs and expenses applicable to the Fund. In
addition, if the Fund were to no longer invest in the Master Portfolio, these
expenses may change.

The Company offers two other classes of shares that also invest in the
Master Portfolio -- the Class A and Class B Shares. The Class A and B Shares
are available to qualified retail investors. In addition to selling its
interests to the Fund, the Master Portfolio may sell its interests to other
mutual funds or accredited investors. The expenses and, correspondingly, the
investment returns of the Class A and Class B Shares and other investment
options in the Master Portfolio may differ from those of Institutional Class
Shares of the Fund. Information regarding these and other (if any) investment
options in the Master Portfolio may be obtained by calling Stephens at
1-800-643-9691. Additional information regarding the Fund's and the Master
Portfolio's expenses is included under the headings "Summary of Fund Expenses"
and "Management, Distribution and Servicing Fees."

HOW THE FUND WORKS

INVESTMENT OBJECTIVES AND POLICIES

INVESTMENT OBJECTIVE -- The Small Cap Fund's investment objective is
to seek above-average long-term capital appreciation in order to provide
investors with a rate of total return exceeding that of the Russell 2000 Index
(before fees and expenses) over a time horizon of three to five years. The
Small Cap Fund seeks to achieve its investment objective by investing all of
its assets in the Small Cap Master Portfolio, which has the same investment
objective as the Fund. The Fund and Master Portfolio are designed to provide
above-average capital growth for investors willing to assume above-average
risk. The Master Portfolio seeks to achieve this investment objective through
the active management of a broadly diversified portfolio of growth-oriented
common stocks. The Master Portfolio invests primarily in companies with market
capitalizations between $50 million and $1 billion at the time of acquisition,
although it may sometimes invest in companies with capitalizations greater or
less than these amounts. The Master Portfolio invests primarily in common
stocks of domestic and foreign companies believed by Wells Fargo, as investment
adviser, to be characterized by new or innovative products, services or
processes and to have above-average prospects for capital appreciation. The
Master

7
<PAGE> 69
Portfolio will sell the common stock of any company in its investment portfolio
after such company's market capitalization exceeds $2 billion.

EQUITY SECURITIES -- The equity securities in the Master Portfolio's
investment portfolio may have some of the following characteristics:

- Low or no dividends

- Smaller market capitalizations (less than $1 billion)

- Less market liquidity

- Newly public companies (i.e., recent initial public offering)

- Relatively short operating histories

- Aggressive capitalization structures (including high debt levels)

- Involvement in rapidly growing/changing industries and/or new technologies

Under normal market conditions, the Master Portfolio holds at least
20 common stock issues spread across multiple industry groups and sectors of
the economy. The majority of these holdings consist of companies with smaller
market capitalizations, established growth companies and turnaround or
acquisition candidates. Under normal market conditions, more than [50%] of the
Master Portfolio's total assets will be invested in companies with smaller
market capitalizations. The Master Portfolio will invest primarily in companies
with market capitalizations between $50 million and $1 billion at the time of
acquisition. The Master Portfolio may, however, invest in companies with a
market capitalization under $50 million if Wells Fargo believes such
investments to be in the best interests of the Master Portfolio. The Master
Portfolio may invest in attractive larger capitalization companies with market
capitalizations greater than $1 billion, but will sell the common stock of
companies in its investment portfolio whose market capitalizations have
exceeded $2 billion. Additionally, the Master Portfolio may acquire securities
through initial public offerings of companies whose securities have been
offered to the public for three months or less ("IPOs") and may acquire and
hold securities of start-up companies and other newer issuers. It is expected
that no more than 20% of the Master Portfolio's assets will be invested in
these highly aggressive issues at one time.

There may be some additional risks associated with investments in
smaller capitalization companies, IPOs and start-up companies or other newer
issuers. Such companies tend to have limited operating histories and their
securities tend to be less liquid than securities of larger companies.
Further, the market price of such companies' securities is generally more
sensitive to changes in the issuer's financial condition and current economic
trends and, therefore, the prices of such companies' securities may be more
volatile than those of larger companies.

8
<PAGE> 70
Under ordinary market conditions, at least 65% of the value of the
total assets of the Master Portfolio will be invested in common stocks and in
securities which are convertible into common stocks that Wells Fargo, as
investment adviser, believes have better-than-average prospects for
appreciation. At most, 5% of the Master Portfolio's net assets will be
invested in convertible debt securities that are not either rated in the four
highest rating categories by one or more nationally recognized statistical
rating organizations ("NRSROs"), such as Moody's Investor Service, Inc.
("Moody's") or Standard & Poor's Corporation ("S&P"), or unrated securities
determined by Wells Fargo to be of comparable quality. Securities rated in the
fourth lowest rating category (i.e., rated "BBB" by S&P or "Baa" by Moody's)
are regarded by S&P as having an adequate capacity to pay interest and repay
principal, but changes in economic conditions or other circumstances are more
likely to lead to a weakened capacity to make such repayments. Moody's
considers such securities as having speculative characteristics.

There may be some additional risks associated with investments in
smaller and/or newer companies. Such companies tend to have limited operating
histories and their shares tend to be less liquid than securities of larger
companies. Further, the share price of smaller and newer companies is
generally more sensitive to purchase and sale transactions and changes in the
issuer's financial condition and, therefore, the prices of such stocks may be
more volatile than those of larger company stocks.

MASTER/FEEDER STRUCTURE

9
<PAGE> 71
The Fund invests all of its assets in the Master Portfolio of the
Trust which has the same investment objective as the Fund. See "Investment
Objective and Policies" for a description of the Fund's and Master Portfolio's
objectives and policies and "Management, Distribution and Servicing Fees" for a
description of the Fund's and Master Portfolio's management. The Trust is
organized as a trust under the laws of the State of Delaware. See "Organization
and Capital Stock."

Certain policies of the Master Portfolio which are non-fundamental may
be changed by vote of a majority of the Trust's Trustees without interestholder
approval. If the Master Portfolio's investment objective or fundamental or non-
fundamental policies are changed, the Fund may elect to change its objective or
policies to correspond to those of the Master Portfolio. The Fund may also
elect to redeem its interests in the Master Portfolio and either seek a new
investment company with a matching objective in which to invest 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 the Fund or the Master Portfolio, to the
extent possible. See "Investment Objective and Policies" for additional
information regarding the Fund's and the Master Portfolio's investment

10
<PAGE> 72
objectives and policies. Additional information regarding the officers and
Directors/Trustees of the Company and the Trust is located in the Fund's SAI
under "Management."

In addition to Institutional Class Shares the Fund offers Class A and
Class B Shares available only to qualified retail investors selling its
interests to the Fund. The Master Portfolio may sell its interests to other
mutual funds or accredited investors. The expenses and, correspondingly, the
investment returns of The Class A and Class B Shares and other investment
options in the Master Portfolio may differ from those of the Institutional Class
Shares of the Fund. Information regarding these and other (if any) investment
options in the Master Portfolio may be obtained by calling Stephens at
1-800-643-9691. Additional information regarding the Fund's and the Master
Portfolio's expenses is included under the heading "Summary of Expenses."

PERFORMANCE

Average annual total return on the shares of each class is based on
the overall dollar or percentage change in value of a hypothetical investment
in such shares and assumes that all dividends and capital gain distributions
attributable to such class are reinvested in shares of that class. In addition
to presenting standardized total return, the Fund also may present
nonstandardized total returns, yields and distribution rates for purposes of
sales literature. For example, the performance figure of the shares of a class
or Fund may be calculated on the basis of an investment at the net asset value
per share or at net asset value per share plus a reduced sales charge (see
"Investing in the Fund"), 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 performance information advertised by the Fund for periods prior
to September __, 1996, the date the Fund and the Master Portfolio commenced
operations, is based upon the prior performance of the Collective Investment
Fund. The performance information is adjusted to reflect the Fund's and the
Master Portfolio's current level of operating expenses, including any front-end
sales loads or contingent deferred sales charges. The prior performance of the
Collective Investment Fund is deemed relevant because the Fund invests all of
its assets in the Master Portfolio which acquired the assets of the Collective
Investment Fund immediately prior to the commencement of the Fund's operations.
the Master Portfolio, as successor to the assets of the Collective Investment
Fund, is managed by Wells Fargo in a manner that is in all material respects
equivalent to the management of the Collective Investment Fund.

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Additional information about the performance of the Fund will be
contained in its Annual Report. The Annual Reports, when available, may be
obtained without charge by calling the Company at 1-800-222-8222.

THE FUND AND MANAGEMENT

The Fund is one of the funds of the Stagecoach Family of Funds. The
Company was organized as a Maryland corporation on September 9, 1991. The
Company currently offers shares of the following series: the Aggressive
Growth, Arizona Tax-Free, Asset Allocation, Balanced, California Tax-Free Bond,
California Tax-Free Income, California Tax-Free Money Market Mutual, Corporate
Stock, Diversified Income, Equity Value, Ginnie Mae, Government Money Market
Mutual, Growth and Income, Intermediate Bond, Money Market Mutual, Money Market
Trust, National Tax-Free, National Tax-Free Money Market Mutual, Oregon
Tax-Free, Prime Money Market Mutual, Short-Intermediate U.S. Government Income,
Small Cap, Treasury Money Market Mutual and U.S. Government Allocation Funds.
The Board of Directors may, in the future, authorize the issuance of other
series of capital stock representing shares of additional investment
portfolios.

MASTER PORTFOLIO INVESTMENT ADVISER

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Ms. Sandra Thornton, as portfolio co-manager of the Master Portfolio,
is primarily responsible for the day-to- day management of the Master
Portfolio. Ms. Thornton has been co-manager of the Master Portfolio since its
inception. Ms. Thornton co-managed the [SMALL CAPITALIZATION GROWTH FUND],
from November, 1994 until the sale of its assets to the Master Portfolio in
September, 1996. Ms. Thornton manages other equity portfolios for Wells Fargo
and is a member of the Wells Fargo Growth Equity Team. Prior to joining Wells
Fargo in 1993, she worked in the research department of RCM Capital Management.
She obtained her license as a Certified Public Accountant from the State of
California while performing tax/financial planning services at Price
Waterhouse. She holds a B.A. from Albertus Magnus College and is a Chartered
Financial Analyst.

Mr. Steve Enos, as portfolio co-manager of the Master Portfolio, also
is primarily responsible for the day-to- day management of the Master
Portfolio. Mr. Enos has been co-manager of the Master Portfolio since
inception. Mr. Enos co-managed the Small Capitalization Growth Fund since
November 1994. Mr. Enos is a member of the Wells Fargo Growth Equity Team. He
began his career with First Interstate Bank, where he was assistant vice
president and portfolio manager. Prior to joining Wells Fargo, he was a
principal at Dolan Capital Management where he managed both personal and
pension portfolios. Mr. Enos received his undergraduate degree in economics
from the University of California at Davis. Mr. Enos is a Chartered Financial
Analyst and a member of the Association for Investment Management and Research.

INVESTING IN THE FUND

OPENING AN ACCOUNT

Fund shares may be purchased on any day the Fund is open. The Fund is
open for business each day the New York Stock Exchange ("NYSE") is open for
trading (a "Business Day"). Currently, the NYSE is closed on New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day (each a

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"Holiday"). When any Holiday falls on a weekend, the NYSE typically is closed
on the weekday immediately before or after such Holiday.

SHARE VALUE

The value of a share of each class is its NAV. Wells Fargo calculates
the NAV of each class of a 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). The NAV per share for each class of shares is computed by
dividing the value of a Fund's assets allocable to a particular class, less the
liabilities charged to that class by the total number of the outstanding shares
of that class. All expenses, including fees paid to the investment adviser and
administrator, are accrued daily and taken into account for the purpose of
determining the NAV, which is expected to fluctuate daily.

Except for debt obligations with remaining maturities of 60 days or
less, which are valued at amortized cost, the other assets of the Fund 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.

The portfolio investments of the Master Portfolio are generally 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 or the
Master Trust's Board of Trustees. Prices used for such valuations may be
provided by independent pricing services. The Master Portfolio values debt
obligations with remaining maturities of 60 days or less at amortized cost.

PURCHASE OF INSTITUTIONAL CLASS SHARES

Institutional Class Shares of the Fund are sold at NAV (without a
sales load) on a continuous basis primarily to certain customers ("Customers")
of affiliate, franchise or correspondent banks of Wells Fargo & Company and
other selected institutions (previously defined as Institutions). Customers
may include individuals, trusts, partnerships and corporations. Share
purchases are effected through a Customer's account at an Institution under the
terms of the Customer's account agreement with the Institution, and
confirmations of share purchases and redemptions are sent by the Fund to the
Institution involved. Institutions (or their nominees), acting on behalf of
their Customers, normally are the holders of record of Institutional Class
Shares. Customers' beneficial ownership of Institutional Class Shares is
reflected in the account statements provided by Institutions to their
Customers. The exercise of voting rights and the delivery to Customers of
shareholder communications from the Fund is governed by the Customers' account
agreements with an Institution. Investors wishing to purchase Institutional
Class Shares of the Fund should contact their account representatives.

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Institutional Class Shares of the Fund are sold at the NAV per share
next determined after a purchase order has become effective. Purchase orders
placed by an Institution for Institutional Class Shares in a Fund must be
received by the Company by 1:00 p.m. (Pacific time) on any Business Day.
Payment for such shares may be made by Institutions in federal funds or other
funds immediately available to the custodian no later than 1:00 p.m. (Pacific
time) on the next Business Day following the receipt of the purchase order.

It is the responsibility of Institutions to transmit orders for
purchases by their Customers and to deliver required funds on a timely basis.
If funds are not received within the periods described above, the order will be
canceled, notice thereof will be given, and the Institution will be responsible
for any loss to the Fund or its shareholders. Institutions may charge certain
account fees depending on the type of account the investor has established with
an Institution. In addition, an Institution may receive fees from the Fund
with respect to the investments of its Customers as described under
"Management, Distribution and Servicing Fees." Payment for Institutional Class
Shares of a Fund may, in the discretion of the investment adviser, be made in
the form of securities that are permissible investments for the Fund. For
further information see "Additional Purchase and Redemption Information" in the
SAI.

The Company reserves the right to reject any purchase order or to
suspend sales at any time. Payment for orders that are not received will be
returned after prompt inquiry. The issuance of Institutional Class Shares is
recorded on the Company's books, and share certificates are not issued.

WIRE INSTRUCTIONS -- DIRECT PURCHASES BY INSTITUTIONS

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 and designate the
Institutional Class)
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 sent by telefacsimile, with
the original subsequently mailed, to the following address immediately
after 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

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<PAGE> 77

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.

STATEMENTS AND REPORTS

Institutions (or their nominees) typically send shareholders a
confirmation or statement of the account after every transaction that affects
the share balance or the Fund account registration. A statement with tax
information for the previous year will be mailed by January 31 of each year and
also will be filed with the IRS. At least twice a year, shareholders will
receive financial statements.

REDEMPTION OF INSTITUTIONAL CLASS SHARES

Redemption requests are effected at the NAV per share next determined
after receipt of a redemption request in good order by the Company.
Institutional Class Shares held by an Institution on behalf of its Customers
must be redeemed in accordance with instructions and limitations pertaining to
the Customer's accounts at the Institution. It is the responsibility of an
Institution to transmit redemption requests to the Company and to credit its
Customers' accounts with the redemption proceeds on a timely basis. The
redemption proceeds for Institutional Class Shares of the Fund normally are
wired to the redeeming Institution the following Business Day after receipt of
the request by the Company. The Company reserves the right to delay the wiring
of redemption proceeds for up to seven days after it receives a redemption
order if, in the judgment of the investment adviser, an earlier payment could
adversely affect the Fund or 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 them is not reasonably practicable or (b) it is
not reasonably practicable for the Fund to fairly 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 a Fund.

When Institutional Class Shares are redeemed directly from the Fund,
the Fund will ordinarily send the proceeds by check to the shareholder at the
address of record on the next Business Day unless payment by wire is requested.
The Fund may take up to seven days to make payment, although this will not be
the customary practice. Also, if the NYSE is closed (or when trading is
restricted) for any reason other than the customary weekend or holiday closing
or if an emergency condition as determined by the SEC merits such action, the
Fund may suspend redemptions or postpone payment dates.

To be accepted by a Fund, a letter requesting redemption must include:
(i) the Fund's name and account registration from which the Institutional Class
Shares are being redeemed; (ii) the account number; (iii) the amount to be
redeemed; (iv) the signatures of all registered owners; and (v) a signature
guarantee by any eligible guarantor institution. An "eligible guarantor

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<PAGE> 78
institution" 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.

All redemptions of Institutional Class Shares of the Fund are made in
cash, except that the commitment to redeem Institutional Class Shares in cash
extends only to redemption requests made by each Fund shareholder during any
90-day period of up to the lesser of $250,000 or 1% of the NAV of the Fund at
the beginning of such period. This commitment is irrevocable without the prior
approval of the SEC. In the case of redemption requests by shareholders in
excess of such amounts, the Board of Directors reserves the right to have the
Fund make payment, in whole or in part, in securities or other assets, in case
of an emergency or any time a cash distribution would impair the liquidity of
the Fund to the detriment of the existing shareholders. In this event, the
securities would be valued in the same manner as the securities of the Fund are
valued. If the recipient were to sell such securities, he or she would incur
brokerage charges.

A redemption may be a taxable transaction on which gain or loss may be
recognized.

REDEMPTIONS BY TELEPHONE

Telephone exchange or redemption privileges authorize the Transfer
Agent to act on telephone instructions from any person representing himself or
herself to be the shareholder of record and reasonably believed by the Transfer
Agent to be genuine. The Company requires the Transfer Agent to employ
reasonable procedures, such as requiring a form of personal identification, to
confirm that instructions are genuine and, if it does not follow such
procedures, the Company and the Transfer Agent may be liable for any losses due
to unauthorized or fraudulent instructions. Neither the Company nor the
Transfer Agent will be liable for following telephone instructions reasonably
believed to be genuine.

EXCHANGES

The Company offers a convenient way to exchange Institutional
Class Shares in one Fund for Institutional Class Shares in another fund of the
Company. Before engaging in an exchange transaction, a shareholder should read
carefully the Prospectus describing the fund into which the exchange will
occur. Prospectuses are available without charge and can be obtained by
calling 1-800-222-8222 or by writing the Company at the address listed on the
first page of the Prospectus. A shareholder may not exchange Institutional
Class Shares of one fund for Institutional Class Shares of another fund if
Institutional Class Shares of both funds are not qualified for sale in the
state of the shareholder's residence. The Company may terminate or amend the
terms of the exchange privilege at any time.

Exchange transactions are effected through a Customer's account at an
Institution under the terms of the Customer's account agreement with the
Institution, and confirmations of share

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<PAGE> 79
exchanges are sent by a Fund to the Institution involved. Institutions (or
their nominees), acting on behalf of their Customers, normally are the holders
of record of Institutional Class Shares. Institutions are responsible for
transmitting orders for exchanges to the Company on a timely basis. Customers'
exchange transactions are generally reflected in the account statements
provided by Institutions to their Customers. Investors wishing to exchange
Institutional Class Shares of a Fund for Institutional Class Shares of another
fund should contact their account representatives. Investors with questions
may call the Company at 1-800-222-8222.

A new account opened by exchange must be established with the same
name(s), address and social security number as the existing account. All
exchanges are made at the NAV of the respective funds next determined following
receipt of the request by the Company in good order.

An exchange is taxable as a sale of a security on which a gain or loss
may be recognized. Shareholders should receive written confirmation of the
exchange from the Institution within a few days of the completion of the
transaction.

To exchange Institutional Class Shares, or if you have any questions,
simply call the Company at 1-800-222- 8222. A shareholder of record should be
prepared to give the telephone representative the following information: (i)
the account number, social security number and account registration; (ii) the
name of the fund from and the fund into which the transfer is to occur; and
(iii) the dollar or share amount of the exchange. The conversation may be
recorded to protect shareholders and the Company. Telephone exchanges are
available unless the shareholder of record has declined the privilege on the
Purchase Application.

In addition, Institutional Class Shares of the Fund may be exchanged
for the Fund's Class A shares in connection with the distribution of assets
held in a qualified trust, agency or custodial account maintained with the
trust department of Wells Fargo or another bank, trust company or thrift
institution, or in other cases where Institutional Class Shares are not held in
such qualified accounts. Similarly, Class A shares may be exchanged for the
Fund's Institutional Class Shares if the shares are to be held in such a
qualified trust, agency or custodial account. These exchanges are made at the
NAV of the respective share classes next determined after the exchange request
is received by the Company.

DIVIDENDS

The Fund intends to declare dividends on an annual basis of
substantially all of its net investment income. Shareholders begin earning
dividends on the Business Day following the date the purchase order is
effective and continue to earn dividends through the day such shares are
redeemed. Expenses, such as state securities registration fees and transfer
agency fees, that are attributable to a particular class may affect the
relative dividends and/or capital-gain distributions of a class of shares.

Dividends and capital gain distributions have the effect of reducing
the NA. per share by the amount distributed Although such dividends and
distributions paid on newly issued shares

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<PAGE> 80
shortly after a purchase would represent, in substance, a return of capital,
the dividend or distribution would be attributable to net investment income or
capital gain and, accordingly, would be taxable to the shareholder.

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

MANAGEMENT, DISTRIBUTION AND SERVICING FEES

INVESTMENT ADVISER

For its services as investment adviser to the Master Portfolio, Wells
Fargo is entitled to a monthly fee at the annual rate of 0.60% of the Master
Portfolio's average daily net assets. From time to time, Wells Fargo may waive
its advisory fees in whole or in part. Any such waiver will reduce expenses of
the Master Portfolio and, accordingly, have a favorable impact on the Master
Portfolio's and the Fund's performance. From time to time, the Master
Portfolio, consistent with its investment objective, policies and restrictions,
may invest in securities of companies with which Wells Fargo has a lending
relationship.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo also serves as the Fund's custodian and transfer and dividend
disbursing agent. Under the Custody Agreement, the Fund may, at times, borrow
money from Wells Fargo as needed to satisfy temporary liquidity needs. Wells
Fargo charges interest on such overdrafts at a rate determined pursuant to the
Custody Agreement. The custodian, transfer and dividend disbursing agency
activities are performed at 525 Market Street, San Francisco, California 94105.

For its services as custodian to the Fund, Wells Fargo is entitled to a
net asset charge at the annual rate of 0.0167%, payable monthly, plus specified
transaction charges. Wells Fargo also will provide portfolio accounting
services under the Custody Agreement for a monthly base fee of $2,000 plus a
net asset fee at the annual rate of 0.070% of the first $50,000,000 of a Fund's
average daily net assets, 0.045% of the next $50,000,000, and 0.020% of the
average daily net assets in excess of $100,000,000. For its services as
transfer and dividend disbursing agent to the

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<PAGE> 81
Fund, Wells Fargo is entitled to receive a monthly fee at the annual rate of
0.07% of the Fund's average daily net assets.

INSTITUTIONS AND SHAREHOLDER SERVICING AGENT

The Fund has entered into a Shareholder Servicing Agreement with Wells
Fargo and may enter into similar agreements with other Institutions. Under
such agreements, Shareholder Servicing Agents (including Wells Fargo) agree, as
agents for their customers, to provide shareholder administrative and liaison
services with respect to Fund shares, which include, without limitation,
aggregating and transmitting shareholder orders for purchases, exchanges and
redemptions; maintaining shareholder accounts and records; and providing such
other related services as the Company or a shareholder may reasonably request.
For these services, a Shareholder Servicing Agent is entitled to receive a fee
at the annual rate of up to 0.25% of the average daily net assets attributable
to the Institutional Class shares owned of record or beneficially by investors
with whom the Shareholder Servicing Agent maintains a servicing relationship.
In no case shall payments exceed any maximum amount that may be deemed
applicable under applicable laws, regulations or rules, including the Rules of
Fair Practice of the NASD ("NASD Rules").

A Shareholder Servicing Agent also may impose certain conditions
and/or fees 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. Each Shareholder Servicing Agent has agreed 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

Under the respective Administration Agreements with the Fund and the
Master Portfolio, Stephens has agreed to provide as administrative services,
among other things, (i) general supervision of the operation of the Fund and
the Master Portfolio, including coordination of the services performed by the
various service providers, including the investment adviser (for the Master
Portfolio), transfer agent, custodian, independent auditors and legal counsel;
(ii) general supervision of regulatory compliance matters, including the
compilation of information for

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<PAGE> 82
documents such as reports to, and filings with, the SEC and state securities
commissions, and the preparation of proxy statements and shareholder reports
for the Fund and the Master Portfolio; and (iii) general supervision of the
compilation of data required for the preparation of periodic reports
distributed to the Company's officers and Board of Directors and the Trust's
Board of Trustees. Stephens also furnishes office space and certain facilities
required for conducting the business of the Fund and the Master Portfolio and
pays the compensation of the directors, officers and employees of the Company
and the Trust who are affiliated with Stephens.

Stephens, as the principal underwriter of the Fund within the meaning
of the 1940 Act, has also entered into a Distribution Agreement with the
Company under which Stephens acts as agent for the Fund for the sale of its
shares and may enter into Selling Agreements with Selling Agents that wish to
make available Fund shares to their respective customers.

Stephens has established a non-cash compensation program, pursuant to
which broker/dealers or financial institutions that sell shares of the
Company's 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.

Financial institutions acting as Shareholder Servicing Agents, 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.

Since the Distribution Agreements provide for fees that are used by
Stephens to pay for distribution services, a plan of distribution for each
class of shares (individually, a "Plan," collectively, the "Plans") and the
Distribution Agreement are approved and reviewed in accordance with Rule 12b-1
under the 1940 Act. Rule 12b-1 which regulates the manner in which an
investment company may, directly or indirectly, bear the expense of
distributing its shares. See "Distribution Plans" for a more complete
description of the Plans.

FUND EXPENSES

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<PAGE> 83
From time to time, Wells Fargo 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 Fund's performance.

Except for the expenses borne by Wells Fargo and Stephens, the Company
and the Trust bear all costs of their respective operations, including the
compensation of the Company's directors and the Trust's trustees who are not
officers or employees of Wells Fargo or Stephens or any of their affiliates;
advisory (in the case of the Master Portfolio), shareholder servicing (in the
case of the Fund), and administration fees; payments pursuant to any Plans (in
the case of the Fund); interest charges; taxes; fees and expenses of
independent auditors; legal counsel, transfer agent and dividend disbursing
agent; expenses of redeeming Fund shares or interests in the Master Portfolio;
expenses of preparing and printing prospectuses (except the expense of printing
and mailing prospectuses used for promotional purposes, unless otherwise
payable pursuant to a Plan), shareholders' or investors' reports, notices,
proxy statements and reports to regulatory agencies; insurance premiums and
certain expenses relating to insurance coverage; trade association membership
dues; brokerage and other expenses connected with the execution of portfolio
transactions; fees and expenses of the custodian, including those of keeping
books and accounts and calculating the NAV of the Fund and the Master
Portfolio; expenses of shareholders' or investors' meetings; expenses relating
to the issuance, registration and qualification of shares of the Fund; pricing
services; organizational expenses; and any extraordinary expenses. Expenses
attributable to the Fund and/or the Master Portfolio are charged against the
respective assets of the Fund and/or the Master Portfolio. A pro rata portion
of the expenses of the Company or Trust are charged against the assets of the
Fund or Master Portfolio as applicable.

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<PAGE> 84
TAXES

The Company intends to qualify the Fund as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986 as amended (the
"Code"), as long as such qualification is in the best interest of the Fund's
shareholders. The Fund will be treated as a separate entity for tax purposes
and thus the provisions of the Code applicable to regulated investment
companies will generally 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 Fund will not be subject to federal
income taxes with respect to net investment income and net realized capital
gains distributed to its shareholders. The Fund intends to pay out
substantially all of its net investment income and net realized capital gains
(if any) for each year.

Corporate shareholders of the Fund may be eligible for the
dividends-received deduction on dividends paid out of a Fund's net investment
income attributable to dividends received from domestic corporations, which, if
received directly, would qualify for such deduction. In order to qualify for
the dividends-received deduction, a corporate shareholder must hold Fund shares
paying the dividends upon which the deduction is based for at least 46 days.

The Fund seeks to qualify as a regulated investment company by
investing all of its assets in the Master Portfolio. The Master Portfolio will
be treated as a non-publicly traded partnership rather than as a regulated
investment company or a corporation under the Code, and as such, shall not be
subject to federal income tax. As a non-publicly traded partnership, any
interest, dividends, gains and losses of the Master Portfolio shall be deemed
to have been "passed through" to the Fund (and other investors, if any) in
proportion to the Fund's ownership interest in the Master Portfolio. If the
Master Portfolio were to accrue but not distribute any interest, dividends or
gains, the Fund would be deemed to have realized and recognized its
proportionate share of such income, regardless of whether or not such income
has been distributed by the Master Portfolio. However, the Master Portfolio
will seek to minimize recognition by the Fund and other investors, if any, of
interest, dividends and gains without a corresponding distribution.

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<PAGE> 85
Your Institution, or your 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. 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 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 number 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 Tax -- Foreign Shareholders"
in the SAI.

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<PAGE> 86
PROSPECTUS APPENDIX--
ADDITIONAL INVESTMENT POLICIES

FUND AND MASTER PORTFOLIO INVESTMENTS

Foreign Securities

Privately Issued Securities (Rule 144A)

A-1
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Corporate Reorganizations

Options

Call and Put Options on Specific Securities

A-2
<PAGE> 88

Stock Index Options

The effectiveness of purchasing or writing stock index options will
depend upon the extent to which price movements in the Master Portfolio's
investment portfolio correlate with price movements of the stock index
selected. Because the value of a stock index option depends upon changes to
the price of all stocks comprising the index rather than the price of a
particular stock, whether the Master Portfolio will realize a gain or loss from
the purchase or writing of options on an index depends upon movements in the
price of all stocks in the index, rather than movements in the price of a
particular stock. Accordingly, successful use by the Master Portfolio of
options on stock indexes will be subject to Wells Fargo's ability to correctly
analyze movements in the direction of the stock market generally or of
particular industry or market segments.

Warrants

Temporary Investments

A-3
<PAGE> 89
(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, as investment adviser, are of comparable quality to
obligations of U.S. banks which may be purchased by the Fund or Master
Portfolio.

Floating-and Variable-Rate Instruments

Repurchase Agreements

The Master Portfolio may enter into repurchase agreements wherein the seller
of a security to the Master Portfolio agrees to repurchase that security from
the Master Portfolio at a mutually agreed-upon time and price. The period of
maturity is usually quite short, often overnight or a few days, although it may
extend over a number of months. The Master Portfolio may enter into repurchase
agreements only with respect to obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities (including government-sponsored
enterprises), ("U.S. Government Obligations") certificates of deposit, bankers
acceptances or commercial paper. All repurchase agreements will be fully
collateralized based on values that are marked to market daily. If the seller
defaults and the value of the underlying securities has declined, the Master
Portfolio may incur a loss. In addition, if bankruptcy proceedings are
commenced with respect to the seller of the security, the Master Portfolio's
disposition of the security may be delayed or limited. The Master Portfolio
will only enter into repurchase agreements with registered broker/dealers,
commercial banks and other financial institutions that meet guidelines
established by the Trust's Board of Trustees and are not affiliated with the
investment adviser. The Master Portfolio may also participate in pooled
repurchase agreement transactions with other funds advised by Wells Fargo.

A-4
<PAGE> 90
Loans of Portfolio Securities

The Fund and Master Portfolio 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 or Master Portfolio. In
determining whether to lend a security to a particular broker, dealer or
financial institution, the Fund's or Master Portfolio's investment adviser will
consider all relevant facts and circumstances, including the creditworthiness
of the broker, dealer or financial institution. Any loans of portfolio
securities will be fully collateralized based on values that are marked to
market daily. The Fund and Master Portfolio will not enter into any portfolio
security lending arrangement having a duration of longer than one year. Any
securities that the Fund or Master Portfolio may receive as collateral will not
become part of the portfolio of the Fund or Master Portfolio at the time of the
loan and, in the event of a default by the borrower, the Fund or Master
Portfolio, if permitted by law, will dispose of such collateral except for such
part thereof that is a security in which the Fund or Master Portfolio is
permitted to invest. During the time securities are on loan, the borrower will
pay the Fund or Master Portfolio any accrued income on those securities, and
the Fund or Master Portfolio 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 Fund and Master Portfolio will not lend
securities having a value that exceeds one-third of the current value of their
respective total assets. Loans of securities by the Fund or Master Portfolio
will be subject to termination at the Fund's, Master Portfolio's or the
borrower's option. The Fund and Master Portfolio 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.

Convertible Securities

A-5
<PAGE> 91
Other Investment Companies

The Master Portfolio may invest in shares of other open-end,
management investment companies, subject to the limitations of Section 12(d)(1)
of the Investment Company Act of 1940 (the "1940 Act"), and provided that (i)
any such purchases will be limited to temporary investments in shares of
unaffiliated investment companies and (ii) the investment adviser will waive
its advisory fees for that portion of the Master Portfolio's assets so
invested, except when such purchase is part of a plan of merger, consolidation,
reorganization or acquisition. Subject to the limitations of the 1940 Act, the
Master Portfolio may purchase shares of exchange-listed closed-end funds
consistent with pursuing its investment objective. The Master Portfolio does
not intend to invest more than 5% of its net assets in such securities during
the coming year.

Money Market Instruments

---------------
INVESTMENT POLICY

A-6
<PAGE> 92
the current value of its net assets for temporary purposes only in order to
meet redemptions, and these borrowings may be secured by the pledge of up to
10% of the current value of its net assets (but investments may not be
purchased while any such outstanding borrowings exceed 5% of its net assets);
(iii) not make loans of portfolio securities having a value that exceeds 33
1/3% of the current value of its net assets; (iv) not invest 25% or more of its
assets (i.e., concentrate) in any particular industry, except that the Master
Portfolio may invest 25% or more of its assets in U.S. Government obligations.

A-7
<PAGE> 93

Advised by WELLS FARGO BANK, N.A. & Sponsored/Distributed by
Stephens Inc., Member NYSE/SIPC

NOT FDIC INSURED

<PAGE> 94

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 95
SPONSOR, DISTRIBUTOR AND ADMINISTRATOR

Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201

INVESTMENT ADVISER, CUSTODIAN AND
TRANSFER AND DIVIDEND DISBURSING AGENT

Wells Fargo Bank, N.A.
P.O. Box 7066
San Francisco, California 94120-7066

LEGAL COUNSEL

Morrison & Foerster LLP
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:

o are NOT insured by the FDIC or U.S. Government

o are NOT obligations or deposits of Wells Fargo Bank, N.A.
nor guaranteed by the Bank

o involve investment risk, including possible loss of principal

SC0216 (9/96)

Printed on Recycled Paper
<PAGE> 96
P.O. Box 7066
San Francisco, CA 94120-7066

STAGECOACH FUNDS:

o are NOT insured by the FDIC or U.S. Government

o are NOT obligations or deposits of Wells Fargo Bank, N.A.
nor guaranteed by the Bank

o involve investment risk, including possible loss
of principal

SC0216 (9/96)
Printed on Recycled Paper
<PAGE> 97
P.O. Box 7066
San Francisco, CA 94120-7066
BULK RATE
U.S. POSTAGE
PAID
DALLAS, TEXAS
Permit No. 1808

STAGECOACH FUNDS:

o are NOT insured by the FDIC or U.S. Government

o are NOT obligations or deposits of Wells Fargo Bank, N.A.
nor guaranteed by the Bank

o involve investment risk, including possible loss
of principal
<PAGE> 98
STAGECOACH FUNDS, INC.
Telephone: (800) 222-8222

STATEMENT OF ADDITIONAL INFORMATION
DATED SEPTEMBER __, 1996

SMALL CAP FUND

CLASS A AND CLASS B SHARES

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

Stagecoach Funds, Inc. (the "Company") is an open-end, series
investment company. This Statement of Additional Information ("SAI") contains
information about one of the Company's series -- the SMALL CAP FUND (the
"Fund"). The Fund offers three classes of shares -- Class A Shares, Class B
Shares and Institutional Class shares. This SAI relates only to the Class A
Shares and Class B Shares of the Fund. The investment objective of the Fund is
described in the Prospectus under the heading "Investment Objective and
Policies." The Fund seeks to achieve its investment objective by investing all
of its assets in the Small Cap Master Portfolio (at times, the "Master
Portfolio") of Master Investment Trust (the "Trust"), which has the same
investment objective as the Fund. The Fund may withdraw its investment in the
Small Cap Master Portfolio at any time, if the Board of Directors of the
Company determines that such action is in the best interests of the Fund and
its shareholders. Upon such withdrawal, the Company's Board would consider
alternative investments, including investing all of the Fund's assets in
another investment company with the same investment objective as the Fund or
hiring an investment adviser to manage the Fund's assets in accordance with the
investment policies and restrictions described in the Prospectus and below with
respect to the Trust.

This SAI is not a prospectus and should be read in conjunction
with the Fund's Prospectus, dated September __, 1996. All terms used in this
SAI that are defined in the Prospectus will have the meanings assigned in the
Prospectus. A copy of the Prospectus may be obtained without charge by writing
Stephens Inc., the Company's sponsor, administrator and distributor, at 111
Center Street, Little Rock, Arkansas 72201, or calling the Transfer Agent at
the telephone number indicated above.

----------------------------------
<PAGE> 99
TABLE OF CONTENTS

Page
----
<S> <C>
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Distribution Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Servicing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Performance Calculations . . . . . . . . . . . . . . . . . . . . . . . . . 9

Determination of Net Asset Value. . . . . . . . . . . . . . . . . . . . . . 12

Additional Purchase and Redemption Information. . . . . . . . . . . . . . . 12

Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Federal Income Tax... . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Other.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>

i
<PAGE> 100
INVESTMENT RESTRICTIONS

The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "Investment Objective
and Policies."

FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund and the Master
Portfolio are subject to the following investment restrictions, all of which
are fundamental policies. These restrictions cannot be changed, as to either
the Fund or the Master Portfolio, without approval by the holders of a majority
(as defined by the 1940 Act) of the outstanding voting securities of the Fund
or the Master Portfolio, as appropriate. Whenever the Fund is requested to
vote on a fundamental policy of the Master Portfolio, the Fund will hold a
meeting of Fund shareholders and it will cast its votes as instructed by such
shareholders.

Neither the Fund nor the Master Portfolio may:

(1) purchase the securities of issuers conducting their
principal business activity in the same industry if, immediately after the
purchase and as a result thereof, the value of the Fund's investments in that
industry would equal or exceed 25% of the current value of the Fund's total
assets, provided that there is no limitation with respect to investments in
securities issued or guaranteed by the United States Government, its agencies
or instrumentalities; and provided further, that the Fund may invest all its
assets in a diversified, open-end management investment company, or a series
thereof, with substantially the same investment objective, policies and
restrictions as such Fund, without regard to the limitations set forth in this
paragraph (1);

(2) purchase or sell real estate (other than securities secured
by real estate or interests therein or securities issued by companies that
invest in real estate or interests therein, including mortgage passthrough
securities), commodities or commodity contracts or interests in oil, gas, or
other mineral exploration or development programs;

(3) purchase securities on margin (except for short-term
credits necessary for the clearance of transactions) or make short sales of
securities;

(4) underwrite securities of other issuers, except to the
extent that the purchase of permitted investments directly from the issuer
thereof or from an underwriter for an issuer and the later disposition of such
securities in accordance with the Fund's investment program may be deemed to be
an underwriting; and provided further, that the purchase by the Fund of
securities issued by a diversified, open-end management investment company, or
a series thereof, with substantially the same investment objective, policies
and restrictions as such Fund shall not constitute an underwriting for purposes
of this paragraph (4);

(5) make investments for the purpose of exercising control or
management; provided that the Fund may invest all its assets in a diversified,
open-end management

1
<PAGE> 101
company, or a series thereof, with substantially the same investment objective,
policies and restrictions as such Fund, without regard to the limitations set
forth in this paragraph (5);

(6) issue senior securities, except that the Fund may borrow
from banks up to 10% of the current value of its net assets for temporary
purposes only in order to meet redemptions, and these borrowings may be secured
by the pledge of up to 10% of the current value of its net assets (but
investments may not be purchased while any such outstanding borrowings exceed
5% of its net assets);

(7) make loans of portfolio securities having a value that
exceeds 33 1/3% of the current value of its total assets, provided that, this
restriction does not apply to the purchase of fixed time deposits, repurchase
agreements, commercial paper and other types of debt instruments commonly sold
in a public or private offering; nor

(8) purchase securities of any issuer (except securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) if, as
a result, with respect to 75% of its total assets, more than 5% of the value of
its total assets would be invested in the securities of any one issuer or, with
respect to 100% of its total assets, the Fund's ownership would be more than
10% of the outstanding voting securities of such issuer, provided that the Fund
may invest all its assets in a diversified, open-end management investment
company, or a series thereof, with substantially the same investment objective,
policies and restrictions as such Fund, without regard to the limitations set
forth in this paragraph (8).

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The Fund and the Master
Portfolio are subject to the following investment restrictions, all of which
are non-fundamental policies. These restrictions may be changed by a vote of a
majority of the Directors of the Company or the Trustees of the Trust, as the
case may be, at any time.

Neither the Fund nor the Master Portfolio may:

(1) purchase or retain securities of any issuer if the officers
or directors of the Fund or its Investment Adviser owning beneficially more
than one-half of one percent (0.5%) of the securities of the issuer together
own beneficially more than 5% of such securities;

(2) purchase or sell real estate limited partnership interests;

(3) invest in securities of issuers who, with their
predecessors, have been in existence less than three years, unless the
securities are fully guaranteed or insured by the U.S. Government if, by reason
thereof, the value of its aggregate investment in such securities will exceed
5% of its total assets;

2
<PAGE> 102
(4) purchase securities of any issuer (except securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) if, as
a result, more than 5% of the value of the Fund's total assets would be
invested in the securities of any one issuer;

(5) invest more than 15% of the Fund's net assets in illiquid
securities. For this purpose, illiquid securities include, among others, (a)
securities that are illiquid by virtue of the absence of a readily available
market or legal or contractual restrictions on resale, (b) fixed time deposits
that are subject to withdrawal penalties and that have maturities of more than
seven days, and (c) repurchase agreements not terminable within seven days;

(6) In addition, as a matter of non-fundamental policy, the
Fund may invest in shares of other open-end, management investment companies,
subject to the limitations of Section 12(d)(1) of the Act, provided that any
such purchases will be limited to temporary investments in shares of
unaffiliated investment companies and the Investment Adviser will waive its
advisory fees for that portion of the Fund's assets so invested, except when
such purchase is part of a plan of merger, consolidation, reorganization or
acquisition; nor

(7) Invest more than 25% of their respective net assets in
securities of foreign governmental and foreign private issues that are
denominated in and pay interest in U.S. dollars.

Notwithstanding any other investment policy or limitation (whether
or not fundamental), the Fund may invest all of its assets in the securities of
a single open-end management investment company with substantially the same
fundamental investment objective, policies and limitations as the Fund. A
decision to so invest all of its assets may, depending on the circumstances
applicable at the time, require approval of shareholders.

MANAGEMENT

The following information supplements and should be read in
conjunction with the section in the prospectus entitled "Management of the
Fund." The principal occupations during the past five years of the Directors
and principal executive Officer of the Company are listed below. The address
of each, unless otherwise indicated, is 111 Center Street, Little Rock,
Arkansas 72201. Directors deemed to be "interested persons" of the Company
for purposes of the 1940 Act are indicated by an asterisk.

<TABLE>
<CAPTION>
Principal Occupations
Name, Age and Address Position During Past 5 Years
- --------------------- -------- ---------------------
<S> <C> <C>
Jack S. Euphrat, 74 Director Private Investor.
415 Walsh Road
Atherton, CA 94027.
</TABLE>

3
<PAGE> 103
<TABLE>
<S> <C> <C>
*R. Greg Feltus, 45 Director, Senior Vice President
Chairman and of Stephens; Manager
President of Financial Services
Group; President of
Stephens
Insurance Services
Inc.; Senior Vice
President of Stephens
Sports Management
Inc.; and President of
Investor Brokerage
Insurance Inc.

Thomas S. Goho, 54 Director T.B. Rose Faculty
321 Beechcliff Court Fellow-Business,
Winston-Salem, NC 27104 Wake Forest University
Calloway School, of
Business and
Accountancy; Associate
Professor of Finance of the
School of Business and
Accounting at Wake Forest
University since 1983.

*Zoe Ann Hines, 47 Director Senior Vice President
of Stephens and
Director of Brokerage
Accounting; and
Secretary of Stephens
Resource
Management.

*W. Rodney Hughes, 70 Director Private Investor.
31 Dellwood Court
San Rafael, CA 94901

Robert M. Joses, 78 Director Private Investor.
47 Dowitcher Way
San Rafael, CA 94901
</TABLE>

4
<PAGE> 104
<TABLE>
<S> <C> <C>
*J. Tucker Morse, 52 Director Private Investor; Real Estate
10 Legrae Street Developer; Chairman
Charleston, SC 29401 of Renaissance
Properties Ltd.;
President of Morse
Investment
Corporation; and Co-
Managing Partner of
Main Street Ventures.

Richard H. Blank, Jr., 40 Chief Associate of
Operating Financial Services
Officer, Group of Stephens;
Secretary and Director of Stephens
Treasurer Sports Management
Inc.; and Director of
Capo Inc.
</TABLE>

COMPENSATION TABLE
For the Year Ended December 31, 1995
-----------------------------------
<TABLE>
<CAPTION>

Total Compensation
Aggregate Compensation from Registrant
Name and Position from Registrant and Fund Complex
- ----------------- ---------------------- ----------------
<S> <C> <C>
Jack S. Euphrat $10,188 $39,750
Director

*R. Greg Feltus 0 0
Director

Thomas S. Goho 10,188 39,750
Director

*Zoe Ann Hines 0 0
Director

*W. Rodney Hughes 9,438 37,000
Director

Robert M. Joses 9,938 39,000
Director
</TABLE>

5
<PAGE> 105
<TABLE>
<S> <C> <C>
*J. Tucker Morse 8,313 33,250
Director
</TABLE>

Directors of the Company are compensated annually by the Company
and by all the registrants in the fund complex for their services as indicated
above and also are reimbursed for all out-of-pocket expenses relating to
attendance at board meetings. Each of the Directors and Officers of the
Company serves in the identical capacity as directors and officers of Overland
Express Funds, Inc. and MasterWorks Funds Inc. (formerly, Stagecoach Inc.), and
as trustees and/or officers of Stagecoach Trust, Master Investment Portfolio,
Life & Annuity Trust, Master Investment Trust and Managed Series Investment
Trust, each of which is a registered open-end management investment company and
each of which, prior to January 1, 1996 and the reorganization of Wells Fargo
Nikko Investment Advisors, a former affiliate of Wells Fargo, was considered to
be in the same "fund complex," as such term is defined in Form N-1A under the
1940 Act, as the Company. Effective January 1, 1996, the Company, Overland
Express Funds, Inc., Stagecoach Trust, Life & Annuity Trust and Master
Investment Trust are considered to be members of the same fund complex and are
no longer part of the same fund complex as MasterWorks Funds Inc., Master
Investment Portfolio, and Managed Series Investment Trust. The Directors are
compensated by other companies and trusts within the fund complex for their
services as directors/trustees to such companies and trusts. Currently the
Directors do not receive any retirement benefits or deferred compensation from
the Company or any other member of the fund complex.

As of the date of this SAI, Directors and Officers of the Company
as a group beneficially owned less than 1% of the outstanding shares of the
Company.

Investment Adviser. The Fund has not engaged an investment
adviser. The Master Portfolio (which has the same investment objective as the
Fund, and in which the Fund invests all its assets) is advised by Wells Fargo.
The Advisory Contract provides that Wells Fargo shall furnish to the Master
Portfolio investment guidance and policy direction in connection with the daily
portfolio management of the Master Portfolio. Pursuant to the Advisory
Contract, Wells Fargo furnishes to the Board of Trustees of the Trust periodic
reports on the investment strategy and performance of the Master Portfolio.
For its services as investment adviser to the Master Portfolio, Wells Fargo is
entitled to receive a monthly fee at the annual rate of 0.60% of the Master
Portfolio's average daily net assets.

Wells Fargo has agreed to provide to the Master Portfolio, among
other things, money market security and fixed-income research, analysis and
statistical and economic data and information concerning interest rate and
security market trends, portfolio composition, credit conditions and average
maturities of the Master Portfolio.

The Advisory Contract will continue in effect for more than two
years provided the continuance is approved annually (i) by the holders of a
majority of the Master

6
<PAGE> 106
Portfolio's outstanding voting securities or by the Trust's Board of Trustees
and (ii) by a majority of the Trustees of the Trust who are not parties to the
Advisory Contract or "interested persons" (as defined in the Act) of any such
party. The Advisory Contract may be terminated on 60 days' written notice by
either party and will terminate automatically if assigned.

Administrator and Distributor. The Company has retained Stephens
as administrator and distributor on behalf of the Fund. In addition, the Trust
has retained Stephens as administrator on behalf of the Master Portfolio.
Under the respective Administration Agreements with the Company and the Trust,
Stephens furnishes the Company and the Trust with office facilities, together
with those ordinary clerical and bookkeeping services that are not furnished by
Wells Fargo. Stephens also has entered into a Distribution Agreement with the
Company pursuant to which Stephens has the responsibility of distributing
shares of the Fund. For its services as administration to the Fund, Stephens
is entitled to receive a monthly fee at the annual rate of 0.05% of the Fund's
average daily net assets.

Custodian and Transfer and Dividend Disbursing Agent. Wells Fargo
has been retained to act as custodian and transfer and dividend disbursing
agent for the Fund and the Master Portfolio. The custodian, among other
things, maintains a custody account or accounts in the name of the Fund and the
Master Portfolio, receives and delivers all assets for the Fund and the Master
Portfolio upon purchase and upon sale or maturity, collects and receives all
income and other payments and distributions on account of the assets of the
Fund and the Master Portfolio and pays all expenses of the Fund and the Master
Portfolio. For its services as custodian, Wells Fargo is entitled to receive
fees as follows: a net asset charge at the annual rate of 0.0167%, payable
monthly, plus specified transaction charges. Wells Fargo also will provide
portfolio accounting services under the Custody Agreement as follows: a monthly
base fee of $2,000 plus a net asset fee at the annual rate of 0.070% of the
first $50,000,000 of the Fund's average daily net assets, 0.045% of the next
$50,000,000, and 0.020% of the average daily net assets in excess of
$100,000,000.

For its services as transfer and dividend disbursing agent for the
Fund, Wells Fargo is entitled to receive monthly payments at the annual rate of
0.07% of the Fund's average daily net assets.

Collective Investment Fund Management Fees. Prior to September
__, 1996, Wells Fargo provided management and administrative services to the
Collective Investment Fund. For these services Wells Fargo charged fees at an
annual rate of 0.75% of the Fund's average net assets. Wells Fargo was also
entitled to be reimbursed by the Collective Investment Fund for expenses
incurred on its behalf, excluding costs incurred in establishing and organizing
the Fund. The Collective Investment Fund was entitled to pay up to 0.10% of
its net assets for "Audit Expenses." There were no sales charges. The
Collective Investment Fund paid all brokerage commissions incurred on its
portfolio transactions.

7
<PAGE> 107
DISTRIBUTION PLANS

The following information supplements and should be read in
conjunction with the Prospectus section entitled "Distribution Plans." As
indicated in the Prospectus, the Fund, on behalf of each of its classes of
shares, has adopted a Plan under Section 12(b) of the Act and Rule 12b-1
thereunder (the "Rule"). Each Plan was adopted by a majority of the directors
who were not "interested persons" (as defined in the Act) of the Fund and who
had no direct or indirect financial interest in the operation of the Plans or
in any agreement related to the Plans (the "Qualified Directors").

Under the Distribution Agreement for the Class A Shares, Stephens
is entitled to receive from the Fund, as reimbursement for all or part of the
cost of preparing and printing prospectuses and other promotional materials and
of delivering prospectuses and those materials to prospective shareholders and
as reimbursement for other distribution- related services, a fee computed on a
monthly basis at an annual rate of up to 0.10% of the average daily net assets
of the Class A Shares of the Fund.

Each Plan will continue in effect from year to year if its
continuance is approved by a majority vote of both the directors of the Company
and the Qualified Directors. Agreements related to the Plans also must be
approved by such vote of the directors and the Qualified Directors. Such
agreements will terminate automatically if assigned, and may be terminated at
any time, without payment of any penalty, by a vote of a majority of the
outstanding voting securities of the Fund. The Plans may not be amended to
increase materially the amounts payable thereunder without the approval of a
majority of the outstanding voting securities of the Fund, and no material
amendment to a Plan may be made except by a majority of both the directors of
the Company and the Qualified Directors.

The Plans require that the Treasurer of the Fund shall provide to
the directors, and the directors shall review, at least quarterly, a written
report of the amounts expended (and purposes therefore) under such Plan. The
Rule also requires that the selection and nomination of directors who are not
"interested persons" of the Company be made by such disinterested directors.

SERVICING PLAN

8
<PAGE> 108
who had no direct or indirect financial interest in the operation of the
Servicing Plan or in any agreement related to the Servicing Plan (the
"Servicing Plan Non-Interested Directors").

Under the Servicing Plan and pursuant to the shareholder servicing
agreements for the Class A or B Shares, the Fund may pay one or more servicing
agents, as compensation for performing certain services, a fee at an annual
rate of up to 0.25% of the average daily net assets of the Fund's Class A or B
Shares attributable to the servicing agent's customers. The actual fee payable
to servicing agents is determined, within such limits, from time to time by
mutual agreement between the Company and each servicing agent and will not
exceed the maximum service fees payable by mutual funds sold by members of the
NASD under the NASD Rules of Fair Practice.

Each Servicing Plan continues in effect from year to year if such
continuance is approved by a majority vote of both the Directors of the Company
and the Servicing Plan Non-Interested Directors. Any form of servicing
agreement related to the Servicing Plan also must be approved by such vote of
the Directors and the Servicing Plan Non- Interested Directors. Servicing
agreements may be terminated at any time, without payment of any penalty, by
vote of a majority of the Servicing Plan Non-Interested Directors. No material
amendment to the Servicing Plans may be made except by a majority of both the
Directors of the Company and the Servicing Plan Non-Interested Directors.

Each Servicing Plan requires that the administrator shall provide
to the Directors, and the Directors shall review, at least quarterly, a written
report of the amounts expended (and purposes therefor) under the Servicing
Plan.

PERFORMANCE CALCULATIONS

The following information supplements and should be read in
conjunction with the sections in the Prospectus entitled "Investing in the Fund
- -- Share Value" and "How the Fund Works -- Performance."

As indicated in the Prospectus, the Fund may advertise certain
total return information for a class of shares, computed in the manner
described in the Prospectus. As and to the extent required by the Commission,
an average annual compound rate of return ("T") will be computed by using the
redeemable value at the end of a specified period ("ERV") of a hypothetical
initial investment in a class of shares ("P") over a period of years ("n")
according to the following formula: P(1+T)n = ERV. In addition, as indicated
in the Prospectus, the Fund also may, at times, calculate total return for a
class of shares based on net asset value per share (rather than the public
offering price), in which case the figures would not reflect the effect of any
sales charges that would have been paid by an investor, or would be based on
the assumption that a sales charge other than the maximum sales charge
(reflecting a Volume Discount) was assessed, provided that total return data
derived pursuant to the calculation described above also are presented.

9
<PAGE> 109
In addition to the above performance information, the Fund may also
advertise the cumulative total return of a Class. The cumulative total return
is based on the overall percentage change in value of a hypothetical investment
in a Class of shares, assuming all dividends and capital gain distributions are
reinvested in shares of that class, without reflecting the effect of any sales
charge that would be paid by an investor, and is not annualized.

Performance information may be advertised for non-standardized
periods, including year-to-date and other periods less than a year.

The total return information presented below and advertised by the
Fund for the period prior to September ___, 1996, the date the Fund commenced
operations, is based upon the prior performance of the Collective Investment
Fund. The performance information is adjusted to reflect each Class' current
level of operating expenses.

Average Annual Total Return*

<TABLE>
<CAPTION>
Commencement of Commencement
Operations to of Operations to Eight-Month Period
Class 12/31/95 Year Ended 12/31/95 8/31/96 Ended 8/31/96
- ----- -------- ------------------- ------- -------------
<S> <C> <C> <C> <C>
A % % % %
B % % % %
</TABLE>

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

* Reflects the performance of the Collective Investment Fund adjusted to reflect
the current level of expenses and up-front or contingent deferred sales
charges applicable to each class of shares.

Cumulative Total Return*

<TABLE>
<CAPTION>
Commencement of Operations Commencement of
to Operations to
Class 12/31/95 8/31/96
- ----- -------- -------
<S> <C> <C>
A % %
B % %
</TABLE>

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

* Reflects the performance of the Collective Investment Fund adjusted to reflect
the current level of expenses and up-front or contingent deferred sales
charges applicable to each class of shares.

From time to time and only to the extent the comparison is
appropriate for a class of shares of the Fund, the Company may quote the
performance or price-earning ratio of a class of shares of the Fund in
advertising and other types of literature as compared to the performance of the
1-Year Treasury Bill Rate, the S&P Index, the Dow Jones Industrial Average, the
Lehman Brothers 20+ Years Treasury Index, the Lehman Brothers 5-7 Year Treasury
Index, Donoghue's Money Fund Averages, Real Estate Investment Averages (as
reported by the National Association of Real Estate Investment Trusts), Gold
Investment Averages (provided by the World Gold Council), Bank Averages (which
is calculated from figures supplied by the U.S. League of Savings Institutions
based on

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<PAGE> 110
effective annual rates of interest on both passbook and certificate accounts),
average annualized certificate of deposit rates (from the Federal Reserve G-13
Statistical Releases or the Bank Rate Monitor), the Salomon One Year Treasury
Benchmark Index, the Consumer Price Index (as published by the U.S. Bureau of
Labor Statistics), Ten Year U.S. Government Bond Average, S&P's Corporate Bond
Yield Averages, Schabacter Investment Management Indices, Salomon Brothers High
Grade Bond Index, Lehman Brothers Long-Term High Quality Government/Corporate
Bond Index, other managed or unmanaged indices or performance data of bonds,
stocks or government securities (including data provided by Ibbotson
Associates), or by other services, companies, publications or persons who
monitor mutual funds on overall performance or other criteria. The S&P Index
and the Dow Jones Industrial Average are unmanaged indices of selected common
stock prices. The performance of a class of shares of the Fund also may be
compared to the performance of other mutual funds having similar objectives.
This comparative performance could be expressed as a ranking prepared by Lipper
Analytical Services, Inc., CDA Investment Technologies, Inc., Bloomberg
Financial Markets or Morningstar, Inc., independent services which monitor the
performance of mutual funds. The performance of a class of shares of the Fund
will be calculated by relating net asset value per share at the beginning of a
stated period to the net asset value of the investment, assuming reinvestment
of all gains distributions and dividends paid, at the end of the period. Any
such comparisons may be useful to investors who wish to compare the class' past
performance with that of its competitors. Of course, past performance cannot
be a guarantee of future results. The Company also may include, from time to
time, a reference to certain marketing approaches of the Distributor,
including, for example, a reference to a potential shareholder being contacted
by a selected broker or dealer. General mutual fund statistics provided by the
Investment Company Institute may also be used.

In addition, the Company also may use, in advertisements and other
types of literature, information and statements: (1) showing that bank savings
accounts offer a guaranteed return of principal and a fixed rate of interest,
but no opportunity for capital growth; and (2) describing Wells Fargo, and its
affiliates and predecessors, as one of the first investment managers to advise
investment accounts using asset allocation and index strategies. The Company
also may include in advertising and other types of literature information and
other data from reports and studies prepared by the Tax Foundation, including
information regarding federal and state tax levels and the related "Tax Freedom
Day."

The Company also may use the following information in
advertisements and other types of literature, only to the extent the
information is appropriate for a class of shares of the Fund: (i) the Consumer
Price Index may be used to assess the real rate of return from an investment in
a class of shares of the Fund; (ii) other government statistics, including, but
not limited to, The Survey of Current Business, may be used to illustrate
investment attributes of a class of shares of the Fund or the general economic,
business, investment, or financial environment in which the Fund operates;
(iii) the effect of tax-deferred compounding on the investment returns of a
class of shares of the Fund, or on returns in general, may be illustrated by
graphs, charts, etc., where such graphs or charts

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<PAGE> 111
would compare, at various points in time, the return from an investment in a
class of shares of the Fund (or returns in general) on a tax-deferred basis
(assuming reinvestment of capital gains and dividends and assuming one or more
tax rates) with the return on a taxable basis; and (iv) the sectors or
industries in which the Fund invests may be compared to relevant indices of
stocks or surveys (e.g., S&P Industry Surveys) to evaluate the historical
performance or current or potential value of a class of shares of the Fund with
respect to the particular industry or sector.

From time to time the Company may reprint, reference or otherwise
use material from magazines, newsletters, newspapers and books including, but
not limited to the Wall Street Journal, Money Magazine, Barrons, Kiplingers,
Business Week, Fortune, Forbes, the San Francisco Chronicle, the San Jose
Mercury News, The New York Times, the Los Angeles Times, the Boston Globe, the
Washington Post, the Chicago Sun-Times, Investor Business Daily, Worth, Bank
Investor, American Banker, Smart Money, the 100 Best Mutual Funds (Adams
Publishing), Morningstar or Value Line.

The Company may also disclose in advertising and other types of
literature, information and statements the distribution rate on the shares of
each class of the Fund. Distribution rate is the amount determined by dividing
the dollar amount per share of the most recent dividend by the most recent NAV
per share.

The Company also may discuss in advertising and other types of
literature that the Fund has been assigned a rating by an NRSRO, such as S&P or
Moody's. Such rating would assess the creditworthiness of the investments held
by the Fund. The assigned rating would not be a recommendation to purchase,
sell or hold the Fund's shares since the rating would not comment on the market
price of the Fund's shares or the suitability of the Fund for a particular
investor. In addition, the assigned rating would be subject to change,
suspension or withdrawal as a result of changes in, or the unavailability of,
information relating to the Fund or its investments. The Company may compare
the performance of the Fund with other investments that are assigned ratings by
the NRSROs. Any such comparisons may be useful to investors who wish to
compare the Fund's past performance with other rated investments.

The Company also may disclose, in advertising and other types of
literature, information and statements that the Company's investment adviser,
Wells Fargo, is listed in Nelson Publications' ("Nelson's") "Top 20"
performance rankings as published in the 1994 edition of "America's Best Money
Managers." The Nelson survey ranks the performance of money managers in over
30 asset/style categories and is based on analysis of performance composites
and surveys of institutional money managers. The Company may also disclose in
advertising and other types of sales literature the assets and categories of
assets under management by the Company's investment adviser and the total
amount of assets under management by Wells Fargo Investment Management
("WFIM"). As of September __, 1996, WFIM had $[56] billion in assets under
management.

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<PAGE> 112
DETERMINATION OF NET ASSET VALUE

The following information supplements and should be read in
conjunction with the Prospectus section entitled "Investing in the Fund." Net
asset value per share for each class of the Fund and net asset value per unit
of the Master Portfolio are each determined by Wells Fargo on each day the
Exchange is open for trading as of the close of regular trading on the
Exchange, which is currently 4:00 p.m. Eastern Standard time.

Securities of the Master Portfolio for which market quotations are
available are valued at latest prices. Any security for which the primary
market is an exchange is valued at the last sale price on such exchange on the
day of valuation or, if there was no sale on such day, the latest bid price
quoted on such day. In the case of other securities, including U.S. Government
securities but excluding money market instruments maturing in 60 days or less,
the valuations are based on latest quoted bid prices. Money market instruments
maturing in 60 days or less are valued at amortized cost. The assets of the
Master Portfolio other than money market instruments maturing in 60 days or
less are valued at latest quoted bid prices. Prices may be furnished by a
reputable independent pricing service approved by the Board of Trustees.
Prices provided by an independent pricing service may be determined without
exclusive reliance on quoted prices and may take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data. All other securities and other assets of the Master
Portfolio for which current market quotations are not readily available are
valued at fair value as determined in good faith by the Trust's Trustees and in
accordance with procedures adopted by the Trustees.

Expenses and fees, including advisory fees are accrued daily and
are taken into account for the purpose of determining the net asset value of
the Master Portfolio's interests and the Fund's shares.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Payment for shares may, in the discretion of the adviser, be made
in the form of securities that are permissible investments for the Funds as
described in the Prospectuses. For further information about this form of
payment please contact Stephens. In connection with an in-kind securities
payment, the Funds will require, among other things, that the securities be
valued on the day of purchase in accordance with the pricing methods used by a
Fund and that such Fund receives satisfactory assurances that (i) it will have
good and marketable title to the securities received by it; (ii) that the
securities are in proper form for transfer to the Fund; and (iii) adequate
information will be provided concerning the basis and other matters relating to
the securities.

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<PAGE> 113
or during which as determined by the SEC by rule or regulation) an emergency
exists as a result of which disposal or valuation of portfolio securities is
not reasonably practicable, or for such periods as the SEC may permit.

The Company may suspend redemption rights or postpone redemption
payments for such periods as are permitted under the 1940 Act. The Company may
also redeem shares involuntarily or make payment for redemption in securities
or other property if it appears appropriate to do so in light of the Company's
responsibilities under the 1940 Act.

In addition, the Company may redeem shares involuntarily to
reimburse the Funds for any losses sustained by reason of the failure of a
shareholders to make full payment for shares purchased or to collect any
charge relating to a transaction effected for the benefit of a shareholder
which is applicable to shares of a Fund as provided from time to time in the
Prospectus.

PORTFOLIO TRANSACTIONS

Purchases and sales of securities by the Master Portfolio are
usually principal transactions. Portfolio securities normally are purchased or
sold from or to dealers serving as market makers for the securities at a net
price. The Master Portfolio also may purchase portfolio securities in
underwritten offerings and may purchase securities directly from the issuer.
The cost of executing the Master Portfolio's portfolio securities transactions
consists primarily of dealer spreads and underwriting commissions. Under the
1940 Act, persons affiliated with the Trust are prohibited from dealing with
the Trust as a principal in the purchase and sale of securities unless an
exemptive order or other relief allowing such transactions is obtained from the
SEC or an exemption is otherwise available. The Master Portfolio may purchase
securities from underwriting syndicates of which Stephens or Wells Fargo is a
member under certain conditions in accordance with the provisions of a rule
adopted under the 1940 Act and in compliance with procedures adopted by the
Board of Trustees.

The Trust has no obligation to deal with any dealer or group of
dealers in the execution of transactions in portfolio securities. Subject to
policies established by the Trust's Board of Trustees, Wells Fargo is
responsible for the Master Portfolio decisions and the placing of portfolio
transactions. In placing orders, it is the policy of the Company to obtain the
best overall terms taking into account the dealer's general execution and
operational facilities, the type of transaction involved and other factors such
as the dealer's risk in positioning the securities involved. While Wells Fargo
generally seeks reasonably competitive spreads or commissions, the Master
Portfolio will not necessarily be paying the lowest spread or commission
available.

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<PAGE> 114
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. Wells Fargo Bank may cause a Master
Portfolio to pay a broker/dealer which furnishes brokerage and research
services a higher commission than that which might be charged by another
broker/dealer for effecting the same transaction, provided that Wells Fargo
Bank determines in good faith that such commission is reasonable in relation to
the value of the brokerage and research services provided by such
broker/dealer, viewed in terms of either the particular transaction or the
overall responsibilities of Wells Fargo Bank. Such brokerage and research
services might consist of reports and statistics relating to specific companies
or industries, general summaries of groups of stocks or bonds and their
comparative earnings and yields, or broad overviews of the stock, bond, and
government securities markets and the economy.

Supplementary research information so received is in addition to,
and not in lieu of, services required to be performed by Wells Fargo Bank and
does not reduce the advisory fees payable by the Master Portfolios. The Board
of Trustees will periodically review the commissions paid by the Master
Portfolios to consider whether the commissions paid over representative periods
of time appear to be reasonable in relation to the benefits inuring to the
Master Portfolios. It is possible that certain of the supplementary research
or other services received will primarily benefit one or more other investment
companies or other accounts for which investment discretion is exercised.
Conversely, a Master Portfolio may be the primary beneficiary of the research
or services received as a result of portfolio transactions effected for such
other account or investment company.

Broker/dealers utilized by Wells Fargo Bank may furnish
statistical, research and other information or services which are deemed by
Wells Fargo Bank to be beneficial to the Master Portfolios' investment
programs. Research services received from brokers supplement Wells Fargo
Bank's own research and may include the following types of information:
statistical and background information on industry groups and individual
companies; forecasts and interpretations with respect to U.S. and foreign
economies, securities, markets, specific industry groups and individual
companies; information on political developments; portfolio management
strategies; performance information on securities and information concerning
prices of securities; and information supplied by specialized services to Wells
Fargo Bank and to the Trust's Trustees with respect to the performance,
investment activities and fees and expenses of other mutual Funds. Such
information may be communicated electronically, orally or in written form.
Research services may also include the providing of equipment used to
communicate research information, the arranging of meetings with management of
companies and the providing of access to consultants who supply research
information.

The outside research assistance is useful to Wells Fargo Bank
since the brokers utilized by Wells Fargo Bank as a group tend to follow a
broader universe of securities and other matters than the staff of Wells Fargo
Bank can follow. In addition, this research provides Wells Fargo Bank with a
diverse perspective on financial markets. Research services which are provided
to Wells Fargo Bank by brokers are available for the benefit of all accounts
managed or advised by Wells Fargo Bank. It is the opinion of Wells Fargo Bank
that this material is beneficial in supplementing their research and analysis;
and,

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<PAGE> 115
therefore, it may benefit the Master Portfolios by improving the quality of
Wells Fargo Bank's investment advice. The advisory fees paid by the Master
Portfolios are not reduced because Wells Fargo Bank receives such services.

Portfolio Turnover. Portfolio turnover generally involves some
expenses to the Master Portfolio, including brokerage commissions or dealer
mark-ups and other transactions costs on the sale of securities and the
reinvestment in other securities. A high portfolio turnover rate should not
result in the Master Portfolio paying substantially more brokerage commissions,
since most transactions in government securities and municipal securities are
effected on a principal basis. Portfolio turnover also can generate short-term
capital gains tax consequences. The portfolio turnover rate will not be a
limiting factor when Wells Fargo deems portfolio changes appropriate.

FEDERAL INCOME TAX

The following information supplements and should be read in
conjunction with the Prospectus sections entitled "Dividends" and "Taxes." The
Prospectus describes generally the tax treatment of distributions by the
Company. This section of the SAI includes additional information concerning
federal income tax.

Qualification of the Fund as a regulated investment company under
the Code requires, among other things, that (i) the Fund derive (a) at least
90% of its annual gross income from interest, payments with respect to
securities loans, dividends and gains from the sale or other disposition of
securities or options thereon; (ii) the Fund derive less than 30% of its gross
income from gains from the sale or other disposition of securities or options
thereon held for less than three months; and (iii) the Fund diversify its
holdings so that, at the end of each quarter of the taxable year, (a) at least
50% of the market value of the Fund's assets is represented by cash, government
securities and other securities limited in respect of any one issuer to an
amount not greater than 5% of the Fund's assets and 10% of the outstanding
voting securities of such issuer, and (b) not more than 25% of the value of the
Fund's assets is invested in the securities of any one issuer (other than U.S.
Government securities or the securities of other regulated investment
companies), or in two or more issuers which the Fund controls and which are
engaged in the same or similar trades or businesses. As a regulated investment
company, the Fund will not be subject to federal income tax on its net
investment income and net capital gains distributed to its shareholders,
provided that it distributes to its stockholders at least 90% of the sum of its
net investment income and net tax-exempt income earned in each year.

A 4% nondeductible excise tax will be imposed on the Fund to the
extent it does not meet certain minimum distribution requirements by the end of
each calendar year. For this purpose, any income or gain retained by the Fund
that is subject to income tax will be considered to have been distributed by
year-end. In addition, dividends and distributions declared payable as of a
record date in October, November or December of any calendar year are deemed
under the Code to have been distributed by the Fund and received by the

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<PAGE> 116
shareholders on December 31 of that calendar year if the dividend is actually
paid no later than January 31 of the following year. Such dividends will,
accordingly, be subject to income tax for the year in which the record date
falls. The Fund intends to distribute substantially all of its net investment
income and net capital gains and, thus, expects to avoid the excise tax.

Income and dividends received by the Fund from sources within
foreign countries may be subject to withholding and other taxes (generally at
rates from 10% to 40%) imposed by such countries. Tax conventions between
certain countries and the United States may reduce or eliminate such taxes.
Because the Fund does not expect to hold more than 50% of the value of its
total assets in securities of foreign issuers, the Fund does not expect to be
eligible to elect to "pass through" foreign tax credits to shareholders.

The Master Portfolio will be treated as a non-publicly traded
partnership rather than as a regulated investment company or a corporation
under the Code. As a non-publicly traded partnership under the Code, any
interest, dividends and gains or losses of the Master Portfolio will be deemed
to have been "passed through" to the Fund and other investors in the Master
Portfolio, regardless of whether such interest, dividends or gains have been
distributed by the Master Portfolio or losses have been realized by the Fund
and other investors. Therefore, to the extent the Master Portfolio were to
accrue but not distribute any interest, dividends or gains, or accrue losses,
the Fund would be deemed to have realized and recognized its proportionate
share of interest, dividends, gains or losses without receipt of any
corresponding distribution. However, the Trust will seek to minimize
recognition by investors of interest, dividends, gains or losses without a
corresponding distribution.

Gains or losses on sales of portfolio securities by the Master
Portfolio will be long-term capital gains or losses if the securities have been
held by it for more than one year, except in certain cases including the case
where the Master Portfolio acquires a put or writes a call thereon. Other
gains or losses on the sale of securities will be short-term capital gains or
losses. To the extent that the Fund recognizes long-term capital gains, such
gains will be distributed at least annually. Such distributions will be
taxable to shareholders as long-term capital gains, regardless of how long a
shareholder has held Fund shares. Such distributions will be designated as
capital gain distributions in a written notice mailed by the Fund to
shareholders not later than 60 days after the close of the Fund's taxable year.
If a shareholder receives such a designated capital gain distribution (to be
treated by the shareholder as a long-term capital gain) with respect to any
Fund share and such Fund share is held for six months or less, then (unless
otherwise disallowed) any loss on the sale or exchange of that Fund share will
be treated as a long- term capital loss to the extent of the designated capital
gain distribution. Gain recognized on the disposition of a debt obligation
(including tax-exempt obligations purchased after April 30, 1993) purchased by
the Master Portfolio at a market discount (generally, at a price less than its
principal amount) will be treated as ordinary income to the extent such accrued
market discount had not been previously included as taxable income during the
period of time the Master Portfolio held the debt obligation.

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<PAGE> 117
As of the printing of this SAI, the maximum individual tax rate
applicable to ordinary income is 39.6% (effective rates may be higher for some
individuals due to phase out of exemptions and eliminations of deductions); the
maximum individual marginal tax rate applicable to net capital gains is 28%;
and the maximum marginal corporate tax rate applicable to ordinary income and
net capital gains is 35% (except that to eliminate the benefit of lower
marginal corporate income tax rates, corporations which have taxable income in
excess of $100,000 for a taxable year will be required to pay an additional
amount of income tax up to $11,750 on taxable income exceeding $100,000 in a
taxable year and corporations which have taxable income in excess of
$15,000,000 for a taxable year will be required to pay an additional tax of up
to $100,000). Naturally, the amount of tax payable by an individual or
corporation will be affected by a combination of tax laws covering, for
example, deductions, credits, deferrals, exemptions, sources of income and
other matters.

If a shareholder exchanges or otherwise disposes of shares of the
Fund within 90 days of having acquired such shares and if, as a result of
having acquired those shares, the shareholder subsequently pays a reduced sales
charge for shares of the Fund or of a different fund, the sales charge
previously incurred in acquiring the Fund's shares shall not be taken into
account (to the extent such previous sales charges do not exceed the reduction
in sales charges) for the purpose of determining the amount of gain or loss on
the exchange, but will be treated as having been incurred in the acquisition of
such other shares.

Also, any loss realized on a redemption or exchange of shares of
the Fund will be disallowed to the extent that substantially identical shares
are reacquired within the 61-day period beginning 30 days before and ending 30
days after the shares are disposed of.

If, in the opinion of the Company, ownership of its shares has or
may become concentrated to an extent that could cause the Company to be deemed
a personal holding company within the meaning of the Code, the Company may
require the redemption of shares or reject any order for the purchase of shares
in an effort to prevent such concentration.

Foreign Shareholders. Under the Code, distributions of net
investment income by the Fund to a nonresident alien individual, nonresident
alien fiduciary of a trust or estate, foreign corporation, or foreign
partnership (a "foreign shareholder") will be subject to U.S. withholding tax
(at a rate of 30% or a lower treaty rate). Withholding will not apply if a
dividend paid by the Fund to a foreign shareholder is "effectively connected"
with a U.S. trade or business, in which case the reporting and withholding
requirements applicable to U.S. citizens, U.S. residents or domestic
corporations will apply. Distributions of net long-term capital gains are not
subject to tax withholding, but in the case of a foreign shareholder who is a
nonresident alien individual, such distributions ordinarily will be subject to
U.S. income tax at a rate of 30% if the individual is physically present in the
U.S. for more than 182 days during the taxable year.

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<PAGE> 118
Other Matters. Investors should be aware that the investments to
be made by the Master Portfolio may involve sophisticated tax rules such as
marked to market rules that would result in income or gain recognition by the
Master Portfolio without corresponding current cash receipts. Although the
Master Portfolio will seek to avoid significant noncash income, such noncash
income could be recognized by the Master Portfolio, in which case the Master
Portfolio may distribute cash derived from other sources in order to meet the
minimum distribution requirements described above.

CAPITAL STOCK

The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "The Fund, the Master
Portfolio and Management."

The Company, an open-end management investment company, was
incorporated in Maryland on September 9, 1991. The authorized capital stock of
the Company consists of [48,000,000,000] shares having a par value of $.001 per
share. As of the date of this SAI, the Company's Board of Directors has
authorized the issuance of twenty-four series of shares, each representing an
interest in one of the Company's funds -- the Aggressive Growth, Arizona
Tax-Free, Asset Allocation, Balanced, California Tax-Free Bond, California
Tax-Free Income, California Tax-Free Money Market Mutual, Corporate Stock,
Diversified Income, Equity Value, Ginnie Mae, Government Money Market Mutual,
Growth and Income, Intermediate Bond, Money Market Mutual, Money Market Trust,
National Tax-Free, National Tax-Free Money Market Mutual, Oregon Tax-Free,
Prime Money Market Mutual, Short-Intermediate U.S. Government Income, Small
Cap, Treasury Money Market Mutual and U.S. Government Allocation Funds -- and
the Board of Directors may, in the future, authorize the issuance of other
series of capital stock representing shares of additional investment
portfolios.

The Fund is comprised of three classes of shares, Class A Shares,
Class B Shares and Institutional Class shares. With respect to matters that
affect one class but not another, shareholders vote as a class; for example,
the approval of a Plan. Subject to the foregoing, on any matter submitted to a
vote of shareholders, all shares then entitled to vote will be voted separately
by portfolio unless otherwise required by the Act, in which case all shares
will be voted in the aggregate. For example, a change in the Fund's
fundamental investment policies would be voted upon only by shareholders of the
Fund and not shareholders of the Company's other investment portfolios.
Additionally, approval of an advisory contract is a matter to be determined
separately by the Fund. Approval by the shareholders of one portfolio is
effective as to that portfolio whether or not sufficient votes are received
from the shareholders of the other portfolios to approve the proposal as to
those portfolios. As used in the Prospectus and in this Statement of
Additional Information, the term "majority," when referring to approvals to be
obtained from shareholders of a class of the Fund, means the vote of the lesser
of (i) 67% of the shares of such class of the Fund represented at a meeting if
the holders of more than 50% of the

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<PAGE> 119
outstanding shares of such class of the Fund are present in person or by proxy,
or (ii) more than 50% of the outstanding shares of such class of the Fund. The
term "majority," when referring to the approvals to be obtained from
shareholders of the Company as a whole, means the vote of the lesser of (i) 67%
of the Company's shares represented at a meeting if the holders of more than
50% of the Company's outstanding shares are present in person or by proxy, or
(ii) more than 50% of the Company's outstanding shares. Shareholders are
entitled to one vote for each full share held and fractional votes for
fractional shares held.

The Company may dispense with annual meetings of shareholders in
any year in which it is not required to elect directors under the Act.
However, the Company undertakes to hold a special meeting of its shareholders
for the purpose of voting on the question of removal of a director or directors
if requested in writing of the holders of at least 10% of the Company's
outstanding voting securities, and to assist in communicating with other
shareholders as required by Section 16(c) of the Act.

Each share of a class of the Fund represents an equal proportional
interest in the Fund with each other share of the same class and is entitled to
such dividends and distributions out of the income earned on the assets
belonging to the Fund as are declared in the discretion of the Directors. In
the event of the liquidation or dissolution of the Company, shareholders of the
Fund are entitled to receive the assets attributable to the Fund that are
available for distribution, and a distribution of any general assets not
attributable to the Fund that are available for distribution in such manner and
on such basis as the Directors in their sole discretion may determine.

Shareholders are not entitled to any preemptive rights. All
shares, when issued, will be fully paid and non-assessable by the Company.

The Trust is a business trust organized under the laws of
Delaware. In accordance with Delaware law and in connection with the tax
treatment sought by the Trust, the Trust's Declaration of Trust provides that
its investors would be personally responsible for Trust liabilities and
obligations, but only to the extent the Trust property is insufficient to
satisfy such liabilities and obligations. The Declaration of Trust also
provides that the Trust shall maintain appropriate insurance (for example,
fidelity bonding and errors and omissions insurance) for the protection of the
Trust, its investors, Trustees, officers, employees and agents covering
possible tort and other liabilities, and that investors will be indemnified to
the extent they are held liable for a disproportionate share of Trust
obligations. Thus, the risk of an investor incurring financial loss on account
of investor liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.

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<PAGE> 120
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of the
Trustee's office.

The interests in the Master Portfolio have substantially identical
voting and other rights as those rights enumerated above for Fund shares. The
Trust also intends to dispense with annual meetings, but will hold a special
meeting and assist investor communications under the circumstances described
above with respect to the Company in accord with provisions under Section 16(c)
of the Act. Whenever the Fund is requested to vote on a matter with respect to
the Master Portfolio, the Fund will hold a meeting of Fund shareholders and
will cast its votes as instructed by such shareholders. In a situation where
the Fund does not receive instruction from certain of its shareholders on how
to vote the corresponding shares of the Master Portfolio, the Fund will vote
such shares in the same proportion as the shares for which the Fund does
receive voting instructions.

As of September __, 1996, Stephens owned approximately 99% of the
outstanding Class A and B Shares of the Fund and such could be considered a
"control person" of the Fund for purposes of the 1940 Act. However, upon
commencement of the initial public offering of the Fund's shares, it is
expected that Stephens will own a significantly smaller percentage of the
Fund's outstanding voting securities and will no longer be considered a control
person of the Fund.

OTHER

The Registration Statements of the Trust and the Company,
including the Fund's Prospectus, the SAI and the exhibits filed therewith, may
be examined at the office of the Commission in Washington, D.C. Statements
contained in the Prospectus or the SAI as to the contents of any contract or
other document referred to herein or in the Prospectus are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.

INDEPENDENT AUDITORS

KPMG Peat Marwick LLP has been selected as the independent
auditors for the Company and the Trust. KPMG Peat Marwick LLP provides audit
services, tax return preparation and assistance and consultation in connection
with review of certain Securities & Exchange Commission filings. KPMG Peat
Marwick LLP's address is Three Embarcadero Center, San Francisco, California
94111.

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FINANCIAL INFORMATION

The portfolio of investments, audited financial statements and
independent auditors' reports for the Company's other Funds are contained in the
Annual Report for the fiscal year. The Annual Report is available by calling
1-800-222-8222.

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<PAGE> 122

SAI APPENDIX

The following is a description of the ratings given by Moody's and
S&P to corporate bonds and commercial paper.

Corporate Bonds

Moody's: The four highest ratings for corporate bonds are "Aaa,"
"Aa," "A" and "Baa." Bonds rated "Aaa" are judged to be of the "best quality"
and carry the smallest amount of investment risk. Bonds rated "Aa" are of
"high quality by all standards," but margins of protection or other elements
make long-term risks appear somewhat greater than "Aaa" rated bonds. Bonds
rated "A" possess many favorable investment attributes and are considered to be
upper medium grade obligations. Bonds rated "Baa" are considered to be medium
grade obligations; interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds have
speculative characteristics as well. Moody's applies numerical modifiers: 1,
2 and 3 in each rating category from "Aa" through "Baa" in its rating system.
The modifier 1 indicates that the security ranks in the higher end of its
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end.

S&P: The four highest ratings for corporate bonds are "AAA,"
"AA," "A" and "BBB." Bonds rated "AAA" have the highest ratings assigned by
S&P and have an extremely strong capacity to pay interest and repay principal.
Bonds rated "AA" have a "very strong capacity to pay interest and repay
principal" and differ "from the highest rated issued only in small degree."
Bonds rated "A" have a "strong capacity" to pay interest and repay principal,
but are "somewhat more susceptible" to adverse effects of changes in economic
conditions or other circumstances than bonds in higher rated categories. Bonds
rated "BBB" are regarded 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. The
ratings from "AA" to "BBB" may be modified by the addition of a plus or minus
sign to show relative standing within the category.

Corporate Commercial Paper

Moody's: The highest rating for corporate commercial paper is
"P-1" (Prime-1). Issuers rated "P-1" have a "superior capacity for repayment
of short-term promissory obligations." Issuers rated "P-2" (Prime-2) "have a
strong capacity for repayment of short-term promissory obligations," but
earnings trends, while sound, will be subject to more variation.

S&P: The "A-1" rating for corporate commercial paper indicates
that the "degree of safety regarding timely payment is either overwhelming or
very strong."

1
<PAGE> 123
Commercial paper with "overwhelming safety characteristics" will be rated
"A-1+." Commercial paper with a strong capacity for timely payments on issues
will be rated "A-2."

2
<PAGE> 124
STAGECOACH FUNDS, INC.
Telephone: (800) 222-8222

STATEMENT OF ADDITIONAL INFORMATION
DATED SEPTEMBER __, 1996

SMALL CAP FUND

INSTITUTIONAL CLASS SHARES

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

Stagecoach Funds, Inc. (the "Company") is an open-end, series
investment company. This Statement of Additional Information ("SAI") contains
information about one of the Company's series -- the SMALL CAP FUND (the
"Fund"). The Fund offers three classes of shares -- Class A Shares, Class B
Shares and Institutional Class shares. This SAI relates only to the
Institutional Class Shares of the Fund. The investment objective of the Fund
is described in the Prospectus under the heading "Investment Objective and
Policies." The Fund seeks to achieve its investment objective by investing all
of its assets in the Small Cap Master Portfolio (at times, the "Master
Portfolio") of Master Investment Trust (the "Trust"), which has the same
investment objective as the Fund. The Fund may withdraw its investment in the
Small Cap Master Portfolio at any time, if the Board of Directors of the
Company determines that such action is in the best interests of the Fund and
its shareholders. Upon such withdrawal, the Company's Board would consider
alternative investments, including investing all of the Fund's assets in
another investment company with the same investment objective as the Fund or
hiring an investment adviser to manage the Fund's assets in accordance with the
investment policies and restrictions described in the Prospectus and below with
respect to the Trust.

----------------------------------
<PAGE> 125
TABLE OF CONTENTS

Page
----
<S> <C>
Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Servicing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Performance Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Determination of Net Asset Value.... . . . . . . . . . . . . . . . . . . . . . 10

Additional Purchase and Redemption Information . . . . . . . . . . . . . . . . 11

Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Federal Income Tax... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Other.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>

i
<PAGE> 126
INVESTMENT RESTRICTIONS

The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "Investment Objective
and Policies."

Neither the Fund nor the Master Portfolio may:

(3) purchase securities on margin (except for short-term
credits necessary for the clearance of transactions) or make short sales of
securities;

(5) make investments for the purpose of exercising control or
management; provided that the Fund may invest all its assets in a diversified,
open-end management

1
<PAGE> 127
company, or a series thereof, with substantially the same investment objective,
policies and restrictions as such Fund, without regard to the limitations set
forth in this paragraph (5);

Neither the Fund nor the Master Portfolio may:

(2) purchase or sell real estate limited partnership interests;

2
<PAGE> 128
(4) purchase securities of any issuer (except securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) if, as
a result, more than 5% of the value of the Fund's total assets would be
invested in the securities of any one issuer;

(7) Invest more than 25% of their respective net assets in
securities of foreign governmental and foreign private issues that are
denominated in and pay interest in U.S. dollars.

MANAGEMENT

The following information supplements and should be read in conjunction
with the section in the Prospectus entitled "Management of the Fund." The
principal occupations during the past five years of the directors and executive
officers of the Company are listed below. The address of each, unless otherwise
indicated, is 111 Center Street, Little Rock, Arkansas 72201. Directors
deemed to be "interested persons" of the Company for purposes of the Act are
indicated by an asterisk.

3
<PAGE> 129
<TABLE>
<CAPTION>
Principal Occupations
Name, Address and Age Position During Past 5 Years
- --------------------- -------- ---------------------
<S> <C> <C>
Jack S. Euphrat, 73 Director Private Investor.
415 Walsh Road
Atherton, CA 94027

*R. Greg Feltus, 44 Director, Senior Vice President
Chairman and of Stephens; Manager
President of Financial Services
Group; President of
Stephens Insurance
Services Inc.;
Senior Vice President
of Stephens Sports
Management Inc.;
and President of
Investor Brokerage
Insurance Inc.

Thomas S. Goho, 53 Director T.B. Rose Faculty
321 Beechcliff Court Fellow-Business,
Winston-Salem, NC 27104 Wake Forest University
Calloway School of
Business and
Accountancy; Associate
Professor of Finance of
the School of Business
and Accounting at Wake Forest
University since 1983.

*Zoe Ann Hines, 46 Director Senior Vice President
of Stephens and
Director of Brokerage
Accounting; and
Secretary of Stephens
Resource
Management.

*W. Rodney Hughes, 69 Director Private Investor.
31 Dellwood Court
San Rafael, CA 94901

Robert M. Joses, 77 Director Private Investor.
47 Dowitcher Way
San Rafael, CA 94901
</TABLE>

4
<PAGE> 130
<TABLE>
<S> <C> <C>
*J. Tucker Morse, 51 Director Private Investor; Real Estate
10 Legare Street Developer; Chairman
Charleston, SC 29401 of Renaissance
Properties Ltd.;
President of Morse
Investment
Corporation; and Co-
Managing Partner of
Main Street Ventures.

Richard H. Blank, Jr., 39 Chief Associate of
Operating Financial Services
Officer, Group of Stephens;
Secretary and Director of Stephens
Treasurer Sports Management
Inc.; and Director of
Capo Inc.
</TABLE>

COMPENSATION TABLE
For the Fiscal Year Ended December 31, 1995
<TABLE>
<CAPTION>

Total Compensation
Aggregate Compensation from Registrant
Name and Position from Registrant and Fund Complex
- ----------------- --------------- ----------------
<S> <C> <C>
Jack S. Euphrat $10,187.50 $39,750
Director

*R. Greg Feltus 0 0
Director

Thomas S. Goho 10,187.50 39,750
Director

*Zoe Ann Hines 0 0
Director

*W. Rodney Hughes 9,437.50 37,000
Director

Robert M. Joses 9,937.50 39,000
Director

*J. Tucker Morse 8,312.50 33,250
Director
</TABLE>

5
<PAGE> 131
Directors of the Company are compensated annually by the Company
and by all the registrants in the fund complex for their services as indicated
above and also are reimbursed for all out-of-pocket expenses relating to
attendance at board meetings. Each of the Directors and Officers of the Company
serves in the identical capacity as directors and officers of Overland Express
Funds, Inc. and MasterWorks Funds Inc. (formerly, Stagecoach Inc.), and as
trustees and/or officers of Stagecoach Trust, Master Investment Portfolio, Life
& Annuity Trust, Master Investment Trust and Managed Series Investment Trust,
each of which is a registered open-end management investment company and each
of which, prior to January 1, 1996 and the reorganization of Wells Fargo Nikko
Investment Advisors, a former affiliate of Wells Fargo, was considered to be in
the same "fund complex," as such term is defined in Form N-1A under the 1940
Act, as the Company. Effective January 1, 1996, the Company, Overland Express
Funds, Inc., Stagecoach Trust, Life & Annuity Trust and Master Investment Trust
are considered to be members of the same fund complex and are no longer part of
the same fund complex as MasterWorks Funds Inc., Master Investment Portfolio
and Managed Series Investment Trust. The Directors are compensated by other
companies and trusts within the fund complex for their services as
directors/trustees to such companies and trusts. Currently the Directors do
not receive any retirement benefits or deferred compensation from the Company
or any other member of the fund complex.

As of the date of this SAI, Directors and Officers of the Company
as a group beneficially owned less than 1% of the outstanding shares of the
Company.

The Advisory Contract will continue in effect for more than two
years provided the continuance is approved annually (i) by the holders of a
majority of the Master Portfolio's outstanding voting securities or by the
Trust's Board of Trustees and (ii) by a majority of the Trustees of the Trust
who are not parties to the Advisory Contract or "interested persons" (as
defined in the Act) of any such party. The Advisory Contract may

6
<PAGE> 132
be terminated on 60 days' written notice by either party and will terminate
automatically if assigned.

For its services as transfer and dividend disbursing agent for the
Fund, Wells Fargo is entitled to receive monthly payments at the annual rate of
0.07% of the Fund's average daily net assets.

Collective Investment Fund Management Fees. Prior to September 1,
1996, Wells Fargo provided management and administrative services to the
Collective Investment Fund. For these services Wells Fargo charged fees at an
annual rate of 0.75% of the Collective Investment Fund's average net assets.
Wells Fargo was also entitled to be reimbursed by the Collective Investment
Fund for expenses incurred on its behalf, excluding costs incurred in
establishing and organizing the Fund. The Collective Investment Fund was
entitled to pay up to 0.10% of its net assets for "Audit Expenses." There
were no sales charges. The Collective Investment Fund paid all brokerage
commissions incurred on its portfolio transactions.

7
<PAGE> 133
SERVICING PLAN

The Company's Board of Directors, on behalf of the Fund, adopted a
Servicing Plan ("Servicing Plan") on August __, 1996, with respect to each
class of the Fund's shares. The Servicing Plan was approved by a majority of
the Directors who were not "interested persons" (as defined in the Act) of the
Fund and who had no direct or indirect financial interest in the operation of
the Servicing Plan or in any agreement related to the Servicing Plan (the
"Servicing Plan Non-Interested Directors").

Under the Servicing Plan and pursuant to the shareholder servicing
agreements for the Institutional Class Shares, the Fund may pay one or more
servicing agents, as compensation for performing certain services, a fee at an
annual rate of up to 0.25% of the average daily net assets of the Fund's
Institutional Class Shares attributable to the servicing agent's customers.
The actual fee payable to servicing agents is determined, within such limits,
from time to time by mutual agreement between the Company and each servicing
agent and will not exceed the maximum service fees payable by mutual funds sold
by members of the NASD under the NASD Rules of Fair Practice.

Each Servicing Plan continues in effect from year to year if such
continuance is approved by a majority vote of both the Directors of the Company
and the Servicing Plan Non-Interested Directors. Any form of servicing
agreement related to the Servicing Plan also must be approved by such vote of
the Directors and the Servicing Plan Non-Interested Directors. Servicing
agreements may be terminated at any time, without payment of any penalty, by
vote of a majority of the Servicing Plan Non-Interested Directors. No material
amendment to the Servicing Plans may be made except by a majority of both the
Directors of the Company and the Servicing Plan Non-Interested Directors.

PERFORMANCE CALCULATIONS

The following information supplements and should be read in
conjunction with the sections in the Prospectus entitled "Investing in the Fund
- -- Share Value" and "How the Fund Works -- Performance."

8
<PAGE> 134
net asset value per share (rather than the public offering price), in which
case the figures would not reflect the effect of any sales charges that would
have been paid by an investor, or would be based on the assumption that a sales
charge other than the maximum sales charge (reflecting a Volume Discount) was
assessed, provided that total return data derived pursuant to the calculation
described above also are presented.

In addition to the above performance information, the Fund may
also advertise the cumulative total return of a Class. The cumulative total
return for such periods is based on the overall percentage change in value of a
hypothetical investment in a Class of shares, assuming all dividends and
capital gain distributions are reinvested in shares of that class, without
reflecting the effect of any sales charge that would be paid by an investor,
and is not annualized.

Performance information may be advertised for non-standardized
periods, including year-to-date and other periods less than a year.

The total return information for the Institutional Class Shares
presented below and advertised by the Fund for the period prior to September
___, 1996, the date the Fund commenced operations, is based upon the prior
performance of the Collective Investment Fund. The performance information is
adjusted to reflect the current level of operating expenses applicable to the
Institutional Class Shares.

Average Annual Total Return*

<TABLE>
<CAPTION>
Commencement of Commencement of
Operations to Operations to Eight-Month Period
Class 12/31/95 Year Ended 12/31/95 8/31/96 Ended 8/31/96
- ----- -------------- ------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Instl. % % % %

</TABLE>

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

* Reflects the performance of the Collective Investment Fund adjusted to reflect
the current level of expenses of each class of shares.

Cumulative Total Return*

<TABLE>
<CAPTION>
Commencement of Commencement of
Operations to Operations to
Class 12/31/95 8/31/96
----- --------------- ---------------
<S> <C> <C>
Instl. % %

</TABLE>

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

* Reflects the performance of the Collective Investment Fund adjusted to reflect
the current level of expenses of each class of shares.

9
<PAGE> 135
Industrial Average, the Lehman Brothers 20+ Years Treasury Index, the Lehman
Brothers 5-7 Year Treasury Index, Donoghue's Money Fund Averages, Real Estate
Investment Averages (as reported by the National Association of Real Estate
Investment Trusts), Gold Investment Averages (provided by the World Gold
Council), Bank Averages (which is calculated from figures supplied by the U.S.
League of Savings Institutions based on effective annual rates of interest on
both passbook and certificate accounts), average annualized certificate of
deposit rates (from the Federal Reserve G-13 Statistical Releases or the Bank
Rate Monitor), the Salomon One Year Treasury Benchmark Index, the Consumer
Price Index (as published by the U.S. Bureau of Labor Statistics), Ten Year
U.S. Government Bond Average, S&P's Corporate Bond Yield Averages, Schabacter
Investment Management Indices, Salomon Brothers High Grade Bond Index, Lehman
Brothers Long-Term High Quality Government/Corporate Bond Index, other managed
or unmanaged indices or performance data of bonds, stocks or government
securities (including data provided by Ibbotson Associates), or by other
services, companies, publications or persons who monitor mutual funds on
overall performance or other criteria. The S&P Index and the Dow Jones
Industrial Average are unmanaged indices of selected common stock prices. The
performance of a class of shares of the Fund also may be compared to the
performance of other mutual funds having similar objectives. This comparative
performance could be expressed as a ranking prepared by Lipper Analytical
Services, Inc., CDA Investment Technologies, Inc., Bloomberg Financial Markets
or Morningstar, Inc., independent services which monitor the performance of
mutual funds. The performance of a class of shares of the Fund will be
calculated by relating net asset value per share at the beginning of a stated
period to the net asset value of the investment, assuming reinvestment of all
gains distributions and dividends paid, at the end of the period. Any such
comparisons may be useful to investors who wish to compare the class' past
performance with that of its competitors. Of course, past performance cannot
be a guarantee of future results. The Company also may include, from time to
time, a reference to certain marketing approaches of the Distributor,
including, for example, a reference to a potential shareholder being contacted
by a selected broker or dealer. General mutual fund statistics provided by the
Investment Company Institute may also be used.

10
<PAGE> 136
including, but not limited to, The Survey of Current Business, may be used to
illustrate investment attributes of a class of shares of the Fund or the
general economic, business, investment, or financial environment in which the
Fund operates; (iii) the effect of tax-deferred compounding on the investment
returns of a class of shares of the Fund, or on returns in general, may be
illustrated by graphs, charts, etc., where such graphs or charts would compare,
at various points in time, the return from an investment in a class of shares
of the Fund (or returns in general) on a tax-deferred basis (assuming
reinvestment of capital gains and dividends and assuming one or more tax rates)
with the return on a taxable basis; and (iv) the sectors or industries in which
the Fund invests may be compared to relevant indices of stocks or surveys
(e.g., S&P Industry Surveys) to evaluate the historical performance or current
or potential value of a class of shares of the Fund with respect to the
particular industry or sector.

11
<PAGE> 137
assets under management by the Company's investment adviser and the total
amount of assets under management by Wells Fargo Investment Management Group
("IMG"). As of September __, 1995, IMG had $30.1 billion in assets under
management.

DETERMINATION OF NET ASSET VALUE

Expenses and fees, including advisory fees are accrued daily and
are taken into account for the purpose of determining the net asset value of
the Master Portfolio's interests and the Fund's shares.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Payment for shares may, in the discretion of the adviser, be made
in the form of securities that are permissible investments for the Funds as
described in the Prospectus. For further information about this form of
payment please contact Stephens. In connection with an in-kind securities
payment, the Funds will require, among other things, that the securities be
valued on the day of purchase in accordance with the pricing methods used by a
Fund and that such Fund receives satisfactory assurances that (i) it will have
good and marketable title to the securities received by it; (ii) that the
securities are in proper form for

12
<PAGE> 138
transfer to the Fund; and (iii) adequate information will be provided
concerning the basis and other matters relating to the securities.

Under the 1940 Act, the Funds may suspend the right of redemption
or postpone the date of payment upon redemption for any period during which the
NYSE is closed (other than customary weekend and holiday closings, or during
which trading is restricted, or during which as determined by the SEC by rule
or regulation) an emergency exists as a result of which disposal or valuation
of portfolio securities is not reasonably practicable, or for such periods as
the SEC may permit.

In addition, the Company may redeem shares involuntarily to
reimburse the Funds for any losses sustained by reason of the failure of a
shareholders to make full payment for shares purchased or to collect any charge
relating to a transaction effected for the benefit of a shareholder which is
applicable to shares of a Fund as provided from time to time in the Prospectus.

PORTFOLIO TRANSACTIONS

13
<PAGE> 139
competitive spreads or commissions, the Master Portfolio will not necessarily
be paying the lowest spread or commission available.

In assessing the best overall terms available for any transaction,
Wells Fargo Bank considers factors deemed relevant, including the breadth of
the market in the security, the price of the security, the financial condition
and execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. Wells Fargo Bank may cause a Master Portfolio to pay a broker/dealer
which furnishes brokerage and research services a higher commission than that
which might be charged by another broker/dealer for effecting the same
transaction, provided that Wells Fargo Bank determines in good faith that such
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker/dealer, viewed in terms of either the
particular transaction or the overall responsibilities of Wells Fargo Bank.
Such brokerage and research services might consist of reports and statistics
relating to specific companies or industries, general summaries of groups of
stocks or bonds and their comparative earnings and yields, or broad overviews
of the stock, bond, and government securities markets and the economy.

14
<PAGE> 140
The outside research assistance is useful to Wells Fargo Bank since
the brokers utilized by Wells Fargo Bank as a group tend to follow a broader
universe of securities and other matters than the staff of Wells Fargo Bank can
follow. In addition, this research provides Wells Fargo Bank with a diverse
perspective on financial markets. Research services which are provided to
Wells Fargo Bank by brokers are available for the benefit of all accounts
managed or advised by Wells Fargo Bank. It is the opinion of Wells Fargo Bank
that this material is beneficial in supplementing their research and analysis;
and, therefore, it may benefit the Master Portfolios by improving the quality
of Wells Fargo Bank's investment advice. The advisory fees paid by the Master
Portfolios are not reduced because Wells Fargo Bank receives such services.

FEDERAL INCOME TAX

15
<PAGE> 141
A 4% nondeductible excise tax will be imposed on the Fund to the
extent it does not meet certain minimum distribution requirements by the end of
each calendar year. For this purpose, any income or gain retained by the Fund
that is subject to income tax will be considered to have been distributed by
year-end. In addition, dividends and distributions declared payable as of a
record date in October, November or December of any calendar year are deemed
under the Code to have been distributed by the Fund and received by the
shareholders on December 31 of that calendar year if the dividend is actually
paid no later than January 31 of the following year. Such dividends will,
accordingly, be subject to income tax for the year in which the record date
falls. The Fund intends to distribute substantially all of its net investment
income and net capital gains and, thus, expects to avoid the excise tax.

16
<PAGE> 142
or exchange of that Fund share will be treated as a long-term capital loss to
the extent of the designated capital gain distribution. Gain recognized on the
disposition of a debt obligation (including tax-exempt obligations purchased
after April 30, 1993) purchased by the Master Portfolio at a market discount
(generally, at a price less than its principal amount) will be treated as
ordinary income to the extent such accrued market discount had not been
previously included as taxable income during the period of time the Master
Portfolio held the debt obligation.

As of the printing of this SAI, the maximum individual tax rate
applicable to ordinary income is 39.6% (effective rates may be higher for some
individuals due to phase out of exemptions and eliminations of deductions); the
maximum individual marginal tax rate applicable to net capital gains is 28%;
and the maximum marginal corporate tax rate applicable to ordinary income and
net capital gains is 35% (except that to eliminate the benefit of lower
marginal corporate income tax rates, corporations which have taxable income in
excess of $100,000 for a taxable year will be required to pay an additional
amount of income tax up to $11,750 on taxable income exceeding $100,000 in a
taxable year and corporations which have taxable income in excess of
$15,000,000 for a taxable year will be required to pay an additional tax of up
to $100,000). Naturally, the amount of tax payable by an individual or
corporation will be affected by a combination of tax laws covering, for
example, deductions, credits, deferrals, exemptions, sources of income and
other matters.

17
<PAGE> 143
dividend paid by the Fund to a foreign shareholder is "effectively connected"
with a U.S. trade or business, in which case the reporting and withholding
requirements applicable to U.S. citizens, U.S. residents or domestic
corporations will apply. Distributions of net long-term capital gains are not
subject to tax withholding, but in the case of a foreign shareholder who is a
nonresident alien individual, such distributions ordinarily will be subject to
U.S. income tax at a rate of 30% if the individual is physically present in the
U.S. for more than 182 days during the taxable year.

Other Matters. Investors should be aware that the investments to
be made by the Master Portfolio may involve sophisticated tax rules such as
marked to market rules that would result in income or gain recognition by the
Master Portfolio without corresponding current cash receipts. Although the
Master Portfolio will seek to avoid significant noncash income, such noncash
income could be recognized by the Master Portfolio, in which case the Master
Portfolio may distribute cash derived from other sources in order to meet the
minimum distribution requirements described above.

CAPITAL STOCK

The following information supplements and should be read in
conjunction with the section in the Prospectus entitled "The Fund, the Master
Portfolio and Management."

The Company, an open-end management investment company, was
incorporated in Maryland on September 9, 1991. The authorized capital stock of
the Company consists of [48,000,000,000] shares having a par value of $.001 per
share. As of the date of this SAI, the Company's Board of Directors has
authorized the issuance of twenty-four series of shares, each representing an
interest in one of the following funds -- the Aggressive Growth, Arizona
Tax-Free, Asset Allocation, Balanced, California Tax-Free Bond, California
Tax-Free Income, California Tax-Free Money Market Mutual, Corporate Stock,
Diversified Income, Equity Value, Ginnie Mae, Government Money Market Mutual,
Growth and Income, Intermediate Bond, Money Market Mutual, Money Market Trust,
National Tax-Free, National Tax-Free Money Market Mutual, Oregon Tax-Free,
Prime Money Market Mutual, Short-Intermediate U.S. Government Income, Small
Cap, Treasury Money Market Mutual and U.S. Government Allocation Funds -- and
the Board of Directors may, in the future, authorize the issuance of other
series of capital stock representing shares of additional investment
portfolios.

18
<PAGE> 144
an advisory contract is a matter to be determined separately by the Fund.
Approval by the shareholders of one portfolio is effective as to that portfolio
whether or not sufficient votes are received from the shareholders of the other
portfolios to approve the proposal as to those portfolios. As used in the
Prospectus and in this Statement of Additional Information, the term
"majority," when referring to approvals to be obtained from shareholders of a
class of the Fund, means the vote of the lesser of (i) 67% of the shares of
such class of the Fund represented at a meeting if the holders of more than 50%
of the outstanding shares of such class of the Fund are present in person or by
proxy, or (ii) more than 50% of the outstanding shares of such class of the
Fund. The term "majority," when referring to the approvals to be obtained from
shareholders of the Company as a whole, means the vote of the lesser of (i) 67%
of the Company's shares represented at a meeting if the holders of more than
50% of the Company's outstanding shares are present in person or by proxy, or
(ii) more than 50% of the Company's outstanding shares. Shareholders are
entitled to one vote for each full share held and fractional votes for
fractional shares held.

Shareholders are not entitled to any preemptive rights. All
shares, when issued, will be fully paid and non-assessable by the Company.

19
<PAGE> 145
liability is limited to circumstances in which both inadequate insurance
existed and the Trust itself was unable to meet its obligations.

The Declaration of Trust further provides that obligations of the
Trust are not binding upon the Trustees individually but only upon the property
of the Trust and that the Trustees will not be liable for any action or failure
to act. However, nothing in the Declaration of Trust protects a Trustee
against any liability to which the Trustee would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of the Trustee's office.

As of September __, 1996, Stephens owned approximately 99% of the
outstanding Institutional Class Shares of the Fund and such could be considered
a "control person" of the Fund for purposes of the 1940 Act. However, upon
commencement of the initial public offering of the Fund's shares, it is
expected that Stephens will own a significantly smaller percentage of the
Fund's outstanding voting securities and will no longer be considered a control
person of the Fund.

OTHER

INDEPENDENT AUDITORS

20
<PAGE> 146
& Exchange Commission filings. KPMG Peat Marwick LLP's address is Three
Embarcadero Center, San Francisco, California 94111.

FINANCIAL INFORMATION

The portfolio of investments, audited financial statements and
independent auditors' reports for the Company's other Funds are contained in the
Annual Reports for the fiscal year ended December 31, 1995. The Annual Report
is available by calling 1-800-222-8222.

21
<PAGE> 147
SAI APPENDIX

The following is a description of the ratings given by Moody's and
S&P to corporate bonds and commercial paper.

Corporate Bonds

Corporate Commercial Paper

S&P: The "A-1" rating for corporate commercial paper indicates
that the "degree of safety regarding timely payment is either overwhelming or
very strong."

A-1
<PAGE> 148
Commercial paper with "overwhelming safety characteristics" will be rated
"A-1+." Commercial paper with a strong capacity for timely payments on issues
will be rated "A-2."

A-2
<PAGE> 149
STAGECOACH FUNDS, INC.
SEC REGISTRATION NOS. 33-42927; 811-6419

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

Not Applicable.

(b) Exhibits:

Exhibit
Number Description
------- -----------

1 - Amended and Restated Articles of Incorporation
dated November 22, 1995, incorporated by
reference to Post- Effective Amendment No. 17
to the Registration Statement, filed November
29, 1995.

2 - By-Laws, incorporated by reference to the
Initial Registration Statement, filed September
30, 1991.

3 - Not Applicable

4 - Not Applicable

5(a)(i) - Advisory Contract with Wells Fargo Bank, N.A.
on behalf of the Asset Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

5(a)(ii) - Sub-Advisory Contract with BZW Barclays Global
Fund Advisors on behalf of the Asset Allocation
Fund, incorporated by reference to
Post-Effective Amendment No. 21 to the
Registration Statement, filed February 29,
1996.

5(b)(i) - Advisory Contract with Wells Fargo Bank, N.A.
on behalf of the U.S. Government Allocation
Fund, incorporated by reference to
Post-Effective Amendment No. 2 to the
Registration Statement, filed April 17, 1992.

5(b)(ii) - Sub-Advisory Contract with BZW Barclays Global
Fund Advisors on behalf of the U.S. Government
Allocation Fund, incorporated by reference to
Post-Effective Amendment No. 21 to the
Registration Statement, filed February 29,
1996.

5(c) - Advisory Contract with Wells Fargo Bank, N.A.
on behalf of the California Tax-Free Money
Market Mutual Fund, incorporated by reference
to Post-Effective Amendment No. 2 to the
Registration Statement, filed April 17, 1992.

C-1
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5(d) - Advisory Contract with Wells Fargo Bank, N.A.
on behalf of the California Tax-Free Bond Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

5(e) - Advisory Contract with Wells Fargo Bank, N.A.
on behalf of the Ginnie Mae Fund, incorporated
by reference to Post-Effective Amendment No. 2
to the Registration Statement, filed April 17,
1992.

5(f) - Advisory Contract with Wells Fargo Bank, N.A.
on behalf of the Growth and Income Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

5(g)(i) - Advisory Contract with Wells Fargo Bank, N.A.
on behalf of the Corporate Stock Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

5(g)(ii) - Sub-Advisory Contract with BZW Barclays Global
Fund Advisors on behalf of the Corporate Stock
Fund, incorporated by reference to
Post-Effective Amendment No. 21 to the
Registration Statement, filed February 29,
1996.

5(h) - Advisory Contract with Wells Fargo Bank, N.A.
on behalf of the Money Market Mutual Fund,
incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement,
filed May 1, 1992.

5(i) - Advisory Contract with Wells Fargo Bank, N.A.
on behalf of the California Tax-Free Income
Fund, incorporated by reference to
Post-Effective Amendment No. 4 to the
Registration Statement, filed September 10,
1992.

5(j) - Advisory Contract with Wells Fargo Bank, N.A.
on behalf of the Diversified Income Fund,
incorporated by reference to Post-Effective
Amendment No. 17 to the Registration Statement,
filed November 29, 1995.

5(k) - Form of Advisory Contract with Wells Fargo
Investment Management Inc. on behalf of the
Arizona Tax-Free Fund, incorporated by
reference to Post-Effective Amendment No. 25 to
the Registration Statement, filed June 17,
1996.

5(l) - Form of Advisory Contract with Wells Fargo
Investment Management Inc. on behalf of the
Balanced Fund, incorporated by reference to
Post-Effective Amendment No. 25 to the
Registration Statement, filed June 17, 1996.

5(m) - Form of Advisory Contract with Wells Fargo
Investment Management Inc. on behalf of the
Equity Value Fund, incorporated by reference to
Post-Effective Amendment No. 25 to the
Registration Statement, filed June 17, 1996.

5(n) - Form of Advisory Contract with Wells Fargo
Investment Management Inc. on behalf of the
Government Money Market Mutual Fund,
incorporated by reference to Post-Effective
Amendment No. 25 to the Registration Statement,
filed June 17, 1996.

5(o) - Form of Advisory Contract with Wells Fargo
Investment Management Inc. on behalf of the
Intermediate Bond Fund, incorporated by
reference to Post-Effective Amendment No. 25 to
the Registration Statement, filed June 17,
1996.

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5(p) - Form of Advisory Contract with Wells Fargo
Investment Management Inc. on behalf of the
Money Market Trust Fund, incorporated by
reference to Post-Effective Amendment No. 25 to
the Registration Statement, filed June 17,
1996.

5(q) - Form of Advisory Contract with Wells Fargo
Investment Management Inc. on behalf of the
National Tax-Free Fund, incorporated by
reference to Post-Effective Amendment No. 25 to
the Registration Statement, filed June 17,
1996.

5(r) - Form of Advisory Contract with Wells Fargo
Investment Management Inc. on behalf of the
Oregon Tax-Free Fund, incorporated by reference
to Post-Effective Amendment No. 25 to the
Registration Statement, filed June 17, 1996.

5(s) - Form of Advisory Contract with Wells Fargo
Investment Management Inc. on behalf of the
Prime Money Market Mutual Fund, incorporated by
reference to Post-Effective Amendment No. 25 to
the Registration Statement, filed June 17,
1996.

5(t) - Form of Advisory Contract with Wells Fargo
Investment Management Inc. on behalf of the
Treasury Money Market Mutual Fund, incorporated
by reference to Post-Effective Amendment No. 25
to the Registration Statement, filed June 17,
1996.

6(a) - Amended Distribution Agreement with Stephens
Inc., incorporated by reference to
Post-Effective Amendment No. 15 to the
Registration Statement, filed May 1, 1995.

6(b) - Selling Agreement with Wells Fargo Bank, N.A.
on behalf of the Funds, incorporated by
reference to Post- Effective Amendment No. 2 to
the Registration Statement, filed April 17,
1992.

7 - Not Applicable

8(a) - Custody Agreement with Wells Fargo
Institutional Trust Company, N.A. on behalf of
the Asset Allocation Fund, incorporated by
reference to Post-Effective Amendment No. 2 to
the Registration Statement, filed April 17,
1992.

8(b) - Custody Agreement with Wells Fargo
Institutional Trust Company, N.A. on behalf of
the U.S. Government Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

8(c) - Custody Agreement with Wells Fargo
Institutional Trust Company, N.A. on behalf of
the Corporate Stock Fund, incorporated by
reference to Post-Effective Amendment No. 2 to
the Registration Statement, filed April 17,
1992.

8(d) - Custody Agreement with Wells Fargo Bank, N.A.
on behalf of the California Tax-Free Money
Market Mutual Fund, incorporated by reference
to Post-Effective Amendment No. 2 to the
Registration Statement, filed April 17, 1992.

8(e) - Custody Agreement with Wells Fargo Bank, N.A.
on behalf of the California Tax-Free Bond Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

C-3
<PAGE> 152
8(f) - Custody Agreement with Wells Fargo Bank, N.A.
on behalf of the Growth and Income Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

8(g) - Custody Agreement with Wells Fargo Bank, N.A.
on behalf of the Ginnie Mae Fund, incorporated
by reference to Post-Effective Amendment No. 2
to the Registration Statement, filed April 17,
1992.

8(h) - Custody Agreement with Wells Fargo Bank, N.A.
on behalf of the Money Market Fund,
incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement,
filed May 1, 1992.

8(i) - Custody Agreement with Wells Fargo Bank, N.A.
on behalf of the California Tax-Free Income
Fund, incorporated by reference to
Post-Effective Amendment No. 17 to the
Registration Statement, filed November 29,
1995.

8(j) - Custody Agreement with Wells Fargo Bank, N.A.
on behalf of the Diversified Income Fund,
incorporated by reference to Post-Effective
Amendment No. 17 to the Registration Statement,
filed November 29, 1995.

8(k) - Custody Agreement with Wells Fargo Bank, N.A.
on behalf of the Short-Intermediate U.S.
Government Income Fund, incorporated by
reference to Post-Effective Amendment No. 8 to
the Registration Statement, filed February 10,
1994.

8(l) - Custody Agreement with Wells Fargo Bank, N.A.
on behalf of the National Tax-Free Money Market
Mutual Fund, incorporated by reference to
Post-Effective Amendment No. 24 to the
Registration Statement, filed April 29, 1996.

8(m) - Custody Agreement with Wells Fargo Bank, N.A.
on behalf of the Aggressive Growth Fund,
incorporated by reference to Post-Effective
Amendment No. 20 to the Registration Statement,
filed February 28, 1996.

8(n) - Form of Custody Agreement with Wells Fargo Bank
on behalf of the Arizona Tax-Free, Balanced,
Equity Value, Government Money Market Mutual,
Intermediate Bond, Money Market Trust, National
Tax-Free, Oregon Tax-Free, Prime Money Market
Mutual and Treasury Money Market Mutual Funds,
incorporated by reference to Post-Effective
Amendment No. 25 to the Registration Statement,
filed June 17, 1996.

9(a)(i) - Administration Agreement with Stephens Inc. on
behalf of the Asset Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

9(a)(ii) - Administration Agreement with Stephens Inc. on
behalf of the U.S. Government Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

9(a)(iii) - Administration Agreement with Stephens Inc. on
behalf of the California Tax-Free Bond Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

C-4
<PAGE> 153
9(a)(iv) - Administration Agreement with Stephens Inc. on
behalf of the California Tax-Free Money Market
Mutual Fund, incorporated by reference to
Post-Effective Amendment No. 2 to the
Registration Statement, filed April 17, 1992.

9(a)(v) - Administration Agreement with Stephens Inc. on
behalf of the Ginnie Mae Fund, incorporated by
reference to Post-Effective Amendment No. 2 to
the Registration Statement, filed April 17,
1992.

9(a)(vi) - Administration Agreement with Stephens Inc. on
behalf of the Growth and Income Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

9(a)(vii) - Administration Agreement with Stephens Inc. on
behalf of the Corporate Stock Fund,
incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement,
filed April 17, 1992.

9(a)(viii) - Administration Agreement with Stephens Inc. on
behalf of the Money Market Mutual Fund,
incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement,
filed May 1, 1992.

9(a)(ix) - Administration Agreement with Stephens Inc. on
behalf of the California Tax-Free Income Fund,
incorporated by reference to Post-Effective
Amendment No. 4 to the Registration Statement,
filed September 10, 1992.

9(a)(x) - Administration Agreement with Stephens Inc. on
behalf of the Diversified Income Fund,
incorporated by reference to Post-Effective
Amendment No. 4 to the Registration Statement,
filed September 10, 1992.

9(a)(xi) - Administration Agreement with Stephens Inc. on
behalf of the Short-Intermediate U.S.
Government Income Fund, incorporated by
reference to Post-Effective Amendment No. 8 to
the Registration Statement, filed February 10,
1994.

9(a)(xii) - Administration Agreement with Stephens Inc. on
behalf of the National Tax-Free Money Market
Mutual Fund, incorporated by reference to
Post-Effective Amendment No. 19 to the
Registration Statement, filed December 18,
1995.

9(a)(xiii) - Administration Agreement with Stephens Inc. on
behalf of the Aggressive Growth Fund,
incorporated by reference to Post-Effective
Amendment No. 19 to the Registration Statement,
filed December 18, 1995.

9(a)(xiv) - Form of Administration Agreement with Stephens
Inc. on behalf of the Arizona Tax-Free,
Balanced, Equity Value, Government Money Market
Mutual, Intermediate Bond, Money Market Trust,
National Tax-Free, Oregon Tax-Free, Prime Money
Market Mutual and Treasury Money Market Mutual
Funds, incorporated by reference to
Post-Effective Amendment No. 25 to the
Registration Statement, filed June 17, 1996.

9(b)(i) - Agency Agreement with Wells Fargo Bank, N.A. on
behalf of the Funds, incorporated by reference
to Post- Effective Amendment No. 2 to the
Registration Statement, filed April 17, 1992.

9(b)(ii) - Agency Agreement with Wells Fargo Bank, N.A. on
behalf of the National Tax-Free Money Market
Mutual Fund, incorporated by reference to
Post-Effective Amendment No. 24 to the
Registration Statement, filed April 29, 1996.

C-5
<PAGE> 154
9(b)(iii) - Form of Agency Agreement with Wells Fargo Bank,
N.A. on behalf of the Aggressive Growth Fund,
incorporated by reference to Post-Effective
Amendment No. 19 to the Registration Statement,
filed December 18, 1995.

9(b)(iv) - Form of Amended Agency Agreement with Wells
Fargo Bank, NA on behalf of the Arizona
Tax-Free, Balanced, Equity Value, Government
Money Market Mutual, Intermediate Bond, Money
Market Trust, National Tax-Free, Oregon Tax-
Free, Prime Money Market Mutual and Treasury
Money Market Mutual Funds, incorporated by
reference to Post- Effective Amendment No. 25
to the Registration Statement, filed June 17,
1996.

9(c)(i) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the California
Tax-Free Money Market Mutual Fund, incorporated
by reference to Post-Effective Amendment No. 2
to the Registration Statement, filed April 17,
1992.

9(c)(ii) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the Corporate
Stock Fund, incorporated by reference to
Post-Effective Amendment No. 2 to the
Registration Statement, filed April 17, 1992.

9(c)(iii) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the Money Market
Mutual Fund, incorporated by reference to
Post-Effective Amendment No. 3 to the
Registration Statement, filed May 1, 1992.

9(c)(iv) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the California
Tax-Free Income Fund, incorporated by reference
to Post-Effective Amendment No. 17 to the
Registration Statement, filed November 29,
1995.

9(c)(v) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the
Short-Intermediate U.S. Government Income Fund,
incorporated by reference to Post-Effective
Amendment No. 8 to the Registration Statement,
filed February 10, 1994.

9(c)(vi) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the National
Tax-Free Money Market Mutual Fund,
incorporated by reference to Post-Effective
Amendment No. 24 to the Registration Statement,
filed April 29, 1996.

9(c)(vii) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the Class B
Shares of the Asset Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

9(c)(viii) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the Class B
Shares of the California Tax-Free Bond Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

9(c)(ix) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the Class B
Shares of the Diversified Income Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

C-6
<PAGE> 155
9(c)(x) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the Class B
Shares of the Ginnie Mae Fund, incorporated by
reference to Post-Effective Amendment No. 15 to
the Registration Statement, filed May 1, 1995.

9(c)(xi) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the Class B
Shares of the Growth and Income Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

9(c)(xii) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the Class B
Shares of the U.S. Government Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

9(c)(xiii) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the Class B
Shares of the Aggressive Growth Fund,
incorporated by reference to Post-Effective
Amendment No. 20 to the Registration Statement,
filed February 28, 1996.

9(c)(xiv) - Amended Shareholder Servicing Agreement with
Wells Fargo Bank, N.A. on behalf of the Class A
Shares of the Asset Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

9(c)(xv) - Amended Shareholder Servicing Agreement with
Wells Fargo Bank, N.A. on behalf of the Class A
Shares of the California Tax-Free Bond Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

9(c)(xvi) - Amended Shareholder Servicing Agreement with
Wells Fargo Bank, N.A. on behalf of the Class A
Shares of the Diversified Income Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

9(c)(xvii) - Amended Shareholder Servicing Agreement with
Wells Fargo Bank, N.A. on behalf of the Class A
Shares of the Ginnie Mae Fund, incorporated by
reference to Post-Effective Amendment No. 15 to
the Registration Statement, filed May 1, 1995.

9(c)(xviii) - Amended Shareholder Servicing Agreement with
Wells Fargo Bank, N.A. on behalf of the Class A
Shares of the Growth and Income Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

9(c)(xix) - Amended Shareholder Servicing Agreement with
Wells Fargo Bank, N.A. on behalf of the Class A
Shares of the U.S. Government Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

9(c)(xx) - Shareholder Servicing Agreement with Wells
Fargo Bank, N.A. on behalf of the Class A
Shares of the Aggressive Growth Fund,
incorporated by reference to Post-Effective
Amendment No. 20 to the Registration Statement,
filed February 28, 1996.

C-7
<PAGE> 156
9(d)(i) - Servicing Plan on behalf of the National
Tax-Free Money Market Mutual Fund, incorporated
by reference to Post- Effective Amendment No.
17 to the Registration Statement, filed
November 29, 1995.

9(d)(ii) - Servicing Plan on behalf of the Class B Shares
of the Asset Allocation Fund, incorporated by
reference to Post- Effective Amendment No. 15
to the Registration Statement, filed May 1,
1995.

9(d)(iii) - Servicing Plan on behalf of the Class B Shares
of the California Tax-Free Bond Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

9(d)(iv) - Servicing Plan on behalf of the Class B Shares
of the Diversified Income Fund, incorporated by
reference to Post-Effective Amendment No. 15 to
the Registration Statement, filed May 1, 1995.

9(d)(v) - Servicing Plan on behalf of the Class B Shares
of the Ginnie Mae Fund, incorporated by
reference to Post- Effective Amendment No. 15
to the Registration Statement, filed May 1,
1995.

9(d)(vi) - Servicing Plan on behalf of the Class B Shares
of the Growth and Income Fund, incorporated by
reference to Post-Effective Amendment No. 15 to
the Registration Statement, filed May 1, 1995.

9(d)(vii) - Servicing Plan on behalf of the Class B Shares
of the U.S. Government Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

9(d)(viii) - Servicing Plan on behalf of the Class A Shares
of the Aggressive Growth Fund, incorporated by
reference to Post-Effective Amendment No. 19 to
the Registration Statement, filed December 18,
1995.

9(d)(ix) - Servicing Plan on behalf of the Class B Shares
of the Aggressive Growth Fund, incorporated by
reference to Post-Effective Amendment No. 19 to
the Registration Statement, filed December 18,
1995.

9(d)(x) - Servicing Plan and Form of Shareholder
Servicing Agreement on behalf of the Class A
Shares of the Arizona Tax- Free, Balanced,
Equity Value, Government Money Market Mutual,
Intermediate Bond, National Tax-Free, Oregon
Tax- Free, Prime Money Market Mutual and
Treasury Money Market Mutual Funds,
incorporated by reference to Post- Effective
Amendment No. 25 to the Registration Statement,
filed June 17, 1996.

9(d)(xi) - Servicing Plan and Form of Shareholder
Servicing Agreement on behalf of the Class B
Shares of the Arizona Tax- Free, Balanced,
Equity Value, Intermediate Bond, National
Tax-Free and Oregon Tax-Free Funds,
incorporated by reference to Post-Effective
Amendment No. 25 to the Registration Statement,
filed June 17, 1996.

9(d)(xii) - Servicing Plan and Form of Shareholder
Servicing Agreement on behalf of the
Institutional Class Shares of the Arizona
Tax-Free, Balanced, California Tax-Free Bond,
California Tax-Free Income, Equity Value,
Ginnie Mae, Growth and Income, Intermediate
Bond, Money Market Mutual, National Tax-Free,
Oregon Tax-Free, Prime Money Market Mutual,
Short-Intermediate Government and

C-8
<PAGE> 157
Treasury Money Market Mutual Funds,
incorporated by reference to Post-Effective
Amendment No. 25 to the Registration Statement,
filed June 17, 1996.

9(d)(xiii) - Servicing Plan and Form of Shareholder
Servicing Agreement on behalf of the Service
Class Shares of the Prime Money Market Mutual
and Treasury Money Market Mutual Funds,
incorporated by reference to Post-Effective
Amendment No. 25 to the Registration Statement,
filed June 17, 1996.

9(e) - Cross Indemnification Agreement, incorporated
by reference to Post-Effective Amendment No. 11
to the Registration Statement of Stagecoach
Inc., filed July 27, 1994.

10 - Opinion and Consent of Counsel, filed herewith.

11 - Not Applicable.

12 - Not Applicable

13 - Investment letter, incorporated by reference to
Item 24(b) of Pre-Effective Amendment No. 1 to
the Registration Statement, filed November 29,
1991.

14 - Not Applicable

15(a)(i) - Distribution Plan on behalf of the California
Tax-Free Money Market Mutual Fund, incorporated
by reference to Post-Effective Amendment No. 2
to the Registration Statement, filed April 17,
1992.

(a)(ii) - Distribution Plan on behalf of the Corporate
Stock Fund, incorporated by reference to
Post-Effective Amendment No. 2 to the
Registration Statement, filed April 17, 1992.

(a)(iii) - Distribution Plan on behalf of the Money Market
Mutual Fund, incorporated by reference to
Post-Effective Amendment No. 3 to the
Registration Statement, filed May 1, 1992.

(a)(iv) - Distribution Plan on behalf of the California
Tax-Free Income Fund, incorporated by reference
to Post-Effective Amendment No. 4 to the
Registration Statement, filed September 10,
1992.

(a)(v) - Distribution Plan on behalf of the
Short-Intermediate U.S. Government Income Fund,
incorporated by reference to Post-Effective
Amendment No. 8 to the Registration Statement,
filed February 10, 1994.

(a)(vi) - Distribution Plan on behalf of the National
Tax-Free Money Market Mutual Fund, incorporated
by reference to Post-Effective Amendment No. 17
to the Registration Statement, filed November
29, 1995.

(b)(i) - Distribution Plan on behalf of the Class B
Shares of the Asset Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

(b)(ii) - Distribution Plan on behalf of the Class B
Shares of the California Tax-Free Bond Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

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(b)(iii) - Distribution Plan on behalf of the Class B
Shares of the Diversified Income Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

(b)(iv) - Distribution Plan on behalf of the Class B
Shares of the Ginnie Mae Fund, incorporated by
reference to Post- Effective Amendment No. 15
to the Registration Statement, filed May 1,
1995.

(b)(v) - Distribution Plan on behalf of the Class B
Shares of the Growth and Income Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

(b)(vi) - Distribution Plan on behalf of the Class B
Shares of the U.S. Government Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

(b)(vii) - Distribution Plan on behalf of the Class B
Shares of the Aggressive Growth Fund,
incorporated by reference to Post-Effective
Amendment No. 19 to the Registration Statement,
filed December 18, 1995.

(b)(viii) - Distribution Plan on behalf of the Class B
Shares of the Arizona Tax-Free, Balanced,
Equity Value, Intermediate Bond, National
Tax-Free and Oregon Tax-Free Funds,
incorporated by reference to Post-Effective
Amendment No. 25 to the Registration Statement,
filed June 17, 1996.

(c)(i) - Amended Distribution Plan on behalf of the
Class A Shares of the Asset Allocation Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

(c)(ii) - Amended Distribution Plan on behalf of the
Class A Shares of the California Tax-Free Bond
Fund, incorporated by reference to
Post-Effective Amendment No. 15 to the
Registration Statement, filed May 1, 1995.

(c)(iii) - Amended Distribution Plan on behalf of the
Class A Shares of the Diversified Income Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

(c)(iv) - Amended Distribution Plan on behalf of the
Class A Shares of the Ginnie Mae Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

(c)(v) - Amended Distribution Plan on behalf of the
Class A Shares of the Growth and Income Fund,
incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement,
filed May 1, 1995.

(c)(vi) - Amended Distribution Plan on behalf of the
Class A Shares of the U.S. Government
Allocation Fund, incorporated by reference to
Post-Effective Amendment No. 15 to the
Registration Statement, filed May 1, 1995.

(c)(vii) - Distribution Plan on behalf of the Class A
Shares of the Aggressive Growth Fund,
incorporated by reference to Post-Effective
Amendment No. 19 to the Registration Statement,
filed December 18, 1995.

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(c)(viii) - Distribution Plan on behalf of the Class A
Shares of the Arizona Tax-Free, Balanced,
Equity Value, Government Money Market Mutual,
Intermediate Bond, National Tax-Free and Oregon
Tax-Free Funds, incorporated by reference to
Post-Effective Amendment No. 25 to the
Registration Statement, filed June 17, 1996.

16(a) - Schedules for Computation of Performance Data,
incorporated by reference to Post-Effective
Amendment No. 2, filed April 17, 1992.

16(b) - Schedules for Computation of Performance Data,
incorporated by reference to Post-Effective
Amendment No. 15, filed May 1, 1995.

17 - Powers of Attorney, incorporated by reference
to Initial Registration Statement, filed
September 30, 1991.

18(a) - Rule 18f-3 Multi-Class Plan, incorporated by
reference to Post-Effective Amendment No. 14
to the Registration Statement, filed April
14, 1995.

18(b) - Amended Rule 18f-3 Multi-Class Plan,
incorporated by reference to Post-Effective
Amendment No. 19 to the Registration Statement,
filed December 18, 1995.

18(c) - Amended Rule 18f-3 Multi-Class Plan,
incorporated by reference to Post-Effective
Amendment No. 25 to the Registration
Statement, filed June 17, 1996.

Item 25. Persons Controlled by or under Common Control with Registrant

As of May 31, 1996, the Asset Allocation, Corporate Stock and
U.S. Government Allocation Funds each owned approximately 99% of the
outstanding beneficial interests of the Asset Allocation, Corporate Stock and
U.S. Government Allocation Master Portfolios, respectively, of Master
Investment Trust. As such, each Fund could be considered a "controlling
person" (as such term is defined in the 1940 Act) of the corresponding Master
Portfolio.

Item 26. Number of Holders of Securities

As of May 31, 1996, the number of record holders of each class of
Securities of the Registrant was as follows:

C-11
<PAGE> 160
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
-------------- ------------------------

Class A* Class B
------- -------
<S> <C> <C>
Aggressive Growth Fund 415 420

Asset Allocation Fund 71,668 2,610

California Tax-Free Bond Fund 9,293 869

California Tax-Free Income Fund 3,015 N/A

California Tax-Free Money Market Mutual Fund 29,778 N/A

Corporate Stock Fund 30,253 N/A

Diversified Income Fund 12,690 529

Ginnie Mae Fund 14,083 543

Growth and Income Fund 25,314 683

Money Market Mutual Fund 161,507 5,187**

National Tax-Free Money Market 17 N/A
Mutual Fund

Short-Intermediate U.S. Government 6,328 N/A
Income Fund

U.S. Government Allocation Fund 16,069 191
</TABLE>

* For purposes of this chart, shares of single class Funds are included under
the designation "Class A"

** Designates the number of Class S recordholders.

Item 27. Indemnification

The following paragraphs of Article VIII of the Registrant's
Articles of Incorporation provide:

(h) The Corporation shall indemnify (1) its Directors and
Officers, whether serving the Corporation or at its request any other
entity, to the full extent required or permitted by the General Laws of
the State of Maryland now or hereafter in force, including the advance of
expenses under the procedures and to the full extent permitted by law,
and (2) its other employees and agents to such extent as shall be
authorized by the Board of Directors or the Corporation's By-Laws and be
permitted by law. The foregoing rights of indemnification shall not be
exclusive of any other rights to which those seeking indemnification may
be entitled. The Board of Directors may take such action as is necessary
to carry out these indemnification provisions and is expressly empowered
to adopt, approve and amend from

C-12
<PAGE> 161
time to time such By-Laws, resolutions or contracts implementing such
provisions or such further indemnification arrangements as may be
permitted by law. No amendment of these Articles of Incorporation of the
Corporation shall limit or eliminate the right to indemnification
provided hereunder with respect to acts or omissions occurring prior to
such amendment or repeal. Nothing contained herein shall be construed to
authorize the Corporation to indemnify any Director or officer of the
Corporation against any liability to the Corporation or to any holders of
securities of the Corporation to which he is subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office. Any indemnification by the
Corporation shall be consistent with the requirements of law, including
the 1940 Act.

(i) To the fullest extent permitted by Maryland
statutory and decisional law and the 1940 Act, as amended or interpreted,
no Director or officer of the Corporation shall be personally liable to
the Corporation or its stockholders for money damages; provided, however,
that nothing herein shall be construed to protect any Director or officer
of the Corporation against any liability to which such Director or
officer would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in
the conduct of his office. No amendment, modification or repeal of this
Article VIII shall adversely affect any right or protection of a Director
or officer that exists at the time of such amendment, modification or
repeal.

Item 28. Business and Other Connections of Investment Adviser.

Wells Fargo Bank, N.A. ("Wells Fargo Bank"), a wholly owned
subsidiary of Wells Fargo & Company, currently serves as investment adviser to
several of the Registrant's investment portfolios and to certain other
registered open-end management investment companies. Wells Fargo Bank's
business is that of a national banking association with respect to which it
conducts a variety of commercial banking and trust activities.

To the knowledge of Registrant, none of the directors or
executive officers of Wells Fargo Bank, except those set forth below, is or has
been at any time during the past two fiscal years engaged in any other
business, profession, vocation or employment of a substantial nature, except
that certain executive officers also hold various positions with and engage in
business for Wells Fargo & Company. Set forth below are the names and principal
businesses of the directors and executive officers of Wells Fargo Bank who are
or during the past two fiscal years have been engaged in any other business,
profession, vocation or employment of a substantial nature for their own
account or in the capacity of director, officer, employee, partner or trustee.
All the directors of Wells Fargo Bank also serve as directors of Wells Fargo &
Company.

C-13
<PAGE> 162
<TABLE>
<CAPTION>
Name and Position Principal Business(es) and Address(es)
at Wells Fargo Bank During at Least the Last Two Fiscal Years
- ------------------- ------------------------------------------
<S> <C>
H. Jesse Arnelle Senior Partner of Arnelle & Hastie
Director 455 Market Street
San Francisco, CA 94105

Director of FPL Group, Inc.
700 Universe Blvd.
P.O. Box 14000
North Palm Beach, FL 33408

William R. Breuner General Partner in Breuner Associates, Breuner Properties and
Director Breuner-Pavarnick Real Estate Developers. Retired Chairman of
the Board of Directors of John Breuner Co.
2300 Clayton Road, Suite 1570
Concord, CA 94520

Vice Chairman of the California State Railroad
Museum Foundation.
111 I Street
Old Sacramento, CA 95814

William S. Davila President and Director of The Vons Companies, Inc.
Director 618 Michillinda Avenue
Arcadia, CA 91007

Officer of Western Association of Food Chains
825 Colorado Blvd. #203
Los Angeles, CA 90041

Rayburn S. Dezember Director of CalMat Co.
Director 3200 San Fernando Road
Los Angeles, CA 90065

Director of Tejon Ranch Co.
P.O. Box 1000
Lebec, CA 93243

Director of Turner Casting Corp.
P.O. Box 1099
Cudahy, CA 90201

Director of The Bakersfield Californian
P.O. Box 440
1707 I Street
Bakersfield, CA 93302

Director of Kern County Economic Development Corp.
P.O. Box 1229
2700 M Street, Suite 225
Bakersfield, CA 93301

</TABLE>

C-14
<PAGE> 163
<TABLE>
<S> <C>
Chairman of the Board of Trustees of Whittier College
13406 East Philadelphia Avenue
P.O. Box 634
Whittier, CA 90608

Paul Hazen Chairman of the Board of Directors of
Chairman of the Wells Fargo & Company
Board of Directors 420 Montgomery Street
San Francisco, CA 94105

Director of Pacific Telesis Group
130 Kearny Street
San Francisco, CA 94108

Director of Phelps Dodge Corp.
2600 North Central Avenue
Phoenix, AZ 85004

Director of Safeway Inc.
Fourth and Jackson Streets
Oakland, CA 94660

Robert K. Jaedicke Accounting Professor and Dean Emeritus of
Director Graduate School of Business, Stanford University
MBA Admissions Office
Stanford, CA 94305

Director of Homestake Mining Co.
650 California Street
San Francisco, CA 94108

Director of California Water Service Company
1720 North First Street
San Jose, CA 95112

Director of Boise Cascade Corp.
1111 West Jefferson Street
P.O. Box 50
Boise, ID 83728

Director of Enron Corp.
1400 Smith Street
Houston, TX 77002

Director of GenCorp, Inc.
175 Ghent Road
Fairlawn, OH 44333

Paul A. Miller Chairman of Executive Committee and Director of
Director Pacific Enterprises
633 West Fifth Street
Los Angeles, CA 90071

</TABLE>

C-15
<PAGE> 164
<TABLE>
<S> <C>
Paul A. Miller Chairman of Executive Committee and Director of
Director Pacific Enterprises
633 West Fifth Street
Los Angeles, CA 90071

Trustee of Mutual Life Insurance Company of New York
1740 Broadway
New York, NY 10019

Director of Newhall Management Corporation
23823 Valencia Blvd.
Valencia, CA 91355

Trustee of University of Southern California
University Park TGF 200
665 Exposition Blvd.
Los Angeles, CA 90089

Ellen M. Newman President of Ellen Newman Associates
Director 323 Geary Street, Suite 507
San Francisco, CA 94102

Chair of Board of Trustees of
University of California at San Francisco Foundation
250 Executive Park Blvd., Suite 2000
San Francisco, CA 94143

Director of American Conservatory Theater
30 Grant Avenue
San Francisco, CA 94108

Director of California Chamber of Commerce
1201 K Street, 12th Floor
Sacramento, CA 95814

Philip J. Quigley Chairman, Chief Executive Officer and
Director Director of Pacific Telesis Group
130 Kearney Street, Rm. 3700
San Francisco, CA 94108

Director of Varian Associates
3050 Hansen Way
P.O. Box 10800
Palo Alto, CA 94303

Carl E. Reichardt Chairman and Chief Executive Officer of the
Director Board of Directors of Wells Fargo & Company
420 Montgomery Street
San Francisco, CA 94105

Director of Ford Motor Company
The American Road
Dearborn, MI 48121

Director of Hospital Corporation of America,
HCA-Hospital Corp. of America
One Park Plaza
Nashville, TN 37203

</TABLE>

C-16
<PAGE> 165
<TABLE>
<S> <C>

Director of Pacific Gas and Electric Company
77 Beale Street
San Francisco, CA 94105

Director of Newhall Management Corporation
23823 Valencia Blvd.
Valencia, CA 91355

Donald B. Rice President, Chief Operating Officer and Director of
Director Teledyne, Inc.
2049 Century Park East
Los Angeles, CA 90067

Director of Vulcan Materials Company
One Metroplex Drive
Birmingham, AL 35209

Retired Secretary of the Air Force

Susan G. Swenson President and Chief Executive Officer of Cellular One
Director 651 Gateway Blvd.
San Francisco, CA 94080

Chang-Lin Tien Chancellor of University of California at Berkeley
Director UC at Berkeley
Berkeley, CA 94720

John A. Young President, Director and Chief Executive Officer of
Director Hewlett-Packard Company
3000 Hanover Street
Palo Alto, CA 94304

Director of Chevron Corporation
225 Bush Street
San Francisco, CA 94104

William F. Zuendt Director of 3Com Corp.
President 5400 Bayfront Plaza
P.O. Box 58145
Santa Clara, CA 95052

Director of MasterCard International
888 Seventh Avenue
New York, NY 10106

Trustee of Golden Gate University
536 Mission Street
San Francisco, CA 94163
</TABLE>

Prior to May 1, 1996, BZW Barclays Global Fund Advisors ("BGFA"),
a wholly-owned subsidiary of BZW Barclays Global Investors, N.A. ("BGI",
formerly, Wells Fargo Institutional Trust Company), served as the sub-adviser
to the Asset Allocation, Corporate Stock

C-17
<PAGE> 166
and U.S. Government Allocation Funds of the Company and to certain other
open-end management investment companies. As of May 1, 1996, BGFA no longer
served as sub-adviser to the Asset Allocation, Corporate Stock and U.S.
Government Allocation Funds. As of this date, BGFA served as sub-adviser to
the corresponding Asset Allocation, U.S. Government Allocation and Corporate
Stock Master Portfolios of Master Investment Trust, in which such funds invest
substantially all of their assets.

The directors and officers of BGFA consist primarily of persons
who during the past two years have been active in the investment management
business of the former sub-adviser to the Registrant, Wells Fargo Nikko
Investment Advisors ("WFNIA") and, in some cases, the service business of BGI.
With the exception of Irving Cohen, each of the directors and executive
officers of BGFA will also have substantial responsibilities as directors
and/or officers of BGI. To the knowledge of the Registrant, except as set
forth below, none of the directors or executive officers of BGFA is or has been
at any time during the past two fiscal years engaged in any other business,
profession, vocation or employment of a substantial nature.

<TABLE>
<CAPTION>
Name and Position Principal Business(es) During at
at BGFA Least the Last Two Fiscal Years
- ------- --------------------------------
<S> <C>
Frederick L.A. Grauer Chairman and Director of WFNIA and WFITC
Chairman, Director 45 Fremont Street, San Francisco, CA 94105

Donald L. Luskin Chief Executive Officer of WFNIA's Defined Contribution Group
Vice Chairman & Director 45 Fremont Street, San Francisco, CA 94105

Irving Cohen Chief Financial Officer and Chief Operating Officer of Barclays Bank
Director PLC, New York Branch and Chief Operating Officer of Barclays Group,
Inc. (USA); previously, Chief Financial Officer of Barclays de Zoete
Wedd Securities Inc. (1994)
222 Broadway, New York, NY 10038

Andrea M. Zolberti Chief Financial Officer of WFNIA and WFITC
Chief Financial Officer 45 Fremont Street, San Francisco, CA 94105

Vincent J. Bencivenga Previously Vice President at State Street Bank & Trust Company
Chief Fiduciary Officer One Financial Center, Boston, MA 02111
</TABLE>

Prior to January 1, 1996 Wells Fargo Nikko Investment Advisors
("WFNIA") served as sub-adviser to the Asset Allocation, Corporate Stock
and U.S. Government Allocation Funds of the Company and as adviser or
sub-adviser to various other open-end management investment companies. For
additional information, see "The Funds and Management" in the Prospectus and
"Management" in the Statement of Additional Information of such Funds. For
information as to the business, profession, vocation or employment of a
substantial nature of each of the officers and management committees of WFNIA,
reference is made to WFNIA's Form ADV and Schedules A and D filed under the
Investment Advisers Act of 1940, File No. 801-36479, incorporated herein by
reference.

C-18
<PAGE> 167
Pursuant to an Agreement and Plan of Reorganization by and
between Pacifica Funds Trust ("Pacifica") and the Company, several portfolios
of Pacifica, subject to shareholder approval, will be reorganized into the
following funds of the Company: Arizona Tax-Free Fund, Balanced Fund, Equity
Value Fund, Government Money Market Mutual Fund, Intermediate Bond Fund, Money
Market Trust Fund, National Tax-Free Fund, Oregon Tax-Free Fund, Prime Money
Market Mutual Fund and Treasury Money Market Mutual Fund. Prior to the
Reorganization, Wells Fargo Investment Management, Inc. and its predecessor,
First Interstate Capital Management, Inc. served as adviser to the Pacifica
portfolios.

Item 29. Principal Underwriters.

(a) Stephens Inc., distributor for the Registrant, does not
presently act as investment adviser for any other registered investment
companies, but does act as principal underwriter for Overland Express Funds,
Inc., Stagecoach Inc. and Stagecoach Trust; and is the exclusive placement
agent for Master Investment Trust, Managed Series Investment Trust, Life &
Annuity Trust and Master Investment Portfolio, which are registered open-end
management investment companies, and has acted as principal underwriter for the
Liberty Term Trust, Inc., Nations Government Income Term Trust 2003, Inc., and
Nations Government Income Term Trust 2004, Inc., and Managed Balanced Target
Maturity Fund, Inc., which are closed-end management investment companies and
Nations Fund Trust, Nations Funds, Inc., Nations Fund Portfolios, Inc. and
Nations Institutional Reserves (formerly, The Capitol Mutual Funds), which are
open-end management investment companies.

(b) Information with respect to each director and officer of
the principal underwriter is incorporated by reference to Form ADV and
Schedules A and D filed by Stephens Inc. with the Securities and Exchange
Commission pursuant to the Investment Advisers Act of 1940 (file No.
501-15510).

Item 30. Location of Accounts and Records.

(a) The Registrant maintains accounts, books and other
documents required by Section 31(a) of the Investment Company Act of 1940 and
the rules thereunder (collectively, "Records") at the offices of Stephens Inc.,
111 Center Street, Little Rock, Arkansas 72201.

(b) Wells Fargo Bank maintains all Records relating to its
services as investment adviser and custodian and transfer and dividend
disbursing agent at 525 Market Street, San Francisco, California 94105.

(c) WFNIA and Wells Fargo Institutional Trust Company, N.A.
maintain all Records relating to their services as sub-adviser and custodian,
respectively, for the period prior to January 1, 1996, at 45 Fremont Street,
San Francisco, California 94105.

C-19
<PAGE> 168
(d) BGFA and BGI maintain all Records relating to their
services as sub-adviser and custodian, respectively, for the period beginning
January 1, 1996 at 45 Fremont Street, San Francisco, California 94105.

(e) Stephens maintains all Records relating to its services as
sponsor, administrator and distributor at 111 Center Street, Little Rock,
Arkansas 72201.

Item 31. Management Services.

Other than as set forth under the captions "The Fund, the Master
Portfolio and Management" in the Prospectuses constituting Part A of this
Registration Statement and "Management" in the Statements of Additional
Information constituting Part B of this Registration Statement, the Registrant
is not a party to any management-related service contract.

Item 32. Undertakings.

(a) Not Applicable.

(b) Registrant undertakes to file a post-effective amendment to
the Registration Statement, for the Small Cap Fund using
financial statements which need not be certified, within
four to six months from the effective date of this
Registration Statement.

(c) Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant
to the provisions set forth above in response to Item 27,
or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in
such Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue

(d) Not Applicable.

(e) Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of its most current
annual report to shareholders, upon request and without
charge.

C-20
<PAGE> 169
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to its Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereto duly authorized in the City of Little Rock, State of
Arkansas on the 1st day of July, 1996.

STAGECOACH FUNDS, INC.

By /s/Richard H. Blank, Jr.
----------------------------
Richard H. Blank, Jr.
Secretary and Treasurer
(Principal Financial Officer)

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement on Form N- 1A has been
signed below by the following persons in the capacities and on the date
indicated:

<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
* Director, Chairman and President
- ----------------------------------- (Principal Executive Officer)
(R. Greg Feltus)

/s/Richard H. Blank, Jr. Secretary and Treasurer (Principal
- ----------------------------------- Financial Officer)
(Richard H. Blank, Jr.)

* Director
- -----------------------------------
(Jack S. Euphrat)

* Director
- -----------------------------------
(Thomas S. Goho)

* Director
- -----------------------------------
(Zoe Ann Hines)

* Director
- -----------------------------------
(W. Rodney Hughes)

* Director
- -----------------------------------
(Robert M. Joses)

* Director
- -----------------------------------
(J. Tucker Morse)

July 1, 1996

*By /s/Richard H. Blank, Jr.
------------------------------
Richard H. Blank, Jr.
As Attorney-in-Fact
</TABLE>

<PAGE> 170
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to the Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Little Rock, State of
Arkansas, on the 1st day of July, 1996.

MASTER INVESTMENT TRUST

By /s/Richard H. Blank, Jr.
----------------------------
Richard H. Blank, Jr.
Secretary and Treasurer
(Principal Financial Officer)

<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
* Chairman, President (Principal
- ----------------------------------- Executive Officer) and Trustee
(R. Greg Feltus)

/s/Richard H. Blank, Jr. Chief Operating Officer, Secretary
- ----------------------------------- and Treasurer (Principal Financial
(Richard H. Blank, Jr.) Officer)

* Trustee
- -----------------------------------
(Jack S. Euphrat)

* Trustee
- -----------------------------------
(Thomas S. Goho)

* Trustee
- -----------------------------------
(Zoe Ann Hines)

* Trustee
- -----------------------------------
(W. Rodney Hughes)

* Trustee
- -----------------------------------
(Robert M. Joses)

* Trustee
- -----------------------------------
(J. Tucker Morse)

July 1, 1996

*By /s/Richard H. Blank, Jr.
------------------------------
Richard H. Blank, Jr.
As Attorney-in-Fact
</TABLE>

<PAGE> 171
STAGECOACH FUNDS, INC.
FILE NOS. 33-42927; 811-6419

EXHIBIT INDEX

EXHIBIT NUMBER DESCRIPTION

- EX-99.B10 Opinion and Consent of Counsel

<PAGE> 1
EX-99.B10

Opinion and Consent of Counsel

<PAGE> 2

July 2, 1996
Writer's Direct Dial Number
(202) 887-1500

Stagecoach Funds, Inc.
111 Center Street
Little Rock, Arkansas 72201

Re: Issuance of Shares of Common Stock of Stagecoach Funds, Inc.
Ladies/Gentlemen:

We refer to Post-Effective Amendment No. 27 and Amendment No. 28
to the Registration Statement on Form N-1A (SEC File Nos. 33- 42927 and
811-6419) (the "Registration Statement") of Stagecoach Funds, Inc. (the
"Company"). The Company has requested our opinion in connection with the
issuance by the Company of the Small Cap Fund, a separate series of the Company
(collectively, the "Shares").

We have been requested by the Company to furnish this opinion as
Exhibit 10 to the Registration Statement.

We have examined documents relating to the organization of the
Company and its series and the authorization and issuance of shares of its
series.

Based upon and subject to the foregoing, we are of the opinion
that:

The issuance and sale of the Shares by the Company, upon completion
of such corporate action as is deemed necessary or appropriate, will be duly and
validly authorized by such corporate action and, assuming delivery by sale or in
accord with the Company's dividend reinvestment plan in accordance with the
description set forth in the Fund's current prospectuses the Shares will be
legally issued, fully paid and nonassessable by the Company.
<PAGE> 3
Stagecoach Funds, Inc.
July 2, 1996
Page Two

We consent to the inclusion of this opinion as an exhibit to the
Registration Statement. In addition, we hereby consent to the use of our name
and to the reference to our firm under the caption "Legal Counsel" and the
description of advice rendered by our firm under the heading "Management of
the Fund and the Master Portfolio" in the Prospectuses, which are included as
part of the Registration Statement.

Very truly yours,

/s/ MORRISON & FOERSTER LLP
-------------------------------------
MORRISON & FOERSTER LLP